Thematic (Sector/Industry)

• Stocks rallied on Wednesday as the Federal Reserve maintained interest rates, underscoring progress against inflation.
• Megacap tech stocks rebounded strongly, with Nvidia soaring 12.8% after rival AMD’s positive results boosted semiconductor sector optimism
• The Bank of Japan raised interest rates to 0.25% and announced a bond tapering plan, signaling confidence in economic recovery and addressing yen weakness

• The overall textiles sector especially in FY23 was dull and witnessed difficulties across the industry and especially on the exports side.
• However, the union budget 2024 has provided several positives for the textiles industry in general, especially on the MSMEs side. 
• If things go well, the sector is poised for a turnaround and can be the theme of the year.

• BHP bullish on copper, bearish on iron ore due to buying Filo with Lundeens
• FMG share price down nearly 40% with export volumes shrinking and rising costs in WA operations
• Iron ore prices break below $100/ton for the first time in a while, China steelmaker Jiangsu DeLong facing counterparty risk and property market struggles due to lack of demand and unfinished projects

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• Nicotine alternatives like zins and nicotine gum are becoming increasingly popular
• Sales of these products have skyrocketed, leading to shortages
• The regulatory landscape around nicotine products is complex and constantly evolving

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

• SEBI proposes measures to curb speculative trading in index derivatives, including rationalizing options strikes and increasing contract sizes.
• High retail losses in derivatives trading prompt SEBI’s intervention to enhance market stability and investor protection.
• SEBI’s actions emphasize cautious participation and regulatory oversight in the highly speculative derivatives market.

• Covid created unusual demand trends causing some companies to invest in the wrong areas
• Current consumer landscape is cautious with consumers spending less due to inflation and interest rates
• Market is cautious on consumer sector, presenting buying opportunities for quality companies

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

• Airtel repurposes 4G spectrum for advanced 5G, launching Standalone and Non-Standalone modes soon.
• HPCL aims to start LNG terminal in December, seeking long-term import deals and expansion.
• Vedanta’s demerger plan approved by creditors, creating six independent entities to manage debt.

• Meta and MSFT commented they are seeing benefits from their AI investments, pointing to increased capex positive for JP SPE names.
• Advantest upgrading its tester market outlook for both SoC and memory over a solid 1Q earnings print will be positive for 6871 Micronics ahead of numbers.
• Japan off the China export ban for now, however the US is unlikely to rollover and allow China unfettered access to cutting edge tech.

• Total public EV charging stations (incl. temporary unavailable locations) were 71,129 as of July 30, 2024. Compared to the end of FY23, it is an increase of 10.0%.
• Total EVSE charging ports (including the temporary unavailable ports) were 190,454, up nearly 13.1% compared to the end of 2023 and up 1.3% over June 2024.
• US considerably lags behind China which had 3.05 million public charging stations at the end of May 2024.

• The S&P 500 fell 0.5%, pressured by declines in megacap tech stocks as investors awaited key earnings reports
• Toyota retained its position as the world’s top automaker in the first half of 2024, selling 5.16 million vehicles globally
• Shimano revised its fiscal year 2024 net profit forecast up by 8% to 77 billion yen,  driven by strong sales of high-priced bicycle parts in China

• Weak performance in the tech sector with dampened sentiment towards AI and semiconductor stocks. Microsoft’s stock price fell after market pulling other large caps lower
• US homebuilders were strong with Lennar +1.3%, Dr Horton +1%, after S&P CoreLogic home prices topped expectations in a good read for 1911 Sumi Forestry and 1928 Sekisui House
• TDK’s strong 1Q OP beat estimates, driven by HDD and energy products. MLCC sales fell, which may negatively impact Taiyo Yuden, while Murata missed estimates.

• BABA US/PDD US/JD US: Alibaba overhauls Taobao/Tmall merchant fees (+/-/-)
• NTES US: NetEase’s <Naraka Mobile> Ranks 3rd on China iOS Grossing Chart on First Day, Performance In Line with Expectations (+)
• TCOM US/ATAT US: Hotel RevPAR Drops 9% YoY in July MTD (-/-）

• Tencent’s game performance was mixed. <DnF Mobile> continued to perform well, with popularity increasing after the summer update. <Peacekeeper Elite> saw a natural decline due to the game’s lifespan.
• NetEase’s <Naraka Mobile> launched on July 25 and showed an impressive performance with a large influx of players. It is expected to be a blockbuster with billions in annual grossing
• Bilibili’s <FGO> surged to fifth place on the grossing chart after its anniversary event, demonstrating the strong spending enthusiasm and loyalties of players for this nearly decade-old game.

