Macro case Flashcards
(101 cards)
1
Q
What have been the four drivers of us Outperformance of EM
A
- Earnings growth
- Valuation/multiple expansion
- ccy
- dividends
2
Q
Is EM P/E Expansion near historic lows?
A
Yes
3
Q
Do we believe dividend yields will still be higher in EM vs US ?
A
Yes
4
Q
What about currency?
A
We don’t take a position on ccy
5
Q
What are the new economies of em
A
- consumet discretionary
- consumer staples
- it and comm services
6
Q
what are the old economies of em
A
- Materials
- Energy
- Industrials
7
Q
Do EM Earnings growth now lead the U.S
A
Yes!
8
Q
What does GDP Growth per region show?
A
EM will lead the US on expected growth recovery
9
Q
What are the risks to the USD
A
- Loose US Monetary policy
- Real falling Interest rates
- Rising inflation
- Portfolio inflows reversing
10
Q
Give me 2 examples of EM Rotation?
A
1.2015 Russia top index performer, 2017 lowest, 2019 highest
2.2011 India lowest , 2014 highest , 2019 lowest
3
11
Q
Which country has largest economy in Latin America?
A
Brazil
12
Q
What are 4 features of Brazilian economy
A
- size
- natural ressources
- supportive reforms
- political force
13
Q
What is the importance of iron ore in Brazil
A
it is the worlds 2nd largest producer of it
14
Q
what is the population of Brazil
A
204 million
15
Q
Name 3 reforms of bolsonaro
A
- lower tarifs
- cutting public debt
- nov 2019 pension reforms
16
Q
what % of South Americas GDP comes from Brazil
A
53%
17
Q
What is the projected middle class numbers for china?
A
2022 = 550m people
18
Q
what % does domestic consumption make in china as % of GDP
A
55%
19
Q
what is 16% - related to china
A
% of word GDP coming from china
20
Q
which is the 4th largest wind power globally
A
India
21
Q
which country had a digital transformation?
A
India
22
Q
what is the projected middle class consumption in India?
A
for 2030- 8.8 trillion up from 32 billion $ in 1965
23
Q
what % of Indias GDP comes from private consumption
A
56%
24
Q
What percentage of 25-34 years olds have a ternary education?
A
70%
25
What fields does Korea lead in?
1. Tech
2. e commerce
3. 5G Adoption
26
whow much did Koreas governance core increase from 2018-2019 according to Morningstar
- 42.87-45.04
27
What % of global exports does Korea account for ?
15%
28
What % of Koreas GDP is from private consumption ?
47%
29
when is the cap rebalancing for fuse 18/30 indices
March, June , September , December
30
what is higher in the fuse indices vs msci ?
1. number of constituents
| 2. A shares representation
31
What is an A share ?
stock shares of mainland china companies trading on
1. shanghai stock exchange SSE
2. Shenzen stock exchange SZSE
32
What does the HK Stock connect make accessible ?
Access to china a shares via HK brokers.
33
Name the top 4 representations of shae class in our China Index
1. pchip
2. n shares
3. h shares
4. a shares
34
What is fuse inclusion factor for A shares?
25%
35
what doesn't the Korean economy depend on?
Tourism
36
Are Koreas cash holdings higher or lower than peers
higher
37
what do future growth forecast indicate for Korea
Outpace APAC & World
38
what are two examples of Korea prudent policymaking
1. Low debt to GDP - Under 50%
| 2. Budget low % of GDP
39
what are two examples of Koreas resilient economy
1. .crude oil is a high % of GDP
| 2. Tourism contribution is very low under 1% of GDP
40
What are 2 examples of conservative balance sheets ?
1. over 30% of company balance sheets have net cash, high relative to peers.
2. highest cash holdings as % of market cap (vs world/dm/em)
41
what % of sector exposure in tech does Korea have?
1.over 50%
42
EPS Growth forecasts said what about Korea ?
over20% higher than FTSE APAC + World
43
Does Korea pe trade at a discount?
Yes, to APAC AND WORLD
44
How much does ftse have benchmarked?
over 16$tn
45
what are the methodology differences between fuse and msci?
1. ftse reviews within regions an countries where as MSCI assigns minimum size reference limits within a developed market universe to region and counties
2. fuse review universe includes securities that fail additional screens, whereas msci excludes securities that fail additional screens.
