Investment Rating - The report indicates a volatile environment for equity funds with significant inflows and outflows, particularly highlighting a negative trend in bond funds [1][2]. Core Insights - Equity funds experienced inflows of US$7.9 billion, while bond funds faced redemptions totaling US$20.1 billion during the week ending April 16, 2025 [1]. - Emerging Market (EM) funds saw outflows of US$3.2 billion, primarily driven by US$3.7 billion in redemptions from China funds [2]. - Developed Markets (DM) funds, particularly in Western Europe, showed resilience with inflows of US$6.0 billion, while North America faced outflows of US$6.3 billion [3][4]. Summary by Sections Fund Flows Overview - Global funds recorded inflows of US$8.7 billion, with gold funds also seeing a notable increase of US$7.6 billion [1]. - The report highlights a significant divergence in performance across regions, with MSCI Europe gaining up to 11% compared to a 3% loss in MSCI US [1][3]. Emerging Markets - EM funds resumed net outflows, with specific regions like Korea and Taiwan experiencing foreign outflows of US$0.9 billion and US$0.5 billion, respectively [2]. - Japan recorded a second consecutive week of foreign inflows amounting to US$1.1 billion, indicating a potential shift in investor sentiment [2]. Geographic Focus - The report provides detailed insights into fund flows by geographic focus, showing that North America and EM Asia faced significant outflows, while Western Europe and Japan attracted inflows [3][4]. - The cumulative flows to equity funds versus bond funds indicate a preference for equities in the current market environment [29][40]. ESG Funds - The report also touches on flows to ESG funds, indicating trends in both developed and emerging markets, with specific figures illustrating the performance of these funds relative to traditional funds [121][127]. Alternative Funds - Alternative funds, including gold and cryptocurrency funds, are highlighted for their performance, with gold funds showing a positive trend in inflows [144][149]. Local Intelligence - The report includes local intelligence on foreign investor flows in various Asian markets, indicating a mixed sentiment across the region [157][161].

Investment Rating - The report indicates a positive sentiment towards Qualcomm (QCOM) with a raised estimate and a positive catalyst watch due to expected strength in the handset market, particularly in China [4][5][21]. Core Insights - Broadcom (AVGO) is identified as the most popular long position among investors, often seen as the only long, with its software component providing a defensive edge due to recurring revenue [2][10]. - NVIDIA (NVDA) ranks second in popularity but with significantly less interest compared to AVGO [11]. - Analog Devices (ADI) and KLA Corporation (KLAC) are viewed as defensive stocks due to ADI's high margins and KLAC's leading edge exposure and share gains at TSMC [12]. - There is a general lack of interest in the broader semiconductor sector, attributed to a consensus belief in an impending recession [13]. - Texas Instruments (TXN) is noted as the most popular short position, heavily shorted due to concerns over China tariffs [9][13]. Summary by Sections Popular Long Positions - AVGO is seen as the safest investment in the semiconductor sector, primarily due to its software component and recurring revenue model [2][10]. - NVDA follows as a less popular long position, indicating a significant drop-off in interest [11]. Defensive Stocks - ADI and KLAC are recognized for their defensive characteristics, with ADI benefiting from high margins and KLAC gaining market share at TSMC [12]. Market Sentiment - The semiconductor sector is experiencing a lack of conviction and interest, driven by widespread expectations of a recession [13]. - QCOM is positioned for potential upside due to low sentiment and reasonable valuation, with raised sales and EPS estimates indicating a positive outlook [4][6][18].

Investment Rating - The investment rating for the global integrated oil and gas industry is predominantly "Buy" for several major companies, indicating a positive outlook for expected total returns [7][21][22]. Core Insights - The energy industry is currently experiencing a level of uncertainty that is less severe than during the Global Financial Crisis (GFC) or the COVID-19 pandemic, with oil prices remaining within one standard deviation of their 20-year average [1][2]. - Corporate behavior in the current economic environment is expected to be more measured compared to previous downturns, with companies likely to prioritize defending dividends over aggressive buybacks [2][4]. - The anticipated scenario includes a potential for negative year-over-year growth in oil demand, but not to a degree that would allow OPEC+ to lose market control, with Brent oil prices projected around $60 per barrel [3][4]. Summary by Sections Financial Health and Corporate Actions - Companies in the energy sector are in a better financial position than they were prior to the COVID-19 pandemic, allowing them to manage current challenges without drastic measures [1][2]. - Dividends across the sector appear defendable in a $60 per barrel oil environment, with yields comparable to or exceeding 5-year corporate bond yields [4][6]. Market Dynamics - The current oil price environment is seen as stabilizing, with expectations that prices will align closely with the marginal long-run cost of supply, particularly influenced by U.S. shale production [3][4]. - The ability of energy majors to navigate through this cycle will depend on their financial starting points, with some companies expected to signal reductions in share buybacks while maintaining dividends [4][6].

