I’m writing this month’s issue from Kuala Lumpur, a city that has surprised me with its pace of transformation. KL feels sharper, more intentional—its skyline taller, its infrastructure smoother, and its energy unmistakably future-facing. Walking its streets, you can see the shift everywhere: EV chargers tucked into mall basements, solar panels glinting from rooftops, and Chinese EVs quietly gliding through traffic. It’s a reminder that the macro isn’t just numbers on a chart—it’s lived reality, visible in how cities evolve and how people adopt new technologies.
This trip has reinforced my conviction that the next wave of opportunity lies in sectors where China has already achieved scale and cost leadership: clean energy, robotics, and AI. These aren’t abstract themes anymore—they’re embedded in ASEAN’s daily life. Waste-to-energy plants are rising across Indonesia, AI-driven logistics hubs are streamlining Vietnam’s ports, and robotics are creeping into Malaysia’s factories. The region is no longer just a consumer of innovation; it’s becoming a deployment zone.
That’s why my focus remains on valuations in emerging markets. While developed economies wrestle with debt overhangs, policy fatigue, and inflated multiples, I see asymmetric upside in places where capital efficiency is real, and adoption curves are steep. China’s vertical integration and policy alignment make its clean energy and robotics sectors resilient, while ASEAN provides the proving ground for their global expansion.
In this issue, I will walk through how I’m positioning across asset classes, why I’m rotating out of overleveraged Western exposures, and how to build portfolios that reflect real growth in the broader economy—not just the headlines.
Let’s dive in.
Sincerely,
Assistant Director | Investment Advisory | iFAST Global Markets
This Month's Issue:
The Great Rebalancing:
Why Capital Is Rotating East
Global capital markets are navigating an intersection of policy, debt, and growth divergence. The latest data underscores three critical developments shaping asset allocation today.
First, Asia ex-Japan continues to outpace the G7 in GDP growth, with India leading at nearly 8% and China, Indonesia, and Malaysia sustaining steady expansion. This structural divergence is not just cyclical—it signals a rebalancing of global capital flows toward regions where adoption curves are steep, and valuations remain compelling.
Second, in the U.S., federal interest payments have now surpassed their entire defense budget, a stark reminder of how debt sustainability is crowding out fiscal flexibility. 10-year Treasury yields are rising again after the latest rate cuts and are tightening financial conditions, pressuring both consumers and corporates, and reviving recession risks as the yield curve creeps back into historically predictive territory.
Finally, China’s clean energy and EV sectors are accelerating, supported by policy tailwinds and export momentum, with BYD and CATL extending their cost leadership globally. This is not just an industrial story—it’s a geopolitical one, as China leverages vertical integration to project influence across emerging markets.
Together, these shifts highlight the widening gap between economies weighed down by debt overhangs and those deploying capital into future-facing industries. The challenge for investors is clear: rotate away from inflated Western exposures and position portfolios where real growth is being built, not borrowed.
In the following Sections, I dive deeper into the narratives and I share my asset allocation strategy based on Global Economic Conditions, Recession indicators and Market Cycle Markers. I will try to objectively tailor my advisory practice around the following asset allocation strategy and review the performance here regularly.
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