Perspectives Blog

How bad is China’s credit crisis?

Weili Jasmine Huang, Senior Portfolio Manager | February 3, 2014

We look at the scope and impact of China’s credit crisis We believe the possibility of a financial meltdown is low We discuss how resolution of the crisis may unfold News of a trust product on the brink of default has deepened the concerns of increasing instability of China’s financial system. The risk of defaults on trust and wealth management products will likely continue to impact markets. We believe that the shadow banking issue will…

Finding opportunity in Chinese reforms

Robert McConnaughey, Director of Global Research | June 16, 2014

We continue to be excited about the opportunities to position in emerging markets ahead of positive change where market uncertainty still exists. Chinese corporate level governance reforms may be fertile ground for undiscovered investment opportunities. The scope and pace of China’s reform will have significant influence on the global economy and should be monitored closely. I spent last week in China, meeting with corporate management teams,…

China’s reform announcement

Timothy Flanagan, Associate Portfolio Manager | November 21, 2013

China has announced significant social and economic reforms. We believe the vague wording and lack of timetables in the announcement should allow for balancing policy changes against short‐term growth prospects. If fully implemented, the plans announced should move the country towards a long-term sustainable growth model. If rolled out gradually, the near‐term effects on growth should be minimal. The biggest take‐away from China’s recent Third…

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

While the growth of smartphones on the high-end is decelerating, the low-end in China and the emerging markets continue to see strong growth. The outlook for communications infrastructure seems to have improved. The ‘Internet of Things’ may be more evolutionary than revolutionary for most companies. Mobile World Congress (MWC) is the industry’s annual trade show, which was held this year during the last week of February in Barcelona, Spain. As…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

…broad EM growth story. Those factors included the positive effects of reforms stemming from credit and currency crises of the late 1990’s, the rise of outsourcing and low-cost manufacturing, record commodity consumption from China’s infrastructure and capacity building binge, and easy access to cheap funding from the developed world. However, these factors are rapidly evolving and having dramatic impacts on the emerging markets. The Chinese-led…

Investing selectively in Asia

Soo Nam Ng, Head of Asian Equities | July 14, 2014

…which sub-segments offer the greatest potential. While Swiss watches and Italian handbags are reeling from an anti-corruption drive that affects lavish “gifting” to officials, the underlying appetite for luxury consumption in China remains healthy as evidenced by the brisk sales of BMW cars. While infrastructure spending has slowed, investments in rail locomotives and rolling stock are still increasing in order to intensify usage of the rail netw…

The beginnings of a new moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 2, 2014

…e significant is a noticeable shift in the last few years towards a sustainability mindset in its emerging economies. This shift is continuing to gain traction under the current economic and political climate, particularly in China under the Xi Jinping leadership. Post the GFC, the Hu-Wen leadership in China rolled out aggressive and hastily implemented fiscal measures in a bid to prevent a sharp slowdown. Low return projects and local government…