KKR Releases New Macro Report Discussing the “Shifting Landscape” in China and Japan
October 12, 2015
“Looking at the big picture, our key conclusion from the trip is that
the slowdown we are seeing in
In the piece,
-
China is in structural slowdown mode, as excess debt and capacity now weigh on profits, not just GDP. Slowing Chinese GDP data seems to garner all the headlines these days, but after our most recent trip, we think the focus should be on trends in corporate profits. -
Japan is no longer just a macro story; focus on the micro too. The positive macro story inJapan is – on the margin – waning. As such, we think primarily just those companies that are actively shedding assets and/or returning cash to shareholders will outperform handily from current levels. -
Overall,
Asia is in somewhat of a funk. Our trip reconfirmed our thesis that many EM Asia countries recently redirected their economies — potentially at just the wrong time — to take advantage of what they thought would be ongoing strength in China’s economy. However, with China’s growth now stalling amid lower commodity prices and weak inbound trade, many EM countries are now enduring weaker than expected growth, bigger deficits, and heightened political tensions.
Links to access the full report as well as an archive of our previous publications follow:
- To read the latest Thoughts from the Road, visit KKR’s web site.
- Click the following link to download a PDF version.
- Click the following link for an archive of previous publications.
About KKR
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world‐class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners’ capital and brings opportunities to others through its capital
markets business. References to KKR’s investments may include the
activities of its sponsored funds. For additional information about
The views expressed herein are the personal views of Henry McVey of
KKR and do not necessarily reflect the views of KKR. This information is
not research and should not be treated as research. References to a
target portfolio and allocations of such a portfolio refer to a
hypothetical allocation of assets and not an actual portfolio. Such
views and discussion of any target portfolio or allocation do not
represent valuation judgments with respect to any financial instrument,
issuer, security or sector that may be described or referenced herein,
do not represent a formal or official view of KKR, and may not be
reflected in the strategies and products that KKR offers or invests,
including strategies and products to which
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