ANCHOR REPORT Global Markets Research We set end-2026F Nifty target of 29,300, implying 12% return. The downside risks are global factors, including rise in risk premium, higher commodity prices, and trade deficit. The upside risks include a decisive pick up in the capex cycle. We recommend a selective bottom-up approach. We suggest that investors avoid narrative-driven richly valued stocks, consider increasing exposure to underperforming exporters, and be selective on segments with government intervention. ...

Summary of Key Points from Conference Call Transcripts Industry Overview - **Macro Research Focus**: The conference call discusses macroeconomic trends, particularly the implications of U.S. Federal Reserve policies, China's economic strategies, and geopolitical tensions affecting global markets [1][2][3]. Key Insights U.S. Federal Reserve Policy - **Rate Cuts Anticipated**: A 25 basis point rate cut is expected at the upcoming FOMC meeting, influenced by the September U.S. jobs report. Future rate cuts are anticipated in March and June 2026, with U.S. growth projected to reaccelerate to 2-2.5% [1]. - **Labor Market Concerns**: Despite a surprising increase in nonfarm payroll growth in September, the underlying job growth is estimated at a weak 39,000 per month. Layoff mentions in earnings calls have increased, indicating potential entrenched weakness in the labor market [1]. China's Economic Strategy - **Export-Led Growth**: China's government aims to double down on export-led growth, potentially increasing its current account surplus to 1% of global GDP by 2029, up from 0.4% currently. This could negatively impact manufacturing and employment in trading partners, particularly in Europe [2]. - **Impact on Euro Area Growth**: The increased competition from Chinese exports has led to a downward revision of Euro area growth forecasts for 2026 and 2027 to 1.2% and 1.3%, respectively [2]. Geopolitical Tensions and Economic Impacts - **Russia-Ukraine Peace Deal**: A limited ceasefire could boost Euro area GDP by 0.2%, while a comprehensive peace agreement might increase GDP by 0.5%. Lifting Russian oil sanctions could lead to a significant decline in refined oil product prices [8]. - **Japan-China Relations**: Rising tensions between Japan and China could result in a 0.2 percentage point reduction in Japanese GDP growth due to decreased Chinese tourism and exports [8]. Commodity Market Insights - **Industrial Metals Outlook**: Copper prices are expected to remain strong due to constrained mine supply and robust global demand, with forecasts ranging between $10,000 and $11,000 per metric ton next year. In contrast, aluminum, lithium, and iron ore prices are expected to decline significantly by the end of 2026 [9]. Additional Considerations - **UK Fiscal Policy**: The recent Autumn Budget indicates a more backloaded fiscal consolidation, leading to a slight increase in the UK GDP growth forecast for 2026 to 1.1% [8]. - **Inflation Dynamics**: Increased supply of Chinese goods may contribute to a cumulative downside of approximately 0.25% to Euro area core prices, keeping inflation modestly below target [2]. This summary encapsulates the critical insights and forecasts discussed in the conference call, highlighting the interconnectedness of macroeconomic policies, geopolitical events, and their implications for global markets.

Group 1 - Leading investment banks have raised price targets for key UK companies, indicating a positive outlook for their future performance [2][3][10] - Jefferies increased its price target for Senior PLC from 185p to 230p and for Imperial Brands from 3,600p to 3,700p [2] - Citi raised its target price for Smiths Group from 2,700p to 2,900p, while J.P. Morgan boosted its target for Reckitt from 5,500p to 6,100p and Haleon from 315p to 335p [3][10] Group 2 - Global equity markets are experiencing gains, driven by expectations of a Federal Reserve rate reduction following weak U.S. economic data [4][10] - The Japanese Yen remained stable amid speculation of a rate hike, while the New Zealand Dollar strengthened due to a hawkish tone from the Reserve Bank of New Zealand [5] Group 3 - Japan's official Takaichi emphasized the importance of a strengthening economy for fiscal improvement and projected a decline in Japanese Government Bond issuance for the current fiscal year [6][10] - Machine Tool Orders in Japan for October showed a year-on-year increase to 17.1%, up from 16.8% [7] Group 4 - The UK is preparing for a series of tax hikes in its upcoming Autumn Budget 2025, indicating potential fiscal consolidation [8][10] - Finland's housing market showed mixed signals, with a year-on-year House Price Index at -2.4% but a month-on-month stabilization at 0.0% [9][10] Group 5 - Soybean prices are rising due to increased Chinese demand for U.S. supplies, reflecting strong trade relations in the agricultural sector [11][10]