Investment Rating - The report maintains a cautious outlook on US equities, lowering the S&P 500 year-end target to 5,800, reflecting a reduction in earnings estimates and valuation assumptions [4][54][63]. Core Insights - The recent US tariffs are viewed as a negative supply shock, likely leading to increased inflation and reduced economic growth, with core PCE inflation projected to reach 3.5% by year-end and real GDP growth slowing to near zero [10][29]. - The European economy is expected to face downward pressure due to tighter financing conditions and a direct negative demand shock from tariffs, prompting the European Central Bank to cut policy rates [11][44]. - Emerging markets, particularly "Factory Asia," are significantly threatened by the tariffs, with export-led economies experiencing substantial growth shocks and rising inflation [12][46]. Summary by Sections US Economics - The average effective tariff rate is estimated at about 21%, representing an 18% increase, and is expected to remain elevated for at least 3-6 months [3][25]. - The Federal Reserve is anticipated to respond to economic weakness with policy rate cuts, potentially totaling 125 basis points this year [10][30]. European Economics - The US tariffs are expected to have interwoven consequences for the European economy, leading to a shift towards a more domestically driven growth model, which may result in higher real rates and inflation over time [11][36]. - A J-shaped profile for growth, inflation, and policy rates is anticipated, with all three metrics expected to decline in the near term before rising again [45]. Emerging Markets Economics - The tariffs pose a significant threat to export-led economies in Asia, with simulations indicating asymmetric impacts and necessitating aggressive monetary easing by central banks in the region [12][46]. - Countries like Vietnam and Mexico are particularly exposed to the US market, facing substantial growth shocks due to the tariffs [47][50]. US Equities - The S&P 500 year-end target has been lowered to 5,800, with a reduction in the 2025 earnings estimate to $255, reflecting a wider range of potential earnings outcomes due to tariff uncertainty [4][54][63]. - The report suggests that the market volatility and tariff announcements have led to a significant reevaluation of earnings growth expectations for 2025 [54][56]. Commodities - The commodities outlook is bearish for oil and copper while bullish for gold, aligning with the anticipated impacts of the tariff growth shock [6][19].

V i e w p o i n t | 17 Apr 2025 14:09:17 ET │ 107 pages Emerging Markets Economic Outlook & Strategy US-Led Trade Turmoil and its EM Implications CITI'S TAKE The global trading system has been drastically altered by Liberation Day turmoil and US-China tariff dispute, dealing a significant demand shock to EM. We simulate the growth impact by assuming US trading partners are bucketed into three groups – strong allies, "complicated partners" and China. In reality, we expect trade negotiations could be a lot me ...

Investment Rating - The report maintains a Buy rating on Advanced Micro-Fabrication Equipment (AMEC) with a target price of Rmb220, indicating an expected share price return of 14.9% and a total expected return of 15.1% [2][15]. Core Insights - AMEC's 2024 results showed revenue and gross profit growth of 45% and 36% year-over-year, respectively, aligning with preliminary results. However, net profit decreased by 9% year-over-year to Rmb1.61 billion due to lower investment incomes [1]. - The gross profit margin (GPM) contracted by 2.8 percentage points year-over-year to 41.1% in 2024, attributed to price discounts offered to customers in China [1]. - Operating cash flow (OCF) improved significantly to Rmb1.46 billion cash inflow in 2024, compared to Rmb977 million outflow in 2023 [1]. - Despite the challenges, the report emphasizes that AMEC's solid fundamentals and the import replacement thesis remain intact [1]. Summary by Sections Earnings Summary - In 2024, AMEC's net profit is projected at Rmb1,626 million, with a diluted EPS of Rmb2.626, reflecting an EPS growth decline of 8.8%. For 2025, net profit is expected to rise to Rmb2,391 million, with an EPS of Rmb3.862, indicating a growth of 47.1% [4]. - The report outlines a decreasing P/E ratio from 72.9 in 2024E to 49.6 in 2025E, suggesting improved valuation metrics over time [4]. Market Comparison - The report indicates a preference for NAURA (002371.SZ) over AMEC due to NAURA's potential for mergers and acquisitions to expand its product portfolio and its cheaper price-to-sales (P/S) valuation [2][15]. - AMEC's P/S valuation is based on approximately 11 times the 2025 estimated sales, reflecting the market's recognition of its semi-equipment business [15].

