Thematic (Sector/Industry)

• Core inflation rates remain stubbornly high and real wages are still falling. 
• Surveys suggest one more major round of price hikes in October but the government still thinks prices will stabilise below its 2% target by the end of the year.
• The increases are lowering consumer confidence – bad news for most retailers, although major discount chains are making hay while the sun, well, doesn’t shine.

• Major central banks are shifting towards rate cuts, with the European Central Bank this week lowering rates to 3.5%
• Japanese stocks ended mixed: Nikkei (+0.5%), Topix (-1%), while the yen strengthened ~1 yen to 140.8/$.
• Ebara, IHI, and Softbank were among the major gainers this week

• Chinese banks are under strain as their deposits shrink in the wake of a regulatory crackdown on offering deposit rates higher than regulatory caps.
• In the first half of the year, many Chinese mainland-listed commercial banks saw a decline in their net cash flow generated from operating activities — a key indicator of lenders’ liquidity — Caixin calculations based on their interim reports show.
• Among China’s “Big Six” state-owned banks by assets, only Postal Savings Bank of China Co.

• Chariot (CHAR LN)C; Target price £0.40 per share: Anchois-3 encounters gas in the appraisal targets but one of the exploration target is dry – The Anchois-3 well has 3 objectives.
• While the initial pilot hole encountered the targeted reservoirs at the Anchois Footwall prospect, they were interpreted as water wet.
• Our ReNAV for this prospect was £0.03/sh.

• U.S. stocks climbed Thursday after a key inflation report showed the producer-price index rose 0.2% in August, in line with expectations
• The European Central Bank cut its deposit rate by 25 basis points to 3.5% amid slowing inflation and weak economic growth
• Sumitomo Corporation is launching a renewable energy business in India, investing 100 billion yen with a local partner to develop solar and wind power plants

• The Fed’s Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new
• JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of ‘importance to system’ so that JPM is ranked as first and State Street the lowest
• Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared

• EV demand slump prompts CATL production cuts, lithium prices fall below breakeven
• What happened to Nvidia’s MOAT? AMD is gaining inference traction 
• Samsung issues at 2nm and 4nm and TSM continues to widen tech leadership. TSM as a Monopsony could hurt TEL and ASML in time

• US homebuilders outperformance after Freddie Mac reported 30-year mortgages were at 18-month lows a positive for Sumitomo Forestry and Sekisui House.
• Shin-Etsu should also see upside given its US PVC exposure, with the stock looking oversold after heavy foreigner selling MTD.
• Shiseido’s first new product launch in 4-years for ‘Elixir’ range, along with reports that its domestic business is picking up, may be enough to spark a squeeze off multi-year lows.

• ATAT US/TCOM US: Hotel demand grow steadily in 1st week of September, with leisure travel being the main driver(+/+)
• AAPL US/1810 HK/981 HK: Pre-registrations for iPhone 16 series in China well below prior models.(-/+/+)
• AAPL US/1810 HK/981 HK: Huawei Mate XT receives positive commentary for design (-/-/+)

• During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.
• Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.
• The Silicon wafer segment is entering a recovery phase. Yet, you can buy the key players today for the same price you would have paid 5 years ago. That’s nice..

• Shopping malls have finally recovered to pre-Covid sales levels now that consumers are travelling freely (at least inside Japan) and spending more on discretionary items in some segments.
• But development of new malls is slow due to falling demand from tenants, saturation in the best locations, higher costs and the labour shortage.  
• The outlook remains muted, with little prospect of a major change in investment schedules although some larger developments are in the pipeline.

