Asia MicroStrategy:The Yield curveball

The likelihood of a potential fiscal stimulus in the US post recent election resultshas caused a global chase toward Cyclicals/Financials (funded at the expense ofQuality, Yield and Defensives) as the US yield curve (10Y less 2Y) steepenedfrom ~80bps at the end of Sep-16 to 122bps (by close of 22-Nov). This reflationrally seems to be well underway in Asia ex Japan, too.

Asian investors so far have played the reflation rally via Taiwan/China Insurance,Singapore/HK/Korean Banks; whilst shunning Yield plays (Korea/HK Utilities,Indo Telcos) and HK/Singapore REITs sectors. The table on the right panelhighlights the performance of some of these trades relative to their benchmarks.