The investment world is changing quickly and 2015 should prove to be a very interesting year, but we see no reason to change our long-held positive view on global equities.
China's economy likely slowed much more than the official statistics show; otherwise, the government would not have reversed course on its various crackdowns, especially on the property market.
Asia Pacific ex-Japan markets were volatile in November, with the MSCI Asia Pacific ex-Japan Index down 1.3%, dragged down by MSCI Australia Index which returned -6.3% in USD terms.
Asia is evolving rapidly, which has implications for investors globally. It should no longer be viewed as just a cheap manufacturing hub, but a region with high value-added industries catering to an increasingly wealthy middle class.
Many empirical studies have shown that a value style approach to investing in Australian shares has consistently outperformed growth investing - and with less risk.
Asia ex-Japan markets bounced back towards the end of October returning 2% for the month in USD terms and outperforming the MSCI World index by 1.4%.
Is political democracy good for economic growth and ultimately, stock markets in Asia? Indisputably, sound political systems are crucial for economic development and progress.
Asia Pacific markets succumbed to profit-taking after registering seven consecutive months of positive USD based returns. The MSCI Asia Pacific ex-Japan Index was down 7.2% for the month in USD terms as the strengthening dollar magnified the loss.
A confluence of factors worked against the Australian market during the month. Regulatory concerns in the banking sector, lower commodity prices and a weaker Australian dollar were the key drivers of the market’s underperformance.
Asia Pacific ex-Japan markets gave back some of the year-to-date (YTD) outperformance versus its global peers. The MSCI Asia Pacific ex Japan index returned 0.8% in the month of August, underperforming the MSCI World by 1.4%.
Asia Pacific ex-Japan markets outperformed their global counterparts, bolstered by strong price returns in China and Hong Kong which were up 7.3% and 6% in USD terms respectively.
Last month we described Japan’s “Show me the Money” corporate governance as regards the sharp rise in corporate profit margins to new highs. This theme is paralleled by the trend in dividend payments.
Asia Pacific ex-Japan markets performed in-line with global counterparts returning 1.7% in USD terms versus 1.8% for MSCI World.