In today’s briefing:
- Kissinger’s Warning that Ukraine Must Give Russia Territory – A Key Inflection Point for KOSPI?
- Yuan Devaluation (CNY): China At A Turning Point?
- The Week That Was in ASEAN@Smartkarma – Avian Paint, Grab’s Surprise, and Heineken for Tourists
- Asian Monetary Policy: Hawkish Moves To Continue, Albeit In A Graduated Manner
- Increased US-China Contestation: Near-Term Risks Likely Contained
Kissinger’s Warning that Ukraine Must Give Russia Territory – A Key Inflection Point for KOSPI?
- Henry Kissinger’s statement that Ukraine must give Russia some territory could be a crucial inflection point in the global markets.
- Most of the market rebound in KOSPI in the past 100 days have occurred in the past one week.
- The rally in global equity markets in the past week seems to suggest some higher probability that the war in Ukraine could be ended in the next several months.
Yuan Devaluation (CNY): China At A Turning Point?
- Chinese economy skidding badly, buffeted by C-19 lockdowns and strong US dollar. Domestic economic weakness alongside strong dollar are two critical facts.
- US dollar has been weaponized and pointed towards the Chinese Yuan. Growing pressure on Yuan to devalue
- US policy is to drive Fed balance sheet lower and US dollar higher, forcing credit funders back to the US unit
The Week That Was in ASEAN@Smartkarma – Avian Paint, Grab’s Surprise, and Heineken for Tourists
- 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 PT Avia Avian (AVIA IJ), Mitra Adiperkasa (MAPI IJ), Grab (GRAB US), Heineken Malaysia Bhd (HEIM MK) and a lot more besides.
- There were also sector pieces on Asian Tourism, Thai Banks, and Indonesian Banks plus our usual value-added commentary on the past week’s developments in South-East Asia.
Asian Monetary Policy: Hawkish Moves To Continue, Albeit In A Graduated Manner
- There remains a pronounced preference to support growth and look past the supply-side factors driving inflation across Asian central banks.
- But, it is unlikely that Asian central banks can withstand the wave of monetary tightening elsewhere in the world.
- Expect a faster pace of monetary tightening across the region.
Increased US-China Contestation: Near-Term Risks Likely Contained
- The US and China are trying to be better-positioned for more purposeful talks than the unproductive exchanges that have been held thus far between Beijing and the Biden Administration.
- BUT For the longer term, however, there is little doubt that the contestation between the two big powers over the Indo-Pacific region has hardened.
- Political risks will grow but there could be silver linings in terms of production relocation from China to Southeast Asia.
Before it’s here, it’s on Smartkarma
