Asia Pacific Media Coverage

Asia Pacific Media Coverage 13 October 2017 Asia Asset Management (October Issue): No plain sailing In AAM s October Issue, Dwyfor Evans, Head of Asia Pacific Macro Strategy at SSGM, shared his thoughts on how the global landscape is shaping up, particularly in the Asia Pacific region. Evans commented that we remain close to the beginning of the interest rate cycle, but with minimal data support for an acceleration. On a forward looking basis, SSGM expects a gradual shift away from stimulus in the Eurozone, but policymakers continue to suggest some scepticism on rates, given the policy tightening inbuilt to currency appreciation. o Evans highlighted two potential winners that may outperform against the US dollar going forward: G-10 currencies, where interest rate and policy expectations are firming and currencies, where there is a natural yield pick-up. o On equity markets, Evans noted that the fundamental background remains generally supportive: growth is positive but not excessive, with inflation evident but still below target. The Canberra Times: ASX rallies to a 3 1/2-month high The article noted that Australian stock trading started on a muted note on Thursday after a lacklustre US session where investors parsed the latest meeting minutes from the Fed for clues regarding interest rate and inflation trends while they wait for some major bank earnings at the end of this week. Dwyfor Evans, Head of Asia Pacific Macro Strategy at SSGM, commented, US inflation has shifted towards a more solid basis for an interest rate hike in December With data support, we believe the Federal Reserve has a good chance to follow through with its plans, which is much more aggressive than the market had priced. Wall Street Journal: Stock Markets Extend Gains The article noted that the Hang Seng Index reversed early losses to end the morning session up 0.3% on Thursday, as buying picked up in financials and property stocks. Ben Luk, Global Macro Strategist at SSGM, commented that abundant liquidity in the Hong Kong market could help local banks keep interest rates low, even if the Fed raises rates later this year, while low funding costs could help support property developers. BusinessTimes.com.sg: MAS seen edging toward tightening policy BusinessTimes.com.sg picked up on Bloomberg s survey of economists views on the latest developments from Singapore s central bank son Friday. The article quoted Ng Kheng Siang, Asia- Pacific Head of Fixed Income at SSGA, as saying that the prospect of further tightening by the Fed next year may prompt the MAS to slowly move in that direction, though that will also depend on the Singapore dollar s performance against the basket. Ng was also added, As of now, there isn't a strong need for the MAS to alter its monetary policy stance. That kind of policy has served the economy well. STATE STREET CORPORATION 1

Simplywall.st: Should You Be Tempted To Buy State Street Corporation (STT) Because Of Its PE Ratio? The article noted that State Street trades with a trailing P/E of 18.1x, which is lower than the industry average of 18.8x. It means that investors are paying less than they should for each dollar of STT s earnings. Therefore, STT is an under-priced stock. Hexun.com: Upwards momentum of Japanese stocks seems unstoppable Wallstreetcn: Japanese stocks hit highest level since 1996 what are the reasons behind the rise? Yahoo TW: Japanese stocks hit highest level in 20 years, Abe likely to emerge as the victor in October s snap election PChome: Japanese stocks hit highest level in 20 years, Abe likely to emerge as the victor in October s snap elections The articles picked up Bloomberg s report which noted that on Wednesday, Nikkei 225 Stock Average rose to its highest level since 1996, reflecting investors expectation that Japan Inc. will boost annual profit targets during the upcoming earnings season as well as an anticipated victory for the Abe administration in the upcoming general election. Ben Luk commented, We have a pretty positive Japanese equity story, Japan has the highest earnings growth potential because earnings momentum is also highest right now. Earnings are there, valuation is a great support and now you re seeing a political backdrop which is still supportive of growth. Mingpao: ETF Connect will launch after a clear timetable for establishing the investor identification framework is developed The article noted that ETFs will be included in the Stock Connect program when there is a clear timetable for establishing the investor identification framework. It mentioned that Hong Kong currently has 150 ETF products, but the trading volume is not high. The three most active ETFs include the Tracker Fund of Hong Kong. Campaignjapan.com: If there is corporate hypocrisy, high-impact marketing may backfire A Global Marketing Brief column explained that State Street has agreed to pay USD 5 million in response to claims that it paid undeservedly low salaries to female and African American employees. It noted that in spring this year, State Street installed the Fearless Girl statue on Wall Street to criticize male-dominated companies. The statue won prizes at the Cannes Lions awards and promoted State Street as a firm that actively encourages diversity. Daily Sun New York Online: Wage discrimination found at firm behind Fearless Girl statue; where is the strength of women? State Street to pay USD 5 million A translated New York Times report originally published on 6 October said that State Street, which installed the Fearless Girl statue in Manhattan as an expression of the strength of women, has revealed that it will pay approximately USD 5 million to settle a claim it paid employees differently based on gender and race. State Street paid 305 female employees less than their male colleagues in the same positions, and paid 15 African American executives less than their white counterparts. The US Department of Labor launched an ongoing investigation into the firm since the second half of 2012. STATE STREET CORPORATION 2

