https://www.scmp.com/rss/327079/feed Tai Hui is chief market strategist for the Asia-Pacific at JP Morgan Asset Management. Based in Hong Kong, he formulates and disseminates the company's view on the market, economy and investing to financial advisers and investors in Asia. He regularly appears on international and local financial media, including as a guest host on CNBC Asia, as well as Bloomberg TV and Reuters TV. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com This is expected to be a significant year for elections around the world, with several scheduled to be held in places such as India, Indonesia, Russia, South Africa, Taiwan, Britain and the United States. While these elections will undoubtedly dominate the news headlines, the impact on markets could be subtler. Local asset markets could be more volatile ahead of the votes and perform more constructively once there is higher certainty about the future policy outlook. Of course, market reaction... https://www.scmp.com/comment/opinion/article/3247018/global-markets-bracing-2024-full-potentially-volatile-elections?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3247018/global-markets-bracing-2024-full-potentially-volatile-elections?utm_source=rss_feed Wed, 03 Jan 2024 07:45:15 +0000 The latest round of central bank meetings in the US, UK and the euro zone all point to an end to interest rate rises. These central banks face similar conditions; inflation is moderating but is still some distance from their official targets. They should start to pay more attention to recession risks in the quarters ahead. Economic growth momentum is slowing, especially in the manufacturing sector. The manufacturing purchasing manager indices (PMI) for the US, UK and euro zone are all below 50.... https://www.scmp.com/comment/opinion/article/3236235/us-fed-must-watch-its-step-economic-recession-risks-loom?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3236235/us-fed-must-watch-its-step-economic-recession-risks-loom?utm_source=rss_feed Fri, 29 Sep 2023 12:30:24 +0000 The global economy has struggled with high inflation in the past two years. A combination of recovery from the Covid-19 pandemic, generous government spending and higher food and energy prices arising from Russia’s invasion of Ukraine all contributed to this problem. Most central banks were forced to raise interest rates aggressively to tame price increases. China has been the odd one out so far. In fact, its consumer price index fell by 0.3 per cent year on year in July, the first negative... https://www.scmp.com/comment/opinion/article/3231397/chinas-property-sector-not-deflation-risk-its-top-economic-worry?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3231397/chinas-property-sector-not-deflation-risk-its-top-economic-worry?utm_source=rss_feed Fri, 18 Aug 2023 22:15:17 +0000 India is attracting investors’ attention, more so after Indian Prime Minister Narendra Modi’s visit to Washington, where he met US President Joe Biden and addressed a joint session of Congress. Meanwhile, US tech giants, including Amazon and Google, are increasing investment in India. Recent US-China geopolitical tensions have also made India an option for multinational companies looking to diversify their supply chains. For example, Apple has started to make consumer electronic products in... https://www.scmp.com/comment/opinion/article/3226863/us-china-tensions-offer-india-chance-flex-its-manufacturing-muscles?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3226863/us-china-tensions-offer-india-chance-flex-its-manufacturing-muscles?utm_source=rss_feed Fri, 07 Jul 2023 14:00:09 +0000 The US Federal Reserve will next meet on June 13-14 to discuss monetary policy. For the first time since the rate-raising cycle began in March 2022, the discussion is likely to revolve around whether to stop raising interest rates. Economic data, the vulnerability of the banking sector and the US government debt ceiling saga all influence the decision. The Fed could opt to leave rates unchanged – but there is a growing probability that this would just be a pause, rather than the end of the... https://www.scmp.com/comment/opinion/article/3223370/us-inflation-jobs-report-show-fed-cant-just-stick-autopilot-interest-rate-rises?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3223370/us-inflation-jobs-report-show-fed-cant-just-stick-autopilot-interest-rate-rises?utm_source=rss_feed Fri, 09 Jun 2023 13:15:14 +0000 There is no hiding that China’s relationship with the West, especially the United States, has become more complicated in the past decade. At the state level, there is strategic competition in the technology and finance sectors, as well as China’s expanding influence in geopolitics. The Ukraine war has exacerbated differences between China and the West, with China maintaining its comprehensive strategic partnership, including economic ties, with Russia. At the business level, the trade war... https://www.scmp.com/comment/opinion/article/3220186/de-risking-china-companies-and-countries-have-different-goals?