Regional

Investment Insights by our experts and thought leaders

Developed Asia-Pacific: Growth Dynamics in Asia-Pacific – Crucial Differences in the Region

Given the shifting dynamics in the region, for investors interested in Asian equities, there are multiple options depending upon the level of risk they are willing to assume. This paper looks at the outlook for several countries in Asia-Pacific.

Asian Fixed Income Monthly Outlook - September 2017

The US Treasury (UST) market grinded higher in August. Rising tensions in the Korean peninsula and a lack of direction from the US Federal Reserve and the European Central Bank on the outlook for monetary policy put pressure on US Treasury yields.

Asian Equity Monthly Outlook - September 2017

The MSCI AC Asia ex Japan (AxJ) Index rose by 1.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 31.1%. This was the eighth straight month of positive returns.

“Although Mester and Yellen do not align closely with Trump’s values, they are at least professional central bankers and can likely be relied upon to drive a non-political, non-confrontational but most importantly a safe course for monetary policy and bank regulation.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan’s “Show Me the Money” Corporate Governance

The release of the second quarter data on aggregate Japanese corporate profits confirms my twelve-year theme about improving corporate governance in Japan and how investors should not worry about the slow domestic economy.

Germany's Election Should Be Supportive

Our London-based Global Credit Portfolio Manager lays out the scenarios of the upcoming German election and its ramifications for select German credits.

Reforming India

Our equity portfolio manager who specializes in India concludes that reforms should have a very positive effect on that country’s growth.

China: the great disruptor of our time

As China’s economic development enters a more sophisticated and mature phase, it is beginning to challenge many of the status quos that have been taken for granted since the middle of the 20th century.

Asian Equity Monthly Outlook - August 2017

The MSCI AC Asia ex Japan (AxJ) Index rose by 5.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 29.4%.

Asian Fixed Income Monthly Outlook - August 2017

US Treasury (UST) yields ended largely unchanged in July following soft US inflation print, dovish comments from the Federal Reserve and expectations of an autumn policy shift from the European Central Bank.

Australian housing – Still waiting for the decline

We identify the fundamentals that have supported Australian housing and the signals that investors should look for to determine if this period of positive appreciation is coming to an end.

Forbes: The Fed's Tabooed Tool

“Wall Street seems to have long had a hands-off warning to the Fed, which seems to have been very effective, but does this really deserve to be continued? Can Wall Street effectively regulate against speculative bubbles?”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Emerging Divergence as Unwinding of QE Gathers Pace

What is the prognosis for Emerging Markets as major global central banks begin to tighten policy?

Asia High Grade Credit - A More Selective Approach

The rapid development of the Asia Credit markets provides new opportunities to improve the risk and return profile for investors.

Forbes: Bank Bailouts And Italian GDP Changed Draghi's View?

“ECB rhetoric might waver back and forth, but unless there is a global downturn or a major political revolution in Italy, its monetary policy will become less accommodative...”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asian Fixed Income Monthly Outlook - July 2017

US Treasury (UST) yields were range-bound for the most part of June, before surging in the last few days of the month. The US Federal Reserve (Fed) raised interest rates by 25 basis points (bps), despite soft inflation data.

Asian Equity Monthly Outlook - July 2017

The MSCI Asia ex Japan (AxJ) Index rose by 1.6% in US dollar (USD) terms. Year-to-date (YTD), the index returned 22.8%, outperforming MSCI World by over 12%.

Improving Japanese Shareholder Returns Ahead

Our top Japanese Equity staff, including our CIO, report on how Corporate Governance remains on a strong upward trend, which should boost alpha for active managers and beta for the overall market via improvements in ROE and shareholder distributions.

The Global Investment Committee remains moderately optimistic about the global economy and equity markets, while being cautious on global bonds.

June Gamble Doesn't Pay Off for May

Theresa May’s Conservative Party lost its outright majority in last Thursday’s general election. What are the implications for Brexit and the markets?

