Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

<p>It is not official yet. But against many odds it looks like Trump has taken it.  There are many implications we need to act on in our portfolios. ... </p><p>I didn’t think he’d manage it. His indiscretions seemed too large, his gaffes too many. But what we saw, with some 1+m Trump win of the popular vote, was the forgotten rural Americans voting anti-Clinton in greater numbers than expected, particularly in Blue Belt (Rust Belt) areas of the US Center. All while doing what Trump said he would do in…</p>

It is not official yet. But against many odds it looks like Trump has taken it.  There are many implications we need to act on in our portfolios. ... I didn’t think he’d manage it. His indiscretions seemed too large, his gaffes too many. But what we saw, with some 1+m Trump win of the popular vote, was the forgotten rural Americans voting anti-Clinton in greater numbers than expected, particularly in Blue Belt (Rust Belt) areas of the US Center. All while doing what Trump said he would do in…

Against [Official] Odds It's a Trump USA Now

China Macroeconomics & Academia

Christopher Balding

Macroeconomics

<p>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.</p><p>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.</p>

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

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

<ul>
<li><div style="text-align: justify;"><span lang="EN-US">I’ve been highlighting since mid-year a likely normalization of bond yields (and equity proxy multiples) from extreme valuation levels which were discounting recession/deflation fears</span></div></li>
<li><div style="text-align: justify;"><span lang="EN-US">The data suggests the opposite risk - the global composite PMI is now at its highest level of the year, with broad based improvement in October.</span></div></li>
<li><div style="text-align: justify;">
<span lang="EN-US">The earnings yield outlook for equities is rapidly improving – the MSCI AC net earnings revisions ratio looks set to turn positive, having been at a post 2008 low of</span>…</div></li>
</ul>


I’ve been highlighting since mid-year a likely normalization of bond yields (and equity proxy multiples) from extreme valuation levels which were discounting recession/deflation fears
The data suggests the opposite risk - the global composite PMI is now at its highest level of the year, with broad based improvement in October.

The earnings yield outlook for equities is rapidly improving – the MSCI AC net earnings revisions ratio looks set to turn positive, having been at a post 2008 low of…


Global Equity Earnings Revisions Rebound, Can Macau Casino Revenues?

Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/015/810/original/ChartForeignInvestor.png?1478147665" class="editor-image img-responsive" data-smartkarma-image-id="15810"></figure><div class="content-caption">Foreign Investors are Top Shareholders (Source: JPX)</div><h2>Summary</h2><p>Foreign investors now form the largest cohort of investors in Japanese stocks, according to Tokyo Stock Exchange data.  Yet given Japan's deflationary dynamic, Japanese equities have demonstrated a tendency to disappoint investors in terms of Return on Equity.  "Why Hold Japan?" is a question that recurs among investors - in particular during cyclical downturns. Although there remains a degree of confidence in "Abenomics", uncertainty in…</p>

Foreign Investors are Top Shareholders (Source: JPX)SummaryForeign investors now form the largest cohort of investors in Japanese stocks, according to Tokyo Stock Exchange data.  Yet given Japan's deflationary dynamic, Japanese equities have demonstrated a tendency to disappoint investors in terms of Return on Equity.  "Why Hold Japan?" is a question that recurs among investors - in particular during cyclical downturns. Although there remains a degree of confidence in "Abenomics", uncertainty in…

Why Hold Japan, Part I: Relative Tax Regimes

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.
​
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.

<p>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>.</p><p>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).</p><p>Coming five months…</p>

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…

Japan

Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.

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Mizuho Financial Group (8411 JP)

Against [Official] Odds It's a Trump USA Now

It is not official yet. But against many odds it looks like Trump has taken it. There are many implications we need to act on in our portfolios....

Charles De Trenck

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

Global Equity Earnings Revisions Rebound, Can Macau Casino Revenues?

I’ve been highlighting since mid-year a likely normalization of bond yields (and equity proxy multiples) from extreme valuation levels which were...

Sean Maher

Why Hold Japan, Part I: Relative Tax Regimes

SummaryForeign investors now form the largest cohort of investors in Japanese stocks, according to Tokyo Stock Exchange data. Yet given Japan's...

Naomi Fink

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

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