Asian Economist

Kok Peng Chan

Cross Asset Strategy

<ul>
<li>China’s bank-centric funding model is an under-reported risk that appears to be lost amidst the current rally in Chinese stocks</li>
<li>While it powered China’s investment boom previously, this model now misallocates capital, warehouses property losses on bank balance sheets, blunts PBoC easing, prolongs deflation risks and echoes Japan-style balance-sheet stagnation</li>
<li>Without credible bank clean-up and a shift toward bond, equity and REIT funding, China’s rally risks remaining tactical rather than structural. The current rally does not signal a multi-year bull-run</li>
</ul>


China’s bank-centric funding model is an under-reported risk that appears to be lost amidst the current rally in Chinese stocks
While it powered China’s investment boom previously, this model now misallocates capital, warehouses property losses on bank balance sheets, blunts PBoC easing, prolongs deflation risks and echoes Japan-style balance-sheet stagnation
Without credible bank clean-up and a shift toward bond, equity and REIT funding, China’s rally risks remaining tactical rather than structural. The current rally does not signal a multi-year bull-run


China’s Bank-Centric Funding: An Under-Reported Risk

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>China's trade surplus soared to US$1.17trn in the 12 months to Aug'25. Yet FX reserves, despite mild monthly improvements, are flat relative to Sep'24, implying continued massive capital flight. </li>
<li>FAI for Jan-Aug'25 rose 0.5%YoY (vs 1.6%YoY for Jan-Jul'25), implying FAI declined 7.2%YoY in Aug'25. Even non-property FAI declined 3.5%YoY in Aug'25, while property FAI declined 19.1%YoY that month.  </li>
<li>Persistent PPI deflation (35 consecutive months) has caused CPI deflation for 5 of the last 8 months. As re-exports via Mexico/ASEAN become costlier, China's real GDP will grow &lt;3%YoY Oct'25-Jun'26.</li>
</ul>


China's trade surplus soared to US$1.17trn in the 12 months to Aug'25. Yet FX reserves, despite mild monthly improvements, are flat relative to Sep'24, implying continued massive capital flight. 
FAI for Jan-Aug'25 rose 0.5%YoY (vs 1.6%YoY for Jan-Jul'25), implying FAI declined 7.2%YoY in Aug'25. Even non-property FAI declined 3.5%YoY in Aug'25, while property FAI declined 19.1%YoY that month.  
Persistent PPI deflation (35 consecutive months) has caused CPI deflation for 5 of the last 8 months. As re-exports via Mexico/ASEAN become costlier, China's real GDP will grow &lt;3%YoY Oct'25-Jun'26.


China: Still on the Edge of a Financial Precipice, Kept Afloat by US Distraction

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>With a 5-week rally <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is in overbought territory and quantitative models flag potential for a pullback.</li>
<li>Options may be underpricing the downside risk, creating an attractive opportunity to buy cheap options with high payoff potential.</li>
<li>This Insight outlines an option strategy combining quantitative signals with volatility analysis.</li>
</ul>


With a 5-week rally China Mobile (941 HK) is in overbought territory and quantitative models flag potential for a pullback.
Options may be underpricing the downside risk, creating an attractive opportunity to buy cheap options with high payoff potential.
This Insight outlines an option strategy combining quantitative signals with volatility analysis.


China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside

<ul>
<li>TSF increased by a record RMB15.18trn (US$2.09trn) in Q12025, enabling industrial growth of 6.5%YoY, FAI growth of 4.2%YoY, retail sales growth of 4.6%YoY and real GDP growth of 5.4%YoY. </li>
<li>Slumping imports and 7.5%YoY growth in exports in Q1/2025 took the 12m-rolling trade surplus to US$1.08trn in Mar'25, but FX reserves declined slightly YoY, suggesting persistence of colossal capital flight.</li>
<li>Producer prices have deflated for 5 of the past 10 years, including all 30 latest months (-2.5%YoY Mar'25). Tariff barriers will prevent exporting overcapacity, thereby exacerbating deflation, hastening financial crises. </li>
</ul>


TSF increased by a record RMB15.18trn (US$2.09trn) in Q12025, enabling industrial growth of 6.5%YoY, FAI growth of 4.2%YoY, retail sales growth of 4.6%YoY and real GDP growth of 5.4%YoY. 
Slumping imports and 7.5%YoY growth in exports in Q1/2025 took the 12m-rolling trade surplus to US$1.08trn in Mar'25, but FX reserves declined slightly YoY, suggesting persistence of colossal capital flight.
Producer prices have deflated for 5 of the past 10 years, including all 30 latest months (-2.5%YoY Mar'25). Tariff barriers will prevent exporting overcapacity, thereby exacerbating deflation, hastening financial crises. 


