In today’s briefing:
- China: Major Policy U-Turn Underway
- China A-Shares: Powering to New Highs
- Seeking El Dorado
- The MAD Report – Cross Market Analysis
- The Week That Was in ASEAN@Smartkarma – Astra’s Future, Matahari Dept Store on Form, and GoTo’s IPO
- CX Daily: China’s Covid Response Calibration
China: Major Policy U-Turn Underway
- Vice-Premier Liu He convened a rare policy meeting to signal a significant policy “U-turn” that paves the way for more concerted pro-growth policies to be introduced soon.
- The recalibration of policy reflects behind-the-scenes pushback on the broad direction of economic policy undertaken by President Xi since the start of 2021.
- Expect higher policy risks in the medium-term as regulatory excesses over the past year are unwound – with the possibility of a renewed crackdown once growth is on surer footing.
China A-Shares: Powering to New Highs
- China A-Shares allocations continues to grow among active EM investors. Average holding weights sit close to all-time highs of 5.60%, with a record 87.8% of funds invested
- Over the past 6-months, EM investors have made a clear rotation in to A-Shares, with all measures of ownership moving higher vs country peers. Growth investors are the key allocators
- Ecovacs Robotics Co Ltd and East Money Information have seen ownership levels double, whilst CATL and Midea Group remain the most widely held stocks.
Seeking El Dorado
- Over the past 20 years, tech (QQQ) has given 2x the return of the S&P 500 while almost having a similar risk profile and max drawdown.
- While not all of us can leave our jobs to follow a fast-growing trend, something we can do is invest in such companies/industries
- The price of lithium-ion batteries has fallen more than 97% in the last 3 decades. It is in ubiquitous use, in everything from our phones to electric cars
The MAD Report – Cross Market Analysis
- Fixed Income markets have stabilised after the Fed including the relentless rise in short end (2Y) yields. Short term Bonds are not a sell
- Equity markets have also stabilised with positive short term price action while there are too many bears
- The USD has stabilised and showing early signs of a slip (ex USDJPY). Watch the price action
The Week That Was in ASEAN@Smartkarma – Astra’s Future, Matahari Dept Store on Form, and GoTo’s IPO
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
- The past week saw insights on Astra International (ASII IJ) as it hatched its future plans, and on Matahari Department Store (LPPF IJ) as it enters a new growth phase.
- There were also a number of insights looking at the upcoming GoTo IPO, which may not measure up on valuations but there is probably more there than meets the eye.
CX Daily: China’s Covid Response Calibration
Covid-19 / Cover Story: China’s Covid response calibration.
Markets / In Depth: Chinese stocks’ wild ride.
China-U.S. / Xi Jinping calls for China and U.S. to share responsibilities for world peace.
Before it’s here, it’s on Smartkarma
