野村证 券 亚洲经济研究报告 2010-9.pdf

See the important disclosures and analyst certifications on pages 24 this they argue occurs at GNI per capita levels of below USD3,000. But most previous studies that project future global demand for food underestimate the total population that falls under this line because they neglect income inequality, particularly in the world’s rapidly developing – and most populated – economies. Also often overlooked are the changes in diets taking place in countries such as China, India and Indonesia towards a higher calorie intake: it takes some 3kg of grain and about 16,000 litres of virtual water to produce just 1kg of meat. The supply side of the food equation is being constrained by low agricultural productivity gains and competing use of available land due to rising trends of urbanization and industrialization, while supply has also become more uncertain due to greater use of biofuels, global warming and increasing water scarcity. Feedback loops also seem to have become more powerful, there being at least some evidence of increasing mutual causation between energy prices and food prices, and that the 2007-08 food price surge was exacerbated by trade protectionism and market speculation. For all the supply and demand-side challenges, however, extreme predictions that the world will run out of food are over blown given the enormous potential for new investment in agriculture, especially in developing economies. The beauty of market forces is that there will always be a price that will encourage agricultural investment; the question is, how high might that be? Which countries stand to be affected most? The Nomura Food Vulnerability Index (NFVI) ranks the world’s 80 largest economies in terms of their exposure to a food price surge. NFVI identifies Bangladesh, Nigeria, Egypt and Sri Lanka as among the most vulnerable, while the least negatively affected and, potentially, net beneficiaries are New Zealand, Uruguay and Argentina. The NFVI is used to quantify the impact of the 2007-08 food price surge, by comparing the 25 most vulnerable and 25 least vulnerable economies. As theory suggests, the most vulnerable group experienced relatively weaker GDP growth, much higher CPI inflation, greater fiscal deterioration, higher policy rates and wider government bond spreads to US Treasuries. How can investors “play” this structural theme? In terms of fixed-income strategy, our strategists recommend using a combination of structured products – to buy a basket of agricultural commodities – and relative basket trades – in rates, FX and CDS spreads. They recommend paying 2-year interest rate swaps of the 10 countries with the highest exposure to food in their CPI basket against receiving the 10 with the lowest. The impact on FX is more clouded, but our strategists expect owning a basket of currencies selected from those with the lowest exposure to food in the CPI basket and most likely to experience an improvement in terms of trade against a basket of the opposite to be profitable. We use the NFVI in combination with a starting debt-to- GDP threshold to buy CDS protection on those sovereigns most likely to experience fiscal deterioration against those least likely to. Trades in the inflation-linked space are limited, but our strategists believe there is value in buying European inflation breakevens against US ones. In the equity space, the total market capitalisation of the food sector is tiny compared to that of, for example, financials or property. However, the investment universe may be larger than it appears. Our strategists suggest that investors should also consider companies involved in the shipping and storage of soft commodities, seed and fertilizer producers, and those that produce farm machinery, tractors and irrigation systems, as well as timber and other industrial soft commodities. 1 For the full report, see The coming surge in food prices, Nomura Global Economics and Strategy, September 2010. Nomura Global Economics 3 Asia Economic Weekly September 10, 2010 Asia   Feature Article Rob Subbaraman Feature Articles Taking stock of monetary policy We single out four economies, where the current monetary stance risks being too loose. Asian central banks seem to be shifting to a wait-and-see approach. Malaysia’s central bank, paused at its 2 September meeting, and this week the Bank of Korea unexpectedly paused. In recent weeks we have been removing rate hikes from our forecasts. We now expect: Malaysia’s central bank to stay on hold until Q1 2011; the Monetary Authority of Singapore to not alter its current policy stance in its semi-annual statement next month; and the Reserve Bank of India to hike on 16 September, but then pause until Q2 2011. We have pushed out the timing of the first rate hikes in the Philippines and Indonesia to November 2010 and January 2011, respectively. And for China, Korea and Thailand we judge that the risk is for central banks to raise rates by less than we are forecasting by year-end.。