Full articles Asia Asset Management (Oct Issue) 2017-10-13 No plain sailing http://www.asiaasset.com/aam/2017-10/1017_mw.aspx For this edition of Marketwatch, Jack McIntyre, portfolio manager and senior research analyst at Brandywine Global, and Dwyfor Evans, head of Asia Pacific macro strategy at State Street Global Markets, share their thoughts on how the global landscape is shaping up, particularly in the Asia Pacific region. Asia Asset Management: Where are we in the interest rate cycle looking ahead to the next six-to-nine months? Dwyfor Evans: We remain close to the beginning of the cycle, but with minimal data support for an acceleration. Central bank rate functions tend to be tied to inflation targets, and the story through most of the developed world is that realised inflation remains benign and below target despite a pick-up in other real sector indicators such as labour market strength, for one. Markets have adjusted their expectations and central bankers have done and said little to dispel this, with a very slow and gradualist approach expected to policy and rate normalisation in the US, the eurozone and the UK, and the continuation of stimulus in Japan. On a forward looking basis, we expect to get a gradualist shift away from stimulus in the eurozone, but policymakers continue to suggest some scepticism on rates, given the policy tightening inbuilt to currency appreciation. The Federal Reserve (Fed) is a little more complex given potential personnel changes, but even as the most advanced in the normalisation process, it is notable that a largely dovish monetary committee continues to shy away from tightening. STATE STREET CORPORATION 3

This has the potential for change in 2018 if a more hawkish Fed takes the mantle, but markets give that a low probability at this point. Jack McIntyre: In order to answer a question on the interest-rate cycle, we need to break down our answer into two subsets: developed versus emerging market rates, and short- or long-term rates. Developed market rates: Given the backdrop of non-inflationary global growth, developed market central banks don t have to be in a hurry to normalise policy rates. First of all, I don t think any developed market central bank should be viewed through a hawkish lens; they are simply less dovish than they were a year ago, both in terms of actions and rhetoric. Secondly, the G-3 central banks will remain economic-data dependent including the Fed. The last thing the Fed wants to do is surprise markets, so Chairwoman (Janet) Yellen will take great care in choosing her words carefully. US labour market conditions continue to tighten and yet inflation still is not building. The lack of inflationary pressure will likely keep rate increases on a shallow trajectory. A lack of clarity regarding the future of Fed leadership should also bar any aggressive tightening. US President Donald Trump will either reappoint Ms. Yellen or someone made from the same mould having more core dovish tendencies. The same holds true for the Bank of Japan (BoJ) and the European Central Bank (ECB) both face tighter labour markets with the absence of inflation. Markets are still waiting for Japanese data that will support the Bank of Japan s less dovish rhetoric; I think markets will be forced to wait for a long time. Generally, I believe the Fed will be one of the only developed market central banks to increase policy rates [in this six-to-nine-month period]. Emerging market rates: Inflation in most of the emerging world has rolled over, but real rates remain significantly higher relative to developed markets, meaning inflation expectations remain elevated in the emerging economies. STATE STREET CORPORATION 4

While developed market central banks are pondering normalisation, we think emerging market central banks have plenty of room to continue cutting rates. The combination of undervalued currencies and monetary easing should create a positive growth feedback cycle for emerging markets attracting more capital, both portfolio and foreign direct investment, which will further strengthen their currencies, and put additional pressure on inflation to move lower. The result should be more aggressive rate cuts by emerging market central banks, and should thus create the positive feedback loop. We ve recently seen the Reserve Bank of India and the Banco do Brasil cut their policy rates, and expect these central banks, along with their peers, to continue lowering short-term rates over the next six-to-nine months. Which currencies do you think can continue to outperform against the US dollar in the year ahead? Evans: The picture painted by only modest rate hiking expectations allude to an environment where yield and carry-strategies may again outperform, and this indicates two potential winners going forward: G-10 currencies where interest rate and policy expectations are firming, and currencies where there is a natural yield pick-up. The former grouping includes markets where central banks could surprise with a more hawkish stance, for example, the ECB and the Bank of Canada, and thus the euro and the Canadian dollar could continue to make gains against the US dollar. The latter [potential winner group] has a signal for continued strong performance by higher-yielding emerging market currencies, particularly in an environment where volatility remains well contained and carry-to-vol returns are attractive for example, the Indian rupee and Indonesian rupiah. STATE STREET CORPORATION 5

One counter story to this is a potential hawkish Fed bias next year; this could trigger US dollar interest if the bond markets have under-priced Fed expectations, but that is a medium-term story and the yield chasing bias looks quite entrenched at this point. McIntyre: The US dollar is finally coming down from its lofty valuations after a multi-year bull market. Over the last couple of years, the dollar was universally strong against the majority of global currencies and more recently, surged immediately following the US presidential election. The US economy has been the relative strong man over the last few years, and now we are starting to see better growth elsewhere in the world. Therefore, we think it is a rich environment in finding currencies that have the potential to outperform the US dollar. We think the currencies of emerging markets and commodity-linked economies stand to benefit from a global environment of non-inflationary global growth. These currencies are higher yielding and have generally lagged the broader currency market since 2011; they are poised to revert to their respective means over a three-to-five-year cycle. We believe a combination of higher real rates, stable commodity prices, lower inflation, stronger economic growth, better domestic demand, and still undervalued currencies, will help attract foreign capital and improve the manufacturing and industrial sectors to thus improve trade imbalances and current account deficits. Emerging market currency valuations should eventually reflect these improvements. The Indonesian rupiah, Brazilian real, Indian rupee, South African rand, Malaysian ringgit, and Turkish lira are just some of the currencies that could benefit from the mean-reverting cycle. How do you see equity markets shaping up in the next six months to a year? STATE STREET CORPORATION 6

