Market Sentiment and Support - Indian markets are positioned well amid global uncertainties, with Asia and GEM funds increasing their positions in India[1] - Domestic policy support is strong, with government capital expenditure reaching a record high in Q1 2025 and the central bank cutting benchmark rates by 50bps and cash reserve ratio by 100bps[2] Earnings Growth Outlook - Q1 2025 earnings for FTSE India (excluding commodities) showed a 10% year-on-year increase, a recovery from previous quarters[3] - Despite the positive Q1 results, a sustained recovery in earnings growth is expected to take several more quarters, with consensus estimates for 2025 earnings growth at 11%[4] Sector Performance - Strong growth was reported in industrials, healthcare, and telecom, while consumer discretionary saw a 14% EPS growth driven by retail and services[3] - FMCG companies faced challenges with weak demand and increased competition, leading to low single-digit growth in that sector[3] Investment Strategy - The report recommends five stocks: Godrej Consumer Products (GCPL), United Phosphorus Limited (UPL), GAIL, Ujjivan Small Finance Bank, and HDFC Life, focusing on those with good growth potential[5] - GCPL is noted for its innovation and market share gains in home insecticides, while UPL is expected to recover due to improved margins and lower debt[6] Valuation and Risks - The Sensex index target for the end of 2025 is set at 82,240, indicating a neutral stance on Indian equities from an Asian perspective[7] - Elevated valuations and concerns about growth outlook remain, despite recent market rebounds[5]

Trade Relations - A new round of China-US trade talks is focusing on export controls, with high-level meetings scheduled in London starting from June 9[2] - Tariffs collected from China reached 25% of the US' total imports from China from January to April, significantly higher than the previous 8-9%[4] - China's container exports to the US have started to rebound since late May, approaching pre-tariff average levels in early June[4] Domestic Policies - China released 10-point guidelines on June 9 to improve people's livelihoods, emphasizing social welfare coverage for low-income groups, youth, and gig workers[9] - The central government allocated RMB158.7 billion in fiscal support for low-income households, with a focus on employment subsidies for college graduates[12] - A childcare subsidy system and increases in the minimum wage are part of the new policies aimed at enhancing social safety nets[9] Economic Indicators - The operating rate for semi-steel tyres, a key component for automobiles, edged down, while the production rate in the chemical sector rose further[14][16] - The Baltic Dry Index has risen, indicating an increase in shipping costs, while steel rebar prices have fallen further[34][57] - The average daily coal consumption in eight major provinces has shown fluctuations, reflecting changes in industrial activity[26]

Trade Diversification - Vietnam's exports to the US account for 30% of its total exports, highlighting the need for diversification amid trade turbulence[2] - Vietnam has a free-trade agreement (FTA) with the EU, but trade with the EU is significantly lower at USD 68 billion compared to USD 206 billion with China and USD 135 billion with the US[11] - Vietnam's trade exposure with ASEAN peers is among the lowest in the region, indicating potential for increased intra-regional trade[3] Trade Performance - Vietnam's exports grew by 17% year-on-year in May, while imports increased by 14% year-on-year, driven largely by non-phone electronics shipments[29] - The trade surplus has halved to USD 0.5 billion in April and May from the first quarter of 2025, indicating an import-intensive manufacturing sector[30] - Electronics exports to the US surged over 70% year-on-year, underscoring the significance of Vietnam in the electronics supply chain[29] Economic Indicators - The Purchasing Managers' Index (PMI) showed a decline from 50.5 in March to 49.8 in May, indicating a contraction in manufacturing activity[5] - Consumer Price Index (CPI) remained stable at 3.2% year-on-year in May, well below the State Bank of Vietnam's target of 4.5-5%[38] - Retail sales have improved, now only 4% lower than pre-pandemic levels, signaling recovery in domestic consumption[38]

