ab 14 November 2025 Global Research ASIA FI/FX Strategy 2026 Outlook: Tailwinds Fade, Trade-offs Begin Closing Windows, Shifting Winds Key themes, Top Trades and our answers to investors' Top FAQs This deck covers top-down and bottom-up themes likely to shape Asian FX and Rates in 2026. Slide 4: Key Themes; Slide 5: cheat sheet of bottom-up views; Slide 8: Top Trades. Global Strategy Global Rohit Arora Strategist rohit-b.arora@ubs.com +65-6495 5232 Teck Quan Koh Strategist teck-quan.koh@ubs.com +65-6495 441 ...

Summary of Zijin Mining Group Conference Call Company Overview - **Company**: Zijin Mining Group - **Industry**: Mining (Copper and Gold) - **Headquarters**: China - **Market Cap**: US$107.469 billion as of November 5, 2025 - **Stock Ratings**: Overweight (OW) for both H and A shares with price targets of HK$46.1 and Rmb42.2 respectively [1][8][52] Key Industry Insights - **Copper and Gold Market**: The current market for copper and gold is characterized by supply disruptions and rising prices, making Zijin Mining a standout choice among copper stocks [3][12][56] - **Production Growth**: Zijin expects copper production to reach 115,000 tonnes in 2025, with a compound annual growth rate (CAGR) of 10.5% from 2025 to 2028. Gold production is expected to grow at a CAGR of 7.3% [3][53] Financial Performance - **Cost Control**: Zijin has maintained low exploration costs, averaging US$11.7 per ounce of gold, significantly below the industry average of US$32.3 per ounce. Mining costs have also decreased from US$38.7 per tonne in 2022 to US$31.3 in 2023 [4][54] - **Revenue and Profitability**: Projected revenues for 2025 are Rmb354.239 million, with net income expected to reach Rmb52.385 million. The company has a P/E ratio of 11.0 for 2025, which is attractive compared to peers [8][32][61] Market Outlook - **Bullish Commodity Outlook**: The commodities team forecasts copper prices to rise due to supply disruptions, with a projected deficit of 230,000 tonnes in 2025 and 590,000 tonnes in 2026. Gold prices are expected to rebound to US$4,500 per ounce by mid-2026 [5][57][59] - **Geopolitical Factors**: Ongoing geopolitical tensions and the trend towards de-dollarization are expected to increase demand for gold as a safe-haven asset [55][58] Investment Drivers - **M&A Activity**: Recent mergers and acquisitions in gold, lithium, and molybdenum projects are expected to enhance Zijin's growth potential and diversify its portfolio [22][23] - **Sustainable Growth Model**: The company employs an "acquisition — exploration — reserve expansion" model, which has proven effective in achieving sustainable operational growth [3][53] Risks and Considerations - **Upside Risks**: Stronger copper prices driven by robust demand or continued supply disruptions could benefit Zijin. Additionally, project ramp-ups and untapped resources present further growth opportunities [56][59] - **Downside Risks**: Potential risks include weaker copper prices due to economic downturns, project execution failures, and geopolitical disruptions that could impact production [56][59] Valuation - **Attractive Valuation**: Zijin's valuation is considered attractive compared to peers, with a projected P/E of 11.2x for 2026, lower than the average of ~13x for other copper miners [6][61][60] Conclusion Zijin Mining Group is positioned favorably within the copper and gold markets, with strong production growth, effective cost control, and a positive outlook for commodity prices. The company's strategic M&A activities and sustainable growth model further enhance its investment appeal.

