Thematic (Sector/Industry)

• 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: Thailand GDP growth, South Korea interest rates and GDP growth expectations.
• Companies mentioned:Samsung Electronics (005930 KS), Tencent (700 HK), JD.com (9618 HK), Reliance Industries (RIL IN)

• This week, markets remained relatively flat, as investors awaited guidance from monetary policymakers, particularly Fed Chair Jerome Powell’s much-anticipated speech on Friday
• With inflation trending downward—core CPI has fallen for four consecutive months to 3.2%—the Fed seems poised to ease monetary policy
• Topix rose +0.2%; 13 stocks reached 52-week highs, with only one stock, Colowide, hitting a new yearly low

• Hindalco’s $10 Billion Expansion to Drive Aluminium and Copper Growth.
• BC Jindal Group to Invest $2.5 Billion in India’s Renewable Energy Sector by 2029.
• Cement Firms Plan Rs 1.5-Trillion Investment to Meet Growing Demand.

• .Chariot (CHAR LN) C ; Target price £0.45 per share: Commencing drilling operations at high impact well in Morocco – Drilling operations have commenced on the Anchois East well (now named Anchois-3). The well has three objectives.
• An initial pilot hole will be drilled to evaluate the potential of the Anchois Footwall prospect, located in an undrilled fault block to the east of the main field with a 2U Prospective Resource estimate of 170 bcf in the main O Sand target.
• Our unrisked NAV for this prospect is £0.05/sh. A side-track will then be drilled to intersect and further evaluate the discovered gas sands in the Anchois field, with a current gross 2C Contingent Resource estimate of 637 bcf, in the eastern part of the main fault block of the field. 

• The S&P 500 declined 0.89% on Thursday, closing at 5,570, as investors awaited Federal Reserve Chair Jerome Powell’s speech at Jackson Hole
• Japan’s machine tool orders rose 8% year-on-year in July, marking the third consecutive month of growth
• Nippon Steel and JFE Steel are investing $1.08 billion in Whitehaven’s Blackwater coal mine in Australia

• A significant ¥22 trillion gap exists between book and market values, pushing companies to sell non-core real estate for capital efficiency. 
• 50% of TSE Prime Market firms trade below a P/B ratio of 1, reflecting low market valuations and driving asset divestitures. 
• Mizuho Trust saw an 800% surge from 13 to 110 inquiries in 2023, as firms seek to improve their P/B ratios through asset sales.

• Technological advancements are leading to a tectonic shift in computing
• Companies are currently over investing in infrastructure build out for future potential
• There are concerns about the long-term monetization and financial implications of these investments

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

• US profit-taking in tech/growth will set a muted tone to start as the market holds its breath for comments from BoJ Gov. Ueda who addresses parliament this morning.
• China chip imports at record highs may add to pressure for the US to broaden its export restrictions for specific technologies as well as  for legacy node equipment.
• Koizumi leading the polls will be positive for renewable energy names which remain highly oversold after the multi-year weakness in Japanese small caps.

• 1810 HK/981 HK/AAPL US: Xiaomi’s Africa smartphone sales outgrow market in 2Q24 (+/+/-)
• XPEV US:Xpeng Motors’ revenue in the second quarter was in line with our expectations, and its losses were greater than our expectations(/)
• 1211 HK/1810 HK/XPEV US/NIO US/LI US:In the 33rd week of 2024, the delivery of new energy vehicles by Xiaomi fluctuated, Leapmotor and Li were strong, and NIO remained weak  (/////////)

• 700 HK/BABA US:Taobao Deals App Now Supports WeChat Pay for All Users. (+)
• 700 HK: <Arena Breakout: Infinite> Developing AI Technology: Voice-Command Teammates (+)
• NTES US: <Where Winds Meet> Final Pre-Launch Test Scheduled for August 28th (+)

• Stocks edged higher Wednesday after Federal Reserve minutes strengthened expectations for a September rate cut
• Japan set a record for foreign visitors in July, with 3.29 million arrivals, driven by a weak yen and summer holiday
• Japan Tobacco (JT) announced a $2.4 billion acquisition of Vector Group, the fourth-largest U.S. tobacco company

• Japan’s Meteorological Agency has issued a warning of an upcoming serious 8-9-point earthquake
• The expected epicenter is home to at least one dozen semiconductor wafer fabrication plants: “Fabs”
• While it’s hard to predict earthquakes, this news should be considered when investing in the area.