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3220186/de-risking-china-companies-and-countries-have-different-goals?utm_source=rss_feed Fri, 12 May 2023 16:30:15 +0000 The sustainability of the US dollar’s dominance in global trade and finance is not a new question. Recent comments and actions by senior leaders in emerging markets are bringing this debate to the fore once again. While the level of intent and official support could move the dial more than before, the structure of trade and financial transactions means this transition towards a more multilateral currency regime could still be decades away. There is a greater desire for emerging economies to... https://www.scmp.com/comment/opinion/article/3217705/why-chinas-goal-ending-us-dollar-dominance-still-decades-away?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3217705/why-chinas-goal-ending-us-dollar-dominance-still-decades-away?utm_source=rss_feed Fri, 21 Apr 2023 13:30:09 +0000 China’s latest “two sessions” meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference have attracted considerable attention internationally. They mark the start of President Xi Jinping’s third five-year term, one in which he is unveiling a new team of top government officials. Investors are closely watching this new team’s approach to managing the economy, which will set the tone for government policies in the next five years. This is particularly... https://www.scmp.com/comment/opinion/article/3212929/chinas-gdp-growth-target-reasonable-revenge-spending-wont-do-job-alone?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3212929/chinas-gdp-growth-target-reasonable-revenge-spending-wont-do-job-alone?utm_source=rss_feed Fri, 10 Mar 2023 05:45:12 +0000 The United States is one of the few countries in the world whose level of government issuance is limited by its lawmakers. The US federal government debt ceiling has been raised or suspended close to 100 times, usually without much debate. However, the current political climate in the US could mean the path to lifting the debt ceiling and avoiding a government default could be bumpier than investors would prefer. In mid-January, Treasury Secretary Janet Yellen warned that the US federal debt... https://www.scmp.com/comment/opinion/article/3212039/fixing-latest-us-debt-ceiling-crisis-needs-compromise-biden-and-house-republicans?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3212039/fixing-latest-us-debt-ceiling-crisis-needs-compromise-biden-and-house-republicans?utm_source=rss_feed Fri, 03 Mar 2023 13:30:13 +0000 Last year saw some of the biggest synchronised monetary policy tightening around the world, involving both developed and emerging-market central banks. However, the Bank of Japan was an exception. It justified maintaining a negative interest rate policy and yield curve control measures – which have pegged the 10-year Japanese government bond yield at around zero per cent since 2016 – as a way to stimulate the economy. But both economic and technical market factors are making this policy... https://www.scmp.com/comment/opinion/article/3208701/pressure-building-japan-give-its-ultra-loose-monetary-policy?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3208701/pressure-building-japan-give-its-ultra-loose-monetary-policy?utm_source=rss_feed Fri, 03 Feb 2023 14:00:10 +0000 Driving in a straight line is relatively easy, but going around a corner requires greater skill. For central bankers, 2022 would seem like a straight road, given what could come in 2023. The risk of policy error is rising. 2022 was a year of strong growth and high inflation for the United States and Europe. The tailwind of recovery from economic reopening and fiscal stimulus, especially in the US, prompted a robust recovery in the job market and demand. Meanwhile, the Russia-Ukraine conflict... https://www.scmp.com/comment/opinion/article/3204845/bumpy-2023-markets-central-banks-face-high-inflation-and-low-growth?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3204845/bumpy-2023-markets-central-banks-face-high-inflation-and-low-growth?utm_source=rss_feed Fri, 30 Dec 2022 08:30:09 +0000 Recent policy announcements from the Chinese authorities on both Covid-19 policy and extending liquidity to the real estate market are not magic wands that yield immediate results. Patience is key as we await economic recovery. But this could be a critical turning point after the disappointing market performance in the past two years. The Chinese equity market has been hampered by internal and external factors in the past two years. The economic slowdown in 2020 following the Covid-19 pandemic... https://www.scmp.com/comment/opinion/article/3200701/signs-point-chinese-stock-market-turnaround-after-two-hard-years?