• L&T wins contracts for key grid infrastructure in India, Saudi Arabia, UAE, advancing clean energy.
• Airtel re-farms mid-band spectrum to boost 5G speeds and coverage, launching SA technology soon.
• Adani Total Gas reports 20% profit rise, driven by higher CNG and PNG sales.

• LKNCY US:Luckin Coffee’s Moutai Flavored Latte is Gradually Being Phased Out (-)
• 1519 HK/ZTO US: Weekly parcel volume grew ~33% y-o-y (+)
• 981 HK/1810 HK/AAPL US/NVDA US: SMIC’s upcoming N+3 process to narrow performance with TSMC’s 5nm (+/-/-/-)

• US stocks closed mostly flat on Monday, starting a significant week that includes a Federal Reserve rate decision, the July jobs report, and Big Tech earnings
• Japanese luxury market thrives due to Chinese tourists exploiting the weak yen. Brands like Gucci, Burberry, and LVMH report strong sales in Japan, contrasting global trends
• Hong Kong’s activist investment fund Oasis Management acquired about 5% of Pasona Group; Murakami takes 5.05% of Heiwa Real Estate. 

• Coal India advancing 119 projects to increase coal production, aiming for 1 billion tonnes by 2025-26.
• Adani’s $4 billion PVC project resumes, targeting India’s PVC demand with 2 million tonnes capacity.
• ITC plans Rs 20,000 crore investment, focusing on FMCG, paperboards, packaging, and hotel business demerger.

• This is going to be a big week, so I’ll be as brief as I can while getting everything in one place.
• Let’s start with Automotive, which is my favorite idea set right now. The problem is that the near-term results were much weaker than I expected, and it looks like the bottom is maybe in.
• I was expecting another quarter of scrapping along the bottom, and Industrial weakness punched a new low.

• Budget 2024 introduces revised income tax slabs, increased standard deductions, and changes to capital gains taxation, including higher rates and updated exemption limits.
• Key updates include reduced surcharge rates for high earners, higher capital gains taxes, and increased STT on F&O, affecting investor returns and compliance.
• The budget’s changes simplify tax structures but increase tax burdens on capital gains and trading, requiring adjustments in investment strategies and tax planning.

• Positive CEO comments on Silicon Carbide (SiC) from ON Semi could be beneficial for Rohm which has significant SiC exposure.
• Tesla’s 5.6% rise after Morgan Stanley named it a top pick in the US auto sector may help buoy sentiment for the beleaguered Panasonic with Tesla as it’s major customer.
• Names in Factory Automation with strong China exposure may benefit from Fanuc’s stronger-than-expected Q1 results, driven by government subsidies and growth.

• The market rotation continued to benefit many of the stocks in the Water Tower Research Furniture and Furnishings indexes.
• The Water Tower Research Commercial/Contract Furniture Index was up (+5.5%) and Home Goods Retailers Index was up (+4.7%) for the week, while the Residential Manufacturers & Suppliers Index pulled back slightly (-1.4%) overall, even as many individual issues within the index continued higher, as the rotation to smaller-cap and value stocks continued with the S&P 500 and Dow 30 (-1.9%) down, while the R2K (+1.8%) continued higher.
• The Water Tower Research Mass Retailers Index was down modestly (-0.4%).

• Last week, IONS matched Ultragenyx’s Angelman benefit, with maybe better safety.
• PFE and SGMO had approvable gene therapy results in hemophilia A, but durability remains a question.
• BIIB had a bad week, as SAGE-partnered essential tumor trial failed and ESAIY-partnered lecanemab in Alzheimer’s hit an EU regulatory wall. 

• US stocks ended a volatile week on a positive note as promising inflation data bolstered investor sentiment.
• KEYENCE reported a net income of 93.5 billion yen for April-June 2024, a 10% increase year-on-year and a record high for the fourth consecutive year
• Strategic Capital acquired a 5.02% stake in Yellow Hat, as revealed in a large shareholding report submitted to the Kanto Finance Bureau.