• Good retailer numbers and outlooks by Target and TJX setting a positive tone for the likes of Mercari on the read for consumer spending.
• Toll Bros numbers from the day before lifting US Homebuilders should see the likes of Sumitomo Forestry rebound off yesterdays weak price action.
• Japanese R/E names look increasingly vulnerable to downside ahead of Ueda’s speech tomorrow which should point to a BoJ trajectory for future rate hikes.

• The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.
• Trump’s reform in the field of healthcare has two major propositions – One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.
• From a US national security perspective, China’s APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of “decoupling” further increases.

• Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday
• In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE
• We also recommend some trade ideas based on our analysis and suggest specific stocks

• Stocks declined on Tuesday, snapping an eight-day winning streak for the S&P 500 and Nasdaq
• Hitachi acquired U.S.-based Castle Hill Technologies to expand its digital transformation (DX) support in production, particularly in the pharmaceutical sector
• Oasis Management, an activist investment fund, disclosed a 3.96% stake in Mercari, making it the company’s sixth-largest shareholder.

• TXN lowering capex slightly and commenting that demand remains below 2019 levels a slight negative for SPE and analog/power names such as Rohm and Fuji Elec.
• Keysight technologies strong earnings and guidance beat after hours is a strong positive read for Anritsu who offers similar telco testing products.
• Poor sales figures from Hainan Island point to a continued tough operating environment in China for cosmetics names such as Shiseido.

• With consumption in the doldrums, one would expect none growing at double digits. This is actually not the case; 
• Further, how many Chinese Growth Equity names are accelerating in growth in the second half? Quite a lot;
• We reiterate our view that Chinese Internet names are took-all winners with strong pricing power, which are showing when they need to. The weak market sentiment is self-fulfilling.

• 700 HK: <Black Myth: WuKong> Tops Steam’s Most Played Games Now with Over 1.2 million Concurrent Players (+)
• 700 HK: Tencent’s <Rock Kingdom: World> Begins Beta Testing Today: iOS Only, Android/PC Versions Not Yet Available (+)
• 700 HK: <Honor of Kings> Matchmaking Algorithm to Be Overhauled (+)

• LKNCY US: The drink “Tengyun American” coffee package jointly launched by Luckin and “Black Myth: Wukong” game was sold out in its first day （/）
• 1519 HK/ZTO US: Weekly parcel volume grew ~29% y-o-y (+)
• Consumer Industry update:China’s Retail Industry Prosperity Index moderate rebound in August, mainly from offline retail recovery. (+)

• The WTR Sustainable Index was up 3.0% W/W versus the S&P 500 Index (up 3.9%), the Russell 2000 Index (up 2.9%) and the Nasdaq Index (up 5.4%).
• Energy Technology (13.8% of the index) was up 3.8%, while Industrial Climate and Ag Technology (46.2% of the index) was up 2.9%, ClimateTech Mining was up 2.7%, and Advanced Transportation Solutions (20.1% of index) was up 2.7%.
• Top 10 Performers: ZEV, ORGN, GIGA, GTEC, PSIX, GEVO, GCEI, COMM, ASPN, FF

• The S&P 500 and Nasdaq each marked their eighth consecutive day of gains, a first in 2024
• Tokyo Metro is preparing for a late October listing on the Tokyo Stock Exchange, with an expected market capitalization of 640-700 billion yen
• Canadian convenience store giant Alimentation Couche-Tard has made a takeover offer for Seven & I Holdings

• Estee Lauder continues to  underwhelm on its China strategy, making names with less country exposure such as Kose look increasingly attractive
• While the 7&I deal outcome remains highly  uncertain, NKY225 replacement candidates should see a lift in the short-term
• This includes PPIH, which looks oversold after yesterdays negative price reaction to the Founder’s 22 year old son being promoted to a non-exec director.

