Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Macroeconomics

<div class="content-highlight"><p><strong><em>The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors.</em></strong></p></div><p><strong><em> </em></strong></p><p>We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.</p><p>We see the following evidence in our analysis:</p><p> </p><ul><li><div class="content-highlight">The failure of some…</div></li></ul>

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors. We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: The failure of some…

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

<p><em>Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.</em></p>

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<div>In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.</div><ul>
<li>Slower growth of the working age population (which is largely baked in).</li>
<li>Urbanisation to continue albeit at a more gradual pace.</li>
<li>The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…</li>
</ul>

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.
Slower growth of the working age population (which is largely baked in).
Urbanisation to continue albeit at a more gradual pace.
The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…


Thematic (Sector/Industry)

<ul><li>Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.</li></ul><ul><li>In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.</li><li>Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.</li></ul>

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

<p>The market is firmly expecting another rate cut from the RBA at today&rsquo;s Board meeting. The domestic data flow has not delivered any large negative surprises, but the key swing factor over the past month appears to have been the 25% slide in the iron ore price, reflecting lower steel demand associated with renewed weakness in Chinese housing markets but also a lift in expected future iron ore production. Importantly, short-term gyrations in volatile commodity markets are unlikely to sway the RBA, nor does the the slide in the iron ore price provide a positive narrative to ease monetary policy. The RBA has plenty of scope to cut interest rates: the economy remains stuck in a nominal recession, revenue conditions are subdued, there is still considerable slack in the labour market, growth in private sector wages has reached a record low and the inflation outlook does not pose an obstacle to another rate cut.&nbsp;&nbsp; But the central bank will likely wait for another month.</p>

The market is firmly expecting another rate cut from the RBA at today&rsquo;s Board meeting. The domestic data flow has not delivered any large negative surprises, but the key swing factor over the past month appears to have been the 25% slide in the iron ore price, reflecting lower steel demand associated with renewed weakness in Chinese housing markets but also a lift in expected future iron ore production. Importantly, short-term gyrations in volatile commodity markets are unlikely to sway the RBA, nor does the the slide in the iron ore price provide a positive narrative to ease monetary policy. The RBA has plenty of scope to cut interest rates: the economy remains stuck in a nominal recession, revenue conditions are subdued, there is still considerable slack in the labour market, growth in private sector wages has reached a record low and the inflation outlook does not pose an obstacle to another rate cut.&nbsp;&nbsp; But the central bank will likely wait for another month.

Another line ball decision for the RBA, but expect no change in April

Australia

Alumina Limited is an Australian resource company that produces alumina.  The Company owns about 40% of Alcoa World Alumina and Chemicals through a joint venture with Alcoa.

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Alumina Ltd (AWC AU)

Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Domestic Australian factors are being overshadowed by global developments. These global drivers account for both its rapid rebound over the last...

Greg Gibbs

RBA Downbeat on Commodity Price Outlook

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further,...

Sam Ferraro

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards...

Sam Ferraro

Another line ball decision for the RBA, but expect no change in April

The market is firmly expecting another rate cut from the RBA at today’s Board meeting. The domestic data flow has not delivered any large negative...

Sam Ferraro

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