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<p>CLSA Americas, the US arm of the Chinese-owned broker CLSA, is closing for business, according to people familiar with the matter.</p><p>The US office <a href="https://www.clsa.com/global/americas/">was set up in 1986</a>, and focused on serving US funds looking to invest in Asia. <span>In 2009, it started covering US equities too.  Then, in 2013, Chinese banking giant <span>CITIC Securities acquired CLSA, becoming the first Chinese brokerage to purchase a global financial institution, according to CLSA's website.</span></span></p><p><span><span>The firm has offices in New York, Boston, Chicago, Dallas and San Francisco, according to its website. </span></span></p><p><span><span>One person said the decision to close the US operation was unexpected.</span></span></p><p><em>More to follow</em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/side-effects-brain-body-drugs-adderall-recreationally-adhd-pill-2017-2">What happens to your brain and body if you use Adderall recreationally</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="FtY3hzOTE6I-lLvh74cjJwaK2QnBUvzk" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

One of Asia's top trading firms is shutting down in the US

<p style="text-align: justify;"><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span>Bloomberg TV</span></p><p class="caption">Mike Mayo</p></div><p></p></div></div>CLSA analyst Mike Mayo does not like the fact that Bank of America is trying to combine the role of CEO and chairman at the bank.</p><p style="text-align: justify;"><span>He doesn't like the fact that chief executive Brian Moynihan has already taken the chairman post, despite a 2009 shareholder vote to separate the roles.</span></p><p style="text-align: justify;"><span>He thinks the combination stiffs shareholders because the board lacks oversight as it is. </span>He also thinks the board should see a full year of financials before making a decision on this.</p><p style="text-align: justify;">And so he wrote a note about it, as analysts do.</p><p style="text-align: justify;">But this is no ordinary analyst note. No. This is a perfect example of how you eviscerate a Wall Street bank, or any other company for that matter.</p><p style="text-align: justify;">Instead of simply outlining his argument for the sell rating, Mayo released an annotated version of Bank of America's proxy statement. Bank of America didn't comment in time for publication. </p><p style="text-align: justify;">We've selected a few particularly Mayo-esque excerpts and included them below for your instruction:</p><p style="text-align: justify;"><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div> <div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p style="text-align: justify;"> </p><p style="text-align: justify;"><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p style="text-align: justify;"><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p style="text-align: justify;"> </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/subways-jared-fogle-allegedly-sent-lewd-texts-2015-8">More trouble for Subway's Jared Fogle...</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5ncHNudjonEIaSoYSJP9tcN-cA_jh7Sm" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

