Thematic (Sector/Industry)

• Markets always act erratically, but I thought I would highlight one aspect that disproportionately impacts semiconductors.
• Factor investing is not new, but we are in a unique period where Momentum has quite a period of outperformance and short-term outperformance.
• This matters because semiconductors are (as far as my memory holds) the most significant weight in Momentum I’ve ever witnessed. 

• US stocks were mixed ahead of Tuesday’s CPI report that should give some clues on the path of interest rates
• Bitcoin rose to fresh record after the UK FCA said that it would not block requests for crypto-backed ETFs
• Nippon Active Value Fund, a British activist, increased its stake in Goodspeed, an automotive retailer, raising its ownership to 9.81%

• We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.
• Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  
• Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.

• Earnings from Culp, Arhaus, and Techtronic Industries led the sector news last week.
• Culp reported $60.4 million in revenue and a $1.74 million loss on the operating line.
• The revenue number was in line with our expectations and up 15% Y/Y. 

• The US cannabis MSOS ETF fell for the fourth time in the last five weeks.
• MSOS finished -8.68%, while the global YOLO ETF finished -7.99%. YTD, MSOS is +19.64% and YOLO is +10.59%.
• MSOS hit a 52-week high on February 6 at $10.64 and has since fallen 23.87%. Interestingly, since February 6, the fund has received $77.13 million in inflows.

• The Nikkei 225 Index declined by 0.56%, closing at 39,689 for the week, while the broader Topix Index gained 0.64% to reach 2,727
• In terms of sectors, defensive and domestic sectors posted the strongest gains this week. Gas Utilities (+9%), Electric Utilities (+5%), Construction (+7%), and Banks (+6.6%) were standout performers.
• At the stock level, Tsumura (+28%) was the standout stock this week on revisions to NHI drug prices

• US Stocks stumbled on Friday as Nvidia’s remarkable surge paused, capping off a volatile week.
• In the US, employers added 275,000 jobs in February, surpassing expectations despite a rise in the unemployment rate. This marks the third consecutive month of gains above 200,000
• SEC Chair Gary Gensler cautioned investors about cryptocurrencies as bitcoin reached a new all-time high, labelling the field as “rife with abuses and fraud.” Larry Fink is a HODLer

• 700 HK: Tencent has announced a new SLG mobile game titled <Civilization Mobile>（+）
• BABA: Alibaba launches new AI tool targeting content creation for merchants (+)
• BILI: Source suggested that Bilibili will establish a new game development department.(/)

• 1211 HK: Tesla’s German factory caught on arson, interrupting production for a week (-)
• BZ: Government’s 2024 new job creation guidance is relatively soft. (-)
• 9926 HK/9995 HK/1801 HK/1877 HK/BGNE: US senator move forward with bill to constrain Wuxi Apptec-（/）

• 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 Korea industrial production and inflation data, China trade data.
• Companies mentioned:Tata Motors Ltd (TTMT IN), SK Hynix (000660 KS), Indosat Tbk PT (ISAT IJ)

• Europe’s Real Estate sector has been dealing with a protracted slowdown in growth and financing availability that has seen the industry battle rising borrowing and refinancing costs, increasing the repayment burden on Developers, REITs and Real Estate Services providers.
• The downturn has been especially pertinent for the Real Estate Owners and Developers as they navigate the higher-for-longer interest rate environment.
• However, this trend hasn’t been pervasive throughout the Euro Area.

• Silicon wafers area shipments (in MSI) declined by 14.3% YoY in 2023
• Wafer revenues also declined by 10.9% to $12.3 billion over the same period
• We expect Q124 revenues to be down ~20% QoQ and anticipate a further 5% YoY decline in full year 2024 shipments

• Panoro Energy (PEN NO)C; target price of NOK47 per share: Hibiscus South on stream at 5-6 mbbl/d – The Hibiscus South well has been put in production at a rate of 5-6 mbbl/d.
• Once stabilized this should take production at Dussafu to ~30 mbbl/d.
• Pulsar Helium (PLSR CN)C; target price of C$0.80 per share: High Helium concentration at high impact appraisal well – The Jetstream #1 appraisal well at the Topaz helium project in Minnesota encountered helium shows while drilling, with helium concentration of up to 12.4% according to the on-site spectrometer.

• Developers scrambled to advertise projects to potential investors in the US between 2021-2023
• Prices for lithium reached all time highs due to impact of COVID on supply chains
• Prices have since plunged nearing a three-year low, causing uncertainty for companies with viable projects and automakers scaling back EV production forecasts

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

• The Dow Jones Industrial Average rose 0.34% to 38,791, while the S&P 500 hit a new record close, climbing 1.03% to 5,157
• Speculation over the Bank of Japan’s policy shift triggers yen’s strengthening, leading to a sell-off in export-oriented stocks.
• Japan’s largest labor confederation announced on Thursday that wage increase demands from its member unions have reached a 31-year high

• It’s the first MoM decline in semi sales since February 2023, but it’s a seasonal thing & YoY comparisons continue to grow stronger. 
• Forecasting 10% YoY growth in 2024 semiconductor sales, in line with TSMC’s outlook
• $1 trillion in annual semiconductor sales will likely happen in 2032 based on a 7.7% CAGR over the coming decade. 

• Federal Reserve Chair Jerome Powell reaffirms potential interest rate cuts, pending sustained evidence of inflation slowdown.
• ADP National Employment Report shows private sector job growth in February, surpassing January but missing Wall Street predictions
• Japanese firms enact substantial job cuts despite stock market surge, reflecting strategic restructuring amid rising wages.

