Monetary Policy - Hungary's central bank prioritized currency stability [1] - Policymakers are wary of premature monetary easing [1] Interest Rates - Hungary maintains the highest borrowing costs in the European Union [1]

Market Trends - Taiwan's interest-rate swaps are rising [1] - Traders are reducing monetary easing bets [1] - Taiwan's economy is defying headwinds from US tariffs [1]

Investment Strategy - T Rowe favors local bonds in Thailand and Malaysia [1] - The company anticipates that further monetary easing will be a primary factor influencing investor returns, potentially outweighing currency appreciation [1] Regional Focus - The investment strategy specifically targets Thailand and Malaysia [1]

Monetary Policy - Egypt's central bank decided to hold interest rates steady, pausing a period of monetary easing [1] - The decision reflects concerns about regional tensions and the impact of President Trump's tariffs [1] - These concerns outweighed the influence of slowing inflation on monetary policy [1]

Investment Rating - The report advises a balanced portfolio with high-quality, large-cap offshore internet names and A-share blue-chip consumer names [1][12]. Core Insights - A-share investor sentiment improved significantly, with the weighted Morgan Stanley A-share Sentiment Indicator (MSASI) rising by 9 percentage points to 76% [2][6]. - The People's Bank of China (PBoC) announced a monetary easing package, including a 50 basis point cut in the reserve requirement ratio (RRR) and a 10 basis point cut in the policy rate to 1.4% [11]. - High-level US-China trade negotiations are set to begin, which could lead to a gradual removal of tariffs, although a durable resolution remains uncertain [4][11]. Summary by Sections Investor Sentiment - The weighted MSASI improved to 76%, while the simple MSASI rose to 67% [2][6]. - Average daily turnover for ChiNext, A-shares, and Northbound increased by 13%, 12%, and 19% respectively compared to the previous cycle [2]. Trade Negotiations - Vice Premier He Lifeng will meet with US Treasury Secretary Scott Bessent, marking the first high-level talks since tariff escalations [4]. - Current US effective tariffs on China are at 107%, with a potential reduction to 45% by year-end [4]. Monetary Policy - The PBoC's recent easing measures include a Rmb1.1 trillion lift in relending quota and support for the stock market [11]. - The easing package exceeded market expectations and indicates further room for monetary support [11]. Market Monitoring - Key indicators to monitor include the progress of US-China talks, potential tariff pauses, and developments regarding non-tariff measures against China [13].

Group 1: Market Performance - MSCI China has nearly recovered its 13% drawdown since Liberation Day, returning 12% year-to-date[1] - The Rmb appreciated against the USD by 1.7% in the past month, indicating currency strength amid trade tensions[1] - Chinese government bonds are re-testing all-time highs, reflecting resilience in financial assets despite trade frictions[1] Group 2: Economic Forecasts - The effective US tariff rate on Chinese imports is expected to decrease from approximately 160% to around 60% soon, positively impacting earnings forecasts[1] - The 12-month index target for MSCI China and CSI300 has been raised to 78 and 4,400, suggesting potential returns of 7% and 15% respectively[1] - EPS growth estimates for MSCI China have been adjusted from 4% to 6% based on lower tariff expectations and a stronger Rmb[9] Group 3: Policy Measures - The PBoC and other regulatory bodies announced 23 measures to support the economy, including targeted monetary easing to improve liquidity[5] - Recent monetary policy actions include a 50 basis point RRR cut, providing approximately Rmb1 trillion in liquidity[7] - The focus of policy measures is increasingly on demand-side support, aiming to stabilize the housing market and enhance social safety nets[5] Group 4: Trade and Investment Dynamics - Southbound equity flows to HK-listed stocks have reached US$80 billion year-to-date, three times larger than the same period last year[18] - Concerns regarding ADR de-listing risks have moderated, but potential liquidity disruptions could arise if US investors liquidate over US$800 billion in Chinese stocks[14] - The Chinese National Team has actively supported the A-share market, purchasing at least Rmb110 billion worth of equities since April[18]

