Letter to investors Central banks - drivers and driven For a long Ume, central banks have been driving markets ever higher. But there are limits to their power and political priorities are also important. Both the power and powerlessness of central banks can he observed on three continents at the moment. Let's start with crisis-ridden Greece. After several 'final deadlines' had passed, only one measure promoted a real sense of urgency: the decision by the European Central Bank (ECB) not to increase Emergency Liquidity Assistance (ELA). Had ELA been cancelled completely - for example ii ECB debt had not been serviced - a few bank holidays wouldn't have been sufficient to save the Greek banking system. But this also demonstrated the ECB's powerlessness because it ended up being forced to act as a vicarious agent for political objectives, being no longer able to take its decisions autonomously and based on rts own set of rules. Compared to the few hundred billion euros at stake in Greece, the People's Bank of China (PBoC) had to fight against a far bigger monster the local stock market with a market capitalization of $7 trillion (down from a peak of over $10 trillion in June). The Chinese central bank does not, at least, have to pretend to be politically independent. But since the PBoC could not cope with the situation alone, it delivered only one of the many weapons which Beijing tired at the erratic stock exchange. Whether the market downturn was a systemic risk is doubtful - only 5% of financial assets held by the Chinese are equities, and even after recent falls the domestic stock exchanges are still up by double-digit levels year-to-date. The situation on the Hang Seng China Enterprises Index (HSCEI), which is key for foreign investors, is different. This index is now at a similar level to the start of 2015 and could, in our view, offer opportunities in the second half of the year due both to valuations and a likely r