Insights

Investment Insights by our experts and thought leaders

Harnessing Change-Monthly Insights: Asian Equity (September 2024)

The market expects more rate cuts from the Fed, giving Asian central banks room to lower rates, which is very supportive for domestic growth. Meanwhile, with more China stimulus measures anticipated, we see asset allocation into Chinese equities picking up pace and lift the entire market.

Japan’s pivotal improvement in risk premium

Japan’s long history of undercompensating equity investors, a legacy of deflation, is coming to an end with its risk premium now achieving parity with that of the US. This historic shift is being driven by rising dividend payouts ratios, strong earnings and reasonable valuation of underlying equities.

On the Ground in Asia-Monthly Insights: Asian Fixed Income (September 2024)

The start of the Fed’s rate cut cycle has created room for monetary easing across Asia. We expect Asian government bond yields, particularly high yielders like those of India, Indonesia and the Philippines, to trend lower.

Navigating Japan Equities: Monthly Insights From Tokyo (October 2024)

This month we assess views in the market that the BOJ may have taken a dovish turn at its September policy meeting; we also point to further signs of a steady rise in wages and how that paves the way for a recovery in consumption and, ultimately, higher stocks.

New Zealand Equity Monthly (September 2024)

Nikko AM NZ released its first annual “climate statement” under New Zealand’s new climate-related disclosures regime in July. The framework requires approximately 200 organisations, including large publicly listed companies, to release reports on how their activities may impact the climate and the effect of the climate on their businesses.

Are China’s stimulus measures enough?

The raft of stimuli recently unveiled in China is the most coordinated policy since the start of the country’s economic downturn. This, along with the start of the Fed’s monetary policy easing, represents key fundamental changes. However, as the old saying goes, the devil is in the details.

Global Investment Committee’s outlook: low risk no longer

We perceive heightened risk to both growth (two-way) and inflation (upside) compared to our previous guidance. Nevertheless, our central near-term scenario remains for slowing but positive growth in the US, alongside slowly moderating prices.

Staying on the road less travelled

As global equity investors, we are often asked how we have successfully navigated an evolving market landscape since the strategy’s inception in 2014. The truth can ultimately be attributed to three key factors: humility, collaboration with people who share the same core team values and a robust investment philosophy.

Global Equity Quarterly (Q2 2024)

Perhaps there may be disappointment at the lack of money-spinning applications pertaining to AI which may cause investor sentiment to cool. Nevertheless, the improvements in earnings and cash flow appear sustainable so far and are certainly much more attractive than those being produced by many other parts of the economy.

Balancing Act-Monthly Insights: Global Multi-Asset (September 2024)

For August we maintained our overweight growth position and a neutral position on defensives. Several factors continue to support our optimism towards growth assets, including the first rate cut from the Fed, earnings surprises remaining above their historic average, US economic growth beating expectations, and large fiscal spending globally.

What the Fed’s rate cut tells us about current financial conditions

The Federal Reserve’s 50 bps rate cut demonstrated the power of financial markets at present. As the markets had already priced in a significant probability of a 50 bps reduction, the Fed could have viewed such conditions as a good time to “buy insurance” and implement a half a percentage point cut while the markets were likely to absorb it well.

Less may be more in Japan’s LDP leadership contest

There is one major thing to keep in mind going into Japan’s upcoming leadership contest for the ruling Liberal Democratic Party (LDP)—the country’s looming general election. The ruling party’s chief concern is to select a candidate who can prevail at this election. This makes the candidacy of an incipient LDP leader more of a marathon than a sprint.

Harnessing Change-Monthly Insights: Asian Equity (August 2024)

We believe that the biggest fundamental change for Asian markets in the medium term is a shift in the interest rates regime, notably that of the US.

On the Ground in Asia-Monthly Insights: Asian Fixed Income (August 2024)

In a positive bond market environment driven by global monetary easing expectations, we favour government bonds from India, Indonesia and the Philippines, where higher yields remain attractive to investors.

Navigating Japan Equities: Monthly Insights From Tokyo (September 2024)

This month we assess why the market is unfazed by Japan’s upcoming leadership change; we also explain how a bid for a prominent Japanese convenience store operator has highlighted how affordable domestic firms now look in the eyes of their foreign counterparts.

New Zealand Fixed Income Monthly (August 2024)

The Reserve Bank of New Zealand’s rate cut in August appears to constitute a slight easing of the brakes rather than a large change. With the Official Cash Rate at 5.25%, conditions are still restrictive. The first signs of recovery are likely to be seen in improvements in business and consumer confidence, but it will take some time for the impact to filter through to borrowers.

New Zealand Equity Monthly (August 2024)

In August the Reserve Bank of New Zealand lowered interest rates, marking the first change in the Official Cash Rate since May 2023. We expect New Zealand equities to be supported if the central bank maintains an accommodative approach.

If Trump wins: uncertainties and opportunities from an Asian equity perspective

As the November 2024 US presidential elections draw ever closer, we explore the global trade, economic and geopolitical implications from an Asian equity perspective, focusing on the uncertainties and opportunities that could arise if Donald Trump secures a second term in office.

Change as the only constant: investing in a world in transition

The Global Equity Team answers the following questions related to the key trends they see emerging: 1)does the AI investment theme still offer significant long-term potential? 2) will the market leadership broaden beyond technology names into other sectors? and 3) what are the main risks and challenges equity investors may face in the remainder of 2024?

Balancing Act-Monthly Insights: Global Multi-Asset (August 2024)

For August we reduced our overweight on growth assets amid volatility in the markets and maintained a neutral position on defensives. We expect volatility to be quelled, given that the markets have factored in the Fed cutting interest rates in September and with more easing anticipated over the following 12 months.

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