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Ebullience: An issuing forth in agitation, like boiling water; overflow; enthusiasm, extravagance.
What a difference a year makes. Gloom enveloped equities in Asia at the beginning of 2017. This year could be hardly different. There is a general sense of optimism as global economic growth shows signs of acceleration. China, at least in the near term, neither faces a capital account crisis nor deflationary bust. China and other related North Asian economies are recovering from a deep slowdown of 2015/16. While debt still is the elephant in the room, incremental cash flows and earnings for old stack companies display robust positive trends. Stock prices are made at the margin; with data looking positive to distinctly bullish, equities are responding to this fundamental evidence.
You would be excused in feeling ultra-bullish on markets. Several sell side strategists have increased their targets for returns and pronounced this uptrend in its second or third innings. Even the dreaded geopolitical issue of North Korea and the spectre of a nuclear war have receded. Last week there were indications of a potential conversation between South and North Korea.
I do not have much to add to the comments in the press, whether on economics or geopolitics. Stars seem to be aligned at the moment; our job is to monitor developments and watch for risks. Apart from the company-specific risks that are asymmetric in nature, the ones that I think we still need to keep a watch on are: protectionism for general trade; regulation for the tech sector (internet companies in particular); rising inflationary pressure forcing the Federal Reserve to hike more than expected; and a sudden shake out of liquidity as central banks reverse their QE policies.
Disclaimer
Source: JOHCM/Bloomberg unless otherwise stated. Past performance is no guarantee of future performance. The value of investments and the income from them may go down as well as up and you may not get back your original investment. Investors should note that this Fund invests in emerging markets and such investments may carry risks with failed or delayed settlement and with registration and custody of securities. Companies in emerging markets may not be subject to accounting, auditing and financial reporting standards or be subject to the same level of government supervision and regulation as in more developed markets. The information contained herein including any expression of opinion is for information purposes only and is given on the understanding that it is not a recommendation. Government involvement in the economy may affect the value of investments and the risk of political instability may be high. The reliability of trading and settlement systems in some emerging markets may not be equal to that available in more developed markets which may result in problems in realising investments. Lack of liquidity and efficiency in certain of the stock markets or foreign exchange markets in certain emerging markets may mean that from time to time the Investment Manager may experience difficulty in purchasing or selling holdings of securities. Furthermore, due to local postal and banking systems, no guarantee can be given that all entitlements attaching to quoted and over-the-counter traded securities acquired by this Fund, including those related to dividends, can be realised. Issued and approved in the UK by J O Hambro Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority. JOHCM® is a registered trademark of J O Hambro Capital Management Ltd. J O Hambro® is a registered trademark of Barnham Broom Ltd. Registered in England and Wales under No: 2176004. Registered address: Ground Floor, Ryder Court, 14 Ryder Street, London SW1Y 6QB.
Samir Mehta, manager of the JOHCM Asia ex Japan Fund, explains the portfolio tilts and his outlook for China.
Samir Mehta, manager of the JOHCM Asia ex Japan Fund, provides his outlook on the Indian economy and explains why he has reduced his position.
Samir Mehta, manager of the JOHCM Asia ex Japan Fund, provides his thoughts on HSBC Holdings
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