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While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
Surging Treasury yields and increasing anxiety over the Fed’s ‘higher for longer’ policy led global equities to ‘risk-off’ in the third quarter, though the challenge for Chinese stocks in the CSI 300 Index, down -2.9% for the quarter, remained mostly a function of negative sentiment toward China’s property market and skepticism that policymakers were doing enough to put the nation’s economic recovery back on track. Nevertheless, we saw some very positive signs in Q3, with Beijing beginning to implement targeted stimulus that, by quarter end, already appears to be bearing fruit. From a factor perspective, the new economy portfolio’s quality growth exposure is effectively levered to the upside surprises we see as significantly undervalued at this moment, while the bedrock index should continue to benefit from value and quality exposures, allowing us to identify true bargains poised for revaluation. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses third-quarter performance and outline our expectations for China’s economy and market as 2023 draws to a close.
Nov 6, 2023
Surging Treasury yields and increasing anxiety over the Fed’s ‘higher for longer’ policy led global equities to ‘risk-off’ in the third quarter, though the challenge for Chinese stocks in the CSI 300 Index, down -2.9% for the quarter, remained mostly a function of negative sentiment toward China’s property market and skepticism that policymakers were doing enough to put the nation’s economic recovery back on track. Nevertheless, we saw some very positive signs in Q3, with Beijing beginning to implement targeted stimulus that, by quarter end, already appears to be bearing fruit. From a factor perspective, the new economy portfolio’s quality growth exposure is effectively levered to the upside surprises we see as significantly undervalued at this moment, while the bedrock index should continue to benefit from value and quality exposures, allowing us to identify true bargains poised for revaluation. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses third-quarter performance and outline our expectations for China’s economy and market as 2023 draws to a close.
Nov 6, 2023
From “Goldilocks” to “Nightmare on Wall Street” – the convergence of structural and cyclical forces looks set to inflict a lot more damage on US assets. For some time now, we had been warning about the upside risks to US Treasury yields. That slow, upward creep in US Treasury yields recently turned into a rampage, with nasty implications for both US bonds and equities. Meanwhile structural factors are further feeding the rise in UST yields – more supply, less demand. In this article, our Senior Advisor Say Boon Lim discusses about the great refinancing pressure of US government debt looming, how a lot of stuff could “break” if funding costs keep going up – including US banks – and how things may play out if the structural factors are dominant, a cyclical economic downturn may not necessarily bring down funding costs.
Oct 19, 2023
From “Goldilocks” to “Nightmare on Wall Street” – the convergence of structural and cyclical forces looks set to inflict a lot more damage on US assets. For some time now, we had been warning about the upside risks to US Treasury yields. That slow, upward creep in US Treasury yields recently turned into a rampage, with nasty implications for both US bonds and equities. Meanwhile structural factors are further feeding the rise in UST yields – more supply, less demand. In this article, our Senior Advisor Say Boon Lim discusses about the great refinancing pressure of US government debt looming, how a lot of stuff could “break” if funding costs keep going up – including US banks – and how things may play out if the structural factors are dominant, a cyclical economic downturn may not necessarily bring down funding costs.
Oct 19, 2023
Bloomberg reported that Chinese policymakers, led by the Ministry of Finance and the National Development and Reform Commission, are planning to launch a new round of stimulus, involving a potential issuance of at least RMB 1 trillion of additional China government bonds and an upward revision of fiscal budget deficit. Some investors may be worried about its negative impact on the bond market with the potential jump in supply. In this article, our Partner & Co-CIO David Lai discusses why we agree with most analysts that it would not create any lasting impact even if the plan materializes. In fact, China remains disciplined in fiscal policy whilst the overall monetary stance stays accommodative. China government bonds have outperformed almost all other sovereign bonds this year due to the rate cuts and low inflation expectations. The long end of China yield curve in particular benefited the most year-to-date, with the yields on 10-year, 30-year, and 50-year having fallen 13.8bps, 18.0bps, and 20.2bps respectively already.
