E.g., 15-10-2018
E.g., 15-10-2018
We have found 1379 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research Call October 2018

    In this month’s Research Conference Call Louis-Vincent Gave examined the present bad tidings from markets and asked whether the global bull market faces a denouement. Anatole Kaletsky argued that this sell-off will likely prove to be a temporary setback for emerging markets and that the global bull market may have further to run. However, he warned that the outcome will depend heavily on where the oil price goes from here.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Bonds' Failure To Rally

    Given all the bad news for markets this year, one would be forgiven for thinking that US treasuries and German bunds would have been a good investment. But even as emerging markets have sold off and the US dollar has risen against almost every emerging market currency out there, US treasuries (and to a lesser extent bunds) have been an absolute dog of an investment.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The EM Value Question

    After a grim seven-month sell-off, it is natural to ask whether emerging markets now offer attractive value. Since its January peak, the MSCI emerging markets index has fallen -22%. The corollary has been a deep derating, which has left EM equities trading below their long term mean P/E ratios. However, a healthy dose of caution is warranted.

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: Are We Still In A Bull Market?

    At the start of the year, markets seemed poised for a rotation out of US equities into non-US assets. In fact, US equities and cash are the only assets to have delivered positive returns this year. Louis examines the reasons why and concludes that portfolio managers should stay defensive, while looking for buying opportunities in oversold emerging markets, and in European assets in non-euro countries such as the UK, Sweden and Switzerland.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Severity Of India’s Rout

    It has been a torrid month for Indian markets. Equities have tanked by -7%, the rupee has dropped to all-time lows, and a new crisis is emerging in the financial sector. Liquidity is tightening in the money markets, threatening the survival of several non-bank financial companies and raising the prospect of contagion risk that could spill over to the rest of the financial system and lead to a broader economic slowdown. The rout in emerging...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Does Beijing Really Manage The RMB Against A Basket?

    Possibly the only easy thing about studying China is that Chinese policymakers tend to “say what they do and do what they say”. Take the Chinese exchange rate as an example. From 1998 to 2005, the renminbi’s exchange rate was fixed at CNY8.28 to the US dollar. Then, in 2005, investors were told that the renminbi would be allowed to appreciate gradually and with a controlled daily volatility. When the financial crisis hit, the Chinese exchange...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Back To A Three-Figure Oil Price

    Oil broke higher on Monday, with the price of Brent decisively breaching US$80/bbl, a level it had repeatedly tested since early May, when the US administration announced it would reimpose sanctions on Iranian exports. The immediate trigger for the break-out was the decision at the weekend by the Opec cartel plus Russia not to increase their formal output target in the near term. At first glance, the market response might appear an over-reaction...

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Heads I Win, Tails I Don’t Lose In Japan

    A glance at the headlines suggests the story in Japan is still “stasis as usual”. As expected, on Wednesday the Bank of Japan reaffirmed its intention to keep interest rates low indefinitely. And later on Thursday, Shinzo Abe is all but sure to fend off a leadership challenge from within his ruling Liberal Democratic Party, setting him on course to become the country’s longest-serving prime minister. In tune with this “no change” refrain,...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why You Should Buy Indonesia

    There are reasons to think that a 2% rise in the broad emerging market index over the last two days may be more than just a relief rally. For those investors who are minded to seek out EM equities, one of the more interesting options is Indonesia, which has unfairly been treated by investors as a sort of Asian Turkey.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why The US Cannot Win A Trade War

    The US has made a fundamental policy mistake in pursuing a trade war against China. A Keynesian macroeconomic analysis shows that the US will likely be worst affected by the conflict, while China should escape unscathed and several other emerging markets could be clear gainers. This sell-off may be an ideal opportunity to "buy the dip" in EMs

    7
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Exit From A Liquidity Squeeze

    If it walks like a duck and quacks like a duck, then it probably is a duck. By the same token, if central bank reserves are shrinking, the US dollar is rising, and emerging market currencies are cratering, we probably face a liquidity squeeze. None of this should be surprising, as the drains on US dollar liquidity have come from all directions this year.

    7
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    On Getting It Wrong

    Louis went into 2018 with a set of assumptions about how growth and markets around the world would play out. It hasn’t exactly worked out as expected and in this mea culpa he seeks to understand how he got it wrong and what comes next. He concludes that a key driver of the changed investment environment was not so much the strength of the US dollar but China’s decision to allow a renminbi devaluation.

