This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Korea Value Up Index – Surprising Inclusions and Exclusions
- There are some major surprises (both inclusions and exclusions) in the Korea Value Up index.
- In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&T and LG Corp) are surprising exclusions in the index.
- There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).
2. Global Commodities: All systems go for precious metals
- Gold prices have been supported by rising interest rates and central bank demand, but investor flow is now becoming the key driver for further sustained rally.
- Physical demand in China has decreased, but investor demand, particularly in ETFs, has been increasing over the past four months.
- The upcoming direction of gold prices will depend on the pace of Fed cuts and the shift in investor ownership from money market funds to gold ETFs.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
3. Overview #10 -China Knocks It Out of the Park
- A review of recent events/data impacting our investment themes or outlook
- China announces a barrage of fiscal and monetary stimulus plans
- New LDP leader and Japan Prime Minister impacts the markets
4. Direct-reduced iron: India carving its path to meet ‘green’ steel ambitions
- Direct Reduced Iron (DRI) is playing a significant role in India’s steel industry, accounting for 33% of total steel output
- India’s DRI market is characterized by rapid growth driven by steel production targets and sustainable steel making practices
- DRI production is concentrated in central and eastern parts of India, with states like Chhattisgarh and Odisha being prominent producers and trade hubs.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
5. Indonesia: Sentiment Weakens as Key Sectors and Stocks Lose Ground
- Indonesia’s exposure among EM funds is beginning to taper, with 2.3% of funds closing positions and 6.3% shifting to underweight over the past six months
- Bank Central Asia and Bank Rakyat reached record ownership highs this year but have since faced closures by select funds
- On the fund level, closures have outpaced openings, led by Aubrey and BlackRock, with the majority of funds now holding allocations below 5%.
6. Toby Rodes – Unlocking Value in Japan (EP.407)
- Toby Rhodes became interested in Japan due to his grandfather’s stories about the country and its culture
- Toby is the co-founder and managing partner of Konami Capital, a value and quality oriented manager of small cap Japanese equities
- He discusses the past false starts of Japanese activism, recent changes in corporate governance, and Konami’s process for taking advantage of opportunities in the Japanese market
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
7. OVER THE HORIZON: HK/CHINA No Longer the Stock Market Pinata!
- HK/China markets have entered a Bull market trend which was sparked by Beijing’s multi-faceted stimulus program.
- An overhang of extreme pessimism on China’s economy and markets will gradually dissipate as the media/analyst narrative will follow the market higher.
- As discussed in previous insights, a turn in sentiment is the key to not only moving the market but also to reviving the Chinese consumer.
8. Positioning Watch – Markets Are Moving Away from the US (in FI)
- Hello everyone, and welcome back to our weekly positioning update!
- Everything is about China these days, with both the PBoC and the Politburo preparing stimulus packages to save the Chinese economy from its nasty downturn.
- While the stimulus initiatives are not very large, relatively speaking (roughly a percentage of GDP on average across stimulus packages), markets clearly see the heavy amounts of proposed stimulus as a “whatever it takes” signal, sparking a strong momentum trend in the Hang Seng and China proxies.
9. Indonesia Strategy – Caught in a Perfect Updraft?
- Indonesia has been the recipient of significant investment flows for foreign investors with more of a “risk on” environment with a large portion flowing into Indonesian banks.
- Indonesia stacks up from an investment perspective with a stable political environment, solid GDP growth of around 5% YoY, rising flows of FDI, and a more stable IDR.
- Despite the JCI knocking on all-time highs, valuations continue to look attractive with prospects of a better 2H2024 and lower interest rates. Top picks: Banks, property, consumer, and selective elsewhere.
10. China Steps Up Monetary Support, But Not a Game Changer
- China has surprised and cut the 7 day reverse repo rate by 20bps to 1.5%, with a 50bps cuts in the RRR rate.
- Combined with other measures this is a step-up in support and could help GDP on the margin, but the measures are not game changers as monetary policy is currently ineffective.
- While further fiscal easing will likely arrive in the next few weeks, we still maintain our forecast of 4.0% GDP growth for 2025.
