All Reports

 



April 2018

Global Fixed Income & Credit Outlook

The broad-based synchronized growth story continued to soften through March, as consumers pared back purchases in the face of rising prices.

Balancing Act - Multi-Asset global research views

As much as we would prefer to discuss market fundamentals over the trials and tribulations of the current US Administration, it has been largely unavoidable in this first quarter of 2018.

Emerging Markets Quarterly - Taking Volatility 'In Stride'

The market narrative changed abruptly over the quarter, from observing the “melt up” in January with exceptionally low volatility, to a massive spike in volatility in early February with markets remaining on edge ever since. What happened?

Asian Equity Monthly Outlook

Volatility across global markets has picked up in recent months following an abnormally long period of stability and strong returns across asset classes.

Asian Fixed Income Monthly Outlook

In the near-term, we foresee US Treasury moves influencing the direction of regional bonds.

Japan Equity Monthly Review

The Japanese equity market fell in March, with both the TOPIX (w/dividends) and the Nikkei 225 (w/dividends) dropping 2.04% on-month.


March 2018

Balancing Act - Multi-Asset global research views

Markets continue to come to terms with the return of higher volatility, triggered ostensibly by fears of inflation and the unwinding of highly leveraged short volatility positions at the beginning of last month. To this list we can now also add the spectre of increasing protectionism and outright Trade Wars.

Global Fixed Income & Credit Outlook

A broad-based synchronized recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Asian Equity Monthly Outlook

Despite recent volatility, we see the rally in Asian equity markets being well supported by both positive structural reform and increasing economic activity across the region.

Asian Fixed Income Monthly Outlook

In the near-term, we foresee flows into Indonesian bonds to be supported by the inclusion of IDR-denominated bonds into the Bloomberg Barclays Global Aggregate Index.

Japan Equity Monthly Review

Japanese stocks were not spared the global selloff in early February. While we would not be surprised to see volatility persist as market conditions normalise, we continue to expect healthy returns for risk assets such as equities.


February 2018

Balancing Act - Multi-Asset global research views

In our 2018 outlook, we made the case for rising volatility as central banks across the developed world slowly remove the stimulus punch bowl, but few would have imagined volatility spiking with such a vengeance as it did in recent weeks.

Global Fixed Income & Credit Outlook

A broad-based synchronized recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Japan Equity Monthly Review

The Bank of Japan (BOJ) has been trimming its bond purchases lately, fuelling speculation that the central bank may wind back its monetary stimulus this year.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan Index returned 7.6% in USD terms in January, amid optimism about solid economic growth and corporate earnings. China's solid stock market gain was underpinned by the financials, energy and real estate sectors.

Asian Fixed Income Monthly Outlook

There was a sharp rise in US Treasury yields in January on the back of positive macro news, steady rise in oil prices and speculation that central banks in developed markets will start winding back on stimulus measures.


January 2018

Balancing Act - Multi-Asset global research views

Over the past few years, one of the main risks that concerned our team was the possibility that asset classes could become positively correlated. In 2017, we saw the positive correlation story start to play out in the best possible way, with strong positive returns across the board.

Global Fixed Income & Credit Monthly Outlook

A broad-based synchronised recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Asian Fixed Income Monthly Outlook

As widely expected, the US Federal Reserve (Fed) raised interest rates by 25bps in December, its third rate hike this year. It also raised its GDP forecast for 2018.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 2.7% in USD terms in December.

Japan Equity Monthly Review

The Japanese equity market rose in December, with the TOPIX (w/dividends) climbing 1.57% on-month and the Nikkei 225 (w/dividends) rising 0.32%.

2018 Global Credit Outlook

We see the key investment themes to drive performance in Global Credit in 2018 to be similar to last year. Using the output of our initial market assessment, we have developed our investment themes: Long US High Yield, Long Chinese Tier1 SOEs, Long European Hybrids, Long European Financials, Long Rising Stars.

2018 Developed Markets Outlook

For 2018 and beyond, we see a story of central bank policy normalization and foresee the global economy growing in a similar fashion to how it did in 2017: low growth coupled with comparatively low inflation data.


December 2017

2018 Asian Credit Outlook

We expect the economic backdrop for Asian credits to remain constructive in 2018, but remain cognizant of several risks including rising interest rates, robust supply, unexpected weakness in China, geopolitical developments and cross-asset volatility.

