The document provides an overview and analysis of global markets and economic conditions in December 2012. It discusses uncertainties in the US around resolving the fiscal cliff issues and debates around raising the debt ceiling. In Europe, more bailouts are being crafted for Greece but are only temporary fixes. Japan may see new stimulus policies from an incoming government. Across asset classes, the outlook is neutral to negative due to ongoing debt and economic challenges facing developed nations. High dividend stocks and select property investments are preferred over fixed income given inflation risks.
Henley December Outlook Singapore 2012 Optimisedjaydean71
The document provides an overview and outlook of various asset classes for December 2012 from The Henley Group. It discusses uncertainties in the markets as holidays approach and whether "Christmas magic" will provide solutions. It also summarizes views on fixed income, currencies, property, equities and other asset classes with a focus on developments in the US, Europe, UK, Japan, Hong Kong and Singapore. The outlook is mostly neutral to negative given continued uncertainties and concerns over fiscal and debt issues in developed economies.
Henley November Outlook Hong Kong 2012(Low)Tania Scott
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to low yields and inflation risks. Property is given a neutral assessment with selective opportunities. Currencies are predicted to further devalue against commodities and the Yen is seen as a safe haven.
The document provides an overview of the global economic and political outlook for November 2012. It notes that the next few months could see significant changes or events, as issues in the US, China, Europe and elsewhere may be coming to a head. The outlook remains uncertain, as America faces its "fiscal cliff" and debt ceiling, China transitions to new leadership, and debt problems continue to threaten Greece, Spain and the eurozone more broadly. However, the IMF may be preparing for reforms to the broken monetary system by revisiting an alternative proposed in the 1930s.
The document discusses the uncertain global economic and political environment over the next few months. It notes that the US faces budget issues as tax cuts are set to expire and spending cuts will be implemented. China is also transitioning to new leadership. In Europe, Germany does not want to directly fund bailouts for troubled countries like Greece, Portugal, and Spain, making their conditions impossible to meet. The global monetary system is unsustainable long-term, and the IMF is exploring alternatives like those in the Chicago Plan from the 1930s.
The document summarizes the February 2012 monthly market outlook from investment firm The Henley Group. It discusses the ongoing negotiations between Greece and its hedge fund creditors over restructuring Greek sovereign debt. It also covers the European Central Bank providing liquidity to European banks and governments to alleviate financing pressures as several countries need to refinance hundreds of billions in debt in the coming months. The report expresses concern about inflation risks from the rapid expansion of central bank balance sheets and recommends accumulating gold and silver as a hedge.
Equities pushed higher over the summer months, recouping losses from May. However, the document notes the health of the world economy looks far from great, with Europe flirting with recession supported mainly by Germany. The document discusses how monetary easing is driving equity prices higher despite weak economic fundamentals. It provides an overview of various asset classes and regions with a generally neutral outlook, noting preferences for high dividend stocks and selectivity in alternative investments.
The document summarizes the October 2012 monthly market outlook from The Henley Group. It discusses how September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended monetary stimulus. It predicts this will accelerate currency debasement and a potential hyperinflation. Real assets like precious metals are expected to perform well due to monetary stimulus inflating prices, while bonds and cash are risky. Geopolitical tensions are also discussed.
The document provides a summary of the monthly market outlook for October 2012. It discusses that September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended unlimited monetary stimulus. It also summarizes views on various asset classes, including a negative outlook for fixed income given low government bond yields, and a neutral outlook for property with a focus on specialized assets.
Henley December Outlook Singapore 2012 Optimisedjaydean71
The document provides an overview and outlook of various asset classes for December 2012 from The Henley Group. It discusses uncertainties in the markets as holidays approach and whether "Christmas magic" will provide solutions. It also summarizes views on fixed income, currencies, property, equities and other asset classes with a focus on developments in the US, Europe, UK, Japan, Hong Kong and Singapore. The outlook is mostly neutral to negative given continued uncertainties and concerns over fiscal and debt issues in developed economies.
Henley November Outlook Hong Kong 2012(Low)Tania Scott
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to low yields and inflation risks. Property is given a neutral assessment with selective opportunities. Currencies are predicted to further devalue against commodities and the Yen is seen as a safe haven.
The document provides an overview of the global economic and political outlook for November 2012. It notes that the next few months could see significant changes or events, as issues in the US, China, Europe and elsewhere may be coming to a head. The outlook remains uncertain, as America faces its "fiscal cliff" and debt ceiling, China transitions to new leadership, and debt problems continue to threaten Greece, Spain and the eurozone more broadly. However, the IMF may be preparing for reforms to the broken monetary system by revisiting an alternative proposed in the 1930s.
The document discusses the uncertain global economic and political environment over the next few months. It notes that the US faces budget issues as tax cuts are set to expire and spending cuts will be implemented. China is also transitioning to new leadership. In Europe, Germany does not want to directly fund bailouts for troubled countries like Greece, Portugal, and Spain, making their conditions impossible to meet. The global monetary system is unsustainable long-term, and the IMF is exploring alternatives like those in the Chicago Plan from the 1930s.
The document summarizes the February 2012 monthly market outlook from investment firm The Henley Group. It discusses the ongoing negotiations between Greece and its hedge fund creditors over restructuring Greek sovereign debt. It also covers the European Central Bank providing liquidity to European banks and governments to alleviate financing pressures as several countries need to refinance hundreds of billions in debt in the coming months. The report expresses concern about inflation risks from the rapid expansion of central bank balance sheets and recommends accumulating gold and silver as a hedge.
Equities pushed higher over the summer months, recouping losses from May. However, the document notes the health of the world economy looks far from great, with Europe flirting with recession supported mainly by Germany. The document discusses how monetary easing is driving equity prices higher despite weak economic fundamentals. It provides an overview of various asset classes and regions with a generally neutral outlook, noting preferences for high dividend stocks and selectivity in alternative investments.
The document summarizes the October 2012 monthly market outlook from The Henley Group. It discusses how September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended monetary stimulus. It predicts this will accelerate currency debasement and a potential hyperinflation. Real assets like precious metals are expected to perform well due to monetary stimulus inflating prices, while bonds and cash are risky. Geopolitical tensions are also discussed.
The document provides a summary of the monthly market outlook for October 2012. It discusses that September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended unlimited monetary stimulus. It also summarizes views on various asset classes, including a negative outlook for fixed income given low government bond yields, and a neutral outlook for property with a focus on specialized assets.
The document summarizes the February 2012 outlook from The Henley Group. It discusses the ongoing negotiations between Greece and its hedge fund creditors over restructuring Greek sovereign debt. It also summarizes the European Central Bank providing nearly half a trillion euros to the European banking system to relieve financing pressures as several countries and banks have had their credit ratings downgraded. The outlook remains negative on the US dollar, British pound, and euro over the medium to long term.
September 2012 was one of the most important months for markets since 2008, as both the ECB and Fed announced plans for open-ended, unlimited monetary stimulus. This stimulus will likely lead to higher inflation in the short term and further debase paper currencies over the long run. Precious metals and mining funds are expected to perform well due to ongoing monetary stimulus, while financial assets face increasing risk after adjusting for inflation.
The document provides an outlook on global markets and asset classes for June 2012. It discusses ongoing issues in Europe, including uncertainty around Greece's future in the eurozone. It also mentions weakness in China's economy and concerns around derivatives exposures and potential defaults. Overall, the outlook remains cautious due to ongoing risks and challenges around the world.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document discusses Standard Life Investments' views on global markets in the third quarter of 2010. It notes that investors face political and regulatory challenges in addition to normal fiscal and monetary decisions. While stock markets are supported by improved corporate profits and balance sheets, volatile financial markets are expected to continue into 2011. The document emphasizes that change and uncertainty create difficulties but also opportunities to add value for clients through active investment management.
