Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>Asia is cheap relative to the US - trading at less than 40% of US's P/BV - but that's because Asia's ROE has consistently declined relative to US's.</li>
<li>Over the next couple of years Asian ROEs are forecast to revive relative to the US's but all Asian markets are not forecast to participate in this recovery.</li>
<li>The "ROE Winners" (rising forecast ROEs) are Korea, Taiwan, India, Malaysia. Indonesia to stay flat but solidly higher than Asian average. We are skeptical of HK/China and Thailand's ROE recovery.</li>
</ul>


Asia is cheap relative to the US - trading at less than 40% of US's P/BV - but that's because Asia's ROE has consistently declined relative to US's.
Over the next couple of years Asian ROEs are forecast to revive relative to the US's but all Asian markets are not forecast to participate in this recovery.
The "ROE Winners" (rising forecast ROEs) are Korea, Taiwan, India, Malaysia. Indonesia to stay flat but solidly higher than Asian average. We are skeptical of HK/China and Thailand's ROE recovery.


Asian Equities: Be Selective - Focus on The "ROE Winners"

<ul>
<li>A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. </li>
<li>Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.</li>
<li>We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. </li>
</ul>


A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. 
Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.
We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. 


Asian Equities: In Search of Earnings Estimate Uptrends

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

TSE Tokyo Price Index TOPIX / Equity Derivatives

<ul>
<li>Observing implied volatility across 16 markets plus gold provides a picture of falling implied volatility, despite dispersion in market performance.</li>
<li>Several, but not all, markets display moderation from unusual volatility levels to a more balanced implied volatility structure.</li>
<li>The realignment of implied volatility across markets presents potential relative value opportunities.</li>
</ul>


Observing implied volatility across 16 markets plus gold provides a picture of falling implied volatility, despite dispersion in market performance.
Several, but not all, markets display moderation from unusual volatility levels to a more balanced implied volatility structure.
The realignment of implied volatility across markets presents potential relative value opportunities.


EQD | Global Option Implied Volatility – Consistently Declining Volatility Amid Mixed Markets

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Taiwan Stock Exchange Weighted Index / Technical Analysis

<ul>
<li>Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.</li>
<li>We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.</li>
<li>Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.</li>
</ul>


Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.
We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.
Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.


Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

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>We expect a 12.5bp hike in the policy rate in Sep'24, as CPI inflation (2.52%YoY in Jul'24) remains well above the 2% target amid CBC concerns about overheated property markets. </li>
<li>Real GDP grew 5.1%YoY in Q2CY24, following 6.6%YoY growth in Q1 (both faster than mainland China). Exports grew 10%YoY in Jan-Jul'24, and export orders growth is at a 2-year high.</li>
<li>The market's trailing P/E ratio (23.56x) is well above its 20-year mean (19.84x). But we recommend a mild Overweight in Taiwan equities, with a focus on the largest tech stocks. </li>
</ul>


We expect a 12.5bp hike in the policy rate in Sep'24, as CPI inflation (2.52%YoY in Jul'24) remains well above the 2% target amid CBC concerns about overheated property markets. 
Real GDP grew 5.1%YoY in Q2CY24, following 6.6%YoY growth in Q1 (both faster than mainland China). Exports grew 10%YoY in Jan-Jul'24, and export orders growth is at a 2-year high.
The market's trailing P/E ratio (23.56x) is well above its 20-year mean (19.84x). But we recommend a mild Overweight in Taiwan equities, with a focus on the largest tech stocks. 


Taiwan: Rates to Buck Global Loosening as Growth Stays Robust and Inflation Too High

Taiwan

The TWSE, or TAIEX, Index is capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange. The index has a base value of 100 based on its 1966 level. The index is also known as the TSEC Index.

Taiwan Stock Exchange Weighted Index (TWSE INDEX)

Taiwan Stock Exchange Weighted Index (TWSE INDEX)

Asian Equities: Be Selective - Focus on The "ROE Winners"

Asia's cheap P/BV compared to the US is due to low ROE. Over the next couple of years Asian ROE is forecast to revive relative to US, driven by...

Manishi Raychaudhuri

Asian Equities: In Search of Earnings Estimate Uptrends

Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Manishi Raychaudhuri

EQD | Global Option Implied Volatility – Consistently Declining Volatility Amid Mixed Markets

Despite varying market performances, implied volatility is generally decreasing across 16 equity markets and gold. The realignment might offer...

Gaudenz Schneider

Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Expecting Downside Ahead $ACWI $SPX; Stick With Defensive Sectors; Downgrading Taiwan $EWT $TSM to Market Weight; Global Discretionary vs. Staples...

Vermilion Research

Taiwan: Rates to Buck Global Loosening as Growth Stays Robust and Inflation Too High

Taiwan's RGDP growth outpaced the PRC's for the past 3 quarters, and inflation (2.52%YoY in Jul'24) will require a 12.5bp rate hike. Despite rich...

Prasenjit K. Basu

Asian Equities: Be Selective - Focus on The "ROE Winners"

​Asia's cheap P/BV compared to the US is due to low ROE. Over the next couple of years Asian ROE is forecast to revive relative to US, driven by...

Manishi Raychaudhuri

Asian Equities: In Search of Earnings Estimate Uptrends

​Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Manishi Raychaudhuri

EQD | Global Option Implied Volatility – Consistently Declining Volatility Amid Mixed Markets

​Despite varying market performances, implied volatility is generally decreasing across 16 equity markets and gold. The realignment might offer...

Gaudenz Schneider

Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Expecting Downside Ahead $ACWI $SPX; Stick With Defensive Sectors; Downgrading Taiwan $EWT $TSM to Market Weight; Global Discretionary vs. Staples...

Vermilion Research

Taiwan: Rates to Buck Global Loosening as Growth Stays Robust and Inflation Too High

Taiwan's RGDP growth outpaced the PRC's for the past 3 quarters, and inflation (2.52%YoY in Jul'24) will require a 12.5bp rate hike. Despite rich...

Prasenjit K. Basu

Asia's cheap P/BV compared to the US is due to low ROE. Over the next couple of years Asian ROE is forecast to revive relative to US, driven by...

Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Despite varying market performances, implied volatility is generally decreasing across 16 equity markets and gold. The realignment might offer...