The World Bank earlier on Monday released its latest East Asia and Pacific Data Monitor, warning China's that slowdown could accelerate.I wrote last week that there were early signs of a turnaround in China's growth outlook (see China dodges a bullet?). Now Macro Man wrote about signs of a bounce in Asian exports, including China.
In the report, the international lender said that ambitious investment plans announced by several local governments in China could face funding constraints, "not least because governments are feeling the pinch of a cooling real estate market, which lowers land sales revenues".
The World Bank said the central government was unlikely to come up with a major fiscal stimulus package as policymakers were concerned about a rebound in home prices and a possible reversal of hot money flows.
So, adding it all up, TMM [Team Macro Man] reckon with China back this week, the potential is there for the market to reassess the Asia slowdown trades, because it looks to us as though these are - particularly in China and Australia - past their sell-by date.While I do take their analysis with a grain of salt because Macro Man is long the AUD and therefore talking their book, these disparate indicators nevertheless form a mosaic picture of a nascent growth turnaround in Asia and China in particular.
In this case, the World Bank downgrade of China's growth outlook may be the nadir of Asian slowdown fears.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest. None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.