China

Why now is a good time to add some more exposure to emerging markets

One of the reasons 2018 turned out to be such a disappointment for equity investors was the underwhelming performance of the Chinese economy, the ramifications of which were felt as far afield as Germany.

While most equity markets had a rough year, the performance of emerging markets and eurozone stocks were among the worst. So for 2019, some of the most important questions facing investors are what caused the slowdown in China last year and when the economy is likely to bounce back.

Prepare for the bear: the factors set to trigger the next recession

The economist Paul Samuelson once joked that the stockmarket has predicted nine of the past seven recessions. But while the over-reactive nature of equity market investors and their poor predictive powers ring true, there is nonetheless a clear link between economic and market performance, at least in advanced economies.

Six adventurous single-country fund ideas

The Bric group of countries (Brazil, Russia, India and China) captured investors’ imagination back in 2001 when Goldman Sachs’ chief economist at the time, Jim O’Neill, coined the term. This new investment theme spawned a raft of fund launches, and investors piled in. Then in 2010 South Africa joined the group to turn Bric into Brics.

John Redwood: a new opportunity to buy China?

The Chinese bear market in shares has lasted since the peaks reached in the summer of 2015.

The index of share prices for the Shanghai market has halved since June 2015. Then, excessive exuberance tempted many domestic buyers into the stock market. A substantial credit expansion allowed people to buy shares on borrowed money.

Tactical Asset Allocator: geopolitical strains can lead to big gains for investors

It would be easy to imagine that the US/China trade war and the US Federal Reserve’s resolve to tighten monetary policy, which have been the two big fears hanging over the US stock market throughout 2018, are reaching some sort of stasis. The market certainly rejoiced when Fed chairman Jay Powell made the dovish comment that interest rates are “just below” the range of rates considered neutral. The Dow Jones Industrial Average index shot up by 600 points in one session, its best single-day gain since March.

How US policy could benefit emerging markets

Arguably the biggest reason for the pullback in emerging market equities is owing to the trade spat between the US and China. However, we think that the market reaction has been excessive.

While it’s certainly hard to predict how things could play out, in light of the recent G20 meeting and talks between US President Donald Trump and his Chinese counterpart Xi Jinping, there seems to be a sense that there could be further negotiations and a more conciliatory tone going forward.