Oct 19, 2023
Bloomberg reported that Chinese policymakers, led by the Ministry of Finance and the National Development and Reform Commission, are planning to launch a new round of stimulus, involving a potential issuance of at least RMB 1 trillion of additional China government bonds and an upward revision of fiscal budget deficit. Some investors may be worried about its negative impact on the bond market with the potential jump in supply. In this article, our Partner & Co-CIO David Lai discusses why we agree with most analysts that it would not create any lasting impact even if the plan materializes. In fact, China remains disciplined in fiscal policy whilst the overall monetary stance stays accommodative. China government bonds have outperformed almost all other sovereign bonds this year due to the rate cuts and low inflation expectations. The long end of China yield curve in particular benefited the most year-to-date, with the yields on 10-year, 30-year, and 50-year having fallen 13.8bps, 18.0bps, and 20.2bps respectively already.
Oct 19, 2023
China has emerged as the world’s largest consumer and producer for industrial robots and equipment. In fact, the country recorded US$6.6 billion sales of industrial robotics in 2022, most of which were produced domestically, far more than the second largest country Germany which registered US$2 billion sales during the same year. Propelled by its changing demographics and its evolution from low-cost manufacturing to high-value added processes, China will continue to drive the development of a homegrown robotics sector and pursue manufacturing upgrade, as underscored by China’s 14th Five Year Plan which explicitly laid out the national strategic goal of building a modern high tech society. Sector leaders would be natural beneficiaries of support measures for this broad policy. In this article we discuss more about how along with development of a highly integrated ecosystem of high tech processes and smart manufacturing systems, China is also integrating new materials, new energy, smart grids and energy saving systems, etc. to its technology-enabled ecosystem that sits well with China’s 2060 net zero targets, and its national strategic goal towards a modern, high tech society.
Sep 29, 2023
China has emerged as the world’s largest consumer and producer for industrial robots and equipment. In fact, the country recorded US$6.6 billion sales of industrial robotics in 2022, most of which were produced domestically, far more than the second largest country Germany which registered US$2 billion sales during the same year. Propelled by its changing demographics and its evolution from low-cost manufacturing to high-value added processes, China will continue to drive the development of a homegrown robotics sector and pursue manufacturing upgrade, as underscored by China’s 14th Five Year Plan which explicitly laid out the national strategic goal of building a modern high tech society. Sector leaders would be natural beneficiaries of support measures for this broad policy. In this article we discuss more about how along with development of a highly integrated ecosystem of high tech processes and smart manufacturing systems, China is also integrating new materials, new energy, smart grids and energy saving systems, etc. to its technology-enabled ecosystem that sits well with China’s 2060 net zero targets, and its national strategic goal towards a modern, high tech society.
Sep 29, 2023
The youth unemployment rate in China has been much talked about, however the phenomenon is often poorly interpreted without addressing the important nuances behind the structural, transformational and societal factors in China. In fact, the elevated unemployment rate is a transitional legacy from COVID and many countries also shared the experience of high youth unemployment. There is a lag in China’s youth unemployment data compared to western countries, given China’s relatively late reopening from the COVID pandemic. In this article, we discuss the structural factors contributing to the youth unemployment rate in China, and explain why the number will likely to decline and why the unemployed youth will be absorbed into workforce as China continues on its path of recovery.
Aug 24, 2023
The youth unemployment rate in China has been much talked about, however the phenomenon is often poorly interpreted without addressing the important nuances behind the structural, transformational and societal factors in China. In fact, the elevated unemployment rate is a transitional legacy from COVID and many countries also shared the experience of high youth unemployment. There is a lag in China’s youth unemployment data compared to western countries, given China’s relatively late reopening from the COVID pandemic. In this article, we discuss the structural factors contributing to the youth unemployment rate in China, and explain why the number will likely to decline and why the unemployed youth will be absorbed into workforce as China continues on its path of recovery.