Investment Rating - The report initiates coverage on Anadolu Group Holding (AGHOL) with a Buy rating and a target price of TRY373 per share, implying approximately 43% upside potential [6][22][30]. Core Views - Anadolu Group Holding is a consumer conglomerate with strong exposure to the defensive FMCG sector, primarily driven by its key businesses in beer, soft drinks, and food retail, which accounted for 93% of the group's revenue and EBITDA in 2024 [2][13][36]. - The company has demonstrated solid growth execution, with revenues and EBITDA growing at a compound annual growth rate (CAGR) of approximately 11.7% and 12.2%, respectively, from 2019 to 2024 [3][48]. - The group's net debt/EBITDA ratio has significantly improved, decreasing from 2.3x in 2019 to 0.5x by the end of 2024, indicating strong deleveraging and balance sheet strength [4][18][66]. - The current NAV discount of AGHOL has narrowed from an average of 77% in 2019 to 35%, which is viewed as unjustified given the company's defensive positioning and growth potential [5][21][40]. Summary by Sections Investment Case - AGHOL's portfolio is resilient, with a strong focus on defensive FMCG sectors, which are less susceptible to macroeconomic volatility [13][36]. - The company has a leading position in the Turkish market, with significant stakes in Anadolu Efes, Coca-Cola Icecek, and Migros, all of which have strong growth prospects [2][13][36]. Financial Performance - The retail and soft drink segments are the primary growth drivers, with revenue CAGRs of approximately 14% and 13%, respectively, from 2019 to 2024 [3][14][49]. - The beer segment has faced challenges, growing at a CAGR of 7.1% over the past five years due to external factors like the COVID-19 pandemic and geopolitical tensions [55]. Balance Sheet Strength - The group's net debt has decreased significantly, with a notable improvement in cash flow generation capabilities, supporting a comfortable leverage position [4][18][66]. - The deleveraging trend is primarily driven by Migros, which has transitioned to a net cash position [70]. Dividend Profile - AGHOL has seen a substantial increase in dividends received, rising from TRY0.8 billion (USD46 million) in 2022 to TRY2.7 billion (USD81 million) in 2024, with a dividends-paid-to-received ratio reaching 52% in 2025 year-to-date [19][77][80]. Valuation - The target NAV estimate for AGHOL is TRY90.9 billion, with a 25% holding company discount applied to arrive at the target price of TRY373 per share [6][22][29].

Investment Rating - The report maintains a "Buy" rating for InterGlobe Aviation, with a target price raised to INR 6,650 from INR 5,975, indicating an upside potential of 21.3% from the current share price of INR 5,482 [6][19][68]. Core Insights - InterGlobe Aviation's strategy focuses on expanding its domestic network, particularly in tier 2 and tier 3 routes, which allows the company to reduce reliance on competitive lower-yielding routes and enhances its capacity deployment [2][28]. - The company is experiencing a near full recovery in demand following a temporary drop due to geopolitical tensions, with expectations for strong trading supported by tight capacity [3][24]. - The international expansion strategy is deemed sensible, with potential for significant profit accretion in the medium to long term, despite short-term execution challenges [4][28]. Summary by Sections Network Strategy - Indigo's domestic network is highly fragmented, with the top 15 routes accounting for only 20% of its capacity, indicating low reliance on competitive metro routes [2][32][33]. - The company holds a significant market share, with over 60% capacity share on routes where it has deployed 66% of its domestic capacity, up from 53% in 2022 [2][27]. Financial Performance - The report adjusts forecasts following FY25 results, with FY26-27 EBITDA increasing by approximately 2% and net profit forecasts rising by 19% and 18%, respectively [6][66]. - Revenue projections for FY26 are set at INR 917,392 million, with a net profit forecast of INR 92,745 million [15][66]. Cost Management - Despite rising costs, the company expects to maintain flat ex-fuel unit costs, supported by improvements in its Aircraft on Ground (AOG) situation and low double-digit capacity growth during FY26 [5][61]. - The report anticipates a 1% year-on-year decline in ex-fuel unit costs for FY26, reflecting easing cost pressures [65]. International Expansion - Indigo's international operations are expected to grow significantly, with plans to increase international capacity contribution to nearly 40% of total capacity by FY30 [26][28]. - The company has signed agreements with major international airlines to enhance brand recognition and expand its international footprint [46][47]. Market Outlook - The Indian air travel market is projected to grow at a low double-digit rate, with Indigo expected to outperform the industry average due to its market leadership [25][54]. - The supportive macro environment and government initiatives to develop international hubs in India are likely to benefit the airline industry [54].

