The notion that China’s currency, the renminbi (RMB), is on a long-term path of appreciation appears in question after its sharp decline since February. We think that the setback is only temporary—and that the currency will resume its climb in a few months.
Emerging markets have fallen from favor, but does that mean investors should avoid them entirely? We don’t think so.
An announcement in late July by the Hong Kong Monetary Authority (HKMA) may prove to be a milestone we look back on as the trigger for the next step in the evolution of the offshore renminbi bond market. Effectively, the People’s Bank of China (PBOC) has underwritten liquidity in the offshore renminbi. (more…)
Recent data releases and the transition to new political leadership have created some uncertainty about China’s short-term economic outlook. While positive growth surprises are unlikely in 2013, we still think nothing can stop the long-term appreciation of China’s currency, the renminbi (RMB). (more…)
The renminbi (RMB) has strengthened significantly in recent years. We don’t think it will continue to appreciate at the same pace, and in the very short term we may see two-way volatility in the exchange rate. But we are still positive on the currency, especially in the medium term. Here are five reasons why. (more…)
China’s recent move to widen the renminbi’s trading band is unlikely to impact the near-term path of the currency, but we believe it represents another important step forward in the country’s financial liberalization. Below, my colleague Anthony Chan explains how a more flexible—and stronger—currency is a vital component of policymakers’ efforts to rebalance China’s export-dependent economy. (more…)
China is set to overtake the US as the world’s largest economy in less than a decade, but its currency, the renminbi, still accounts for just a tiny fraction of global trade settlement. While there’s a long way to go before it’s viable as a global reserve currency, we think that the renminbi will challenge the US dollar’s dominance in the Asia-Pacific region sooner than many expect. (more…)
The prospect of currency gains has long been a key attraction for investors seeking exposure to Chinese assets. But this week, The People’s Bank of China said China’s currency, the renminbi, was now close to its “equilibrium value.” We think the currency’s appreciation is far from over, as my colleague Anthony Chan explains below.
With bond yields at historical lows and the risk-free status of many developed countries under question, many investors are looking to diversify the income stream in the defensive part of their strategies. So why are Asian ex Japan bonds typically so underrepresented in fixed-income portfolios? (more…)
A reader of my recent article on dim sum bonds, which was reposted on Seeking Alpha, expressed confusion about what action we recommend. While we are not, per se, making recommendations, here’s a clarification of what I meant. (more…)