Core Insights - The surge in physical buying of silver in India due to the Diwali holiday has led to significant spot premiums, indicating a potential shift in the precious metals market dynamics towards supply and demand over paper trading [1] - Both gold and silver have seen spot prices rise over 150%, with recent backwardation suggesting a physical metals shortage [1] Industrial Reasons - Gold is increasingly used in medical applications such as pacemakers and imaging, while silver is valued for its electrical conductivity in various technologies [5][7] - The demand for solar panels and AI technologies is driving significant physical silver purchases, particularly from China and Saudi Arabia [7] Economic Reasons - Inflation under current economic policies has been a major driver for the bull run in gold and silver prices since 2022, with the US dollar losing significant purchasing power [9][10] Geopolitical Reasons - A global trend towards de-dollarization, led by BRICS nations, is contributing to increased accumulation of physical gold and silver [19] - Central banks are hoarding gold and silver at an accelerated rate, further impacting supply dynamics [19] Systemic Reasons - The paper silver market is significantly larger than the available physical silver, leading to concerns about the reliability of futures markets [21][24] - Current shortages are exacerbated by refinery capacity issues and increased hoarding at the sovereign level [21][24] ETFs to Consider - Various ETFs such as Abrdn Physical Silver Shares ETF, Sprott Physical Silver Trust, and SPDR Gold Trust are highlighted as potential investment vehicles that track the spot prices of silver and gold [2][3][26]

Group 1: Gold Price Movement - Gold prices have recently crashed below the $4,000 level after previously rising past $5,000 per ounce, impacting gold mining companies significantly [1] - The recent decline in gold prices is viewed as a healthy correction, with expectations that prices will not fall much below the $4,000 level [4] Group 2: Gold Mining Companies - Anglogold Ashanti (AU) stock has seen a significant increase, tripling in value this year, but is now nearing bear market territory with a potential drawdown of 20% from its peak [2] - The outlook for AU and similar mining companies is primarily driven by gold prices rather than company-specific factors [4] Group 3: Long-term Drivers for Gold - Central banks globally are engaged in de-dollarization, with their gold holdings surpassing U.S. Treasury holdings for the first time in three decades, indicating a strong demand for gold [5] - Trust in fiat currencies has diminished due to rising national debts, with many investors turning to gold as a safe-haven asset [5] - Loose monetary policies and low interest rates are expected to support gold prices, as lower rates are favorable for non-yielding assets like gold [5] - Ongoing geopolitical tensions, particularly from countries like China and Russia, are likely to keep demand for gold elevated [5]

Core Insights - The SPDR Gold Trust (GLD) experienced a 5% decline over the past week due to easing U.S.-China trade tensions, a stronger U.S. dollar, and technical indicators suggesting overbought conditions [1] - The U.S. dollar ETF Invesco DB US Dollar Index Bullish Fund (UUP) gained 0.5% over the past week and 1.3% over the past month, while lower-than-expected September inflation negatively impacted gold prices [2] - A potential U.S.-China trade agreement could significantly reduce geopolitical tensions that have been supporting gold prices [3] Gold Market Performance - The gold bullion ETF GLD has surged approximately 53.8% year-to-date and 7.1% over the past month, while the S&P 500 has increased by 15.8% this year and 2% in the past month [5] - Investors are increasingly turning to gold as a safe-haven asset amid global instability, geopolitical tensions, and the likelihood of Federal Reserve rate cuts [6] Central Bank Demand - Central bank demand, particularly from BRICS nations and emerging economies, is driving the gold rally as these countries seek to diversify away from the U.S. dollar [7] Investment Recommendations - Ray Dalio of Bridgewater Associates recommends a 15% portfolio allocation to gold, citing its role as a hedge against monetary debasement and geopolitical uncertainty [8] - Dalio compares the current market environment to the early 1970s, highlighting gold as a credible safe-haven asset amid high inflation and government debt [9] Future Projections - Market expert Ed Yardeni predicts gold could reach $10,000 per ounce by 2030, driven by factors such as tariffs, pressure on the Fed to lower interest rates, and issues in China's real estate market [11] - For investors looking to capitalize on the bullish trend, gold ETFs like SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and SPDR Gold MiniShares Trust (IAUM) are recommended [12]

