China Is Bouncing Back, but Can We Trust Its Numbers?
China's economy looks to be well on its way to recovering from the coronavirus-imposed lockdown with consumer spending, manufacturing and investment bouncing back. But can we trust China's macro numbers?
China on the Road to Recovery
China's economy was the first to suffer the consequences of fighting the novel coronavirus and is the first on the road to recovery. After an initial cover-up and more than 3,000 deaths, China appears to have brought COVID-19 under control and laid the foundation for a gradual economic recovery, although normal activity levels may not be reached until 2021.
Demographics Drive Japan's Innovation and Growth
Japanese growth stocks, along with global equities, experienced considerable volatility in the first quarter. Uncertainty around the coronavirus, slowdowns in global manufacturing activity and worries about dampened consumer activity related to Japan's consumption tax each impacted Japan's markets.
Is China a Safe Haven?
After an initial cover-up and more than 3,000 deaths, China appears to have brought COVID-19 under control, just as the spread of the coronavirus is accelerating across the U.S. and Europe. With China's domestic-demand driven economy set to rebound and mainland investors avoiding the panic that has smacked western markets, its economy could put a floor under global growth and offer a safe haven to investors.
Coronavirus and Falling Oil Prices Roil Markets; Long-Term Perspective Is Key
Long-term perspective is key as coronavirus and falling oil prices roil markets. Members of the Matthews Asia investment team share their insights and outlook amid volatile markets.
I've been fielding many questions from investors about the new coronavirus, COVID-19, and would like to share my answers with you in this issue of Sinology.
Matthews Asia CIO Robert Horrocks, PhD, and Investment Strategist Andy Rothman offer their perspectives on the Coronavirus and its possible impact on China's governance and economy.
A Year of Living Less Dangerously
The publication this week of the U.S. — China trade deal and the final macro numbers for 2019 should set the stage for healthy economic performance and stronger market sentiment in China in 2020, but the risk of a return to tense relations between Washington and Beijing looms over 2021 and beyond.
The 2020 Outlook for Southeast Asia
The best environment would be moderate U.S. growth, a sideways U.S. market and a weaker U.S. dollar.
A Disappointing Deal, and a Healthy Economy
President Trump called it “amazing,” and U.S. Trade Representative Lighthizer said the China deal is “remarkable.” In my view, however, it is merely the best trade deal in the last 36 months of Chinese history, and it falls well short of two key objectives. Because the deal sets highly unrealistic goals for U.S. exports to China...
Troubled Times Can Give Birth to Opportunity
Asia goes into the global deceleration with already-lean companies and a valuation advantage.
What's Next for China A-Shares Inclusion in MSCI Indices
Improvements in accessibility are expected to accelerate further inclusion in the near term.
The Case for Greater China Exposure in Global Equity Portfolios
China has come to the forefront of investors’ minds, and has become a larger portion of global indices over the past years while dominating global headlines. We believe investors’ slow reaction to the rise of China as a global economic power creates an opportunity for investors who are willing to lead the pack.
Completing Your China Exposure: Small Companies Help Capture China's New Growth Drivers
As China's economy continues its shift toward services and consumption, small and medium-sized businesses are accelerating this transformation.
Country Updates for the month ending September 2019
Chinese equities were flat in September. A-shares posted slight gains while small caps posted slight losses.
Asia's Productivity Boom
As Asia’s private sector uses capital and labor more efficiently, economic growth rises.
The Case for Greater China Exposure in Your Portfolio
While global investors continue to feel the repercussions of U.S–China trade tensions, China boasts a vibrant, entrepreneurial economy, creating opportunities for investors with a long-term view. Despite market volatility, China remains the world’s best consumer story, represents the world’s second largest economy and has been the key driver of global economic growth for a decade.
Please join Matthews Asia Portfolio Strategist Jeremy Murden along with Portfolio Managers Winnie Chwang and S. Joyce Li, CFA, for an interactive discussion on:
- Why China remains a global growth engine
- Investment opportunities in China to keep an eye on
- Opportunities and risks in China’s A-share market
- Reasons to increase your allocation to China
- The economic outlook for China in the months ahead
Evaluating Portfolios in Unsettling Times
Investment opportunities arise amid trade-related market disruption.
The Promise of 'Belt and Road'
China's ambitious infrastructure initiative points to the potential of global cooperation.
E-Commerce Surges in Southeast Asia
In Southeast Asia, a collective market of over 650 million urbanizing and upwardly mobile people have seen many companies poised to prosper in the burgeoning e-commerce sector and many have set their sights to scale in Indonesia.
Decoding Hong Kong's Protests
Protests in Hong Kong create a political balancing act for China. With the world watching, a patient approach may be in China's best interest.