Investment Rating - The report indicates a downward revision in growth projections for Asia, with a specific focus on the impact of tariffs and related uncertainties on the economic outlook [3][29]. Core Insights - Asia's GDP growth is expected to slow sharply from 4.8% in 4Q24 to 3.6% in 4Q25, reflecting a decrease of 120 basis points [5][29]. - The weighted average tariff on Asia has increased significantly from 4.8% in January 2025 to 43.8%, contributing to a decline in trade and corporate confidence [1][13]. - The report emphasizes that uncertainty surrounding tariffs is likely to persist, affecting business cycles and investment decisions across the region [7][28]. Summary by Sections Economic Growth Projections - The report forecasts a significant slowdown in Asia's GDP growth, with specific country projections indicating declines, such as China from 5.4% to 3.7% and Hong Kong from 2.4% to 1.2% [5][29]. - The overall GDP growth estimate for Asia is lowered to 4% for 2025, down from 4.4% previously [29]. Tariff Impact - The report highlights that the escalation of tariffs raises recession risks and has already negatively impacted the business cycle, leading to a wait-and-see approach among corporations [8][31]. - The likelihood of reaching trade deals varies by country, with economies like India, Japan, and Korea being more likely to secure agreements compared to China and Vietnam [10][9]. Monetary and Fiscal Policy Outlook - The report anticipates more monetary easing across Asia, with specific measures expected from central banks in response to the economic slowdown [46][49]. - In China, a significant fiscal easing package is expected, while other Asian economies may face constraints due to rising public debt levels [56][57]. Sectoral Analysis - Trade-oriented economies such as Korea, Taiwan, and Malaysia are projected to experience sharper slowdowns due to their exposure to tariff impacts [31][32]. - India is viewed as relatively better positioned due to supportive policy measures, although its growth forecast has also been adjusted downward [33][44].

Group 1 - Gold prices have increased by over 50% since the Federal Reserve indicated potential monetary easing in December 2023 [1] - The rise in gold prices has been supported by multiple growth catalysts since the Fed's announcement [1] Group 2 - The analyst has over 10 years of experience in accounting, auditing, and tax areas, focusing on global macro strategy and value investing [2] - The preferred sectors for analysis include energy, real estate, and utilities, with an emphasis on companies that have competitive advantages and strong management [2] - Key investment criteria include good cash flow, solid asset base, sustainable debt levels, growing income, and healthy margins [2]

Market Overview - The U.S. stock market is experiencing a strong bull run, driven by economic resilience and increased CEO confidence, which reached an index of 60 in Q1 2025, indicating "confident optimism" [1] - The economy expanded by 2.8% in Q4 2024, supported by a robust labor market, while a 1% rate cut by the Federal Reserve has lowered borrowing costs, promoting business expansions and consumer spending [1] - Inflation is trending towards the Fed's 2% target, leading to optimism about further monetary easing in 2025 [1] Investment Strategy - Investors are encouraged to focus on relative price strength, identifying stocks that outperform their peers as market trends strengthen [2] - High-performing stocks with strong relative price momentum are seen as advantageous in navigating the ongoing bull market [2] Recommended Stocks - **Pitney Bowes (PBI)**: Expected earnings growth of 47.6% for 2025, with a trailing four-quarter earnings surprise of approximately 96.6% and a share price increase of 177.4% over the past year [10][11] - **The Hanover Insurance Group (THG)**: Projected earnings growth of 7.7% for 2025, with a trailing four-quarter earnings surprise of about 21.7% and a share price increase of 20.2% over the past year [12][13] - **EnerSys (ENS)**: Anticipated EPS growth rate of 19.8% for fiscal 2025, with a 12.8% share price increase over the past year [14][15] - **First Financial Corporation (THFF)**: Expected earnings growth of 39% for 2025, with a share price increase of 38.6% over the past year [16][17] Screening Parameters - Stocks are screened based on relative price changes over 12 weeks, 4 weeks, and 1 week, as well as positive current-quarter estimate revisions [8] - Only Zacks Rank 1 (Strong Buy) stocks that have historically outperformed the S&P 500 are considered, with a minimum price of $5 and adequate trading volume [9][10]