USA: FOMC Minutes Note Committee Is "Well Positioned to Wait for More Clarity" BOTTOM LINE: The minutes to the FOMC's May meeting noted that FOMC participants believed the Committee was "well positioned to wait for more clarity" on the economic outlook, given "solid" economic growth and a "moderately restrictive" monetary policy stance. "Almost all" participants saw a risk that "inflation could prove to be more persistent than expected." At the same time, the Fed staff judged that a recession was "almost as ...

Investment Rating - The report maintains a bullish outlook on stocks related to Reliability of Power/Water/Energy, Efficiency of Energy/Resources/Land, and solutions for Aging Populations/labor strains [1][15][38] Core Insights - Sustainable funds with broader APAC regional mandates have outperformed non-ESG peers for six consecutive quarters, while those with individual country mandates have struggled [1][35] - Performance is deemed more critical than policy for the growth of Sustainable Investing's AUM penetration, with a focus on quality and governance [1][13] - The report highlights a notable increase in AUM penetration for ANZ-focused Sustainable funds, reaching 4.8% by 1Q25, up 23 basis points year-over-year [12] APAC Fund Performance and Flows - APAC-focused Sustainable equity AUM remained flat at US$212 billion, with minor outflows of -US$0.9 billion in 1Q25, primarily from Japan and Emerging Markets-focused funds [9][19] - Passive Sustainable strategies now represent 52% of total APAC-focused Sustainable AUM, attracting US$1.0 billion of inflows in 1Q25 [9][19] - Sustainable funds in the top two quintiles based on 3-year risk-adjusted returns saw cumulative inflows of +US$6.0 billion in 2024, contrasting with -US$16 billion outflows in the bottom cohort [10][12] Stock Ideas - New entrants into the E&S Leaders screen include companies like JYP Entertainment, Kweichow Moutai, and Tata Consultancy, all rated as Buy by Goldman Sachs [6][7] - Thematic stock in focus includes Harmonic Drive Systems, which aligns with Green Capex and Aging Populations Solutions themes [6] Sustainable Fund Trends - The report notes that the median performance of APAC-focused Sustainable funds was at the 45th percentile in 1Q25, indicating underperformance relative to peers [35][42] - Greater China-focused Sustainable funds have shown significant impact on median performance, comprising approximately 50% of the funds tracked [36][44] - The report emphasizes a less-is-more approach to Sustainable integration strategies, focusing on measurable metrics [38]

28 May 2025 | 10:30PM EDT USA: Court Blocks Majority of Tariff Hikes, But White House Could Reinstate Them Following Appeal or Through Other Tariff Authorities BOTTOM LINE: The Court of International Trade blocked the tariffs the Trump administration imposed under the International Emergency Economic Powers Act (IEEPA). The ruling blocks 6.7pp of tariff increase since the start of the year, including the tariffs on Canada, China, Mexico, and the 10% baseline tariff, but does not affect sectoral tariffs. As ...

Investment Rating - The report maintains a Neutral rating for Big Yellow (BYG.L) with a 12-month price target of 1,110p, implying a 12.5% upside from the current price of 987p [1]. Core Insights - Revenue growth is expected to decelerate, with occupancy forecasted to remain stable at around 80.3% to 81% for FY26E and FY27E, compared to 79.1% in FY24/25. Rate growth has moderated to 3.2% year-on-year, down from a peak of 8.6% [2][3]. - The balance sheet is solid, with a net debt to EBITDA ratio of 3.1x, an interest coverage ratio of 6.1x, and a loan-to-value ratio of 12.8%, the lowest in the sector. The development pipeline includes 14 sites, with 9 under construction, expected to generate a net operating income (NOI) of £36.6 million [3]. - Valuation appears fair, trading at a 6.3% earnings yield, above its long-term average of 4.6%, and at a 31% discount to net tangible assets (NTA), below its long-term average of 0% [4]. Revenue and Earnings Forecast - Revenue is projected to grow from £177.8 million in FY25 to £216.5 million in FY28, with adjusted EPS estimates for FY26E to FY28E showing minimal changes of 0% to -2% [1][14]. - The forecasted EPS for FY26E is 59.55p, with a dividend yield expected to increase from 4.2% in FY25 to 5.2% in FY28 [11][14]. Financial Metrics - The report highlights that the average net achieved rent per square foot has declined to 3.2% year-on-year, down from a peak of 8.6% [20]. - The company’s leverage is noted to be the lowest among its peers, with a net debt to property value ratio of 13% [22]. Market Context - The demand environment remains subdued, with forward demand indicators showing a 3% year-on-year decline in prospect numbers for FY24/25 and a decrease in Google searches for self-storage options [2][18]. - The broader UK economic context is characterized by low growth and global macroeconomic uncertainty, which may continue to impact occupancy and revenue growth [2][25].