Evans: The fundamental background remains generally supportive: growth is positive but not excessive, with inflation evident but still below target. The view on central banks ranges from gradual tightening (the Fed), eventual but-not-imminent tapering (ECB) and continued stimulus (BoJ). In short, normalisation is proceeding, but slowly, matching developments in demand and prices. All this should remain favourable for equities irrespective of continued geopolitical concerns. The combination of volatility, risk concentration and correlations also alludes to relatively low drawdown risk for global equities, while earnings momentum remains strong analyst upgrades globally outnumber downgrades. Moreover, measures of valuation still show that stocks are more attractive than bonds. McIntyre: The global economy s current non-inflationary growth environment should benefit risk assets in general, including global equities. As an asset class, equities are still under-owned in the majority of investment portfolios. For example, the baby boomers have been burned on multiple occasions, in the late 1990s and mid-2000s, and have yet to fully load up on the stock portion of their asset allocation. Anecdotally, financial news viewership is still off its peak, and I think this metric reflects the lack of overenthusiasm regarding equities. This will change as stock prices continue to move higher, which, historically, brings in capital off the sidelines. In the US, value has continued to underperform the broader market. Defensive stocks in the US have outperformed cyclical sectors, but we think this should change as US gross domestic product growth improves after an underwhelming first quarter. Thus far, a weaker dollar has helped US corporate profits, as reflected by a strong second-quarter earnings season. However, dollar valuations remain rich, making equity markets outside the US more attractive. Additionally, better economic growth outside the US should help international equities. Unsurprisingly, our views on currencies correlate with international equity markets that may offer compelling value. Countries outside the eurozone, like Poland, the UK, and the Scandinavian nations, have presented opportunities for global equity investors. As crude oil prices continue to recover, the energy sector across countries and regions may also present value over the next year. From the macro standpoint, which economies do you think are likely to give us cause for concern as we go forward? Evans: Fears over China are always going to be highlighted given concerns over debt sustainability, and while we have legitimate worries over longer-term dynamics for China, many of the structural imbalances look contained at this point. STATE STREET CORPORATION 7

Looking at the region on a North Asia versus The Association of Southeast Asian Nations (ASEAN) basis, some of the fears over South Korea clearly emanate from geopolitical (concerns), but the macro data is picking up, by dint of resurgent aggregate demand. Nowhere in the region is a frontline concern at this point, and capital flows to the region remain robust as a reflection of this, but we remain watchful of swings in commodity prices and external demand conditions as a potential area of weakness for regional markets. McIntyre: In the event the US turns more isolationist, we could see China step in and strengthen existing trade relationships and pursue new ones. If the Chinese economy surprises to the downside, that weakness would extend to commodity markets, economies tied to natural resource exports, emerging markets, and global trade. We continually monitor the factors that could cause an economic slowdown in China credit growth, real estate prices, and consumption and believe the Chinese economy should continue to post gross domestic product growth in line with expectations. How are Asian bond markets performing at the moment compared to the global bond market; where are the bright spots, and where do you see the best opportunities arising? Evans: Two factors stand out for regional bonds: inflation trends and yield pick-up, and both look favourable. Inflation threats within the region are low, and previously high-inflation markets such as India and Indonesia are running historically low levels of inflation given strong and stable currencies and more modest commodity prices. Chinese prices are well contained and online prices for South Korea are running at less than 1%, which again dissuades the Bank of Korea from having to lift rates. Part of the price action is cyclical with other asset markets: the move towards risk more broadly is supportive for Asian currencies. As Asian currencies strengthen, then they become disinflationary in terms of imports. This limits exogenous price pressures, and in many instances, domestic demand is unable to offset this disinflationary backdrop. Central banks are thus reluctant to tighten policy, which augurs well for regional bonds, and the desire for yield pick-up relative to low/zero/negative developed markets yields attracts global capital to local-currency bonds. If this is unhedged, then the weight of capital into the asset class adds another fillip to local currencies and the disinflation cycles begins anew. There is little to suggest that this cycle will be broken any time soon. STATE STREET CORPORATION 8

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The Canberra Times 2017-10-12 ASX rallies to a 3 1/2-month high http://www.canberratimes.com.au/business/markets/asx-rallies-to-a-312month-high-20171012-gyzei5.html Australian stocks advanced on Thursday in a broad-based rally that lifted the market to levels last recorded at the end of June. The S&P/ASX 200 index rose 22 points, or 0.4 per cent, to 5794, while the All Ordinaries index climbed 23 points, or 0.4 per cent, to 5864. Trading started on a muted note on Thursday after a lacklustre US session where investors parsed the latest meeting minutes from the US Federal Reserve for clues to interest rate and inflation trends while they wait for some major bank earnings at the end of this week. "US inflation has shifted towards a more solid basis for an interest rate hike in December," said Dwyfor Evans, head of Asia Pacific Macro Strategy at State Street Global Markets. "With data support, we believe the Federal Reserve has a good chance to follow through with its plans, which is much more aggressive than the market had priced," Mr Evans said. Still, the US dollar hit a two-week low versus a basket of currencies on Thursday after the minutes suggested some central bankers are still concerned about the possibility of persistently low inflation. The Australian dollar bounced back to US78.17. Sentiment improved thought the trading day in Australia, however, with financials helping the advance as NAB rose 0.9 per cent, Westpac rose 0.6 per cent, and ANZ climbed 0.5 per cent. CBA edged up 0.1 per cent. Bank of Queensland climbed 1.2 per cent after the lender declared a special dividend of 8 per share and reported annual cash earnings of $378 million for the year ended August 31, beating the consensus forecast of $361 million. Bluechips that gained ground included Wesfarmers, up 1.3 per cent, and CSL, which rose 0.9 per cent. Utilities performed strongly, with AGL Energy up 2.3 per cent and Origin Energy, higher by 1.4 per cent. Medibank shares climbed 1.7 per cent following the news that Health Minister Greg Hunt will unveil a 14-point plan for reforming the health insurance sector, in the hope this will reverse the exodus of members from funds. Bellamy's shares jumped 4.6 per cent, moving higher for the fourth straight day after the infant formula brand upgraded its full-year guidance. Miners had a bad day on Thursday, however, with BHP trading down 1.6 per cent, Rio Tinto losing 1.4 per cent, Fortescue Metals down 1.8 per cent and South32, which was also downgraded to neutral at Credit Suisse, down 0.9 per cent. Chinese iron ore futures slid to their weakest level in more than three months on Thursday, with investors fretting over demand ahead of steel production cuts during the winter as China battles smog. STATE STREET CORPORATION 12

