MSCI Asia ex-Japan: Underweight and Overweight November 2017
November’s Underweight and Overweight features a Country Focus on China (Overweight) and Korea (Overweight), while there’s a Sector Focus on Telecoms (Underweight), the regions weakest sector up just 10% from last December’s low, compared to a benchmark gain of 40%.Korea looks to be resuming its longer-term relative uptrend after a pause. While China continues to be very strong: 35% of the China stocks in our universe are in Quintile 1 (the top 20% of our universe, based on relative strength.
This month’s 5 Buys include Aurobindo Pharma (ARBP IN), HKEX (388 HK) and LG Corp (003550 KS). Amongst the 5 Sells are ASE (2311 TT), Haitong Securities (6837 HK) and Infosys (INFO IN).
In the Korea focus section we note that Samsung Electronics (005930 KS) is approaching the important KRW3,000,000 level, which is likely to see some selling interest and Hyundai Motor (005380 KS), which has been basing for 27 months may provide a buying opportunity in the coming months.
Underweight and Overweight issued today contains all our country and sector weightings, focus reports on countries and sectors and the 5 buys/sells or all the clearly actionable stuff. Tomorrow’s Underweight and Overweight Benchmark and Data includes an overview of the MSCI Asia Free ex-Japan (MXASJ) and lots of technical data on the region’s stocks.
With best wishes, Chris
Asianomics, founded by Dr Jim Walker in 2007 and based in Hong Kong, specialises in economic analysis research, cross-referencing their work with credit cycles, profit cycles and cash flows. Asianomics focus is on developments in the Asia-Pacific region, and they also cover developed markets like the US and Europe.
The Austrian Economics model provides a framework for the economic research. The basis of the School of Austrian Economics is that economies work more efficiently and effectively when companies and individuals are free from excessive interference by government and special interest groups. The Asianomics economic research team includes Deputy Chief Economist Sharmila Whelan who is recognised for non-consensus thinking and her depth and quality of primary research, and Chief Economist Dr. Jim Walker.
Asianomics’ subscribers have access to regular economic commentary, stand-alone Country Reports, Special Reports and Investment Strategy Reports. Dr. Jim Walker also provides weekly webcasts.
Dr. Jim Walker is regarded as one of Asia’s leading economists. Prior to setting up Asianomics, he was the Chief Economist at CLSA Asia-Pacific Markets, where he worked for more than 16 years. He has achieved numerous ‘Best Economist’ rankings in the Asiamoney, Institutional Investor and Greenwich surveys of fund managers.
Previous successful calls include:
- In 1995 Dr. Jim Walker wrote about the prospect of Asia being forced off its de facto dollar peg “within the next two-three years”. The Asian Crisis, precipitated by the Thai baht devaluation, began in July 1997.
- Forecasted the US 2007 downturn and financial sector meltdown in series of ‘Apocalypse’ reports.
- Called early the upswing in the Indian stock market in the final quarter of 2013.
Recent Recommendations:
- Overweight China - We are overweight Chinese equities with momentum improvement in the economy.
- Short Sterling, Long Renminbi - China’s currency offers good upside with a positive carry.
- Short European Financials, Long Indian Financials - This is the simplest pair trade to play superior demographics and growth in Asia relative to the region with the biggest problems.
- Long EM Asia, Short Developed countries - South and SE Asia, and direct investors from North Asia, are ‘buy and hold’ investment bets.
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