Aug 24, 2023
In a refreshing break from the consensus of gloom surrounding China, Cambridge Associates wrote recently that the Chinese economy was not stalling. Meanwhile IMF holds steady its China GDP growth forecasts in the World Economic Outlook Update report released last week, at 5.2% for 2023 and 4.5% for 2024. In this article, our Senior Advisor Say Boon Lim shares more about why China may surprise to the upside and the appeal of Chinese equities as a relative value play.
Aug 3, 2023
In a refreshing break from the consensus of gloom surrounding China, Cambridge Associates wrote recently that the Chinese economy was not stalling. Meanwhile IMF holds steady its China GDP growth forecasts in the World Economic Outlook Update report released last week, at 5.2% for 2023 and 4.5% for 2024. In this article, our Senior Advisor Say Boon Lim shares more about why China may surprise to the upside and the appeal of Chinese equities as a relative value play.
Aug 3, 2023
The “Urban Village Redevelopment” initiatives outlined at the Politburo Meeting in July could potentially create new housing demand which is valued at over RMB 2 trillion per year and property fixed asset investment worth RMB 0.4 trillion per annum. What is urban villages, and why is it a significant development to monitor? In this article, we discuss why urban villages are an integral part of China's new phase of urbanization, and how this links up with China's smart and green city planning, and a holistic set of initiatives that roll up to building China towards its goals of building China into a high tech, modern society under the 14th Five Year Plan.
Aug 2, 2023
The “Urban Village Redevelopment” initiatives outlined at the Politburo Meeting in July could potentially create new housing demand which is valued at over RMB 2 trillion per year and property fixed asset investment worth RMB 0.4 trillion per annum. What is urban villages, and why is it a significant development to monitor? In this article, we discuss why urban villages are an integral part of China's new phase of urbanization, and how this links up with China's smart and green city planning, and a holistic set of initiatives that roll up to building China towards its goals of building China into a high tech, modern society under the 14th Five Year Plan.
Aug 2, 2023
While global equities generally performed well in Q2 amidst a frenzy around A.I., sentiment toward Chinese stocks remained lacklustre as investor enthusiasm waned. That said there remained bright spots in the market that quietly outperformed - including our multi-factor China Bedrock Economy ETF which delivered YTD USD return of ~12.6% as of Aug 2nd 2023. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, reviewed the performance of various style factors during the quarter, and discusses why we see China as grossly undervalued going into the second half.
Aug 1, 2023
While global equities generally performed well in Q2 amidst a frenzy around A.I., sentiment toward Chinese stocks remained lacklustre as investor enthusiasm waned. That said there remained bright spots in the market that quietly outperformed - including our multi-factor China Bedrock Economy ETF which delivered YTD USD return of ~12.6% as of Aug 2nd 2023. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, reviewed the performance of various style factors during the quarter, and discusses why we see China as grossly undervalued going into the second half.
Aug 1, 2023
The US Treasury’s recent – and ongoing – dash for cash highlights the economy’s enormous fiscal challenges. To quote Bloomberg: “The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher. Sales of government notes and bonds are set to begin rising in August, with net new issuance estimated to top USD 1 trillion in 2023 and nearly double next year to fund a widening deficit.” On top of that, according to calculations by asset manager Horizon Kinetics and as quoted by gold fund manager Incrementum, the US will have to refinance around half of its national debt of more than USD 35 trillion by 2025. That’s a lot of debt maturities to digest in two years. In this article, our Senior Advisor Say Boon Lim cautions that even if Fed rates stabilise, the longer-term outlook for US Treasury yields would likely remain risky as persistent deficits drive up debt relative to GDP, in turn driving interest payments as a percentage of GDP up “vertically”. Indeed, the Congressional Budget Office is warning of the “risk of a fiscal crisis”.