Franklin Templeton Quarterly Report -Debt Market - August 2012Natraj71
This document discusses the fixed income markets and FT funds. It provides an overview of the global and Indian macroeconomic environment, noting accommodative monetary policies, slowing growth, and high interest rate differentials. It then summarizes FT's fixed income funds, including the Templeton India Low Duration Fund, Short Term Income Plan, Income Opportunities Fund, and Corporate Bond Opportunities Fund. These funds are well positioned for the current environment given their focus on short-dated securities and corporate bonds.
The document summarizes market performance in August 2010 and KBCAM's outlook. Global equity markets declined in August while European bonds increased. News was mixed with strong corporate earnings but concerns around the US economy. KBCAM maintains the view that the global economy will avoid recession, though volatility is expected in the near term. Future food shortages are highlighted as a major challenge given population growth, increasing demand, and limited agricultural supply. Investment opportunities exist across the food value chain.
Wallet4wealth delivering you a monthly newsletter to manage your personal finance. When we are out with our latest issue of NEWSLETTER by the end of February 2022, world is watching yet another crisis ! Russia - Ukraine war.
As Indian stock market tanked around 5% on Thursday 24th Feb 2022 amidst Russia - Ukraine war situation, most investors got into panic and fear grip. By the time we are publishing this newsletter, the WAR crisis is more intensified and the peace talk is looking dim. The Crisis seems to take an ugly turn if NATO members unite together and push Russia to take some dangerous turn.
There are many political and expert comments available in free media which are providing live updates on the situations. However we have shared a special note related to this WAR situation and key reasons behind this Crisis. Understanding the key reason for any crisis gives you better control on your emotional decisions related to such event.
If you want to give any feedback you can suggest us in the comment box. Also do like and share to motivate us so that we will provide you latest information in our next Newsletter. For more update visit our website https://wallet4wealth.com/ . Thank You.
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to low yields and inflation risks. Property is given a neutral assessment with selective opportunities. Currencies are predicted to further devalue against commodities and the Yen is seen as a safe haven.
The Henley Group Monthly Outlook September 2012jenks23
Equity prices have risen over the summer despite a weak global economy. Europe remains at risk of recession while China is showing signs of slowing. The document suggests equity prices have risen due to expectations of further monetary easing from central banks. It recommends agricultural equities as crops face drought conditions and reviews minutes from the US Federal Reserve that indicate consensus for more stimulus if growth falters further. Gold and silver prices jumped on the Fed minutes as investors anticipate additional quantitative easing.
The document provides an outlook on various asset classes and markets for August 2012 from The Henley Group. It discusses views on currencies, fixed income, property, equities, commodities, and alternative investments. The outlook expresses negative views on the US dollar, British pound, and euro, as well as fixed income generally. It notes slowing economic data from China and concerns about high home prices in some markets like India, Brazil, and parts of China.
The document provides a summary of the monthly market outlook for October 2012. It discusses that September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended unlimited monetary stimulus. It also summarizes views on various asset classes, including a negative outlook for fixed income given low government bond yields, and a neutral outlook for property with a focus on specialized assets.
The document provides an overview and analysis of global markets and economic conditions in December 2012. It discusses uncertainties in the US around resolving the fiscal cliff issues and debt ceiling debates. In Europe, more bailouts are being crafted for Greece but fail to solve underlying issues. Japan may see new stimulus but past attempts have not succeeded. Overall the outlook expresses skepticism around resolutions to major economic problems and sees continued monetary easing fueling future inflation risks.
The document provides an overview and assessment of various asset classes and markets for November 2011. It notes that European politicians seemed to start addressing the arithmetic of their debt crisis in October but the situation has since degenerated into a "tragic farce". Fixed income is viewed negatively due to downgrades in Europe and high funding costs in China negatively impacting businesses. Property prices are seen as stabilized after falls in 2009 but fundamentals remain weak in some areas. Equities are given a neutral outlook with weaknesses for the US noted around its fiscal position and housing market.
This document provides an outlook on global markets for January 2012 from The Henley Group. It discusses challenges and risks across various asset classes including fixed income, currencies, property, and equities in major regions. Some of the main points covered include ongoing issues in the Eurozone debt crisis, concerns about hard landings in China, the fragile state of the US economy, and political risks remaining high in Europe. Overall the outlook maintains a cautious stance due to numerous risks and uncertainties in the global economic and market environment.
Equity prices have risen over the summer despite a weak global economy. Europe remains at risk of recession while China is showing signs of slowing. The prospect of further monetary easing is driving stock prices higher even as economic data remains poor. Agricultural commodity prices have risen sharply due to drought conditions, making agribusiness equities more attractive investments. The US Federal Reserve is expected to take substantial easing action to support the economy should growth stall further.
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to risks of higher inflation from monetary easing. Property is given a neutral assessment with selective opportunities seen in Asia.
The document provides an overview and analysis of the global economic and market outlook for July 2012. It summarizes that European governments and banks are insolvent, US governments and banks also face challenges, and foreigners are abandoning the US dollar in favor of alternatives like gold. While central banks are providing liquidity, high debt levels, weak growth, and political uncertainties persist as major concerns. The outlook remains negative across many asset classes.
The document provides an outlook on global markets and asset classes for May 2012 from The Henley Group. Key points include:
- The period of calm in European markets following ECB intervention was short-lived as concerns over Spain's debt resurfaced.
- Problems facing the global economy like high debt levels remain systemic and structural.
- Spanish debt levels and unemployment are high while property markets and banks are struggling.
- Many banks remain highly leveraged which could lead to insolvency if losses are incurred.
- Political changes in Europe may undermine austerity efforts, adding further uncertainty.
- Precious metals and miners' shares are recommended as long term holdings.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document summarizes the Henley Group's market outlook for July 2012. It notes that European governments and banks are insolvent, and that the US is not far behind. While a meeting of the Council of Europe claimed to have a plan to solve the Eurozone crisis, there was actually no formal agreed plan. The debt crisis continues to deteriorate rapidly. Several countries have requested bailouts, yet the money to fund them is uncertain. Foreign holdings of US Treasuries and dollars are declining as other currencies like gold, yuan and others rise in prominence. In short, significant economic problems remain in Europe and globally despite political claims of progress.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document summarizes the February 2012 outlook from The Henley Group. It discusses the ongoing negotiations between Greece and its hedge fund creditors over restructuring Greek sovereign debt. It also summarizes the European Central Bank providing nearly half a trillion euros to the European banking system to relieve financing pressures as several countries and banks have had their credit ratings downgraded. The outlook remains negative on the US dollar, British pound, and euro over the medium to long term.
September 2012 was one of the most important months for markets since 2008, as both the ECB and Fed announced plans for open-ended, unlimited monetary stimulus. This stimulus will likely lead to higher inflation in the short term and further debase paper currencies over the long run. Precious metals and mining funds are expected to perform well due to ongoing monetary stimulus, while financial assets face increasing risk after adjusting for inflation.
The document provides an outlook on global markets and asset classes for June 2012. It discusses ongoing issues in Europe, including uncertainty around Greece's future in the eurozone. It also mentions weakness in China's economy and concerns around derivatives exposures and potential defaults. Overall, the outlook remains cautious due to ongoing risks and challenges around the world.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document discusses Standard Life Investments' views on global markets in the third quarter of 2010. It notes that investors face political and regulatory challenges in addition to normal fiscal and monetary decisions. While stock markets are supported by improved corporate profits and balance sheets, volatile financial markets are expected to continue into 2011. The document emphasizes that change and uncertainty create difficulties but also opportunities to add value for clients through active investment management.
Franklin Templeton Quarterly Report -Debt Market - August 2012Natraj71
This document discusses the fixed income markets and FT funds. It provides an overview of the global and Indian macroeconomic environment, noting accommodative monetary policies, slowing growth, and high interest rate differentials. It then summarizes FT's fixed income funds, including the Templeton India Low Duration Fund, Short Term Income Plan, Income Opportunities Fund, and Corporate Bond Opportunities Fund. These funds are well positioned for the current environment given their focus on short-dated securities and corporate bonds.
