Market Quote: Outlook Outtakes II (Indonesia Equities, U.S. Deficit Funding, REITs)
Author: The editor's desk
December 22, 2023
Members of AGF’s Investment Management Team weigh in on the week that was in global financial markets. In this edition, more highlights from AGF’s Outlook 2024 publication.
Developing Story
…Less well-known, perhaps, is the potential in Indonesia, the fourth-most populous country in the world, with a median age of just 30. That huge population remains under-banked (opening huge growth opportunities for banks and online payments firms) and under-connected (with e-commerce comprising only 4% of GDP, versus 11% in China). Indonesia is also a leading supplier of nickel, a key component of electric vehicle batteries. Add the fact that domestic demand is strengthening, and Indonesia is positioned to turn in sustained 5%-plus annual GDP growth… (The Slow Divorce in Emerging Markets)
Un-Yielding
…True, a U.S. government default seems like a remote possibility, notwithstanding regular congressional debates over the debt ceiling. Yet running ever-higher deficits means that the Treasury must issue more and more bonds. The increased supply puts upward pressure on yields, which, along with those swollen deficits, will likely mean the government will pay more and more in interest… (Who’s Going to Fund the U.S. Deficit?)
Get Real
…While declining interest rates would take time to be reflected in REIT earnings, history suggests that sentiment on the sector begins to turn positive ahead of time, with real estate stocks beginning to bottom approximately 18 to 24 weeks ahead of a rate cut announcement, according to research from UBS. In our opinion, even moderate interest rate declines would be quite positive for the sector, and 2024 could start a run of outperformance for REITs that has been a long time coming… (What if There’s a Recession (And Central Banks Start Cutting Rates)?)
For full bios, please visit our contributor’s page.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds, or investment strategies.
Commentary and data sourced from Bloomberg, Reuters and other news sources unless otherwise noted. The commentaries contained herein are provided as a general source of information based on information available as of December 5, 2023 and are not intended to be comprehensive investment advice applicable to the circumstances of the individual. Every effort has been made to ensure accuracy in these commentaries at the time of publication, however, accuracy cannot be guaranteed. Market conditions may change and AGF Investments accepts no responsibility for individual investment decisions arising from the use or reliance on the information contained here.
This document may contain forward-looking information that reflects our current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The term AGF Investments may refer to one or more of these subsidiaries or to all of them jointly. This term is used for convenience and does not precisely describe any of the separate companies, each of which manages its own affairs. AGF Investments entities only provide investment advisory services or offers investment funds in the jurisdiction where such firm, individuals and/or product is registered or authorized to provide such services.
® ™ The “AGF” logo and all associated trademarks are registered trademarks or trademarks of AGF Management Limited and used under licence.
RO:3280152
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
For further information, please visit AGF.com.
© 2024 AGF Management Limited. All rights reserved.
