Geopolitical tensions reignite following Trump’s escalation of China trade war
Trump’s trade narrative with China continues and India’s long-term domestic demand story remains intact
When walking investors through the quantitative process we adopt within our China strategies, one topic that is frequently discussed is how often we ‘override’ our models.
Chinese equities continue to rally while Indian real gross capital formation rose YoY
Government influence was prominent in both China and India this month, with fiscal deterioration at Indian government level capping investor enthusiasm for equities, and the ongoing US-China trade tariff negotiations moving closer to pricing in a pact by the end of March.
Given the bashing that emerging markets were dealt in 2018, it is notable that valuations are looking more attractive in early-2019 than they have for quite some time. However, beyond valuations, a number of trends are emerging that may be useful in determining where to look for winning trades.
Catalysts for the Chinese equities rally in January include expectations for a positive outcome to the US-China trade impasse as well as a softening rhetoric on further US Federal Reserve rate rises.
The governor of the Reserve Bank of India’s sudden resignation took the markets by surprise.
Five Indian states are in the process of voting with results due early December
China’s equity markets continued to sell-off through the month
China’s equity markets remained under pressure for the quarter
Indian economy grows at its fastest rate in nine quarters, driving domestic consumption and manufacturing growth.
With recent economic and political events buffeting equity markets in the Asia and emerging market (EM) space, Simon Finch and Craig Farley flag some of the key issues that investors may be grappling with and how these affect the positioning of the Chindia Equity Fund.
Trade tensions and renminbi weighed on Chinese equity markets in July but Indian equity markets rose.
Latest sell-off in China seems prompted by Trump’s focus on trade agenda