E.g., 25-03-2019
E.g., 25-03-2019
We have found 1427 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The EM Equity Question

    Despite this year’s strong run-up, there remain good reasons to stick with emerging market assets. The twin impact of collapsed borrowing costs amid a renewed global hunt for yield, and greatly reduced exchange rate volatility has been the ideal environment for EM yield curve flattening trades.

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

    Gavekal Research

    The Flow Through To EM Equities

    These are strange times for investors with bond yields in big developed markets plumbing new depths on dark concerns about never ending deflation and stagnation. Yet in a clearly related development, US equities are making new highs while corporate- and emerging market-bonds continue to rally.

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

    Gavekal Research

    The JGB Endgame Approaches

    Over the last couple of weeks, the world’s attention has been focused by turns on British politics, Italy’s banking crisis, the US presidential race and most recently, last night’s ghastly events in Nice. It is little surprise then, that a series of three stories from Japan (or perhaps just two and a half) has passed largely under the radar. Taken together, however, these developments bear heavily on the future of the Japanese government bond...

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

    Gavekal Research

    Can ‘Make In India’ Work?

    In September 2014, Prime Minister Narendra Modi launched an initiative to transform India from an industrial laggard into a global manufacturing hub. The “Make in India” plan is sorely needed: in 2014, India’s merchandise exports accounted for a paltry 1.7% share of the global total. That was on a par with Taiwan, whose population is smaller than Delhi’s. India relies heavily on imports of consumer goods, especially from China, and runs a large...

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

    Gavekal Research

    A Fundamental Assault On Freedom

    Of all basic freedoms, one of the most fundamental of all is the freedom of the individual to organize his or her relationship with time. The way we order our affairs with respect to the all too brief time allocated to us on this earth is a profound right that we all should be allowed to exercise unhindered. In short, everyone should be free to choose whether to be an ant or a grasshopper.

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

    Gavekal Research

    The Next Monetary Move

    Shinzo Abe was today scheduled to meet with Ben Bernanke, the chief architect of unconventional monetary policy responses following the 2008 crisis, with the issue of Japan’s adoption of so called helicopter money expected to top the agenda. In this piece Joyce asks would Japan do it and more importantly could money drops make any difference in the land of the stagnant price index.

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

    Gavekal Research

    Ignore Japan’s Banks At Your Peril

    Any investors contemplating adding to their Japanese equity exposure following Shinzo Abe’s weekend election victory and the subsequent market rally should look closely at the performance of Japanese bank shares. Their signal, argues Joyce, is anything but encouraging.

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

    Gavekal Research

    Positioning For Uncertain Times

    Regular readers will know that Gavekal is a broad church. And while the church choir only occasionally sings in perfect unison, the different singers can often hit harmonies that are all the more powerful for being unexpected. This may be one of those occasions. Yesterday, Anatole, Charles and Louis took part in a conference call in which they laid out their different views of Brexit and what it will mean for the economy and markets of the UK,...

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

    Gavekal Research

    The Gavekal Monthly: Life After The Brexit Vote

    The world is now a considerably more uncertain place than a month ago. Following the UK’s referendum vote in favor of Brexit, a near-term recession in the UK is more likely than not, the European Union faces the possibility of a renewed economic slowdown, and investors find themselves forced to reassess the probability that Donald Trump will win November’s US presidential election. In this edition of the Gavekal Monthly, our analysts set out to...

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

    Gavekal Research

    The Enemy Of My Enemy Is My Friend

    The British prime minister was not the only one thwarted by a vote last week. Despite Narendra Modi’s personal efforts and heavyweight backing from Washington, India failed in its attempt to join the 48-country Nuclear Suppliers Group. It was a bruising setback for Modi, who has spent two years energetically trying to boost India’s global clout. Yet the result itself was less significant than the US support for India in the face of Chinese...

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

    Gavekal Research

    India’s Reform Agenda After Rajan

    Over the weekend, Reserve Bank of India governor Raghuram Rajan announced he will not seek an extension of his three-year term, which ends in September. His unexpected decision will dampen sentiment in the near term, as it follows—and was perhaps even precipitated by—a high decibel campaign seeking his ouster by members of India’s ruling BJP. However, fears that the hard-won credibility of the RBI under Rajan will be undermined by the...

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

    Gavekal Research

    Japan As Safe Haven

    Global markets are in a risk-off mood as investors scramble to find a sure thing in an uncertain world. The populist surge in Europe and the US is ending long held “certainties” about the developed democracies, while next week’s Brexit vote could set in train the European Union’s break-up. Ironically, as investors scramble for stable ground, Japan is proving an island of calm, at least for those with an eye to capital preservation. The yen has...