Whitehaven Coal lost 2.8 per cent after it said that it sold its thermal coal for an average $91 per tonne over the quarter, a 3.2 percent discount on the quoted average price of $94 per tonne. The firm is trading at around five-year highs on the back of strong thermal coal prices. Stockwatch Transurban shares rose 0.9 per cent after the toll road operator collected $567 million in toll revenue in the three months to the end of September - up 10.5 per cent on a year earlier. Average daily traffic lifted by 1.1 per cent. Transurban also said it is evaluating the NSW's government's proposed sale of a 51 per cent stake in Sydney Motorway Corporation, which is responsible for delivering the WestConnex toll road project. "Overall it was a strong set of numbers, with proportionate revenue of $589 million, slightly higher versus our forecast of $581 million and up 11 per cent on a comparable and proportionate basis. The Melbourne, Sydney and Brisbane concessions outperformed our numbers modestly while the US concessions were slightly softer as a result of lower average tolls but nonetheless grew strongly," RBC's Paul Johnston said. Aussie The Australian dollar is set to fall to US70 cents, from its current level of around US78, Paul Dales at Capital Economics believes. The financial markets have gone too far by pricing in a strong possibility that the Reserve Bank of Australia will raise interest rates twice next year, from 1.5 per cent to 2.0 per cent, he said. Economic conditions won't be good enough to warrant higher rates and high household debt will force the RBA to be cautious. "The resulting fall in interest rate expectations would remove some support for the Australian dollar. If we are also right in expecting interest rate expectations in the US to rise and the iron ore price to fall, then a perfect storm could weaken the Australian dollar from US78 now to around US70 next year," Mr Dales added. Iron ore Chinese iron ore futures slid to their weakest level in more than three months on Thursday, underlining investor worries over demand ahead of steel production cuts during the winter as China battles smog. Spot iron ore prices have fallen along with futures, with the benchmark spot price slipping below $60 a tonne this week for the first time since June. The most-active iron ore contract for January delivery on the Dalian Commodity Exchange fell to 427.50 yuan ($65) a tonne, its weakest since June 27. It was trading at 430 yuan, down 2.3 percent. Steel plants in China's northern cities, including in top steelmaking province Hebei, are scheduled to slash output by up to half for four months from mid-november as part of Beijing's campaign against air pollution. Asia bull run Asian stocks are hovering near decade highs, with MSCI's broadest index of Asia-Pacific shares outside Japan adding 0.15 per cent to trade within a hair of the decade high it touched in the previous session. Japan's Nikkei was up 0.4 per cent after brushing its highest since December 1996. South Korea's KOSPI added 0.1 per cent to mark a fresh record high. Asia took its cues from Wall Street, where major indexes rose to yet another set of record closing highs following a report that a market-friendly candidate was being pushed as successor to Janet Yellen at the helm of the Fed. Global equities also now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride to reach those record tops. NZ confidence STATE STREET CORPORATION 13

New Zealand consumer confidence dropped in October from a three-year high although it remains at its third highest level for that period. The ANZ-Roy Morgan consumer confidence index fell four points to 126.2 in October, with the current conditions index dropping 3.3 points to 124 and the future conditions measure down 3.8 points to 127.8. "History suggests consumers should be feeling a little spooked," said ANZ senior economist Sharon Zollner. "A sharply weaker housing market typically sees consumers' appetite to spend drop in tandem. Together with the uncertainty over government policy, one might think that consumers would be in a slightly grave mood." STATE STREET CORPORATION 14