• There has been a long-term trend of market concentration in Japan’s retail sector for more than a decade.
• But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.
• With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&A in sectors like drugstores and even supermarkets.  

• Cabinet Approves INR 33,700 Crore Infrastructure Project, including rail, and new airport
• Adani Power in Negotiations to Acquire Reliance Power’s 600-MW Thermal Plant
• Hero MotoCorp Faces INR 17 Crore Tax Notice from Delhi GST Authorities

• Q1FY25 results of the leading Indian pharmaceutical companies showed healthy and broad-based growth of the Indian pharmaceutical market, which grew 8.7% in Q1FY25.
• Most of the top listed players registered double-digit revenue growth from their respective India formulation segments. Focus on chronic therapies remained major growth driver.
• The Nifty Pharma Index has outperformed the benchmark Nifty 50, rising 32% YTD. The benchmark index has gained just 13% over the same period.

• DRAM revenues amounted to $23.3 billion in Q224, representing increases of 28.3% QoQ and 110.5% YoY.
• In the case of NAND, Q224 revenues amounted to $16.5 billion, representing increases of 17% QoQ and 83% YoY.
• Unprecedented demand for HBM & DDR5, robustly increasing content per box for both PC & Smartphone, looming capacity constraints, more/better LTA coverage are all mounting tailwinds for the memory segment 

• Lots of inquiries and discussions about the semiconductor market this week, stock market movements relatively flat
• Nvidia up 11%, AMD up 7%, Microsoft up 4% last week
• Market experiencing a dialing back of hype, some names still overvalued, but overall growth dynamics in semiconductors still intact

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

• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Last week, Medicare posted the first negotiated prices for Part D drugs, an additional 11% discount by our estimate.
• Mpox declared a global emergency, as the SIGA antipox treatment drug failed study, but mpox vaccine makers BVNRY and GOVX got a boost. 

• The US cannabis MSOS ETF ended the week +7.05%, while the global YOLO ETF finished +7.03%.
• The MJUS ETF rebalancing drove considerable volatility in the underlying, with MariMed (CSE: MRMD, OTCQX: MRMD) and TerrAscend (TSX: TSND, OTCQX: TSNDF) both up more than 30% in the last five sessions, while Curaleaf (TSX: CURA, OTCQX: CURLF) and Green Thumb Industries (CSE: GTII, OTCQX: GTBIF) ended in the red.
• The top 10 MSOs (by enterprise value) have reported 2Q earnings. 

• Stocks closed higher on Friday, capping the best week of the year for major indexes.
• In the April-June quarter, 70% of surveyed Japanese companies exceeded profit forecasts
• Japan’s anime and content exports, at 4.7 trillion yen annually, are nearing parity with the semiconductor industry’s 5.7 trillion yen

• This week, the S&P 500 surged 3.9%. The rally was driven by encouraging inflation data, robust retail sales, and lower-than-expected initial jobless claims
• Japanese stocks saw a remarkable recovery this week, with the Nikkei surging over 3,000 points and posting gains for four consecutive trading days.
• Fujikura’s stock surged 40% over the past week due to a positive market outlook driven by the rising demand for AI servers

• Upbeat results briefing from Asahi Intecc on Friday continues to make this look oversold with GPM bottoming, its MTP 1-year ahead of plan and strong growth outlooks for key markets China and US.
• With numbers out for PPIH on Friday and the outlook reassuringly steady, this may start to get more attention as NKY225 inclusion candidate given it comes from the under-represented consumer goods segment.
• AMAT numbers showing a decline in China revenues a red flag for Japanese SPE names overly reliant on China sales?