• Despite management’s plans for buybacks, restructuring, and debt reduction, Sanken’s stock fell below preannouncement levels and appears mispriced. 
• Strong results from US homebuilders and the Electronic Materials sector suggest positive momentum for Japanese firms like Sumitomo Forestry, Sekisui House, and Shin-Etsu.
• With 50% of operating profit coming from China, Screen is vulnerable to US trade restrictions. Despite a positive earnings report, concerns over these issues may dampen sentiment

• The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: South Korean and Thailand GDP growth data.
• Companies mentioned:Kakao Corp (035720 KS), Tencent (700 HK), Samsung Electronics (005930 KS)

• The Topix declined by 5.6%, while the Nikkei lost almost 2,400 points, or 6%. However, equities took a back seat to the FX market
• Given the currency movements and the global tech sell-off, it’s no surprise that the worst performers were semiconductors (-10%) and autos (-9%).
• The recent market movements appear to have been driven primarily by macro events, particularly the yen’s reversal, which impacted high beta and momentum stocks.

• 1797 HK/JD US: Popular live streamer Dong Yuhui leaves East Buy (-/+)
• BABA US/PDD US: AliExpress receives small fine in Korea due to data privacy violation (+)
• Chinese Gaming Industry: Games Can Now Be Filed for Testing Without Approval of Game Code, Guangdong Province Leads the Way  (+)

• Wheat trading sideways on weather concerns, but bearish sentiment driven by ample supplies is likely to prevail.
• Corn prices rally significantly driven by unfavorable weather conditions and strong export demand. Analysts expect bearish turnaround.
• Soybeans recover on US presidential election uncertainty; but speculation is overshadowed by persistent concerns over Chinese demand.

• Industry executives attending the World AI Conference in Shanghai expressed concerns about recurring technological issues in the development of large language models (LLMs) and offered possible solutions, as demand for more reliable artificial intelligence (AI) models designed for sector-specific software grows stronger.
• The issues also come as China’s tech titans have kicked off a new round of price cuts for their AI models, extending a fierce price war in an effort not to lead the industry but to gain more users for their cloud businesses — a key resource for AI developers.
• Xu Li, CEO of Chinese facial recognition and AI specialist SenseTime Group Inc.

• Bajaj Auto to invest INR 800 crore in Maharashtra to boost electric three-wheeler production.
• Emami plans to fully acquire The Man Company, enhancing its digital-first brand portfolio.
• WeWork India to launch new workspaces in Bengaluru and Noida, addressing flexible workspace demand.

• AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; target of A$0.75 per share: Diversified and high impact newsflow over the balance of 2024 – ADX has confirmed a very busy programme of activity from September.
• The overall unrisked value of the programme is ~A$1.70 per share, which represents 17x the current share price.
• In early September, ADX will drill the Anshof-2A side track.

• We look at the global macro themes that are impacting the equity market including the US election, the Fed and China’s latest rate cut
• We also look at the latest condition in Hong Kong, including the rates, the economy and the physical RE market
• HK RE stocks continue to trade at compelling valuation, but fund flows are needed if we want a re-rating

• 1810 HK/AAPL: Xiaomi’s China unit volume grew 17% yoy in 2Q (+/-)
• 1810 HK: Xiaomi acquires more land to build another EV factory (+)
• 981 HK/1810 HK: SMIC’s upcoming “5nm” process to feature significant efficiency improvement (+/-)

• Nearly six out of 10 of China’s trust companies saw their revenue and profit decline in the first half of 2024, reflecting challenges amid a regulator crackdown on an industry plagued by scandals.
• Among the 53 trust companies that have published their unaudited first half financial results, 13 reported net profits of less than 100 million yuan ($13.8 million) and three posted net losses.
• About 60% of trust companies saw year-on-year declines in operating revenue, total profit and net profit in the first half, underscoring significant business pressure and performance disparities among companies, according to a research report by China Credit Trust Co.

