Have you missed the strong rally in the Chinese market since Fall of 2022 and wonder if you should get it?
See our view via this Tableau viz.
We are cautious though there are specific sectors like the financials that have value.
Contact us for more information.
Global Sectors Outlook as of June 2022 using the Residual Income Model and Lumen calculated Cost of Equity
Selected Regional Markets Outlook as of June 2022 – Value vs. Risk
Please check out the Intrinsic Value column for the ranking of value and the Intrinsic Risk column for the ranking of risk – based on the Residual Income Model.
While the current level of inflation is well above the long-term averages, there are good reasons to expect that inflation will remain benign, in Lumen’s view.
The less accommodative monetary policy points to higher real rates and possibly a healthy market correction typical in a late-cycle policy tightening.
Using the Lumen Global Value Compass calculated market-implied expected returns and stress-testing with the Residual Income Model, we discovered lots of value dispersion regionally and within the emerging world. Intrinsic risk is more skewed towards EM than DM.
Based on our intrinsic value vs. intrinsic risk calculation using the Lumen market-implied expected returns, we highlight a few sectors – healthcare, financials, and consumer staples for the China A-share market.
Global markets are at an unusually sharp inflection point reflecting an equally unusual convergence of uncertain geopolitical and public health outcomes markedly affecting economic activity and policy stances across advanced and emerging economies alike.
Read on to see why we believe an aggressive stance is justified.
