Research

QuotedData’s Economic Roundup – May 2022

Economic and Political Monthly Roundup

Kindly sponsored by Allianz

A collation of recent insights on markets and economies taken from the comments made by chairs and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned.

Roundup

Overall, managers and chairs reflect on a strong 2021 in their annual reports, a recovery from the volatility and widespread underperformance of 2020. This contrasts with how markets look today. April was a brutal month for stocks and uncertainty remains, stemming from the Russo-Ukrainian conflict and concerns over its long-term impact. Some commentators believe that not even a strong earnings season can restore investors’ fortunes. The dollar jumped as expectations rose of faster interest rate hikes. Government bond yields have continued to climb while oil prices are now signalling a more balanced supply and demand outlook.

April’s highlights

Global

The manager of Martin Currie Global Portfolio highlights the impact of the ongoing Russo-Ukrainian conflict.

UK

Merchants’ chair explains how the once out-of-favour UK has been more resilient than its global peers of late.

Dunedin Income Growth’s chair reflects on a year of strong economic growth as economies benefited from the annualisation effect from the previous year.

Mercantile’s managers look at the rapid economic recovery that drove all-time highs in financial markets as well as the constraints that accompanied it.

The managers of Invesco Perpetual UK Smaller Companies acknowledge the cost of living crisis, but counter-argue that consumer balance sheets are stronger than ever.

Fidelity Special Values’ manager discusses the market volatility and sharp shifts in the UK economy.

Troy Income & Growth’s chair explains why heightened uncertainty and volatility seem likely to characterise the months ahead.

The manager of BlackRock Smaller Companies says that while the Russo-Ukrainian conflict has already had a significant impact on certain areas of the market, it will take time for the wider implications to manifest themselves.

British & American’s manager says with the war still in its early stages and already of a size, ferocity and brutality not seen in Europe since WWII, it is impossible to predict how much more damage it will cause in the months to come to global security, society, growth, trade and markets.

Asia Pacific

Commenting on China, the managers of Schroder Asia Total Return say there are many headwinds from 2021 that are likely to continue to have a material impact on both the economy and stock market, from zero-COVID policies impacting consumption and production to sluggish income growth.

abrdn Asia Focus’ chair assesses three broad themes that have captured investor attention during the period under review.

The chair of Scottish Oriental Smaller Companies notes that recovery is particularly evident in Indonesia and the Philippines, where consumer demand is gradually improving after severe disruption over the last two years.

Asia Dragon’s chair explains why the current market environment underlines the importance of maintaining an active approach to investing.

Fidelity Asian Vales’ manager discusses how extreme valuations have been caused by a wall of money – created by governments across the globe in response to the pandemic – all chasing the same stocks in the market.

The managers of Henderson Far East Income say they are cautiously optimistic on the outlook for Asia Pacific equities and that the region looks cheap compared to its peers while earnings look to be well underpinned by fundamentals.

Renewable Energy Infrastructure

Gresham House Energy Storage’s manager says opportunities in the UK and Irish markets will remain healthy for many years as the deployment of renewables continues apace and electricity demand starts to rise in the UK.

The managers of Aquila European Renewables Income explain why energy and power markets are likely to receive higher levels of scrutiny and future interventions from now on as a result of the Russian conflict.

Other

We have also included comments on global emerging markets from JPMorgan Global Emerging Markets Income; North America from North American Income and JPMorgan American; Japan from Schroder Japan Growth; China from Baillie Gifford China Growth; Latin America from BlackRock Latin American; Vietnam from Vietnam Enterprise; infrastructure from BBGI Global Infrastructure; commodities & natural resources from Baker Steel Resources; growth capital from Schroder UK Public Private; environmental from Impax Environmental; hedge funds from Third Point Investors; debt from CVC Credit Partners European Opportunities, Fair Oaks Income, RM Infrastructure Income, VPC Specialty Lending and Blackstone Loan Financing; insurance and reinsurance from Life Settlement Assets and property from BMO Real Estate Investments, UK Commercial Property REIT and Standard Life Investments Property Income.

Full version

Click on the link at the bottom of the page to access the full report.

Kindly sponsored by Allianz

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May 2022 Economic & Political Roundup

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