It is worth noting that while the significant rally in BATJX – Baidu, Alibaba, Tencent, JD.com, Xiaomi – and the offshore listed tech/internet players have dominated headlines lately, the bottoming out of the overall China market since the policy shift in late September last year started onshore, with A shares experiencing a sharper rebound first and with a more slower but sustained trend, as domestic investors were more sensitive to the reset in policy tones and significant shift in government’s commitment to reviving economic growth and capital market activities. In this article, Partner & Co-CIO David Lai discusses the factors that could drive a more sustained outperformance in onshore equity market, and why it is a good entry point to rotate from offshore to onshore companies in policy supported sectors.

Mar 20, 2025

While the market is focused on the size of the fiscal stimulus emerging from the Two Sessions currently underway in Beijing, there are other important drivers that could shape the outlook for the relative performance of Chinese equities versus US stocks. The first is about relative valuation; the second is cyclical – that is, the turning of the US economic cycle; and the third is secular – that is, the sustainability of the repeated use of the “policy bazooka” in the US. In this article, our Senior Advisor Say Boon Lim discusses what causes the underperformance of US market since the Inauguration of President Trump, and diversification out of the US equities has become more important than ever while the slump in consumer confidence and potential debt crisis continue to add downward pressures on the US economy.

Mar 09, 2025

The Two Sessions have delivered a strong signal: China’s economy remains focused on steady growth, with robust government support, despite mounting global uncertainties. With an economic target of 5% growth for 2025 and the highest budget deficit in three decades, policymakers are set to implement a more proactive fiscal policy. This will include increasing government financing to drive domestic demand and boost private sector confidence. In this article, our Partner & Co-CIO David Lai highlights growth and policy supported areas to focus, during this ideal window to add exposure for Chinese equities, particularly opportunities from leaders in artificial intelligence (AI), semiconductors, robotics, and biotech that are still trading at attractive valuation via a via global and even offshore listed China peers.

Mar 09, 2025

After a stellar third quarter on renewed hopes of powerful fiscal stimulus, Chinese stocks followed shares in other emerging markets down in Q4, giving back some of those gains as the CSI 300 Index slipped 1.7% (CNY). Weighing on mainland stocks were investors’ fears that Trump 2.0 tariffs, along with a lack of follow-through by Chinese policymakers, might hinder the country’s growth revival. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses what will spur Beijing to inject more stimulus, where it might go, and what Trump’s trade war and the DeepSeek saga might tell us about where A shares outperformance could come from in 2025.

Feb 24, 2025

Robust projected earnings growth for 2025 – part of a multi-year growth story driven by Artificial Intelligence – will give the Taiwan market a helpful buffer amidst geopolitical and trade uncertainties. Also, Taiwan has added protection from being the indispensable total supply chain for the tech industry – with its dominance driven by semiconductor and technology manufacturing leaders like TSMC, Hon Hai, and MediaTek. Economic growth is expected to remain solid at around 3.3% for this year. Beyond the tech sector, the government’s push to upgrade its financial services capabilities, with high domestic penetration and receptiveness of financial products, also provide promising tailwinds. The risks of Trump 2.0 make Taiwan a nuanced opportunity this year. It threatens volatility. But the AI revolution remains a multi-year growth driver, and Taiwan's strategic role, indeed global leadership in semiconductor manufacturing, offers strong long-term potential. Notwithstanding geopolitical considerations and general market risks, the medium to long term growth trajectory remains robust. In this article, our Portfolio Manager Alex Chu suggests that corrections could provide the long term investors attractive entry points into Taiwan’s technology-driven equity market which has a low correlation with global equity market as well as other major asset classes.

Jan 27, 2025

Asia ex-Japan investment grade credits should continue to outperform their global peers in 2025, amidst risks in the US of a continued rise in US Treasury yields, at a time when corporate credit spreads in the US are already at cyclical lows. On the other hand, Asia ex-Japan credits will likely be supported by a combination of monetary easing, shorter duration, the offer of significant yield pickups, credit upgrades and likely lower issuance. Further to Part 1 and Part 3 of our 2025 outlook which dealt with the US and ASEAN market outlook, in this article we discuss how Asia ex-Japan US Dollar Investment Grade Credits (using JACI IG as the investment universe) generate allocation alpha in a complex landscape dominated by concerns over economic uncertainties in the U.S – about its fiscal outlook, a resurgence in inflation, rapidly rising government debt and the impact of radical policy plans.

Jan 27, 2025

Emerging ASEAN stock valuation has likely overpriced the trade threat posed by the incoming Trump Administration. This has created a value opportunity that has priced a catastrophe akin to the COVID pandemic which is unlikely to play out. The forward PE ratio for the Dow Jones Emerging ASEAN Titans 100 Index is almost at COVID-19 lows. The valuation of the index also hit a low late in 2016, when Donald Trump was elected to the Presidency the first time. In tis article, our Senior Advisor Say Boon Lim discusses why the region could be a sweet spot for value investing, given the growth trajectory and drivers in Emerging ASEAN, which could be benefited rather than suffered from US tariffs.

Jan 07, 2025

China’s financial markets stand on the cusp of resilience and opportunity, buoyed by proactive government interventions and structural reforms. Beijing’s commitment to fostering innovation in artificial intelligence, semiconductors, and renewable energy highlights its strategic pivot towards self-reliance. Meanwhile, reforms aimed at enhancing corporate governance and shareholder returns signal a shift toward greater efficiency and market appeal. While challenges persist, including heightened US tariffs and soft domestic demand, the leadership’s “all-in” growth strategy and flexible policy framework highlight a clear long-term vision for sustainable development. For investors, China in 2025 presents a wealth of opportunities across a range of sectors—from cutting-edge technology and dividend-focused equities to stable government bonds and a recovering real estate market. In this article, our Partner & Co-CIO David Lai suggests that this year could be one of the strategic investments for China with potential for substantial returns.

Jan 07, 2025

US equities sentiment is now maximum bullish despite great policy uncertainties – altogether posing considerable risk to late-cycle momentum chasers. The US economy had barely cooled down before it was stimulated by 100 basis points in rate cuts in just three months from September 2024. The cuts started just when the US economy was rebounding. More importantly, they came after US inflation started picking up again. In fact, the US stock market is now in the grip of “Trumpian euphoria” because market expects the incoming administration will likely be supportive of even stronger growth, through more debt and deficits and extreme economic nationalism. The imminent risk now is that the US will have to pay more for its borrowings despite its dominance of the global debt market. This is not about other countries bypassing the Dollar in trade. It is about inflation – which will likely be worsened by President-elect Trump’s inflationary policies – and the term premia. In this article, our Senior Advisor Say Boon Lim discusses why US equities are in a bubble, drivers behind the Trumpian Euphoria 2.0, and that the stubborn or even revived inflation are credible risks in 2025.

Dec 24, 2024