[Sector Edition] What’s Hot? China Still Hot, India Not

What’s Hot

• China is King again…again, see here and here. This shouldn’t shock anyone who has followed our coverage…
• … zero-Covid is over, Xi is striking a kinder tone with the global community, and the housing market has stabilised. China’s citizens have also accumulated $2.6T in new savings last year, an all-time record which is increasingly likely to be spent domestically.
• Our top performer this month, Tech has finally bounced after being the second-worst performer last month. This is unsurprising after heavy selling saw it crumble almost 40% peak to trough since late 2021…
• It bounced more than double the current bounce mid last year, before losing it rapidly. Buyers beware
• Another familiar face from November and last year is Latin America, where higher interest rates are benefitting their large financial services stock market sectors. 

What’s Not

• India has suffered another difficult month, after a brilliant couple of years (and decades in fact). This followed the release of the Hindenburg report, which cratered Adani Enterprises stock price, down 60%, one of the biggest companies in India and home to the world’s third richest man.
• Healthcare has also struggled this month. After shrugging off the market meltdown of the last year or two, rising interest rates have exposed the piles of poor-quality debt. 1/5 of distressed bonds are now issued by the healthcare sector.
• The rest of the “Not” list is made up of sectors with positive returns, with short-term money markets and US treasuries treading water as cash equivalents, and UK property holding up after an interest rate onslaught which has weighed heavily.

What’s Hot

What’s Not

Performance 02/01/2023 – 31/01/2023

All performance figures quoted as total return in GBP