• PDD US/BABA US: PDD’s updated ad-tool to launch this week (+/-)
• BABA US: Freshippo private-brand food products to launch in Australia supermarket eBest (/)
• PDD US/SE US : Temu remains most-downloaded app in LATAM during August (+/-)

• WTR-CMI last week. In a down week for the market, with both the S&P 500 and Russell 2000 declining 4.2% and 5.7%, respectively, 29 of the 30 stocks in our WTR-CMI Index likewise saw their prices fall 4.0%, with AVD being the only exception, appreciating 9.1% for the week.
• YTD, the S&P 500, heavily weighted toward tech and internet stocks, has increased 13.4%, while our WTR-CMI Index has increased 7.2%, outperforming the broader Russell 2000’s 3.2% rise, despite lithium stocks’ 50%- plus declines.
• Recycled plastics market gaining acceptance. LYB announced the acquisition of German APK AG, a mechanical plastics recycler to bolster its circular economy and low-carbon credentials, while AVTN launched a pigment additive for plastics used in automotive plications made from recycled tires, as an alternative to carbon black, again aiming at helping its customers reduce their carbon impact while improving its own circular economy efforts.

• The Nasdaq jumped 2.17%, driven by tech and semiconductor stocks. Nvidia surged 8%, and AMD rose nearly 5%
• Mitsui & Co. is doubling its share buyback limit from 200 billion to 400 billion yen, the largest in its history.
• Kubota acquired U.S. agricultural startup Bloomfield Robotics, which specializes in AI-powered fruit analysis using tractor-mounted cameras

• Topsports International Holdings (6110 HK) miss suggests inventory fire sale ahead. Negative for demand in China, Nike (NKE US), Anta Sports Products (2020 HK) and the whole sector
• Chinese consumers aren’t buying Bayerische Motoren Werke (BMW) (BMW GR) or going to the Movies
• But Americans are still walking in Westerns Boots Boot Barn Holdings (BOOT US) 

• Ally Financial (ALLY US) gave a poor view of now and the immediate future for credit costs within its primary loan book, used cars for subprime borrowers
• There is often good read-through for mainstream banks and overall credit metrics, we saw this in Thailand before 1997 and in the US with Indymac, Countrywide, Household
• If the Fed has a better view on granular data than one single finance company, we believe they will use this data when considering rate cut magnitude, next week

• Major rebound for tech/AI as markets went risk-on with the debate de-risked and consumer inflation data adding to the certainty for Sep rate cuts and a soft landing for the US economy.
• Renewables in Japan should follow US names higher after the likes of FSLR surged on expectations measures such as the inflation reduction act will continue.
• SPE set to surge, but avoid excessive optimism for China export names after Harris comments that the US will win the AI and quantum computing race, and Trump’s China critisism.

• The EU AI Act’s strict testing for high-risk AI may increase compliance costs for tech firms, forcing them to slow down releases or invest more in safety protocols. 
• California’s AI Bill anticipates future advancements, putting tech firms on notice, driving pre emptive transparency efforts, and likely raising operational costs for scaling AI systems. 
• Tech giants like Meta and OpenAI, with democrats like Pelosi oppose California’s SB 1047, citing risks to open-source AI and innovation. Prominent figures like Musk and Anthropic AI support regulation.

• Paladin announcement surprises after lack of information in the morning
• Greatland raises $500 million for Newmont’s Telfer, with potential deferred payments
• Telfer nearing end of its life, but potential for new opportunities with Greatland’s involvement

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The downturn in the property market is an indisputable fact, but who can survive this disaster depends on whether they can “turn around” quickly enough.
• In fact, in addition to the word “split”, the recent theme of the property market also revolves around the word “reform”.
• For example, the government has taken the lead in “converting” 20% of the commercial floor space in the Hung Shui Kiu New Development Area in Yuen Long into residential buildings.

• The U.S. House passed the Biosecure Act, mandating U.S. pharma firms to cut ties with specific Chinese biotechs by 2032.
• This opens opportunities for Indian CDMOs, positioning them as viable alternatives due to geopolitical alignment and regulatory quality.
• India’s CDMOs could see substantial growth, benefiting from increased global diversification efforts away from China.