Management, Not Manipulation
We believe China is managing, not manipulating, its currency. The country's central bank aims to maintain a stable exchange rate amid trade-related volatility.
Trade War Won't Stop Asia's Growth
Factors other than U.S.-China friction drive the region's progress.
China's "Currency Manipulation"—A Sign of Panic or a Cunning Plan?
Over the past several months, there has been hype about the prospect of the Chinese renminbi (RMB) weakening past 7 per U.S. dollar, despite no evidence that 7 is a magical number. China's central bank, People's Bank of China (PBOC), had denied that it was focused on defending 7, and the IMF said it wasn't significant.
Chinese government economists in Beijing have indicated that, while they are prepared to intervene with stimulus if current conditions deteriorate, investors should not anticipate material changes to monetary and fiscal policy. Sinology takes a look at the latest China economic data.
Has Trump Re-set U.S.-China Relations?
Following U.S. President Donald Trump's recent Asia trip, Sinology explains why prospects seem brighter for an improved broader U.S.–China relationship.
What China's Greater Openness Means for Investors
Its economic leadership creates a potential opportunity that cannot be ignored.
For the Month Ending May 2019
Market updates from across the region.
Health Care's Rich, Diverse Landscape
Primed for growth, Asia’s health care sector helps capture consumer spending in the region.
Market Reaction to Tariffs Misses Larger Opportunity in Asia
Structural advantages that point to fast long-term growth in Asia are getting short shrift.
For the Month Ending April 2019
Market updates from across the region.
Indonesia's Election Outcome Removes Overhang for Equities
With Jokowi appearing set to retain power, equity flows should improve and indications are positive for economic reforms as political uncertainty is dispelled.
Asia Credit Spreads Look Rewarding
We recently sat down with Matthews Asia Portfolio Managers Teresa Kong and Satya Patel to discuss the appeal of Asia corporate bonds for bond investors seeking global diversification.
Quarterly Review of Asia's Markets
China and Asia are once again at the forefront of many investors' minds. Investors have taken notice of a potential resolution to the trade dispute with the U.S., the pause in Federal Reserve tightening and the curtailing of the U.S. dollar's rally, along with headlines suggesting China is looking to stimulate growth.
What Investors Should Know About MSCI's Rising China A-Shares Inclusion
China's A-shares are gaining a larger role in MSCI indices. Matthews Asia's portfolio strategy team offers its views.
China's Debt Problem
Sinology explains that the key to understanding China’s debt problem is that it is the result of state banks lending to state firms at the direction of the state, so there is no mark-to-market pressure.
Four Key Elections in Asia to Watch
What investors should expect from upcoming elections in Thailand, Indonesia, India and the Philippines.
Asia's Markets Can Do Without the Drama
Focusing on the long term and on better-managed companies has been a tailwind for returns in Asia.
Assessing Valuations in India's Stock Market
When considering the prospects for India's stock market, key factors of performance are the growth outlook and underlying valuations.
Six Sources of Alpha in Emerging Markets
Matthews Asia Portfolio Strategist David Dali discusses the new drivers of growth in emerging markets.
Has the China Collapse Finally Arrived?
Our January Sinology explains that China’s economy did not slow sharply in 4Q18. Growth rates of household consumption and private investment actually accelerated.
Will Vietnam and Thailand Benefit From U.S.-China Trade War?
In Southeast Asia, which countries have been the fastest to benefit from a shift in supply change and manufacturing, as costs in China have risen? Our regional expert takes a look.
Sometimes It's Wiser Not to Follow the Herd
Conventional wisdom is always right—until it isn't. The question is: When is it right to disagree? The investment herd is thinking: Trade wars, tight money, fractious politics and a falling stock market in the U.S. Banking systems in distress in Europe and the splitting of the EU.
China Equities 2019: Fundamentals Sound, Sentiment Is Wild Card
Amid macro concerns including trade conflicts and fears of slowing growth, Chinese equities were highly volatile in 2018. The declines in equity prices seem to have been driven largely by sentiment. Two decades of investing in China has taught me to look past sentiment and take a closer look at what's happening on the ground.
County Updates: For the month ending October 2018
Market Updates from across the region.
Value Emerges in Asia's Markets as Panic Sets In
I have been waiting for the first signs of real panic in Asia's bear market. First, there was the question of why India had been so defensive, with its current account deficit, high structural inflation, strained banking system, difficult government finances and high valuations.
GICS Sector Changes and Implications for Investors
Changes result in a major shift in sector weights across indices globally.
The Great China Disconnect
Our October Sinology explores the disconnect between weak market performance in China, and strong macro conditions and corporate earnings. How likely is this to narrow?
For the Month Ending September 2018
Market updates from across the region.
