China Macroeconomics & Academia

Christopher Balding

Macroeconomics

It is frequently said that trying to trade politics is a fools errand, but it does impact the macro-economic direction.  Yesterday, China announced Finance Minister Lou Jiwei would be stepping down in favor of Xiao Jie who managed the tax administration department within the Ministry of Finance.We remain skeptical as to the state of the Chinese economy, not just when focused on public finances, but due to industrial policy.  For instance, debt for equity swap appears poorly conceived and failing to address the fundamental problems.  Coupled with state owned enterprise mergers that make inefficient firms even larger while remaining inefficient fail to inspire confidence.

It is frequently said that trying to trade politics is a fools errand, but it does impact the macro-economic direction.  Yesterday, China announced Finance Minister Lou Jiwei would be stepping down in favor of Xiao Jie who managed the tax administration department within the Ministry of Finance.We remain skeptical as to the state of the Chinese economy, not just when focused on public finances, but due to industrial policy.  For instance, debt for equity swap appears poorly conceived and failing to address the fundamental problems.  Coupled with state owned enterprise mergers that make inefficient firms even larger while remaining inefficient fail to inspire confidence.

What Is the Impact of Chinese Finance Ministry Reshuffle

EM PM, Ecstrat

Emad Mostaque

EM PM

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.

Thematic (Sector/Industry)

Yesterday's high court ruling stating that parliament must have a say before any triggering of Article 50 to start the process for Britain to leave the EU puts us at point 7 in my <a href="https://www.smartkarma.com/insights/the-path-to-no-brexit" target="_blank">path to no Brexit</a>.The reaction from the pro-Brexit press and prominent individuals has been sharp, from declaring the judges in question as enemies of the nation (The Daily Mail) to saying this is the darkest day for the UK since World War II and for readers to fight, fight, fight (The Daily Express).Coming five months…

Yesterday's high court ruling stating that parliament must have a say before any triggering of Article 50 to start the process for Britain to leave the EU puts us at point 7 in my path to no Brexit.The reaction from the pro-Brexit press and prominent individuals has been sharp, from declaring the judges in question as enemies of the nation (The Daily Mail) to saying this is the darkest day for the UK since World War II and for readers to fight, fight, fight (The Daily Express).Coming five months…

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

There are about 10 items on the DBS website, related to new disclosure. The last one is almost always the most important. There is far too much noise in statements and other presentations, where the numbers, by contrast, are clinical and clear. We are not sure how the concept of resilience comes to the fore for DBS when characterizing the quarter, where its bad loan ratio in Singapore rose by 50% in just three months and it saw another S$1.1bn in total bad loans?Despite the magnitude of the…

There are about 10 items on the DBS website, related to new disclosure. The last one is almost always the most important. There is far too much noise in statements and other presentations, where the numbers, by contrast, are clinical and clear. We are not sure how the concept of resilience comes to the fore for DBS when characterizing the quarter, where its bad loan ratio in Singapore rose by 50% in just three months and it saw another S$1.1bn in total bad loans?Despite the magnitude of the…

There is no blow-out in NPLs or credit costs at OCBC, and earnings are not a disaster. But we do not believe that all is as well as it may appear on the surface. A closer look at its own disclosure and NPL distribution is our first point of focus.In slide 22 of OCBC’s 3Q16 release it outlines its oil &amp; gas and commodities exposure.  We reproduce this slide for your convenience, with our points of interest highlighted. In the case of oil &amp; gas NPLs, its footnote that says ‘more than half are…

There is no blow-out in NPLs or credit costs at OCBC, and earnings are not a disaster. But we do not believe that all is as well as it may appear on the surface. A closer look at its own disclosure and NPL distribution is our first point of focus.In slide 22 of OCBC’s 3Q16 release it outlines its oil &amp; gas and commodities exposure.  We reproduce this slide for your convenience, with our points of interest highlighted. In the case of oil &amp; gas NPLs, its footnote that says ‘more than half are…

OCBC's Disclosure of NPLs and Distribution Is of Interest

Amareos

Ryan Shea

As any parent will confirm, teenagers know one thing. Unfortunately, it is “every”-thing. The rest of the population, by contrast, recognizes and appreciates the complexity of the world in which we inhabit, all the uncertainty that this necessarily generates, and the associated risks.Borrowing the lexicon of Donald Rumsfeld, there are two types of risk that we regularly encounter: unknown-unknowns and known-unknowns. As investors we can’t do much about the former, but we can do something about the latter. Indeed, this is the bread and butter of risk managers around the world.Crowd-sourced sentiment indicators provide a new additional tool for investors to monitor and assess a wide variety of financial market risks.  In this note, we demonstrate their applicability before going on to assess the short-run and long-run risks for US equities; particularly pertinent given two substantial known-unknowns looming on the near-horizon, namely the US Presidential election campaign and the upcoming FOMC meetings.

As any parent will confirm, teenagers know one thing. Unfortunately, it is “every”-thing. The rest of the population, by contrast, recognizes and appreciates the complexity of the world in which we inhabit, all the uncertainty that this necessarily generates, and the associated risks.Borrowing the lexicon of Donald Rumsfeld, there are two types of risk that we regularly encounter: unknown-unknowns and known-unknowns. As investors we can’t do much about the former, but we can do something about the latter. Indeed, this is the bread and butter of risk managers around the world.Crowd-sourced sentiment indicators provide a new additional tool for investors to monitor and assess a wide variety of financial market risks.  In this note, we demonstrate their applicability before going on to assess the short-run and long-run risks for US equities; particularly pertinent given two substantial known-unknowns looming on the near-horizon, namely the US Presidential election campaign and the upcoming FOMC meetings.

Singapore

DBS Group Holdings Limited and its subsidiaries provide a variety of financial services.  The Company offers services including mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage .  DBS Group also acts as the primary dealer in Singapore government securities.

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DBS (DBS SP)

What Is the Impact of Chinese Finance Ministry Reshuffle

It is frequently said that trying to trade politics is a fools errand, but it does impact the macro-economic direction. Yesterday, China announced...

Christopher Balding

Brexit: Judgement Versus Obedience

Yesterday's high court ruling stating that parliament must have a say before any triggering of Article 50 to start the process for Britain to leave...

Emad Mostaque

Another S$1.1bn of New NPLs at DBS

There are about 10 items on the DBS website, related to new disclosure. The last one is almost always the most important. There is far too much...

Daniel Tabbush

OCBC's Disclosure of NPLs and Distribution Is of Interest

There is no blow-out in NPLs or credit costs at OCBC, and earnings are not a disaster. But we do not believe that all is as well as it may appear...

Daniel Tabbush

Risk: Dealing With Known-Unknowns

As any parent will confirm, teenagers know one thing. Unfortunately, it is “every”-thing. The rest of the population, by contrast, recognizes and...

Amareos

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