Investment Rating - The investment rating for ASML Holding NV is "Buy" with a target price of €860, lowered from €930, indicating an expected share price return of 49.8% and a total return of 51.0% [4][6]. Core Insights - ASML maintains its revenue guidance for 2025 in the range of €30-35 billion, with a slight reduction in estimates due to tariff uncertainties, now forecasting €32.5 billion, which is 3% lower than previous estimates [2][11]. - The company anticipates strong growth dynamics in 2025, primarily driven by advanced logic demand for 2nm technology, despite potential push-outs due to tariffs [2][11]. - For 2026, ASML expects an increase in orders, with a backlog estimated at approximately €13 billion, representing 45-50% of projected system revenue [3][13]. Summary by Sections Revenue and Earnings Estimates - 2025 revenue is now estimated at €32.5 billion, with gross margins adjusted to 52.1% [2][11]. - 2026 revenue is projected at €36.1 billion, reflecting a growth forecast of 11% [13][14]. - Diluted EPS for 2025 is revised to €23.72, down from €25.17, while 2026 EPS is expected to be €26.80 [14]. Valuation - ASML shares are currently trading at a P/E ratio of 23x for 2025 and 21x for 2026, which is considered historically attractive [4][22]. - The valuation approach uses a PEG ratio of approximately 1.6x based on FY26 earnings, aligning with other high-growth stocks [23]. Market Dynamics - The report highlights the ongoing uncertainty due to tariffs but expresses confidence in a resolution that could benefit ASML's unique position in the lithography market [1][4]. - The demand for AI and semiconductor manufacturing is expected to drive growth, with ASML positioned to capitalize on these trends [22].

CITI'S TAKE Materials demand in 1Q25 was mostly in line with our expectation, with stronger prints on steel and cement, and weaker on coal. As the trade war between the US and China escalates, we assess the impact from trade disruptions and potential RMB depreciation on materials. We believe the impact of tariffs has already kicked in for the battery supply chain (see note) and expect more to be felt through commodities in the coming months. This should call for more decisive policies from Chinese side to b ...

Investment Rating - The report maintains a cautious outlook on the China Internet sector due to trade disputes and delisting risks, while highlighting potential opportunities in domestic consumption-focused companies [1][2]. Core Insights - The ongoing tariff dispute has limited direct operational impacts on most China internet companies, but it poses risks of a global economic slowdown and investment outflows [1]. - Major internet companies are increasing investments to support government initiatives aimed at converting export supply into domestic consumption, which may lead to excess supply and margin pressures if revenue growth slows [1][3]. - Delisting risks for American Depositary Receipts (ADRs) have escalated, prompting companies like PDD and YMM to consider dual listings in Hong Kong [1][4]. Summary by Sections Investment Opportunities - Key picks include Tencent and Alibaba as core AI plays, along with JD.com, YMM, and Meituan for domestic consumption exposure, and NetEase and TME for defensive revenue streams [2]. Government Initiatives - The Chinese government is actively promoting policies to boost domestic consumption, with several internet companies committing to support these initiatives [3][8]. - JD.com has launched a RMB 200 billion scheme to assist cross-border merchants in tapping into the domestic market [9][10]. Delisting Risks - The risk of ADR delisting has increased following comments from US Treasury officials, leading to expectations that companies without Hong Kong listings will seek dual listings [4][20]. - Companies with higher US investor ownership may face greater selling pressure if investment restrictions are imposed [26]. Earnings Outlook - The first quarter of 2025 is expected to be largely on track for major companies, with management's guidance for the second quarter and full year being closely monitored [5][29]. AI Technology Advancement - Despite tariff challenges, Chinese internet companies continue to advance their AI technologies, with significant investments planned for the coming years [6][32]. - Major players like Alibaba and Tencent are ramping up their AI capabilities, with substantial capital expenditures projected [37][38]. Market Performance - China's GDP grew by 5.4% year-on-year in the first quarter of 2025, exceeding expectations, while online retail sales showed a growth of 7.9% year-on-year [47][48].

V i e w p o i n t | 14 Apr 2025 15:50:07 ET │ 36 pages Equity Markets Positioning Model Tariff Pause Offers Limited Boost for US Positioning CITI'S TAKE Positioning levels across US equities edged higher following last Wednesday's announcement of a 90-day pause on tariffs. However, uncertainty persists and there had been limited evidence of new long risk flows to US equities. Furthermore, recent market volatility has driven a sharp rise in losses for S&P 500 and EuroStoxx positions, and this could further a ...