    10
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Korean Advantage

    Yesterday was another bad day for weak-link emerging markets battling a rising US dollar. Still, my contention during this year’s EM sell-off has been that investors should sort the wheat from the chaff. With a current account surplus of 5% of GDP and forex reserves of US$400bn, exhibit-A is South Korea.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: A Simple Guide To US Asset Allocation

    We synthesize four years of work on asset allocation and present a model portfolio built around analysis of the cost of and return on capital; the real rate of return on equities, bonds and cash; and the ideal duration of fixed-income holdings. Today we recommend that US portfolios hold 75% in equities, 25% in cash, and shun bonds.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Disentangling The EM Mess

    It has been tough reconciling weak emerging market performance this year with their generally decent macro fundamentals. Charles pins the blame on a US dollar squeeze and will publish an update later today. By contrast, Anatole reckons that markets have made a mistake in assuming that EMs are especially vulnerable to a strong US dollar. I see merit in both positions, but do not buy the fact that there is a catch-all explanation for what is going...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Tail Risks That Worry Me

    Yesterday I made the case that emerging markets should be superior performers in a global bull market, which I characterized as the most hated in history. What that analysis left out was the relative prospects of the other big blocks in the global equity universe; namely, Europe and Japan. My core point yesterday was that trade wars do more harm to economies that close their markets than those countries which supply them, and on this score...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    India Macro Update: A Mixed Masala

    As public spending is cranked up ahead of an election that is expected to be held next spring, India should be able to sustain its current level of economic growth for a while yet. However, the rate of expansion has likely passed the high water mark for this cycle, argue Udith and Tom in this quarterly update.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Misunderstanding Today’s EMs

    Suppose that, like me, you think the global equity bull market has a few more years to run and hence the sell-off which culminated with Turkish debt being downgraded two weeks ago was a merely a correction. Where are the best opportunities to “buy the dip”? The answer depends on whether you also share my view about the underlying causes of this year’s market setbacks.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Trouble With Monopsonies II: Joan Robinson Versus David Ricardo

    Among the discussion topics at this week’s Jackson Hole meeting of world central bankers will be whether the market power of giant corporations is so great it allows them to hold down workers’ wages at the global level. Charles has no doubt, arguing in this paper that the development of platform companies into labor monopsonies accounts for what has been misunderstood as “secular stagnation”.

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    How To Assess The Stresses On EMs

    Emerging market equities are officially in a bear market, with the MSCI EM index down -20% from its January peak. EM-related commodities are also hurting, notably copper which has fallen -18% since June. The central question now is whether one should steer clear of all EM assets, because the rout is general and likely to get worse; or if one should keep an eye out for buying opportunities here and there. With some trepidation, we advise the...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why Indian Tourists Are The New Chinese

    Some 25mn Indians traveled abroad last year, making sub-continent tourists increasingly important for a range of major destinations. They may not yet rival Chinese travellers who are by far the biggest group of globe-trotters, but in this piece Tom argues that is only a matter of time. Already, it is cheaper for Indians to travel to a range of overseas destinations than within India itself and the middle class increasingly has the travel bug.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Fire Testing Of Asian Junk

    The strong US dollar, rising oil prices and a gathering trade war have sent capital fleeing from emerging markets. Asian high-yield debt has taken a hit with the benchmark (JP Morgan) index down -3% this year, sparking worries of a self-feeding cycle that ends with a debt crisis. We have taken a fairly constructive view on emerging economies due to their generally non-threatening macro-fundamentals. Hence, with EM asset prices stabilizing it is...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: Towards A Global Liquidity Crisis?

    In our latest outlook for global investment strategy, Charles Gave warns that the world may be heading into a dollar liquidity squeeze. There have been seven such scarce-dollar episodes since 1971, and every one produced some big financial accidents. The basic symptom today is that the US is heading into an inflationary boom, while the rest of the world is seeing slower economic growth and weaker asset prices. Investors must be defensive; but...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Bank Of Japan's Choices

    Global bond markets have been jolted this week by an unusual source: the Bank of Japan. Reports that the BoJ is considering making unspecified tweaks to its policy stance triggered a 5bp spike in the 10-year Japanese government bond yield on Monday, and were blamed for an 8bp rise in the 10-year US treasury yield. BoJ governor Haruhiko Kuroda promptly denied the stories, insisting he knew “absolutely nothing” about the matter. And the central...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    An Indian Quagmire

    India has won kudos for adopting a modern bankruptcy law that makes it easier for big lenders to clean house on a bad debt problem that has festered since the early 2000s. The problem is that an approach which would garner broad support on Wall Street and then be executed through fairly efficient courts in New York and Delaware, has in India run into the sand of murky politics and bureaucratic sloth.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: Understanding India’s Bad Loan Problem