• We call the communique courageous because it pressed ahead on three fundamental, long standing issues of Chinese economy: fiscal revenue, social security and over-capacity;
• But we question its timing as well as the wisdom of staunch refusal to print money to revive consumption. In our view, such measure doesn’t run counter to the communique;
• We believe the likelihood points to prolonged slow recovery in consumption, investment, job market and eventually manufacturing. But we see positive momentum in healthcare, infrastructure and eventually consumption.

• US economy grew at a faster-than-expected 2.8% in the second quarter.  
• Nasdaq Composite dropped 0.95% on Thursday, extending losses as investors sold off leading 2024 tech stocks
• Canon forecasts a 27% increase in net profit to 335 billion yen for fiscal year 2024, reaching a 17-year high

• Intraday trading surged from 1.5 million traders in FY19 to 6.9 million in FY23, driven by accessibility and financial literacy.
• Despite rising participation, 71% of intraday traders incurred losses in FY23, highlighting the risks and need for careful trading.
• The high losses among new traders emphasize the importance of experience, risk management, and informed decision-making in intraday trading.

• China is expected to be the largest national market for commercial airplane deliveries through 2043, Boeing Co. said, as the U.S. company resumed deliveries of its cash-cow 737 Max jets to Chinese airlines after a two-month pause.
• Boeing predicts 43,975 new commercial airplanes will be delivered globally over the next 20 years, according to its 2024 Commercial Market Outlook released Friday. That’s up from last year’s forecast of 42,595 aircraft.
• The manufacturer raised its forecast because it believes that air travel will have fully recovered from its pandemic-era slump by then, with demand even surpassing pre-pandemic levels, according to a press release about the Outlook.

• The GLP-1 market is evolving at a rapid pace, and we have quickly moved onto the development of a triple agonist drug.
• First mover advantage is expected to lose steam as more effective GLP-1s are launched.
• Scary side effects; challenged patents and strong competition will favour the cost-effective producers.

• HDFC Bank raises fixed deposit rates to 7.35% and 7.40% for specific tenors.
• Adani Green Energy starts 250 MW wind project, boosting total capacity to 2,250 MW.
• EQT exits RBL Bank with Rs 1,100 crore stake sale; shares drop 3%.

• Heavy lithium. Halfway through the year, the S&P 500 has appreciated 15.4% YTD, driven by the strong performance of the Magnificent Seven, even as the remaining 490+ companies saw their stock prices move more in line with the Russell 2000, which itself posted an 7.8% gain YTD.
• Over the same timeframe, the WTR-CMI Index delivered a disappointing 4.4% gain under the weight of lithium and graphite companies losing 36-62% of their value due to collapsing lithium and synthetic graphite prices, driven by slower growth of EVs and steel production and liquidation of excess inventories by customers, built over the course of 2022-23.

• Sticky costs remain as pricing power wanes. Over the course of 2022-23, many companies experiencing a rapid rise in raw material costs, driven by higher petrochemical prices and rising costs of transportation and logistics aggressively raised prices in an attempt to preserve profits, if not profit margins. 

• US semiconductor restrictions are limiting China’s access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.
• Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.
• To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like Xiaomi Corp (1810 HK) to benefit first.

• U.S. stocks plunged on Wednesday, driven by a 3.6% drop in the Nasdaq Composite
• Canon Marketing Japan announced a tender offer to buy back up to 90 billion yen of its own
• Furukawa Electric will build new plants in Japan and the Philippines to produce water-cooled systems for data centers

• Paytm and Axis Bank collaborate to enhance POS solutions, integrating advanced card payment devices.
• Gland Pharma and Zydus Lifesciences secure key USFDA approvals for new medications.
• Tata Consumer announces a Rs 3,000 crore rights issue to bolster financial position and growth.

• Equity analysts spend most of their time trying to get a handle on what is going to happen over the next 12-24 months for the companies that they follow.
• Much of the focus is on ‘the numbers’. But sometimes it’s useful to pause and take some time to think about the big picture factors that could affect the industries and companies we care about.
• In this industry report, we talk about five of the current themes and one trend we have been thinking about, with an eye on how they may affect the furniture and furnishings industries (both residential and contract/commercial) going forward

• Major indices surged, led by Rambus +9.14% signaling strong tech sector momentum.  However there is continued weakness for auto related chips and a lower cyclical demand in industrial IC’s.
• CrowStrike continued it’s significant drop, with CEO to testify on outage; increased interest in rivals like Trend Micro suggests potential market share shifts in security software. 
• Kyushu Rail announced a 15% rail fare hike effective April 2025, leading to a +6.78% surge; tech industry growth in Kyushu will impact infrastructure-related firms positively.