The document summarizes market performance in August 2010 and KBCAM's outlook. Global equity markets declined in August while European bonds increased. News was mixed with strong corporate earnings but concerns around the US economy. KBCAM maintains the view that the global economy will avoid recession, though volatility is expected in the near term. Future food shortages are highlighted as a major challenge given population growth, increasing demand, and limited agricultural supply. Investment opportunities exist across the food value chain.
Wallet4wealth delivering you a monthly newsletter to manage your personal finance. When we are out with our latest issue of NEWSLETTER by the end of February 2022, world is watching yet another crisis ! Russia - Ukraine war.
As Indian stock market tanked around 5% on Thursday 24th Feb 2022 amidst Russia - Ukraine war situation, most investors got into panic and fear grip. By the time we are publishing this newsletter, the WAR crisis is more intensified and the peace talk is looking dim. The Crisis seems to take an ugly turn if NATO members unite together and push Russia to take some dangerous turn.
There are many political and expert comments available in free media which are providing live updates on the situations. However we have shared a special note related to this WAR situation and key reasons behind this Crisis. Understanding the key reason for any crisis gives you better control on your emotional decisions related to such event.
If you want to give any feedback you can suggest us in the comment box. Also do like and share to motivate us so that we will provide you latest information in our next Newsletter. For more update visit our website https://wallet4wealth.com/ . Thank You.
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to low yields and inflation risks. Property is given a neutral assessment with selective opportunities. Currencies are predicted to further devalue against commodities and the Yen is seen as a safe haven.
The Henley Group Monthly Outlook September 2012jenks23
Equity prices have risen over the summer despite a weak global economy. Europe remains at risk of recession while China is showing signs of slowing. The document suggests equity prices have risen due to expectations of further monetary easing from central banks. It recommends agricultural equities as crops face drought conditions and reviews minutes from the US Federal Reserve that indicate consensus for more stimulus if growth falters further. Gold and silver prices jumped on the Fed minutes as investors anticipate additional quantitative easing.
The document provides an outlook on various asset classes and markets for August 2012 from The Henley Group. It discusses views on currencies, fixed income, property, equities, commodities, and alternative investments. The outlook expresses negative views on the US dollar, British pound, and euro, as well as fixed income generally. It notes slowing economic data from China and concerns about high home prices in some markets like India, Brazil, and parts of China.
The document provides a summary of the monthly market outlook for October 2012. It discusses that September 2012 was one of the most important months for markets since 2008, with the ECB and Fed announcing open-ended unlimited monetary stimulus. It also summarizes views on various asset classes, including a negative outlook for fixed income given low government bond yields, and a neutral outlook for property with a focus on specialized assets.
The document provides an overview and analysis of global markets and economic conditions in December 2012. It discusses uncertainties in the US around resolving the fiscal cliff issues and debt ceiling debates. In Europe, more bailouts are being crafted for Greece but fail to solve underlying issues. Japan may see new stimulus but past attempts have not succeeded. Overall the outlook expresses skepticism around resolutions to major economic problems and sees continued monetary easing fueling future inflation risks.
The document provides an overview and assessment of various asset classes and markets for November 2011. It notes that European politicians seemed to start addressing the arithmetic of their debt crisis in October but the situation has since degenerated into a "tragic farce". Fixed income is viewed negatively due to downgrades in Europe and high funding costs in China negatively impacting businesses. Property prices are seen as stabilized after falls in 2009 but fundamentals remain weak in some areas. Equities are given a neutral outlook with weaknesses for the US noted around its fiscal position and housing market.
This document provides an outlook on global markets for January 2012 from The Henley Group. It discusses challenges and risks across various asset classes including fixed income, currencies, property, and equities in major regions. Some of the main points covered include ongoing issues in the Eurozone debt crisis, concerns about hard landings in China, the fragile state of the US economy, and political risks remaining high in Europe. Overall the outlook maintains a cautious stance due to numerous risks and uncertainties in the global economic and market environment.
Equity prices have risen over the summer despite a weak global economy. Europe remains at risk of recession while China is showing signs of slowing. The prospect of further monetary easing is driving stock prices higher even as economic data remains poor. Agricultural commodity prices have risen sharply due to drought conditions, making agribusiness equities more attractive investments. The US Federal Reserve is expected to take substantial easing action to support the economy should growth stall further.
The document provides an overview and assessment of various asset classes and geopolitical issues for the month of November 2012 by The Henley Group. It notes that the next few months bring uncertainty from leadership transitions in the US and China as well as ongoing debt issues in Europe and America. Fixed income is viewed negatively due to risks of higher inflation from monetary easing. Property is given a neutral assessment with selective opportunities seen in Asia.
The document provides an overview and analysis of the global economic and market outlook for July 2012. It summarizes that European governments and banks are insolvent, US governments and banks also face challenges, and foreigners are abandoning the US dollar in favor of alternatives like gold. While central banks are providing liquidity, high debt levels, weak growth, and political uncertainties persist as major concerns. The outlook remains negative across many asset classes.
The document provides an outlook on global markets and asset classes for May 2012 from The Henley Group. Key points include:
- The period of calm in European markets following ECB intervention was short-lived as concerns over Spain's debt resurfaced.
- Problems facing the global economy like high debt levels remain systemic and structural.
- Spanish debt levels and unemployment are high while property markets and banks are struggling.
- Many banks remain highly leveraged which could lead to insolvency if losses are incurred.
- Political changes in Europe may undermine austerity efforts, adding further uncertainty.
- Precious metals and miners' shares are recommended as long term holdings.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document summarizes the Henley Group's market outlook for July 2012. It notes that European governments and banks are insolvent, and that the US is not far behind. While a meeting of the Council of Europe claimed to have a plan to solve the Eurozone crisis, there was actually no formal agreed plan. The debt crisis continues to deteriorate rapidly. Several countries have requested bailouts, yet the money to fund them is uncertain. Foreign holdings of US Treasuries and dollars are declining as other currencies like gold, yuan and others rise in prominence. In short, significant economic problems remain in Europe and globally despite political claims of progress.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document summarizes the Henley Group's market outlook for July 2012. It notes that European governments and banks are insolvent, and that the US is not far behind. While a meeting of the Council of Europe claimed to have a plan to solve the Eurozone crisis, there was actually no formal agreed plan. The debt crisis continues to deteriorate rapidly. Several countries have requested bailouts, yet the money to fund them is uncertain. Foreign holdings of US Treasuries and dollars are declining as other assets like gold are pursued instead. In short, significant economic problems remain in Europe and globally.
The document provides an outlook on global markets and asset classes for July 2012 from The Henley Group. It summarizes the recent meeting of the Council of Europe regarding the eurozone crisis, noting there was no formal agreement reached. It then provides an overview and assessment of various asset classes, including fixed income, currencies, property, equities, and commodities, noting concerns about the sustainability of government and private debts in developed economies while maintaining a neutral stance on property and selective positive views on other assets.
The document provides an outlook on various asset classes and markets for August 2012 from The Henley Group. It discusses ongoing concerns around the LIBOR manipulation scandal and hopes that issues with unallocated gold schemes will be similarly exposed. The outlook then covers views on currencies, fixed income, property, equities, commodities, and alternative investments. Fixed income is viewed negatively due to challenges facing central banks and struggling economies. Commercial property is given mixed views, with caution on US and UK markets but growth seen in other regions.
The document provides an outlook on various asset classes and markets for August 2012 from The Henley Group. It discusses concerns around ongoing weakness in the Eurozone and prospects of hyperinflation. Fixed income markets remain challenging with central banks trying to stimulate growth through low rates. Cautious outlook on property markets except for prime central London, with concerns around overvaluation in some markets like India, Brazil, and parts of China.
