What links unrest in Ukraine, the US Federal Reserve, and rising Chinese equities? The answer, quite possibly, is the Hong Kong dollar, which has been testing the limits of its US dollar peg over the past month.
The Hong Kong Monetary Authority has been forced to intervene in the market in order to maintain its 31-year old currency peg to the US dollar. It bought more than US$6bn to weaken the Hong Kong dollar in July alone - the first such move since late 2012. Continue reading »
It’s been three months since Ma Jun – sell-side economist and well-known China bull – quit the world of investment banking and moved from Deutsche Bank to the People’s Bank of China.
Now the German bank has found a replacement – poaching China bear Zhang Zhiwei from Nomura. With apparently rather divergent views on where the economy is heading, either Deutsche or Zhang is likely to be revising its forecasts pretty soon. Continue reading »
The years of periodic “will-they-won’t-they” chatter about South Korea’s potential upgrade to developed market status are over, at least for now. Index compiler MSCI has finally thrown in the towel.
But rather than bump up Korea (and Taiwan), it has instead decided to boot them off its upgrade watch list. Regardless of your view on the underlying debate, the clarity such a move offers should be welcomed. Continue reading »
Alibaba’s decision to head to the US for its blockbuster IPO – perhaps the world’s largest ever – is undoubtedly a major blow to Hong Kong’s global ambitions.
But chucking out years of hard-won progress for a single pay-day – with the risk of opening the market to myriad potential problems down the road – would have been the wrong move. Continue reading »
Southeast Asian markets have been a far better bet than China in the past few years for portfolio investors. Now the region can claim another victory over its northern neighbour – this time in foreign direct investment.
The Asean-5 (Indonesia, Malaysia, Thailand, Philippines and Singapore) together received more in FDI last year than China, according to research from Bank of American Merrill Lynch released on Wednesday. Continue reading »
These days, Jim O’Neill doesn’t bother much with “Brics” – the moniker he invented. The former Goldman strategist is more into “growth markets” instead. So – is it time for him to look more closely at the FTSE100, rather than the Bovespa?
Based on the new Bank of England projections, the UK economy is set to grow at a 3.4 per cent clip this year. Not too shabby. Less shabby still when compared with the supposedly “high growth rates” in certain parts of the emerging world. Continue reading »
Consumer stocks are in and heavy industry is out in a shake up of the two most important equity indices listed in Hong Kong.
China Mengniu, the mainland dairy producer part-owned by Danone, will join Hong Kong’s best known index, the Hang Seng 50, following a review of its constituents completed this week. Continue reading »
It’s that time of the year again where visitors to China are deafened by firecrackers, mobbed by mass ranks of red-capped tourists, and overcharged for, well, everything. The year of the slippery snake is drawing to a close, the year of the galloping (and in 2014, wooden) horse is upon us.
But it’s also when CLSA gets one of its analysts to use their feng shui compass to figure whether this year’s qi will be good or bad news for investors. Continue reading »
Guess what? Mark Mobius, chairman of Templeton Emerging Markets, is still an EM bull! He dismisses the 2013 taper tantrum as “overdone”, and says that the actual onset of tapering will prove ” not significant” to emerging markets as an asset class.
It may not come as a huge surprise to hear an EM perma-bull being bullish. But the often white-suited Mobius oversees around $50bn of assets, including Templeton’s $14bn Asian growth fund, making his views on the market worth hearing. Continue reading »
Last week, data showed that the renminbi had overtaken the euro in the world of trade finance, something we thought looked a little out of place with real trade settlement.
On Tuesday, a fresh sign of fishiness appeared, after Chinese industrial production came in below expectations. Continue reading »
An apparent fresh milestone for the renminbi arrived on Tuesday, when payments tracker Swift announced that the Chinese currency had leapfrogged the euro to become the world’s second most used trade financing currency.
However, the news is unlikely to be greeted with champagne corks by those in China’s commerce ministry hoping to see the renminbi go global. Continue reading »
Like its American counterpart, the Chinese dream remains a rather abstract idea. But that doesn’t stop the leadership in Beijing talking it up – it was a key theme during the recent party plenum.
So where better to see the dream in action than at a show home, designed to entice China’s newly-minted white-collar workers to part with piles of cash? Beyondbrics took a trip to the suburbs of Shenzhen too see how the latest in aspirational living is shaping up. Here are five things we learnt. Continue reading »
Investors can’t get enough of Cinda’s Hong Kong IPO. On Monday, day one of order taking for the Chinese bad bank, would-be shareholders put in bids of more than $10bn for only $1bn of product. And that’s before retail investors get their chance.
While it may offer a unique (for now) way of accessing China’s economic underbelly, there are some reasons why investors might want to think twice. Here are the main risks facing Cinda. Continue reading »
Initial reactions to the statement that came out of China’s third plenum can be summed up in three simple words: ‘was that it?’ Investors bemoaned the lack of details, and sent Chinese shares lower by 2 per cent on the day following the release of the document.
Fast forward to Friday, and Chinese equities are spiking. So have minds changed? Continue reading »
Predicting the outcome of any Chinese political meeting is a fool’s errand. However, investors are already trying to weed through the possible winners and losers from a whole host of possible reform measures that could come out of China’s Third Plenary Session – aka the plenum – which opens this weekend .
Here is a roundup of ten sectors in the spotlight. Continue reading »