Core Viewpoint - Gold prices experienced a significant decline on October 21, 2025, marking the largest daily drop in years, attributed to easing U.S.-China trade tensions, a stronger U.S. dollar, and technical indicators suggesting overbought conditions [1][2]. Group 1: Market Performance - The SPDR Gold Trust (GLD) lost approximately 6.9% over two days as of October 22, 2025 [1]. - The gold bullion ETF GLD has surged about 53.7% year-to-date as of October 22, 2025, with a 9% increase over the past month [5]. - In comparison, the S&P 500 has rallied 14.2% this year and 0.6% in the past month [5]. Group 2: Analyst Perspectives - Analysts view the recent drop in gold prices as a temporary setback, with ongoing high inflation, low real interest rates, and geopolitical uncertainties supporting a bullish outlook for gold [3]. - Bank of America maintains a "long gold" stance, predicting prices could reach $6,000 per ounce by mid-2026, while Goldman Sachs has raised its forecast to $4,900 per ounce by the end of next year [4]. Group 3: Investment Trends - There is a notable increase in central bank demand for gold, particularly from BRICS nations and emerging economies, as they seek to diversify away from the U.S. dollar [7]. - Ray Dalio recommends that investors allocate up to 15% of their portfolios to gold, emphasizing its role as a hedge against monetary debasement and geopolitical uncertainty [8]. - Market expert Ed Yardeni predicts gold could reach $10,000 an ounce by 2030, driven by various economic factors [11]. Group 4: ETF Opportunities - For investors looking to capitalize on the bullish trend in gold, ETFs such as SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and SPDR Gold MiniShares Trust (IAUM) are highlighted as potential investment options [12].

Core Viewpoint - Gold's significant price drop in 2025, with a more than 5% decline in a single day, marks the largest daily drop since 2013, yet it remains up over 50% year-to-date, indicating ongoing volatility in precious metals markets [1][2]. Group 1: Market Performance - Gold's price fell by $230 in a single day, reflecting a broader volatility in the market, with silver also experiencing a 7.5% drop on the same day [1][2]. - Despite the recent selloff, gold has outperformed equities, bonds, and Bitcoin, highlighting its strong performance over the year [2]. Group 2: Market Dynamics - The recent volatility is attributed to leveraged trades and profit-taking, with analysts suggesting that this pullback is not indicative of a full-blown crash but rather a temporary setback [3][4]. - The underlying fundamentals for gold remain strong, supported by central bank accumulation, ETF inflows, and steady demand from China [5]. Group 3: Economic Factors - Gold's rise in 2025 is driven by concerns over dollar debasement and de-dollarization, as Western deficits and monetary expansion weaken confidence in fiat currencies [6][7]. - Emerging markets and BRICS nations are increasingly turning to gold as a hedge against reliance on the U.S. dollar, further supporting gold's market dynamics [7]. Group 4: Future Outlook - Analysts believe that gold could experience further declines without breaking its long-term uptrend, with a potential low of $3,973 still consistent with a structural bull market [5]. - The narrative surrounding gold remains intact, with ongoing fears of fiscal and monetary policies devaluing fiat currencies continuing to drive market interest [6][8].