The document provides an overview and assessment of various global markets and asset classes in May 2012. It notes that the brief period of calm in European markets following ECB intervention had ended, with concerns shifting from Greece to problems in Spain. Fixed income investments are viewed negatively due to high debt levels and political uncertainty in Europe. Property prices are seen as neutral overall, with weakness in some areas offset by strength in others like Asia and London. US and Japanese equities are given negative and positive outlooks respectively, based on country-specific economic factors.
The document provides an overview of the monthly market outlook for June 2012. It discusses the ongoing crisis in Europe, with a focus on the elections in Greece and France and how they have changed Europe profoundly. It notes the short-term focus remains on Europe and how Germany is now isolated in its refusal to support growth measures. It also briefly touches on concerns around Greece running out of money, Spain's banking troubles, and slowing growth in China. In conclusion, it states the fate of Greece and the euro remain the major cliffhangers for the month.
The document provides an overview of the global economic and political outlook for March 2012. It discusses the ongoing debt crisis in Europe, particularly focusing on Greece's struggling economy and negotiations over private sector involvement in debt relief. It notes rising gold and silver prices as a sign of uncertainty. The document also critiques policies in the US that undermine civil liberties and allow large banks and corporations to avoid accountability. It presents an uncertain and unstable political and economic landscape globally.
The document summarizes economic concerns from a single day in May 2012. It discusses Greece potentially leaving the eurozone and going into economic collapse. It also mentions the weakening European economy, troubles in the European commercial real estate market, and issues with J.P. Morgan that were hurting market sentiment. However, the document expresses that diversification may help investors weather volatility and that the outlook is better than 2008-2009 despite some challenges still existing.
The document provides an overview of markets and investment outlook from various managers in the last quarter. Key points include:
- Markets performed well despite initial Brexit reaction, with UK and international equities rising. Bonds and commodities also rose.
- Managers are assessing economic outlooks, seeing potential for US growth but concerns in Europe. Some see opportunities from coordinated fiscal plans.
- Managers have mixed views on regions like Japan, Europe, and property exposure. Bonds are largely held for safety over yield.
- The outlook discusses navigating uncertainty after Brexit through diversification. Unemployment rates suggest the UK economy remains stronger than Eurozone economies.
The document provides an overview of markets and investment outlook from various managers in the last quarter. Key points include:
- Markets performed well despite initial Brexit reaction, with UK and international equities rising. Bonds and commodities also rose.
- Managers are assessing economic outlooks, seeing potential for US growth but concerns in Europe. Some see opportunities from coordinated fiscal plans.
- Managers have mixed views on regions like Japan, Europe, and property exposure. Bonds are largely held for safety over yield.
- The outlook discusses navigating uncertainty after Brexit through diversification. Unemployment rates suggest the UK economy remains stronger than Eurozone economies.
The document discusses the recent underperformance of gold mining stocks relative to gold prices, as represented by declines in the HUI Index. It analyzes technical indicators that suggest gold stocks may continue to decline in the medium term, potentially retesting support levels from 2015-2016. It also notes threats to continued economic growth like inflation, debt levels, and financial market instability that could support further gains in gold prices.
This document provides an investment outlook and analysis of opportunities for 2014. It maintains a strategy of being long certain equities outside the US while preparing for volatility. The US and Europe are seen as in bubble territory for stocks and credit. Japan is pursuing aggressive monetary policies that could drive further equity gains and yen weakness. China's growth is positive in the short term but credit risks loom in coming years. Corrections are anticipated, with tapering, disappointing data, or earnings declines as possible catalysts. The document recommends hedging positions and selectivity in international equities and commodities tied to China.
Similar to Henley December Outlook Hong Kong 2012 Low (20)
The Henley Group Seminar - 22 October 2014Tania Scott
The Henley Group's Chief Economist, Martin W. Hennecke will be answering commonly asked client questions and Jeremy Stunt from CFT Asia Group will help explain how you make investment decisions! To register please email: ts@thehenleygroup.com.hk
Martin Hennecke will give his top 10 predictions for 2014 and discuss whether the Year of the Horse will be smooth or bumpy for China's markets. Timothy Beardson will discuss challenges facing China in coming decades, including prospects for growth, innovation, and whether China will replace the US as the next superpower. The seminar on February 27th will include presentations from Hennecke and Beardson as well as a Q&A session covering issues related to foreign affairs, politics, the military, cyber security, the environment, and social issues in China.
The Henley Group – Seminar Invitation – 27 February 2014Tania Scott
The Henley Group’s 27 February Seminar "Predictions for 2014 and the future for China". Speakers: Martin Hennecke, Chief Economist, The Henley Group and author Timothy Beardson of 'Stumbling Giant'.
The Henley Group's Market Outlook - January 2014Tania Scott
The document provides an outlook on global markets from Henley, an investment firm, for January 2014. It discusses various asset classes including equities, fixed income, currencies and commodities across different geographic regions. Some key points include that US debt levels remain unsustainable, European sovereign debt issues persist, and Chinese growth is holding up relatively well. Equities appear more attractive than property in China relative to historical valuations. Bitcoin is not recommended due to its lack of intrinsic value and unlimited supply of virtual currencies. Overall the outlook captures both positives and risks across global markets to help investors with asset allocation.
The Henley Group Seminar Invitation-13 NovemberTania Scott
Please join us at The Henley Group’s last seminar of 2013 on Wednesday 13 November to hear about asset bubbles vs undervalued opportunities and Dr Jim Walker's view on the global economy. If interested please register by email: ts@thehenleygroup.com.hk
Do you have any connection with the UK? If so, this could be for youTania Scott
A free breakfast seminar addressing the new UK residence rules and your UK pension. This is ideal for anyone who has any UK connections or has worked in the UK. If interested please email your interest to: ts@thehenleygroup.com.hk
The Henley Group's Market Outlook - August 2013Tania Scott
The document provides an overview and outlook for various global asset classes, including equities, fixed income, currencies and property. Key points include:
- European debt problems continue to deteriorate and discussions of bailouts, bail-ins and debt restructurings are resurfacing.
- The US economy continues to struggle with high unemployment and declining real wages. Detroit's bankruptcy filing highlights fiscal issues facing many US cities.
- China and Japan face their own economic challenges as China tries to rebalance its economy and Japan attempts stimulus through money printing.
- Precious metals saw a recovery in recent weeks after declines in April and June, but concerns remain around a potential collapse of the paper gold market.
-
The document provides an outlook on global markets from Henley for July 2013. It discusses developments in various asset classes including equities, currencies, fixed income, and property. For equities, it analyzes regions including the US, Japan, UK, Europe, Australia, ASEAN, China, India, and other emerging markets. It also covers commodities, alternative investments, and risks related to potential bank bail-ins. The author advises taking precautions with bank deposits given new laws allowing for deposit haircuts and the insolvency of many financial institutions masked by fraudulent accounting.
The Henley Group's Market Outlook - May 2013Tania Scott
The document provides an outlook on global markets from Henley for May 2013. It discusses developments in various asset classes including equities, currencies, fixed income, property, and commodities. For equities, it provides a positive assessment of Japan due to new stimulus measures weakening the Yen but remains negative on the US due to large national debt and lack of political will to address long-term fiscal issues. It also remains neutral on Japan, expecting more stimulus and monetary easing to revive the economy under a new Prime Minister and central bank Governor. The outlook expresses a negative view on fixed income given low yields compared to potential future inflation, but sees some opportunities in emerging market bonds in the short-term. Property prices are seen
The Henley Group’s April Seminar
Speaker 1: Peter Wynn Williams, Investment Director & Partner, The Henley Group Limited – Market Update
Speaker 2: Jeremy Stunt, Director CFT, Asia Group Limited - Investment Decision Making and Your Brain
The Henley Group' Outlook - March 2013 editionTania Scott
The document provides a March 2013 market outlook from Henley focusing on global equities. It notes that after a volatile start to the year, markets have pulled back from highs reached on quantitative easing from central banks. There is disagreement at the US Federal Reserve over continuing open-ended QE. Central banks are trapped and cannot exit QE without disrupting markets or causing inflation. This leaves gold and silver as the best ways to rebalance accounts given several years of money printing that has not worked as intended.