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

    Gavekal Research

    Never Do On Monday What You Wish You’d Done On Friday

    The first rule of bear markets is never to do on Monday what you wish you had done on Friday. During bear markets, the constant stream of negative stories from the media leads to a build-up of anxiety among investors, anxiety that pours out first thing on Monday morning on trading floors everywhere.

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

    Gavekal Research

    South China Sea Risks

    In the next few weeks the Permanent Court of Arbitration in The Hague will likely rule in favor of the Philippines in its dispute with China over territorial claims in the South China Sea. Beijing’s reaction will show to what extent China is prepared to defy international law to defend what it claims are “core interests”.

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

    Gavekal Research

    The New Material

    The US$1.8trn global aviation sector shows no sign of slowing—last year passenger numbers rose by 6.5%. The race is on to deliver cheaper, more efficient aircraft. The big winners from this trend may be makers of composite carbon fiber. The market for carbon fiber used in aircraft is set to grow from US$17.3bn in 2014 to US$34.2bn by 2020.

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

    Gavekal Research

    Japan: Twice Bitten, Thrice Shy

    It was a case of twice bitten, thrice shy. This week Shinzo Abe announced he will postpone next April’s planned 2pp increase in Japan’s sales tax until October 2019—a step the prime minister had previously sworn he would only take in a Lehman-scale crisis. Despite Abe’s protestations to the contrary at last weekend’s G-7 meeting, the world economy is facing no such meltdown. Nevertheless, deferring the tax hike makes sense. Previous increases in...

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

    Gavekal Research

    How Much Geopolitical Risk In Asia?

    With the global economy in the doldrums and most asset markets stuck in neutral, the last thing that is needed is a trade war or an armed confrontation in the world’s most vibrant region, East Asia. The risk of either is low, but inching up.

    3
  • Gavekal Research

    The Challenge For Equity Markets

    Given high valuations and a rock bottom risk-free rate, it is hard to see US equities moving higher without a pick-up in corporate earnings. Yet with the strong US dollar hurting exporters and domestic economic data coming in weak, US-based firms may struggle to deliver.

    6
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A New Marginal Buyer Of Japanese Equities

    Thanks in part to erratic monetary policy moves, Japan has slid back to being an irrelevance for global investors. Perhaps that does not matter, as foreigners only account for about 30% of the market while Japan has a vibrant domestic equity scene. Yet, the fact remains that it generally takes fickle gaijin to get excited about Japanese equities for the market to break out—that was the story in 2012-15 as a 50% yen devaluation supercharged...

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

    Gavekal Research

    India’s Significant Step Forward

    When Narendra Modi took over as Indian leader nearly two years ago, he promised to deliver higher growth by making the world’s most bureaucratic large economy more business friendly. It has been a hard slog, with a slew of failures along the way: the BJP-led government’s attempts to push through tax, land and labor reforms have all been hobbled by opposition in parliament. But with the passing of a new bankruptcy code last week the fog of...

    0
  • Gavekal Research

    Asia’s Best Market Reaches A Precipice

    The Philippines has since 2011 morphed into a balanced development story with growth averaging about 6% Growth has been underpinned by robust domestic demand, and it has also benefited from a long period of fairly trouble-free governance so when Filipinos go to the polls on Monday to elect a replacement for the President, much is at stake.

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

    Gavekal Research

    Making Sense Of The Rally In Cyclicals

    By all accounts, 2016 has so far proved to be a challenging year for “market neutral” funds, and “smart beta” strategies, along with various quant funds. Before we have even reached the seasonally-challenging part of the year—sell in May and go away, and all that—a quick glance at year-to-date returns for “low volatility” hedge funds illustrates that the pain is pretty widespread. In a sense, this is surprising; after all, spreads are tighter...

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

    Gavekal Research

    The Gavekal Monthly: Glass Half Full Or Glass Half Empty?

    The past month has seen the US dollar seemingly top out, the oil price settle into a trading range and China’s economic outlook stabilize. Emerging markets in particular have bolted higher despite weak global trade, an oversupplied commodity complex and worries about high levels of leverage. In this edition of The Gavekal Monthly we ask a pressing question for EM investors: is the glass now half full, or half empty?

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

    Gavekal Research

    Can The BoJ Ever Do The Right Thing?

    Another Bank of Japan meeting, another market slump. Yesterday saw investors mortified by a BoJ tease which came to nothing, while in January the same market response followed an activist move to charge a negative interest rate on a small part of banks’ reserves. In response to the disappointment the yen soared against the US dollar with its biggest daily move in seven years, while the ensuing six hours saw a 7% peak-to-trough move in Nikkei...

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

    Gavekal Research

    Asian Plowshares Into Swords

    Japanese Prime Minister Shinzo Abe invested time and prestige in a failed bid to supply Australia with 12 new attack submarines and service them for the next 50 years. It was announced yesterday that the approximate US$38bn contract was scooped by a rival French bidder due to its technical competence, but also after a strong lobbying effort by China which does not want to see a resurgent Japanese defense sector. Canberra’s decision represents a...

