瑞信长篇-Global Equity Strategy Regional allocation

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收藏 2017-09-19

   瑞信 9 月 14 日长篇，75页英文。供参考。
   We downgrade Japan to benchmark (fromoverweight) because: i) BoJ policyis increasingly unclear (their purchase pace has tapered by around c20% fromits peak) at a time when CPI inflation ex food and energy is -0.1%; ii) thecase for yen weakness has diminished; iii) Prime Minister Abe's loss of popularitythreatens a tighter fiscal policy and loss of reform momentum; iv) buybacks aretracking lower than 2016, while Japan is the most leveraged region to globalPMIs, which are peaking. What stops us from downgrading further: i) clear-cutsupport from funds flow (BoJ/corporate buying); ii) Japan is No. 2 on ourvaluation scorecard (with EV/EBITDA particularly depressed); and iii) we seesome clear signs of corporate change.
      Our largest overweight remains GEM equities: We added to weightings in April and June, having been overweightsince December 2015. GEM currencies have clear-cut valuation support (26% cheapon our models) and they are the most important driver of returns. GEM equitiesare also cheap (19% on a sector-adjusted PE basis). GEM corporates appear to bechanging for the better with improved capital discipline, while unit labourcosts are falling for the first time in six years. The tech share of market capis now twice that of commodities, and above that of the US; GEM, we believe,benefits more than any other region from digitalisation/disruptive technology.GEM also still has policy flexibility. Only a third of equity outflows since2013 have returned. Russia, China and Korea look attractive on our scorecards.
      Continental Europe: small overweight in localcurrency terms: In dollar terms,Continental European equities are a clear overweight. We cut local currencyweightings in June (owing to concerns over euro strength, with 10% on thecurrency taking c.6% off EPS). Supports include relative growth momentum, valuationand an ECB which, by focusing too much on its inflation mandate, potentiallycould underwrite an asset bubble. The risk remains that the euro captures moreof the macro upside.
      We stay benchmark UK equities: The dominant drivers of UK equities are: sterling (we areclose to the end of the sterling bear market in trade-weighted terms);commodities (22% of market cap); GEM exposure (c.17% of sales) and leadindicators (with the UK actually somewhat defensive). On Brexit, we see a highprobability of a very long transitional deal, and a rising probability of a secondreferendum, but other factors are likely to cap sterling trade weighted. Wereduce the size of our underweight in US equities ex tech: The US is theclear beneficiary of a weaker dollar (and hence scores No. 2 on our compositescorecard) and US performance has mirrored PMIs, while it has high exposure togrowth and tech stocks. We remain underweight due to: i) valuation (PE and PBrelatives at extremes); ii) the Fed may be more willing to tighten in the faceof muted inflation given its employment/financial stability mandate; iii)corporate leverage is near a record high at a time when buybacks have accountedfor half of cash payouts (and a third of earnings growth), and buybacks as astyle are starting to underperform; iv) it has low GEM exposure.