Date: Monday, 12th October 2015
Source: Macquarie Group, 02 October 2015
Macquarie forecasts that the first Federal Reserve interest rate rise will occur in December 2015. Volatility has receded from highs reached in August, but remains elevated. Developed markets lost ground, with the US and Australia shedding around 3%, exceeded by losses in European markets of between 4% and 6%. The deflationary pressures of persistently weak commodities have been a prominent macroeconomic theme since a rather dramatic sell-off commenced in mid-2014.
Source: NAB, 05th October 2015
- Improvement in the non-mining economy.
- Mining investment, business investment and commodity prices are not interest sensitive.
- Still lower interest rates would boost the rate sensitive sectors of the economy and increase financial risks.
- Rates are already very low and the full impact of the cuts to 2% in H1 2015 is still to flow through.
- The $A is now more clearly supporting growth.
- The RBA only has 200bps of rate cuts left
Source: China daily, 08 October 2015
During September, SAFE accelerated the licensing process of QFII and RQDII, with quota of 40.6 billion and 11 billion specifically. Since analysts believed it is a great opportunity for value investors to open a position, the money is supposed to be in the investing pool quite soon. In addition, after waiting for almost 2 months, fund managers are seeking opportunities in the securities market as well.
Source: Bloomberg, 12 October 2015
In August, Thomas Schroeder correctly predicted that a rebound in Chinese stocks wouldn’t last, whereas now he offers that the benchmark equity gauge will plummet to new lows as a bear-market rally fails. The Shanghai Composite Index will climb to 4,100 in the next three months before slumping as much as 41 percent to 2,400 in early 2016.
Other Financial Services Working Group Members’ market updates:
Australian Markets Weekly by National Australia Bank
Australian Economic Perspective by Commonwealth Bank
Australian Economic Reports by Westpac Banking Corporation
ANZ Bluenotes by ANZ Bank
Market Insights by Macquarie Group
This brief summarises a range of publicly available news articles in both Chinese and English and AustCham takes no responsibility for the accuracy of the information in these articles. In addition, the views and opinions reflected in these articles are not necessarily representative of AustCham.
AustCham Beijing’s Financial Services Working Group is chaired by Zhongmin Zha (Westpac Banking Corporation). For more details on how to get involved in the AustCham Beijing Financial Services Working Group, please contact Andrew Britz.
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