Jul 24, 2023
The US Treasury’s recent – and ongoing – dash for cash highlights the economy’s enormous fiscal challenges. To quote Bloomberg: “The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher. Sales of government notes and bonds are set to begin rising in August, with net new issuance estimated to top USD 1 trillion in 2023 and nearly double next year to fund a widening deficit.” On top of that, according to calculations by asset manager Horizon Kinetics and as quoted by gold fund manager Incrementum, the US will have to refinance around half of its national debt of more than USD 35 trillion by 2025. That’s a lot of debt maturities to digest in two years. In this article, our Senior Advisor Say Boon Lim cautions that even if Fed rates stabilise, the longer-term outlook for US Treasury yields would likely remain risky as persistent deficits drive up debt relative to GDP, in turn driving interest payments as a percentage of GDP up “vertically”. Indeed, the Congressional Budget Office is warning of the “risk of a fiscal crisis”.
Jul 24, 2023
BY TOPICS
Chart of the Week
Research & Analytics
The rebalancing of the Chinese economy is happening, aligning the government’s intention in allocating resources from speculative sectors to manufacturing and high-tech sectors. Outstanding loans to the property sector fell RMB 100 billion to RMB 53 trillion at the end of September from a year earlier, the first decline on record. In contrast, lending to the industrial sector surged by almost RMB 5 trillion in the same period. Despite the historic drop in loans, the PBOC said that the overall slowdown in property loans has stabilized, adding that the pace of declines remained unchanged. With more supportive policies such as lower downpayment requirements and reducing mortgage rates, the property sector saw a soft-landing last month. Value of new home sales among the 100 biggest real estate companies in October fell 27.5% YoY to RMB 406.7 billion, narrowing from a 29.2% decline in September, according to China Real Estate Information Corp. On the corporate front, Vanke said it will repay its debts on time after getting signals of support from a local regulator and its biggest shareholder last week, driving a strong rebound in its dollar bonds. Our Premia CSI Caixin China New Economy ETF (3173.HK) offer a diversify universe to capture the opportunities from the economic rebalancing in China, with ~21% invested in industrials and ~27% in information technology. Besides, our Premia China USD Property Bond ETF would be an efficient instrument bottom fish the USD property bonds issued by Chinese developers.
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Chart of the Week
- Research & Analytics
The rebalancing of the Chinese economy is happening, aligning the government’s intention in allocating resources from speculative sectors to manufacturing and high-tech sectors. Outstanding loans to the property sector fell RMB 100 billion to RMB 53 trillion at the end of September from a year earlier, the first decline on record. In contrast, lending to the industrial sector surged by almost RMB 5 trillion in the same period. Despite the historic drop in loans, the PBOC said that the overall slowdown in property loans has stabilized, adding that the pace of declines remained unchanged. With more supportive policies such as lower downpayment requirements and reducing mortgage rates, the property sector saw a soft-landing last month. Value of new home sales among the 100 biggest real estate companies in October fell 27.5% YoY to RMB 406.7 billion, narrowing from a 29.2% decline in September, according to China Real Estate Information Corp. On the corporate front, Vanke said it will repay its debts on time after getting signals of support from a local regulator and its biggest shareholder last week, driving a strong rebound in its dollar bonds. Our Premia CSI Caixin China New Economy ETF (3173.HK) offer a diversify universe to capture the opportunities from the economic rebalancing in China, with ~21% invested in industrials and ~27% in information technology. Besides, our Premia China USD Property Bond ETF would be an efficient instrument bottom fish the USD property bonds issued by Chinese developers.
Nov 13, 2023PREMIA POINT OF VIEW - WEBINARS
See More Webinars...FEATURED INSIGHTS & WEBINAR
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
Surging Treasury yields and increasing anxiety over the Fed’s ‘higher for longer’ policy led global equities to ‘risk-off’ in the third quarter, though the challenge for Chinese stocks in the CSI 300 Index, down -2.9% for the quarter, remained mostly a function of negative sentiment toward China’s property market and skepticism that policymakers were doing enough to put the nation’s economic recovery back on track. Nevertheless, we saw some very positive signs in Q3, with Beijing beginning to implement targeted stimulus that, by quarter end, already appears to be bearing fruit. From a factor perspective, the new economy portfolio’s quality growth exposure is effectively levered to the upside surprises we see as significantly undervalued at this moment, while the bedrock index should continue to benefit from value and quality exposures, allowing us to identify true bargains poised for revaluation. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses third-quarter performance and outline our expectations for China’s economy and market as 2023 draws to a close.