Core Viewpoint - Gold prices experienced a significant decline on October 21, 2025, marking the largest daily drop in 12 years, with spot gold falling over 6% and SPDR Gold Shares (GLD) losing approximately 6.4% on the same day [1][2]. Market Dynamics - The selloff was attributed to easing U.S.-China trade tensions, a stronger U.S. dollar, and technical indicators suggesting that gold had entered overbought territory [2]. - Despite the drop, some analysts, including Tom Essaye from Sevens Report Research, view this as a temporary setback, citing ongoing high inflation, low real interest rates, geopolitical uncertainty, and the U.S. government shutdown as factors supporting a bullish outlook for gold [3][6]. Investment Outlook - Investment firms maintain a bullish stance on gold, with Bank of America predicting prices could reach $6,000 per ounce by mid-2026, while Goldman Sachs raised its forecast to $4,900 per ounce by the end of next year [4]. - The SPDR Gold Trust (GLD) has surged approximately 54% in 2025, with a monthly gain of over 9%, contrasting with the S&P 500's 15% increase year-to-date [5]. Safe-Haven Demand - The current global instability and geopolitical tensions have driven investors towards gold as a safe-haven asset, further fueled by the U.S. government shutdown [6]. - Central bank demand, particularly from BRICS nations and emerging economies seeking to diversify from the U.S. dollar, has led to record levels of sovereign gold purchases [7]. Strategic Recommendations - Ray Dalio, founder of Bridgewater Associates, recommends that investors allocate up to 15% of their portfolios to gold, emphasizing its role as a hedge against monetary debasement and geopolitical risks [8]. - Dalio draws parallels between the current market environment and the early 1970s, highlighting the appeal of gold amidst high inflation and government spending [9]. Future Projections - Market expert Ed Yardeni suggests that gold could reach $10,000 per ounce by 2030, driven by factors such as tariffs, pressure on the Fed to lower interest rates, and issues in China's real estate market [10]. Investment Vehicles - For investors looking to capitalize on the bullish trend in gold, ETFs such as SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and SPDR Gold Minishares Trust (IAUM) are highlighted as potential investment options [11].

Core Insights - India's central bank is facilitating the use of the rupee for international transactions with free-trade partners, aiming to strengthen the local currency over time [1][3] - The Reserve Bank of India (RBI) is establishing direct reference rates for currencies like the UAE dirham and Indonesian rupiah, expanding its currency links beyond the US dollar [2][4] - Prime Minister Modi's initiative to promote the rupee in global trade is part of a broader strategy to enhance India's economic stability and reduce reliance on foreign currencies [3][4] Currency Strategy - The RBI's actions are aligned with India's goal of becoming a "developed nation" by 2047, with expectations to become the world's fourth-largest economy this year and third by 2027-28 [4] - India is pursuing a multi-currency regime for global trade settlements, which is seen as a stable option for economic transactions [4] - The rupee is currently the second-worst performing currency in Asia, impacted by significant outflows from local stocks and high US tariffs [5] Trade Agreements - India has established free-trade agreements with over a dozen countries, including recent deals with the UK, Australia, and the UAE, and is negotiating with the US, EU, and others [6][7] - The country is actively discussing rupee invoicing in its trade negotiations, indicating a strategic push for local currency use in international trade [7] Internationalization Efforts - The Indian government aims to internationalize the rupee by enhancing its usability for trade and capital transactions among neighboring countries [9] - A central bank report from 2023 outlined goals for expanding currency swap arrangements and integrating Indian payments with other nations [9] - Currently, the rupee does not rank among the top 20 global payment currencies, with the US dollar holding a dominant share [10]

Key Insights - Global financial markets are responding to significant economic data and geopolitical events, particularly the rise in gold holdings by central banks and trade tensions involving the U.S. [2] Central Bank Gold Reserves - Gold has reached a 30-year high in global central bank reserves, now comprising over 20% of total reserves, indicating a shift away from reliance on fiat currencies like the U.S. dollar [3][4] - The accumulation of gold by central banks, especially in emerging markets, is driven by de-dollarization efforts, geopolitical fragmentation, and inflation concerns [4] Asian Markets - Hong Kong's Hang Seng Index is expected to open 2.5% higher, with the Hang Seng Automobile Index projected to rise by 3% [5] - The People's Bank of China injected 189 billion yuan through 7-day reverse repos at a steady interest rate of 1.40%, while draining a net 64.8 billion yuan through open market operations [6] Japanese Government Bonds - The yield on 10-year Japanese Government Bonds increased by 2.5 basis points to 1.650%, influenced by easing political uncertainty in Japan [7] U.S. Trade Policy - U.S. President Donald Trump announced plans to increase tariffs on Colombia due to drug trade tensions, cutting off subsidies to the nation [8][9]