Emerging markets have benefitted from both improving fundamentals and bullish sentiment driving inflows to the asset class. Individual country risks, however, are poised to rise. Be selective.
Lately, investors have been focused on headlines about China’s twice-a-decade congress reshuffling, looking for signs of leadership changes to come in the world’s second-largest economy. But a different kind of leadership change in China is well underway – and investors should take note.
Growth in the country's corporate debt load has finally leveled off this year as financial conditions and regulatory oversight tighten. That's good. But rebounding returns on incremental assets and common equity are even better.
Economic dislocations, regulatory shifts or intense competition can change the market dynamics confronting big, and at times unwieldy, conglomerates. They often force corporate restructurings that can result in more effective capital allocation and returns for investors who recognize promising new strategies amid the prevailing market pressures.
In its most concerted effort to reverse slowing credit and economic growth to date, New Delhi devises a $32 billion public sector bank recapitalization.
Zhou Xiaochuan appeared to be talking about China, given his contextual warnings about the country’s high corporate and rising household debt loads. But the message may apply to frothy and debt-laden markets globally.
Low market correlations make it easier for active portfolio managers to stand out—positively or negatively. But what matters most is how a portfolio of select stocks performs through market cycles, regardless of correlations.
India has implemented measures that combined should generate a surge in economic growth, corporate earnings, and double-digit annualized stock returns over the next decade.
Fed’s balance sheet unwind comes amid mixed U.S. data, but the global acceleration in growth and inflation gives it cover to continue normalizing policy and reduce market distortions. The upswing might also give pause to those asserting the death of the Phillips Curve.
Versatile, relative-value analysis of securities across sub-sectors and hybrid asset classes can help fixed income teams negotiate a challenging, expansive, potentially rewarding terrain.