• Stan Druckenmiller just bought shares in Barrick Gold and Newmont Mining.

• He thinks gold serves as a store of value, but only over the long run. It’s a hedge against any devaluation of the US Dollar.

• He also seems to think that gold prices should go up in a scenario of lower interest rates, higher inflation rates or a combination of both.

• NTES/700 HK : NPPA has released the February approvals for domestic game codes, with <Black Myth: Wukong> and <Naraka Mobile> receiving approval. (+)
• NTES: NetEase has established a new overseas studio, led by former <Call of Duty> designer.(+)
• BABA/BIDU/700 HK: Alibaba Cloud announces steep discounts on hardware products (+/-/-)

• E-Commerce growth slowed marginally as the sector consolidated post-Covid but remained higher than any other channel in 2022. 
• By 2025-26, it will be the largest channel, overtaking convenience stores – but Japan’s continuing support for retail stores means that omnichannel will be the main model.
• As a result, the majority of transactions will be researched, initiated, and fulfilled through a combination of online and physical stores.

• LI/XPEV/NIO: Li, Xpeng and GAC AION announced new price actions（+/+/-）
• ZLAB: Zai Lab’s revenue growth in 4Q23 is weak, and loss narrowing is limited （-）
• 1810 HK: Qualcomm exhibited a number of client-side LLM products at MWC Barcelona, covering mobile phones, PCs and communications（+）

• Bitcoin hit a high of $69,202 hitting an all time high. It then reversed course and fell to $63,400
• US stocks closed down by around 1% on Tuesday dragged down by weakness in tech stocks; Apple shares -2.8% on China iphone slump
• Tesla shares were ~4% lower after production halted at Giga factory in Berlin. Tesla also seeing 16% drop in auto shipments in China. 

• The yields on financial assets at DBS is now 3.92% for FY23. This compares with 4.64% for OCBC. 
• The change in yields on financial assets at DBS in the past year is 160bps compared with 194bps for OCBC.
• From FY19 to FY23 OCBC has only added SGD70bn to its total financial assets or +19%. DBS added SGD169bn or +28% over this period.

• S&P ends lower as Apple receives a 1.8 billion euro antitrust fine from the EU; APPL -2%
• Crypto stocks lead gainers as Bitcoin surges +7% to $67,000. Super Micro Computer jumps +18% on AI 
• China is anticipated to set its annual growth rate for 2024 at “around 5%” during the upcoming National People’s Congress

• After a quiet week in the sector, three earnings reports will get the attention of investors in the furniture/furnishings space this week.
• Culp Inc. will report its 3QFY24 results after the close on Wednesday, March 6 and host an investor call at 11:00 am on Thursday, March 7.
• We expect EPS of a loss of $0.22 on revenue of $60 million. Consensus is EPS of a loss of $0.19 on revenue of $59.5 million.

• The US cannabis MSOS ETF fell 7.80% last week, its third loss in the last four weeks.
• Earnings this week were relatively strong, but sentiment around federal reform may be driving short-term prices.
• Despite the sell- off, MSOS had $1.8 million in inflows. The global YOLO ETF held up better, losing 1.89% over the last five sessions.

• The WTR Sustainable Index was up by 4.3% W/W versus the S&P 500 Index (up 0.9%), the Russell 2000 Index (up 3.0%), and the Nasdaq Index (up 2.0%).
• Energy Technology (12.7% of the index) was up by 3.9%, while Industrial Climate and Ag Technology (53.5% of the index) was up by 1.4%, ClimateTech Mining was down 0.7% and Advanced Transportation Solutions (27.9% of index) was up 11.2%.
• Top 10 Performers: ENG, AMY, TPCS, HYLN, VIEW, XOS, AMYZF, SMR, EVA, PMET,

• US Stocks end higher on Friday, with the S&P 500 and Nasdaq rising to new records
• Sakura Internet emerges as latest AI play with high-powered cloud services. Stock up 93% over past month
• Japanese auto makers see continued strong US auto sales; Nissan potentially to invest $400m in EV truck maker, Fisker

• Supportive policies from central and local governments on the development of the hydrogen energy industry have boosted the share prices of the sector (up 12.3% YTD).
• Inner Mongolia has eased regulations on electrolysis water hydrogen production projects while Shandong has waived hydrogen-powered vehicle tolls on highways. 
• Beijing SinoHytec (2402 HK), Weichai Power (2338 HK), Dongyue Group (189 HK), CIMC Enric (3899 HK), and Dongfang Electric (1072 HK) have recorded good progress in hydrogen business.

• The last week saw the return of mega SPAC deals, with a SPAC announcing plans to take an online trading platform public, and the brand management business of an airline going public through a merger with a blank-cheque firm.
• Also, a SPAC switches merger targets, and Trump’s media firm gets sued by its co-founders. Read on to find out the latest about all things SPACs.  
• New York-based online brokerage Webull is going public through a merger with SPAC SK Growth Opportunities Corporation in a deal valuing the firm at $7.3 billion. 

• 2023 WFE revenues amounted to $93 billion, representing a YoY decrease of just ~1%. Most had expected a 20% YoY decline at the start of last year
• We forecast 2024 WFE revenues to grow modestly by around 5% YoY
• China’s WFE spend in 2023 was ~1.5x Taiwan & ~2x Korea

• 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: China PMI data, India GDP growth data
• Companies mentioned:Ant Group (6688 HK), Alibaba Group Holding (9988 HK), NetEase (9999 HK), Reliance Industries (RIL IN)