• Retailing is booming in Japan, backed by consumers getting out and about, buying enthusiastically and enjoying Japan’s shop-focused entertainment centres once again. 
• Tourists are back in record numbers, with 3 million a month entering Japan since March and well over 30 million expected in 2024 overall.
• Inflation remains a concern, but we’re two years into this round of price increases and consumers are becoming resigned to higher prices. FY2024 will be another excellent year.

• From C1Q24 results we concluded that media platforms with large, untapped and preferably contextual traffic tend to benefit the most from Generative AI (GAI). C2Q24 largely trended the same line;
• But Google is experimenting with inserting ads above or below the AI Overview Box. We hold reservation on the result but Baidu can likely copy;
• New growth emerged in AI Agent with API calls on Microsoft Azure, Google, Linked-In and Snap showing accelerated sequential growth. AI agent is likely the next hot spot in GAI.

• Last week in Japan’s retail sector: continued weakness in shopping mall development due to both falling demand from tenants and competition from online.
• Don Quijote operator, Pan Pacific posted strong results, reflecting high demand from both locals looking for value and tourists browsing for fun.
• The retail sector had a record year in FY23, but a big constraint is the labour shortage but, with many fit older Japanese, some employees are now over 80. 

• Japan market is more than just about the Yen carry trade, it is fundamentally sound and attractive valuation wise. It can prosper with a stronger JPY/USD   
• We believe the longer-term story has not changed, the battle for manpower will make Japan companies more productive and invoke the capitalist animal spirit 
• Topix and Nikkei 225 values have mostly recovered from the 4 Aug plunge, but some stocks continues to lag and is a value BUY

• This note is a weekly (select weeks on SK) curated selection of Chinese news articles and company announcements focused on developers in distress
• We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
• We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

• 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: China industrial production, retail sales, fixed asset investment; India inflation data.
• Companies mentioned:Bharti Airtel (BHARTI IN), Samsung Electronics (005930 KS)

• High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession
• Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages
• Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending

• Swan Energy to Sell Stake in FSRU to Turkey’s Botas for $400 Million
• L&T Realty and Valor Estate Collaborate on INR 8,500 Crore Project in Mumbai’s Bandra West
• Coal India to Face Penalties for Non-Supply of E-Auctioned Coal in Landmark Decision

• Criterium Energy (CEQ CN)C; Target price C$0.35 per share: New drilling expected to start in September – A drilling rig is scheduled to be mobilized to site in August.
• The two-well infill program, targeting a previously undrilled section of the MGH Field, is anticipated to commence in early September with the wells expected to come on production in early November at a forecasted combined rate of 300 bbl/d.
• While this is a bit later than we anticipated, we continue to forecast that Criterium will exit 2024 with ~1,250 boe/d production.

• Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.
• Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.
• Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays

• ATAT US/TCOM US:Daily Traffic Volume growth on highways is flattish YoY During the Summer Travel Season(-/-)
• BEKE US: Decrease in New Short-term Loans to Residents in July, but Increase in New Long-term Loans(+)
• BEKE US:House prices continued to decline in July . (-)

• 700 HK: Based on <DnF Mobile> Developer Nexon’s 2Q24 Financial Report, the Game Generated around RMB 7bn in Revenue During the Quarter (+)
• 700 HK: <League of Legends> to Introduce Another PVE Game Mode (+)
• BILI US: Bilibili’s <Aether Gazer> to Shut Down on November 12 (/)

• Some more minor data points and highlights: KLIC (ball bonders) says that utilization is 75-80%, which is a good read on China despite the negative industrial headwind.
• Allegro Microsystems is definitely scraping the bottom, and while Sanken (its distributor) is still increasing its inventory, I like the setup there.
• Arrow Electronics (Distributor) says things are improving, which is a big counterpoint to everything else.