• US stocks closed mixed on Tuesday as investors braced for an upcoming consumer inflation report crucial to potential Fed rate cuts
• Japan Machine Tool Manufacturers’ Association reported a 4% decrease in August orders to 110.7 billion yen.
• Sony will launch the PlayStation 5 Pro on November 7, featuring AI-enhanced visuals, a more powerful GPU, and doubled storage capacity

• AAPL US/1810 HK/981 HK: iPhone 16 sees negative initial reception in China (-/+/+)
• 981 HK: SenseTime announces 54,000 GPU cluster, likely supplied by Huawei (+)
• 1810 HK/XPEV US/NIO US/LI US: Tesla officially announced that it will launch FSD in China in the first quarter of 2025.(///////)

• Apple (AAPL US) iPhone event ‘boring’, lacks innovation, pushes tech improvements out to 2025. Consumers’ reaction? “Meh”
• Samsung Electronics (005930 KS) Samsung’s AI products are only at 30% of consumers’ expectations. Meanwhile Huawei Technology (40978Z CH) Mate XT takes technology to a new level 
• Electric Vehicles backlash to regulations mirror setbacks for OEMs. Toyota Motor (7203 JP) positioned to win

• Strong tech rebound off the morning lows with AI related names starting to pick up favour again helped by good numbers from Oracle.
• The hefty price tag for Sony’s PS5 Pro is unlikely to appeal to casual gamers, but should still boost sales in the interim as a mid-cycle boost for the PlayStation.
• Fujitsu’s IR day yesterday sets an upbeat tone, but lacks catalysts which could help push the stock to new highs.

• Adani Green Energy redeemed $750 million Holdco Notes, advancing its 50 GW renewable capacity target.
• Jio Financial and BlackRock form a joint venture to offer investment advisory services in India.
• Bank of Baroda raises INR 5,000 crore through infrastructure bonds, underscoring strong investor demand.

• 700 HK: Tencent’s <Honor of Kings: World>to Launch in 2025.(+)
• 700 HK: Tencent’s <Delta Force> to Launch on September 26 for PC and Mobile (+)
• 700 HK/NTES US: Tencent and NetEase Announce Playtime Restrictions for Minors During Mid-Autumn and National Day Holidays (/)

• We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
• Portfolio changes: Two stock remains, 12 stocks added into portfolio
• Since its inception, it has generated a before-fee total return of 168% versus the MSCI Asia ex Japan of 82%

• U.S. stocks surged Monday as investors bought the dip following Wall Street’s worst week of the year, anticipating a Federal Reserve rate cut later this month
• Apple’s “Glowtime” event revealed the iPhone 16 lineup, AI-powered iOS 18 updates, and new hardware including AirPods 4 and Apple Watch Series 10
• In August, Japanese investors set a record by purchasing 7.34 trillion yen ($51.3 billion) in foreign bonds, driven by a stronger yen

• With many real estate developers in China reporting losses, and with greater clarity of their woes, there should be flow through to banks.
• Generally, at the top line and in head line bad loans, this is simply not visible, so that one must look to notes to financial statements, other granular data.
• Bank Of Communications Co H (3328 HK) shows restructured loans up from RMB41bn to RMB61bn in just six months, with many China banks showing far higher loss loans

• Tech rebounds overnight led by AI related, although concerns weighing on China export names including ASML.
• Oracle numbers beating after hours setting a positive tone for software as well as some SPE, with capex plans set to double YoY.
• Nothing amazing from the Apple event likely to weigh on Japanese suppliers, although little expectation priced in. ARM and Softbank the big winners, with V9 chips running the new iPhones.

• We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology
• Portfolio changes: Four stocks remain, 10 stocks added to our portfolio
• Since its inception, the portfolio has generated a before-fee total return of 249% versus MSCI ASEAN’s 39%

• Tencent’s <Honor of Kings> has seen significant grossing growth following gameplay features’ expansion and global servers’ launch.
• Additionally, <Teamfight Tactics Mobile> saw a surge in grossing rankings after its anniversary event and has since maintained a stable position.
• <Justice Mobile> has stabilized following its anniversary update, while <Naraka Mobile> experienced a noticeable drop in revenue rankings. Future updates will be monitored to assess the game’s performance moving forward.