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3200701/signs-point-chinese-stock-market-turnaround-after-two-hard-years?utm_source=rss_feed Fri, 25 Nov 2022 08:00:13 +0000 The annual meetings of the International Monetary Fund and World Bank typically come with volumes of research on the global economic outlook and assessments of financial stability. Most of the world’s economic challenges are well documented, indicating that slower growth, high inflation and tighter monetary policy are expected to extend into the next year. In the latest Global Financial Stability Report, the IMF offered an important reminder that deteriorating market liquidity could pose risks... https://www.scmp.com/comment/opinion/world/article/3196613/uk-turmoil-shows-how-market-stress-can-amplify-policy-errors?utm_source=rss_feed https://www.scmp.com/comment/opinion/world/article/3196613/uk-turmoil-shows-how-market-stress-can-amplify-policy-errors?utm_source=rss_feed Fri, 21 Oct 2022 08:30:11 +0000 Extreme weather and natural disasters are happening regularly. With climate change, these incidents are becoming more frequent and their economic impact is getting more serious. While many governments have pledged to become carbon neutral in the next 30 to 40 years, additional policies are needed to address the more immediate effects of these disasters. Not only will these solutions require additional resources from governments, they need to be innovative as well. This summer, we have seen... https://www.scmp.com/comment/opinion/article/3192556/summer-drought-and-floods-shows-need-tackle-economic-impact-climate?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3192556/summer-drought-and-floods-shows-need-tackle-economic-impact-climate?utm_source=rss_feed Fri, 16 Sep 2022 03:30:14 +0000 Last year was a year of regulatory overhaul for the Chinese internet sector, which triggered a prolonged period of tech stock corrections in Hong Kong and New York. If 2021 was a year of establishing the new regulatory framework, 2022 is a year of implementation. Tech giants are still being penalised for past breaches, but at least the regulatory uncertainties have been reduced and this could help improve investor confidence in the medium term. The 2021 regulatory reform came under several broad... https://www.scmp.com/comment/opinion/article/3188511/chinas-tech-sector-gets-back-its-feet-look-beyond-internet?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3188511/chinas-tech-sector-gets-back-its-feet-look-beyond-internet?utm_source=rss_feed Fri, 12 Aug 2022 03:30:12 +0000 The aggressive policy tightening by the US Federal Reserve and other central banks in developed economies has made many headlines lately. While some Asian central banks have already begun raising interest rates, their pace has been more moderate. Many had assumed that Asian central banks would need to track the Fed closely, or risk currency depreciation and capital outflows. Are monetary authorities in the region behind the curve, and do they risk more trouble in the future? The short answer is... https://www.scmp.com/comment/opinion/article/3184432/why-asias-gradual-covid-19-recovery-means-it-has-less-fear-rising?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3184432/why-asias-gradual-covid-19-recovery-means-it-has-less-fear-rising?utm_source=rss_feed Fri, 08 Jul 2022 04:15:13 +0000 The first half of 2022 has been a difficult year for both the global and local economies. In Hong Kong, the Covid-19 fifth wave added extraordinary pressure on the economy, not to mention the lives lost. Globally, the worst military conflict in Europe since World War II is taking place between Russia and Ukraine. And a number of cities in China, including Shanghai, went into lockdown to avert an Omicron outbreak, threatening global production and supply chains. In the US and a number of other... https://www.scmp.com/comment/opinion/article/3181008/why-global-economies-should-expect-see-out-2022-better-shape-now?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3181008/why-global-economies-should-expect-see-out-2022-better-shape-now?utm_source=rss_feed Fri, 10 Jun 2022 04:30:14 +0000 Decades of globalisation have brought more affordable products to Western consumers, while leading to rapid earnings growth for multinational companies. Globalisation has also helped lift hundreds of millions of people in developing economies out of poverty, and narrowed the income gap between developed and emerging markets. However, there is growing concern that this trend will come to an end soon, or even reverse. Perhaps, expecting the world to “deglobalise” is too simplistic; instead,... https://www.scmp.com/comment/opinion/article/3177464/globalisation-enters-new-phase-companies-and-consumers-will-pay?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3177464/globalisation-enters-new-phase-companies-and-consumers-will-pay?utm_source=rss_feed Fri, 13 May 2022 17:30:23 +0000 The US Federal Reserve increased interest rates at its March Federal Open Market Committee meeting, as well as its forecasts for inflation and policy rates. Senior officials have, since then, indicated that the focus will be on tackling inflation. The market now expects a 50 basis point rate increase at the Fed’s next meeting in early May. This has heightened market concerns that aggressive policy tightening will not only reduce inflation but also economic growth. The US Treasury yield curve has... https://www.scmp.com/comment/opinion/article/3173219/us-heading-recession-theres-more-it-inverted-yield-curve?