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

    Gavekal Research

    The End Of Asian Equity Market Underperformance?

    With Asian equities having underperformed their global equivalents by almost 40% since 2011, the past five years have not been much fun for regional investors. Encouragingly, however, just as the panic over a possible China currency crisis and economic implosion reached its apex last summer, Asia’s underperformance seems to have abated. Over the following eight month period or so, Asian equities have held their own with a number posting decent...

    1
  • Gavekal Research

    NIRP: Machiavellian Design Or A Policy Mistake?

    In order to make money, Starbucks has little choice but to sell coffee. Ford must sell cars if it hopes to stay open. And Lockheed Martin better get orders for bombs, missiles and planes if it is to remain relevant. But banks do not need to make loans (their stated purpose) in order to make payrolls and pay shareholders a dividend, at least at certain points in the cycle. When the yield curve is steep, banks can borrow money cheaply at the...

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

    Gavekal Research

    Emerging Markets Reality Check

    Emerging market assets have enjoyed a powerful momentum-driven rally over the last two months. A more dovish stance from the US Federal Reserve, falling yields, acceptance that the US dollar is no longer strengthening, and a pick-up in commodity prices combined to quell the market’s worst fears and persuade investors that emerging markets were not in fact facing Armageddon. More recently last week’s release of relatively upbeat economic data...

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

    Gavekal Research

    The Sum Of All Fears

    As “China implosion” and renminbi devaluation fears have faded, risk assets around the world have enjoyed a sustained a rally led by “China sensitive” assets such as commodities, Asian equities and emerging market high-yield debt. In short, all the assets that were priced for a scenario just short of Armageddon. But following this rebound, what next? The most obvious point is that, with the pick-up in fiscal stimulus, the rebound in construction...

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

    Gavekal Research

    Worth Buying This Japanese Dip

    Those with an active interest in Asian markets had much to process in early trading with shorts cheered by the hardly surprising news that Iran and Saudi Arabia could not agree on an oil production freeze, while longs could point to China whose 1Q15 GDP report on Friday seemed to confirm that the authorities will do whatever it takes to defend their near-term growth targets. But perhaps the bigger factor unnerving investors has been the fallout...

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

    Gavekal Research

    The Bright Spot Amid Japan’s Gloom

    The new narrative about Japan is straightforward: Japanese government bond yields will fall even further, the yen will strengthen, corporate earnings will collapse, stock prices will sink, and Mrs Watanabe will withdraw all her savings from the bank and stash them under her tatami. Over the last couple of months, international investors have positioned themselves accordingly. Yet anything more than a cursory visit to Japan quickly emphasizes...

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

    Gavekal Research

    Why India Can Move Faster

    India’s lack of efficient roads and railways lowers productivity, depresses aggregate demand, raises costs and stymies trade—all impediments to economic growth. The good news is that India’s latest infrastructure push, financed initially by public investment, is showing signs of traction. The latest government budget committed a hefty US$32bn to roads, rail and other infrastructure, a big increase within a broader environment of fiscal...

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

    Gavekal Research

    The Yen And Japanese Equities

    It is hard not to feel a smidgen of sympathy for Haruhiko Kuroda. In the last 18 months, the Bank of Japan governor has deployed a whole battery of heavy artillery, stepping up his asset purchases to ¥80trn a year, extending them to cover exchange-traded funds and real estate investment trusts, and pushing short term interest rates into negative territory. As well as supporting asset markets, much of this effort was aimed at driving the yen...

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

    Gavekal Dragonomics

    CEQ Q1 2016 - Powerhouse, Menace, Or The Next Japan?

    Two popular narratives about China are that it will either reform its economy and become the next superpower, or fall victim to a dramatic financial crisis. There is a third and perhaps more likely scenario: gradual stagnation, along the lines of 1990s Japan.

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

    Gavekal Research

    Fade The Emerging Market Rally

    In defiance of conventional wisdom the oil price has tumbled -10% in the last two weeks despite a weak US dollar. For emerging markets investors, the breakdown of this correlation raises tricky questions.

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

    Gavekal Dragonomics

    CEQ: Avoiding The Japan Trap

    Growth is slowing, debt is rising, and the government is openly talking about "zombie companies" in key industries. This is China today, but there are also echoes of 1990s Japan. This issue of the CEQ examines the similarities and differences, and handicaps China’s chances of dodging a Japanese scenario of low-growth, high-debt stagnation.

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

    Gavekal Research

    The Gavekal Monthly: The Dollar Weakens; Time To Buy Jewels?

    The big change over the last month is that the US dollar is now falling on a year-on-year basis. This weakness reflects a more abundant international supply of dollars as the US trade balance, ex-China and ex-oil, has swung back into the red after six years in surplus. In this edition of The Gavekal Monthly, Louis outlines why, in such a plentiful-dollar environment, investors should consider prioritizing “jewels” over “tools”.

