Insights

Investment Insights by our experts and thought leaders

Emerging Markets Quarterly: A Firm Reprieve, For Now

Emerging markets (EM) slid from February through the year-end on the back of a stronger dollar, an escalating trade war and notably weaker growth in China. However, we see evidence that these previous headwinds may now be turning into tailwinds.

Japan Equity Monthly - January 2019

The Japanese equity market fell in December, with the TOPIX (w/dividends) dropping 10.21% on-month and the Nikkei 225 (w/dividends) declining 10.28%.

Asian Rates and FX Outlook 2019

Global growth is expected to grind lower in 2019, with continued monetary policy normalization in developed markets being the key headwind for the world economy. Financial conditions will tighten further as the Fed continues its gradual increase in interest rates.

Asian Fixed Income Monthly Outlook - January 2019

In December, US Treasury (UST) yields fell as risk assets came under pressure from various factors, triggering ‘safe-haven’ buying.

The return of negative bond/equity correlations was a rare silver lining for multi-asset investors in 2018.

Asian Equity Monthly Outlook - January 2019

The MSCI AC Asia ex Japan (AxJ) Index fell by 2.6% in USD terms in December, as concerns about slowing global growth, tightening monetary policy and rising geopolitical tensions continued to drive sentiment.

Australian Equities Outlook - January 2019

The S&P/ASX 200 Accumulation Index returned -0.1% during December.

Australian Fixed Income Outlook - January 2019

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 1.50% over the month, outperforming Australian equities which fell 0.12%.

2019 & Beyond: A New Zealand Bond Manager's Thoughts

The word “volatility” crops up a lot when commentators try to explain price movements in financial markets.

New Zealand Outlook 2019

While New Zealand markets have had a rather interesting and more volatile time, the main drivers of the economy remain sound.

Japan Equity Monthly - December 2018

The Japanese equity market rose in November, with the TOPIX (w/dividends) climbing 1.30% on-month and the Nikkei 225 (w/dividends) rising 1.98%. Equities rose in the early part of the month on strong US economic indicators and easing political uncertainty after the US midterm election results largely matched expectations.

As we wrap up the final weeks of 2018 and look ahead to whatever challenges lay ahead next year, we can’t help but reflect on what has been a testing and frustrating year for investors.

Asian Fixed Income Monthly Outlook - December 2018

US Treasuries (USTs) registered gains in November, while yields fell along with faltering US equities.

The Case For Hiking A 'Very Gradual' 10 Basis Points

While it is true that the Fed will be criticized no matter what it does tomorrow, it could limit criticism to mild levels if it hikes only 10 bps.

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan's 'Show Me the Money' Corporate Governance: Q3 Weather Effect

Today’s release of the 3Q CY18 data on aggregate Japanese corporate profits showed interesting trends regarding our long-term theme about improving corporate governance.

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asia Credit Outlook 2019

The macroeconomic backdrop for Asian countries should remain broadly neutral for credit performance in 2019. GDP growth is expected to moderate across the key economies, although we don’t expect any hard landing scenarios to materialize.

Asia ex-Japan Equity Outlook 2019

One thing is for sure, 2019 will not be a dull year. We expect more headlines and drama on trade but would pay more attention to underlying policy direction at both the Federal Reserve and Chinese authorities, as bigger markers for improved fortunes across Asian markets.

Developed Markets Outlook 2019

Shakespeare once said, “present fears are less than horrible imaginings.” As we come to the close of 2018, we have observed equity markets turn double-digit returns to losses, an aggressive rise in interest rates and a modest increase on the perception of escalating tensions surrounding the world’s two largest economies.

Emerging Markets Outlook 2019

In addition, we have to consider the eventuality of a prolonged trade war. But China would be able to mitigate its impact initially via a combination of monetary and fiscal stimulus, helping offset the impact of tariffs to a certain extent.

Global Credit Outlook 2019

Credit markets didn’t perform in line with the expectations we set at the beginning of the year and disappointed most investors.

Global Equity Outlook 2019

The potential hangover from the monetary binge of QE continues to weigh on global equity markets as we head towards 2019. The turning of the calendar will do little to change this.

Global Multi-Asset Outlook 2019

Once again, the Federal Reserve (Fed) policy has proven itself to be the key determinant of global liquidity, and 2018 was clearly tight.

Japan Equity Outlook 2019

As we reflect on 2018, we would all agree that Trump and his trade policies dominated the conversations and dictated some of the major moves in the financial markets around the world.

Singapore Equity Outlook 2019

We believe 2019 will be an important year for active selection or alpha and our focus will be on delivering on stock selection returns by picking quality companies who are resilient in growth amid a rising risk environment.

Global Investment Committee Outlook 2019: Tempered Positive View

So many developments have occurred since we last met in September, but the major ones were the surprising collapse in oil prices mostly due to geopolitical factors, the U.S.-China trade and BREXIT conflicts becoming increasingly intractable, and that aspects of the global economy showed occasional signs of moderation.

Global Fixed Income & Credit Outlook - November 2018

Global growth remains desynchronized, with China, the Eurozone and Japan continuing to show further signs of moderation, while the US remains relatively robust.