Investment Rating - The report maintains a "Buy" rating for BOCHK Holdings (2388 HK) despite the decline in HIBOR, indicating resilience in the stock [2]. Core Insights - HIBOR is at a three-year low, raising questions about its implications for the Hong Kong stock market. Strong local liquidity is supporting the market, even with rising HIBOR [1][4]. - The real estate market is expected to gain more support due to low HIBOR, while local banks may face declining net interest margins and slower income growth [4]. Summary by Sections HIBOR and Market Impact - HIBOR's decline is a significant factor influencing investor sentiment and market dynamics in Hong Kong [1][4]. - The report discusses the implications of HIBOR fluctuations on the stock market, local banks, and the real estate sector [4]. Company Ratings - BOCHK Holdings (2388 HK) is rated as a "Buy" due to its resilience despite the declining HIBOR [2]. - Sino Land (83 HK) has been downgraded to "Hold" due to increasing profit pressures [2]. Real Estate Market - The report highlights the growing resilience of the Hong Kong real estate market, suggesting a more stable foundation moving forward [2][4].

Investment Rating - The report does not explicitly state an investment rating for the real estate industry in Dubai and Abu Dhabi Core Insights - The Dubai Land Department has launched a tokenised real estate platform allowing investments starting from AED2,000, with expectations that tokenised assets will represent 7% of Dubai's real estate market by 2033, equating to around AED60 billion in value [2] - Residential sales prices in Dubai increased by 5.7% in the first four months of 2025, indicating a slowdown compared to previous years [3][22] - In contrast, Abu Dhabi's residential sales prices increased by 7.0% in the same period, showing a stronger growth trend [4][41] - The rental market in Dubai has also seen a slowdown, with a 4.1% increase in rents in the first four months of 2025, compared to 15.7% in 2024 [3][51] - Abu Dhabi's rental values increased by 8.9% in the first four months of 2025, driven primarily by apartments [5][59] Summary by Sections Residential Market - Dubai's residential sales prices increased by 5.7% in early 2025, down from 18.0% in 2024 and 20.1% in 2023, indicating a slowdown [3][22] - Abu Dhabi's residential sales prices increased by 7.0% in early 2025, compared to 11.1% in 2024 and 5.0% in 2023 [4][41] - Rental values in Dubai increased by 4.1% in early 2025, down from 15.7% in 2024, while Abu Dhabi saw an 8.9% increase in rents [3][51][59] Supply Trends - The residential supply in Dubai is expected to increase significantly by 2027, with approximately 16% of the current supply expected to be added [5] - Abu Dhabi is also expected to see a rise in residential supply, with around 12% of the current stock anticipated to be added by 2027 [5][44] - The office market in Abu Dhabi is projected to add approximately 7% to the current stock by the end of 2027, while Dubai's office market is expected to add about 3.5% [6][68] Retail Market - The retail market in Dubai is expected to see limited additions, with only about 1.6% of the current stock expected to be added by the end of 2027 [7][72] - Abu Dhabi's retail market is projected to see a slightly higher increase of around 5.6% [7][72] Hospitality Sector - Dubai currently has a stock of 154,800 hotel rooms, with an additional 4,500 rooms forecasted to be delivered by the end of 2024 [77] - Abu Dhabi has a current stock of 32,800 hotel rooms, with another 540 rooms expected to be delivered by the end of 2024 [79]

