The FSA Spy market buzz – 22 November 2024
Dimensional excludes the Middle Kingdom; JP Morgan’s optimistic outlook; Household wealth is rocketing; Schroders is thinking about privates; Ninety One’s pithy AI; German woes and much more.
Sean Taylor, Asia-Pacific CIO at Deutsche Asset Management, said that the firm stayed cautious on any potential credit spread widening in some sovereign-linked sectors that had higher foreign holdings, but he added he also saw some potential buying opportunities.
They include: Chinese financials, such as commercial banks, policy banks, insurance and other leasing companies; commercial state-owned enterprise issuance and local government debt, commonly issued via local government financing vehicles (LGFV).
“We do not expect a huge selloff in the Chinese credit market and the Chinese space should continue to be supported by the robust domestic bid. However, this downgrade, as well as the currently inverted China government bond curve in view of the ongoing deleveraging and tight liquidity, could remain a drag on the overall sentiment, therefore presenting potential buying opportunities upon any weakness,” he said.
“While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government,” he added.
Dimensional excludes the Middle Kingdom; JP Morgan’s optimistic outlook; Household wealth is rocketing; Schroders is thinking about privates; Ninety One’s pithy AI; German woes and much more.
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