Nov 6, 2023
Surging Treasury yields and increasing anxiety over the Fed’s ‘higher for longer’ policy led global equities to ‘risk-off’ in the third quarter, though the challenge for Chinese stocks in the CSI 300 Index, down -2.9% for the quarter, remained mostly a function of negative sentiment toward China’s property market and skepticism that policymakers were doing enough to put the nation’s economic recovery back on track. Nevertheless, we saw some very positive signs in Q3, with Beijing beginning to implement targeted stimulus that, by quarter end, already appears to be bearing fruit. From a factor perspective, the new economy portfolio’s quality growth exposure is effectively levered to the upside surprises we see as significantly undervalued at this moment, while the bedrock index should continue to benefit from value and quality exposures, allowing us to identify true bargains poised for revaluation. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses third-quarter performance and outline our expectations for China’s economy and market as 2023 draws to a close.
Nov 6, 2023
From “Goldilocks” to “Nightmare on Wall Street” – the convergence of structural and cyclical forces looks set to inflict a lot more damage on US assets. For some time now, we had been warning about the upside risks to US Treasury yields. That slow, upward creep in US Treasury yields recently turned into a rampage, with nasty implications for both US bonds and equities. Meanwhile structural factors are further feeding the rise in UST yields – more supply, less demand. In this article, our Senior Advisor Say Boon Lim discusses about the great refinancing pressure of US government debt looming, how a lot of stuff could “break” if funding costs keep going up – including US banks – and how things may play out if the structural factors are dominant, a cyclical economic downturn may not necessarily bring down funding costs.
Oct 19, 2023
From “Goldilocks” to “Nightmare on Wall Street” – the convergence of structural and cyclical forces looks set to inflict a lot more damage on US assets. For some time now, we had been warning about the upside risks to US Treasury yields. That slow, upward creep in US Treasury yields recently turned into a rampage, with nasty implications for both US bonds and equities. Meanwhile structural factors are further feeding the rise in UST yields – more supply, less demand. In this article, our Senior Advisor Say Boon Lim discusses about the great refinancing pressure of US government debt looming, how a lot of stuff could “break” if funding costs keep going up – including US banks – and how things may play out if the structural factors are dominant, a cyclical economic downturn may not necessarily bring down funding costs.
Oct 19, 2023
Bloomberg reported that Chinese policymakers, led by the Ministry of Finance and the National Development and Reform Commission, are planning to launch a new round of stimulus, involving a potential issuance of at least RMB 1 trillion of additional China government bonds and an upward revision of fiscal budget deficit. Some investors may be worried about its negative impact on the bond market with the potential jump in supply. In this article, our Partner & Co-CIO David Lai discusses why we agree with most analysts that it would not create any lasting impact even if the plan materializes. In fact, China remains disciplined in fiscal policy whilst the overall monetary stance stays accommodative. China government bonds have outperformed almost all other sovereign bonds this year due to the rate cuts and low inflation expectations. The long end of China yield curve in particular benefited the most year-to-date, with the yields on 10-year, 30-year, and 50-year having fallen 13.8bps, 18.0bps, and 20.2bps respectively already.
Oct 19, 2023
Bloomberg reported that Chinese policymakers, led by the Ministry of Finance and the National Development and Reform Commission, are planning to launch a new round of stimulus, involving a potential issuance of at least RMB 1 trillion of additional China government bonds and an upward revision of fiscal budget deficit. Some investors may be worried about its negative impact on the bond market with the potential jump in supply. In this article, our Partner & Co-CIO David Lai discusses why we agree with most analysts that it would not create any lasting impact even if the plan materializes. In fact, China remains disciplined in fiscal policy whilst the overall monetary stance stays accommodative. China government bonds have outperformed almost all other sovereign bonds this year due to the rate cuts and low inflation expectations. The long end of China yield curve in particular benefited the most year-to-date, with the yields on 10-year, 30-year, and 50-year having fallen 13.8bps, 18.0bps, and 20.2bps respectively already.