Asian Equity Monthly Outlook - June 2017

MSCI Asia ex Japan (AxJ) gained 4.7% in USD terms, outperforming the MSCI AC World and MSCI Emerging Markets Indices.

Asian Fixed Income Monthly Outlook - June 2017

Better-than-expected US non-farm payroll figures and a more favourable FOMC statement were offset by political uncertainties in Washington. FBI director James Comey's firing and investigations into possible ties between Trump's election campaign and Russia increased concerns of a set-back in the president's economic agenda.

Forbes: After Yellen, An All-White Male Fed Board Ahead?

“Could it be possible that Trump would accept an all-white male Fed Board?”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asia High Grade Credit - A Safe Haven within Emerging Market Debt

Asia Credit is significant enough as an asset class to be considered separately, and its high grade segment could be a relative safe haven if EMD flows reverse.

Forbes: The Future Of Navarro And America First Policies

“Many people are claiming that President Trump’s aggressive trade rhetoric during the campaign has been permanently overridden by the realities of the presidency.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

On 24 May 2017, Moody’s downgraded China’s sovereign credit rating to A1 from Aa3 citing expectations that China’s “financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows”.

On 19 May 2017, S&P upgraded Indonesia’ sovereign rating to BBB- with a stable outlook from BB+ with a positive outlook.

How would a Korean crisis impact Japan?

While highly unlikely, we examine the potential impact on Japan of a major crisis on the Korean Peninsula.

Forbes: What Was Japan's Bubble Like In 1989?

“Japan's example should always provide a guide to investors to be wary of arguments that surges in risk assets to high valuations based upon huge monetary and fiscal policy stimuli, coupled with excessive confidence, even if long-lasting, are acceptable.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asian Equity Monthly Outlook - May 2017

MSCI Asia ex Japan (AxJ) was up another 2.2% in USD terms, outperforming the MSCI AC World. All AxJ markets ended higher in April.

Asian Fixed Income Monthly Outlook - May 2017

10-year US Treasury (UST) yields ended the month at 2.28%, about 11 basis points (bps) lower compared to end-March levels. Mixed economic data and rising geopolitical tensions drove sentiment over the month.

Japan in Motion: What does the future hold?

We believe that Abenomics is working, however we feel that its success cannot be determined by viewing government policy frameworks in isolation.

Forbes: Why The Yen Should Not Strengthen In A Crisis

“Any major crisis in the Northeast Asian region, especially one involving a crisis within Japan’s borders, is likely to be handled very aggressively by the Bank of Japan (BOJ), with it bending the rule-book as much as the Fed did during the Global Financial Crisis or as the ECB has done in the past five years.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

View on the French Elections

Our team of our Portfolio Managers in London, one of whom hails from France, reviews the prospects and ramifications of this weekend's French election.

Japan’s Inflation and Monetary Policy Outlook

Our Tokyo Fixed Income team explains its view on the Japanese labor market and its effect on consumer inflation and Bank of Japan policy.

Value Investing now back in favour — Will this continue?

During the 2016 December quarter, we witnessed the value style stage a partial recovery after having underperformed for at least two years or so. Is this as good as it gets? Or will value continue to outperform after its initial recovery, after having being in the wilderness for some time?

China started 2017 with real momentum, following the property driven debt-fuelled stimulus of last year, and the blue skies a result of Government directives to curb pollution during March’s Central Government meetings. However, with an expectation of lower steel intensity sectors driving growth this year, what will this mean for Australia’s resource sector?

Asian Equity Monthly Outlook - April 2017

MSCI Asia ex Japan (AxJ) was up 3.3% in USD terms, outperforming MSCI AC World. All Asian markets rose over the month, with gains led by India and Korea.

Asian Fixed Income Monthly Outlook - April 2017

US Treasury (UST) yields rose in the first half of the month buoyed by hawkish comments from the Federal Reserve (Fed), a solid US jobs report and possible scale back of quantitative easing (QE) by the European Central Bank (ECB).

