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Global View
Harriet Chan profile
Author status: Employed
Author country: Canada
Author company: Private Practice
Job title: Financial Analyst
Expert Area: Alternative Investments, Behavioral Finance, Economics, Equity Investments, Fixed Income
Geografical Area: Africa, Middle East, North America
Economics Area: Developed, G20, MIST, N11, OPEC
Country
China (Real GDP)
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
Cyprus (Real GDP)
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
Company
China (Real GDP)
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
Cyprus (Real GDP)
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
Polymetal International PLC
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
BDO Unibank Inc
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
- BDO has the best deposit franchise in the country with 73% CASA ratio and is the best beneficiary of rising rates. Also the Bank has been the best example of business expansion by M&A activity over the past 5 years, with loans growth at an 18% CAGR over the period. In sum I view the BDO's stocks as an attractive investment.
WPP PLC
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
- BDO has the best deposit franchise in the country with 73% CASA ratio and is the best beneficiary of rising rates. Also the Bank has been the best example of business expansion by M&A activity over the past 5 years, with loans growth at an 18% CAGR over the period. In sum I view the BDO's stocks as an attractive investment.
- Company's financials are broadly in-line with management's outlook around flat for net sales and margins flat. However, as Sir Martin Sorrel, the man who created the company and its iconic CEO since 1985, leaves company (Board announced on April, 14), I expect a lot uncertainty about company's future.
Suncor Energy Inc
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
- BDO has the best deposit franchise in the country with 73% CASA ratio and is the best beneficiary of rising rates. Also the Bank has been the best example of business expansion by M&A activity over the past 5 years, with loans growth at an 18% CAGR over the period. In sum I view the BDO's stocks as an attractive investment.
- Company's financials are broadly in-line with management's outlook around flat for net sales and margins flat. However, as Sir Martin Sorrel, the man who created the company and its iconic CEO since 1985, leaves company (Board announced on April, 14), I expect a lot uncertainty about company's future.
- I am bullish on Suncor due to long-term commitment on solid FCF to shareholders. Fort Hills and Hebron projects are in ramp mode in 2018-19, and so capital spending steps back down to a ~$5B long-term level. Suncor is starting to shift its attention to a series of medium-term low-investment opportunities, mostly focused on cost reductions (could represent significant upside in years ahead)
John Keells Holdings PLC
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
- BDO has the best deposit franchise in the country with 73% CASA ratio and is the best beneficiary of rising rates. Also the Bank has been the best example of business expansion by M&A activity over the past 5 years, with loans growth at an 18% CAGR over the period. In sum I view the BDO's stocks as an attractive investment.
- Company's financials are broadly in-line with management's outlook around flat for net sales and margins flat. However, as Sir Martin Sorrel, the man who created the company and its iconic CEO since 1985, leaves company (Board announced on April, 14), I expect a lot uncertainty about company's future.
- I am bullish on Suncor due to long-term commitment on solid FCF to shareholders. Fort Hills and Hebron projects are in ramp mode in 2018-19, and so capital spending steps back down to a ~$5B long-term level. Suncor is starting to shift its attention to a series of medium-term low-investment opportunities, mostly focused on cost reductions (could represent significant upside in years ahead)
- John Keells Holdings is a diversified business operating in Sri Lanka with business interests primarily in transportation, leisure, property, plantations, etc. I believe that the Company's shares will show the growth, which will supported by increase in transportation segment earnings, due to growth in volumes in South Asian Gateway Terminals (SAGT) and Lanka Marine Services (LMS). Also I expect that retail segment growth will be additional positive catalyst for JKH's shares.
Ceconomy AG
- I expect that China's economy growth will be more moderate in coming years (6 - 6.5%), however, that will mainly caused by Government's plan of 'high-quality development': reducing of imbalances in economy, reducing pollution, stabilization of financing sector. As a result, it is expected (1) further decline in investment due to capacity cuts and stricter pollution controls, (2) tighter credit conditions that will lead to demand decreasing. In the same time, government is likely to support the growth by fiscal stimulus (through SOE and infrastructure projects). I assume that long-term results could be mostly positive for China economy (despite lower growth in near-term). However, there are some challenges for Government in near and long-term perspective: 1) Possible trade war with USA (that could cost for China 1-2% of GDP growth). 2) Demographic: rapidly aging population, declining labor force (one of the key issue announced by The Chinese Academy of Social Sciences, a leading government think tank). 3) Unemployment growth, particularly, due to planned reducing of imbalances in economy and capacity cuts. Coupled with rising living cost, this problem might create a social instability in China. 4) Local governments debts. Despite China conducts tighter monetary policy to stabilize its financing sector, the real situation with local governments debts is opaque (due to local government financing vehicles, public-private partnerships and possible faking reporting data)
- I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.
- I think that the Company's new investments plan for 2018-2021 is a good growth opportunity especially at the Company's low production cost. In spite of increasing CAPEX, which will put pressure on dividends, in my view Polymetal will deliver decent dividend yield of 6-7% pa over the next three years. So I evaluate Polymetal's shares as an attractive investment opportunity.
- BDO has the best deposit franchise in the country with 73% CASA ratio and is the best beneficiary of rising rates. Also the Bank has been the best example of business expansion by M&A activity over the past 5 years, with loans growth at an 18% CAGR over the period. In sum I view the BDO's stocks as an attractive investment.
- Company's financials are broadly in-line with management's outlook around flat for net sales and margins flat. However, as Sir Martin Sorrel, the man who created the company and its iconic CEO since 1985, leaves company (Board announced on April, 14), I expect a lot uncertainty about company's future.
- I am bullish on Suncor due to long-term commitment on solid FCF to shareholders. Fort Hills and Hebron projects are in ramp mode in 2018-19, and so capital spending steps back down to a ~$5B long-term level. Suncor is starting to shift its attention to a series of medium-term low-investment opportunities, mostly focused on cost reductions (could represent significant upside in years ahead)
- John Keells Holdings is a diversified business operating in Sri Lanka with business interests primarily in transportation, leisure, property, plantations, etc. I believe that the Company's shares will show the growth, which will supported by increase in transportation segment earnings, due to growth in volumes in South Asian Gateway Terminals (SAGT) and Lanka Marine Services (LMS). Also I expect that retail segment growth will be additional positive catalyst for JKH's shares.
- I rate Metro Neutral, due to C&C Russia (25% of EBIT) is going through a significant repositioning, which, in the context of a deteriorating consumer environment in Russia, should continue to put pressure to both LFLs and margins.
Exchange
Brazil Real | BRL/USD
- I think that Brazil, as a diversified commodities exporter, in future will have the advantage from rising commodity prices. As we can see, increase in commodity prices and soft domestic demand did its work and reduced current account deficit to 0.5% of GDP for 2017 from as high as 4.2% in 2014. A continued commodity rally could make the BRL great again, as in 2005-2008.
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