< The 2015 All-Asia Research Team
Hak Bin Chua, Ting Lu & team
Bank of America Merrill Lynch
First-place appearances: 3
Total appearances: 11
Team debut: 1998
For a third year running, investors and buy-side analysts deem Bank of America Merrill Lynch the top provider of Asia ex-Japan economics research. Co-helmed since 2012 by Hak Bin Chua in Singapore and Hong Kong–based Ting Lu, the firm’s ten-person team wins praise for providing the “best analysis for helping me understand the dynamics of global economies,” in the words of one backer. Another admirer remarks that the economists’ “work on China is especially strong. They look past the noise and sensational news from the media and tell us what’s actually driving China’s real economy.” For the remainder of this year, the BofA Merrill group expects two forces to dominate Asia’s equity and currency markets: the downward course of oil prices and population changes in the area. Brent crude oil prices have collapsed, plummeting from a peak of more than $115 in mid-June to settle below $63 at the end of April. Emerging Asia, which relies on imports for as much as 18 percent of its oil consumption and 3.4 percent of regional gross domestic product, the analysts note, will benefit greatly from falling prices. This is especially true of China, because the country accounts for 11 percent of global oil use and is the world’s largest net importer of crude, they point out. Further, lower fuel costs will improve China’s current-account balance, help reduce inflation and “provide room for more targeted measures,” Chua reports. He and his colleagues forecast that other big winners will include the Philippines, South Korea and Thailand; while Malaysia is poised to be the only net loser. Meanwhile, demographic trends are changing rapidly in several Asian countries, the researchers advise. For example, the United Nations estimates that China’s working-age population — those between 15 and 59 years — will begin to decline in 2016. South Korea and Thailand are expected to follow suit a couple years later. The experiences of Japan and the euro zone “point to troubling trends near this inflection point,” says Chua, “including lower potential growth, a rising fiscal burden and deflationary pressures.” Demographic inputs will likely “bias monetary policy” toward more easing in China, Hong Kong, South Korea and Thailand, he advises. Countries with younger pools of workers — such as India, Indonesia and the Philippines — are expected to enjoy the strongest labor force and GDP growth over the next decade, he adds. This year Chua, 48, also co-leads, with Chin Seng Tay, a crew that captures third place for its coverage of Malaysia. Lu, 40 — who joins with David Cui in directing the firm’s China squad to a fourth straight No. 1 finish — is going out on top. He left BofA Merrill in the spring and is expected to join China’s Huatai Securities Co. in June.