Asia

The Turkish presidential election will go to a runoff in two weeks, but President Erdogan outperformed his opinion polls. His party, the incumbent AKP, won a majority in parliament. This outcome rewards Turkey’s inflationary policies and as such reinforces our underweight position in Turkish equities. By contrast, the Thai election reinforces our recommendation to stay overweight Southeast Asia relative to global equities.

An unprecedented trade surplus has given Indonesia a rare opportunity to transition into a lower real rates regime. The sustainability of Indonesian stocks outperformance is contingent upon whether the authorities can do so.

This week we are sending you a transcript of my conversation with one of China’s most prominent and influential pro-market economists. Topics raised during my conversation with this Chinese expert may offer our clients important insights and provide context into recent developments in China’s economy.

Indian EPS growth is set for major disappointments vis-à-vis the lofty expectations. Weak domestic demand amid tight fiscal and monetary policy entails more downside in stock prices. Stay underweight.