Wall Street Journal 2017-10-12 Stock Markets Extend Gains Asian share markets extended gains on Thursday, taking cues from fresh overnight records set by key U.S. indexes and a robust earnings outlook for the region. Strong earnings growth has supported major stock indexes this year, and some analysts said they expect third-quarter results to continue to outperform expectations. What you are seeing in Asia is that there is some good recovery in earnings, said Frank Benzimra, head of Asia equity strategy at Société Générale, following stagnant earnings growth between 2011 and 2016. Singapore s Straits Times Index was up 0.7%, while Australia s S&P/ASX 200 added 0.3%, and Taiwan s Taiex rose 0.5%. The broad equity gains also come as the Federal Reserve signaled its confidence that the U.S. economy was strong enough to support further rate increases. The Fed minutes indicated a positive outlook on the U.S. economy. That augurs well for global growth, said Alex Wijaya, head of Southeast Asia for Axicorp Financial Services. Minutes from the Fed s latest policy meeting, released Wednesday, showed most officials expect the central bank to raise short-term interest rates again this year. That helped alleviate signs of rate uncertainty to a certain extent in the market, said Mr. Wijaya. Japan s Nikkei Stock Average gained 0.4% in afternoon trading, building on Wednesday s rise to a 21- year closing high. The market s strength came despite overnight appreciation in the yen, which usually weighs on export-related stocks. The U.S. dollar last bought 112.36, compared with 112.48 at the end of Wednesday s trade in New York. Technology shares led gains in Japan, with SoftBank rising 4% and messaging operator Line Corp. adding 1.2%. But energy stocks weakened, with Inpex falling 1.7% and Japan Petroleum shedding 0.8% following a drop in oil prices. U.S. crude prices fell as data from the American Petroleum Institute showed oil inventories rose last week. Oil futures in Asia were down about 0.5% in early afternoon trade. Elsewhere in the region, KoreaaboKospi added 0.4% to Wednesday s record close, while stocks in New Zealand inched up 0.1% to an eighth straight closing record. The Shanghai Composite Index bucked broad gains the region, falling 0.2% as traders await new policy initiatives from the Communist Party Congress, which starts next week. STATE STREET CORPORATION 15

In Hong Kong, the Hang Seng Index reversed early losses to end the morning session up 0.3%, as buying picked up in financials and property stocks. Abundant liquidity in the Hong Kong market could help local banks keep interest rates low, even if the Fed raises rates later this year, said Ben Luk, global macro strategist at State Street. Low funding costs could help support property developers, he said. Still, with many Asian markets at record or multidecade highs, concerns are growing that a major pull back could be on the cards. However, Société Générale s Mr. Benzimra said the factors that have been driving Asian shares higher remain. e factors that have been drivalued,alu said. Kevin Kingsbury contributed to this article. Write to Kenan Machado at kenan.machado@wsj.com STATE STREET CORPORATION 16

BusinessTimes.com.sg 2017-10-13 MAS seen edging toward tightening policy [SINGAPORE] Singapore's central bank is widely seen sticking to a neutral stance on Friday, but it may be moving closer to tightening policy as the economy continues to strengthen. All but one of the 23 economists surveyed by Bloomberg predict the Monetary Authority of Singapore, which uses the exchange rate rather than interest rates as its main tool, will keep its policy stance where it is: seeking no appreciation in the currency against a trading basket. Less clear is whether the MAS will signal it's ready to tighten next year. More than half of the economists in the survey expect that forward-looking language used in the previous two policy statements - that the neutral stance is appropriate for an "extended period of time" - will be dropped. Eight predict some tightening at the next scheduled policy decision in April. "The market is toying with the idea that the MAS may move," said Adam McCabe, head of Asian fixed income in Singapore at Aberdeen Standard Investments. "At this point in time, there is no aggressive reason to tighten, even inflation is not a problem." Singapore's growth outlook is brightening amid a resurgence in global trade, putting the prospect of policy tightening back on the table. The MAS has been in easing mode since 2015 to help bolster the export-led economy in the face of declining consumer prices. Prime Minister Lee Hsien Loong said in August that Singapore will probably grow 2.5 per cent this year, which would be the best since 2014. While inflation has picked up this year, price pressures are uneven, giving the central bank room to hold off on tightening just yet. The domestic economy also remains weak in the face of job cuts and rising debt. Employment contracted in the last two quarters. Singapore's recovery is "lopsided and clustered in older sectors of the economy that, on a trend basis, are shrinking," said Vaninder Singh, a Singapore-based economist at NatWest Markets, part of Royal Bank of Scotland Group Plc. Core inflation, the central bank's preferred measure of prices, will remain near the middle of the MAS's forecast range of 1 per cent to 2 per cent, with diminishing wage pressures, he said. "Calling for a neutral slope for this week's decision is easy," said Singh, who expects the central bank to retain its policy settings through at least April. "What has been trickier for the market and analysts to assess is the forward guidance." A tightening move would mean the MAS seeks a stronger trade-weighted local dollar. The Singapore dollar's nominal effective exchange rate is already approaching the highest level it reached this year in July. The currency has strengthened more than 6 per cent against the US dollar this year, among the top performers in the region. FED HIKES If the MAS drops its forward-looking language, it would signal a return to a tightening path as soon as in April, according to firms including Macquarie Bank Ltd. and United Overseas Bank Ltd. STATE STREET CORPORATION 17

The prospect of further tightening by the US Federal Reserve next year may prompt the MAS to "slowly move in that direction," though that will also depend on the Singapore dollar's performance against the basket, said Ng Kheng Siang, Asia-Pacific head of fixed income at State Street Global Advisors. "As of now, there isn't a strong need for the MAS to alter its monetary policy stance," Mr Ng, who is based in the city-state, said. "That kind of policy has served the economy well." The central bank eased policy twice in 2015 and again in April last year, when it shifted to a zero appreciation stance. Policy makers guide the local dollar against a basket of its counterparts and adjust the pace of appreciation or depreciation by changing the slope, width and center of a currency band. Chua Hak Bin, a Singapore-based senior economist with Maybank Kim Eng Research - and the only analyst surveyed by Bloomberg who's predicting a tightening this week - said the MAS has opted for a neutral stance in a downturn or recession, and that's no longer the economic environment. "A neutral stance is no longer appropriate, given the strong growth dynamics and the risk that inflation could inch forward going into next year," Mr Chua said. The Singapore dollar will probably rally more than 0.5 per cent should the MAS act, he said. BLOOMBERG STATE STREET CORPORATION 18

