Economist, Centennial Asia Advisors

Jason Tan

Economist

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

Economy may be finding its feetEven as we await GDP figures that is set to be released on Tuesday (19 Jan), the Chinese economy looks to be showing signs of stabilisation.<ul>
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Trade declines steadying: Exports declined 1.4% y/y in Dec 15, from -3.0% y/y fall in Nov 15. Import contraction also improved to -7.6% y/y in Dec 15 from -15.1% y/y in Nov 15.</li>
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Monetary indicators show policy easing is working: M2 money supply grew robustly by 13.3% y/y in Dec 15, slightly slower than 13.7% y/y in Nov 15 while…</li>
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Economy may be finding its feetEven as we await GDP figures that is set to be released on Tuesday (19 Jan), the Chinese economy looks to be showing signs of stabilisation.

Trade declines steadying: Exports declined 1.4% y/y in Dec 15, from -3.0% y/y fall in Nov 15. Import contraction also improved to -7.6% y/y in Dec 15 from -15.1% y/y in Nov 15.

Monetary indicators show policy easing is working: M2 money supply grew robustly by 13.3% y/y in Dec 15, slightly slower than 13.7% y/y in Nov 15 while…


China: Policymakers to Focus on Supply-Side Reforms

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.

Despite another bad day on the Chinese stock market on Monday, China used its currency fix, jawboning and possibly intervention to calm volatility in the CNY exchange rate.  This provided some calm to global markets.  A statement by a PBoC official discussing CNY policy appealed for calm but also highlighted a more flexible approach to currency management.  Below we look at the parallels with the Australian experience in the late 1970s and early 1980s as it moved from a peg to the USD to a crawling peg guided by its trade-weighted index and market forces, and eventually to a floating regime in 1983.  Financial and capital control deregulation go hand in hand and once started create their own-momentum.  China’s policy actions over recent years have illustrated this self-perpetuating catalytic effect.  China is likely to continue its reform process and experiment with increasing currency flexibility over coming years, even if at times it may appear to take backward steps to cool depreciation pressure and calm its own and global financial markets. While this is a sensible policy to put the economy on a path to longer term stability, in the meantime it is likely to add to global market uncertainty and a weaker growth path for China.

Despite another bad day on the Chinese stock market on Monday, China used its currency fix, jawboning and possibly intervention to calm volatility in the CNY exchange rate.  This provided some calm to global markets.  A statement by a PBoC official discussing CNY policy appealed for calm but also highlighted a more flexible approach to currency management.  Below we look at the parallels with the Australian experience in the late 1970s and early 1980s as it moved from a peg to the USD to a crawling peg guided by its trade-weighted index and market forces, and eventually to a floating regime in 1983.  Financial and capital control deregulation go hand in hand and once started create their own-momentum.  China’s policy actions over recent years have illustrated this self-perpetuating catalytic effect.  China is likely to continue its reform process and experiment with increasing currency flexibility over coming years, even if at times it may appear to take backward steps to cool depreciation pressure and calm its own and global financial markets. While this is a sensible policy to put the economy on a path to longer term stability, in the meantime it is likely to add to global market uncertainty and a weaker growth path for China.

Parallels with China's Currency Regime and Australia Before the AUD Float in 1983

Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

<ul><li>Unfavourable economic reports and unpredictable policy moves in China over the past week have sent markets into a frenzy; equities and currencies have tumbled freely on a global scale. Is the slowdown in China worse than expected? Do policymakers have a coherent policy direction?</li></ul>

Unfavourable economic reports and unpredictable policy moves in China over the past week have sent markets into a frenzy; equities and currencies have tumbled freely on a global scale. Is the slowdown in China worse than expected? Do policymakers have a coherent policy direction?

China: No Net Gain from a Major Currency Devaluation

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.

Since the devaluation of the Chinese Yuan in August, the US dollar has appreciated by over 6% against the currency, with the PBOC undertaking a further devaluation most recently on January 6th (see chart).<img src="https://static-prod.smartkarma.com/images/media/000/004/899/original/WhatUMissed-CNYshortTerm.jpg?1452376886" class="img-responsive" data-smartkarma-image-id="4899"> The adverse impact the devaluation has had on global financial markets reflects the signalling effect; in much the same way that a cut to dividends signals to investors that the insiders are concerned about a company’s future growth prospects, market participants have inferred from the…

Since the devaluation of the Chinese Yuan in August, the US dollar has appreciated by over 6% against the currency, with the PBOC undertaking a further devaluation most recently on January 6th (see chart). The adverse impact the devaluation has had on global financial markets reflects the signalling effect; in much the same way that a cut to dividends signals to investors that the insiders are concerned about a company’s future growth prospects, market participants have inferred from the…

Devaluation Yes, but After Years of Strong Appreciation

Hao Wang, CFA

Thematic (Sector/Industry)

<h2>Thoughts on stock markets:</h2>After this China stock markets crash, this is my view on the China stock markets: the market will rebound in the very short term due to CSRC (who already announced to stop circuit breaker on Friday), PBoC and other regulator's intervention, but this will likely also attract continuous selling from investors.The bottom line here is that the government's top priority is stability and other political agenda, not necessarily healthy stock markets, on the other hand…

Thoughts on stock markets:After this China stock markets crash, this is my view on the China stock markets: the market will rebound in the very short term due to CSRC (who already announced to stop circuit breaker on Friday), PBoC and other regulator's intervention, but this will likely also attract continuous selling from investors.The bottom line here is that the government's top priority is stability and other political agenda, not necessarily healthy stock markets, on the other hand…

What You Need to Know About China Stock Markets

China

iShares FTSE A50 China Index ETF is an exchanged-traded fund established in Hong Kong. The investment objective of the iShares FTSE A50 China Index ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of A50 Index.

iShares FTSE/Xinhua A50 China (2823 HK)

China: Policymakers to Focus on Supply-Side Reforms

Economy may be finding its feetEven as we await GDP figures that is set to be released on Tuesday (19 Jan), the Chinese economy looks to be showing...

Jason Tan

Parallels with China's Currency Regime and Australia Before the AUD Float in 1983

Despite another bad day on the Chinese stock market on Monday, China used its currency fix, jawboning and possibly intervention to calm volatility...