The 2014 All-Asia Research Team: Currency & Rates Strategy, No. 1: Adarsh Sinha & team
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The 2014 All-Asia Research Team: Currency & Rates Strategy, No. 1: Adarsh Sinha & team

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2014-05-tom-johnson-all-asia-research-team-adarsh-sinha.jpg

Adarsh Sinha

& team

Bank of America

Merrill Lynch

First-Place Appearances: 1

Total Appearances: 3

Team Debut: 2012

The Bank of America Merrill Lynch squad leaps from third place to finish on top for the first time. Directed by Hong Kong–based newcomer Adarsh Sinha, the strategists are “original thinkers and often come up with angles that other people aren’t looking at,” says one supporter. “They do a good job of giving you options and probabilities, which is what we always look for in this space.” Among the researchers’ top recommendations are to short the Japanese yen while going long on the South Korean won. “Overall, we believe the dollar will trade stronger against Asian foreign exchange due to the improved structural competitiveness of the U.S. economy,” says Sinha, 34. “However, on a relative basis, we believe that the won can outperform the yen’s weakness driven by the divergence of their current-account performance, with Korea’s surplus now exceeding Japan’s. Moreover, valuation metrics and portfolio flows also favor the won’s outperformance relative to the yen.” They recommended pairing the currencies in March, when the won was trading at 10.5 to the yen, targeting a value of 9.8. In late April it had appreciated to 10.14. The group also advises that “the Korean swap curve is too flat and not sufficiently pricing in global economic recovery and Bank of Korea’s tightening in 2014,” he explains. “We expect the BoK to hike rates by 25 basis points in the second half of 2014 and for its economy and related exports to benefit from the upturn in global demand.” Accordingly, the analysts believe that “positioning for higher five-year interest rate swaps is compelling.” Before joining BofA Merrill as head of Asia-Pacific Group of Ten foreign exchange strategy in August 2010, Sinha worked as a senior currency strategist at Barclays Capital, responsible for covering G-10 countries, with a focus on Europe. He holds masters’ degrees in economics from England’s University of Oxford and University of Warwick.


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