2018 Asian Rates and FX Outlook

The global recovery is expected to continue, albeit at a more moderate pace. Meanwhile, we see policy normalisation and an acceleration of inflation in Asia. Political action will move to South Asia in the wake of upcoming elections there.

From the Asian Equity Desk - Market Outlook 2018

Going forward, a robust global economy and well telegraphed withdrawal of monetary stimulus in advanced economies provides a good back-drop for export-oriented Asian economies.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields declined during the month. The nomination of Jerome Powell as the next US Federal Reserve (Fed) chairman overshadowed stronger US economic data, but was subsequently offset by increased geopolitical risks in the Middle East and a setback to US tax reform.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 0.6% in USD terms in November.


November 2017

Japan Equity Monthly Review

The Japanese equity market rose in October, with the TOPIX (w/dividends) climbing 5.45% and the Nikkei 225 (w/dividends) rising 8.16%.

Asian Fixed Income Monthly Outlook

US Treasuries (USTs) fell in October, as prospects of higher growth and inflation increased after the US Senate approved the Republican-backed budget for 2018.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 4.7% in USD terms in October, outperforming the MSCI World Index which returned 1.9%.


October 2017

Japan Equity Monthly Review

The Japanese equity market moved upwards in September, with the TOPIX (w/dividends) climbing 4.34% on-month and the Nikkei 225 (w/dividends) rising 4.28%.

Asian Fixed Income Monthly Outlook

US Treasuries declined in September, prompted by the possibility of a rate hike by the Federal Reserve in December and Trump's tax reform bill being passed by Congress.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index fell by 0.1% in US dollar (USD) terms, underperforming the MSCI AC World Index which returned 2.2%. Profit-taking and currency weakness relative to the USD pressured returns in September.


September 2017

Asian Fixed Income Monthly Outlook

The US Treasury (UST) market grinded higher in August. Rising tensions in the Korean peninsula and a lack of direction from the US Federal Reserve and the European Central Bank on the outlook for monetary policy put pressure on US Treasury yields.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index rose by 1.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 31.1%. This was the eighth straight month of positive returns.


August 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields ended largely unchanged in July following soft US inflation print, dovish comments from the Federal Reserve and expectations of an autumn policy shift from the European Central Bank. Overall, 10-year UST yields ended the month at 2.30%, about 0.9 basis points (bps) lower compared to the previous month.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan Index rose by 5.3% in US dollar terms, outperforming the MSCI AC World index and bringing year-to-date returns to 29.4%. This was the seventh straight month of positive returns.


July 2017

Japan Equity Outlook

In a survey conducted by the Nikkei in March 2017, 80% of respondent companies indicated that they were either planning or considering the implementation of productivity enhancing investments. Furthermore, more than 70% of respondent companies indicated that they would invest in productivity enhancing technology to address excessively long employee working hours.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields were range-bound for the most part of June, before surging in the last few days of the month. The US Federal Reserve (Fed) raised interest rates by 25 basis points (bps), despite soft inflation data. Overall, 10-year UST yields ended the month at 2.30%, about 10 bps higher compared to the previous month.

Asian Equity Monthly Outlook

The MSCI Asia ex Japan (AxJ) Index rose by 1.6% in US dollar (USD) terms. Year-to-date (YTD), the index returned 22.8%, outperforming MSCI World by over 12%.


June 2017

Japan Equity Outlook

In the Japanese equities market, high dividend strategies have significantly outperformed other strategies. We believe that – in a low growth, low interest rate environment where investors yearn for yield – these strategies will continue to outperform.

China A-Shares: A New Milestone

Following four years of intense consultation and three failed attempts, MSCI has just added China A-Shares into its international indices. We view this as expected and in some ways, long overdue. Although the initial size of the inclusion is symbolic in nature, the implications are far reaching.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) gained 4.7% in USD terms, outperforming the MSCI AC World and MSCI Emerging Markets Indices. The results of the French presidential elections buoyed sentiment and outweighed patchy economic growth data.

Asian Fixed Income Monthly Outlook

Better-than-expected US non-farm payroll figures and a more favourable FOMC statement were offset by political uncertainties in Washington. FBI director James Comey's firing and investigations into possible ties between Trump's election campaign and Russia increased concerns of a set-back in the president's economic agenda. 10-year UST yields ended the month at 2.20%, about 8 basis points (bps) lower compared to end-April levels.

