Loading... Global Select role INSIGHTS RESPONSIBILITY ABOUT US Search 15 November 2021 Social Sharing 2022 Equity Outlook: Disruptions Drive Alpha as Spending Ramps Up AUTHOR: Anik Sen Global Head of Equities We remain constructive on equities despite high valuations due to the strong likelihood of earnings upgrades to come. However, we do not expect a repeat of high beta returns next year and place more emphasis on alpha from companies that are improving their market positions. The release of pent-up capex was a big theme in 2021, and could be even bigger in the coming year and well beyond. We believe an enormous amount of investment spending lies ahead, with capex intentions for many companies skyrocketing. Company sentiment remains strong, and qualms about policy uncertainties and financing conditions that had long hamstrung companies’ investment decisions have eased at a time when the need to upgrade or replace obsolete or inefficient equipment has grown more urgent amid pandemic-related shifts and the global push for sustainability. China’s ambitions under the heading of “Common Prosperity” have also been misunderstood by some market participants. In our view, China has embarked on reducing the income gaps between segments of its population (such as urban versus rural) by increasing the size of the pie rather than slicing it differently through income redistribution by taxation or welfare. The objective is to increase the provision of social security and to improve affordability and access to education, housing, and healthcare – and the policy shift has resulted in a raft of regulations on these “Three Mountains” sectors. For more economic and asset class insights, see our full 2022 Investment Outlook: Opportunities in a Climate of Change. 2022 Investment Outlook Opportunities in a Climate of Change Explore Now Banner Curve Related Insights Global Select role COOKIES PRIVACY POLICY REGULATORY DISCLOSURE TERMS OF USE SITE MAP ABOUT PINEBRIDGE CAPABILITIES FIRM LEADERSHIP INSIGHTS MEDIA & PRESS RELEASES OFFICE LOCATIONS By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Our Cookie Policy Cookies Settings