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3173219/us-heading-recession-theres-more-it-inverted-yield-curve?utm_source=rss_feed Fri, 08 Apr 2022 17:30:19 +0000 One of the main economic impacts from the events in Ukraine is higher energy prices. Oil prices have risen to more than US$100 per barrel, the highest in a decade. High energy prices typically coincide with higher food prices because of increased fertiliser and transport costs. It can also translate into higher taxes on households, which could in turn hurt consumption. Yet the global economy can still avoid this troubling combination of high inflation and weak growth, although some regions could... https://www.scmp.com/comment/opinion/article/3169058/higher-energy-prices-over-ukraine-invasion-should-worry-europe-more?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3169058/higher-energy-prices-over-ukraine-invasion-should-worry-europe-more?utm_source=rss_feed Fri, 04 Mar 2022 14:00:20 +0000 As we approach the third year of the pandemic, a growing number of countries are now living with Covid-19. Higher vaccination rates across developed economies have really helped. The more contagious yet less severe Omicron variant also feeds into this strategy. Many see this as a possible way out of the doldrums of the past two years, as Covid-19 may finally transition from pandemic to endemic. After two years of disruption to people’s lives, there is also greater public resistance to lockdowns.... https://www.scmp.com/comment/opinion/article/3164790/china-costs-living-covid-19-are-still-too-high?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3164790/china-costs-living-covid-19-are-still-too-high?utm_source=rss_feed Fri, 28 Jan 2022 05:30:17 +0000 The US Federal Reserve is ending 2021 with a bang, accelerating its policy normalisation and predicting raising interest rates earlier than previously anticipated. While inflation is an immediate concern, there are constraints on how aggressive the Fed could be in raising interest rates in the long run. In its latest monetary policy setting meeting, the Fed said it will reduce asset purchases by US$30 billion each month, instead of by US$15 billion as announced in November. This implies its... https://www.scmp.com/comment/opinion/article/3160822/why-federal-reserve-taking-modest-approach-raising-interest-rates?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3160822/why-federal-reserve-taking-modest-approach-raising-interest-rates?utm_source=rss_feed Sun, 26 Dec 2021 06:30:22 +0000 It has been a year since the US presidential election and we are one year away from the midterm elections. Many had hoped that Joe Biden’s victory would restore some political normality to both the United States and the rest of the world. This has happened to some extent. However, recent data and events show that US voters remain divided, and it is increasingly likely that Biden’s legislative agenda could come to a standstill in the second half of his term. The midterm elections will be held on... https://www.scmp.com/comment/opinion/world/article/3156429/how-bidens-midterm-election-performance-could-affect-us-stock?utm_source=rss_feed https://www.scmp.com/comment/opinion/world/article/3156429/how-bidens-midterm-election-performance-could-affect-us-stock?utm_source=rss_feed Fri, 19 Nov 2021 17:30:23 +0000 Which government is working to reduce income inequality, raise wages, improve welfare for workers, get companies and financial investors to pay their fair share of taxes and improve the environment? China? The United States? Japan? Britain? Germany? The answer is all of the above. Among these, though, China has been in spotlight this year with a flurry of regulatory changes aimed at achieving “common prosperity”. These include improving income equality, controlling home prices for better... https://www.scmp.com/comment/opinion/article/3152315/global-shift-towards-greater-equality-shows-chinas-common?