Banks
Indonesia will not revert to dictatorship. Yet the guardrails against authoritarianism are also constraining the actions of the next government in tackling near term domestic and regional challenges. For long-term positioning, use potential selloff from a “dictatorship scare” to build position as structural outlook for Indonesia is positive due to the China-West divorce and the global energy transition.
We do not believe that NYCB is a canary in the coal mine for a new round of bank distress. The MidCap 400 Regional Bank Index’s subsequent 10% decline looks to us like a juicy opportunity for stockpickers who can separate the wheat from the chaff. Our Special Report is meant to assist them with their initial winnowing.
Poland’s inflation will stay elevated. And yet, its return to the European mainstream has improved its financial market outlook. Accordingly, we are recommending new trades on Polish equity, fixed income, and currency.
The latest round of earnings calls from the systemically important banks suggested that the expansion is still intact. Households are still flush and still spending and consumer and business delinquencies remain remarkably low.