Perspectives Blog

How bad is China’s credit crisis?

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

me haircut in interest payment. It is believed that the costs will be shared among CCT (issuer), ICBC (distributor) and the local government involved in this business (implicit guarantor). In recent years, China’s trust sector has been one of the fastest growing types of non-bank credit, or “shadow banking” credit, to circumvent the government’s bank loan quota system. Currently, overall trust assets are about Rmb 10 trillion (U…

From tactical to core – The case for emerging market debt

Columbia Management, Investment Team | June 2, 2014

…an investment grade asset class Source: Barclays U.S. EM Sovereign & Quasi-sovereign as of 4/30/2014 Many investors had been increasing their EMD holdings, recognizing their fairly low allocations to EMD relative to the sector’s capitalization and economic importance. However, investor confidence in the sector and its attractive risk-return proposition was unexpectedly tested last year. Yields on EMD and corporate credit, which historically…

Harvesting a New Moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 23, 2014

…nstantly evolving. A good sense of the “sub-climates” within the general growth picture is needed and this is where it might get a little more complicated. As a region that is still the fastest growing in the world, not every sector is experiencing a slowdown. In growing sectors such as life insurance, growth strategies must feature alongside cost sensibilities. For new economy sectors such as eCommerce, online media and mobile gaming, fierce bat…

Rebalancing the U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

…rter and looks to decline to something near 3% this year. Receipts are up 13% and outlays are down 5.5% in the last year—this is admirable progress. The easing fiscal drag will add to GDP via less subtraction. Indeed, private sector real GDP growth (GDP less government expenditures) is up 3% in the last 12 months versus overall real GDP at 1.7%. With the fiscal drag receding, monetary policy will also begin to normalize, providing less accommodat…

Biotech’s beneficiaries: How outsourcing is improving the sector and spreading the wealth

Aaron Reames, Senior Equity Analyst | February 24, 2014

Conditions favor biotech outperformance of broader markets for at least a few more quarters. Outsourcing offers biotech firms varied advantages, from cost reduction to enhancing credibility. The sector’s success and the outsourcing trend is fueling ancillary businesses, notably specialty REITs, CROs and research tools companies. As biotech indices continue to surpass all-time highs, one must contemplate if there is additional room to run. We c…

Investing selectively in Asia

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

Beneath the surface of slowdown headlines lay pockets of exciting growth opportunities. As companies step back from chasing revenue growth and start emphasizing profit delivery, better cash flows and dividend payouts typically follow. We see the greatest contrarian opportunities in sectors where market sentiment has been most depressed. In my previous two articles, I argued that big picture conditions for more sustainable growth are beginning…

First quarter earnings wrap up – A bit light

Tom West, Director of Equity Research | May 19, 2014

…probably adjust full year estimates down a bit, but not by much. The first quarter reporting season has wound down for those companies with “normal” reporting calendars, i.e. those with March quarter ends. Much of the retail sector is on a shifted calendar and is just now reporting. If you compare the results so far to the “earnings walk” laid out at the beginning of the year, you would likely come to conclusion that first quarter results, broad…