• U.S. stocks slumped Friday, capping a volatile week as weak August jobs data fueled concerns about the economy
• Seiren: Hong Kong’s activist fund Oasis Management acquired a 6.28% stake in Seiren, becoming its third-largest shareholder
• Toyota announced plans to produce next-generation EV batteries at new plants in Fukuoka and Hyogo prefectures.

• The US released its framework for further semiconductor related export restrictions to China late last week, including access to quantum computers and components, chipmaking tools including gate all-around (GAA) technologies.
• US homebuilders jumped after a survey showed new home orders rebounded sharply in August ahead of the expected rate cuts in September.
• Plenty of positive headlines for Alimentation Couche-Tard’s bid for 7&I, including comments that they are confident financing the deal in cash, and ready and willing to advance friendly discussions.

• Generative AI seen through the lens of corporate earnings shows a lack of ROI or growth drivers in applications Broadcom (AVGO US)Hewlett Packard Enterprise (HPE US)  Alphabet (GOOGL US) 
• U.S. semi equipment restrictions to China could negatively impact Tokyo Electron, ASML results in 2025 ASML Holding NV (ASML NA)Tokyo Electron Device (2760 JP) 
• Flagship global Tech conference in NYC suggests interest has picked up in global software above hardware in a notable shift

• Recent improvements in solar and battery technologies have been driven by advances in materials science, manufacturing techniques, and system efficiency.
• Solid-State batteries replace the liquid electrolyte in traditional lithium-ion batteries with a solid electrolyte, energy density, and charging speeds. They are seen as a game-changer, especially for electric vehicles.
• Both solar and battery technologies are becoming cheaper, making renewable energy more accessible and economically viable.

• Assets remained under pressure across the board: SPX (-4.2%), Nasdaq (-5.8%), Oil (-7.5%) and 10 year bonds (-20bps).
• Japanese stocks were also under pressure: Nikkei (-5.8%), Topix (-4.2%), while the yen strengthened almost 4 yen.
• Kao’s stock rose by 9% this week due to improved earnings estimates and favorable conditions for raising prices of everyday necessities in Japan

• The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Chinese PMI data, South Korean exports and inflation data.
• Companies mentioned:Alibaba Group Holding (9988 HK), ByteDance (1439927D CH)

• India’s IPO boom is bucking the global trend with highest ever IPOs in H12024; thanks to strong inflows and investor confidence.
• SEBI’s report show flipping trend with 54% of investors have sold their IPO bound stocks within a week of listing.
• 2024 has been the golden year for all the stakeholders considering better listing gains and returns along with number of opportunities available.

• China’s solar manufacturers have seen their bottom line severely hit by a deepening industry glut that has triggered a brutal price war.
• Several companies published first-half results on Friday, showing worsening profitability as the industry grapples with plunging prices.
• Longi Green Energy Technology Co. Ltd., China’s largest solar wafer producer, reported a net loss of 5.2 billion yuan ($732 million) for the first six months, a sharp reversal from the 9.2 billion-yuan net profit recorded a year earlier.

• Adani-Tower JV to Set Up $10 Billion Semiconductor Plant in Maharashtra
• Reliance Industries’ 1:1 Bonus Shares Announcement and Stock Perfor mance  
• Centre Plans Incentives for Electric Ambulances and Police Vehicles under FAME III

• The South African All Property Index (J803) continued its strong run in August, rising 8.37% for the month.
• The All Property Index’s 2024 Total Return is now up 23.91%. 
• Investor in South African Listed Property are finally reaping the rewards for their patience through a long and difficult down-cycle for the sector.

• Condor Energies (CDR CN)C; Target price C$5.80 per share: Initiating coverage – Condor Energies is a ~US$75 mm market cap TSX-listed company focused on low carbon and energy transition opportunities in Central Asia.
• Condor was transformed in 2024 by the acquisition of >10 mboe/d production of natural gas in Uzbekistan.
• The key value driver for the shares is the imminent sanction of Condor’s 1st liquefaction plant in Kazakhstan to convert low-cost natural gas into high value LNG to displace expensive diesel for rail and mining haul truck transportation.