This is the finest trolling we've ever seen in a Wall Street analyst note

Data adoption and tariff hike-led revenue growth as well as 5G rollouts are key monitorables for 2023 which will also be a decisive year for Vodafone Idea as a viable third player, according to a report. The telecom sector's Average Revenue Per User (ARPU) when adjusted for inflation is still 17 per cent below pre-Reliance <keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> launch. "...we expect <keyword id="6406583" type="General" weightage="80" keywordseo="bharti" source="Orion">Bharti</keyword> (Airtel) to lead tariff hikes to ARPU of Rs 236 by FY25, while Bharti targets Rs 300 ARPU", leading brokerage <keyword id="6397676" type="General" weightage="100" keywordseo="clsa" source="Orion">CLSA</keyword> said in its report on the telecom sector. <br /><br /> According to CLSA's outlook, 2023 will have three trends to watch out for when it comes to India's mobile market. Among them will be 5G rollouts and monetisation led by top-end subscribers. <br /><br /> "We see multiple events to watch, led by likely tariff hikes and <keyword id="6354504" type="General" weightage="80" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword>'s (RJio) widely-anticipated IPO," it said. <br /><br /> Private networks, if allowed, may eat into 5G operators' enterprise services opportunity. <br /><br /> India's mobile sector revenue, after rising 14 per cent in 2022, should grow again in 2023 led by tariff hikes, rising data penetration and usage. <br /><br /> CLSA expects that Bharti (Airtel) will possibly lead tariff hikes, with <keyword id="634808" type="General" weightage="80" keywordseo="vil" source="Orion">VIL</keyword> (Vodafone Idea Ltd) and Reliance Jio likely to follow. <br /><br /> VIL's financial crisis has not been averted, with delays in fund raising and pending conversion of four years' interest on spectrum and AGR (Adjusted Gross Revenue) payments into equity for government. <br /><br /> With decline in VIL's share, Bharti and Jio together control 77 per cent and should continue to gain share, the report said. <br /><br /> "VIL fund raising is critical for 4G capex and 5G rollout while delays could trigger further share loss, which would be gains for RJio and Bharti which will ramp up 5G rollouts in 2023," it added. <br /><br /> Jio and Bharti 5G rollout will coincide with growing subscriber realisations and market share gains. <br /><br /> "We forecast rising ARPU and data penetration to drive a 14 per cent CAGR in sector revenue to Rs 2,84,600 crore (USD 36 billion) by FY25," it said. <br /><br /> As per the report, the new telecom bill will be "positive" for VIL. <br /><br /> "VIL, which is currently in a four-year moratorium on government dues, could gain from this regulatory bill, which could have options of write-offs," the report said.<br /><br /><strong>SEE ALSO:<br /><br /><a href="https://www.businessinsider.in/business/corporates/news/overall-demand-scenario-not-changed-significantly-but-europe-is-a-problem-says-tcs-ceo/articleshow/96859049.cms">Overall demand scenario not changed significantly but Europe is a problem says TCS CEO</a><br /><br /><a href="https://www.businessinsider.in/business/telecom/news/airtel-reliance-jio-and-vodafone-idea-q3-earnings-preview-tariff-hikes-a-key-trigger/articleshow/96796094.cms">Churn and fewer 4G subscribers to slow down telecom revenue growth in Q3</a><br /><br /></strong><a href="https://www.businessinsider.in/finance/banks/news/sbi-hdfc-bank-axis-bank-among-other-private-and-public-bank-earnings-could-see-a-further-ramp-up-in-q3-2022/articleshow/96768992.cms"><strong>Bank earnings could see a further ramp up in Q3, say analysts</strong></a><br />

Tariff hike-led growth, 5G key events for telecom in 2023, decisive year for VIL: CLSA

<ul><li>CLSA believes that in the next 18 months, RBI might cut 75 basis points or 0.75% in interest rates.<br /></li><li>It already cut its base lending rate by 1.35% this year.<br /></li><li>CLSA expects base rate to come down to 4.4% by early FY21.<br /></li></ul>The Reserve Bank of India (RBI) will have to take up an extra responsibility—of pushing the slowing growth in the country. In the last few months, central government too had played its part by reducing corporate taxes and other moves. But the sluggish economy might need more impetus, and the government may not have the cash for it.<br /><br />Research firm CLSA believes thatRBI might end up cutting 75 basis points or 0.75% in interest rates in the next 18 months. This will help banks lend more at lower interest rates, which will help push the economy. <br /><br />The banking regulator has consistently cut the rate at which it lends to banks at every monetary policy since February this year. In all, it reduced its repo rate by 135 basis points to 5.15%. But as per CLSA, it will have to come down to 4.4% by early FY21.<br /><br />“Absent fiscal options, the onus for stimulus remains with monetary policy. The government’s fiscal position has already been stretched by the corporate tax cut, which will widen the fiscal deficit by around 0.7% of GDP,” the CLSA report said.<br /><br />To provide a fiscal boost, the government had reduced corporate tax rate to 21.1% from 34.2%. While this came as good news to many companies, the exchequer has to pay for it. It will also translate to tightened budgets of state governments, which will spend less as tax revenue falls. Government is one of the largest spenders across schemes and measures, and is a key driver of the economy.<br /><br />Added to that, private entities are also not keen on expanding as capital goods imports have almost remained steady. Apart from the existing banking crisis which is leaving them weary of lending, corporates too are wary of growth in times when consumption is shrinking.<br /><br />In fact, large FMCG companies are resorting to price cuts to reverse the slowing trend. “Consumption prospects are clouded by declining rural real wage growth. On RBI’s estimate of sticky 3.8% nominal wage growth for rural labourers over the last 12 months, the rising inflation measure for rural labourers means their real wage growth has turned negative,” the CLSA report said.<br /><br /><br /><br />

