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  • Long to reign | Thinking Aloud
    period it has ranged from 24 to today s 0 Interest rates back then were 4 and have ranged from today s almost zero to 17 I wonder whether Her Majesty is a subscriber to the lower for longer argument so prevalent today or is she more persuaded by a reversion to a mean I suspect the latter In 1952 the national debt was 25 9 billion 39 8 billion This undoubtedly kept Cameron Cobbold the then Governor of the Bank of England awake at night Little did he know that his most recent successor 63 years later would be able to sleep soundly despite the mountain of IOUs in the vault totaling 1 6 trillion 2 5 trillion It is clearly a very different political economic social and financial world today compared to the one the Queen presided over in 1952 But her presence has been one of the few constants running through this period We wish her well in this very special week It is clearly a very different political economic social and financial world today compared to the one the Queen presided over in 1952 Ref 24533 090915 1 Social media Download share or print this page Copy link Email link Print this page Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture long to reign Select Article URL Close Economics Equities Global Interest rates UK Related Articles Japan why faltering reforms shouldn t hide corporate achievements Like the US the UK needs infrastructure capital Paradox for emerging market positivity Fighting off China s cold ECB action kitchen sink or leaky tap for hedge funds Economics Equities Global Interest rates UK Related Links Learn more about Aberdeen Contact Us This Content Component encountered an error Send us feedback First Name Last Name Email Address Comments Thinking aloud Internal Links About Thinking aloud Privacy and Cookies Policy Accessibility Help Keep in touch twitter LinkedIn google facebook More about Aberdeen Asset About Aberdeen Asset Management Aberdeen Asset Management Copyright 2015 IMPORTANT INFORMATION PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS The views and opinions expressed are provided for general information only and do not constitute specific tax legal or investment advice to or recommendations for any person We suggest that you consult your financial or tax advisor accountant or attorney with regard to your specific situation The details contained here are for information purposes only and should not be considered as an offer or solicitation to deal in any of the investments mentioned herein Aberdeen Asset Management AAM does not warrant the accuracy adequacy or completeness of the information contained herein and expressly disclaims liability for errors or omissions in such information and materials Any research or analysis used in the preparation of the information has been procured by Aberdeen for its own use and may have been acted on for its own purpose Some of the information may contain projections or other

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/long-to-reign (2016-04-26)
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  • China: the whys and wherefores | Thinking Aloud
    week s announcements but also to other central banks The U S Federal Reserve Fed will provide an early test given the strength of its domestic economy it had been considering raising rates in September but that move could well be pushed back Investment Insight Much to think about This has obviously been a painful time for investors with most large equity markets down around 10 month to date at the time of writing Commodities have seen continued weakness with Brent crude down 15 in August alone and copper and aluminium both down over 5 in the same period Some currencies that are seen as having more exposure to recent developments have also fallen significantly with the Malaysian ringgit and Russian ruble down around 10 and the Kazakhstani tenge down by over a quarter The catalyst for these sharp market falls has been the devaluation of the Chinese renminbi This is an important event and a significant departure by Chinese policymakers The reasons for this change of policy are many but one of the main factors is the slowing Chinese economy This is an economy that exists in a world where the Fed appears willing to accept a rising dollar but where many other central banks have adopted policies resulting in the devaluation of their currencies This combination is problematic to the Chinese export sector and therefore to economic growth It would seem likely that the implications of this change in Chinese policy and the likely path and efficacy of future policy will remain at the forefront for investors for some time This also comes at a time when investors are contending with the end of quantitative easing in the United States and the accompanying prospects for higher interest rates This combination may mean that current increased levels of volatility will continue However we should remember that there are benign impacts of recent developments Falling commodity prices are unhelpful to those countries or companies that produce them but in aggregate they should be helpful to the consumers of these commodities and to global growth It would also seem likely that the deflationary implications of Chinese policy will result in policymakers elsewhere having little need to worry about inflation any time soon with helpful implications for the path of future interest rates In this regard we should remember also that the U S and U K economies are growing steadily and that there is real evidence of a pick up in the Eurozone economy With global growth still expected to be around 3 this year we believe there is still plenty of opportunity for revenue and profit growth which can fund dividends and interest payments to satisfy both equity and debt holders There is clearly still much to think about But as you would expect we will continue to monitor developments carefully and look to take advantage of opportunities where appropriate There is clearly still much to think about Important Information Forecasts are offered as opinion and are not reflective of