Asia High Grade Credit

Asia Credit is significant enough as an asset class to be considered separately, and its high grade segment could be a relative safe haven if EMD flows reverse.


May 2017

Japan Equity Outlook

We believe inflation will pick up gradually in the second half of 2017, in which case the rational expectations of Japanese consumers are likely to shift towards anticipation of even higher inflation. Higher inflation expectations are precisely what BOJ Governor Kuroda has been seeking to achieve. Therefore such a development would be positive for the Japanese equity market.

Asian Fixed Income Note: Indonesia's Investment Grade rating upgrade by S&P

On 19 May 2017, S&P upgraded Indonesia’ sovereign rating to BBB- with a stable outlook from BB+ with a positive outlook. In the longer term, the market is expecting that this rating upgrade will result in inflows of as much as USD 5bn into the bond market, particularly from Japanese investors who require a full investment grade rating from the three rating agencies.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up another 2.2% in USD terms, outperforming the MSCI AC World. All AxJ markets ended higher in April. Robust economic data from China offset concerns over President's Trump's ability to pass through sweeping corporate tax cuts in the US.

Asian Fixed Income Monthly Outlook

10-year US Treasury (UST) yields ended the month at 2.28%, about 11 basis points (bps) lower compared to end-March levels. Mixed economic data and rising geopolitical tensions drove sentiment over the month. Towards the month-end, market sentiment improved after pro-euro French presidential candidate Emmanuel Macron secured the most number of votes in the first round of elections.


April 2017

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up 3.3% in USD terms, outperforming MSCI AC World. All Asian markets rose over the month, with gains led by India and Korea. The Indian Rupee was also the best-performing currency in March. The US Federal Reserve raised interest rates by 25 basis points (bps), as widely expected.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields rose in the first half of the month buoyed by hawkish comments from the Federal Reserve (Fed), a solid US jobs report and possible scale back of quantitative easing (QE) by the European Central Bank (ECB). While the Fed raised short-term interest rates, as expected, the absence of a more hawkish tone from the central bank triggered a drop in UST yields.


March 2017

Emerging Markets Quarterly - Recovery broadens but with policy risk still on the horizon

The Trump reflation trade may have lost some of its shine during the quarter, but any disappointment was more than overshadowed by strong global data as exports and production continued to gather pace. In fact, fading enthusiasm for Trump’s ability to execute has arguably served as a tailwind for Emerging Market (EM) assets in the form of a weaker dollar and moderating long term rates.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up 3.4% in USD terms, marginally outperforming MSCI AC World. Absolute returns were positive for all AxJ markets except the Philippines. The Taiwan Dollar (TWD) was the best performing currency in AxJ followed by the Korean Won and Indian Rupee. Buoyed by the partial unwind of the post-election Trump-trade, gold was the best performing commodity.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields traded in a tight range in February. Risk assets rallied and UST yields rose in the first half of the month, on the back of the prospect of tax cuts and a Dodd-Frank overhaul in the US. Subsequently, yields were pressured lower by concerns about a possible victory by Marine Le Pen in France’s presidential elections. Overall, the 2-year and 10-year points on the UST curve ended the month about 6 basis points (bps) higher and 6bps lower respectively.


February 2017

Global Fixed Income & Credit Monthly Outlook

With President Trump announcing that he will be releasing his tax plans in the coming weeks, we have shifted to a more cautious position on US duration. The risk is that President Trump announces a sizeable stimulus package, with the backing of the broad Republican base. This would raise fears that the US Federal Reserve would need to act more quickly than expected, and with markets only pricing in two or three rate hikes in 2017, we believe that markets are under-pricing the risks of this announcement.

Asian Equity Monthly Outlook

Asia ex-Japan (AxJ) equities returned 6.2% in US Dollar (USD) terms, outperforming MSCI World. Singapore, Hong Kong and Chinese equities outperformed while Indonesia, Malaysia and Thailand lagged. Asian currencies generally strengthened against the USD over the month.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields ended higher in January as weaker-than-expected payroll data led markets to moderate their forecasts for Federal Reserve (Fed) rate hikes in 2017. Overall, 2-year and 10-year UST yields rose about 2 and 1 basis points (bps) respectively in the month.