Oct 19, 2023
China has emerged as the world’s largest consumer and producer for industrial robots and equipment. In fact, the country recorded US$6.6 billion sales of industrial robotics in 2022, most of which were produced domestically, far more than the second largest country Germany which registered US$2 billion sales during the same year. Propelled by its changing demographics and its evolution from low-cost manufacturing to high-value added processes, China will continue to drive the development of a homegrown robotics sector and pursue manufacturing upgrade, as underscored by China’s 14th Five Year Plan which explicitly laid out the national strategic goal of building a modern high tech society. Sector leaders would be natural beneficiaries of support measures for this broad policy. In this article we discuss more about how along with development of a highly integrated ecosystem of high tech processes and smart manufacturing systems, China is also integrating new materials, new energy, smart grids and energy saving systems, etc. to its technology-enabled ecosystem that sits well with China’s 2060 net zero targets, and its national strategic goal towards a modern, high tech society.
Sep 29, 2023
China has emerged as the world’s largest consumer and producer for industrial robots and equipment. In fact, the country recorded US$6.6 billion sales of industrial robotics in 2022, most of which were produced domestically, far more than the second largest country Germany which registered US$2 billion sales during the same year. Propelled by its changing demographics and its evolution from low-cost manufacturing to high-value added processes, China will continue to drive the development of a homegrown robotics sector and pursue manufacturing upgrade, as underscored by China’s 14th Five Year Plan which explicitly laid out the national strategic goal of building a modern high tech society. Sector leaders would be natural beneficiaries of support measures for this broad policy. In this article we discuss more about how along with development of a highly integrated ecosystem of high tech processes and smart manufacturing systems, China is also integrating new materials, new energy, smart grids and energy saving systems, etc. to its technology-enabled ecosystem that sits well with China’s 2060 net zero targets, and its national strategic goal towards a modern, high tech society.
Sep 29, 2023
The youth unemployment rate in China has been much talked about, however the phenomenon is often poorly interpreted without addressing the important nuances behind the structural, transformational and societal factors in China. In fact, the elevated unemployment rate is a transitional legacy from COVID and many countries also shared the experience of high youth unemployment. There is a lag in China’s youth unemployment data compared to western countries, given China’s relatively late reopening from the COVID pandemic. In this article, we discuss the structural factors contributing to the youth unemployment rate in China, and explain why the number will likely to decline and why the unemployed youth will be absorbed into workforce as China continues on its path of recovery.
Aug 24, 2023
The youth unemployment rate in China has been much talked about, however the phenomenon is often poorly interpreted without addressing the important nuances behind the structural, transformational and societal factors in China. In fact, the elevated unemployment rate is a transitional legacy from COVID and many countries also shared the experience of high youth unemployment. There is a lag in China’s youth unemployment data compared to western countries, given China’s relatively late reopening from the COVID pandemic. In this article, we discuss the structural factors contributing to the youth unemployment rate in China, and explain why the number will likely to decline and why the unemployed youth will be absorbed into workforce as China continues on its path of recovery.
Aug 24, 2023
In a refreshing break from the consensus of gloom surrounding China, Cambridge Associates wrote recently that the Chinese economy was not stalling. Meanwhile IMF holds steady its China GDP growth forecasts in the World Economic Outlook Update report released last week, at 5.2% for 2023 and 4.5% for 2024. In this article, our Senior Advisor Say Boon Lim shares more about why China may surprise to the upside and the appeal of Chinese equities as a relative value play.
Aug 3, 2023
In a refreshing break from the consensus of gloom surrounding China, Cambridge Associates wrote recently that the Chinese economy was not stalling. Meanwhile IMF holds steady its China GDP growth forecasts in the World Economic Outlook Update report released last week, at 5.2% for 2023 and 4.5% for 2024. In this article, our Senior Advisor Say Boon Lim shares more about why China may surprise to the upside and the appeal of Chinese equities as a relative value play.
