Investment Rating - The investment rating for Hangzhou Hikvision Digital Technology is Neutral, with a target price of Rmb30.000, indicating an expected share price return of 8.5% and an expected total return of 11.6% including a dividend yield of 3.1% [2][15]. Core Insights - The Canadian government's ban on Hikvision's operations is expected to have a limited revenue impact, as current revenue exposure from Canada is less than 1%, and developed markets account for approximately 10% of total revenue [1][4]. - The valuation target of Rmb30 is based on a 20.2x NTM PE, reflecting the company's leading position in the surveillance camera market and its growing innovation business, while also considering uncertain growth in the SMBG segment and geopolitical risks [4][1]. Summary by Sections Revenue Impact - The Canadian government's request for Hikvision to cease operations is primarily due to national security concerns, but the overall revenue impact is expected to be limited due to low exposure in Canada and developed markets [1]. Valuation - The target price of Rmb30 is justified by the company's historical average PE ratio and its strong market position, despite potential risks from competition and geopolitical factors [4]. Market Position - Hikvision maintains a leading position in the surveillance camera market, supported by ongoing innovation, which is crucial for sustaining growth amid external challenges [4].

Investment Rating - The report indicates a cautious outlook on gold, suggesting a potential knee-jerk rally but ultimately a defensive stance due to geopolitical risks and market conditions [5][6][8]. Core Insights - Gold prices have declined due to easing geopolitical risks following a ceasefire between Iran and Israel, with oil prices also contributing to the downward trend [3][4]. - The gold/silver ratio has narrowed, indicating silver's relative strength despite overall declines in precious metals [3][9]. - The report highlights that the market may require more destabilizing events to push gold prices to new highs, as current geopolitical tensions have not significantly impacted oil prices [6][8]. Summary by Sections Precious Metals Overview - Gold price as of the report: USD 3,302.50/oz, with silver at USD 36.06/oz, platinum at USD 1,304.00/oz, and palladium at USD 1,071.00/oz [2]. - Speculative positions as of June 17, 2025: Long positions in gold at 31.64 Moz, silver at 612.17 Moz, platinum at 3,668.7 thousand oz, and palladium at 1,062.4 thousand oz [2]. Market Focus and Emerging Trends - The decline in gold was cushioned by ETF purchases, but overall sentiment remains weak due to geopolitical developments and lower oil prices [3][4]. - The report notes that while gold has been resilient against lower USD and yields, the focus may shift to US budget concerns and ongoing Middle East risks [5][8]. Outlook on Precious Metals - The report expresses less optimism for silver, suggesting that the gold/silver ratio at around 90:1 may make long positions in silver less attractive [9]. - Platinum is facing resistance, and demand from China appears to be easing, which may also affect palladium prices [9].

Summary of the Conference Call on Global Shipping & Oil Industry Overview - The call focuses on the **global shipping and oil industry**, particularly the implications of recent **Middle East tensions** on oil markets and global supply chains [1][2][3]. Core Insights and Arguments - **Geopolitical Risk**: The recent flare-up in the **Strait of Hormuz** led to increased energy volatility and discussions around tanker operations. However, the geopolitical risk premium has partially unwound following a ceasefire agreement between the US and Iran [2][3]. - **Long-term Risks**: Despite the current calm, underlying risks in the Middle East remain, including strategic implications for Israel and uncertainties in the Red Sea, which could affect global trade routes [3]. - **Investor Sentiment**: Investors are questioning whether the recent tensions are truly resolved or if they represent a new normal, indicating a need for careful positioning in the market [3]. - **Shipping Companies Analysis**: The call will analyze how elevated risks around key maritime routes are impacting routing, insurance costs, and overall sentiment towards major shipping companies such as **China Cosco, Hapag-Lloyd, Maersk, K-Line, MOL, NYK, OOIL, and ZIM** [3]. - **Energy Sector Impact**: Discussion will also cover how the risk reset affects global oil majors and companies heavily leveraged in the energy sector, focusing on supply shock risks and demand-side resilience [3]. Additional Important Points - **Market Framework**: The session will outline the current oil market framework and assess how much geopolitical risk is already priced in, which is crucial for understanding tanker rates and rerouting risks [2][3]. - **Volatility in Spot Rates**: Spot rates are experiencing volatility, driven by geopolitical headlines, necessitating a discussion on which companies are better positioned based on fleet, regional mix, or contract structure [3]. - **Investment Flows**: The dynamic between supply shock risks and demand resilience may shift expectations for refining margins, fuel costs, and investment flows into energy infrastructure [3]. Conclusion - The call aims to provide a comprehensive understanding of the complex macro shocks affecting the shipping and energy sectors, helping clients navigate potential investment opportunities and risks in the current landscape [3].