January 2017

Emerging Markets Quarterly - Recovery Intact With Rising Developed Market Unknowns

Donald Trump winning the US presidential election delivered a big surprise, defying poll predictions but ringing consistent with the wave of populism sweeping the developed world. First witnessed early last summer with the Brexit vote, the rise of populism remains a key risk in Europe, while the implications for the shift in US policy are more likely to be mixed.

Global Fixed Income & Credit Monthly Outlook

Credit markets are expected to have another positive year. We expect economic growth in Asia to be stable but see some potential downside risks. In Europe, political risk remains high for 2017. Some of our key themes are: hybrid bonds, financials, oil/emerging markets and High Yield.

Asian Credit Outlook 2017

Economic growth in Asia is expected to remain broadly stable in 2017. While there will be greater external uncertainties as well as country-specific challenges, Asian economies are, on balance, better equipped to deal with external pressures compared to a few years back.

Asian Equity Monthly Outlook

Asia ex-Japan (AxJ) equities returned -2.0% in US Dollar (USD) terms, underperforming MSCI World and MSCI Emerging Markets (EM). Currencies across AxJ generally weakened against the dollar following the Federal Reserve's (Fed’s) decision to hike rates. Meanwhile, Gold declined 2.2% while oil jumped 8.66% month-on-month.

Asian Fixed Income Monthly Outlook

USTs weakened further in December, as caution prevailed following the November sell-off. As widely expected, the US Federal Reserve (Fed) raised interest rates by 25 basis points (bps). 10-year UST yields ended the month at 2.44%, about 6 basis points (bps) higher compared to end-November levels.


December 2016

Global Fixed Income and Credit Outlook 2017

We are currently in a position where we are facing more questions than answers regarding Trump's policy stance as he comes into office and how it will affect the market.

Equities Market Outlook 2017

Global Equity - Asia ex-Japan Equity - Japan equity
This PDF is a compilation of 2017 market outlook reports by three of our equity teams.

Japan Equity Market Outlook 2017

We believe that in an increasingly uncertain world, Japan’s less uncertain market will provide a compelling opportunity for serious investors.

Asia ex-Japan Equity Market Outlook 2017

The phrase “lower for longer” could well become unfashionable very quickly after years of central banks combating the forces of deflation and wishing for inflation instead.

Global Equity Market Outlook 2017

The cumulative positioning of investors in companies and asset classes that are deemed safe in a “lower for longer” environment is undergoing a significant test at present.

Global Multi-Asset Market Outlook 2017

2016 may best be remembered as the year in which Trump won and the world changed. The question becomes which reforms will take centre stage.

Asian Equity Monthly Outlook

Asia ex-Japan equities returned -2.9% in US Dollar (USD) terms, underperforming MSCI World. US president-elect Donald Trump's stance on the repeal of the Trans-Pacific Partnership and a domestic US focus at the expense of foreign trade has initially been perceived as negative for Asia, although there remains much uncertainty with regard to US policy going forward.

Asian Fixed Income Monthly Outlook

UST yields surged in the month as Trump's election victory prompted expectations of a significant fiscal package and possible upside inflation risk under the new administration.


November 2016

Global Fixed Income and Credit Outlook

October was another difficult month for Global credit markets, in particular for Investment Grade bonds. By contrast, more risky High Yield bonds outperformed. In terms of sector results, financial issuers outperformed.

Asian Equity Monthly Outlook

Asia ex-Japan equities returned -1.5% in US Dollar (USD) terms, outperforming the MSCI World which declined by 1.9%. Crude oil prices finished the month down as OPEC members failed to reach a conclusive deal on supply, while political developments in US and ASEAN were key drivers of markets during the month.

Asian Fixed Income Monthly Outlook

USTs ended lower in October. Better US economic data and a hawkish statement from the Federal Open Market Committee (FOMC) bolstered expectations of a December interest rate hike. 10-year UST yields rose about 23 basis points (bps) to 1.83%.


October 2016

ASEAN Equity Outlook

"Find growth and you will find performance" was our Asian Equity investment mantra in early 2016 as the world grappled with slowing growth and lethargy with monetary experimentaton in low and depressed interest rates.

Emerging Markets Quarterly - Better Fundamentals but still Risks in DM Policy

Emerging markets (EM) have endured strong adjustments in commodities and currencies that coupled with reforms makes a good case for better growth ahead. Still, it will take time for EM to navigate to more stable sources of growth, requiring relative stability through the delicate transition.

