In today’s briefing:
- Two Key Positive Catalysts for Major Korean Holding Companies
- India: Budget Aims to Generate Concentric Virtuous Circles & Crowd-In Private Capex
- An Update on High Conviction 2022 Thematic Rate Curve Steepening Trades in EM
Two Key Positive Catalysts for Major Korean Holding Companies
- There are two key, positive catalysts for major Korean holding companies that could result in these stocks outperforming the market in the coming months.
- The first main catalyst is that the two leading presidential candidates are both have campaign pledges to protect minority shareholders when conglomerates conduct physical division spin-offs/splits.
- The second key catalyst is the shift from growth to value stocks amid heightened market volatility.
India: Budget Aims to Generate Concentric Virtuous Circles & Crowd-In Private Capex
- In the first 9 months of FY2021/22, the fiscal deficit was 50% of the budgeted estimate for the full-year. More realistically, this year’s fiscal deficit will be 5.7% of GDP.
- Given more credible revenue estimates, the deficit for FY2022/23 will decline to 4.9% of GDP. The government’s lower borrowing requirement will help crowd-in private investment.
- A 35%YoY increase in public investment will fund a multimodal connectivity rollout, while carbon-fibre will reach all villages, solar and 5G will be harnessed to create a tech virtuous circle.
An Update on High Conviction 2022 Thematic Rate Curve Steepening Trades in EM
- With the volatility of US rates remaining elevated, it is a good time to evaluate how my thematic recommendation for 2022 of curve steepening trades in EM is playing out.
- The slopes of rate curves in EM have stabilized even as they continue to flatten in the US and, more broadly, DM – a break in correlation that should persist.
- EM curves should start steepening as ex-Asia they are ahead of DM in rate-hiking cycles and their worsening debt dynamics should keep the risk premium elevated in the long end.
Before it’s here, it’s on Smartkarma
