The Intelligence Report – 10 October 2017

10 Oct 2017

  • Productivity gains: the hidden benefit of Japan’s aging population – Tony explores Japanese equities, analysing their prospects through focusing on such factors as earnings revisions, improvements in corporate governance, productivity and demographics.
  • Crude market outlook – the new oil era – Guillermo Felices argues that technological advances in shale production have changed the supply and demand landscape for oil, and analyses the outlook for oil prices in this context as firming demand meets a more elastic supply curve.

Politics has been a recurring theme over the past several years, with more recent headlines provided by the escalation of tensions in the Korean peninsula, German election surprises, the latest twists in Brexit negotiations and dramatic developments in Catalonia. With so many new and complex stories to grab market players’ attention, it is perhaps unsurprising that foreign investors have reacted somewhat nonchalantly to Japanese Prime Minister Abe’s recent calling of snap elections – after all most investors are underweight Japanese assets and may feel that they therefore have little at stake.

However, the outcome of these elections, and their implications for future leadership, may have a significant impact on the outlook for monetary policy, asset prices and the yen in the months and years to come. In the first of our articles, Tony Glover takes advantage of this event to take stock of Japanese equities, analysing their prospects
through focusing on such factors as earnings revisions, improvements in corporate governance, productivity and demographics.

In our second article we return to another recurring theme of recent years: the outlook for oil prices. Guillermo Felices argues that technological advances in shale production have changed the supply and demand landscape for oil, and analyses the outlook for oil prices in this context as firming demand meets a more elastic supply curve.

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