- The document provides an outlook on various asset classes and markets for February 2013 from Henley, a wealth management firm.
- It discusses the decoupling of markets and fundamentals due to money printing by developed nations, and sees a currency crisis as likely within the next couple years.
- In equities, it is positive in the short-term due to quantitative easing inflating prices, but negative on fundamentals. Real estate prices are stabilizing in select areas like Singapore, London, and signs of stability in the US, but further weakness is expected elsewhere. Fixed income carries inflation risk from monetary easing.
1. Monthly Market Outlook
December 2012
As the home straight to the holidays looms rapidly into view, the
markets are crying out for some Christmas magic to provide solutions
for some of the many uncertainties to have bedevilled them (again)
this year. Will a fairy godmother wave her magic wand and take us
to the ball, or will 2013 turn out to be the year when we find out the
markets are a pumpkin pulled by mice?
The Henley Outlook
December 2012
THE WEALTH MANAGEMENT PROFESSIONALS
2. The Henley Outlook
December 2012
Overview
ASSET CLASS HOUSE VIEW REMARKS
Fixed Income Investment Grade
High Yield
Student accommodation only.
Property
High dividend stocks preferred.
Equities US
Japan
High dividend stocks preferred.
UK
High dividend stocks preferred.
Europe Ex UK
Australia
ASEAN
Broad equity exposure
Greater China including the region preferred.
India
Other Emerging Markets
Commodities Energy
Precious Metals
Industrial Metals
Agribusiness equities.
Agriculture
Selective strategies only.
Alternative Investments
Key: Positive Neutral Negative
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3. The Henley Outlook
December 2012
Global Overview
As the home straight to the holidays looms rapidly into view, the markets are crying out for some Christmas magic to
provide solutions for some of the many uncertainties to have bedevilled them (again) this year. Will a fairy godmother
wave her magic wand and take us to the ball, or will 2013 turn out to be the year when we find out the markets are a
pumpkin pulled by mice?
This month, our American friends are consumed with the fight about how to avoid their fiscal cliff. No doubt the argument
will continue until the clock is striking twelve and probably beyond. Which taxes are going to increase? Which spending
is going to be cut?
Does any of it actually matter?
The US federal budget is divided into “discretionary” and “mandatory” categories. There is also a third category: interest
payments on existing debt; but that is also mandatory. For a while now, the government has not been able to collect
enough revenue to meet its mandatory payments and debt servicing – even at today’s minuscule interest rates. That
means even if the government cut the discretionary portion of its budget to zero, there would still be a deficit.
Please note here that the discretionary portion of the budget includes military spending (USD0.5tn). Even if that were cut
to zero, there would still be a deficit.
Even if income tax were raised to 100%, there would still be a deficit.
There is absolutely no prospect of any reduction in the debt of the US government (or most governments, come to that)
unless and until a hatchet is taken to “entitlements”. This would involve dismantling the welfare state, something that
neither side of US politics wants even to discuss. The situation is that simple.
In the New Year, the debate about the US’s debt ceiling will re-open. Perhaps not so much this time about how much to
raise the debt ceiling, but whether to have a debt ceiling at all. Now that quantitative easing has been made unlimited
and open ended, a debt ceiling (in place since 1917) seems a rather quaint idea, an anachronism from the days when
fiscal discipline mattered. Many, including the Secretary of the Treasury, are advocating abolition.
There are, however, those who think that the debt ceiling does continue to provide the world’s reserve currency with at
least a fig leaf of propriety, a pretence of decency. Now re-elected for his final term, President Obama might choose
to short circuit the whole debate and raise the debt ceiling by executive order, circumventing Congress altogether –
something many powerful figures were urging him to do last year. Take the debt ceiling away, however, and the fiction
that US sovereign debt is sustainable would be much harder to maintain. Absurdities abound in history, and the more
abject the absurdity, the more tenacious it tends to be. Today, a US Treasury debt limit is a very necessary absurdity.
Meanwhile, in Europe, there appears to be no limit to the creativity of bankers and officials when it comes to papering
over cracks in The Project. Two and a half years after Greece’s first bailout, a new package of a few tens of billions in
subsidies and backhanders has been painstakingly crafted to keep the country solvent for a while longer. If it were not
so sad, it would be funny to watch all that highly-paid help tying itself in ever-more complicated knots in an attempt to
perpetuate their failed experiment.
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4. The Henley Outlook
December 2012
The Japanese, on the other hand, now in their third decade of post-bubble financial funk, seem poised to re-elect the
Liberal Democratic Party (LDP) in this month’s general election. The LDP is apparently determined to do something
about Japan’s rolling deflations and recessions (these used to be called a “depression”). Only this time they really mean
it. Apparently. They’re promising us 3% nominal GDP growth and 2% inflation, while at the same time promising Japan’s
first ever primary surplus by 2020. Now that’s what I call Christmas magic!
And on that exciting note, I’d like to wish all our readers “Happy Holidays!” and a 2013 that is even more interesting than
2012. There again, perhaps we should be more careful about what we wish for…
Peter Wynn Williams
Investment Director
pww@thehenleygroup.com.hk
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5. The Henley Outlook
December 2012
Cash & Currencies
USD Index (Source: Bloomberg)
Summary
• A month of very little trend in the FX markets.
• After a much stronger October and early November for USD (post election), the greenback has retraced a little.
• The UK has announced the successor to Sir Mervyn King, in the form of the current head of the Bank of Canada, Mark
Carney. The first time in the bank’s 318-year history a foreigner has been appointed and he is the youngest too.
Carney is very highly regarded and has performed the role in Canada to great acclaim. However the role at the BoE is
a much greater challenge. Notoriously hawkish, he may find it tough to maintain the BoE’s current policies.
• Cable (GBP/USD) has been steady and UK Economic Growth for Q3 was confirmed at 1%. However they are not out
of the ‘woods’ yet.
• AUD still range bound with USD, but remains strong.
• EUR has recovered form weakness based on the ever present discussions on short-term solutions for Greece.
• SGD has been flat against USD.
• JPY has some respite as it has weakened against the USD.
HENLEY ASSESSMENT:
Strongly Negative USD, GBP and EUR over medium-to-long term against trade-weighted basket of currencies,
given that all of these currencies are debasing and devaluing through significant quantitative easing. AUD to
remain volatile based around the Chinese data. Still favour SGD as a safe haven and commodity currencies
for yield.
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6. The Henley Outlook
December 2012
Fixed Income
Positives
• Equity markets behaved erratically as a result of the concerns over the ‘fiscal cliff issue’ in the US leading to investors
looking towards fixed income assets to place their cash while waiting on the side lines
• US corporate bonds were reported to have returned 10.2% YTD, while high-yield or so-called junk corporate debt is up
12.8%, according to Barclays indices.
Negatives
• France’s credit rating was cut to Aa1 from AAA by Moody’s. It also maintained a negative outlook for Europe’s second-
largest economy, citing what it called a worsening growth outlook. Although French borrowing costs have tumbled
since Hollande took office, the economy has failed to grow in three quarters and unemployment is currently at a 13-
year high.
• Spain’s 10-year yield has climbed for four consecutive weeks, the longest run of increases since June, signalling that
markets are worried about Spain. The causes of these new fears are as a result of the Spanish government refraining
from asking for aid from the ECB’s outright monetary transactions program.
• On the other end of the spectrum German bonds were sold at a negative rate for the second time on record on 14Nov,
the first time since July. German two-year notes yielded minus 0.034%. A negative yield means investors who hold the
security until it matures will receive less than they paid to buy it.