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3152315/global-shift-towards-greater-equality-shows-chinas-common?utm_source=rss_feed Fri, 15 Oct 2021 06:30:15 +0000 As the US Federal Reserve gets ready to roll back its quantitative easing programme and start tapering its asset purchases by the end of the year, investors can’t help but recall the 2013 market “tantrum” that greeted the Fed’s previous attempt to taper its bond buying, as they decide what to do now. But there are important differences between then and now that should caution investors against simply copying and pasting their 2013 playbook. After the Fed announced, in December 2013, that it... https://www.scmp.com/comment/opinion/united-states/article/3148883/forget-2013-tantrum-playbook-us-fed-prepares-taper?utm_source=rss_feed https://www.scmp.com/comment/opinion/united-states/article/3148883/forget-2013-tantrum-playbook-us-fed-prepares-taper?utm_source=rss_feed Fri, 17 Sep 2021 17:30:17 +0000 Businesses, investors and central bankers have all been warning about the risk of inflation since the global economy started to recover in early 2021. The widely cited concern has been that aggressive government spending and interest rates at zero would prompt a sharp spike in inflation, meaning consumers would have to pay more for everything from fuel to food. The reality may be somewhat different. It may not be the cost of household items that rockets but, rather, the price of financial assets... https://www.scmp.com/comment/opinion/article/3144793/why-asset-inflation-could-be-real-danger-not-higher-consumer-prices?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3144793/why-asset-inflation-could-be-real-danger-not-higher-consumer-prices?utm_source=rss_feed Fri, 13 Aug 2021 06:30:15 +0000 As the midpoint of 2021 passes, three factors are likely to shape the investing future for the next six months and beyond. First, the global pace of vaccinations will determine the speed of the recovery. The US and Britain have led this race in the first half of the year, resulting in a robust domestic economic recovery so far. Europe and China have also accelerated their progress in recent weeks. While vaccine hesitancy around the world could prevent these economies from reaching the 60-70 per... https://www.scmp.com/comment/opinion/article/3139343/three-factors-financial-markets-should-watch-over-next-six-months?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3139343/three-factors-financial-markets-should-watch-over-next-six-months?utm_source=rss_feed Fri, 02 Jul 2021 08:30:16 +0000 More than a year since the World Health Organization designated the Covid-19 outbreak a pandemic, the global economy is still working through the consequences. While the US and Europe are reopening and their consumers are rightfully happy to gather and enjoy themselves again, the story is very different in Asia. In the past two months, Hong Kong has done well keeping local infections at bay. However, India has experienced devastating infection numbers and deaths, with its health care system... https://www.scmp.com/comment/opinion/article/3134926/time-asia-ditch-temporary-covid-19-measures-and-learn-live-virus?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3134926/time-asia-ditch-temporary-covid-19-measures-and-learn-live-virus?utm_source=rss_feed Fri, 28 May 2021 06:30:10 +0000 April 22 was Earth Day. It originated in 1970 to raise awareness of the need to protect the environment. As the impact from climate change has become more obvious – from extreme temperature swings to more frequent and powerful typhoons – the calls for action have grown louder. In particular, reducing greenhouse gas emissions to slow the impact of global warming has become a top priority. Two events in the past year have added momentum to this effort.  First, President Xi Jinping announced last... https://www.scmp.com/comment/opinion/article/3130670/climate-crisis-race-cut-carbon-emissions-could-be-gold-mine?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3130670/climate-crisis-race-cut-carbon-emissions-could-be-gold-mine?utm_source=rss_feed Sat, 24 Apr 2021 01:15:09 +0000 More than a year into the Covid-19 pandemic, the multi-speed global race to vaccinate populations around the world is now setting the stage for the next challenge of returning to normalcy for economic as well as public health. There are four broad groups of economies in terms of performance. Those economies that have failed to control the virus so far might be able to compensate for their poor performance by running ahead with their rate of vaccinations. The first group, including China, has led... https://www.scmp.com/comment/opinion/article/3127982/coronavirus-recovery-vaccine-success-can-help-make-prevention?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3127982/coronavirus-recovery-vaccine-success-can-help-make-prevention?utm_source=rss_feed Fri, 02 Apr 2021 08:00:08 +0000 The global Covid-19 pandemic has led to another round of ultra-loose monetary policy from central banks in developed economies, flooding the markets with cheap money. Although the global economy needs a lot of support to recover from the Covid-19 pandemic, there is a rising concern that a prolonged period of low interest rates could lead to asset inflation or excessive credit growth.  Several Asian central banks – such as the People’s Bank of China (PBOC), the Bank of Korea and the Reserve Bank... https://www.scmp.com/comment/opinion/article/3123104/interest-rate-rises-table-asian-economies-try-curb-speculation-and?