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

    Gavekal Research

    The Beef In Japan’s Budget Bowl

    At ¥97trn, the 2016/17 budget passed by the Japanese parliament on Tuesday was the country’s biggest ever, with accelerating spending increases for welfare, pensions, healthcare, and defense. Yet no one expects Tuesday’s budget to be the end of this year’s fiscal story. Greater than expected increases in tax revenues both from corporations and individuals mean the budget’s reliance on funding from Japanese government bond issuance fell to 35.6...

    6
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Bridging India’s Financing Gap

    India’s shoddy infrastructure is the stuff of legend. Ranked 87th in the World Economic Forum’s infrastructure quality index, much of it would not look out of place in sub-Saharan Africa. Mumbai’s rickety old airport, famous for its frequent delays and scuttling rats, once told visitors everything they needed to know. Yet the city’s sleek and airy new terminal presents a fresh image: five times bigger than the old airport, it is clean, efficient...

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

    Gavekal Dragonomics

    No Worries From China's Rebalancing?

    For a country that gained so much from China’s commodity boom, Australia seems quite sanguine about the bust. Mining investment may be falling, but optimism on tourism is rising. So has Australia already switched from the old commodity-driven to the new consumer-driven China? And will this rebalancing also be painless for the rest of the world?

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

    Gavekal Research

    Dollar Liquidity And Its Dependents

    One of our long-standing rules of thumb has been that a deteriorating US trade balance is good news for the rest of the world, and especially for emerging markets. It is thus a positive sign that the ex-energy, ex-China trade balance shifted from surplus to a deficit in 2015, sending US$150bn to the world outside of China and the oil exporters. The overall trade balance is likely to continue worsening through late 2017, thanks to the lagged...

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

    Gavekal Research

    The Upside In India

    The biggest immediate problem is that corporate India is not investing. Private businesses are over-leveraged and economic demand is weak. Hamstrung by US$130bn of bad loans, India’s state banks aren’t lending. The government has made little headway on the long-running debate over how to clean up their overstretched balance sheets.

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

    Gavekal Research

    The Yen And Hard Truths

    The renewed “risk-on” moves of recent weeks has seen a vicious rebound in commodity prices, renewed stability in credit markets and, notably, a decline in the euro, which has fallen back to its early year level against the US dollar. The big outlier in these moves is the Japanese yen, which has become the new strong man of the currency world.

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

    Gavekal Research

    Not Yet The Buy Of A Lifetime

    With emerging market equities up 13% over the last three weeks, and outstripping developed markets over the year to date, the notion is gaining traction that after four years of underperformance emerging markets are now “the buy of a lifetime”. Investors should be cautious. While it is indeed possible that emerging markets could continue to rally over the next few months as the US dollar tops out and commodity prices stabilize, the longer term...

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

    Gavekal Research

    The Avoidance Of Debt Traps

    Yesterday saw Asia’s two big emerging economies adjust economic settings to deal with their respective debt problems. China cut the required reserve ratio that banks must hold by 50bp and India’s government rolled out a cautious budget. Both countries' actions, while different in nature, reflect sensible responses to testing circumstances.

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

    Gavekal Research

    The Gavekal Monthly: Nothing To Fear But Fear Itself

    February saw some stability return to markets as investors got more comfortable with China’s currency policy and became less convinced that the Federal Reserve made a fatal mistake in December by raising interest rates. In this edition of the Gavekal Monthly Anatole assesses the big worries for global investors, while other writers focus on the burning currency questions in the major economic regions.

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

    Gavekal Research

    Video: On India's Growth

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

    Gavekal Research

    No More Curve To Roll Down

    Since the Bank of Japan introduced a negative deposit rate on January 30, Japanese bank shares have collapsed, falling -21% in yen terms and -15% in US dollars. The first question to ask is this: why were Japanese bank shares derated so dramatically after the policy change? Here are a few explanations, which are not mutually exclusive:

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

    Gavekal Research

    More Power To India

    India’s economic expansion is being retarded by an impaired banking system whose non-performing loan ratio, depending on your methodology, is as high as 12%. The biggest contributor to this bad debt mound is the country’s power sector which accounts for about 10% of bank credit (INR6trn) and 20% of “stressed” loans. The irony is that fast growing India—which currently uses about 1010kWh of power per head versus a global average of about 3000kWh—...

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

    Gavekal Research

    Japan’s Point Of No Return

    On January 29 the BoJ destabilized Japan's market equilibrium with a poorly communicated shift to negative interest rates. The message received by the market was that Governor Haruhiko Kuroda was making a desperate gamble with the suggestion that the BoJ’s quantitative-easing strategy had run up against key limits.

    0
Show me: results