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Simplywall.st 2017-10-12 Should You Be Tempted To Buy State Street Corporation (STT) Because Of Its PE Ratio? https://simplywall.st/news/2017/10/13/should-you-be-tempted-to-buy-state-street-corporation-stt-because-ofits-pe-ratio/ State Street Corporation (NYSE:STT) trades with a trailing P/E of 18.1x, which is lower than the industry average of 18.8x. Although some investors may jump to the conclusion that this is a great buying opportunity, understanding the assumptions behind the P/E ratio might change your mind. Today, I will deconstruct the P/E ratio and highlight what you need to be careful of when using the P/E ratio. Breaking down the Price-Earnings ratio NYSE:STT PE PEG Gauge Oct 13th 17 The P/E ratio is one of many ratios used in relative valuation. By comparing a stock s price per share to its earnings per share, we are able to see how much investors are paying for each dollar of the company s earnings. Formula Price-Earnings Ratio = Price per share Earnings per share P/E Calculation for STT Price per share = 99.29 Earnings per share = 5.478 Price-Earnings Ratio = 99.29 5.478 = 18.1x STATE STREET CORPORATION 20

The P/E ratio itself doesn t tell you a lot; however, it becomes very insightful when you compare it with other similar companies. Ideally, we want to compare the stock s P/E ratio to the average of companies that have similar characteristics as STT, such as size and country of operation. One way of gathering a peer group is to use firms in the same industry, which is what I ll do. Since similar companies should technically have similar P/E ratios, we can very quickly come to some conclusions about the stock if the ratios differ. Since STT s P/E of 18.1x is lower than its industry peers (18.8x), it means that investors are paying less than they should for each dollar of STT s earnings. Therefore, according to this analysis, STT is an under-priced stock. Assumptions to be aware of While our conclusion might prompt you to buy STT immediately, there are two important assumptions you should be aware of. The first is that our similar companies are actually similar to STT. If the companies aren t similar, the difference in P/E might be a result of other factors. For example, if you are inadvertently comparing lower risk firms with STT, then STT s P/E would naturally be lower than its peers, since investors would value those with lower risk with a higher price. The other possibility is if you were accidentally comparing higher growth firms with STT. In this case, STT s P/E would be lower since investors would also reward its peers higher growth with a higher price. The second assumption that must hold true is that the stocks we are comparing STT to are fairly valued by the market. If this assumption is violated, STT s P/E may be lower than its peers because its peers are actually overvalued by investors. NYSE:STT Future Profit Oct 13th 17 What this means for you: Are you a shareholder? You may have already conducted fundamental analysis on the stock as a shareholder, so its current undervaluation could signal a good buying opportunity to increase your exposure to STT. Now that you understand the ins and outs of the PE metric, you should know to bear in mind its limitations before you make an investment decision. STATE STREET CORPORATION 21

Are you a potential investor? If STT has been on your watch list for a while, it is best you also consider its intrinsic valuation. Looking at PE on its own will not give you the full picture of the stock as an investment, so I suggest you should also look at other relative valuation metrics like EV/EBITDA or PEG. PE is one aspect of your portfolio construction to consider when holding or entering into a stock. But it is certainly not the only factor. Take a look at our most recent infographic report on State Street for a more indepth analysis of the stock to help you make a well-informed investment decision. Since we know a limitation of PE is it doesn t properly account for growth, you can use our free platform to see my list of stocks with a high growth potential and see if their PE is still reasonable. STATE STREET CORPORATION 22

Hexun.com 2017-10-12 图解投资者无视造假丑闻日股涨势已势不可挡! http://forex.hexun.com/2017-10-12/191188976.html 环球外汇 10 月 12 日讯 -- 企业丑闻可能会伤及日本曾经受尊重的商业声誉, 但至少有一个市场不会受到影响, 那就是股票市场 在继周三 (10 月 11 日 ) 日经 225 指数创下 1996 年 12 月以来收盘新高后, 周四日股续涨再次刷新纪录, 日经 225 指数收盘上涨 70.73 点, 涨幅 0.34%, 报 20952.00 点 而日本第三大钢铁企业神户制钢数据造假丑闻不断发酵, 股价两日内断崖式跌去 36%, 这也伤及日本引以自豪 的制造业的信誉, 股市似乎没有受到影响 屹立不倒的背后是投资者乐观的预期 : 企业将在即将到来的财报季 中提高年度利润目标以及安倍将顺利赢得大选 券商 Okasan 的首席策略师 Yoshihiro Ito 接受媒体采访时表示, 日经指数可以上涨到 21000 点, 甚至是 22000 点, 不过前提是安倍晋三赢得大选 安倍晋三必须赢得大选, 否则外国投资者不会相信日经指数会继续 走高 彭博数据显示,9 月的最后一周国外投资者向日本股市投入了 2018 亿日元 (187 亿美元 ), 自 7 月份以来首次成 为净买家, 因为预期 10 月下旬开始的财报季强劲的盈利增长 道富环球全球市场的全球宏观策略师 Ben Luk 也认为, 日本股票市场的情况积极正面 日本的盈利增长潜力最大, 现在的盈利势头也是最高的 收益摆在那里, 估值是一个很大的支持, 而且现在的政治环境也仍然支持增长 分析人士预测, 安倍晋三有望连任首相一职, 继续执行安倍经济学, 并在年底前编制规模约 2 万亿日元的新经济刺激方案 不过投资者应警惕回调 技术面上看, 现在日经 225 指数已经超越了斐波纳契回调线中关键的 38.2% 水平线, 下一个关口就是 50% 如果按照周三的收盘价计算, 就是 22,981.49 点 STATE STREET CORPORATION 23