India and Southeast Asia: Country by Country Outlook
India's growth rate accelerated to 8.2% in the second quarter of 2018 as the shocks from demonetization and the imposition of the Goods and Services Tax (GST) wore off, supported by inventory restocking and a low base of comparison. The principal drivers of growth were government and private spending.
China Equity Markets: Pockets of Opportunities, Fundamental Research Is Key
Following a substantial run-up in 2017, China's stock markets experienced notable volatility in recent quarters. The MSCI China Index was down roughly -9% year to date measured in U.S. dollars as of September 30, 2018, while China's mainland, domestic A-shares were down nearly -20% measured in U.S. dollars for the same period.
China Takes Leading Role on Global Trade
Matthews Asia CIO Robert Horrocks says China's leadership on free trade is an important reason to invest in the growth of Asia.
5 Trends Helping Asia’s Entrepreneurs Thrive
Asia’s entrepreneurs have capital, customers and conviction. Learn about the opportunity for global investors.
Asia’s Small Companies Go Big
Capturing a diverse range of business opportunities and return drivers, Asia’s small companies offer attractive opportunities for long-term growth.
Amid Volatility, Positive Signs Emerge for Asia's Markets
Matthews Asia CIO Robert Horrocks says Asia's markets have rebounded because of reasonable valuations.
Are Turkey's Troubles Contagious?
Turkey's crisis may offer investors the opportunity to build positions in ASEAN countries and India.
What's Driving the Downturn in Asia's Markets?
Matthews Asia CIO Robert Horrocks says markets may have overreacted in Asia to news of a trade war and tighter money.
Asia's Stock Valuations Open Opportunities
Matthews Asia CIO Robert Horrocks says valuations are nowhere near as stretched in Asia as they are in the U.S.
Is China Tanking?
Chinese equities have been soft and President Trump is threatening a trade war, but earnings and margins remain firm and China is still the world’s best consumer story.
With trade war rhetoric growing hotter, Presidents Trump and Xi still have time to head to the negotiating table.
Our Views on the U.S.-China Trade Dispute
U.S.-China trade concerns have been weighing on investors. Matthews Asia examines the strength of China's underlying fundamentals, the rate of its middle class expansion and domestic consumption.
Global Markets Fret Over What the Fed Will Do Next
Matthews Asia CIO Robert Horrocks says worries about U.S. monetary policy are not without cause.
New Chapter for Korea Peninsula After U.S.-North Korea Summit
Matthews Asia Portfolio Manager Michael Oh says South Korea’s economy may benefit from closer ties to North Korea, but costs and risks remain.
Matthews Asia Country Updates
Market updates from across the region.
Asia's Stability Makes It Poised for Growth
Matthews Asia CIO Robert Horrocks says Asia’s political and economic environment looks strong for the region’s long-term growth prospects.
What a Trade War Means for Asian Bonds
Media reports have been focusing on a “trade war” following President Donald Trump’s decision to impose tariffs on up to US$60 billion in Chinese imports, targeting technology products.
Investing During a Different Rate Cycle
Amid a rise in market volatility around the world, the fundamentals for Asia equities look fairly healthy. Investors should not ignore, however, the interconnectedness of today’s global markets.
Q&A: Market Volatility Opens Opportunities in Asia
Matthews Asia CIO Robert Horrocks says current stock valuations favor Asia amid an increase in market volatility globally.
Uncovering Opportunities in Asia's Tech Sector
Shares of some large-capitalization tech companies in Asia have delivered strong performance so far this year, driving up the tech sector weighting relative to the broader market. Do these types of stocks represent the best opportunities in Asia’s tech sector right now?
China's A-Share Market: More Investable than Skeptics Think
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 Chinese economy delivered many surprises in the first half of the year, disappointing (yet again) the pundits who predicted a hard landing. Macroeconomic data published over the weekend is consistent with a healthy economy, driven by impressive wage growth and consumer spending, and supported by strong earnings growth.
Focus on Korea
South Korea’s young democracy has successfully withstood months of political turmoil, which concluded recently with the election of President Moon Jae-in as its new leader. What can investors expect next?
A Look at Liquidity
What are the key factors behind changes in liquidity in Asia, and what does this mean for long-term investors in the region? In this issue, we offer a guide to considering such related issues with less trepidation. Asia Insight explores.
CIO Annual Letter
The last few days of 2016 have receded amidst continued pain for Asia's markets. Matthews Asia CIO Robert Horrocks, PhD, reflects on the year that began with a rally in Asia's equity and fixed income markets, but it ended in a slump.
Strong future growth is rooted in some basic dynamics in which Asia Pacific excels.
Brexit and Trump, a Global Trend?
Is the election of Donald Trump the latest example, following on from the Brexit vote and the success of Bernie Sanders and non-mainstream candidates in Europe, of a global trend in demagoguery and isolationism that will sweep all in its path, including the economies of Asia?