About

Ahead of the Curve provides analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity, and FOREX markets are discussed. Rajveer Rawlin is a PhD and received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher, having followed capital markets in the US and India since 1993. His research interests include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Showing posts with label brazil stock exchange. Show all posts

Thursday, 13 August 2015

Interesting Perspective on the Chinese Yuan Devaluation

While the Chinese Yuan devaluation has taken the global markets by storm this week, it certainly is not the first of its kind and pales in comparison to the 50% devaluation in the Yuan in 1994. A very interesting chart from dailyfx below provides insight into the fluctuations in the Yuan.
DEVALUING THE YUAN ISN'T UNCHARTED TERRITORY

DEVALUING THE YUAN ISN'T UNCHARTED TERRITORY

It also appears that the #Yuan is yet to catch up with the deteriorating macro economic back drop in China as per the next chart from dailyfx and the current devaluation may not help matters in the long term.

What Does Yuan's Devaluation Mean for Chinese and Global Markets?

Regardless the contagion effect on the #BRIC and other emerging economies can't be ignored as the threat of cheap Chinese exports flooding the market place is alive and well in the near term. The mere prospect of this has sent some BRIC currencies and stock markets sharply lower and this is likely to continue in the short term:
CNX NIFTY (^NSEI)

iShares, Inc. - iShares MSCI Brazil Capped ETF (EWZ)

Interesting Perspective on the Yuan Devaluation http://t.co/TaHaJQo43u pic.twitter.com/SWDO52FyeD
— samuelR (@RajveerRawlin) September 7, 2015

My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.