Eclectica's Hendry plays Asia's shift to consumption-driven economy

Commodity price decline causing divergence

Eclectica's Hugh Hendry is running a currency trade looking to benefit from the move from commodity-driven to consumption-driven emerging market economies.

Writing in his monthly investor update, Hendry (pictured), who is manager of the CF Eclectica Absolute Macro fund, said the decline in commodities had led to a divergence between consumers and producers. The relative value FX trade focuses on countries with low dependency on external trade on the long side and developed Asia on the short side, which has a high export-to-GDP ratio. Eclectica's Hendry tells investors: 'Don't panic' Countries dependent on the consumer include the Philippines and India, which are populous with large domestic markets and low penetration of consumer cred...