Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Nomura Holdings Inc. has advised investors to reduce their holdings in Chinese equities and redirect their investments towards Indonesia and Malaysia. The move is based on the view that these Southeast Asian markets will benefit more from anticipated cuts in US interest rates. As part of this strategy, Nomura has upgraded Malaysian and Indonesian stocks to 'overweight' from 'neutral,' while downgrading MSCI China to 'neutral' from 'overweight.'
Key Takeaways:
Rationale for the Shift: Nomura's strategists, led by Chetan Seth, believe that Indonesian and Malaysian markets are better positioned to capitalize on the expected US interest rate cuts. This shift comes amid rising interest from foreign investors in these markets, which are seeing a second consecutive month of inflows.
Chinese Market Concerns: China's equity markets have struggled recently, with the MSCI China index down around 3.6% since the end of May. Concerns over China's faltering economy, ongoing real estate slump, and geopolitical tensions with the US have weighed on investor sentiment.
Positive Outlook for ASEAN Markets: Nomura's analysts see Indonesia as "possibly the best way" to bet on a revival in emerging-market stocks as the US Federal Reserve begins to cut rates. The shift reflects a broader optimism about Southeast Asia's economic resilience and growth potential.
Historical Success of Nomura's Picks: Investors may take Nomura's recommendations seriously, as the bank's strategists previously upgraded Taiwanese equities in December, which has resulted in the Taiex Index rising by around 25% this year. This contrasts with the more modest gains seen in other Asian markets.
Foreign Investor Activity: In August, overseas funds purchased $874 million in Indonesian stocks and $240 million in Malaysian shares, reflecting growing confidence in these markets.
Nomura’s decision to pivot away from Chinese equities towards Indonesia and Malaysia highlights the ongoing challenges facing China’s stock market and the emerging opportunities in Southeast Asia, particularly in the context of expected changes in US monetary policy.
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