China’s latest National Party Congress wasn’t the model of transparency, but the market appreciated the overall sense of political stability and policy continuity – and the clear vote of confidence for the continued leadership of General Secretary Xi Jinping, says Raymond Chan, CIO Equity Asia Pacific for Allianz Global Investors.
We explore the reasons we believe the A-share market has become more investable, including improved corporate governance and better disclosures, the ability of companies to create value for investors, company discipline around capital allocation and the fading role of state ownership in certain sectors.
The UK Financial Conduct Authority (FCA) announced on 27 July that it would not sustain the London Interbank Offered Rate (Libor) – the key (and controversial) benchmark for hundreds of trillions of derivatives contracts – after 2021.
Lower correlations, coupled with greater dispersion of volatility across sectors, highlight the importance of asset allocation and could lead to more opportunities for outperformance by active managers over passive beta strategies.
Donald Trump’s policies appear almost certain to contribute to volatility in Asian markets during 2017. For active fixed-income investors who understand the dynamics of bonds and currencies in the region, this creates opportunities.