- Demographics impact economies; as such, they also impact market — "The MY (middle age to young) ratio has often been used as a predictive tool for equity markets. While it shows a relationship in certain developed markets, its relevance is less obvious in Asia ex-Japan. For ASEAN in particular, the MY ratio and equity markets are unrelated. Where there have been many shocks − political and economic, among others − demographics are less important."
- The MY ratio works best in the mid-long term. Short term, it is useless. — "Demographics are slow moving; hence, they contains information but make no noise. Demographics can be used as a forecasting tool 5-8 years out, but they tell us nothing regarding market performance over the next week or month. In general, sectors with a high degree of industrial concentration have benefitted with a rising MY ratio more than sectors where fragmentation is high."
- The MY ratio is set to grow most in Indonesia, Taiwan and India. Least in Singapore and HK — "Indonesia will see its MY ratio expand by 2.2% p.a over the next decade, followed by Taiwan at 1.7% and India at 1.1%. Singapore shows the biggest contraction (-4.5% p.a.), ahead of Hong Kong (-1.1%) and Korea (-0.3%). In the latter markets, non-demographic factors will have to play a larger role in generating demand."
- The MY ratio works best in the mid-long term. Short term, it is useless. — "Demographics are slow moving; hence, they contains information but make no noise. Demographics can be used as a forecasting tool 5-8 years out, but they tell us nothing regarding market performance over the next week or month. In general, sectors with a high degree of industrial concentration have benefitted with a rising MY ratio more than sectors where fragmentation is high."
- The MY ratio is set to grow most in Indonesia, Taiwan and India. Least in Singapore and HK — "Indonesia will see its MY ratio expand by 2.2% p.a over the next decade, followed by Taiwan at 1.7% and India at 1.1%. Singapore shows the biggest contraction (-4.5% p.a.), ahead of Hong Kong (-1.1%) and Korea (-0.3%). In the latter markets, non-demographic factors will have to play a larger role in generating demand."
Citigroup_Asia_ex_Japan_Equity_Strategy_20100824
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