Macro: QT Is Already Here And The 2022-23 Bear Market Is Now Well Underway and more

In today’s briefing:

QT Is Already Here And The 2022-23 Bear Market Is Now Well Underway

Bear market underway in World equities and likely to see one-third peak to trough decline
Trigger is US Fed QT, but US Fed is NOT about to start QT. It has already been underway since Dec 15th 2021
Each $100 billion of QT, costs the SPX index around 60 points. Therefore expect S&P500 to test 3250, or 20% lower

Asia ex-China has been relatively resilient this year despite the harsher global environment.
We believe that the re-opening of the developing Asian economies ex-China will outweigh the headwinds, allowing this resilience to continue.
China is the single biggest risk: it can succeed in suppressing covid infections but only at a high economic cost. Overall, growth in developing Asia can remain relatively resilient

Egyptian equities are beginning to enter a bottoming out phase, although there is likely more economic pain this year and no near-term stock market catalysts are present.
However, with MSCI Egypt trading at circa six times forward earnings, a near 50% discount to MSCI Emerging Markets, Egypt appears to be positioned very well in terms of relative value
Some of the major headwinds approaching include food/energy inflation, declining tourism, and Egypt’s entry into another IMF program this year

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw insights on PT Nippon Indosari Corpindo (ROTI IJ), AEM (AEM SP) in Singapore, as well as Rex International Holding (REXI SP), and Siam Cement (SCC TB).
There was also an interesting macro commentary on Indonesia’s economy as it banned CPO exports but it is seeing a significant pick up in FDI.

Before it’s here, it’s on Smartkarma