Investment Rating - The report indicates that the biggest economic risk to economies and markets remains via an oil shock, with oil prices expected to spike above USD 80 per barrel due to potential closure of the Strait of Hormuz [8][3]. Core Insights - The conflict in the Middle East, particularly the US strikes on Iranian nuclear sites, has intensified uncertainty in global economies and markets [2]. - Oil prices are projected to rise significantly, with a potential increase to above USD 80 per barrel, reflecting a higher probability of a Hormuz closure, which is critical as approximately 18% of the world's oil passes through this strait [3][8]. - The report outlines four key risk channels for global equity markets: oil prices, freight and trade, geopolitical risk premiums, and tourism [4][33]. Summary by Sections Oil Market - Following US strikes on Iran, oil prices are expected to rise due to increased risk premiums, with forecasts suggesting Brent prices could reach USD 67 per barrel in Q2/Q3 and USD 65 per barrel thereafter if supplies are not disrupted [14][8]. - If oil supplies are disrupted, there would be an upside risk to oil prices, although this may eventually be capped by ample OPEC+ spare capacity [14]. Economic and Market Impact - The direction of exchange rates will largely depend on oil prices and the speed of their increase, with potential strengthening of the USD as a safe-haven currency [25]. - The report suggests that while the conflict does not pose a meaningful threat to economic stability in the Gulf, increased uncertainty may negatively impact sentiment, particularly in travel, trade, and tourism sectors [4][26]. Geopolitical Risks - The escalation of conflict between Israel and Iran poses downside risks to emerging market equities, with investors potentially rotating from Gulf Cooperation Council (GCC) countries to Latin America [33]. - The report emphasizes that the biggest risk to economies and markets remains through an oil shock, with trade costs and tourism impacts also being significant [14][32].

Group 1: Oil Industry Insights - Crude oil prices have rallied to one-year highs, but futures indicate lower prices are likely ahead, suggesting temporary disruptions at worst [3] - Kinder Morgan (KMI) offers a 4.2% yield, funding its dividend through tolls on its extensive pipeline network, which transports crude oil and natural gas [6][7] - Kinder Morgan controls 40% of US natural gas flows, allowing for regular price increases and dividend boosts [7] Group 2: Investment Opportunities in Energy Dividends - Alerian MLP ETF (AMLP) provides an 8% dividend yield by consolidating MLPs into a single fund, simplifying tax reporting for investors [9] - The fund has raised its dividend for three consecutive quarters, indicating strong performance [10] Group 3: Gold Market Dynamics - The US dollar has depreciated 28% against gold year-to-date, signaling a shift towards assets that are less affected by central bank policies [11] - VanEck Gold Miners ETF (GDX) serves as a straightforward investment in gold, benefiting from lower energy costs as a primary input for gold miners [12] - GAMCO Global Gold, Natural Resources & Income Trust (GGN) trades at a 2% discount to its net asset value and offers an 8% annualized dividend, providing income stability with potential upside [13]

On the Middle East. The latest headlines coming from the president of the United States posting on truth social, acknowledging what we all sort of knew just a few moments ago here that the attack by Iran onto U.S. assets in Qatar, that most of those missiles had been intercepted. No casualties, no physical damage.No, exactly right. This kind of limited impact, if you will. But what's interesting is investors just the risk on trade, building momentum in these last few minutes of trading.I keep refreshing my ...

Key focus and themes Global Markets Research Foreign Exchange Asia exJapan/Euro Area/Europe Trump's possible diplomacy; Powell; impending tariffs Which of the following most closely matches your expectations for the IsraelIran conflict over the next two weeks? | Fig. 1: Top five top­conviction strategy trades in order (scale 1­5) | | --- | | ★★★★★ | | | Top 5 FX and Rates Trades | | ★★★★★ | | | --- | --- | --- | --- | --- | --- | --- | | Countries | Trade | bp move | bp move from | Target | Timeline | Convi ...

Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates a baseline scenario for the Strait of Hormuz to remain open, suggesting a cautious outlook on geopolitical risks [4]. Core Insights - Geopolitical risks have increased following Israel's attack and Iran's retaliation, with potential disruptions in the Strait of Hormuz posing significant consequences for global oil and LNG supply [4][5]. - Approximately 20% of global oil and LNG supply passes through the Strait, with major producers, including Iran, heavily reliant on this route [4][5]. - The current market assigns a probability of less than 20% for a closure of the Strait, with oil prices potentially surging to $120-130 per barrel in the event of a full closure [1][4]. Summary by Sections Oil Exports and Reliance - The Strait of Hormuz is critical for oil exports, with a total of 21.2 million barrels per day passing through it as of May 2025 [6]. - Countries like Bahrain, Kuwait, and Qatar have no alternative routes, making them particularly vulnerable to disruptions [3][6]. - Saudi Arabia and the UAE have limited pipeline capacities to redirect some hydrocarbon flows, but disruptions would still have a major impact [3][7]. Economic Impact - Hydrocarbon activities account for about one-third of aggregated GCC GDP, with Kuwait being the most reliant and Bahrain the least [7]. - In 2024, net oil and gas current account revenues represented about 21% of GDP, with significant variances across GCC countries [7][11]. - A $10 per barrel increase in oil prices could improve GDP by approximately 2.6% for current accounts and 2.4% for fiscal balances [11]. Sensitivity to Oil Prices - Current higher oil prices, assuming no disruption, could benefit GCC balances due to high sensitivity to price changes [11]. - The report maintains a baseline Brent price forecast of $66 per barrel for 2025, with geopolitical premiums currently adding $10-12 per barrel [11][12]. Conclusion - The report concludes that while risks and uncertainties regarding oil prices and geopolitical stability are present, macroeconomic forecasts for GCC countries remain unchanged for now [17].

Core Viewpoint - The recent U.S. airstrikes on Iran have led to increased interest in defense stocks, with notable momentum observed in the sector as geopolitical tensions rise [1][2]. Defense Stocks Analysis - Northrop Grumman (NYSE: NOC) was not selected as a top stock to watch despite its involvement in the airstrikes, but it remains a key player in the defense narrative [2][3]. - The B-2 Spirit, used in the strikes, costs approximately $2.1 billion per unit and was equipped with 30,000-pound bunker-buster bombs [3]. - Northrop Grumman's shares rose by 1.3% to 1.5% in early trading, slightly outperforming other defense contractors [3]. - Analysts caution that short-term price increases may not lead to sustained budget growth, and Northrop faces $2 billion in cost overruns related to the B-21 Raider program, which could impact earnings but may also position the company for future program successes [4]. Other Notable Defense Stocks - Lockheed Martin (NYSE: LMT) gained approximately 0.5% pre-market, benefiting from its extensive involvement in U.S. military operations and the F-35 program, making it a staple for investors seeking geopolitical hedges [5]. - RTX Corporation (NYSE: RTX), known for producing Tomahawk cruise missiles, saw its stock rise by about 0.6%, highlighting its critical role in U.S. and NATO operations [7]. - General Dynamics (NYSE: GD) also experienced similar gains, being well-positioned to meet increasing demand for munitions, naval systems, and armored vehicles if military operations escalate [9].

Geopolitical Risk & Market Reaction - The market reaction to the US strikes on Iran's nuclear sites was surprisingly muted [1][3] - Poly market estimates a 23% probability of Iran attempting to close the Gulf of Hormuz by July [4] - Successful military action by Israel and the US could give China pause regarding its intentions for Taiwan [9] - The market is balancing the positive aspects of neutralizing Iran against the risks of retaliation [8][10] Economic Factors & Investment Strategies - The market believes it can handle a 10% general tariff and 30% tariff on China, assuming it doesn't worsen [11] - New all-time highs in the S&P are attainable in the next several weeks, barring significant action by Iran [12] - Companies may leverage AI to offset the higher prices resulting from tariffs, increasing efficiency and margins [13][15] - Investment opportunities may lie in the potential users of AI who can significantly increase operational efficiency, rather than solely in AI suppliers [14] Middle East Situation - The damage done to Iran's nuclear capabilities has likely set back their progress towards producing a bomb [6] - Neutralizing the Houthis and securing shipping in the Red Sea and Hormuz are key considerations [5]