Asian Equity Monthly Outlook

Asia ex-Japan equities rose in September, returning 1.6% in US Dollar (USD) terms and outperforming both the MSCI World and MSCI Emerging Markets indices. Risk appetite remained healthy following the US Federal Reserve’s decision to leave interest rates unchanged and a more favourable US presidential debate outcome.

Asian Fixed Income Monthly Outlook

USTs ended September mixed. While the Federal Reserve left interest rates unchanged and the Bank of Japan reinforced commitment to monetary easing, the ECB's lack of new stimulus disappointed the market.


September 2016

Global Fixed Income and Credit Outlook

Central bank policy from the US, Japan and Europe are strongly affecting the current global fixed income markets. New Zealand and Canadian economies also face continued pressure. We maintain the view that there is a positive environment for emerging markets, but have moved slightly more cautious.

Asian Equity Monthly Outlook

Asian markets extended their rally into August. Asian stocks were supported by a robust reporting season where earnings were mostly in line with consensus expectations.

Asian Fixed Income Monthly Outlook

On the back of expectations that the Fed will keep interest rates on hold in the next months, the global search for yield is likely to support demand for Indian, Malaysian and Indonesian bonds.


August 2016

Global Fixed Income and Credit Outlook

In developed markets, global bonds have benefited from recent flows out of Japan into positive-yielding markets. We maintain the view that there is a positive environment for emerging markets.

Asian Equity Monthly Outlook

We continue to see good value in Asia ex-Japan equities for long-term investors. Asia still has considerable room at both the monetary and fiscal levels to stimulate economies if needed and governments appear willing to act on reforms and infrastructure investment.

Asian Fixed Income Monthly Outlook

July saw US Treasury yields ending in mixed trading. Yields of shorter maturities climbed, while those of longer maturities fell. Plus updates on Malaysia, Singapore, India, South Korea, Thailand, Indonesia, and others.


July 2016

Global Fixed Income and Credit Outlook

The major consideration for markets in June was the Brexit vote in the UK. Although we are sceptical about the most pessimistic scenarios for the UK, there will be some negative impact on growth.

Emerging Markets Quarterly - EM Assets Seeing Better Support

The UK's late June vote in favour of 'Brexit' was initially read as a deep negative, particularly given that markets were priced strongly in favour of a 'Remain' vote. However, after brief reflection, markets outside the region saw a rally, with risk asset performance more than making up for Brexit losses. Emerging markets have been a primary beneficiary...

Asian Equity Monthly Outlook

We continue to see good value in Asia Pacific ex-Japan equities for long-term investors. We continue to advocate that Asia is ultimately a net beneficiary of lower-for-longer commodity prices and offers significant growth opportunities led by infrastructure development, albeit contingent on positive government action.

Asian Fixed Income Monthly Outlook

We expect the impact of Britain’s exit from the EU on Asia’s economic activity to be relatively muted, as the region has comparatively low trade links with the UK. Plus updates on US Treasuries, Singapore, India, South Korea, Thailand, Indonesia, and others.

The Nikko AM URAP Index: Identifying Stocks Which Show Consistent Improvement in ROE

This report looks at the Japanese Stewardship Code and its impact on Japanese companies' approach to ROE. It also introduces the Nikko AM URAP Index. URAP stands for “Upside in ROE at an Attractive Price”.


June 2016

Brexit - Japan Equity Update

In light of the significant volatility ensuing from the results of the EU Referendum in the UK, we share our initial thoughts on the evolving situation as well as provide an update on the strategy you are invested or have an interest in and the implications of the event on the broader investment landscape in Japan.

Brexit - Asian Fixed Income Update

The immediate fallout from the Brexit win has been a strong flight to safety.

Asian Equity Monthly Outlook

Asia ex Japan equities declined by 1.3% in USD terms in May, largely on the back of currency weakness.

Asian Fixed Income Monthly Outlook

US Treasury yields remained largely unchanged in May. The impact of a disappointing US payroll figure was offset by the release of the US Federal Reserve’s April meeting minutes, which revealed that most policymakers favoured a rate hike in June should the US economy continue to improve.

Global Fixed Income and Credit Outlook

Continued easy monetary policy in Europe and Japan will be supportive for global interest rates, but the case for further limited rate hikes in the US remains in place for 2016.