Investment Rating - The report assigns a "Sell" rating to Vornado Realty Trust (VNO) with a 12-month price target of $33.00, indicating a downside potential of 13.1% from the current price of $37.97 [14]. Core Insights - Management believes it is in a landlord's market, with strong tenant demand for Class A office space in Manhattan and constrained new supply due to high replacement costs and interest rates [3]. - VNO's occupancy in New York decreased from 88.8% at the end of 4Q24 to 84.4% in 1Q25 but is expected to recover to the low 90% range within 12 months due to leasing activity [3]. - The company completed significant leasing transactions, including a 337k SF lease by Universal Music Group at PENN 2 and a 222k SF lease at 555 California Street in San Francisco [3][11]. - VNO's 2025 comparable FFO is expected to be flat compared to 2024, with meaningful growth anticipated by 2027 driven by the lease-up of PENN 1 and PENN 2 [4]. Financial Performance - VNO's NTM FFO is currently trading at 17.9x, below its historical average of 22.3x, while trading at a 6.0% premium relative to the REIT sector [10]. - On an AFFO basis, VNO is trading at 37.9x NTM AFFO, significantly higher than its pre-pandemic average of 32.0x, reflecting an 88% premium compared to the REITs average [10]. - The report updates estimates for VNO, with 2025 NAREIT FFO projected at $2.20, reflecting a slight decrease from previous estimates, while 2026 and 2027 show growth [12]. Valuation Trends - The report notes that VNO's premium versus the REIT sector is approaching historical average levels, indicating a potential normalization in valuation [6]. - The updated price target reflects a revised AFFO multiple of 27.0x, up from 26.2x, based on recent leasing strength and market movements [12].

Political Landscape - The emergency presidential election in South Korea is scheduled for June 3, 2025, following political uncertainty due to the declaration of martial law and the impeachment of President Yoon Suk-yeol[6]. - Recent polls indicate that opposition candidates are leading, reflecting a favorable trend for the opposition party amid high public support for changing the current government[7][8]. Economic Policy Outlook - Key economic policy platforms focus on improving corporate governance and addressing the "Korea discount," with retail investors representing nearly 30% of the population[19]. - Major candidates propose four main categories of capital market policies: corporate governance reform, tax incentives, enhanced accessibility for capital markets, and establishing a fair market order[20]. Market Projections - The KOSPI 12-month target has been raised to 2900, indicating a 9% upside potential, driven by the elimination of political risks and advancements in capital market reforms[3][64]. - The potential reclassification of South Korea's MSCI status could attract approximately $20-30 billion in foreign investment, improving market accessibility[48][51]. Corporate Governance Reforms - Both leading candidates emphasize the importance of corporate governance reforms, which could play a crucial role in narrowing the Korea discount[22][23]. - Despite previous efforts, the valuation of the Korean stock market remains significantly discounted compared to regional and global peers, with a price-to-book ratio discount of 48% compared to developed markets[28]. Tax Incentives - Proposed reforms include changes to dividend and inheritance tax policies to encourage higher dividend payouts, which previously saw significant increases when similar policies were implemented in 2014[37][40]. - The inheritance tax reform aims to address undervaluation issues of listed company stocks, particularly for those with a price-to-book ratio below 0.8[38]. Market Order and Transparency - Candidates commit to strengthening penalties for illegal trading practices, such as insider trading, to enhance protection for minority shareholders and improve market transparency[52][53]. - The overall number of unfair trading cases has decreased, but there has been a rise in cases related to interest disclosures in 2024[53]. Sector-Specific Policies - Both candidates support strategic industries such as AI, renewable energy, and defense, with commitments to establish investment funds and incentives for domestic production[59][60]. - The focus on enhancing the competitiveness of the shipbuilding industry and advancing defense technology is also highlighted in their platforms[60].

