To The Moon

The Land of Fire and Ice provides examples in decision making, risk assessment By Jo-Ann Chia, Senior Portfolio Manager, Asian Fixed Income April 2024 With volcanic activity heating up, there were a few possible outcomes Last November, I was all packed and ready to set off for my eagerly anticipated holiday to the Land of Fire and Ice—Iceland. A much-needed break from the challenging markets was welcomed. Just a few days before my outbound flight, the news headlines broke: “Iceland's Reykjanes Peninsula bracing for unprecedented volcanic eruption. The town of Grindavík (a tourist destination located on the south coast of the peninsula) has been evacuated. Blue Lagoon geothermal baths (one of Iceland's main tourist attractions) closed as the country is on high alert and experiencing hundred

4 April 2024 Asian Equity Team Watch snippets from the related Insights article titled “Prospect of lower rates makes Asian REITs an increasingly vibrant asset class” Important information: This video is prepared by Nikko Asset Management Co., Ltd. and/or its affiliates (Nikko AM) and is for distribution only under such circumstances as may be permitted by applicable laws. This video does not constitute personal investment advice or a personal recommendation and it does not consider in any way the objectives, financial situation or needs of any recipients. All recipients are recommended to consult with their independent tax, financial and legal advisers prior to any investment. This video is for information purposes only and is not intended to be an offer, or a solicitation of an offer, to

Multi-year growth story could be in store Asian Equity Team 4 April 2024 With borrowing costs expected to decline in 2024, Asian real estate investment trusts (REITs) have the makings of a multi-year growth story that global investors may find hard to ignore. Asian REIT market still has plenty of room for growth The Asian REIT market is the second-largest REIT market globally[1], but there is still plenty of room for growth. As REIT regulations and listing processes become increasingly market-friendly in newer REIT markets, we expect more asset owners to securitise their real estate into REIT products, driving greater investor interest. More regions, and more types of real estate That interest is partly due to the fact that Asian REIT investors can gain broad exposure to different countrie

Nikko AM Shenton Emerging Enterprise Discovery Fund highlights 22 March 2024 Watch Grace Yan, Senior Portfolio Manager of Asian Equity, who manages this award-winning fund as she shares with us on how investing in stocks of Asia ex-Japan smaller companies can be advantageous to an investors’ portfolio. Important information: This video is prepared by Nikko Asset Management Co., Ltd. and/or its affiliates (Nikko AM) and is for distribution only under such circumstances as may be permitted by applicable laws. This video does not constitute personal investment advice or a personal recommendation and it does not consider in any way the objectives, financial situation or needs of any recipients. All recipients are recommended to consult with their independent tax, financial and legal advisers p

Naomi Fink, Global Strategist 28 March 2024 Excerpts from related insights article titled “BOJ takes significant yet incremental step on path back to “normal” rates” Important information: This video is prepared by Nikko Asset Management Co., Ltd. and/or its affiliates (Nikko AM) and is for distribution only under such circumstances as may be permitted by applicable laws. This video does not constitute personal investment advice or a personal recommendation and it does not consider in any way the objectives, financial situation or needs of any recipients. All recipients are recommended to consult with their independent tax, financial and legal advisers prior to any investment. This video is for information purposes only and is not intended to be an offer, or a solicitation of an offer, to

End of negative rates, yield curve control and ETF purchases smoothly digested Naomi Fink, Global Strategist 29 March 2024 The “trial balloons” of media announcements in advance of today’s interest rate hike by the Bank of Japan (BOJ) —its first in 17 years—apparently did their job, as the end of its negative interest rate policy, yield curve control (YCC)[1] and ETF purchases were smoothly digested by markets. Indeed, the BOJ had already embraced greater flexibility on YCC and has significantly decreased its ETF purchases well prior to the policy decision. Neither the yen nor the Nikkei showed extraordinary movements, and Japanese Government Bond (JGB) 10-year yields so far remain contained below 80 basis points (bps). In prior speeches (e.g. Deputy Governor Shinichi Uchida’s much talked-

Future Quality in a changing world. 20 December 2023 Global Equity Team Watch our Global Equity Outlook 2024 video below: Financial regulators like to say that past investment performance is no clear indicator of future performance. Yet, we investors often look to the past to glean an indication of what future market conditions may be like. There are often patterns that can be exploited or traps that may be avoided. As we head into 2024, however, the past may not provide the usual useful insights. From a macro perspective, central banks’ experimentation with quantitative easing—which provided relatively benign market conditions since the Global Financial Crisis—is being unwound and this “quantitative tightening” is new territory for policymakers and investors. At the same time, we seem to

Focus on growth pockets, quality opportunities and earnings resilience. 13 December 2023 Asian Equity Team Watch our ASEAN Equity Outlook 2024 video below: ASEAN well placed for growth in 2024 Global monetary tightening and the dollar’s exceptional strength stood out in 2023, and these factors were a major headwind for most emerging markets including ASEAN. In our view, focus in 2024 will shift from interest rate tightening towards growth, or more specifically, finding pockets of growth amid a slowing global economy. We expect ASEAN to perform relatively well as the region, in our view, possesses a relatively stronger growth narrative and a more accommodative policy backdrop.  ASEAN’s growth as a region is poised to edge up from an estimated 4.0% in 2023 to 4.5% in 2024*. Though incr

9 January 2024 Asian Fixed Income Team Sector Outlooks Financials and non-bank financials Higher interest rates had a net positive impact on the banking sector in Asia through 2023. Banks were able to add pre-emptively to their coffers for non-performing assets and raise their capital buffer, while recording manageable unrealised losses on their portfolio of financial securities due to their strong banking franchise and limited reliance on financial securities for income. As the fundamentally strong financial institutions exude enduring strength and resilience, the divergence taking place within the sector is difficult to ignore. Amid a dynamic operating environment owing to macroeconomic headwinds and geopolitical risks, the main problems plaguing the sector—high household debt against G

Fundamentals and technicals to remain supportive. 9 January 2024 Asian Fixed Income Team Fundamentals Macro The year 2023 turned out differently than we initially envisioned. Throughout 2023, investors have eagerly watched US jobs data and inflationary readings, debating the timing of the last rate hike. Recent rhetoric from Fed officials suggests the central bank is not ruling out another increase in 2023, as labour market conditions remain tight, business activity continues to be more robust than expected and inflation stays above the Fed’s 2% target. Global growth defied any kind of recessionary expectations although interest rates have been raised further and cuts that the market anticipated continue to be postponed. The current macro and market backdrop may see little or minor change