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the economic outlook and policy measures in China, particularly focusing on the People's Bank of China (PBoC) and the Ministry of Finance (MoF) [1][2][3][4]. Core Insights and Arguments - **Interest Rates Held Steady**: The PBoC has maintained the Loan Prime Rates (LPRs) at 3.0% for the 1-year tenor and 3.5% for the 5-year tenor for six consecutive months, indicating a cautious approach to monetary policy [2][3]. - **Fiscal Consolidation Observed**: Recent fiscal data shows an 8.6% year-over-year increase in tax revenue for October, while overall expenditure has contracted by 19.1% year-over-year, suggesting a trend towards fiscal consolidation [2][3]. - **Weakness in Property Sector**: There is a notable absence of new support measures for the property sector despite ongoing data weakness, with home sales and prices showing limited signs of stabilization [2][5]. - **Growth Target Feasibility**: The report suggests that achieving the 5% annual growth target for 2025 remains feasible, with a projected growth of approximately 4.5% year-over-year in Q4 2025 [3][4]. - **Policy Space for 2026**: Policymakers are likely to conserve policy space for 2026, the first year of the 15th Five-Year Plan (FYP), with expectations for potential rate cuts and fiscal measures to support consumer spending and welfare [1][4][5]. Additional Important Insights - **Next Policy Window**: The next significant policy window is anticipated to be after the Central Economic Work Conference (CEWC), with potential for a new round of property support measures and front-loading of government bond issuance for 2026 [1][4][5]. - **Incremental Property Support**: There are hints at possible incremental measures for property support, including interest subsidies for mortgage borrowers and additional funding for property developers, although the central government is not expected to utilize its balance sheet directly [5][9]. - **Long-term Constraints**: Long-standing constraints on further easing remain, particularly concerning debt levels for the MoF and net interest margin (NIM) concerns for the PBoC [3][4]. This summary encapsulates the key points discussed in the conference call, providing insights into the current economic landscape and anticipated policy actions in China.

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the economic outlook for the Asia-Pacific region, focusing on the recovery of both tech and non-tech exports, and their implications for GDP growth and inflation trends in 2026 [2][3][4]. Core Insights and Arguments 1. **Broadening Recovery**: The recovery in Asia is expected to broaden as non-tech exports, which account for 75% of overall exports, begin to recover due to easing trade tensions. This is anticipated to positively impact capital expenditure (capex), job creation, and wage growth, leading to increased discretionary consumption [3][19][29]. 2. **GDP Growth Projections**: Asia's real GDP growth is projected to rise from 4.3% in 4Q25 to 4.7% in 4Q26. For Asia excluding China, nominal GDP growth is expected to rebound from 5.5% in 4Q25 to 7.2% in 4Q26 [3][41]. 3. **Inflation Trends**: Disinflationary pressures are expected to ease in 2026, with underlying inflation rising modestly across the region. Asia excluding Japan's headline inflation is projected to remain within central banks' comfort zones, while China's exit from deflation is not expected until 2027 [4][55][58]. 4. **Central Bank Policies**: Central banks in Asia are nearing the end of the rate cut cycle, with most expected to hold rates steady in 2026. Japan is anticipated to implement one more rate hike in December 2025 before pausing [5][6][38]. 5. **Risks to Growth**: Upside risks include stronger private sector spending in the US and accelerated AI adoption, while downside risks involve a potential mild recession in the US affecting Asia's non-tech exports and possible larger stimulus measures from China [7][38]. Additional Important Insights 1. **Tech vs. Non-Tech Exports**: While tech exports have been strong, they are capital-intensive and have limited spillover effects on the broader economy. Non-tech exports are crucial for driving overall economic growth and consumption [15][16]. 2. **Capex Momentum**: The expected recovery in non-tech exports is likely to lead to an acceleration in capex momentum, with fixed capex growth projected to recover to 3.7% in 1H26 and further to 4.4% in 2H26 [29][30]. 3. **Consumption Recovery**: A turnaround in exports and capex is expected to improve labor market conditions, leading to a recovery in discretionary consumption segments. The slowdown in consumption has been attributed to cyclical factors rather than household balance sheet dynamics [32][36]. 4. **Country-Specific Outlooks**: - **China**: Real GDP growth is expected to improve but nominal GDP growth will remain subdued due to ongoing property sector weakness [48]. - **India**: Anticipated to have the strongest nominal GDP growth in Asia at 10.7% by 4Q26, driven by tax cuts and regulatory easing [49]. - **Japan**: Expected to maintain strong nominal GDP growth supported by expansionary fiscal policies [50]. - **Korea**: Consumption is projected to recover due to improved domestic demand and fiscal easing [51]. - **ASEAN**: Economic performance is expected to be bifurcated, with Malaysia and Singapore growing robustly while Indonesia, the Philippines, and Thailand face challenges [52]. Conclusion The Asia-Pacific economic outlook for 2026 indicates a broadening recovery driven by non-tech exports, with positive implications for GDP growth and inflation. Central banks are expected to maintain a cautious approach to monetary policy, while country-specific dynamics will influence individual economic performances across the region [3][4][5][6][7].

Botswana President Duma Boko says the country is working on a fiscal consolidation plan to help generate efficiency in the economy. He says the country recently launched a new sovereign wealth fund to invest in sectors beyond diamonds. The southern African nation is pushing to secure a majority stake in diamond producer De Beers as Anglo American looks to divest its 85% stake in the firm. Boko tells Bloomberg's Jennifer Zabasajja that potential collaborators including the likes of Qatar and the Oman Soverei ...

