'Peak Momentum' and a New Phase for Asian Stocks

Goldman Sachs Exchanges

Julia McGonagle

Business

4.4 • 1K Ratings

🗓️ 7 April 2017

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

Tim Moe, chief Asia Pacific equity strategist for Goldman Sachs Research, says recent economic data indicate global growth has perhaps reached "peak momentum." While that could mean more modest returns for equity investors going forward, there is still value to be found in Asia, he argues, most notably in China. This podcast was recorded on April 3, 2017. This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this podcast does not constitute research or a recommendation from any Goldman Sachs entity to the listener. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefor (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. The views expressed in this podcast are not necessarily those of Goldman Sachs, and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs to that listener, nor to constitute such person a client of any Goldman Sachs entity. Copyright 2017 Goldman Sachs. All rights reserved.

Transcript

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0:00.0	This is exchanges at Goldman Sachs where we discuss developments currently shaping markets, industries, and the global economy.
0:15.6	I'm Jake Stewart, global head of corporate communications here at the firm.
0:19.8	The global reflation trend that supported rising equity markets to start the year has been broadly felt in Asia Pacific in Asia-Pacific-
0:28.8	Japan Index, which is a key regional benchmark, showing its best returns in the first quarter this year in 26 years.
0:35.8	My guest today, Tim Mo, is the co-head of macro research in Asia and the chief Asia-Pacific
0:40.6	regional equity strategists for Goldman Sachs research.
0:44.2	We'll talk about what he expects to drive market performance going forward in the region and
0:48.4	key issues facing Chinese stocks.
0:50.9	Tim, welcome to the program.
0:51.9	It's a great pleasure to be here.
0:54.0	Tim, you've identified three dynamics that are likely to influence equity performance in Asia,
0:59.4	Pacific, in the coming months.
1:01.1	At the top of that list is the reflation trend. What does the... the
1:05.0	coming months at the top of that list is the reflation trend.
1:04.0	What does the return to a more normal inflationary environment mean for
1:08.0	investors in Asia Pacific?
1:10.0	Simply put, it means better returns.
1:12.0	And the reason for that is that Asia X Japan has been for the last five years, nearly six years,
1:20.0	in a deflationary environment which has put a lot of pressure on corporate profits.
1:27.2	The updated numbers which are quite fresh are that the period from 2011 to 16 inclusively earnings grew 2.6% on a annual basis
1:39.7	in local currency and just 1% in US dollar terms.
1:43.3	So effectively for the past five, six years,
	...

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