Today the world looks a lot more uncertain than at the start of 2016. We have seen a change in the factors that drive capital markets in Asia as the investment world has gone from worrying about the threat of deflation to anticipating inflation.
There is an expectation of a shift from monetary to fiscal stimulus. Furthermore, the investment community now has to cope with increasing political risk in addition to the frail economic conditions in certain parts of the developed world. The automatic reaction in such a scenario is to seek shelter in the relative safety of under-loved and under-valued assets. What this means for Asia is an ongoing secular rotation away from quality and defensive business models to areas like energy, materials, in some cases petrochemicals - all sectors that were unloved towards the end of 2015 and eve...
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