I butcher the great Regency poet William Blake’s surreal ode to tigers and dark satanic mills “China, China burning bright/in the forest of the night/what immortal hand or eye/could frame thy fearful symmetry”. JD is up 8% overnight, Alibaba is up 72% since my $85 golden goose post 3-months ago and the KWEB is up 24% YTD. The PBOC is easing monetary policy. Fiscal stimulus is the imperial diktat from Beijing. The animal spirits of 1.3 billion souls in the Dragon Empire, suffocated by history’s biggest property/shadow banking crash and Xi Dada’s vendetta against uppity tech billionaires who sought to usurp the CCP’s Mandate of Heaven is now over. Xi is China’s President for life and the Lord of 10,000 years and he has forgiven Jack Ma for giving him lip in the aborted Anti IPO.
China is the EM gorilla of 2025 as Pakistan, Sri Lanka, Kenya and Argentina were double baggers in 2024. Not holding by breath for Hindi-Chini Bhai Bhai bromance or Dalal Street’s promoter scam’s pump and dump meltdown. The macro in Modi’s Tianzhu is not pretty, so seek refuge in IBN ADR.
I knew that China was not uninvestable as the masters of the universe on Wall Street and pipsqueak private bankerjis in the Gulf solemnly intoned in unison last year when I bought JD at 20% below the cash in its balance sheet. It is not often that Mr. Market gives you the chance to buy one of the great e-commerce franchises in Asia for 78 cents to the dollar. But that is exactly what happened. I am a fundamentalist on valuations but definitely not the kind who manages risk assets from an Afghan cave.
The macro stars are now aligned for the right emerging markets since West Texas has fallen below 70. The Dollar Index has tanked to 106.40 and the cost of 10-year Uncle Sam money is now 4.30%. This is the time to dial up risk in EM, whatever happens to Nvidia and Nasdaq tonight after the closing bell.
In Asia, the smart money has been accumulating China-tech, South Korea after the Presidential martial law fiasco and Taiwan’s fabulous chip ecosystem. Southeast Asia has lagged as the liquidity barometer pivots to cash and China+1 tailwinds are negated by Trump’s universal reciprocal tariffs.
I have made the case for Prabowo Subianto and Pak Hashim’s Indonesia 6-months before the election that will unleash the consumer firepower of the world’s largest archipelago state. Bet your next nasi goreng that Jakarta will be the winner in the ASEAN sweepstakes in 2025 with the brilliant baba nyonya, bumi and Tam but not Bram kingdom a close second.
I did the first pre-IPO industrial S-REIT on the SGX for a Gulf royal family office in 2006 when the div yield was 8.5% and the Sing dollar hit by the Asian flu was 1.65. It was the easiest, sweetest triple bagger of my life, so I was thrilled to address a delegation from NUS, the Harvard of Asia.
Prologis, my mid-Jan Radio Gaga puppy at 105 is now almost 123. PLD rocks!
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