India: Elections, Incremental Progress and the Decline of Deference (Part 3 of 7)

Korea: Chaebol Under Pressure but Who Will Benefit? (Part 4 of 7)

Taiwan: Risks Rising but Remains Relatively Attractive (Part 5 of 7)

Emerging Market Equities in 2017; Key Issues to Monitor by Market (Part 1 of 7)

Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Cross Asset Strategy

<p>The apparent stability of the Chinese economy leaving 2016 is mainly illusory, as Beijing now faces an increasingly hard struggle to maintain the level of stimulus necessary to prevent the fragile financing structures which underpin the very high levels of corporate debt in China, from starting to unravel on the back of capital outflows. The key additional element for 2017 is the impact of a potential conflict over trade with the incoming US administration, firstly in reducing the trade surplus…</p>

The apparent stability of the Chinese economy leaving 2016 is mainly illusory, as Beijing now faces an increasingly hard struggle to maintain the level of stimulus necessary to prevent the fragile financing structures which underpin the very high levels of corporate debt in China, from starting to unravel on the back of capital outflows. The key additional element for 2017 is the impact of a potential conflict over trade with the incoming US administration, firstly in reducing the trade surplus…

China: Recent Corporate Improvement an Illusion Without Reform (Part 2 of 7)