Have you ever once wish you could be older quicker or be an adult quicker when you were younger? That freedom that comes along with being an adult was all that we craved as we wanted to be in control over what time we get to come home or control over what junk food we will be eating or control over what game we get to play.

But as much as that I wanted to be in control of my own life, I too enjoyed the fact of being taken care of by my parents who provided me with generous pocket money and took care of household chores when I was younger. Being pampered with love and care is not so bad even if it comes with some house rules and parental controls. After all, our parents meant good for us and those “freedom-lost” kept us well-discipline and balance.

Now, 10 years has passed since the Great Financial Crisis in 2008, and many are now calling for a downturn or a recession coming our way in the next few years. Beyond high asset prices, the long term debt cycle also suggests we should take extra caution rather than be complacent.

Which brings us to the elephant in the room – What are the monetary tools left to help cushion, rejuvenate and revive the global economy if we experience yet another big blow to the economy? With interest rates being close to zero and endless amount of quantitative easing being already deployed, are we to stand by and watch the world burns and the global economy rolls back to stone age? In fact, many leading economists and financial heavyweights have cited that the current economic environment that we are in resembles that of the 1930s. As we have learnt from history, what came next was populist polities and the world war II.

As such, this is the perspective where I would like to put trade war into. Yes, it is obvious that trade war is likely to slow the global economy with IMF downgrading world economic growth forecast for 2019 from 3.9% to 3.7%. But think about it again – this trade war can be good “parental control”. We are near the top of economic cycles and such artificial capping of economic growth is exactly what we need to rein in runaway complacency and exuberance and to guide the economy into the elusive soft landing. We have experienced so many cycles of boom and burst in the modern economy – is it not time we should get better at smoothing these economic cycles?

Few may not know, in Singapore, in effort to prevent our housing from becoming unaffordable to the masses as well as deter speculative property investors from taking prices to unsustainable bubbly levels, the government has been pro-active and in front of the curve and enacted 12 or 13 successive cooling measures. Therefore, this trade war can viewed as similar to these cooling measures.

And as many correctly pointed out, governments around the world lack monetary tools to stimulate the economy in the event of another recession. As such, like Singapore housing measures, trade war measures and tariffs can be easily lifted in the event of global economic distress and keep prices and commerce afloat.

As much as China and US are fierce competitors in trade, US and the rest of the world need to live with the arrival of a strong China. Being the number 1 and 2 economic powerhouses, they need each other just as much and like it or not, they have to be friends. iphones, an American brand manufactured in China, is one such marriage symbol blanketing every corner of the world.

Therefore, with that, I believe trade war is here to stay. It is a medium to long term policy. Short term (months and quarterly), we are likely to see alot more volatility. At this moment, economies around the world are still holding up and I remain cautiously optimistic.

For 2019, watch out for signs of distress in 1. Emerging markets 2. Leveraged corporates 3. non-bank financial risk. Equities (defensive sectors and low-leveraged corporates), would remain interesting if they can be found at the correct valuations. Contrary to uncertain times positioning,I am still not a fan of bonds and favours shortening duration.

Indonesia in 2019 will be having its presidential election in 2Q. At this moment, incumbent Jokowi is leading in the polls and is likely to be re-elected. If so, that could be a boost to Indonesia’s economy as Jokowi’s policies and plans can be quickly executed with continuity. Will populism produce another upset as we have seen in recent trends all over the world? That is anybody’s guess. But one thing is clear – whoever wins – Prabowo or Jokowi, they are all keen to continue to grow Indonesia’s economy.

However, regardless of the election results, Indonesia remains one of the least levered emerging market and its underlying socio-economic advantages makes it an attractive investment destination. Domestic economy remains strong and resilient. Sectors ranging from real estate, infrastructure and anything consumer-facing remain as key focus.

Wishing in advance those who celebrate – Merry Christmas! And for everyone, Happy New Year! May the new year ahead brings alots of happiness and good health! Dec 2018