Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia: Portfolio Strategy
Reshuffling North Asia
Portfolio Strategy Research
Moving Korea to market weight on macro and positioning
The macro backdrop (slowing global growth, persistent local inflation) and
investor positioning suggest a less compelling case for Korea in the near
term. Although earnings seem reasonable and Korea’s valuation has more
upside in the long run, we think the gap is more likely to close when macro
tailwinds are present and the authorities take a more accommodative/progrowth
stance. We favor a selective rather than broad-based strategy, and
suggest domestic sector plays and specific stocks.
Stay overweight on Taiwan based on thematic exposure
Although Taiwan is viewed as even more globally cyclical than Korea, we
maintain our overweight stance on Taiwan because we believe it has a
better mix of favored themes (the Apple/smartphone vertical, cross-straits /
China tourism, and domestic demand) compared to Korea. Taiwan has also
outperformed in the 2-3 quarters before the presidential elections, which
are scheduled for early 2012.
Downgrading Japan to underweight
Our greater cautiousness on US growth, combined with residual domestic
risks (supply chain, electricity supply, and yen strength) has prompted us
to reduce our 6M / 12M TOPIX upside to +4% and 15%. However, foreign
buying of Japan now stands at 27 consecutive weeks, for an aggregate
inflow of $58 billion, and (presumably normalized) FY12 PEs in Japan are
higher than every other region, which support a preference for AeJ, where
in our view valuations are lower, longer term growth is better, and
positioning is light.
China remains at overweight
Although China increased the RRR again and inflation has been sticky, we
maintain our six-week old upgrade to overweight. A likely inflation peak
over the next few months and a move to a more neutral policy stance
could underpin slight valuation expansion from the current below-average
levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia: Portfolio Strategy
Reshuffling North Asia
Portfolio Strategy Research
Moving Korea to market weight on macro and positioning
The macro backdrop (slowing global growth, persistent local inflation) and
investor positioning suggest a less compelling case for Korea in the near
term. Although earnings seem reasonable and Korea’s valuation has more
upside in the long run, we think the gap is more likely to close when macro
tailwinds are present and the authorities take a more accommodative/progrowth
stance. We favor a selective rather than broad-based strategy, and
suggest domestic sector plays and specific stocks.
Stay overweight on Taiwan based on thematic exposure
Although Taiwan is viewed as even more globally cyclical than Korea, we
maintain our overweight stance on Taiwan because we believe it has a
better mix of favored themes (the Apple/smartphone vertical, cross-straits /
China tourism, and domestic demand) compared to Korea. Taiwan has also
outperformed in the 2-3 quarters before the presidential elections, which
are scheduled for early 2012.
Downgrading Japan to underweight
Our greater cautiousness on US growth, combined with residual domestic
risks (supply chain, electricity supply, and yen strength) has prompted us
to reduce our 6M / 12M TOPIX upside to +4% and 15%. However, foreign
buying of Japan now stands at 27 consecutive weeks, for an aggregate
inflow of $58 billion, and (presumably normalized) FY12 PEs in Japan are
higher than every other region, which support a preference for AeJ, where
in our view valuations are lower, longer term growth is better, and
positioning is light.
China remains at overweight
Although China increased the RRR again and inflation has been sticky, we
maintain our six-week old upgrade to overweight. A likely inflation peak
over the next few months and a move to a more neutral policy stance
could underpin slight valuation expansion from the current below-average
levels.
No comments:
Post a Comment