    India has won kudos for adopting a modern bankruptcy law that makes it easier for big lenders to clean house on a bad debt problem that has festered since the early 2000s. In this video interview Udith discusses how the new bankruptcy law has worked in practice, and whether it will be enough to solve Indian banks' bad debt problem.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Destination Escalation

    Will we see any break in the escalation of Trump’s trade wars this year—either because one of the targets capitulates and tries to strike a deal with the US, or because blowback within the US against the negative impact of trade wars gets strong enough that Trump needs to beat a tactical retreat? The answer is a firm no, on both counts.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Fair Weather Friend, Or Safe Port In A Storm?

    On Thursday morning in Asia, the Japanese yen was trading at ¥112.7 to the US dollar. At that level the yen is down -7.2% from its late March high, a fall which has erased all its first quarter gains and left the currency exactly flat year-to-date. At first glance this fall might seem surprising, given the degree of nervousness in global markets and the yen’s reputation as a safe haven currency, not to mention its undervaluation relative to...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Japan Joins The Global Labor Market

    The biggest worry of senior managers at Japanese manufacturing firms is not Donald Trump’s trade war, the state of global demand or fear of Chinese intellectual property theft, but an acute shortage of workers. Neil charts the dynamics of Japan’s ever-decreasing labor market, and examines the policies Tokyo is rolling out in an attempt to deal with the problem.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Chinese Juggernaut Will Roll On

    In 2015, I sat down with Sri Lanka’s then-new finance minister. The “teardrop of India” had recently elected a fresh government, kicking out a corrupt president widely regarded as in China’s pocket. Vowing to scrutinize all Chinese deals, the new leaders suspended a massive real estate project in Colombo harbor. “The high costs come from nothing other than corruption, but we do not want taxpayers to pay for the past decisions of a corrupt regime...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Recession Of 2019

    Over the last three months, I have become increasingly concerned that a recession will hit the world economy in 2019. In this paper, I shall explain why. My reasoning is simple, and is based on the behavior of an indicator I have long followed, which I call the World Monetary Base, or WMB. Every time in the past that this monetary aggregate has shown a year-on-year decline in real terms, a recession has followed, often accompanied by a flock of...

    17
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    India’s Logistics Revolution

    India's logistics sector is so inefficient that getting goods from producers to consumers accounts for about 17% of national output, or twice the level in most developed economies. The result is retarded growth and weakened competitiveness. But thanks to a nationwide goods and services tax, growing consumer demand and rising land prices, consolidation and modernization is afoot across the sector.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Hard Yards For Emerging Markets

    Emerging markets have been hit by the combined effect of a stronger US dollar, tighter international liquidity and rising trade tensions, causing their currencies to fall more in the last few months than in the 2013 “taper tantrum”. The big fear for EMs is that the end of easy money globally creates a giant margin call. As a firm, we have tended to be upbeat on their prospects in this cycle, and it may be that a huge buying opportunity has...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: The Four Roads Ahead

    The first half of the year was not a great one for global equities, and the second half is clouded by risks: slowing growth, rising inflation, renewed political stress in the eurozone, and most of all the threat of massive protectionism by the United States. Louis Gave offers four scenarios of how things could play out, and Arthur Kroeber explains why it's time to start seriously worrying about a worst-case trade scenario.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The New Model Duration Rule

    Choosing the right level of duration for a bond portfolio is devilishly tough. It is doubly so when the global interest rate environment is shifting. For this reason KX is introducing a new top-down based duration management tool which encouragingly offers superior signaling and can be used across multiple developed economy bond markets.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Message From Bank Stocks

    This year, being a bank investor has been almost as miserable as being a bank employee. European banks are down -17% year to date. Japanese banks have hardly fared much better, falling -13%. Asian banks are down -7%. And US banks are down around -5%. Tuesday was a case in point: on a day when the US market was broadly flat, banks were once again one of the worst-performing sectors.

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Investment Scenarios Ahead

    The interaction of three prices—the US dollar, long-dated US interest rates, and oil—tend to determine the behavior of most other asset values, and so far this year, all three have moved higher. Investors have adjusted to this new reality with some trepidation: among major markets, only the US (S&P 500) and Japan (Nikkei 225, barely) are up year-to-date in US dollar terms.