Five Charts to Watch

As commodity prices have risen, the Australian economy is set to benefit from these continuing gains.

Move over OPEC, there is a new commodity cartel in town... China

China has had a significant impact on the supply side in two key global commodities during 2016. Going forward, look out for further actions from China on the supply side of commodities.

Asian Equity Monthly Outlook - March 2017

MSCI Asia ex Japan (AxJ) was up 3.4% in USD terms, marginally outperforming MSCI AC World. Absolute returns were positive for all AxJ markets except the Philippines.

Asian Fixed Income Monthly Outlook - March 2017

US Treasury (UST) yields traded in a tight range in February. Risk assets rallied and UST yields rose in the first half of the month, on the back of the prospect of tax cuts and a Dodd-Frank overhaul in the US.

Japan’s “Show Me the Money” Corporate Governance: 4Q update

Given the release of the fourth quarter data, we update our decade-long theme about improving corporate governance in Japan.

The Real Trade War

There has been much concern lately about the new US administration’s trade policy. Taking a step back and looking at global trade numbers, we can draw a number of conclusions that might explain America’s new thinking on trade.

Singapore Equities 2017 - The Year of Expansion

In line with our market outlook going into 2017, we previously observed the prospect of attractive opportunities emerging during the year.

Asia Credit - A New Major Global Asset Class

Asia’s Credit market has come a long way since the Asian Financial Crisis of 1998, having evolved into a large, deep and liquid market.

Asian Equity Monthly Outlook - February 2017

Asia ex-Japan (AxJ) equities returned 6.2% in US Dollar (USD) terms, outperforming MSCI World. Singapore, Hong Kong and Chinese equities outperformed while Indonesia, Malaysia and Thailand lagged.

Asian Fixed Income Monthly Outlook - February 2017

US Treasury (UST) yields ended higher in January as weaker-than-expected payroll data led markets to moderate their forecasts for Federal Reserve (Fed) rate hikes in 2017.

Why ESG for Emerging Asia

Given the challenges, why bother?

What does Trump's First Week say about the Unorthodox Future Ahead?

Our head of Global Strategy in New York analyzes and forecasts the developments of major topics arising from the new Administration.

Asian Credit Outlook 2017

In-depth report: Economic growth in Asia is expected to remain broadly stable in 2017. While there will be greater external uncertainties as well as country-specific challenges, Asian economies are, on balance, better equipped to deal with external pressures compared to a few years back.

Emerging Market Debt Outlook 2017

Our Senior Portfolio Manager for Emerging Market Debt in London forecasts that in 2017, this asset class could well match 2016’s achievement.

Turkey on a Knife's Edge

Our London-based expert on Turkey updates his views on the precarious situation there.

Asia Credit - A Separate Allocation

Why Asia Credit should stand alone from Global Emerging Market Debt.

2017 Asian Rates and FX Outlook

2016 was a year of surprises. The Federal Reserve (Fed) backtracked on its outlook on interest rate hikes, Britain voted to leave the European Union, Italian Prime Minister Matteo Renzi resigned after a resounding defeat in the Italian referendum, and Donald Trump triumphed over Hillary Clinton to become the 45th US President.

Asian Equity Monthly Outlook - January 2017

Asia ex-Japan (AxJ) equities returned -2.0% in US Dollar (USD) terms, underperforming MSCI World and MSCI Emerging Markets (EM). Currencies across AxJ generally weakened against the dollar following the Federal Reserve's (Fed’s) decision to hike rates.

Asian Fixed Income Monthly Outlook - January 2017

USTs weakened further in December, as caution prevailed following the November sell-off. As widely expected, the US Federal Reserve (Fed) raised interest rates by 25 basis points (bps).

Global trade the key for Japan

As we start 2017, we expect the continued recovery in Japan’s economy will be driven by three factors outlined in this article.