• US Stocks were flat ahead of key tech earnings. Both Alphabet and Tesla posted mixed results, with share prices falling after-hours
• Nidec revised its FY2025 forecast, expecting a 48% year-on-year increase in net profit to 185 billion yen
• Hitachi will sell its 40% stake in its air-conditioning joint venture with Johnson Controls International to Bosch

• Nvidia gave guidance for significantly slower Q/Q growth in Q2
• Nvidia and its HBM suppliers have told of shortages, driving hyperscale datacenters to build excess inventory
• At the first sign of softness, Nvidia’s customers are likely to enter a digestion phase, drastically reducing orders

• 9 Key Sectors for generating opportunities for India in Budget: Agri, Employment, Inclusive development, Manufacturing and Services, Urban Development, Energy, Infra, Innovation & R&D, NexGen reforms. 
• The overall tone of the Union Budget 2024 emphasizes support for MSMEs, Infrastructure, defence, and youth development.
• The budget’s focus on diverse sectors and inclusive development strengthens confidence in India’s long-term economic resilience and growth trajectory.

• The Economic Survey 2024 emphasizes long-term strategies for India’s “Amrit Kaal” goals, highlighting sustained economic growth, climate action, and sectoral advancements.
• India’s GDP grew by 8.2% in FY24, with key sectors like agriculture, manufacturing, and electronics showing strong performance. The government focuses on bottom-up reforms for sustained growth.
• The survey’s emphasis on strategic, long-term growth and resilience reinforces confidence in India’s economic future, aligning with the vision for a “Viksit Bharat” by 2047.

• India’s CCI intensively scrutinizes Reliance-Disney $8.5 billion merger amid major antitrust concerns.
• Eureka Forbes, under new leadership, plans extensive distribution network growth and product launches.
• Suzlon’s Q1 consolidated net profit soars 200% YoY, reaching ₹302 crore with a 50% revenue increase.

• 3690 HK/TCOM US: Online catering is robust in 2Q24, while online tourism diminishing quickly（+/-）
• 1024 HK: Source said Kuaishou’s video generation LLM, Kling AI, has surpassed one million total application users.（+）
• 3690 HK:Meituan may launch food delivery service in Riyadh in September or October this year (+)

• Macro News Update: Our take from the decision draft of the CCP 3rd Plenary Session
• 1519 HK/ZTO US: Weekly parcel volume shows 31% y-o-y growth (+)
• 1810 HK/981 HK: Huawei’s mid-premium Nova 13 smartphone to be delayed (+//)

• Inflation and Market Dynamics: In this letter, we discuss persistent inflationary pressures and potential misallocation of capital in financial markets that could lead to future economic instability.
• Of specific concern is persistent under-investment in the Real Asset Ecosystem, which includes commodity producers and industries with significant vertical linkages to commodities, an ecosystem of businesses that ensure sustainable economic growth and stability.

• We review our Enviox and Siemens Energy investment thesis and explain continued confidence in our lithium investments despite widespread negative EV sentiment.

• The WTR Sustainable Index was down 3.6% W/W versus the S&P 500 Index (down 2.0%), the Russell 2000 Index (up 1.7%) and the Nasdaq Index (down 4.0%).
• Energy Technology (14.4% of the index) was down 8.1%, while Industrial Climate and Ag Technology (59.6% of the index) was down 1.7%, ClimateTech Mining was down 7.0%, and Advanced Transportation Solutions (20.7% of index) was down 6.0%.

• Top 10 Performers: ARVL, ZAPP, NAAS, VMC, PEGY, QS, LCID, OUST, EVGO, COMM

• The US Biosecure Act may restrict federal sourcing from China, boosting India’s pharmaceutical manufacturing.
• India’s CDMO market is expected to double in three years, significantly enhancing global competitiveness.
• Strategic investments in India’s pharmaceutical sector now appear more promising and potentially lucrative.