28 May 2025 | 5:35PM BST CEEMEA Economics Analyst Kazakhstan — Lower Trend Growth Likely to Drive Medium-Term Inflation Higher Basak Edizgil +44(20)7774-9878 | basak.edizgil@gs.com Goldman Sachs International Clemens Grafe +44(20)7774-3435 | clemens.grafe@gs.com Goldman Sachs International Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge. ...

Investment Rating - The report maintains a "Buy" rating on selected companies within the MENA region, particularly focusing on UAE and Saudi Arabia [9][45]. Core Insights - The GCC markets exhibit resilience to macroeconomic uncertainties, with a focus on sectors less sensitive to oil prices, particularly in the UAE [2][54]. - A bearish outlook for oil prices is anticipated in 2025-26 due to increased non-OPEC production, but a bullish cycle is expected to follow from 2027 onwards [8][22]. - The report emphasizes the importance of economic diversification in the UAE, which is less exposed to oil price fluctuations compared to Saudi Arabia [27][55]. Summary by Sections Macroeconomic Overview - The US macro team has raised the growth forecast for 2025 by 0.5 percentage points to 1% and reduced the 12-month recession odds to 35% [15][20]. - The perceived de-escalation of tariffs is seen as an indirect positive for GCC markets, although oil price movements remain a more relevant driver for regional performance [17][21]. Sector Analysis - The UAE is highlighted as favorably positioned due to its economic diversification, with strong prospects in Real Estate, Energy, and Mobility sectors [3][54]. - In Saudi Arabia, the focus is on identifying resilient companies in the TMT sector and selective opportunities within Financials, Consumers, and Chemicals [3][54]. Investment Opportunities - Key sectors identified for investment include UAE Real Estate, Energy (specifically ADNOC), and Infrastructure/Mobility [10][12]. - In Saudi Arabia, companies like Saudi Aramco and SABIC are favored due to their strong fundamentals and strategic positioning [10][45]. Capex Cycle Insights - The report anticipates continued spending momentum across sectors in the GCC, particularly in Energy, Digital Innovation, and Clean Tech, despite a lower oil price environment [46][50]. - The GCC Capex Wave is expected to focus on non-oil sectors, with significant investments in digitization, metals & mining, and clean energy [39][40]. Company-Specific Recommendations - The report recommends a selective approach to investments in banks, favoring those with a balanced loan mix and strong deposit franchises, such as SNB and Riyad Bank [10][45]. - In the consumer sector, companies like Almarai and Lulu are under scrutiny for their ability to navigate current market pressures [10][12].

29 May 2025 | 2:07AM SGT Indonesia Banks Apr bank-only data, margin pressure remains for most Apr Net Profit remained weak at +1%yoy with PPOP muted at 0%yoy... Apr 2025 bank-only financial data of our covered banks showed YTD 4M yoy growth in profitability slowing down to +1% from +3% in 3M25 with PPOP growth staying muted at 0%. ROEs also declined to 18.3% on average from 18.7% in 3M25 and 19.3% in 12M24. Driving the lackluster performance is the (1) Continued margin pressure stemming from elevated fundin ...

28 May 2025 | 5:53PM EDT US Economics Analyst The Impact of Tariffs on US Companies: A View from the Equity Market (Peng) Jan Hatzius +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC Alec Phillips +1(202)637-3746 | alec.phillips@gs.com Goldman Sachs & Co. LLC David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC Manuel Abecasis +1(212)902-8357 | manuel.abecasis@gs.com Goldman Sachs & Co. LLC Elsie ...