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    The Way Ahead For North Korea

    After the Trump-Kim summit, North Korea's commitment to denuclearization still remains a fiction. Future negotiations will be mostly about stringing along the US administration. While Washington and Pyongyang talk, Beijing and Seoul will continue to try to normalize the existence of a nuclear-armed North Korea and cement peace.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research Call June 2018

    During Friday’s monthly call, Louis Gave addressed the direction of the US dollar and the impact of expanding US fiscal deficits. Anatole Kaletsky focused on the rise of populist politics, which remains his major concern. Charles Gave considered the impact of resurgent nationalism on the investment environment. There was also significant discussion of the oil price with Anatole and Louis taking differing positions.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Moment Of Truth For Emerging Markets

    A strong US dollar, rising interest rates and higher oil prices are a toxic mix for emerging markets. A month ago it was only Turkey and Argentina that were looking really sick, punished by investors for their structural imbalances. But in recent weeks nervousness has engulfed the currencies of Indonesia, South Africa, India and—most notably—Brazil. This leaves the emerging markets facing a pivotal moment. Until now, the assets of those emerging...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    In Sweeps The Monsoon

    The summer monsoon lashed across southwest India yesterday, just a few hours after the central bank announced its first interest-rate hike in more than four years. With oil prices stoking inflation and foreign portfolio flows pouring out of the country, the Reserve Bank of India followed the lead of other emerging markets battling the global US dollar squeeze. Yet the darkest storm clouds are now political, as Prime Minister Narendra Modi...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    ‘Peak Politics’: Another Chance To Buy The Dip?

    In recent weeks, investors have been hit with multiple political shocks in the shape of Italian politics, American trade policy and global oil shenanigans. But even as President Donald Trump seems to escalate the American “trade war” and Italy’s new prime minister thumbs his nose at Brussels’ budget parsimony, Anatole asks if political risks have in fact peaked, offering a “buy the dip” opportunity.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    America First, The Rest Of The World Second

    Bears are stealthy creatures that rarely offer much warning of their arrival. Based on my experience in the financial wilderness, I have rarely recognized the clear manifestation of a bear market until I was caught firmly in its clutches. In the US today, excitement about President Trump’s daily activities means there is a lack of clear thinking about this market’s outlook. Similarly, a meme for many investors, including Gavekal colleagues, has...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Going Underground (And Overground) In Delhi And Beyond

    India is rapidly adding new urban metro systems, with ten already built, five under construction and 17 in the planning stages. Tom argues that it is following in China’s footsteps, but unlike China, foreign equipment suppliers and contractors look likely to be major beneficiaries of the Indian build-out.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Not Letting A Good Crisis Go To Waste

    At the beginning of 2018, one of Gavekal’s big themes for the coming year was that the liquidity environment was deteriorating. Behind this we saw three causes: 1) the US Federal Reserve’s decision to shrink its balance sheet; 2) the growing toll of rising energy prices, and 3) the coming liquidity drain from runaway US government spending.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: Dollar + Oil + Political Risk = ?

    So far, 2018 has delivered a lot of volatility, and mediocre returns across almost all asset classes. Will the second half be any different? It's hard to sustain a high level of conviction given the resurgence of political risk. In the latest Strategy Monthly, we offer a way to think through investment decisions based on the direction of oil prices and the dollar.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: Malaysia's Old Man In A Hurry

    In elections earlier this month, Mahathir Mohamad stunnned Malaysia, defeating the party he led for 20 years to become the country’s new prime minister. In this short video interview, Udith examines Mahathir’s policy platform, and asks whether the resurgent 92-year-old can really rejuvenate Malaysia’s economy.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    India Macro Update: Summer Market Blues

    Indian growth is picking up nicely just as the external financing environment gets tougher, with a strengthening US dollar, raising yields and most importantly, a sharply rising oil price. In their regular quarterly review, Udith and Tom argue that India can weather the storm, but global investors would do well to back away from the market.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Beyond Japan’s 1Q GDP Contraction

    Japan’s longest run of growth since the 1980s has come to an end. After eight consecutive quarters of growth, data released on Wednesday morning showed that the Japanese economy contracted in the first quarter. For investors, the question is whether this contraction will prove a short-lived blip, or whether it marks a decisive turn for the worse in both Japan’s macro-environment and equity market.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Malaysia’s 92-Year-Old Populist

    It is surely the most remarkable political comeback of recent history. At the tender age of 92, former prime minister of Malaysia Mahathir Mohamad won a shock victory in Wednesday’s general election, ousting from power the coalition he himself headed for 22 of the 61 uninterrupted years it ruled the country—ever since independence in 1957.

    0
Show me: results