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

…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, government officials and investors in the Chinese markets. One of my motivations for making the trip was to get a better sense of the speed and scope of government r…

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

…offsetting growth in demand for LTE equipment), slow government approval for time division (TD)-LTE licensees in China and limited ability of carriers to monetize the growth in data traffic. At MWC this year, the outlook seems to have improved. Within China, China Mobile appears set to make significant investments to upgrade from its 3G network to its LTE network, and its competitor China Telecom looks set to do the same starting in the second ha…

Not all emerging markets are created equal

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

…ithin countries, there are many dynamics at an industry and company level. For example, despite a rocky year for China’s equity markets, investors in Chinese internet service or environmental service companies had a far more positive experience than the broader index. Given the array of reforms introduced after China’s Third Plenum announcements, rapidly changing consumer behaviors and dramatic shifts in industrial capacity growth, we see plenty…

The beginnings of a new moderation in Asia

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

…ies. 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 debt issues followed, including the LGFV(2) issues that have been touted as a potential non-performing loan prob…

Investing selectively in Asia

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

…pricing. The re-rating process may take time, but investors can still enjoy an attractive yield while they wait. China’s anti-corruption drive in the last few years is another shifting cloud. Its oil and gas sector is emerging from the anti-corruption purge of Zhou YongKang, China’s ex security czar who has had his power base within it. Recent positive developments include Petrochina’s plans to invite private capital to take sta…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

Despite continuing headlines of concern, EM markets have rebounded recently. In order to sustain that rally, we need to see progress on export volumes and political/economic reforms. While not universally cheap, EM equity valuations are not unreasonable and we continue to find bottom-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….