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…

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…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

…-up opportunities. A month ago, much of the news from the emerging markets (EM) was negative. We saw headlines highlighting the liquidity headwinds created by U.S. QE tapering, Russia’s aggressive opportunism in the Ukraine, China’s imminent hard landing, Brazil’s drought leading to an imminent energy crisis, a state of emergency being declared in Thailand, Turkey’s political soap opera continuing with business and political leaders being arrest…

Opportunities in global infrastructure

Peter Santoro, Senior Portfolio Manager | February 3, 2014

…l replace telephone poles; natural gas pipelines will displace coal trains fueling utilities. To illustrate the size and focus of the global demand for infrastructure, let’s examine some examples of spending trends in Brazil, China, India and the United States. Brazil • In August 2012, the government said it would spend $69 billion by the end of 2014 to improve its transportation systems. • The infrastructure spending for the 2014 World Cup and f…

Income inequality, disinflation and profit growth – the role of globalization

March 10, 2014

…Data for consumption inequality and household debt-to-income ratios across income deciles outside developed markets is sparse. But it does not appear obvious that patterns in the U.S. are at all in evidence in countries like China. Interestingly, despite levels of inequality rising within individual states, the rapid economic growth seen at the overall economy level for EM has seen global inequality — measured at the household level — first plat…