• US treasuries continue to behave in a manner that is utterly non-reflective of the financial position of America. While
the likes of Spain and Ireland have had their bonds attacked by the CDS market and ratings agencies, which has in turn
resulted in them having to continue to pay more and more to borrow money, America has gotten off scot-free despite
its sovereign balance sheet not being that much better than those of its European neighbours.
USD 10 Yr Bond Yield (Source: Bloomberg)
HENLEY ASSESSMENT:
Negative. While there may be some short-term relief in fixed income from the volatility seen in equity markets
and also a comparative positive return when compared to holding straight cash in the short term, we are
of the opinion that such short-term relief has the potential to come at a costly price in the medium-to-long
term. With the developed economies committed to the path of continued monetary easing, we believe that
inflation will become a serious concern in the future. Such an environment would see the relatively low yields
enjoyed by fixed interest over-run by the cost of goods. There may be an argument to seek short-term safety in
specific emerging market bonds but we see serious danger in accepting the debt of the developed economies,
both on a sovereign default front (especially within Europe) and on a return vs inflation front.
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7. The Henley Outlook
December 2012
Property
Positives
• Central London luxury home prices rose at the fastest rate in four months in October, with a MOM rise of 0.8% from
September and YOY increase of 10.1%, according to Knight Frank. Luxury home values are now 16% above their prices
peak in Mar08, and have risen 52% since the post credit crisis low in Mar09. With all the global uncertainty, prime
central London residential property continues to be viewed as a safe haven asset and in September, international
investors accounted for 41% of all London purchases in excess of GBP1m. However, some buyers are still wary of
the recently introduced increased government transaction taxes and possible proposals to introduce from Apr13 an
annual charge on luxury property above GBP2m owned by “non-natural persons”.
• The Hong Kong government has announced
further measures to discourage speculators
and therefore control the rise of residential
property prices, as non-local and corporate
buyers will now have to pay a 15% purchase
tax. Additionally, the government also
raised a re-sale tax on property by 5% (now
up to a maximum of 20%) and extended
the period during which it applies from two
to three years. Hong Kong is imposing its
third set of property curbs in two months
after residential property prices have almost
doubled in three years, due to record low
mortgage rates, a lack of supply and an Source: JPMorgan
influx of buyers from overseas.
• In Singapore, flat sales in September reached a total 2621 units, a rise of 84% from August, which represented the
highest monthly total in more than three years. Home prices hit record levels in the third quarter, raising further
government concerns of a housing bubble.
Negatives
• After an almost uninterrupted period of decline over the past four years, US home prices at present have some
positive momentum. For example, the S & P / Case–Shiller index of property values in 20 cities has seen its highest
increase in more than two years. Additionally, the National Association of Realtors has reported that the inventory of
homes for sale has dropped to its lowest level since Mar06. However, whilst there are positive signs, it remains to be
seen whether the recovery is sustainable over time. For example, more than 20% of US residential mortgages were still
in negative equity at the end of June, amounting to 10.8m homes.
• UK home prices in October dropped for a fourth consecutive month, falling 0.7% MOM and 2.8% YOY, according
to Lloyds Banking Group. The British property market (ex-London) remains under pressure as economic uncertainty
undermines consumer confidence, and banks continue to restricting lending in order to repair their balance sheets.
HENLEY ASSESSMENT:
Neutral. Property prices generally, after significant falls in 2009, stabilised in 2010 and 2011. Further weakness
of property prices in many areas is now apparent in 2012, as economic conditions remain difficult. Property
values have recovered in selected areas such as Singapore, Hong Kong and London. We still consider some
specialised property assets, such as student accommodation, to merit inclusion in our portfolios. Other than
these investments, we would suggest that clients do not invest further at this time.
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8. The Henley Outlook
December 2012
Equities
US
Positives
• The US economy is highly flexible, resilient and leads the world in technology and innovation.
• The Federal Reserve has forecast rates to remain unchanged until at least 2015.
• In the long term, demographics and returned energy self-sufficiency bode well.
Negatives
• National debt is at USD16.3tn and rising; debt to GDP is at 105%and rising. This is absurdly unsustainable.
• QE to infinity promises currency debasement, rising prices and lower discretionary spending.
• Foreigners were net sellers of US treasuries in September.
• The political system remains dysfunctional while fiscal cliff and debt ceiling require immediate resolution.
HENLEY ASSESSMENT:
Negative. The reality is that the economy never recovered from its collapse from early 2006 into 2009, but
rather stagnated at a low level of activity from 2009 into 2012. The official recovery simply has been a
statistical illusion created by the government’s use of understated inflation in deflating the GDP, which
overstates deflated economic growth. Consumer liquidity remains severely impaired, preventing growth in
consumption. As real incomes continue to fall for many consumers, so too has the level of consumption
resumed its decline. There has been no recovery and none is pending. Instead, economic activity is turning
down anew.
JAPAN
Positives
• Prime Minister Noda will dissolve parliament and new
elections will likely hand power to the opposition party
which advocates an even more aggressive monetary
stimulus.
• JPY declined to a 6-month low at JPY81.2 vs USD on
prospect of more easing. This will help Japan’s export
industry.
Negatives
• The Japanese government announced it will tap into
reserve funds from fiscal budget for JPY1tn (USD12.3bn)
of stimulus in attempt to revive its economy. Japan
reported its steepest decline (-0.9% in Q3) in output
since the tsunami hit in 2011. Many economic indicators
Sources: Bank of Japan, Moody’s Analytics
have deteriorated since September, leading economists
to predict that the nation has entered its fifth technical
recession in the past 15 years.
HENLEY ASSESSMENT:
Neutral. Reuters Tankan survey reported business sentiment had worsened and the risk of recession is rising.
Many large manufacturers are cutting production due to slower global demand. The lacklustre job market is
also dragging down the services industry. The economy remains on the edge of deflation, with core consumer
prices falling 0.3% YOY in August. The Bank of Japan’s 1% inflation target still distant given the falling prices
in clothing, food and household goods.
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9. The Henley Outlook
December 2012
UK
Positives
• Britain’s labour market is flexible and unemployment is at 7.8% of the workforce, down from 8.45 at the end of last
year. Even if it creeps back up, it is unlikely to reach the peaks seen after the past two recessions – a postwar high of
11.9% in 1984 and 10.6%in 1993.
• Investors in UK stock market listed companies enjoyed a record GBP23.2bn total dividend payouts in the third quarter.
Capita’s quarterly dividend monitor reveals that the payout is up 10.4%on last year, although underlying growth has
started to slow.
• In a surprise move, Sir Mervyn King’s successor at the Bank of England has been named as Mark Carney, present
Governor of the Bank of Canada. Canada has the best record for fiscal stability in the G7. Carney is credited with
shielding Canada’s economy the global financial crisis.
Negatives
• As a result of quantitative easing the UK government owes the Bank of England a lot of money. Since March 2009, the
Bank has printed enough money to buy up around a quarter of the government’s total outstanding debt. It now holds
£375bn in British government IOUs (gilts). Regarding the interest payments on this money the bank will have racked
up £35bn by March next year – but George Osborne the UK Chancellor has decided to take this money back.
HENLEY ASSESSMENT:
Negative. The logic of George Osborne’s raid on the interest accrued in the Bank of England accounts is that
rather than pay interest on the loans today, it makes more sense to use that money now to reduce the overall
debt. Whilst that might seem like common sense, it’s taking the UK down a dangerous path.“The point of QE,”
we’re told, “is to get more money flowing around the economy somehow, and so prevent deflation. The point
is, it’s just an extension of what the Bank of England tries to do with interest rates.” But this latest move is
different. It’s been driven by the Treasury. It’s money-printing done to benefit the government’s finances,
not the economy, and that’s a policy that can only end badly – Zimbabwe and Argentina are the first two
countries that spring to mind.
