Just a few weeks ago I attended my first in-person conference since 2019. Over 40,000 people descended upon Lisbon for Web Summit, one of the world’s largest technology conferences. The event brings together CEO’s and founders of established firms together with start-ups and policymakers to discuss and pitch ideas over the course of a week.
As the global economy takes steps to recover from the pandemic, prices have steadily risen around the world. Japan, however, remains an exception among the major economies. The country’s headline CPI did tick up in October, but at a very modest pace, showing that inflation is yet to gain strong traction in a country long stuck in deflation.
Every few years, concerns emerge over whether China is investable. We are currently witnessing the latest round of this cycle amid China’s drive to regulate. However, investing in China during such moments of doubt has reaped substantial returns in the past. The key is not missing the forest for the trees when China is regulating in order to innovate.
Asian stocks rose in October, with investors remaining focused on rising inflationary pressures and the US Federal Reserve’s tapering plans. The markets’ key concern is China’s economic performance and its impact on the energy and commodity complexes.
We expect Indonesian bonds to outperform, as demand is supported by positive supply technicals. Meanwhile, we see bonds of low-yielding countries like Singapore, South Korea and Thailand prone to bear flattening, driven mainly by UST movement.
Japan’s rapidly advancing medical technology is viewed as a way to address the healthcare sector’s inefficiencies while at the same time offering potential value opportunities.
We explain how the recent lower house election win gives Japan’s new prime minister a free hand to pursue policies aimed to help the economy recover from COVID-19. We also analyse why a weaker yen no longer provides as much of a boost to equities.
Our philosophy is centred on the search for “Future Quality” in a company. Future Quality companies are those that we believe will attain and sustain high returns on investment. ESG considerations are integral to Future Quality investing as good companies make for good investment.
US Treasury (UST) yields rose in September, with the US Federal Open Market Committee finally alluding to moderate its asset purchases as soon as November. The rise in rates was further supported by an escalating power crunch across Europe and China amid surging energy prices prompting concerns about inflation.
Volatility has arisen as we expected it eventually would, and September is often an apt month to rediscover risk given market participants’ return from summer vacations noting that record high equity markets do not quite square with a number of significant risk events on the near-term horizon.