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3123104/interest-rate-rises-table-asian-economies-try-curb-speculation-and?utm_source=rss_feed Fri, 26 Feb 2021 08:45:07 +0000 With Joe Biden inaugurated as US president, investors’ attention has shifted to his policy priorities. Asian investors are keen to see if some of the more stringent trade and investment measures against China taken by the Donald Trump administration will be rolled back or eased. Their hopes may be dashed. In the face of many urgent domestic emergencies, the Biden administration will have to focus in its early days on taming Covid-19 and revamping the government’s pandemic response. Any of... https://www.scmp.com/comment/opinion/article/3118699/what-bidens-urgent-policy-priorities-mean-asia-and-world?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3118699/what-bidens-urgent-policy-priorities-mean-asia-and-world?utm_source=rss_feed Fri, 22 Jan 2021 19:30:14 +0000 When I recently shared my work experience with a group of bright young analysts, one question was: “Should investors be contrarian?” Contrarian investors tend to do the opposite of the prevailing market sentiment, like buying with confidence when everyone else is selling in panic. For day traders looking to make quick profits, sometimes it makes sense to be contrarian. If everyone is buying into one hot stock, running up the price, there will be fewer potential investors going forward in the... https://www.scmp.com/comment/opinion/article/3114183/why-tech-stocks-and-sustainable-investing-are-good-long-term-bets?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3114183/why-tech-stocks-and-sustainable-investing-are-good-long-term-bets?utm_source=rss_feed Fri, 18 Dec 2020 07:45:15 +0000 Following the results of last week’s US elections, the policy landscape is certain to be characterised by divided government in the next few years. Another way to describe it would be “steady as she goes, and don’t try anything too radical”. Instead of a “blue wave” where the Democratic Party won the White House, Senate and the House of Representatives, the election results were closer than polls suggested. The Democrats were unable to expand their majority in the House. The Senate will remain... https://www.scmp.com/comment/opinion/article/3109566/bidens-no-1-task-see-america-through-pandemic-and-limit-its-impact?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3109566/bidens-no-1-task-see-america-through-pandemic-and-limit-its-impact?utm_source=rss_feed Fri, 13 Nov 2020 10:15:16 +0000 The recent announcement that Hong Kong plans to issue inflation-linked government debt may have retail investors thinking about the role of bonds. The problem is that today’s markets are anything but conventional and the traditional rules of the game have changed. A classic principle of good investing used to be to maintain diversification – buy assets that don’t move in the same direction, much like taking out an insurance policy. For example, if equities go through a sharp correction, bonds... https://www.scmp.com/business/article/3104661/why-hong-kong-ibonds-china-government-bonds-offer-haven-investors-seeking?utm_source=rss_feed https://www.scmp.com/business/article/3104661/why-hong-kong-ibonds-china-government-bonds-offer-haven-investors-seeking?utm_source=rss_feed Fri, 09 Oct 2020 07:30:12 +0000 The US Federal Reserve recently announced that it will adopt a new monetary framework. It will move to an average inflation target of 2 per cent, instead of treating 2 per cent as the ceiling. Put another way, the Fed has signalled that, to achieve the average, it will be willing to tolerate inflation running hotter and higher for a limited period. It also indicated that it accepts the idea that the job market could stay strong without leading to a surge in inflation. The announcement was not a... https://www.scmp.com/comment/opinion/article/3100110/why-federal-reserves-bid-boost-us-inflation-good-news-asia?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3100110/why-federal-reserves-bid-boost-us-inflation-good-news-asia?utm_source=rss_feed Fri, 04 Sep 2020 08:30:11 +0000 Governments around the world are struggling to balance containing the Covid-19 outbreak to protect public health against securing an economic recovery to safeguard people’s economic well-being, as infection rates spike in many countries. But instead of derailing the global economy and forcing another dip in economic activity, the latest outbreaks are more likely to dampen and delay a full recovery. In the United States, daily new infections accelerated from mid-June to average 50,000 cases a... https://www.scmp.com/comment/opinion/article/3096297/how-governments-are-holding-fragile-recovery-fresh-covid-19?