9 January 2020

Sean Darby

Chief Global Equity Strategist at Jefferies
  • The People's Bank of China is forcing banks to bring their lending rates in line with their borrowing rates via the medium-term lending facilities. Photo: Reuters

    China economy: key changes overshadowed by trade war

    - Jan 7, 2020 4:44pm
    Although the lawyers are still ironing out the details, the last days of 2019 saw a Phase One trade deal sealed between China and the United States.?The trade war is by no means finished and further...
  • Since 2015, China's central bank had altered its monetary tools to ensure that liquidity is delivered to the right areas of the real economy. Photo: Reuters

    China: Time to open the monetary tool box

    - Feb 18, 2019 2:46pm
    The swift move in CSI 300 shares year to date appears to have wrong-footed investors, given that economic data releases are still poor. Meanwhile, authorities have begun to expand their monetary tool kit to ensure the...
  • China's property developers have seen the cost of funding rise substantially since May. Photo: Reuters

    Is China downsizing or downshifting?

    - Dec 19, 2018 3:42pm
    The narrative has changed from weak macro data post the May credit crunch to feeble company numbers – from capital goods to cosmetic sales – hence nothing to do with the trade dispute. With earnings finally...
  • The People's Bank of China retains a lot of independence in keeping rates loose as it deleverages. Photo: China Daily

    HK and China taking separate paths on interest rates

    - Oct 16, 2018 1:54pm
    We believe that differing monetary policy regimes and index constituents will dictate a separation between the Hang Seng Index and the CSI 300 into year-end. Not only are Hong Kong Interbank Offered Rate (HIBOR) and Shanghai...
  • Chinese companies had altered their cashflow management to produce much higher free cash flow generation since 2016. Photo: Bloomberg

    China: Defaults and dividends

    - Jun 14, 2018 12:00pm
    While observers have largely found themselves accommodating stable Chinese growth rather than a slowdown, the headlines have been dominated by corporate bond defaults. This should not have been too surprising observing the liquidity and leverage scores...
  • The new PBOC governor Yi Gang acknowledged that interest-rate differentials with the United States are in a "comfortable range". Photo: Reuters

    HK and China: Travelling in different directions

    - Apr 24, 2018 2:11pm
    North Asian equity markets face a stark choice: follow the Fed or follow China. The Fed is expected to hike rates at least three times in 2018 while the economy experiences fiscal easing. In contrast, China...
  • Since China wants to keep the renminbi competitive,  it has to intervene in the foreign exchange markets, which will mean buying US dollar-denominated assets. Photo: AFP

    A Treasury storm in a Chinese teacup

    - Jan 19, 2018 9:42am
    There have been three main stories over the New Year that have affected Chinese equities: suggestions that China no longer favored US Treasuries, the selloff in Chinese government bonds and the improvement in export trends. Firstly,...
  • Just under 50 percent of the CSI 300 companies (ex-financials) had credit scores that were in the "safe zone for corporate solvency". Photo: Reuters

    How PBoC’s tightening policy will affect CSI 300 companies

    - Jun 6, 2017 11:07am
    Looking at some of the recent moves in commodity prices and the CSI 300 index, it would be easy to construe that China is at the epicenter of global tightening. While the People’s Bank of China...
  • China's worsening balance of payments and fast money supply growth indicate that the renminbi will need to fall further. Photo: CNSA

    Why global investors may need more RMB hedging

    - Nov 28, 2016 9:58am
    Following the surprise victory of Donald Trump in the US presidential election, global investors are analyzing the possible impact on China’s trade with the United States. However, we would argue that market participants are missing a...
  • Hong Kong's equity market offers one of the highest developed world dividend yields. Photo: Bloomberg

    Why Hong Kong will benefit from the global hunt for yield

    - Jul 29, 2016 10:37am
    With the Federal Reserve finally?accomplishing a lift-off in interest rates in December last year, equity investors might want to spend more time looking at the shape of the US yield curve rather than just glancing at...
  • China's central bank has quietly altered the monetary policy tools that control the cost of money. Photo: Bloomberg

    PBoC’s silent revolution

    - May 24, 2016 1:11pm
    While the market’s attention has been fixated on China’s bad loans and economic growth prospects, the nation’s central bank has quietly altered the monetary policy tools that control the cost of money. Without much fanfare and...