India is fast running out of cash to boost the economy-- putting the onus on RBI

Global brokerage CLSA released a report showing the health of India's economy

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Getty Images</span></p></div><p></p></div></div></p><ul><li><strong>It took the benchmark S&amp;P 500 just 13 days to climb from 2,700 to 2,800, by far the fastest 100-point gain since the global financial crisis.</strong></li><li><strong>While this highlights just how hot the stock market is right now, CLSA argues that it should also be a cause for concern as valuations get extended.</strong></li></ul><p><br />Just when it seems the stock market is running out of ways to remind investors that it's virtually unstoppable, it goes and does something unprecedented.</p><p>Such was the case with the <a href="http://markets.businessinsider.com/index/s&amp;p_500" target="_blank" rel="noopener">S&amp;P 500</a>'s recent ascent above 2,800. It took the benchmark equity index just 13 trading days to exceed that level once it passed 2,700, by far the fastest 100-point jump since the global financial crisis, according to data compiled by CLSA.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Andy Kiersz / Business Insider, data from CLSA</span></p><p class="caption">The S&amp;P 500's last 100-point milestone came way faster than any other time since the global financial crisis.</p></div><p></p></div></div></p><p>Investors are tempting fate as they continue to push stocks higher, says CLSA, which also notes a series of overbought indicators that suggest the S&amp;P 500 specifically looks stretched.</p><p>"Market participants are flying closer and closer to the sun, trusting that their wings aren't made of wax," CLSA investment strategist Damian Kestel wrote in a client note. "No doubt at some point there'll be a few more additions to the <a href="https://www.libraryofmistakes.com/" target="_blank" rel="noopener">Library of Mistakes</a>."</p><p>Kestel's warning - and his analogy of choice - is similar to one that's been <a href="http://www.businessinsider.com/stock-market-news-correction-wall-street-warning-2017-10" target="_blank" rel="noopener">continuously voiced</a> by Bank of America Merrill Lynch's chief investment strategist. Michael Hartnett has coined the term the "Icarus trade," which refers to the "melt up" in stocks and commodities seen since early 2016 - one it sees as unsustainable in the long term.</p><p>Still, strategists across Wall Street remain optimistic on the effect of GOP tax reform. They see the tax cuts and repatriation holiday offered by the recently passed bill underpinning continued gains in the S&amp;P 500.</p><p>At the end of the day, this war between skeptics and market bulls will rage on. The best approach is probably to proceed in cautiously bullish fashion, and continue enjoying the market's many milestones along the way.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/fund-manager-shares-what-everyone-gets-wrong-about-economy-2018-1">A $445 billion fund manager explains what everyone gets wrong about the economy</a></h3>        <div>                    </div>    </div>

Stocks are surging at the fastest pace in a decade as traders fly 'closer to the sun' - and that's a reason to be very nervous