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/china-the-whys-and-wherefores (2016-04-26)
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  • Deciphering the Federal Reserve| Thinking aloud US | Thinking Aloud
    be able to say they didn t see it coming if it happens It s very different from 1994 when a round of interest rate rises came out of the blue We know much more about the Fed s thinking now But as the will they won t they tension builds it is worth remembering that all we know is what the Fed thinks and not what it ll do It s told us that the gun is loaded and its finger is on the trigger but when it ll pull the trigger is another matter entirely Ref 24533 210815 1 Social media Download share or print this page Copy link Email link Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture deciphering the federal reserve Select Article URL Close Bonds Central banking Economics Fixed Income Interest rates Monetary policy Related Articles Japan why faltering reforms shouldn t hide corporate achievements Like the US the UK needs infrastructure capital Paradox for emerging market positivity Fighting off China s cold ECB action kitchen sink or leaky tap for hedge funds Bonds Central banking Economics Fixed Income Interest rates Monetary policy Related Links Learn more about Aberdeen Contact Us This Content Component encountered an error Send us feedback First Name Last Name Email Address Comments Thinking aloud Internal Links About Thinking aloud Privacy and Cookies Policy Accessibility Help Keep in touch twitter LinkedIn google facebook More about Aberdeen Asset About Aberdeen Asset Management Aberdeen Asset Management Copyright 2015 IMPORTANT INFORMATION PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS The views and opinions expressed are provided for general information only and do not constitute specific tax legal or investment advice to or recommendations for any person We suggest that you consult your financial or tax advisor accountant or attorney with regard to your specific situation The details contained here are for information purposes only and should not be considered as an offer or solicitation to deal in any of the investments mentioned herein Aberdeen Asset Management AAM does not warrant the accuracy adequacy or completeness of the information contained herein and expressly disclaims liability for errors or omissions in such information and materials Any research or analysis used in the preparation of the information has been procured by Aberdeen for its own use and may have been acted on for its own purpose Some of the information may contain projections or other forward looking statements regarding future events or future financial performance of countries markets or companies These statements are only predictions opinions or estimates made on a general basis and actual events or results may differ materially This information does not provide financial or investment advice and does not take into account the particular financial circumstances of individual investors Before investing investors should seek their own professional advice Neither Aberdeen nor any of its employees associated group companies or agents has given any consideration to nor

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/deciphering-the-federal-reserve (2016-04-26)
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  • The pretense of central banking precision| Thinking aloud US | Thinking Aloud
    Given the lack of precision in economic effects central banks tend not to try to control effective interest rates to the nearest basis point the U S European and U K overnight rates all move around the target rate And if they typically vary by five or ten basis points anyway a move of less than 25 is near enough pointless What s more the rate at any particular point is less important than the path which markets expect and the consequent borrowing rates for longer periods If markets suggest there will be 200 basis points of hikes over the next five years it really doesn t matter if they come in 10 or 25 basis point increments The fear is that you would actually end up with no real macroeconomic gain but more noise and confusion It s worth remembering too that a hike of 25 basis points is pretty gradual in any case No one really talks about the chances of a 50 basis point move yet such as when the Fed raised the federal funds rate from 3 to 6 between February 1994 and February 1995 Four of these hikes consisted of 50 basis points or more There is a pretense of precision in moving rates in smaller increments a belief that somehow small moves allow central banks to fine tune the impact of their decisions But central banks are not capable of such precision So when it comes to toe dipping they should be bold enough to go at least as high as the knees Ref 24533 240815 1 Social media Download share or print this page Copy link Email link Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture the pretense of central banking precision Select Article URL Close Bonds Central banking Economics Fixed Income Interest rates Monetary policy Related Articles Japan why faltering reforms shouldn t hide corporate achievements Like the US the UK needs infrastructure capital Paradox for emerging market positivity Fighting off China s cold ECB action kitchen sink or leaky tap for hedge funds Bonds Central banking Economics Fixed Income Interest rates Monetary policy Related Links Learn more about Aberdeen Contact Us This Content Component encountered an error Send us feedback First Name Last Name Email Address Comments Thinking aloud Internal Links About Thinking aloud Privacy and Cookies Policy Accessibility Help Keep in touch twitter LinkedIn google facebook More about Aberdeen Asset About Aberdeen Asset Management Aberdeen Asset Management Copyright 2015 IMPORTANT INFORMATION PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS The views and opinions expressed are provided for general information only and do not constitute specific tax legal or investment advice to or recommendations for any person We suggest that you consult your financial or tax advisor accountant or attorney with regard to your specific situation The details contained here are for information purposes only and should not be considered as an offer or

