Macro data still weakening,
Tech rally a false start?
􀂄 Global Wave points to continued downturn
Our Global Wave – which quantifies trends in global economic activity – continues
to deteriorate and is now at the lowest level in the 20-year history of our global
data (Chart 2). To put the current downturn in a longer-term perspective, US data
since 1960 shows US industrial confidence, unemployment and capacity
utilisation are currently approaching the levels only reached during the mid-70’s
and early 80’s (Charts 11-13).
Stability of dividends more important than ever
Dividend forecasts are falling faster than ever before (Chart 24) and the
historically high dividend yield for some sectors has a long way to fall to return to
average levels (Chart 26). Investors should be cautious of sectors in which the
dispersion of dividend estimates – measuring dividend uncertainty – has risen
significantly, including Energy, Materials, and Tech Hardware (Chart 27).
Asia Pacific Bunkers continue to outperform
We continue to recommend the defensive Asia Pacific Bunker portfolio which has
outperformed the aggressive Boosters portfolio by 13.5% in the last 12 months.
Sectors that lead performance in an upturn
Although our analysis suggests remaining defensively positioned, investors
preparing for the next upturn should note that Tech Hardware and Diversified
Financials have lead performance after previous major market troughs. That’s
following a false start in Tech seven months early, on average (cover chart).

Contents
Overview 3
Global Wave 4
Style Portfolios 7
The Asia Pacific Pictures 10
Asia Pacific Country Allocation 16
Australia 18
China 19
Korea 20
Taiwan 21
Hong Kong 22
India 23
Singapore 24
Malaysia 25
Asia Pacific Sector Allocation 27
Banks 29
Materials 30
Industrials 31
Tech Hardware 32
Diversified Financials 33
Energy 34
Telecom 35
Consumer Staples 36
Insurance 37
Additional Macro Indicators 40
Interest rates and the cycle 42
China Trade 43
Implications: Markets & Sectors 44
Bear Market or Bull Market? 45
Thematic Quant 46
Style Rotation Index and Performance Summary 47
Quality 48
Beta 50
Size 51
Dividend Yield 52
Dividend Yield + Dividend Growth 53
Interest Rate Sensitivity 54
Price Momentum 55
Earnings Revisions 56
Value – Low PE 57
Value – Low PB 58
Growth 59
Value vs Growth 62
Optimism 63
Estimate Dispersion 64
Oil Price Sensitivity 65
Margins 66
Performance Opportunity 68
Seasonality 70
Asia Pacific Quantitative Publications 71
Interpreting the Momentum & Value Charts 72
Appendix A : Asia Pacific Contenders & Defenders 73