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">If the yield curve inverts, expect the bears to come out to play.</p></div><p></p></div></div></p><ul><li><strong>The <a href="https://www.businessinsider.com/category/yield-curve">yield curve</a> is at its flattest level in over 10 years. </strong></li><li><strong>Its inversion has foreshadowed every US recession since the 1960s. </strong></li><li><strong>The Hong Kong-based trading firm CLSA has identified a dividend strategy that outperforms whenever the yield curve inverts. </strong></li></ul><p>There's no recession indicator more talked about right now than a yield curve inversion.</p><p>Wall Street has been captivated as the curve, which plots the difference between long and short-term bond yields, has slid to its lowest levels since the financial crisis.</p><p>Notably, the difference between 2- and 10-year yields fell last week to as low as 24 basis points, an 11-year trough. The gap has turned negative before every recession since the 1960s.</p><p>If the curve's flattening continues and <a href="https://www.businessinsider.com/morgan-stanley-says-recession-signal-coming-mid-2019-2018-7">Morgan Stanley's forecasts</a> are right, the yield curve will invert next year, meaning short-term interest rates rise above long-term rates. <a href="https://www.businessinsider.com/wall-street-recession-gauge-flashing-yellow-not-everyone-says-false-alarm-2018-7">Economists aren't in agreement</a> that it would signal a recession this time. Still, an inversion would gather "a big bear party," according to <span>CLSA, a <a href="https://www.businessinsider.com/clsa-americas-shutting-down-2017-2">top trading firm</a> based in Hong Kong. </span></p><p>As the bears come out to play, CLSA has a simple recommendation for investors looking to profit if and when the curve inverts: <strong>buy global bond proxies</strong>.</p><p>"A curve flattening/inversion cycle bodes well for high-yield strategies, benefitting bond proxies the most at the expense of GARY (growth at reasonable yield)," the firm wrote in a recent note. </p><p>"Indeed, in line with our preference for defensive growth, bond proxies delivered strong performance in 2Q18 and could remain in favor against a backdrop of rising macro volatility and growth slowdown."</p><p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="CLSA" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/5b5b72fbdce2e938008b46cb-960/screen shot 2018-07-27 at 32410 pm.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p>A yield-curve inversion on its own doesn't cause recessions. But it signals downturns because it shows the Federal Reserve is raising interest rates too aggressively, lifting short-term yields above long-term ones. </p><p>CLSA finds that bond proxies, stocks with bond-like yields, have outperformed during inversions. To screen for the best companies, their criteria included stocks with dividend yields of at least 3%, and positive free-cash-flow conversion on average of the past five years. Stocks in telecoms, utilities, and pharma led the list. </p><p>In the US, companies included <a href="https://markets.businessinsider.com/stocks/wec-stock">Wisconsin Energy</a>, <a href="https://markets.businessinsider.com/stocks/t-stock">AT&amp;T</a>, <a href="https://markets.businessinsider.com/stocks/jnj-stock">Johnson &amp; Johnson</a>, <a href="https://markets.businessinsider.com/stocks/pfe-stock">Pfizer</a>, <a href="https://markets.businessinsider.com/stocks/ko-stock">Coca-Cola</a>, and <a href="https://markets.businessinsider.com/stocks/hsy-stock">Hershey</a>. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/woke-up-430-am-like-navy-seal-exercise-discipline-2018-7">I woke up at 4:30 a.m. for a week like a Navy SEAL</a></h3>        <div>                    </div>    </div>

There's a simple way to profit if one of Wall Street's most-feared recession signals is triggered soon

<p><strong><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>GREG BAKER/AFP/Getty Images</span></p><p class="caption">Customers look at products in an Apple store in Beijing on December 11, 2018.</p></div><p></p></div></div></strong></p><ul><li><strong>Apple's revenue warning this week shook investors, sending shares plunging 10% and plaguing the broader market.</strong></li><li><strong>The tech giant pinned most of the blame on a slowdown in iPhone sales, primarily in China.</strong></li><li><strong>But China isn't Apple's biggest issue, according to a new analysis from CLSA, who points to the iPhones' average selling price and rising competition as the "real problems."</strong></li></ul><p>Investors were shaken this week as Apple <a href="https://www.businessinsider.com/apples-brutal-sales-warning-sparks-wall-street-debate-on-tech-2019-1">warned late Wednesday</a> it would <a href="https://www.businessinsider.com/apple-warns-holiday-quarter-was-a-huge-miss-2019-1">miss</a> revenue expectations for its fiscal first-quarter. CEO Tim Cook wrote in a <a href="https://www.apple.com/newsroom/2019/01/letter-from-tim-cook-to-apple-investors/">letter</a> to investors that lower-than-expected iPhone revenue, "primarily" in Greater China, was largely to blame, <a href="https://markets.businessinsider.com/news/stocks/apple-stock-plunges-cut-revenue-guidance-holiday-quarter-2019-1-1027841499">sending shares down 10% Thursday</a> for their worst day in six years.</p><p>But that's missing Apple's biggest problems, according to a new report from Nicolas Baratte and Cherry Ma, analysts at Hong Kong-based CLSA, who point directly to the iPhone's climbing average selling price (ASP) and increased competition from the likes of Huawei and others.</p><p>CLSA estimates the iPhone's ASP is set to increase by at least 7% versus a year ago, to $852. That would lead to the total iPhone units sold to decline by 20%, or by about 62 million units, they said.</p><p>"While Tim Cook blamed a slowing China economy and trade tension, we maintain that in our opinion the iPhone ASP is the biggest problem given uninspiring specs and rising competition in China and in Europe," the analysts wrote.</p><p>"In particular, we think the Huawei P and Mate are a problem for Apple given similar hardware specs at 2/3rd or half the price."</p><p><span style="background-color: #ffffff;">Apple said other issues impacting its revenue readjustment included foreign-exchange headwinds, weaker-than-expected iPhone upgrades, and <a href="https://www.businessinsider.com/apple-blames-weak-iphone-sales-partly-on-battery-replacement-offer-2019-1">customers taking advantage</a> of a battery-replacement offer.</span></p><p>Here's a breakdown from CLSA's report of the comparisons between Apple's products sold in China and its competitors' products sold in China:</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>CLSA</span></p><p class="caption">Apple products sold in China vs. competitors' products.</p></div><p></p></div></div></p><p>More broadly, the analysts wrote that while Greater China accounted for the majority of the short fall, iPhone sales in other emerging markets also declined. Additionally, iPhone upgrades were weaker-than-expected in some developed markets, too. </p><p>But the majority of Apple analysts are holding onto their bullish views despite problems seemingly coming from all corners.</p><p>The majority of Wall Street analysts <a href="https://markets.businessinsider.com/news/stocks/apple-stock-price-plunging-wall-street-not-changing-tune-2019-1-1027844038">took down their price targets</a> this week, but maintained their positive or neutral ratings. CLSA does not carry a price target or investment rating for the stock. </p><p>"While China demand, trade/tariff worries, lower priced competition, and competition in the mature smart phone industry are all clear headwinds for Apple, we stay bullish on the name purely on our belief in Cupertino's ability to monetize its 1.3 billion active installed base and drive upgrades/services around this for the coming years," Dan Ives, analyst at Wedbush, told clients on Thursday.</p><p>Apple did not immediately respond to a request for comment about this report.</p><p><strong>Read more about the market's reaction to <a href="https://markets.businessinsider.com/stocks/aapl-stock">Apple's</a> announcement:</strong></p><ul><li><strong><a href="https://www.businessinsider.com/apples-market-cap-falls-by-450-billion-more-than-the-value-of-facebook-2019-1">The $450 billion wipeout: Apple's value has fallen by more than Facebook's entire worth in three short months</a></strong></li><li><strong><a href="https://markets.businessinsider.com/news/stocks/apple-stock-price-plunging-wall-street-not-changing-tune-2019-1-1027844038">Apple's stock just plunged, but Wall Street is telling clients to hold on for dear life</a></strong></li></ul><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Markets Insider</span></p><p class="caption">Apple shares.</p></div><p></p></div></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/marie-kondo-on-organizing-your-home-2016-1">Japanese lifestyle guru Marie Kondo explains how to organize your home once and never again</a></h3>        <div>                    </div>    </div>

