Insights

Investment Insights by our experts and thought leaders

New Zealand Fixed Income Monthly (May 2024)

New Zealand's fixed income market has struggled so far in 2024 and inflation has remained high. However, there is growing confidence that the Reserve Bank of New Zealand will lower the Official Cash Rate in the next six to 18 months due to a slowing economy, with the expectation that inflation will retreat to the central bank's target range by the end of 2024.

New Zealand Equity Monthly (May 2024)

New Zealand’s equity market is currently facing challenging times. However, a sense that the country’s interest rates may have peaked are some of the indications that the market’s outlook may brighten.

India’s election and implications for equities

In the 2024 Indian parliamentary elections, Prime Minister Narendra Modi's BJP won fewer seats than expected. However, with support from pre-alliance partners, Prime Minister Modi will lead a coalition government for a third term, indicating a public desire for policy continuity and reform. While economic fundamentals are strong, the election results also reflect rural distress and the need for job creation, suggesting the government may focus on expanding the manufacturing sector, infrastructure development and digitalisation.

Navigating Japan Equities: Monthly Insights From Tokyo (June 2024)

This month we look beyond Japan’s impressive dividends and share buybacks from the perspective of corporate governance reform; we also explain how the “quantity effect” associated with exports may reduce the relevance of currency levels.

Healthcare: the sector where innovation is flourishing under the radar

The healthcare sector is benefiting from rapid innovation, fuelled by a significant jump in COVID-led funding. The breakthroughs achieved during the pandemic are only just being realised, and further innovation will be fuelled by artificial intelligence.

Seeing further: navigating AI change through a Future Quality lens

With AI transforming the technology landscape, how do investors wade through the noise to identify genuine investment opportunities? We use our Future Quality framework to find the high-quality companies that are already moving the AI dial.
As the market comes to grips with the US rate structure potentially remaining high, we expect to see increased market volatility and a potential return of the positive correlation between bond and equities that was evident in the market through 2022.

The yen: how weak is too weak?

The ongoing weakness in the yen has led to intense debate over whether Japan can cope with further challenges to its global purchasing power. Although it is a matter of concern, a weak currency isn't necessarily undermining Japan's economic recovery. That said, a prolonged downtrend for the yen warrants vigilance as it could destabilise the economic recovery by triggering inflation.

Seeing further: the increasing role of electrification in the energy transition

Energy consumption forms the backbone of modern lifestyles, and global economic growth is fundamentally dependant on energy supply growth. But as we consider the transition from fossil fuels to clean energy alternatives, the scale of the challenge is truly monumental.
In terms of duration exposure, we maintain a positive outlook for medium-term duration, finding the current yield levels attractive. We expect Asia credit to remain well-supported due to subdued net new supply as issuers continue to access cheaper onshore funding.

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Nikko AM works with the UK-based international organisation Carbon Footprint Ltd. to offset carbon emissions through offset programmes, and has been certified as carbon neutral since 2018.