ASEAN (Indo) & China-focused. Ex-Deputy HoR UBS.

Johannes Salim, CFA

Thematic (Sector/Industry)

<ul><li>With the US trade deficit with China dwarfing those with other countries (including ASEAN), US-China trade negotiation will come front and center shortly.</li><li>Our base case scenario is the middle ground between full-blown trade war and friendly trade negotiation scenarios. </li><li>We recommend shorting Renminbi (Rmb) currency to play US protectionism theme.</li><li>In the full-blown trade war scenario, there is no hiding place for equity investors, in our opinion.</li></ul>

With the US trade deficit with China dwarfing those with other countries (including ASEAN), US-China trade negotiation will come front and center shortly.Our base case scenario is the middle ground between full-blown trade war and friendly trade negotiation scenarios. We recommend shorting Renminbi (Rmb) currency to play US protectionism theme.In the full-blown trade war scenario, there is no hiding place for equity investors, in our opinion.

Asia Market Strategy: What Does US Protectionism Mean to China and ASEAN?

Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

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

<ul><li>The Chinese economy further cemented its nascent stabilisation on the back of a more buoyant housing market and domestic demand. The economy expanded 6.8% in 4Q16 and clocked in full-year growth of 6.7%. The export outlook is also brighter while credit conditions are likely to be tightened in the year ahead in order to rein in financial risks.</li><li>The respectable growth rate achieved in 2016 was attained on the back of traditional growth engines and unsustainable policy levers. Restructuring efforts need to take place swiftly to ensure that economic growth in the years ahead are of higher quality and greater sustainability. Structural reforms are indeed painful, but sorely needed to move the economy onto the next phase of development.</li><li>Yet, politics loom large. The looming 19th Party Congress will likely crimp reformist zeal as party leaders strive to ensure social stability. A hawkish Trump Administration could also spark a trade war, denting economic growth and impinging on the space for reforms.</li></ul>

The Chinese economy further cemented its nascent stabilisation on the back of a more buoyant housing market and domestic demand. The economy expanded 6.8% in 4Q16 and clocked in full-year growth of 6.7%. The export outlook is also brighter while credit conditions are likely to be tightened in the year ahead in order to rein in financial risks.The respectable growth rate achieved in 2016 was attained on the back of traditional growth engines and unsustainable policy levers. Restructuring efforts need to take place swiftly to ensure that economic growth in the years ahead are of higher quality and greater sustainability. Structural reforms are indeed painful, but sorely needed to move the economy onto the next phase of development.Yet, politics loom large. The looming 19th Party Congress will likely crimp reformist zeal as party leaders strive to ensure social stability. A hawkish Trump Administration could also spark a trade war, denting economic growth and impinging on the space for reforms.

China: Restructuring Efforts Key to Long-Term Growth but Political Factors Also in Play

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

Riedel provides equity research and analysis to leading financial organizations. By becoming members of a region (Asia, Latin America, Emerging Europe or Global), organizations have access to an integrated set of services including:

Regular company coverage reports
Up-to-date investment decision advice (buy, hold, sell)
Monthly regional and global conference calls
Customized company reports and unlimited on-line access to the program's services.

Riedel provides research coverage of companies across the full range of market capitalization. Experienced research professionals in each market develop company reports and analysis as well as earnings models and projections. Ratings are Buy, Hold and Sell with a focus on compelling investment ideas - both long and short. Downloadable, dynamic earnings models are built to facilitate sensitivity analysis.

Please feel free to contact us for complimentary access to our written research.  We want to show you that our unique research flow can add value and help develop a long-term, high value-add relationship.

Riedel's model focuses on providing clients with unique insights and consulting in addition to unlimited access to all produced research This model allows members to receive exponential benefits for their retainer fees.