Apple has way bigger problems than China, analysts say

<p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>During Apple's most recent earnings call, <a href="http://www.businessinsider.com/apple-ceo-tim-cook-talks-about-android-switchers-2015-4">CEO Tim Cook couldn't stop talking about</a> how many people are dropping Android to switch to the iPhone.</p><p>Now, a recent survey from Asian investment banking firm CLSA provides more evidence that consumers in China, the largest smartphone market in the world, are switching from Android to the iPhone at a high rate.</p><p>This is a good sign for Apple, considering China is now one of its largest markets. <span style="font-size: 15px; line-height: 1.5em;">In April, iPhone sales in China outsold those in the United States for the first time. </span></p><p><span style="font-size: 15px; line-height: 1.5em;">And, if Apple is convincing more of China's hundreds of millions of smartphone users to ditch Android for the iPhone, those numbers are bound to rocket even higher.</span></p><p>That would be great news for Apple's investors too. Analysts have been concerned that investors will bail on Apple because the iPhone has been doing so well that it won't have any more room to grow. </p><p>This is what Wall Street usually refers to as the "comps" problem - if the iPhone is performing so well now, it'll be hard for Apple to show its growth in the future.</p><p>And it explains why Apple is so concerned with getting consumers to switch to the iPhone from Android - it'll give Apple an opportunity to show investors that the iPhone still has room to grow.</p><p>Here are a few key points from CLSA's survey that lead the firm to believe there's strong demand for the iPhone from Android switchers.</p><ul><li>53% of survey respondents that own an iPhone switched from Android.</li><li>Only 4% of Android phone owners in the survey switched from the iPhone to Android.</li><li>32% of Android users in the survey plan that plan to buy a new phone in the next 12 months will switch to the iPhone.</li><li>54% of all survey respondents that plan to buy a new phone in the next 12 months will choose the iPhone.</li></ul><p>To get these results, CLSA interviewed 854 middle-class consumers in China, which include 594 in tier 1-2 cities and 260 in tier 3-5 cities. The average age of these respondents was 35.  </p><p>Here are two charts that break down CLSA's findings. You'll notice that a significant chunk of Android phone owners plan to switch to the iPhone, with Samsung coming in as a close second.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><p><span>Of all the people CLSA surveyed, only 36% currently own an iPhone. But the firm is convinced that number is going to explode over the next 12 months, since 54% of phone shoppers plan to buy an iPhone in the next year and most of Apple's current customers will continue to upgrade to newer iPhone models.</span></p><p>It's worth noting that in terms of sheer market share, Android will probably always outpace the iPhone. That's because there are tons of different companies making Android-based smartphones around the world, and Google gives away the source code for Android to phone makers for free. But if you look at which brands sell the most phones, you'll notice it's really a two-horse race between Apple and Samsung. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/gogoro-smartscooter-is-available-and-it-looks-incredible-2015-6">The 'Tesla of scooters' is finally available and it looks incredible</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="JrYjNydTomoXrRoIQe_bxbwlk4mNL1AL" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