3. assigning companies to countries can differ between fuse and msci
4. chona has historically seen the largest differences
46
what are the restrictions on A shares?
foreign ownerdship restriction of 30%
| 28% for stock connect
47
what did China , Brazil, Korea and India perform 2020
china 31%
Brazil -19%
Korea 45%
India 16%
48
what did FTSE EM AND MSCI EM do in 2020
FTSE EM - 7.8%
| msci em 4.1%
49
what % was their of Brazilian real vs use last year?
29%
50
Biggest contributors for china ?
consumer discretionary , online shopping portals, alibaba , meityan (web based shopping)
51
what are some small performers for china?
Nio iNC, byd automobiles in electric vehicles
52
what sector was the biggest detractor in China?
Financials, ICBC AND CCB
53
What sector has also been useful for Korea?
Media services : Never corp 4% weight , kakapo corp up over 50% as well as video gaming software company NCSOFT up 120 Utd
54
what did India struggle with?
peaks in food prices with inflation at 7%
| Financials drag
55
what was a positive influence on India
I.T Infosys and tata consultancy and energy sector heavy weight reliance industries was up 32%
56
what sectors are the biggest drag on Brazil?
Financials and energy.
| financials down 50% and are 30% weight in index. Energy down 50%
57
what is one positive in Brazil ?
Manufactoring pmi
58
how many stocks in ftse china vs msci china as of dec 2020
788 vs 620
59
in ftse vs msci china what is the biggest sector difference
consumer discretionary - MSCI is higher
60
What is an N share?
US listing of Chinese company
61
when were N shares included in MSCI ?
from 2015
62
when did ftse include n shares
2017 (Gradual inclusion)
63
Why does FTSE underperform MSCI IN 2017 ?
Strong performance of largest ADR Weight alibaba
64
How many stocks in ftse vs msci India as of dec 2020
164 vs 96
65
Why do we hold ADRs in our brazil ETF?
To mmitigate capital gains tax
66
What type of cash drag do we see in our China ETF
Holdings not exposed to the market, futures , dividends not spent , sampling when launched
67
What is the cap we have on ADRs for brazil?
40%
68
Where is the CGT Taken from in our ETFs?
From the NAV
69
Where do some other ETFs take the CGT from?
The Bid- this means the bid price on exchange appears to be at a discount to NAV
70
For china what is one of the main differences between our solution and MSCI?
We have higher A shares exposure
71
What is the CGT for India year one vs year 2
15% vs 10%
72
Are china retail sales up? if so by how much
Yes by 3.3%
73
what is the ECI?
Harvard growth labs eonomic complexity index - mexico closest
74
China can deliver - logistics. How does the global logistics performance score get calculated?
customs, infrastructure, tracking and tracing, ease of shipments, logistics services quality and timeliness.
75
what is one of the main risks for investors in China
US Trade war
76
broadly how many stocks in our index vs msci china
1005 vs 714
77
How much has tech contributed to Koreas performance?
over a 1/3
78
Does Korea P/E trade at a discount?
Yes
79
what wee positive EPS growth forecasts for 2021 for Kora
42.4 % vs asia pac 21% , world 25%
80
Is Korean GDP expected to fare better than peers?
Yes
81
Why is their scope for further fiscal expansion in Korea?
Low debt levels and budget surplus
82
does Korea have low government debt?
Yes
83
Doe Korea benefit from a low oil price?
Yes
84
Does Korea have conservative balance sheets?
Yes - higher than words cash on balance sheets , and cash holdings as a % of market cap
85
What was Korea the first country to do?
launch 5th generation services
86
Name some Korea lithion iron batter producers?
LG Chamical
Samsunf SDI
SK innivation
87
What is the Korean robot density
774 per 10,000 employees
88
What do the A&B Markets represent ?
Shanghai stock exchance and shenzen stock exchange - worlds 2nd largest equity market after the Y,S
89
What does the China A share market have a low correlation to?
The global market because it is driven by retail investors who hold 50% of market.
90
What is the HK market more correlated to?
developed markets
91
What is expected in india in 2021?
cyclical rebound
92
what recovery is expected in India in 2021
rural demand
93
What is still slack in India ?
private investment
94
In india is inflation behind us?
apparently
95
Do Indian local currency bonds remain attractive?
Yes
96
What is their growing demand for in terms of global demand (korea makes this)
semiconductors
97
Name headwinds in korean market?
1. deteriorating demographics
| 2. overleveraged household sector
98
What were china exports in November
21.1 y/y compared to 12.0 expected
99
National pension service - what did they do in 2018
Adopt a stewardship code.
100
why did Korea have low job losses than other markets?
unemployment at 4% and poorly looked on to let staff go. government pressure
101
where is korea in league of global economies ?
12th in the world