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  • Despite Shanghai turmoil, the EM case still holds | Thinking Aloud
    Shanghai will almost certainly deepen investor distrust Asia is not China though other equity markets in Asia such as Singapore and Hong Kong are far more liquid transparent and better regulated Meanwhile we believe ignoring emerging markets entirely is a huge mistake for any long term investor since the fundamentals are hard to argue with Ignoring emerging markets entirely is a huge mistake for any long term investor For example at the moment emerging markets are a small proportion of indices which does not reflect their growing economic might and demographics In fact if you draw a circle around China India and southeast Asia there are more people living in that circle today than in the whole of the rest of the world That population is also younger and more dynamic than in the developed economies As a result the economies they live in are moving up the technological curve rapidly Consider the strength of India s IT industry or the fact that there are now more mobile phone subscribers in sub Saharan Africa than in Europe There is a powerful consensus that emerging economies will continue to outperform the developed world for the next 35 years so much so that PwC predicts that by 2050 not only will China be the world s largest economy by some margin but that India will have also overtaken the U S and pushed it into third place Despite this structural shift in the world s wealth from America and Europe to Asia Latin America and Africa there will always be bumps bubbles and corrections along the way Which is why we think it is better to be a stock picker and fundamental investor on a case by case basis and invest for the long term rather than chase market trends Important Information Projections are offered as opinion and are not reflective of potential performance Projections are not guaranteed and actual events or results may differ materially Foreign securities are more volatile harder to price and less liquid than U S securities They are subject to different accounting and regulatory standards and political and economic risks These risks are enhanced in emerging markets countries This article was originally published in The Sunday Telegraph on August 8 2015 QILAI SHEN epa Corbis Ref 24533 120815 1 Social media Download share or print this page Copy link Email link Print this page Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture despite shanghai turmoil the em case still holds Select Article URL Close Asia ex Japan Asia inc Japan Bonds Central banking Developed Developing Economics Emerging Markets Equities Global Interest rates Monetary policy Multi Asset Related Articles Japan why faltering reforms shouldn t hide corporate achievements EM corporate bonds what happened to the apocalypse Asian property seeking excitement without danger Paradox for emerging market positivity Fighting off China s cold Asia ex Japan Asia inc Japan Bonds Central banking Developed

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/despite-shanghai-turmoil-the-em-case-still-holds (2016-04-26)
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  • China: having their currency cake and eating it too? | Thinking Aloud
    risks are enhanced in emerging markets countries Ref 24533 130815 1 Social media Download share or print this page Copy link Email link Print this page Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture china having their currency cake and eating it too Select Article URL Close Asia ex Japan Central banking Currencies Developed Economics Global Monetary policy Related Articles Japan why faltering reforms shouldn t hide corporate achievements Paradox for emerging market positivity Fighting off China s cold ECB action kitchen sink or leaky tap for hedge funds Creating value through effective stewardship Asia ex Japan Central banking Currencies Developed Economics Global Monetary policy Related Links Learn more about Aberdeen Contact Us This Content Component encountered an error Send us feedback First Name Last Name Email Address Comments Thinking aloud Internal Links About Thinking aloud Privacy and Cookies Policy Accessibility Help Keep in touch twitter LinkedIn google facebook More about Aberdeen Asset About Aberdeen Asset Management Aberdeen Asset Management Copyright 2015 IMPORTANT INFORMATION PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS The views and opinions expressed are provided for general information only and do not constitute specific tax legal or investment advice to or recommendations for any person We suggest that you consult your financial or tax advisor accountant or attorney with regard to your specific situation The details contained here are for information purposes only and should not be considered as an offer or solicitation to deal in any of the investments mentioned herein Aberdeen Asset Management AAM does not warrant the accuracy adequacy or completeness of the information contained herein and expressly disclaims liability for errors or omissions in such information and materials Any research or analysis used in the preparation of the information has been procured by Aberdeen for its own use and may have been acted on for its own purpose Some of the information may contain projections or other forward looking statements regarding future events or future financial performance of countries markets or companies These statements are only predictions opinions or estimates made on a general basis and actual events or results may differ materially This information does not provide financial or investment advice and does not take into account the particular financial circumstances of individual investors Before investing investors should seek their own professional advice Neither Aberdeen nor any of its employees associated group companies or agents has given any consideration to nor have they or any of them made any investigation of the investment objectives financial situation or particular need of the reader any specific person or group of persons Accordingly no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the reader any person or group of persons acting on any information opinion or estimate contained herein Aberdeen reserves the right to make changes and corrections to any information at any