China: Tariff Walls to Exacerbate Capital Flight, Deflation, Over-Capacity Challenges

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Thematic (Sector/Industry)

<ul>
<li>Indian equities have seen a broad-based correction, with the Nifty-50 down ~16% from its peak, driven by weak earnings, heavy FII outflows, and global uncertainty. </li>
<li>However, multiple indicators—from easing valuations and supportive policies to an expected earnings rebound—suggest the correction may be nearing its end. </li>
<li>This blog explores past correction trends and key signals pointing to a potential market reversal in FY26.</li>
</ul>


Indian equities have seen a broad-based correction, with the Nifty-50 down ~16% from its peak, driven by weak earnings, heavy FII outflows, and global uncertainty. 
However, multiple indicators—from easing valuations and supportive policies to an expected earnings rebound—suggest the correction may be nearing its end. 
This blog explores past correction trends and key signals pointing to a potential market reversal in FY26.


Charted Insights: A Deeper Look into Indian Market’s Historical Corrections

China

The MSCI China Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1992.

MSCI China Index (MXCN INDEX)

China’s Bank-Centric Funding: An Under-Reported Risk

While a bank-centric funding model with a tightly run economy precludes a financial collapse, it prolongs the adjustment cycle. The current rally...

Kok Peng Chan

China: Still on the Edge of a Financial Precipice, Kept Afloat by US Distraction

Japanification is accelerating: PPI deflating for 35 consecutive months, CPI for 5 of the last 8 months. FAI is contracting. As re-exports via...

Prasenjit K. Basu

China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside

China Mobile (941 HK) is overbought and may see a pullback, creating an opportunity to buy cheap options with high payoff potential.

Gaudenz Schneider

China: Tariff Walls to Exacerbate Capital Flight, Deflation, Over-Capacity Challenges

Record rise in TSF drove strong 1Q2025 industrial & GDP growth. Trade surplus US$1.08trn in year to Mar'25, but FX reserves flat, indicating...

Prasenjit K. Basu

Charted Insights: A Deeper Look into Indian Market’s Historical Corrections

Indian equities have experienced a significant correction due to weak earnings, FII outflows, and global uncertainty, but indicators suggest a...

Nimish Maheshwari

China’s Bank-Centric Funding: An Under-Reported Risk

While a bank-centric funding model with a tightly run economy precludes a financial collapse, it prolongs the adjustment cycle. The current rally...

Kok Peng Chan

China: Still on the Edge of a Financial Precipice, Kept Afloat by US Distraction

Japanification is accelerating: PPI deflating for 35 consecutive months, CPI for 5 of the last 8 months. FAI is contracting. As re-exports via...

Prasenjit K. Basu

China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside

​China Mobile (941 HK) is overbought and may see a pullback, creating an opportunity to buy cheap options with high payoff potential.

Gaudenz Schneider

China: Tariff Walls to Exacerbate Capital Flight, Deflation, Over-Capacity Challenges

​Record rise in TSF drove strong 1Q2025 industrial & GDP growth. Trade surplus US$1.08trn in year to Mar'25, but FX reserves flat, indicating...

Prasenjit K. Basu

Charted Insights: A Deeper Look into Indian Market’s Historical Corrections

​Indian equities have experienced a significant correction due to weak earnings, FII outflows, and global uncertainty, but indicators suggest a...

Nimish Maheshwari

China Mobile (941 HK) is overbought and may see a pullback, creating an opportunity to buy cheap options with high payoff potential.

Record rise in TSF drove strong 1Q2025 industrial & GDP growth. Trade surplus US$1.08trn in year to Mar'25, but FX reserves flat, indicating...

Indian equities have experienced a significant correction due to weak earnings, FII outflows, and global uncertainty, but indicators suggest a...