Wallstreetcn 2017-10-12 继续刷新 1996 以来新高日本股市凭什么这么牛? Japanese stocks hit highest record since 1996, what are the reasons behind the rise? https://wallstreetcn.com/articles/3034617 摘要 : 在昨日创下二十一年以来最高点后, 周四日经指数继续上涨 分析认为, 日经指数可以上涨到 21000 点, 甚至是 22000 点, 不过前提是安倍晋三赢得大选 * 本文来自华尔街见闻 ( 微信 ID:wallstreetcn), 作者方凌 更多精彩资讯请登陆 wallstreetcn.com, 或下载 华尔街见闻 APP * 日本股市不断冲高的脚步还在继续 在昨日创下 1996 年末以来最高点之后, 日本股市今日继续上涨 周四, 日经 225 数开盘上涨 0.26%, 报 20936.50 点, 截止发稿已经上涨至 20952 点 券商 Okasan 的首席策略师 Yoshihiro Ito 接受媒体采访时就认为, 日经指数可以上涨到 21000 点, 甚至是 22000 点, 不过前提是安倍晋三赢得大选 安倍晋三必须赢得大选, 否则外国投资者不会相信日经指数会继续走高 道富环球全球市场的全球宏观策略师 Ben Luk 也认为, 日本股票市场的情况积极正面 日本的盈利增长潜力最大, 现在的盈利势头也是最高的 收益摆在那里, 估值是一个很大的支持, 而且现在的 政治环境也仍然支持增长 日本 GDP 已经连续 6 个季度扩张, 成为十一年以来最长的扩张期 IMF 周二上调了对日本的经济增长预期, 将 2017 年 GDP 增速从 1.3% 上调至 1.5%;2018 年 GDP 增速从 0.6% 上调至 0.7% 此外, 不久前公布的三季度日本制造业信心指数创下十年以来最高水平 ; 日本 9 月制造业 PMI 数据也创下四个 月新高, 连续 13 个月处于扩张区间 野村证券首席策略师 Hisao Matsuura 表示 企业盈利已经上涨至最佳水平, 安倍经济学对此也有一些贡献 10 月 22 日, 日本即将举行众议院选举, 分析人士预测, 安倍晋三有望连任首相一职, 继续执行安倍经济学, 并在年底前编制规模约 2 万亿日元的新经济刺激方案 不过, 也有投资者表示应该警惕回调 现在日经 225 指数已经超越了斐波纳契回调线中关键的 38.2% 水平线, 下一个关口就是 50% 如果按照周三 的收盘价计算, 就是 22,981.49 点 STATE STREET CORPORATION 24

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Yahoo TW 2017-10-12 日股創 20 年高投資人樂觀預期安倍順利過關 https://tw.stock.yahoo.com/news_content/name/%e6%97%a5%e8%82%a1%e5%89%b520%e5%b9%b4% E9%AB%98- %E6%8A%95%E8%B3%87%E4%BA%BA%E9%A0%90%E6%9C%9F%E6%97%A5%E4%BC%81- %E5%AE%89%E5%80%8D%E5%9D%87%E7%B9%B3%E5%87%BA%E6%BC%82%E4%BA%AE%E6%8 8%90%E7%B8%BE%E5%96%AE-092122144.html 日本企業的醜聞可能衝擊產業形象及信譽, 但至少有一項如今並未受到打擊 - 公司股價 據 彭博 報導, 日經 225 指數周三創下 1996 年 12 月以來的新高, 即使神戶製鋼兩天大跌 36%, 也未受到 拖累 再前 1 天, 東證指數也衝上 10 年的高點 周四, 投資人的樂觀情緒依然持續, 日經指數再漲 0.4%, 收 20954.72 點, 直逼 21000 關卡 東證指數漲 0.2%, 至 1700.13 點, 一度觸及 2007 年 7 月以來的高點 市場大漲反映出投資人的預期, 包括日本企業的獲利可望上升, 以及安倍政府有望在選舉中獲勝 而全球股市 的普漲, 也為日股帶來一片良好的氛圍 Okayan Online Securities Co. 在東京的首席策略師 Yoshihiro Ito 表示, 安倍必須大勝, 外國投資人的信心才 會得到證實, 而日經指數也將衝向 21000-22000 點 另外, 也要回到經濟, 企業必須有更好的獲利成績 外資在 9 月的最後一周, 共投入 2018 億日元 (18 億美元 ) 進日本股市, 是今年 7 月以來, 首次的淨流入 企 業財報預期自 10 月下旬開始, 外界預期將有強勁的獲利成長 State Street Global Markets 全球宏觀策略師 Ben Luk 指出, 他們對日股信心十足, 日本有最高的獲利成長 潛力, 獲利的動能如今也是最高的, 當前政治的發展, 也傾向支持繼續增長 投資人心態相對仍謹慎, 日股回升至 1996 年底的水準, 相較之下, 標普 500 指數在這 20 年漲了 243%, 這 段期間, 全球主要市場中, 只有義大利股市表現得比東京股市差 Ito 認為, 日元的進一步疲軟, 對股市持續反彈也至關重要 現在畢竟已經到相對高點, 如果缺少進一步支持, 很難有所突破 STATE STREET CORPORATION 26