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3096297/how-governments-are-holding-fragile-recovery-fresh-covid-19?utm_source=rss_feed Fri, 07 Aug 2020 12:15:12 +0000 Regardless of who wins the US presidential election, the next leader will start his term with record government debt. The pandemic has dealt a significant blow to government finances around the world. For some countries, such as the US and Japan, their central banks can help buy time before a debt reckoning. For others, painful austerity measures could be hard to avoid. With business revenues wiped out by lockdowns, public sector grants and loans are a lifeline for companies. Job protection... https://www.scmp.com/comment/opinion/article/3092225/how-bailout-debt-painting-governments-and-central-banks-corner?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3092225/how-bailout-debt-painting-governments-and-central-banks-corner?utm_source=rss_feed Fri, 10 Jul 2020 13:00:16 +0000 The global economy is crawling back to its feet, but returning to full health will take longer. Disrupted by Covid-19, it is facing its deepest recession since World War II. The good news is that we are starting to see many economies reopening and can anticipate a two-stage recovery process. We are probably at the start of the first stage of recovery from Covid-19 and getting back to some form of normality. However, to eventually rebound to full strength, we will need a vaccine or at least... https://www.scmp.com/business/article/3087420/coronavirus-lockdowns-are-lifting-and-economies-are-reopening-hard-work?utm_source=rss_feed https://www.scmp.com/business/article/3087420/coronavirus-lockdowns-are-lifting-and-economies-are-reopening-hard-work?utm_source=rss_feed Fri, 05 Jun 2020 13:00:15 +0000 Human beings are social animals. They prefer to gather in groups, whether in markets, places of worship, bars or restaurants. Industries were created around this behaviour. The Covid-19 pandemic has disrupted this way of life, yet we find new ways to meet our friends and families. In the age of social distancing and virus containment, meetings, prayers, happy hours and romantic dates are all moving online.  People’s preference for globalisation is the same. Consumers want cheaper and better... https://www.scmp.com/comment/opinion/article/3082321/coronavirus-wont-kill-globalisation-might-just-change-global?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3082321/coronavirus-wont-kill-globalisation-might-just-change-global?utm_source=rss_feed Fri, 01 May 2020 09:00:05 +0000 When a boxer is forced into a corner by his opponent, he is only thinking about how to get out of that situation. His immediate priority is simply to survive this round. The same applies to governments around the world, which are trying to control the coronavirus pandemic and save lives without wrecking economies. Nonetheless, these necessary short-term actions may leave significant longer-term marks on the policy environment. First, global interest rates are rapidly collapsing to zero. We... https://www.scmp.com/comment/opinion/article/3077091/coronavirus-pandemic-could-be-economic-policy-turning-point?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3077091/coronavirus-pandemic-could-be-economic-policy-turning-point?utm_source=rss_feed Fri, 27 Mar 2020 09:00:15 +0000 Moving house is a pain. So imagine how it feels to be moving a factory with millions of dollars’ worth of equipment to another country will different tax and other regulations. Talk of multinational companies moving their factories from China to another location has been going on for some time. The Covid-19 outbreak has made this discussion more urgent, as companies in China struggle to restart production, with workers unable to travel back to workplaces in large parts of the country, much less... https://www.scmp.com/comment/opinion/article/3051634/despite-coronavirus-crisis-and-trade-war-factories-have-good?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3051634/despite-coronavirus-crisis-and-trade-war-factories-have-good?utm_source=rss_feed Fri, 21 Feb 2020 13:00:12 +0000 The abrupt escalation in political tension between the US and Iran briefly rattled markets, at a time when global investors were feeling upbeat about the trade war and Brexit. Trade negotiations between the United States and China have now led to the signing of the phase one deal, and in Britain, the Withdrawal Agreement Bill is heading through Parliament after the Conservative Party’s resounding general election victory. Although both events could still yield more drama in the months ahead,... https://www.scmp.com/comment/opinion/article/3046245/markets-arent-losing-any-sleep-over-us-iran-and-oil-yet-trade-war?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3046245/markets-arent-losing-any-sleep-over-us-iran-and-oil-yet-trade-war?utm_source=rss_feed Fri, 17 Jan 2020 09:00:07 +0000 China’s economic growth remains on the back foot, with both structural and cyclical factors undermining the economy’s rate of expansion. Unlike during previous slowdowns, such as the global financial crisis of 2008 and 2009, the People’s Bank of China is adopting a painstaking approach to easing monetary policy: it is like an artist honing a marble statue with a chisel, instead of smashing up slabs with a sledgehammer. In the year ahead, there are good reasons for the PBOC to persist with such a... https://www.scmp.com/comment/opinion/article/3039728/why-peoples-bank-china-easing-monetary-policy-carefully-chisel-not?