Markets Archives - Page 402 of 782

Emerging Markets Officials Express Exchange Rates Concerns

EM FX ended the week on a soft note, despite the weaker than expected US retail sales report. Official concern about strong exchange rates is beginning to emerge. First, it was Korea, and then on Friday it was Brazil as acting President Temer said his country needs to maintain a balanced exchange rate, neither too weak nor too strong.

We expect more pushback to emerge if the current rally is extended. Still, the global liquidity outlook for now favors EM and “risk.”

Australian Treasurer Morrison is Blocking Chinese Investment

China’s state-owned enterprises are becoming increasingly privatised, as government involvement shifts from full control to economic guidance. This means these firms should be treated like any other foreign investor when it comes to buying Australian assets.

Korea Gets a Credit Upgrade and Thailand’s Constitution Referendum Passes

S&P upgraded Korea a notch to AA with a stable outlook, Voters passed the constitutional referendum in Thailand by a wide margin, The IMF and Egypt have reached a staff-level agreement on a 3-year $12 bln loan program, Argentina’s central bank will begin using a new overnight rate to manage monetary policy, Political uncertainty has returned to Brazil

Is Britain in Danger of being Left Out of Globalization?

There remains great uncertainty in the aftermath of the UK vote to leave the European Union. Few seem to have a plan for what Brexit will look like and how the UK’s relationship with the outside world will take shape.

Is South Korea Facing ‘Lost Decades’?

In recent years, the South Korean economy has slowed significantly. South Korea’s average annual growth rate has fallen from a high of 9.8 percent in the 1980s to an average of just 2.7 percent over the last five years.

Many of the big South Korean industrial giants, such as Samsung and Hyundai, have increasingly moved their new investments abroad to low-cost regions in South Asia and Eastern Europe.

Emerging Markets Boosted by Lower Rates

Scratch an investor, and you will find two models. One is a fair value model, perhaps based on free-cash-flow or earnings expectations, or breakup value. The other is based on liquidity. We suspect that the latter is overwhelming the former in the emerging market equity space.

The ECB and BOJ are easing policy aggressively. The BOJ has indicated it will conduct a comprehensive review next month. The only pre-condition BOJ Governor Kuroda has indicated is that the BOJ will not do less.

South Korea’s High Growth Model has its Shortcomings

Just a few decades ago, South Korea was seen as a model for achieving both growth and equity. In the past half-century, South Korea has gone from being one of the poorest societies in the world to an advanced industrialised economy, joining the OECD in 1996. The country’s rapid industrialisation and export-led development are often cited as an example of ‘compressed growth and transformation’ in the developing world.

Vietnam’s Regional Defense Integration Part of its Economic Future

The United States’ complete lifting of the decade-long embargo on arms sales to Vietnam marked a historic milestone in US–Vietnam relations, paving the way for a strategic partnership between the two former foes. So what will this mean for Vietnamese security and domestic politics?

Practicing Responsible Middle-Power Diplomacy is South Korea’s Way Forward

South Korean Foreign Minister Yun Byung-se once again defended the deployment of the Terminal High Altitude Area Defense (THAAD) missile system on the Korean peninsula in a meeting with his Chinese counterpart Wang Yi in late July. Wang responded that Seoul’s decision had ‘harmed the foundation of mutual trust’ between their two countries.

How did China’s Productivity Find a Lower Gear?

China’s substantive economic slowdown following the 2008–09 global financial crisis has added fuel to the long-running debate over the sustainability of China’s growth model. Despite the government’s unprecedented stimulus package, the official statistics — though often accused of exaggerating real performance, especially in times of crisis — show that China nearly halved its pace of growth, from 13.5 percent per annum in 2005–07 to about 7 percent per annum in 2013–15.