Aug 3, 2023
The “Urban Village Redevelopment” initiatives outlined at the Politburo Meeting in July could potentially create new housing demand which is valued at over RMB 2 trillion per year and property fixed asset investment worth RMB 0.4 trillion per annum. What is urban villages, and why is it a significant development to monitor? In this article, we discuss why urban villages are an integral part of China's new phase of urbanization, and how this links up with China's smart and green city planning, and a holistic set of initiatives that roll up to building China towards its goals of building China into a high tech, modern society under the 14th Five Year Plan.
Aug 2, 2023
The “Urban Village Redevelopment” initiatives outlined at the Politburo Meeting in July could potentially create new housing demand which is valued at over RMB 2 trillion per year and property fixed asset investment worth RMB 0.4 trillion per annum. What is urban villages, and why is it a significant development to monitor? In this article, we discuss why urban villages are an integral part of China's new phase of urbanization, and how this links up with China's smart and green city planning, and a holistic set of initiatives that roll up to building China towards its goals of building China into a high tech, modern society under the 14th Five Year Plan.
Aug 2, 2023
While global equities generally performed well in Q2 amidst a frenzy around A.I., sentiment toward Chinese stocks remained lacklustre as investor enthusiasm waned. That said there remained bright spots in the market that quietly outperformed - including our multi-factor China Bedrock Economy ETF which delivered YTD USD return of ~12.6% as of Aug 2nd 2023. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, reviewed the performance of various style factors during the quarter, and discusses why we see China as grossly undervalued going into the second half.
Aug 1, 2023
While global equities generally performed well in Q2 amidst a frenzy around A.I., sentiment toward Chinese stocks remained lacklustre as investor enthusiasm waned. That said there remained bright spots in the market that quietly outperformed - including our multi-factor China Bedrock Economy ETF which delivered YTD USD return of ~12.6% as of Aug 2nd 2023. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, reviewed the performance of various style factors during the quarter, and discusses why we see China as grossly undervalued going into the second half.
Aug 1, 2023
The US Treasury’s recent – and ongoing – dash for cash highlights the economy’s enormous fiscal challenges. To quote Bloomberg: “The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher. Sales of government notes and bonds are set to begin rising in August, with net new issuance estimated to top USD 1 trillion in 2023 and nearly double next year to fund a widening deficit.” On top of that, according to calculations by asset manager Horizon Kinetics and as quoted by gold fund manager Incrementum, the US will have to refinance around half of its national debt of more than USD 35 trillion by 2025. That’s a lot of debt maturities to digest in two years. In this article, our Senior Advisor Say Boon Lim cautions that even if Fed rates stabilise, the longer-term outlook for US Treasury yields would likely remain risky as persistent deficits drive up debt relative to GDP, in turn driving interest payments as a percentage of GDP up “vertically”. Indeed, the Congressional Budget Office is warning of the “risk of a fiscal crisis”.
Jul 24, 2023
The US Treasury’s recent – and ongoing – dash for cash highlights the economy’s enormous fiscal challenges. To quote Bloomberg: “The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher. Sales of government notes and bonds are set to begin rising in August, with net new issuance estimated to top USD 1 trillion in 2023 and nearly double next year to fund a widening deficit.” On top of that, according to calculations by asset manager Horizon Kinetics and as quoted by gold fund manager Incrementum, the US will have to refinance around half of its national debt of more than USD 35 trillion by 2025. That’s a lot of debt maturities to digest in two years. In this article, our Senior Advisor Say Boon Lim cautions that even if Fed rates stabilise, the longer-term outlook for US Treasury yields would likely remain risky as persistent deficits drive up debt relative to GDP, in turn driving interest payments as a percentage of GDP up “vertically”. Indeed, the Congressional Budget Office is warning of the “risk of a fiscal crisis”.
Jul 24, 2023
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