Group 1 - The Chinese private equity secondary market (S market) is experiencing unprecedented growth, with RMB fund transaction volume reaching a record 77.3 billion yuan in the first half of 2025, a nearly 90% year-on-year increase [1] - A peculiar trading model known as "continuation funds" is becoming the main driving force behind this market, where fund managers sell star assets from old funds to newly established funds, often at prices 40-50% below their net asset value (NAV) [1][7] - The market is facing significant challenges, including a massive exit barrier and geopolitical risks leading to capital withdrawal, which has created a collective anxiety within the industry [1][6] Group 2 - The Chinese private equity market is encountering a "Great Wall of Exit," with only 100 companies successfully listed on the A-share IPO market in 2024, the lowest in a decade, and a total fundraising amount of 67.35 billion yuan, down 81% year-on-year [2] - The tightening of exit channels is exacerbated by the new regulations increasing profit thresholds for IPOs, leading to a significant backlog of projects that were expected to exit within 3-5 years but are now delayed [2][6] Group 3 - Globally, the private equity market is under severe pressure, with over $3 trillion in unexited assets, four times the amount from a decade ago, and a significant decline in cash returns to investors [3] - Major Canadian pension funds have announced a withdrawal from the Chinese private equity market, with CDPQ planning to sell a $2 billion portfolio of Chinese assets [3][4] Group 4 - Geopolitical factors have led many dollar funds to relocate their offices to Singapore or Hong Kong, shifting their focus from investing in China to investing in Asia [4] - The traditional investment chain of "dollar fundraising - VIE investment - US stock listing" has been disrupted, complicating the investment landscape for dollar funds in China [4] Group 5 - In the first half of 2025, RMB fund secondary transactions reached 77.3 billion yuan, with domestic general partners (GPs) accounting for 42% of the transaction volume, a 21 percentage point increase from 2022 [5] - RMB funds are becoming the most active players in the market, primarily supported by state-owned enterprises and government-guided funds, focusing on strategic industries like semiconductors and new energy vehicles [5] Group 6 - The dual pressures of the "Great Wall of Exit" and the "Dollar Retreat" are reshaping the Chinese private equity market, forcing the industry to seek new survival strategies through continuation funds and secondary transactions [6][14] - The continuation fund model allows GPs to sell assets from one fund to another, providing liquidity for private equity funds in need of cash [7][10] Group 7 - Many dollar funds are currently focused on liquidity recovery rather than new investments, leading to significant discounts on Chinese private equity assets, with quality assets being sold at 40-50% below NAV [8] - The supply-demand imbalance is distorting prices, with sellers eager to cash out and buyers demanding substantial discounts as risk compensation [8][9] Group 8 - The lack of regulatory oversight in China creates a trust crisis, as GPs can operate with minimal accountability, leading to potential conflicts of interest in continuation fund transactions [10][11] - The valuation system is fragmented, with different LPs applying varying valuation metrics, complicating the pricing and transparency of transactions [11][12] Group 9 - The Chinese private equity market is at a crossroads, with the number of transactions over $1 billion declining significantly, indicating a challenging environment for large exits [12][14] - If continuation funds can establish transparent rules, they may play a crucial role in revitalizing the $3 trillion of unexited assets in the market [13][14]

Core Viewpoint - The Indian stock market, represented by the SENSEX index, is approaching historical highs, showing resilience against global market trends, particularly in the context of recent tariff increases and a weakening dollar [1][3]. Group 1: Market Performance - The SENSEX index has risen by 5.4% since the tariff increase on April 2, contrasting with the underperformance of U.S. markets [1]. - Emerging markets, including Indonesia, Thailand, and Malaysia, have also experienced gains, outperforming both the CSI 300 and the NASDAQ Composite Index [1]. - The Emerging Asia ETF (SH520580) has surged over 13% since April 8, indicating increasing investor interest and liquidity [1]. Group 2: Dollar Weakness and Emerging Markets - The weakening of the dollar is creating a favorable environment for emerging markets, which are seen as "valuation vacuums" attracting global capital [3]. - Historical trends suggest that a declining dollar often leads to recovery in emerging market currencies and stock valuations [3]. Group 3: Core Asset Pool - The Emerging Asia ETF tracks a selection of 50 leading companies across India (53%), Indonesia (19%), Malaysia (15%), and Thailand (13%), focusing on high market capitalization and liquidity [4]. - The sector allocation within the ETF includes financials (38.5%), technology (15.6%), and energy (10.2%), benefiting from economic expansion and global supply chain trends [4]. Group 4: Liquidity and Trading Flexibility - The Emerging Asia ETF supports margin trading, allowing for diverse investment strategies and flexibility in response to market volatility [6]. - The ETF's T+0 trading mechanism enables quick reactions to market changes, making it suitable for both short-term and long-term investors [6].