A significant group of consumers is ditching Android for the iPhone 

<p>A recent chart-filled note from CLSA's Damian Kestel shows just how top-heavy the US stock market's gains are. In fact, if you only held the bottom 75% of stocks, it turns out that you wouldn't make any return at all. The average (mean) return of a US stock is actually slightly negative. </p><p>The data is from <a href="http://seekingalpha.com/article/108867-the-capitalism-distribution-fat-tails-in-motion">a paper published by BlackStar Funds</a>, published in 2008. It tracked over 8,000 US stocks from 1983 to 2006, all of which at one time would have qualified for the Russell 3,000, the broadest index of American equities.</p><p><span style="line-height: 1.5em;">Here's the distribution of annual returns:</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p>Even a median return of 5.1% certainly isn't particularly impressive for the time period we're talking about.</p><p>So in terms of the market in total, the poor performance of the worst 3,000 or so stocks means that taken together, the bottom 75% haven't returned anything at all - only the top-performing 25% of stocks actually drag the collective return into positive territory:</p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p><p>On one level, this isn't particularly surprising. Of course a lot of stocks don't have strong returns, and it's in the nature of financial capitalism that some of them go bust.</p><p>But it's still quite striking just how top-heavy the distribution is - and it shows how much of a challenge stock picking can be. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/james-altucher-american-dream-college-housing-debt-career-2015-11">JAMES ALTUCHER: The American Dream is a lie</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="pxa24weTqtZQduLr4vlODX7xiO2oUVG5" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Two fascinating charts show that only a small minority of stocks actually drive market gains