• Aehr had a messy print, with the core business actually weaker than expected as they incorporated their recent acquisition. It’s hard to stay bearish, as they have a lot of potential product launches coming.

• TSMC beat gross margins despite everything because of higher utilization. The logic cycle is starting to kick off in earnest. I believe WFE Capex will be much higher next year.

• ASML talked up high-NA DRAM insertion on 25/26. Only Samsung could do it. Good luck, Samsung!

• Nvidia led the tech recovery, surging 4.8%, with Meta and Alphabet also posting strong gains.
• Goodyear Tire & Rubber is selling its off-the-road equipment tire business to Yokohama Rubber for $905 million
• Mitsubishi Heavy Industries has contracted with Airbus to supply emergency doors for A321neo planes, diversifying from its reliance on Boeing

• The Union Budget 2024 expectations: Focuse on job creation, rural support, and domestic manufacturing, aiming to drive economic growth and self-reliance.
• Employment, housing and Manufacturing will be the key priorities for Modi 3.O.
• This Budget can see some Taxation benefits for middle-class salaried individuals by offering improved tax incentives and a simpler tax system.

• FM Nirmala Sitharaman prepares to unveil the Union Budget for the fiscal year 2024-25 on July 23rd.
• Movement of Sensex and Nifty around the Budget day and post that.
• What sectors performed best and worst during the last 10 budget days?

• Markets fell with Russell -0.63%, SPX -0.71%, Nasdaq -0.93% and SOX -3.11%. UST10 rose 0.88% and the yen weakened to Y157.48. Commodoties fell.
• CRWD -11.1%, MSFT -0.74%, and power semis (Wolfspeed -7.17%) fell due to a CrowdStrike IT outage and Trump-related EV concerns respectively, showing sector vulnerability.
• Stocks with China exposure fell sharply due to US export restrictions, with Disco -23.1%, TEL -18.1%, Screen -17.8%. Intuitive Surgical surged on strong Q2 results and da Vinci 5 launch.

• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Roche Holding Ltd. (RHHBY) reported initial Phase 1 data for oral GLP-1R agonist CT-996 in obesity patients, showing a 6.1% placebo-adjusted weight loss (p<0.001) at four weeks.
• While the weight loss compares favorably with approved injectables at four weeks (1-3% adjusted), the lack of details in the CT996 data, like baseline body weight, limits any cross-trial comparison. 

• Cannabis stocks started strong last week but faded on Friday. MSOS dropped 2.50% over the five sessions, while YOLO fell 1.73%.
• Ascend (CSE: AAWH, OTCQX: AAWH) rallied 12.18% following its debt refinancing, while Jushi (CSE: JUSH, OTCQX: JUSHF) lost the most at -9.84%.
• Ascend (CSE: AAWH, OTCQX: AAWH) announced on Monday it successfully refinanced its debt.

• Rotation into smaller-cap and value stocks continues.
• The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers & Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN.
• The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. 

• The S&P 500 dropped 0.7% and the Nasdaq Composite declined 0.8%, both marking their worst week since April
• Speculative short positions in the yen have dropped significantly following Japan’s suspected yen-buying intervention
• Effissimo Capital Management, an activist investment fund, acquired 6.03% of Teijin’s shares

• Irate U.S. politicians have gunned down their own tech sector, triggering declines of 7% to 20% among leading semiconductor equipment stocks outside China. 
• We expect a bounce after such large declines – and further gains for Naura and AMEC in China. 
• Investors now face difficult questions about the future of Chinese demand, the sustainability of the AI boom, and valuations. We are not optimistic.

• All three Chinese airlines trimmed their losses in 1H24, suggesting a pick-up in sector fundamentals. However, their 2Q24 bottom line displayed different trends.
• Air China Ltd (H) (753 HK) is performing the best, with QoQ improvement in both reported and recurring losses (reduction by 41.7% and 7.4%, respectively).
• China Southern Airlines (1055 HK), however, dipped back into red in 2Q24 after making a profit in 1Q24. With Air China underperforming YTD, there is room to revenge in 2H24.

• The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Chinese GDP growth, retail sales, and industrial production, Indian inflation data, and Malaysian GDO growth.
• Companies mentioned:Kakao Corp (035720 KS), Samsung Electronics (005930 KS)