Equity markets

Why Asian family businesses continue to dominate markets

SINGAPORE (Sept 12): The financial performance of Asia’s family-owned businesses is far superior to their peers in terms of growth and profitability, finds a recent report published by the Credit Suisse Research Institute (CSRI).

According to the Credit Suisse Family 1000 in 2018 report, family-owned businesses outperformed broader equity markets across every region and sector on a long-term basis, be it in terms of revenue growth or EBITDA margins, or cash flow returns and gearing.

US protectionism and China deleveraging pace big worries for Asian stock investors: BlackRock

(June 20): While economic fundamentals and earnings results remain strong, the MSCI AC Asia Pacific index has underperformed the MSCI AC World Index year to date. What has happened?

Equity markets plummeted in late January 2018 driven mainly by technical factors, but we were confident that the underlying drivers of corporate earnings remained solid. Global growth prospects were strong even before the new US hefty tax cuts and fiscal stimulus. Combined, we estimate these measures may add as much as one point to US GDP growth.

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Why we should worry about rising interest rates

SINGAPORE (Jan 22): Even as equity markets across the world soar to new heights, the bond market has been sending a less exuberant signal. Yields on US 10-year Treasuries, a major benchmark rate used in financial markets, have risen to just above 2.5%, almost twice the yield when they reached a trough in the middle of 2016. Similarly, in Europe, the German “bund” yield is at its highest level in about two years. Shorter tenure yields have also risen — the two-year US Treasury bill is now yielding around 2%, its highest level since the financial crisis erupted in 2008.

What to look for in equity markets as the business cycle ages

SINGAPORE (Sept 13): With the emergence of renewed geopolitical tensions, the upward incline of equity markets have come to a halt in August, even after a strong earnings season for 2Q.

Nonetheless, Amundi Asset Management says the economic cycle remains sound and synchronised on a global level, and recommends that risk allocation favour equity over credit, with a focus on areas of the market which still retain a valuation gap.

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Volatility and risk are not the same thing

SINGAPORE (Aug 28): The recent spurt in volatility in equity markets should give investors pause.

The extended period of calm that we have seen cannot be taken for granted and is certainly not a reflection of what could happen in the future.

Smaller-cap stocks were the hardest hit in the latest selloff (though they have also rebounded very quickly). I suspect this will always be the case in the future. Smaller-cap stocks typically have lower liquidity, which, in turn, tends to translate into higher short-term price volatility.

Bank of America warns of an ‘ominous’ sign for stocks

(Aug 16): Money managers who’ve watched the surge in corporate profits take US equities to records are starting to fret about earnings growth, and that’s an “ominous” sign, Bank of America says.

Just 33% of managers in the bank’s latest survey say corporate profits profits will improve, down from 58% at the start of the year.

Beware of rising yields on reverse QE

(Aug 14): There has been quite a bit of talk and concern surrounding the US Federal Reserve’s rate hikes and their potential negative impact on equity markets. I believe these concerns are misplaced.

Instead, we need to be far more fearful of the imminent reversal of quantitative easing (QE) not just by the Fed but also the European Central Bank (ECB).

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Are global markets overvalued?

(June 20): Globally, equity markets have remained remarkably resilient despite the recent increase in geopolitical risks and related uncertainties.

Notably, the US market — the key barometer for global investors — is near record highs, extending a rally that started in early 2009. Every correction since then has been short and shallow.

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Ready for rising rates

Koh Liang Choon, head of fixed income at Nikko AM Asia, says the region’s bond market is still growing fast on the back of higher demand and supply. He is raising exposure to US dollar-denominated corporate debt and may lengthen the duration of his portfolios.

Why ‘Trumponomics’ continues to support markets, but not for long

SINGAPORE (Feb 22): Global equities, risk assets and bond yields are on the brink of seeing myriad changes depending on the geopolitical events and policies to come – according to Mark Burgess, chief investment officer (CIO) EMEA and global head of equities at Columbia Threadneedle Investments.

Columbia Threadneedle Investments is the global asset management group of NYSE-listed Ameriprise Financial.

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