Page 6 - 2Q2021 RETAIL WEALTH ADVISORY Playbook

Equity

Region / Previous Current Deliberation
Country Stance Stance
 Having passed the USD 1.9 trillion Covid-19 relief bill, the
US government unveiled another USD 2.25 trillion
infrastructure plan to focus on green energy and
decarbonisation.
 US Fed’s upgrades to US GDP growth translated to only
modest upward revision on inflation forecasts. There is
US Overweight Overweight no change to the projected median policy rate path,
implying no rate hikes through end-2023.
 The Fed Committee is willing to let the economy “run
hot” for a while, which could translate to upside risk for
bond yields in the near term.
 Markets will be on a close watch for initial proposals for
potential tax adjustments to pay for increased spending.
 The delay in relaxation of lockdown restrictions poses
downside risk to Europe’s growth recovery.
Europe Underweight Underweight
 ECB stands ready to ease further by accelerating asset
purchases, which could lend support to asset prices.

 Japan’s economy continues to ride on the broadening
economic recovery via exports.
 Recent Tankan surveys show improvement in business
Japan Neutral Neutral confidence in most industries.
 Bank of Japan’s latest policy tweak can potentially
reduce its ETF purchases, which can weigh on market
sentiment in the near term.

 Swift and aggressive responses from central banks and
governments in the region played a pivotal role in the
current recovery.
 We believe the worst has passed, and the collapse in
corporate profits has likely bottomed.
 The region is transitioning to a technology-driven
Asia ex- Overweight Overweight
Japan economy, and the pandemic has hastened the
transformation across consumer spending and behaviour.
 The transformation has accelerated demand for new
technology infrastructure and secular growth themes
within the region.
 We expect North Asian economies to take the lead in
growth rebound.

 We expect China to adopt a stable and neutral policy
stance to balance the need to support growth and
manage downside financial risks.
 A plateau in onshore margin trading balance alleviated
some concerns of bubble risks.
China Overweight Overweight  The policymakers are unlikely to over-regulate the
technology sector, as it is important to China’s overall
long-term growth plans.
 With robust corporate earnings projected over the year,
we remain positive on China equities and would use the
pull-back to add on quality positions.

5 | P a g e