PChome 2017-10-12 日股創 20 年高投資人樂觀預期安倍順利過關 http://news.pchome.com.tw/finance/cnyes/20171012/index-15078000828517809003.html 日本企業的醜聞可能衝擊產業形象及信譽, 但至少有一項如今並未受到打擊 - 公司股價 據 彭博 報導, 日經 225 指數周三創下 1996 年 12 月以來的新高, 即使神戶製鋼兩天大跌 36%, 也未受到拖累 再前 1 天, 東證指數也衝上 10 年的高點 周四, 投資人的樂觀情緒依然持續, 日經指數再漲 0.4%, 收 20954.72 點, 直逼 21000 關卡 東證指數漲 0.2%, 至 1700.13 點, 一度觸及 2007 年 7 月以來的高點 市場大漲反映出投資人的預期, 包括日本企業的獲利可望上升, 以及安倍政府有望在選舉中獲勝 而全球股市的普漲, 也為日股帶來一片良好的氛圍 Okayan Online Securities Co. 在東京的首席策略師 Yoshihiro Ito 表示, 安倍必須大勝, 外國投資人的信心才會得到證實, 而日經指數也將衝向 21000-22000 點 另外, 也要回到經濟, 企業必須有更好的獲利成績 外資在 9 月的最後一周, 共投入 2018 億日元 (18 億美元 ) 進日本股市, 是今年 7 月以來, 首次的淨流入 企業財報預期自 10 月下旬開始, 外界預期將有強勁的獲利成長 State Street Global Markets 全球宏觀策略師 Ben Luk 指出, 他們對日股信心十足, 日本有最高的獲利成長潛力, 獲利的動能如今也是最高的, 當前政治的發展, 也傾向支持繼續增長 投資人心態相對仍謹慎, 日股回升至 1996 年底的水準, 相較之下, 標普 500 指數在這 20 年漲了 243%, 這段期間, 全球主要市場中, 只有義大利股市表現得比東京股市差 Ito 認為, 日元的進一步疲軟, 對股市持續反彈也至關重要 現在畢竟已經到相對高點, 如果缺少進一步支持, 很難有所突破 STATE STREET CORPORATION 27

Mingpao 2017-10-12 實名制有時間表 ETF 通 可上馬債券通擬擴展南向交易 https://www.mpfinance.com/fin/daily2.php?node=1507750070364&issue=20171012 明報專訊 昨日施政報告對金融領域着墨不多, 不少更是重申今年一直以來的工作 但有關互聯互通的政策方面, 卻為業界帶來好消息 報告指出, 會研究將更多不同的投資產品納入雙向互聯互通機制, 例如交易所買賣基金 (ETF) 政府消息人士稱, 身分識別機制 ( 即實名制 ) 一旦有清晰時間表, 毋須等待落實, 便可把 ETF 及納入互聯互通 明報記者廖毅然 自債券通北向交易於今年 7 月推出後, 業界一直希望進一步擴大互聯互通的範圍 而施政報告特別提到 ETF 通, 同時透露, 可能會把債券通擴展至南向交易 雖然市場一直預期, 要待身分識別機制推出後才會有進一步發展 但消息人士昨日透露, 毋須等實名制真正推出, 只要實名制具備推出的條件 有明確時間表後, 便可推動 ETF 通 業界盼省卻審批只須設額度 港交所 (0388) 發言人昨日回應, 在滬港通推出之初便即曾說明互聯互通機制具有可延伸 可擴容的特點, 相 信日後機制可以靈活擴容, 涵蓋更多的投資產品, 但目前未有具體時間表 香港投資基金公會行政總裁黃王慈明指出, 雖然 ETF 屬基金產品, 但業界均希望 ETF 通 毋須經過審批過程, 亦毋須符合基金互認的法規要求, 而是在股票通的框架之下 她相信, 結構易明的實物 ETF 將會引來內地資金追捧, 故建議當局為 ETF 通 另設額度, 否則現時每日 210 億元人民幣的港股通額度, 可能會在納入 ETF 後爆滿 內地投資渠道少 ETF 料受追捧 現時本港有逾 150 隻 ETF 產品, 但流通量高的並不多, 最活躍的是盈富基金 (2800) 恒生 H 股 (2828) 及兩隻主要的 A 股 ETF 華夏基金 ETF 業務主管諸人進指出, 內地投資產品種類不多, 因此對 ETF 有一定需求, 但內地投資者若來港參與 ETF 市場,A 股 ETF 未必是他們的目標 因此該行計劃重點針對內地投資者的口味設計產品, 例如美股 ETF 或個別板塊, 例如科技股 ETF 等 英大證券首席經濟學家李大霄認為,ETF 相比正股波幅低, 但有助投資者建立長線投資的觀念, 令內地投資者 進一步與成熟市場接軌 他預料, 流通性高又能代表港股的 ETF 會受內地投資者歡迎 新股短期料難納入互通 至於一直只聞樓梯響的 新股通, 政府消息人士稱, 由於一手市場的相關機制較為複雜, 雖然兩地監管機構 仍會持續檢視, 但即使實名制推出後, 短期內亦未必會討論把新股納入互聯互通範圍 至於每日額度方面, 消 息人士僅重申, 兩地監管機構會經常檢視 STATE STREET CORPORATION 28

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Campaignjapan.com 2017-10-12 If there is corporate hypocrisy, high-impact marketing may backfire STATE STREET CORPORATION 30

Daily Sun New York Online 2017-10-11 Wage discrimination found at firm behind girl statue; where is the strength of women? State Street to pay USD 5 million STATE STREET CORPORATION 31