Trump as Teddy Roosevelt

Trump certainly is non-conventional, in many ways similar to Teddy Roosevelt. Hopefully, Japan can adapt to this new reality, and instead of blocking Trump's initiatives, be able to have acceptable compromise “deals” ready.

House View: Bullish on Global Equities and the USD in 2017

Nikko AM's Global Investment Committee's 2017 Outlook — More Economic and Equity Reflation, Despite Less Dovish Central Banks

Japan Equity Market Outlook 2017

We believe that in an increasingly uncertain world, Japan’s less uncertain market will provide a compelling opportunity for serious investors.

Asia ex-Japan Equity Market Outlook 2017

The phrase “lower for longer” could well become unfashionable very quickly after years of central banks combating the forces of deflation and wishing for inflation instead.

How Trump seals China’s policy trilemma

Our China Fixed Income expert in Singapore expounds upon how the Trump election is forcing China into taking specific economic policies.

Asian Equity Monthly Outlook - December 2016

Asia ex-Japan equities returned -2.9% in US Dollar (USD) terms, underperforming MSCI World.

Asian Fixed Income Monthly Outlook - December 2016

UST yields surged in the month as Trump's election victory prompted expectations of a significant fiscal package and possible upside inflation risk under the new administration.

Asia’s Coming Healthcare Boom

A combination of key regional factors—including demographics, urbanization and existing infrastructure gaps—all point to sustainable growth for healthcare in Asia ex Japan.

Five Charts to Keep an Eye On – Making sense of this unique investment environment

Following the US election, we have seen bond rates continuing to increase, a stronger US dollar, firmer commodity prices, and a US stock market at all-time highs. Is optimism around the US President-elect’s fiscal expansion masking the true deflationary picture?

Italian Referendum: Nikko AM Europe Fixed Income Commentary

We expect Italian assets to underperform until it becomes clear who will be able to form and lead a new government. Nevertheless the outcome of the referendum was already priced into financial markets.

Japan’s “Show Me the Money” Corporate Governance: 3Q update

Given the release of the third quarter data, we update our decade-long theme about improving corporate governance in Japan.

Global Emerging Markets: Possible Impacts from a Trump Presidency

Following Trump’s election, our Emerging Market team in London, supported by John Vail, our Global Chief Strategist, discuss what, at this early stage, we can potentially expect to see from the US regarding its relationship with Emerging Market economies.

Global Oil: November Could Be Critical

Our oil experts in the US and London analyze the Saudi oil conundrum.

Asian Markets in the Wake of Trump’s Triumph

Our Senior Portfolio Manager for Asian equities reflects on Asian markets in the wake of Trump’s Triumph.

Trump Win: Surprise, but Not an Accident

Neither Brexit nor Trump’s win was an accident – ‘the people’, in particular the working and middle classes, are purposefully and deliberately giving the political elites a thump on the nose.

Asian Equity Monthly Outlook - November 2016

Asia ex-Japan equities returned -1.5% in US Dollar (USD) terms, outperforming the MSCI World which declined by 1.9%.

Asian Fixed Income Monthly Outlook - November 2016

USTs ended lower in October. Better US economic data and a hawkish statement from the Federal Open Market Committee (FOMC) bolstered expectations of a December interest rate hike.

Political Revolution Hits America

Much like the BREXIT result, Americans surprised the consensus with an anti-establishment vote.

Populism and Strongman Rule - Is Duterte a role model for ASEAN?

Our Senior Portfolio Manager for ASEAN equities reviews the trend towards Strongman rule in ASEAN.

Earnings recovery is much more achievable in EM Asia than LatAm or EMEA

Our Multi-Asset portfolio manager based in Singapore reviews the prospects for profit margin expansion in the three main Emerging Market regions.

Singapore Equity Outlook - October 2016

Singapore's weak 3Q2016 GDP report and MAS's 'unchanged' policy guidance on the SGD paint a sombre outlook for the Singapore economy for the rest of 2016 and 2017.