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/china-having-their-currency-cake-and-eating-it-too (2016-04-26)
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  • Central banking auto-recipe for disaster | Thinking Aloud
    is simply impossible Relatively predictable policy is the best we can hope for but that should involve systematic policy making not automatic rule following Relatively predictable policy is the best we can hope for There is very little economic justification for such legislation Instead its attraction to Congress seems to be that it would allow them to interfere more in the Fed s decision making second guessing and even manipulating its behavior History tells us that such political control of monetary policy rarely ends well We still expect central bankers to make sound decisions based on imperfect information A giant stick from Congress might just make those decisions even harder to make Legendary French chef Auguste Escoffier while not known for his central banking prowess somewhat surprisingly provides us with some insight No theory no formula and no recipe can take the place of experience This article was originally published in CityAM on July 29 2015 Ref 23211 300715 3 Social media Download share or print this page Copy link Email link Print this page Share on twitter Share on LinkedIn Share on Google Share on Facebook Copy URL http www aberdeen asset ca en thinkingaloudus the bigger picture central banking auto recipe for disaster Select Article URL Close Bonds Central banking Developed Economics Fixed Income Global Monetary policy Related Articles Japan why faltering reforms shouldn t hide corporate achievements Like the US the UK needs infrastructure capital Paradox for emerging market positivity Fighting off China s cold ECB action kitchen sink or leaky tap for hedge funds Bonds Central banking Developed Economics Fixed Income Global Monetary policy Related Links Learn more about Aberdeen Contact Us This Content Component encountered an error Send us feedback First Name Last Name Email Address Comments Thinking aloud Internal Links About Thinking aloud Privacy and Cookies Policy Accessibility Help Keep in touch twitter LinkedIn google facebook More about Aberdeen Asset About Aberdeen Asset Management Aberdeen Asset Management Copyright 2015 IMPORTANT INFORMATION PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS The views and opinions expressed are provided for general information only and do not constitute specific tax legal or investment advice to or recommendations for any person We suggest that you consult your financial or tax advisor accountant or attorney with regard to your specific situation The details contained here are for information purposes only and should not be considered as an offer or solicitation to deal in any of the investments mentioned herein Aberdeen Asset Management AAM does not warrant the accuracy adequacy or completeness of the information contained herein and expressly disclaims liability for errors or omissions in such information and materials Any research or analysis used in the preparation of the information has been procured by Aberdeen for its own use and may have been acted on for its own purpose Some of the information may contain projections or other forward looking statements regarding future events or future financial performance of countries markets or companies These statements are only predictions opinions

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/central-banking-auto-recipe-for-disaster (2016-04-26)
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  • Greek bailout: déjà vu all over again | Thinking Aloud
    no firm commitments even to discuss the issue When a country is in double dip recession with its banking sector severely impaired and capital controls set to remain in place for some time increased austerity is likely to make debt and deficit targets harder to meet by shrinking national income This is exactly what has happened over the past five years 3 Creditor tensions could resurface The IMF can only participate in Bailout III if it believes Greece s debt is sustainable and we already know that it regards debt restructuring as a vital part of achieving sustainability If it can t get the other creditors to agree and Germany s Finance Minister Schauble has his face set against it then the Fund s notional 16 4 billion 18 billion contribution to the Bailout III package could be under threat This is a serious possibility the IMF s insistence on sustainability delayed the 2011 bailout agreement and froze payments again in 2012 for a number of months 4 Political backlash in Greece is highly likely and the creditors should be careful what they wish for Back in June we speculated that a desire to effect a change of government in Greece underlay the creditors increasingly hard line After Monday s capitulation by Mr Tsipras and under the pressure of the timetable he now has to enact this seems more likely than ever A government reshuffle looks to be the bare minimum Mr Tsipras has said that he would not be prepared to head up a national unity administration but fresh elections later this year are a possibility The creditors are presumably hoping for a more reform friendly administration but democracy can be an unpredictable process Furthermore previous bailouts have not been helped by political paralysis five prime ministers and eight finance ministers have been in place since the start of the financial crisis in 2008 whereas the UK has taken 36 years to chalk up the same number and a repeat under Bailout III could further weaken prospects for the privatization fund Bottom Line Last weekend s meetings reportedly nearly ended in fisticuffs the mood in the finance ministers all nighter was described as violent and Grexit So the fact that both were avoided provides some immediate relief The short term hurdles over the next week may be overcome though sourcing the full 7 billion 7 7 billion needed for next Monday s ECB European Central Bank and IMF debt repayments still looks troubling at this stage More fundamentally however there are serious concerns about the longer term prospects for the deal If as we believe the privatization fund is unrealizable this Bailout III financial black hole will have to be plugged by some other means additional loans further austerity and or debt restructuring could all be the subject of yet more negotiations For all the twists and turns of recent months this deal is simply déjà vu all over again More fundamentally however there are serious concerns about the

    Original URL path: http://www.aberdeen-asset.ca/en/thinkingaloudus/the-bigger-picture/greek-bailout-dj-vu-all-over-again (2016-04-26)
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