India is standing at the edge of a potential housing boom, which as per <keyword id="6397676" type="CITY" weightage="100" keywordseo="CLSA">CLSA</keyword> India estimates, could reach up to $1.3 trillion in the next seven years. <br /><br /> The country’s growing middle class is demanding better housing, and is better efficient than ever when it comes to the means to achieve this dream. <br /><br /> India has always been extreme in its housing approach, with sprawling slums at one end and enormous mansions at the other. However, the gap can be filled now, since CLSA analysts think that the country might make good use of a broad acceleration in residential construction in the $2 trillion economy. <br /><br /> "The last decade was about price appreciation," Pankaj Kapoor, founder of Mumbai-based <keyword id="1086661" type="UNKNOWN" weightage="100" keywordseo="Liases-Foras-Real-Estate-Rating-Research">Liases Foras Real Estate Rating &amp; Research</keyword> told <a href="https://www.bloomberg.com/politics/articles/2017-06-05/from-tenement-to-township-india-s-1-3-trillion-housing-push">Bloomberg</a>. "This decade will be about volume growth," he adds.<br /><br /> It was in November last year when PM Modi played the demonetisation card to control corruption and black money, a move that impacted the Indian <keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">real estate</keyword> hard. <br /><br /> However, the industry seems to be in the mood of recovery, with housing sales growing 19% across nine cities in the March quarter, says data from PropTiger.com. <br /><br /> The population factor plays its role too, with about 69% of the country's 1.3 billion people being in prime age of house buying, i.e., between 20 to 40 years. This is more than any other nation, says a Bloomberg Intelligence report from April. <br /><br /> Similarly, CLSA's note dated May says that the per capita income has also grown at a compound annual growth rate of 10% for the past five years, which means that an average Indian can get a house in this boom. <br /><br /> However, when it comes to having the adequate number of houses to home this middle class, we lag behind. <br /><br /> With more and more people migrating to urban areas, the infrastructure has weighed down, land costs have gone up, and eventually, there is a shortage of houses.<br /><br /> However, Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s "<keyword id="2481158" type="UNKNOWN" weightage="100" keywordseo="Housing-for-All">Housing for All</keyword>" programme, which was launched in June 2015 comes as a saving grace. The programme aims to build 20 million urban homes and 30 million rural houses by 2022, making property the most affordable in two decades. <br /><br /> The programme, unfortunately, remains marred because of several hurdles. <br /><br /> There's still "a big question mark" over whether the government's housing plan is "realistic and implementable," says <keyword id="6420759" type="PERSON" weightage="100" keywordseo="Anuj-Puri">Anuj Puri</keyword>, chairman of real-estate services at JLL Residential. "It seems impossible if enough land is not released for the creation of affordable housing. Land is a very price-sensitive commodity, and its current shortage in major city-centric areas prevents the development of affordable housing in areas where it is most direly needed."<br /><br /> Even with these challenges, the government has started to view housing as an "economic enabler," said <keyword id="167433" type="PERSON" weightage="100" keywordseo="Abhishek-Lodha">Abhishek Lodha</keyword>, MD of <keyword id="46877" type="COMPANY" weightage="100" keywordseo="Lodha-group">Lodha Group</keyword>, one of India's biggest property developers. <br /><br /> "The government has started recognizing that for the middle class to start creating wealth for themselves they have to participate in housing, just like any democracy," he adds. <br /><br /> Banks are not far behind when it comes to the race to get a piece of the action. The country has seen more than 16 mortgage financiers commencing work in the two years to last June, with banks offering housing loans as a way to boost capital and offset commercial loans that it’s burnt hands with in form of mounting bad debts. <br /><br /> CLSA expects that India would see 60 million new homes between 2018 and 2024, with a 70% rise in social and affordable housing.<br /><br /> The propagated dream of the PM, to give every Indian a home, might eventually come true sometime in the future.<br /><br />(Image source Mom Constructions)<br />

A sneak peak into Indian middle class’s $1.3 trillion housing push

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="http://www.gettyimages.co.uk/license/73225198">Getty Images</a></span></p></div><p></p></div></div></p><p>Japan's yen is unstoppable at the moment, climbing to its highest level against the dollar since 2014 in Asian trade on Monday.</p><p>The Japanese stock market, which is dependent on companies' ability to export, has taken a beating and as a result foreign investors aren't hanging around to wait for the yen to weaken.</p><p>Foreign investors have sold as much as 10.8 trillion yen ($102 billion) of stocks since June 2015, when holdings were at their peak, according to CLSA's Japan analyst Nicholas Smith.</p><p>Foreigners account for about 70% of the traded value of Japanese stocks and have sold 43% of the Japanese stocks they bought since Prime Minister Shinzo Abe came to power in 2012, according to CLSA.</p><p>BlackRock, one of the world's biggest asset managers, is reducing its position in Japan, <a href="http://www.bloomberg.com/news/articles/2016-04-10/abenomics-rebuked-as-blackrock-joins-46-billion-japan-pullout">according to Bloomberg News</a>, with foreign traders pulling out of Japanese stocks for 13 straight weeks.</p><p>This is bad news for Japan because local investors don't trade much, so the foreign funds play a big role in driving the stock market forward.</p><p>Here's Smith (emphasis ours):</p><p style="padding-left: 30px;">Domestic institutional money is overwhelmingly passive in character. So when foreigners, who account for typically 70% of traded value, repatriate their money,<strong> there's no pool of capital with the experience and conviction to decide the price is right. Stocks generally don't recover till the foreigners returns.</strong></p><p>And here's the chart:</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>CLSA</span></p></div><p></p></div></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/hamilton-makes-over-2-million-month-producer-jeffrey-seller-broadway-musical-theater-2016-4">Broadway's biggest hit 'Hamilton' is making over $2 million a month - here's why the producer thinks it could be making a lot more</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="hqaGdtMjE6TuOLd1QuJ1UzvqOkB9_J_a" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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