EUROPE ex UK
Positives
• Euro zone finance ministers and the IMF reached an agreement on a revised Greek bailout plan involving lower interest
rates and extended payment terms on bailout loans and a debt buyback program.
• Greece must stick to its adjustment program to continue receiving bailout aid, but the latest deal gets Greece stabilised
into early 2013 and presents a more realistic plan for Greece to eventually recover.
Negatives
• Euro zone Q3 GDP fell -0.1% QOQ (-0.4% QOQ annualized), which was in line with market expectations but confirmed
that the euro zone economy remains in a recession. Euro zone GDP on a quarter on quarter basis has been either flat
or negative for the last four consecutive quarters and has been negative for the last two quarters.
• The euro zone debt crisis is taking its toll on Germany, Europe’s largest economy. Germany’s economy grew a mere 0.2%
in the July to September period compared to the previous quarter. Unlike most of its recession-wracked partners in the
17-nation euro zone, Germany has until now escaped the worst effects of the three-year crisis that has threatened to
tear the bloc apart.
HENLEY ASSESSMENT:
Strongly negative. The financial crisis, the extent to which the problem is rooted in the banking system, was
particularly acute in the case of Spain and Ireland. Across the euro zone, banks were hit by investments
in flawed financial assets or by lending to financially-stressed governments. However, recovery is also
exacerbated by austerity, spending and taxation policies pursued by many European governments seeking
to reduce their borrowing needs. Membership of the euro means they don’t have the option of allowing
their currency to depreciate to readdress that problem. Instead, they have been hoping that reforming their
economies, notably their labor markets, would do the job.
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10. The Henley Outlook
December 2012
AUSTRALIA
Positives:
• The Westpac-Melbourne Institute Index of Consumer Sentiment increased by 5.2% from 99.2 in Oct12 to 104.3 in
Nov12. This shows that the RBA’s 150bps of interest cuts has had a positive impact, after a long 16-month period when
the Index held below 100 for 14 of those months.
• Australia is forecasted to have a healthy budget surplus this year, through a mix of spending cuts and tax changes.
However, in the event of deterioration in the economic outlook, it can choose to delay the return to surpluses, given
its modest debt-to-GDP ratio.
Negatives:
• Inflationary pressures, fuelled by the carbon tax brought in on 1 July, prompted the RBA to keep the key rate at 3.25%.
As such, Australian government bonds, rated AAA, are set for their first two-month slide since 2010.
• Reports by Ernst & Young and PwC show that deal value in the Australian mining and metals sector fell by up to 50%
in the first nine months of the year while deal numbers were down 17
• Household debt levels remain near all-time highs.
Henley Assessment:
Positive. Amid weaker Chinese demand for iron ore and coal, and falling commodity prices, the mining sector
has slowed down considerably. Thus, the non-mining sectors were expected to pick up the slack. However, the
AUD has failed to fall in line with commodity prices, hurting export industries like manufacturing, tourism and
education. Notwithstanding, the RBA has the clout to further reduce interest rates to stimulate the economy
and we believe that they will do so at the next meeting. Furthermore, China’s situation appears to have
stabilised. While annual GDP growth dropped to 7.4% in the third quarter, the slowest pace since 2009, Oct12
data on exports, factory production and retail sales improved.
ASEAN
Positives:
• Thailand’s investment in infrastructure and water management projects is planned over the next seven years to boost
growth and prevent a repeat of last year’s flood disaster, which cost the economy an estimated THB1.4Ttn.
• Nissan Motor Co. announced a plan to invest THB11bn to build a second factory in Thailand. Other Japanese
corporations like Mitsubishi may follow to invest within the region.
• Malaysia has risen to become the world’s fourth largest IPO centre in 2012, and it expects the spree of IPOs in the
nation to continue into 2013.
Negatives:
• Thailand’s GDP in 3Q12 slowed down as compared to last 2Q12; weak overseas demand dampened exports. The
interest rate cut last month is yet to show any effect.
• Ongoing dispute over Senkaku or Diaoyu island has imposed regional political risks on trade within South-east Asia.
Anti-Japan protests have reduced China sales at Toyota, Nissan and Honda.
Henley Assessment:
Neutral. The region’s growth prospects are helping attract overseas companies, with Japan’s foreign direct
investment in Southeast Asia surpassing that in China, according to Japan External Trade Organization’s
figures using finance ministry data. Japan’s investment in the ASEAN more than doubled to USD19.6bn in
2011 from the previous year, while that in China was USD12.6bn, according to the organisation. The prospects
for developing Asian nations contrast with the fiscal and demographic challenges faced by more advanced
economies, as higher public spending and younger populations support domestic demand and lure investment
even as global expansion weakens.
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11. The Henley Outlook
December 2012
GREATER CHINA
Positives
• HSBC/Markit Flash China manufacturing PMI shows the first expansion in a year – 50.4 in Nov from 49.5 in Oct– after
staying below 50 for 12 consecutive months.
• China infrastructure investments growth picked up from negative territory early this year to positive.
• In October, China export growth accelerated to 11.6% on YOY basis, up from 9.9% YOY in September, and above
market estimate of 10.0% YOY.
• China’s CPI inflation continuously fell in October.
Headline CPI inflation fell from 1.9%YOY in September to
1.7%YoY in October. Looking into individual components,
food prices were up 1.8% YOY, the lowest since late 2009.
Negatives
• One of the most important fundamental reasons why
Chinese equities underperformed for the last year or
two has been that Chinese companies are seeing falling
profits despite seemingly “strong” economic growth.
• China Banking Regulatory Commission (CBRC) published
figures showing total non-performing loans (NPLs) rose
from RMB456.4bn to RMB478.8bn, while the NPL ratio
rose from 0.94% to 0.95%.
Henley Assessment:
Neutral. November 2012 was a big month for China, even for the region. Now, you have the brand new Politburo
Standing Committee of the Communist Party of China (CPC); Xi will succeed Hu as CPC General Secretary and
Central Military Commission Chairman, while Li will take over Wen’s role as State Council Secretary. If all
goes according to plan, after the National People’s Congress (NPC) next March the two will go on to become
president and premier of China respectively. The new leadership will lead the party and the nation over the
next decade. In China, political influence is always far more important than any other factor when it comes to
making an impact on the economy and the market. We will hopefully, therefore, see positive signals sent out
by the new standing committee in the next few months.
India
Positives
• Moody’s backed a stable outlook on India’s Baa3 sovereign rating.
• The Government of India has cut the withholding tax on Rupee-denominated infrastructure bonds from 20% to 5%.
• New reforms were announced by the government on 4 October: 26% FDI will now be allowed in pensions whilst the cap
on FDI in insurance is raised from 26% to 49%.
Negatives
• The inflation rate for October is 7.45%.
• The INR tumbled Friday to its lowest level in 11 weeks.
• Contrary to the widely anticipated announcement of interest cuts in the half-yearly monetary policy decision on 30
October, the country’s central bank, Reserve Bank of India (RBI), kept the interest rate unaltered at 8%.
Henley Assessment:
Neutral. The pace of price rise in India is the fastest amongst emerging markets. Despite the recent ‘big bang’
reforms, the inflationary pressure has left little room for the RBI in monetary policy easing. The central bank
is still awaiting a “little more detail” for government’s roadmap for implementation of these fiscal reforms.
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12. The Henley Outlook
December 2012
Other Emerging Markets (South Korea, Russia, Brazil)
Positives
• The inflation rate in Russia fell to 6.5% in Oct12 from a year earlier, compared with 6.6% in Sep12. Russia, the biggest
emerging economy to raise interest rates this year, is trying to keep a lid on consumer prices after droughts in the US
and locally drove up food costs.
