Group 1: Federal Reserve Monetary Policy Scenarios - The impact of the Federal Reserve's monetary policy on emerging market stocks can be categorized into four scenarios: global monetary policy switching period, stable rate increase/decrease period, global economic recession, and liquidity excess period[1] - In the global monetary policy switching period, market expectations regarding the Fed's hawkish/dovish stance are key, while emerging market economic strength has less impact[1] - During stable rate increase/decrease periods, the sensitivity to monetary policy decreases, and the economic expectations of emerging markets compared to the U.S. become crucial[1] Group 2: Historical Performance Analysis - Historical analysis from 2008 to 2025 shows that emerging market stocks have varied performance under different monetary policy conditions[2] - For instance, from January 2008 to February 2009, emerging markets fell by 59.9% during the financial crisis, while from February 2009 to April 2010, they rebounded by 92.6% in a liquidity excess period[2] - In the stable rate increase period from February 2016 to January 2018, the MSCI Emerging Markets Index rose by 69.0% as global manufacturing PMI improved[2] Group 3: Future Outlook Post-Rate Cut - Following the September rate cut, the macro environment is likely entering a monetary policy switching phase, which may exert downward pressure on emerging market stocks[1] - If the Fed's monetary policy expectations do not shift to rate hikes, emerging markets may still perform well despite potential rate cut reversals[1] - The report suggests that the most favorable time for emerging markets may have passed, similar to the period from September to December 2024[1]

Core Viewpoint - Emerging markets have outperformed US stocks this year primarily due to strong domestic retail investor participation rather than significant foreign capital inflows [1] Group 1: Market Performance - The performance of emerging markets is driven by local retail investors, despite downward adjustments in corporate profit expectations and concerns over potential US tariffs [1] - Investor focus has shifted towards popular sectors such as AI and technology, contributing to an overall optimistic market sentiment [1] Group 2: Future Outlook - Attention should be paid to potential risks such as a slowdown in the US economy and global growth deceleration, alongside the positive effects of easing inflation and monetary policy outside the US [1] - If multiple cyclical factors align, including a faster US economic slowdown compared to other countries, declining real interest rates in the US, and a significant depreciation of the dollar, emerging markets are expected to outperform US stocks within the next 6 to 12 months [1] - This anticipated outperformance is viewed as cyclical rather than structural [1]

Group 1 - The three major indices opened slightly higher, with the energy and metal sectors leading the gains. As of the opening, the Shanghai Composite Index was at 3637.05 points, up 0.05%; the Shenzhen Component Index was at 11159.03 points, up 0.27%; and the ChiNext Index was at 2336.93 points, up 0.13% [1] Group 2 - CITIC Securities believes that the A-share market continues to face certain resistance for short-term upward movement due to weaker-than-expected PPI, the expiration of tariff easing agreements, and completed valuation repairs leading to reduced trading volume. However, it is still considered to be in a bull market continuation phase, with pullbacks providing good allocation opportunities [2] - The firm notes that recent improvements in overseas conditions, potential changes in Federal Reserve personnel may raise market expectations for interest rate cuts, and a weakening dollar trend is favorable for emerging market stocks, particularly benefiting Hong Kong stocks [2] - Huaxi Securities highlights that the current market rally has multiple sources of incremental capital, including insurance, pension funds, public funds, private equity, and retail investors. Since the "924" market rally began, the negative scissors difference between M1 and M2 year-on-year growth has been narrowing, indicating increased capital activation and a marginal recovery in consumer and investment willingness [2] - The recent margin financing balance has reached a ten-year high, reflecting a continuous increase in risk appetite among individual investors. In the context of asset allocation scarcity, the bull market mentality is driving residents' asset allocation towards equity assets, which will be a significant driver for the current "slow bull" market [2] - The focus on the "15th Five-Year Plan" is expected to be a key point for future market attention, with technology growth remaining a policy mainline for a considerable period [2]

Group 1 - The semiconductor sector is under pressure due to President Trump's threat to increase tariffs, leading to a decline in emerging market stocks, with the MSCI Emerging Markets Index down by 0.2% primarily due to TSMC's stock drop [1] - TSMC's stock fell by 2.2%, marking its largest decline since June 23, following the arrest of six individuals for allegedly stealing trade secrets, raising concerns about national security vulnerabilities [3] - The overall sentiment in the chip industry is negative, compounded by Trump's announcement of impending tariffs on semiconductor imports and disappointing earnings reports from companies like Super Micro Computer and GlobalFoundries [3] Group 2 - Emerging market stocks are being reassessed after a seven-month rally, with geopolitical tensions and weak consumer economies contributing to the cautious outlook [1] - Indian bonds declined as the country became a target of Trump's harshest tariff measures, with the 10-year bond yield rising by 7 basis points to 6.40% [4] - The South African Rand and Mexican Peso showed resilience in the currency market, benefiting from expectations of a rate cut by the Federal Reserve [5]

Core Viewpoint - The recent focus in the market is the narrowing of the AH share premium, with UBS indicating that unless there is a significant influx of additional liquidity into the A-shares, the AH premium will remain at its current low mid-range levels [1] Group 1: AH Share Premium Dynamics - UBS statistics show a high correlation coefficient of 0.83 between the AH share premium and the US dollar index over the past 15 years, suggesting that a weaker dollar typically leads to a narrower AH premium, indicating better performance of H-shares relative to A-shares [1] - The changes in the AH share price differential are largely influenced by the liquidity differences between onshore and offshore markets [1] Group 2: Impact of Dollar Fluctuations - During periods of a weaker dollar, global liquidity tends to improve, resulting in capital inflows into emerging markets, and vice versa [1] - Despite the narrowing premium, UBS believes that A-shares will still benefit moderately from a slight strengthening of the RMB against the USD when the dollar declines [1] Group 3: Emerging Market Performance - UBS estimates that over the past decade, a 10% decline in the US dollar index has led to a relative increase of 9% in emerging market equities [1] - From a profitability perspective, Chinese companies with significant costs tied to imports or heavy dollar-denominated debt exposure are likely to benefit from a weaker dollar [1]

Core Viewpoint - Citic Securities emphasizes the investment opportunities in emerging markets such as China and South Korea, particularly if the Federal Reserve unexpectedly lowers interest rates, which could lead to synchronized monetary easing between China and the U.S. [1] Group 1: A-shares - The A-share market is experiencing continuous warming, awaiting a catalyst for ignition [1] Group 2: Hong Kong Stocks - Hong Kong stocks still offer significant value for money, with ample liquidity present [1] Group 3: South Korean Market - The South Korean stock market is expected to maintain a positive trend due to policy support and anticipated liquidity injections [1] Group 4: Indian Market - The Indian stock market faces short-term constraints from high valuations, funding pressures, and earnings downgrades, with a focus on the IT and defensive sectors [1] Group 5: Japanese Market - The Japanese stock market is presented with opportunities due to governance reforms and external environmental resonance [1] Group 6: Southeast Asian Markets - Southeast Asian markets are seeing sustained capital inflows, with the Indonesian market showing medium to long-term investment value [1]

Group 1 - The MSCI Emerging Markets Index rose by 0.9%, reaching its highest level since early 2022 [1] - The Vanguard FTSE Emerging Markets ETF, valued at $87 billion, increased by 0.7% [1] - An index measuring the currencies of developing countries also saw an increase, with the Polish zloty and Hungarian forint leading the gains [1]

Group 1 - European stock markets have experienced inflows for the sixth consecutive week [1] - Emerging markets have seen the largest outflow of funds in 14 weeks [1]