Is China Targeting Foreign Investors Amid the Tech Crackdown?
No. While the ongoing regulatory crackdown on technology companies in China is unsettling markets, it is not specifically targeting foreign investors.
Authored by: Aaron Costello
New Zealand Outlook: Complacency Is the Biggest Risk
New Zealand has arguably fared better during the global pandemic than any other developed country. While 2021 should see the New Zealand economy continue to fare well, complacency is the biggest risk, both in regards to COVID-19 and global growth, but also in relation to sky-high equity valuations, both at home and abroad.
Outlook 2021: A Year of Healing
As 2020 comes to a close, we expect some key investment drivers to persist into next year. While our views speak to many different challenges confronting investors, including the poor bond yields on offer, the fate of US-China relations, and where to find growth, they are rooted in the belief that 2021 will be a year of healing for the global economy.
China’s Onshore Bond Market: An Update
Interest in China’s onshore bond market has been rising steadily since 2016 when the market was thrown open to foreign investors. Foreign holdings of onshore bonds now exceed US$400 billion and are set to rise further. We think the market warrants further attention from global investors, given Chinese bonds continue to offer higher yields and lower correlations than those found in other major bond markets, with the potential to bring portfolio diversification benefits.
Trump Administration Recommends Universities Divest from China
We provide context for the US government recommendation for endowments to divest from Chinese companies, highlight practical considerations if institutions elect to comply, and encourage institutions to reaffirm their approach to investing in Chinese equities.
Should Investors Avoid China Due to Rising US-China Tensions?
No, we still believe China remains an important exposure for investment portfolios. However, US-China tensions will continue to escalate. Investors need to reaffirm both the rationale and implementation of their China investment strategy and must communicate this with key stakeholders. For further reading, please see the “Decoupling” section of Celia Dallas and Wade O’Brien’s “VantagePoint:…
Pandemic Risks and Reactions
Global equities sold off sharply this week as cases of COVID-19 spread rapidly outside of China (particularly in Korea, Italy, and the Middle East). While the spike in volatility has been abrupt, the current market sell-off is arguably a needed correction.
Coronavirus Outbreak: Initial Thoughts and Implications
Investors should stay calm. While the Wuhan coronavirus is still spreading, the virus remains less deadly and more contained than the SARS outbreak of 2002–03. Looking at other epidemics, history suggests that after an initial sharp hit, economies and markets typically recover quickly.
Outlook 2020: Ten Investing Themes for the Coming Year
Our thoughts on key macro questions, emerging opportunities, and risks in 2020.
Does a Dovish Fed Doom the US Dollar?
No, we do not think Federal Reserve rate cuts signal a major downturn in the US dollar.