• Russia’s entry to the World Trade Organisation (WTO), after an 18-year wait, is a huge positive for the economy. While
it may be several years before the full benefits of membership become evident, it offers the prospect of raising the
economy’s long-term sustainable trend growth rate, and marks an important milestone in the country’s economic
history.
• Exports in Korea rose 1.2% from a year earlier, its first increase in four months, while output also rose for the first time
in four months in Sep12 on firmer sales of cars and electronics.
Negatives
• South Korea’s consumer confidence index fell to a nine-month low in Oct12 as the economy feels the pinch of the
protracted European debt crisis and the economic slowdown in its major trading partners such as the US and China.
The Korean economy grew just 1.6% in the third quarter, the slowest pace in four years.
• South Korea faces a growing need to rebalance its economy away from exports and towards domestic consumption to
secure sustainable growth, regardless of changes in external conditions.
• Brazil’s economy continues to struggle, with still precious little to show for government efforts to kick-start growth. The
Latin regional heavyweight’s GDP grew by just 0.4%QOQ in the three months to June, and by 0.5%YOY, weighed down
by a 0.7% fall in investment and sluggish growth in consumer spending and exports.
Source: www.tradingeconomics.com
Henley Assessment:
Neutral. As financial markets continue to react to the re-election of Barack Obama, emerging markets globally
have a keen eye on the developments surrounding the upcoming US Fiscal Cliff. The impacts of automatic
spending cuts and tax increases would be seen worldwide, as declining US demand would affect export-
dependent economies across the globe. Lower aggregate demand would also yield downward pressure on
commodity prices as global manufacturing decelerates, further damaging economies that are dependent on
commodity exports. On the other hand, emerging markets are now better positioned to be resilient in the face
of crisis compared with 2008, due to policy improvements in the fiscal and monetary space.
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13. The Henley Outlook
December 2012
Commodities
Energy
Positives
• Tension in the Middle East is flaring up once again.
• On-going loose money will benefit real assets, including energy.
Negatives
• On-going debt concerns in Europe and a slowdown in China make the demand situation highly uncertain.
• US energy production is increasing rapidly.
HENLEY ASSESSMENT:
We remain neutral. The situation in the Middle East remains complicated. In Syria, the conflict shows few
signs of abating. Israel’s air force struck an Iranian-run missile production facility in the Sudanese city of
Khartoum in what could be a dry run for an attack on sites located in Israel. Geopolitical tension provides
support to energy prices, which based on fundamentals would be under more pressure given the contraction
of GDP in Europe and lackluster growth in the US.
Precious Metals
Positives:
• Obama’s reelection is likely to lead to more dovish
policies from the Federal Reserve.
• Loose monetary policy is expected to continue across
the world for the foreseeable future.
• Gold and gold mining shares remain an under-owned
asset class compared to financial assets.
Negatives
• Near-term volatility to persist.
HENLEY ASSESSMENT:
We remain strongly positive on precious metals. With
the US election out of the way, and with Obama at Sources: Metals Economics Group - Strategies for Gold Reserves Replacement 2012
the helm for the next four years, the stage is set for
more dovish monetary policy from the Federal Reserve. Next up on the agenda to watch is the negotiations
about the fiscal cliff, USD600bn of tax increases and spending cuts. Regardless of the outcome of this, the
US is expected to run significant deficits for the foreseeable future. The political will and ability to do what is
necessary to bring the budget back to balance is simply not there. We believe that money printing will be an
important measure to fund the deficit leading to higher precious metals prices in the years to come.
The Henley Group Limited The Henley Outlook: 13
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info@thehenleygroup.com.hk www.thehenleygroup.com.hk
14. The Henley Outlook
December 2012
Industrial Metals
Positives
• Currency debasement will support real asset prices.
Negatives
• Europe is back in recession.
• Uncertainties surrounding the fiscal cliff will weigh on prices in the short them.
HENLEY ASSESSMENT:
We maintain our neutral view on base metals. Europe is now back in recession and there are significant
uncertainties of how China will deal with slowing economic growth.
Agriculture
Positives
• UN’s Food and Agriculture organisation estimates there will be over nine billion mouths to feed on the planet by 2050.
• Middle class consumers in BRIC economies are
increasingly demanding more varied and protein-
rich foods. As affluence increases protein from
beef, sheep, poultry, pigs, cows and fish may in
turn displace grains in diets.
• Urbanisation and life expectancy is expected to
increase.
Negatives
• Prices are subject to many uncontrollable risks, eg,
weather and natural disasters, politics and other
pests.
• Due to recent drought conditions in the American
Mid-West and Russian Black Sea regions we have
seen corn, wheat and soy prices increase on Source: DWS
average over 50% within a few months.
HENLEY ASSESSMENT:
Positive and Negative: There are two very different markets playing out in the agriculture sector, physical and
equity. Many physical soft commodity prices have exploded due to changing global weather patterns over
the past few months, however these sharp price increases tend to be followed with just as sharp falls; there
is a very seasonal and cyclical pattern with these movements. Currently with many soft commodity prices
at, or near record highs we have a negative view on investing at these levels and encourage profit taking.
On the equity side, the largest weighting funds have to this sector is via fertilizer and seed companies. These
industries are having a significantly more important role to play to help increase yield and in the case of
seed companies, invent seed which is more tolerant to changing global weather patterns. We remain positive
agriculture equity funds.
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Suite 2004-08, 20/F, St George’s Building, 2 Ice House Street, Central, Hong Kong
info@thehenleygroup.com.hk www.thehenleygroup.com.hk
15. The Henley Outlook
December 2012
Alternative Investment
Positives
• Investors added to their hedge fund
portfolios in October, according to the
SS&C GlobeOp Capital Movement Index,
which rose 0.54% in October. Overall capital
activity remains consistent with previous
years as hedge funds enter the last quarter
with positive capital flows.
• Discretionary equity and credit managers
were among the best performers in October.
The increase in dispersion in risk assets
helped alpha generation.
• Long positions in the RMB and onshore/
offshore Chinese equities were a strong
source of return for emerging market hedge
fund managers.
Negatives
• Hedge fund performance was broadly negative in October; the HFRX Global Hedge Fund Index lost 0.5%. Managers
who had increased risk on the back of the September rally tended to give back a portion of their beta-driven gains in
October.
• Central bank intervention threatens to constrain the ranges in currency markets, particularly in the emerging markets.
Therefore, markets continue to lack directionary creating challenging conditions for trading/macro managers.
HENLEY ASSESSMENT:
Cautiously positive. This year so far, returns for most of hedge funds are difficult to generate in the absence
of appropriate levels of risk-taking. Since 2011, the hedge fund industry has been struggling for survival by
reducing fees, increasing transparency, improving governanace etc – essentially reflecting a favourable shift
in terms of trade from the perspective of the investors.
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The Henley Group Limited (“The Henley Group”) has produced this document for your private use only and you must not distribute it to any other person
in Hong Kong. Re-distribution or reproduction in whole or in part of this document by any means is strictly prohibited and The Henley Group accepts
no liability for the actions of third parties in this respect.Funds not authorized by the Securities and Futures Commission may involve more risk and
distribution or re-distribution of information relating to such funds to the public of Hong Kong may constitute an offence under the Securities and Futures
Ordinance.Notwithstanding that the information contained herein has been obtained from sources which The Henley Group believes to be reliable, The
Henley Group makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy, completeness or correctness.
The information in this document, including any expressions of opinions or estimates, should neither be relied upon nor used in any way as indication
of the future performance of any financial products, as prices of assets and currencies may go down as well as up and past performance should not be
taken as indication of future performance.
The Henley Group Limited The Henley Outlook: 15
An SFC Licensed investment advisor in Hong Kong Hong Kong, Singapore & Shanghai
Suite 2004-08, 20/F, St George’s Building, 2 Ice House Street, Central, Hong Kong
info@thehenleygroup.com.hk www.thehenleygroup.com.hk