Investment Rating - The report assigns a "Buy" rating to key stocks including C&D International, CR Land, and China Jinmao, while other stocks are rated as "Hold" [8][17]. Core Insights - There is a growing interest in the China property sector, particularly from large onshore and offshore insurance funds, indicating a potential structural market recovery [2][8]. - Investors are currently underweight in China real estate, presenting opportunities for capitalizing on the expected recovery [2]. - Market expectations have reset, with lower sales anticipated, but this could lead to upside surprises as policy support is expected to stabilize the housing market [3][4]. Summary by Sections Market Sentiment - Interest in the China property sector is increasing, with investors seeking validation for their positive views [2]. - The sentiment has shifted from resistance to a more favorable outlook, particularly from institutional investors [8]. Sales and Policy Expectations - Housing sales showed a slowdown in April but are expected to stabilize in May, with investors adjusting their expectations accordingly [3]. - Anticipation of supportive housing policies ahead of the July politburo meeting could reinforce market stabilization [3]. Investment Opportunities - July is viewed as a potential window for investment as positive data from the pre-sale season in June may emerge [4]. - C&D International is highlighted as a hidden gem with a strong growth outlook due to proactive landbanking and favorable market conditions in Xiamen [5][8]. Key Stock Picks - Top picks include C&D International, CR Land, China Jinmao, and Beike, with C&D International receiving particular attention for its growth potential [5][8]. - C&D International has a target price of HKD 21.20, implying a 56.6% upside from its current price of HKD 13.54 [17].

Investment Rating - The report maintains an underweight rating on Japanese equities within the Asian context [6]. Core Insights - Japanese equities have rebounded 20% since the sharp decline following "Liberation Day" on April 2, 2024, primarily driven by foreign investors who purchased a net USD 17 billion in Japanese stocks during this period [2][9]. - The report identifies four key catalysts affecting the market: the Yen, corporate governance, earnings growth, and local investors [10]. Summary by Sections Yen - The USDJPY exchange rate remains a significant driver for Japanese equities, despite a weakening historical correlation. The JPY has appreciated 9% year-to-date, negatively impacting exporters [3][27]. Corporate Governance - Improvements in corporate governance are noted, with a 70% increase in stock buybacks in 2024 and a decline in average strategic shareholdings from 13.5% in 2015 to 8.4% in FY23. However, the report suggests that the impact on profitability will take time, and ROE still lags behind other major markets [4][18][21]. Earnings Growth - Earnings growth expectations for 2025 have been revised down from 10% to 7%, with consensus forecasts for both export-oriented and domestic sectors being cut. The cautious outlook is reflected in the Q1 2025 earnings season [5][61]. Local Investors - Local investors are currently under-invested in equities, with over half of household financial assets in cash. A mere 1 percentage point shift from cash to equities could result in USD 220 billion flowing into the market. There are signs of increasing interest in equities among households, particularly following the expansion of the Nippon Individual Savings Account (NISA) program [6][46][50].

Investment Rating - The report maintains a "Buy" rating for C&D International with an unchanged target price (TP) of HKD 21.20, implying a 57% upside from the current share price of HKD 13.54 [4][6][10]. Core Insights - C&D International is positioned to benefit from the revitalization of Xiamen's housing market, characterized by increasing sales volumes, declining inventory, and stabilizing new home prices. This marks a recovery from a significant sales decline of 29% year-on-year in 2024 due to market weakness [1][2]. - The implementation of Xiamen's advanced home purchase voucher scheme is expected to stimulate demand and alleviate inventory pressure, contributing to 40% of the gross floor area (GFA) sold in the primary market from October 2024 to February 2025 [2][10]. - C&D's strategic landbank investments in Xiamen, totaling RMB 19 billion for six sites in 2024, provide a competitive supply advantage as market sentiment improves [3][10]. Summary by Sections Investment Rating - Buy rating maintained with a target price of HKD 21.20, reflecting a 57% upside potential [4][6]. Market Conditions - Xiamen's property market is experiencing "goldilocks" conditions with increasing sales volumes and declining inventory, which is expected to benefit C&D International [1][2]. Policy Impact - The new home purchase voucher scheme in Xiamen is effectively stimulating demand and reducing inventory pressure, with significant contributions to sales in the primary market [2][10]. Land Acquisition Strategy - C&D's counter-cyclical land acquisitions in Xiamen position the company favorably against competitors, enhancing its market presence as sentiment improves [3][10]. Financial Projections - The financial outlook includes projected property sales of RMB 138.623 billion for 2024, with a slight decrease expected in subsequent years, followed by a recovery [11][12].