ASEAN Equity Outlook - October 2016

"Find growth and you will find performance" was our Asian Equity investment mantra in early 2016 as the world grappled with slowing growth and lethargy with monetary experimentaton in low and depressed interest rates.

Asian Equity Monthly Outlook - October 2016

Asia ex-Japan equities rose in September, returning 1.6% in US Dollar (USD) terms and outperforming both the MSCI World and MSCI Emerging Markets indices.

Asian Fixed Income Monthly Outlook - October 2016

USTs ended September mixed. While the Federal Reserve left interest rates unchanged and the Bank of Japan reinforced commitment to monetary easing, the ECB's lack of new stimulus disappointed the market.

Will Japan Exit the UK?

Our UK expert on BREXIT and our chief global strategist respond to Japan’s concern about its investments in the UK.

Asian Equity Monthly Outlook - September 2016

Asia ex-Japan equities extended its upward momentum in August, returning 3.4% in US Dollar (USD) terms and outperforming MSCI World by 3.3%.

Asian Fixed Income Monthly Outlook - September 2016

USTs ended marginally lower in August as the market adjusted to the possibility of a Fed rate hike, buoyed by sustained resilience in the labour market.

A deeper look into Japan and China's debt problems

The prevailing market view on the region remains negative, mainly centring on China's debt problem and general doubts about Abenomics. We focus on some aspects of this negativity from a sovereign balance sheet perspective and conclude that the potential dangers are overstated.

Why it matters: Nigeria's Global Oil Impact

Oil production in Nigeria has been severely hampered in recent months as local militant group, the Niger Delta Avengers, have committed numerous attacks on oil pipelines in the region, materially lowering the country’s oil production. Our Emerging Market (EM) debt team in London take a closer look the political situation in Nigeria, the origins of the conflict, prospects for its potential resolution and its impact on global oil prices.

Japan’s “Show Me the Money” Corporate Governance

Given the release of the second quarter data, we update our decade-long theme about improving corporate governance in Japan.

Hitting the Mark: Can Third Arrow Reforms Benefit Investors?

Japan is a consensus-driven culture and improved corporate governance is now the consensus. There are clear signs that many companies are moving towards more shareholder-oriented management.

Asian Fixed Income Monthly Outlook - August 2016

US Treasury (UST) yields ended July mixed: yields of shorter maturities climbed, whilse those of longer maturities fell.

Asian Equity Monthly Outlook - August 2016

Asia ex Japan equities rose by 4.8% in USD terms in July, outpacing global equities. Hopes for monetary and fiscal stimulus led to strong buying of Asian equities.

India – Modi Magic, the GST Game Changer

The CEO of our Indian joint venture and our senior EM portfolio manager in London analyze the great importance of recent legislative developments in India.

Fintech – Disruptor or Saviour?

Our expert on Asian financials describes the exciting technological developments that will change the way we all do business in the future.

Erdogan Hammers the Parallel State

Our expert on Turkey details his cautious stance on Turkey's near-term future.

Japan's Election: Abe's Continued Focus on the Economy

Our Chief Strategist in Japan shares his views on political landscape and the economy.

Asian Fixed Income Monthly Outlook - July 2016

US Treasury (UST) yields gained in a volatile mon across asset classes. The US Federal Reserve (Fed) scaled back projections for raising interest rates, while the UK voted to leave the EU by a 4% margin, surprising markets.

What does Brexit mean for Emerging Markets?

Following our analysis of the recent UK vote, our Emerging Market debt team in London discusses Brexit's potential ramifications for this asset class.

Abenomics hasn't failed yet, but it does face global headwinds

Many are wondering if it's time to give up on Abenomics. While some of the scepticism is understandable, we believe it is too early to throw in the towel.

BREXIT, BREXIT! Where’s The Exit?

Two of our senior portfolio managers in London update their earlier pieces on what lies ahead for what should be a long-drawn out BREXIT path.