GCSI Rises In December but Increased Polarization Predicts Volatility in 2017<ul><li class="li2">In December the RRG Global Consumer Sentiment Index (GCSI) increased slightly to a level of .53, up from .5 in November and above the average reading of 0.37 for the first 11 months of the year.</li></ul><ul>
<li class="li2">Upward momentum in the GCSI has been enough to offset concern about rising inflation and the uncertainty of the Trump presidency in the U.S. set to begin Jan 20th.</li>
<li class="li2">
US dollar strength since Trump’s election in November dampened…</li>
</ul>

GCSI Rises In December but Increased Polarization Predicts Volatility in 2017In December the RRG Global Consumer Sentiment Index (GCSI) increased slightly to a level of .53, up from .5 in November and above the average reading of 0.37 for the first 11 months of the year.
Upward momentum in the GCSI has been enough to offset concern about rising inflation and the uncertainty of the Trump presidency in the U.S. set to begin Jan 20th.

US dollar strength since Trump’s election in November dampened…


Global Consumer Sentiment Strong in Dec but Troubling Patterns Risk Volatility in 2017

<ul>
<li>In December the MNI China Consumer Sentiment Indicator (CSI) increased to a level of 116.6 , just above the threshold of 116 indicating consumers are ‘Rationally Pessimistic’. </li>
<li>Consumer Sentiment has been fluctuating at a low level in recent years and continues this trend. </li>
<li>Nearly half of respondents say that they expect prices to be up by between 6% and 9% in a year.  This would be a surprisingly high level of inflation given that recent CPI reports have been in the 1.9% - 2.3% range. </li>
<li>Nearly 10%…</li>
</ul>


In December the MNI China Consumer Sentiment Indicator (CSI) increased to a level of 116.6 , just above the threshold of 116 indicating consumers are ‘Rationally Pessimistic’. 
Consumer Sentiment has been fluctuating at a low level in recent years and continues this trend. 
Nearly half of respondents say that they expect prices to be up by between 6% and 9% in a year.  This would be a surprisingly high level of inflation given that recent CPI reports have been in the 1.9% - 2.3% range. 
Nearly 10%…


China Consumers Are Concerned About 6% - 9% Inflation and a Much Worse Employment Outlook

CHINA - Healthcare, Steel, Autos, Education, Research From Beijing

Scott Laprise/ 乐天虎

CHINA - Healthcare, Steel, Autos, Education

<ul>
<li>Trump will likely do little to hurt China except negotiate.</li>
<li>
China direct investments in US will slow dramatically in 2017.
</li>
<li>Policies helping Apple with big subsidies will go away impacting foreign companies in China – focus will be made in China only.</li>
<li>Exports to the US will shrink fast and imports into China will rise with the US making iPhones – China will lose a tiny assembly %.</li>
<li>US influence in Asia will fall with Trump government, good for China and its interests.</li>
<li>
China becoming new champion of…</li>
</ul>


Trump will likely do little to hurt China except negotiate.

China direct investments in US will slow dramatically in 2017.

Policies helping Apple with big subsidies will go away impacting foreign companies in China – focus will be made in China only.
Exports to the US will shrink fast and imports into China will rise with the US making iPhones – China will lose a tiny assembly %.
US influence in Asia will fall with Trump government, good for China and its interests.

China becoming new champion of…


CHINA - A Look into 2017 - A Year for Volatility – Part II

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)

Asia Market Strategy: What Does US Protectionism Mean to China and ASEAN?

With the US trade deficit with China dwarfing those with other countries (including ASEAN), US-China trade negotiation will come front and center...

Johannes Salim, CFA

China: Restructuring Efforts Key to Long-Term Growth but Political Factors Also in Play

The Chinese economy further cemented its nascent stabilisation on the back of a more buoyant housing market and domestic demand. The economy...

Manu Bhaskaran

Global Consumer Sentiment Strong in Dec but Troubling Patterns Risk Volatility in 2017

GCSI Rises In December but Increased Polarization Predicts Volatility in 2017In December the RRG Global Consumer Sentiment Index (GCSI) increased...

David Riedel

China Consumers Are Concerned About 6% - 9% Inflation and a Much Worse Employment Outlook

In December the MNI China Consumer Sentiment Indicator (CSI) increased to a level of 116.6 , just above the threshold of 116 indicating consumers...

David Riedel

CHINA - A Look into 2017 - A Year for Volatility – Part II

Trump will likely do little to hurt China except negotiate. China direct investments in US will slow dramatically in 2017. Policies helping...

Scott Laprise/ 乐天虎