Asian Equity Monthly Outlook - December 2018

The MSCI AC Asia ex Japan (AxJ) Index gained 5.3% in USD terms in November, despite persistent concerns over global growth and a slide in technology stocks.

From the Australian Equities Desk - November 18

The S&P/ASX 200 Accumulation Index returned -2.2% during November.

From the Australian Fixed Income Desk - November 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.24% over the month, outperforming Australian equities which fell over 2%.

Global Fixed Income & Credit Outlook - October 2018

Global growth remains desynchronized, with China, the Eurozone and Japan showing a further moderation in growth, while the US remains robust.

ESG's Emergence as a Principal Theme in Asia

Earth’s largest single geographic region, Asia represents approximately 60% of the planet’s population and is one of its fastest growing economic areas. The region had more billionaires in 2017 than anywhere else and it will represent 57% of middle-class consumption by 2030.

Australian Housing - Don't Panic

Over the past year Australian house prices have seen 12 consecutive months of decline, the longest streak of persistent falls in over 20 years.

Stop making sense: the state of volatility in markets

Volatility is back in a big way in 2018. A large increase in the VIX is showing an annual level not witnessed since 2007. The sell-off that started in October appears to have been triggered by a number of negative technical forces in the USA coming into effect at the same time, which impacted global markets.

In the AI Age, Active Managers Making Smart Human Decisions Will Win

One of the pleasures of getting older is that you start to have proper grown-up conversations with your children.

US Recession Risk and the Path for Interest Rates

The US economy is enjoying its second-longest growth cycle in history and is on the way to becoming the longest on record.

Global Equity Quarterly Report - Q3 2018

How do you react when you see blood; do you swoon or just observe with intrigue? Perhaps conditioned by a recent overdose in crime related dramas (favourites include: ‘Killing Eve’, ‘Peaky Blinders’ & ‘Better Call Saul’), it was the latter outcome for me after a recent DIY debacle with a saw.

Asian Equity Monthly Outlook - November 2018

The MSCI AC Asia ex Japan (AxJ) Index fell by 10.85% in USD terms, on the back of concerns about rising interest rates, slower economic growth, and persistent US-China trade tensions. Large technology stocks were particularly hard hit.

Asian Fixed Income Monthly Outlook - November 2018

US Treasury (UST) yields spiked at the start of October as the market responded to stronger US data and Federal Reserve (Fed) Chairman Jerome Powell's hawkish comments.

Japan Equity Monthly - November 2018

The Japanese equity market dropped in October, with the TOPIX (w/dividends) falling 9.41% and the Nikkei 225 (w/dividends) declining 9.04% on-month.

Global equities corrected downwards by 7.5% in USD terms in October. Stocks in the US ended the month down 6.5% after an intra-month peak-to-trough drawdown exceeding -10%.

Asia's Current Account: Good or Bad?

On the back of unrelenting USD strength, 2018 has been a tumultuous period for Asian currencies. Countries in the region with current account deficits have been facing more currency pressure, prompting their central banks to engage in series of rate hikes to defend their currencies.

Trump Will Hate These Buybacks

Clearly, the U.S. Administration has tried to protect the steel and other industries considered important for defense and economic security. The intent is to have them invest in new capacity due to the recently higher product prices.

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

From the Australian Equities Desk - October 18

The S&P/ASX 200 Accumulation Index returned -6.1% during the month.

From the Australian Fixed Income Desk - October 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.48% over the month, outperforming Australian equities which tumbled over 6%.

Climate Change - an Unstoppable Force?

As the world experiences more extreme weather patterns and climate-related incidents, pressure is mounting to curb greenhouse gas emissions.

The trade war between the US and China appears to be morphing into deeper and more protracted conflict as reflected in a recent speech by US Vice President Mike Pence, who criticised China not just for trade practices but more fundamentally for its broad political and economic model.

Asian Equity Monthly Outlook - October 2018

The MSCI AC Asia ex Japan (AxJ) Index fell by 1.38% in USD terms in September. The Sino-US trade conflict and rising oil prices were key drags on performance. During the month, the US Federal Reserve raised rates for the third time this year as widely anticipated, amid positive economic data.

Asian Fixed Income Monthly Outlook - October 2018

In September, the US Federal Reserve (Fed) raised interest rates by 25 basis points (bps). The monetary authority removed the clause that policy rates are "accommodative", and modestly raised its growth forecasts for this year and next.

Japan Equity Monthly - October 2018

The Japanese equity market rose in September, with the TOPIX (w/dividends) climbing 5.55% on-month and the Nikkei 225 (w/dividends) rising 6.17%.

ESG Insights : Assessing Stranded Assets in the Electricity Sector

Nikko AM values companies based on their sustainable earnings capacity. Embedded in our research process is a consideration of all relevant risks that impact sustainable earnings and therefore have valuation implications. This obviously includes risk factors that fall within the ESG realm.

Multi Asset Strategies to Capture Growth with Lower Volatility

The changing shape of China's economy