Economic Policy - Kenya plans to switch to privatization to stimulate the economy [1] Fiscal Strategy - Kenya is shifting its economic strategy after exhausting fiscal consolidation [1]

Economic Recovery & Fiscal Policy - Greece experienced a significant economic turnaround, transitioning from a state of economic crisis to exceeding the European average in growth [1][2] - Fiscal consolidation measures enabled Greece to conclude its bailout programs in 2018 [1] - By 2025, Greek output had partially recovered from a major recession, achieving a budget surplus as one of the few EU nations [2] Debt & Sustainability - Greece's debt burden remains high but has been structured for greater sustainability [2] Socio-Political Landscape - Austerity measures following bailout agreements caused substantial social and economic hardship [1] - Voter dissatisfaction with the ruling government and the rise of populist parties create uncertainty for future elections [3] Lessons Learned - The Greek financial crisis serves as a reminder to prevent future crises [3] - Despite economic improvements, Greece remains one of the poorest EU nations, facing chronic issues [3]

Investment Rating - The report does not explicitly provide an investment rating for the Finnish economy but emphasizes the need for fiscal consolidation and structural reforms to support economic recovery and growth potential [25][30]. Core Insights - The Finnish economy is slowly recovering from a recession, with a projected real GDP growth of 0.7% in 2025 and 1.1% in 2026, driven by declining interest rates and improved purchasing power [30][32]. - Finland has a strong comparative advantage in renewable electricity and engineering, which positions it well for the green industrial transition, but faces challenges in productivity growth and labor market mismatches [25][28]. - The report highlights the importance of attracting foreign talent to address skill shortages and enhance economic growth, alongside the need for reforms in higher education to increase attainment rates [51][43]. Summary by Sections Economic Recovery and Public Finances - The Finnish economy is gradually recovering, but growth lags behind Nordic peers and the OECD average, with a contraction of 0.1% in 2024 [31][30]. - Fiscal pressures are increasing due to rising defense, health, and pension expenditures, with a fiscal deficit of 4.4% of GDP in 2024 [37][30]. - Structural reforms are necessary to improve public spending efficiency and address labor market mismatches to sustain recovery [39][30]. Higher Education Attainment - Finland's higher education attainment rate has stagnated, ranking 30th among OECD countries, contributing to labor shortages in highly skilled positions [44][43]. - The higher education system is primarily publicly funded, and reforms are needed to increase the number of first-entrant places and expand the range of post-graduate qualifications [49][43]. - Encouraging business funding for higher education research is essential to free up resources for new entrants [25][43]. Attracting Foreign Talent - Attracting high-skilled foreign workers is crucial for addressing current and future skill shortages, particularly in sectors like ICT and green energy [51][52]. - Language proficiency remains a barrier for foreign workers, necessitating expanded language training programs and flexible workplace language policies [53][52]. - Initiatives to provide more internship opportunities for foreign students are needed to improve retention rates post-graduation [54][52]. Transition to Net Zero - Finland is not on track to meet its 2035 net zero greenhouse gas emissions target, with a need for increased forest growth and reduced soil emissions [57][56]. - Investment in low-emissions technologies is essential, but current policies and emissions accounting methods hinder progress [67][56]. - The report emphasizes the importance of public-private partnerships to crowd in private investment for the green transition [67][56].

Investment Rating - The report indicates a positive outlook for EM local currency funds, suggesting a new phase of inflows as investors anticipate USD weakness [10][17]. Core Insights - EM fixed income investors are shifting towards local market funds, with a notable preference for non-USD denominated assets, reflecting expectations of USD weakness [10][21]. - The GBI-EM Global Diversified Index has returned approximately 8.5% year-to-date, outperforming hard currency returns of 1.6% [10][22]. - The report highlights a significant rally in the TWD, driven by exporters selling USD and foreign inflows into Taiwan equities [34][40]. Summary by Sections EM Fixed Income Strategy - The report outlines a historical perspective on EM fund flows, categorizing them into four phases from 2008 to the present, with a recent shift towards local currency inflows [18][21]. - The analysis suggests that a weakening USD is crucial for sustaining inflows into local currency funds, with projections indicating further USD depreciation [17][18]. LatAm Oil & Gas - Strong capital expenditure levels in Latin America are expected to drive a compound annual growth rate (CAGR) of approximately 3% through 2030, primarily from Brazil, Argentina, and Guyana [4]. LatAm Macro Strategy - The report assesses risks to central bank pricing in Latin America, indicating mixed rate valuations but identifying potential pockets of value in the region [5]. IMF Spring Meetings Takeaways - The IMF's latest projections indicate a weaker global growth outlook, with emerging markets facing increased fiscal risks and debt levels [60][63]. - The report notes that while fiscal balances are under pressure, there are positive developments in several countries, including Argentina and Nigeria, which may support their reform programs [70].