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December’s most read: Benjamin Deng to join Ping An; HK equity outlook 2022

The former CIO of China Pacific Insurance Co (CPIC) had left the insurer in September for family reasons; select names in the HK stock market should show decent performances, while the overall market sentiment is expected to pick up after the first quarter; positive but moderate returns are still expected from US equities, while the pace of policy normalisation and economic growth is closely watched; and more
December’s most read: Benjamin Deng to join Ping An; HK equity outlook 2022

 

Benjamin Deng to join Ping An after leaving CPIC

Benjamin Deng, the former chief investment officer (CIO) at China Pacific Insurance Co (CPIC) is joining the country’s largest insurer Ping An Insurance Group (Ping An) to head up its investment strategy, according to two sources familiar with the matter.

Deng will join Ping An in a role equivalent to the CIO position, which could be shared with current group CIO Timothy Chan Tak Yin, the sources said. 

A Ping An spokesperson declined to comment about Deng's appointment but said that Chan will continue to be with the group. However, the spokesperson did not specify if Chan will retain the CIO position.

On September 28, Deng stepped down from CPIC as CIO, according to a company announcement. The firm said that the resignation was due to personal family reasons.

 

Hong Kong equity outlook 2022: Is the worst behind us?

In 2021, US stocks rallied throughout the year despite inflationary and pandemic concerns, with three major indices gaining as much as 24% year to date. Even for onshore China, with the economic slowdown, certain sectors have performed well enough to drive Shenzhen and Shanghai indices up by 5%.

Meanwhile in Hong Kong, the Hang Seng Index dropped by 14%, the Tech Index slumped more than 30%, and the China Enterprises Index lost more than 22% year to date

But analysts say the worst may have come to pass for Hong Kong as one of the world’s worst-performing equity markets this year.

Key factors that will define the direction Hong Kong equities are heading in 2022 include: China’s emphasis on stable economic growth, the implementation of regulation, domestic consumption, interest rates both domestically and on Wall Street, as well as Hong Kong’s border reopening with the Chinese mainland.

 

Market Views: Are US equities headed for a big correction in 2022?

The US equity market is trading resiliently this week, despite headwinds from the Omicron variant, inflation, and more rate hikes — although it’s uncertain how long this can last. 

The Federal Reserve held its most hawkish meeting in recent years last week, signalling three interest rate hikes in 2022 in response to decades-high inflation. This projection is up from the September meeting, when half of the Fed members saw at least one rate hike in 2022.

AsianInvestor asked asset managers where they think the US equity market is headed in 2022; whether it is close to a correction; and what their strategies are.

 

In Chinese property, investment grade names suffer from high yield woes

Investment-grade Chinese property developers are not immune from the ongoing debt troubles of their high-yield peers as they face a liquidity crunch, falling stock prices and potential ratings downgrades.

On December 17, Fitch Ratings and Moody’s downgraded Shimao Group, a Chinese developer listed in Hong Kong. Moody’s lowered its rating from BB+, a notch below investment grade, further down to BB-, while Fitch downgraded Shimao by two notches from investment grade to the speculative rating of BB.

A month earlier, S&P Global Ratings had also cut Shimao’s rating from the investment grade of BBB- to the non-investment grade of BB+ on November 10.

“Shimao's credit profile is no longer consistent with investment-grade ratings due to questions around the strength of its liquidity position,” Fitch Ratings said in a commentary.

 

Real estate outlook 2022: niche asset classes boost yields

Historically, the most favoured sectors in Asia Pacific (Apac) real estate markets have been the office and retail sectors, which currently represent some 66% of investor portfolios in the region, according to the latest Urban Land Institute (ULI) report. For 2022, experts are seeing more potential in Australia, Japan, and South Korea under different niche sectors. 

Across Apac, sectors such as logistics, data centres, life science, and multifamily continue to be highly sought after, given their income stability and sector tailwinds, according to Louise Kavanagh, chief investment officer and head of fund management for Apac at Nuveen Real Estate. 

"Niche sectors will offer a way to eke out higher returns in the short term, [including] those involved in telecommunications, pharma, biotech, new energy, data, ecommerce,” Kavanagh said. “[Same goes for sectors] focusing on demographic shifts like the need for retirement living and care homes in markets like Japan and Australia, where there are large [ageing] populations with discretionary spending capacities."

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