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3039728/why-peoples-bank-china-easing-monetary-policy-carefully-chisel-not?utm_source=rss_feed Fri, 29 Nov 2019 14:00:09 +0000 We are now less than a year away from the US presidential and congressional elections. Given the impact of President Donald Trump’s policies in recent years, we should expect the outcome of the race for the White House, whoever wins, to be significant for global investors. Unfortunately, I don’t have a crystal ball to predict how this will play out, but we can make some educated guesses about what to expect. First, Congress is likely to remain divided. Before zooming in on the presidential race,... https://www.scmp.com/comment/opinion/article/3038585/what-expect-2020-us-elections-more-disunity-no-love-china?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3038585/what-expect-2020-us-elections-more-disunity-no-love-china?utm_source=rss_feed Fri, 22 Nov 2019 17:00:17 +0000 When a truck is stuck in the mud, pressing the accelerator may not be helpful and may even leave the vehicle deeper in trouble. You may need help, such as planks to give the wheels extra grip, to get out of the sticky situation. The global economy is in a similar situation. Political events from the trade war to Brexit are dampening corporate sentiment. The risks are spreading to consumption, which has been key in preventing the economy from cooling further. Central banks are working harder,... https://www.scmp.com/comment/opinion/article/3031438/more-policy-easing-wont-get-global-economy-out-mud-government?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3031438/more-policy-easing-wont-get-global-economy-out-mud-government?utm_source=rss_feed Fri, 04 Oct 2019 15:00:14 +0000 China has been opening up its financial markets to international investors over the past two decades. The removal of quotas for the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) schemes, announced on September 10, is the latest milestone of this liberalisation. As foreign investors gain greater access to China’s equity and bond markets, it makes sense to allow Chinese investors overseas to also access a broader range of financial... https://www.scmp.com/comment/opinion/article/3027966/why-chinas-capital-liberalisation-needs-be-two-way-street?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3027966/why-chinas-capital-liberalisation-needs-be-two-way-street?utm_source=rss_feed Fri, 20 Sep 2019 06:00:07 +0000 Inflation in Hong Kong stood at 3 per cent in July. Given that most Hong Kong dollar savings accounts are paying close to zero interest, savers are effectively being robbed by the silent thief of inflation. For every HK$10,000 in a savings account, you lose HK$1 in purchasing power every day. This may not sound like much, but it all adds up when investment prospects are becoming more challenging. Hongkongers who don’t want to see the value of their savings whittled away could try putting that... https://www.scmp.com/comment/opinion/article/3024846/how-can-hong-kong-investors-best-protect-against-inflation-negative?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3024846/how-can-hong-kong-investors-best-protect-against-inflation-negative?utm_source=rss_feed Fri, 30 Aug 2019 06:00:09 +0000 Britain’s newly minted Prime Minister Boris Johnson has stepped up his “no deal” rhetoric, claiming he will not meet with EU leaders unless they agree to change key aspects of a divorce deal, sending the British pound spiralling downwards. Regarding his purportedly hardline stance, Johnson’s exact words were “no ifs, no buts”. This position has prompted market concerns that the British economy could face significant disruption in the event of a no-deal Brexit. As of this writing, the pound was... https://www.scmp.com/comment/opinion/article/3021003/no-clear-path-brexit-expect-more-volatility-uk-markets?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3021003/no-clear-path-brexit-expect-more-volatility-uk-markets?utm_source=rss_feed Fri, 02 Aug 2019 19:00:08 +0000 Politicians earn voters’ support by offering them the prospect of a better living. This can be through improved education, health care or a more equal society. This social contract is a cornerstone of democracy.  Ideals aside, real-world situations are often rife with complexities, such as when a well-intended solution creates unintended consequences. Also, most of these services are not free. Options to raise money to pay for them may not be popular. US President Donald Trump’s “America first”... https://www.scmp.com/comment/opinion/article/3015126/donald-trump-boris-johnson-and-other-populists-loosen-purse-strings?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3015126/donald-trump-boris-johnson-and-other-populists-loosen-purse-strings?utm_source=rss_feed Fri, 21 Jun 2019 03:30:12 +0000