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Carolyn Chan, Asia Income: The impact of fewer Chinese tourists to Hong Kong

I recently returned from a research trip to Hong Kong which reinforced our view that we should have low direct exposure to it within the Fund (currently about 5%). Meetings with several companies suggested that demand trends from mainland Chinese visitors to Hong Kong are changing, particularly for luxury spending.

The Occupy Central Protests at the end of September 2014 took over two months to be resolved and the disruption had a visibly negative impact on retail sales, especially for items such as gold and jewellery. Hopes for a recovery in 2015 have yet to materialise. A meeting with Langham Hospitality Trust, which owns three hotels in Hong Kong including The Langham Hotel in popular Tsim Tsa Tsui, revealed that occupancy rates have continued to fall and the average revenue per room has declined by 5-10% year-on-year so far in 2015.

Stephen Bailey, Macro-Thematic: Why we are now turning positive on the UK consumer

The outlook for UK consumer spending has improved significantly recently. The sharp fall in oil prices and the associated reduction in household energy costs has been a large contributory factor, as has food price disinflation. We have reassessed our view of the UK consumer in the context of a return to real wage growth and have initiated a new leisure & entertainment theme via three new stocks: Whitbread, Restaurant Group and Cineworld.

Figures released earlier this week showed that annual consumer price inflation fell to 0% in February, below the +0.1% expected, and is now flirting with deflationary territory at the lowest rate since the series began in 1989. Real wage growth is generally accepted to be back in positive territory and the employment rate for 16 to 64 year olds has risen to 73.3% (in the three months to January 2015), the highest since records began in 1971. A buoyant employment market is giving individuals increased opportunities and labour market mobility, which can only have a positive effect on consumer confidence.

Mark Williams, Asia Income: Oiling the wheels of growth

The oil price fall has been nothing if not dramatic, with Brent crude prices more than halving from a June 2014 peak of over US$110 per barrel to a recent trough below US$50. In times of rising oil prices, Asia’s status as an energy importer was often regarded as its Achilles heel. As this reverses the region has become one of the world’s biggest beneficiaries: Asia consumes one-third of the oil that the world produces, more than either North America or Europe, and China and Japan are the first and third largest country consumers respectively (source: Barclays). Effectively the fall in oil prices is a transfer of income from its producers to its consumers, and as the largest consumer, Asia is a proportionately high beneficiary.








John Husselbee: Nature or nurture, what makes a top fund manager?

When I meet a fund manager I am looking for five qualities which I have identified as vital over the years: intuition; patience; pragmatism; humility and attention to detail.

I am of course not the first to identify desirable characteristics in prospective fund managers or employees. Many multi-national companies now routinely use online psychometric/personality tests to screen for the type of individuals they are looking for. I have my reservations as the extent to which an individual’s psyche can be encapsulated within a multiple-choice questionnaire, which is one of the reasons I meet managers personally and make my own assessment.

Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

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Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.