Core Viewpoint - The 22nd Nomura Asia Investment Forum highlights the complexities of the current market environment, emphasizing the need for strategic adaptation and collaboration to seize emerging opportunities amidst challenges [2][5]. Group 1: Market Environment - The ongoing trade disputes have caused significant market volatility and disrupted traditional trade flows, leading to a re-evaluation of production layouts and global business strategies by many companies [5]. - Technological advancements, geopolitical shifts, and continuous economic policy adjustments present both challenges and opportunities for businesses [5]. Group 2: Company Strategy and Performance - Despite market fluctuations, the global market business of the company has demonstrated remarkable resilience and adaptability, reflecting strategic initiatives and client trust [6]. - The company aims to leverage its local advantages in Japan to build a robust revenue system across various business segments [6]. Group 3: Economic Outlook - Positive signals from the Chinese economy have prompted the company to raise its GDP growth forecast for China to 4.5% for the year [7]. - India is identified as an attractive market with long-term opportunities, and the company is keen to expand its client base there [6]. Group 4: Forum Insights - The forum brings together experts from various fields, including economics, markets, geopolitics, tariff policies, asset allocation, and technology, to provide multi-dimensional insights [8]. - Approximately 850 investors and 140 companies are participating in the forum, indicating strong interest and engagement in the discussions [8].

去年年底以来，⬀策层及官媒开始营造反内ⷑ的社会氛围。而⯆造业信贷的放 缓、部⮇过Ⱁ行业投资回落以及工业企业⮵润的温和修复似乎显示了再平衡已⮤ 见成效。然而，一家头部新能源车企于周一大幅降价促销，引发了市场ⲁ荡，同 时也重新引发了市场对于中国经济和再通胀⯥景的辩论。 对工业企业⮵润的进一步研究表明，根深蒂固的供需错配仍在⯆约中国的再通 胀。考虑⮽通过债ⱷ推ⲁ的强⯌激政策或已成为过去式，我们认为中国目⯥的再 平衡和再通胀需要伴随一些结构性的改革，ⴎ括社会福⮵的改善、债ⱷ重组、税 ⯆改革以及营造有⮵于增长的监管环境。上述改革皆有难度，因此我们认为实施 的步伐将是循序渐进的，再通胀短期内仍具挑战，而中长期内也无坦途。 #1. 工业企业利润修复主要由于销量以及降本增效，然而定价能力仍然羸弱。 我们可以将工业企业利润增速拆分为三项：售价（使用PPI来观察）、⮵润率（统 计局数据）以及销量（ Exhibit 1 ）。拆⮇后我们可以总结三点： 1.利润率受基数影响，夸大了整体利润增速的改善：去年三季度之后，工业企业⮵ 润同比增速现了明显的反弹，从去年9月份-27%的低谷一路上ⶍ⮽今年4月份 的3.3%。然而，去年三季度⮵润增 ...

Core Insights - Goldman Sachs indicates a rising preference among investors for euro financing, as evidenced by a key indicator measuring global currency demand [1] - Historically, investors have paid a premium for dollar financing in the cross-currency basis swap market, but this trend may be shifting [1] - Future analysis suggests that European Central Bank policies and savings-investment dynamics across the Atlantic will lead to a rise in the basis over time, potentially turning the dollar borrowing premium into a discount [1]

Group 1 - Global stock markets are nearing historical highs, with analysts predicting further increases supported by "buying the dip" activities [1][4] - The MSCI All Country World Index is just 0.5% away from surpassing its historical closing high of 887.72 points set on February 18, having rebounded 19% from its low in April [1] - Many investors are seeking potential pullback opportunities to deploy funds, as the U.S. temporarily exempted most tariffs on trade partners, boosting market risk appetite [4] Group 2 - Analysts forecast an 11% increase in the MSCI global stock benchmark index over the next 12 months, with strategists beginning to adjust allocations to major markets [4] - Morgan Stanley strategists have raised their positions on U.S. stocks and bonds, anticipating that a series of interest rate cuts by the Federal Reserve will support bonds and boost corporate earnings [4] - European stocks have emerged as significant winners, with 8 out of the 10 best-performing stock markets globally this year located in Europe [4][5] Group 3 - The Euro Stoxx 600 index has outperformed the S&P 500 index by 18 percentage points, driven by historic fiscal spending plans in Germany and a stronger euro [5] - Strong corporate earnings and attractive valuations in Europe are making the region a safer investment option amid trade and fiscal debt concerns in the U.S. [5] - Interest in European markets has surged, with inquiries about Europe increasing more in the past two months than in the last decade [5]

Core Viewpoint - The article discusses the potential impact of the tax provision 899 in the "Big Beautiful Act," warning that it could lead to the largest capital tax shock in history for Wall Street, particularly affecting foreign investors in U.S. assets [1][3][12]. Group 1: Tax Provision 899 - Provision 899 introduces a punitive tax structure for investors from countries deemed to have "discriminatory" tax policies, starting with a 5% increase in tax rates, escalating by 5% annually, up to a maximum of 20% [3][4]. - The provision's scope is broad, potentially affecting various forms of income, including passive income, real estate investments, and business profits, which could impact previously exempt entities like foreign central banks and sovereign wealth funds [3][4]. Group 2: Market Implications - If the provision applies to U.S. Treasury bonds, it could lead to a steepening of the yield curve, a weakening of the dollar, and an expansion of credit spreads, as foreign investors may react quickly to tax changes [2][8][12]. - The report indicates that foreign investors hold a significant portion of U.S. debt, with total liabilities to foreign entities reaching $39.8 trillion, of which 83% are securities [4][6]. Group 3: Sector-Specific Effects - The tax changes could disproportionately affect corporate bonds, where foreign investors hold about 25% of the market, potentially leading to liquidity pressures and increased volatility [12][13]. - Commercial real estate (CRE) could see greater valuation impacts due to the higher foreign buyer percentage compared to residential real estate [15]. Group 4: Hedge Fund Risks - Hedge funds may face significant challenges as the tax rate increase could eliminate arbitrage opportunities, fundamentally disrupting the business models of those relying on cross-border arbitrage in U.S. markets [17]. Group 5: Legislative Outlook - The Senate is viewed as a critical player in clarifying the applicability of provision 899, with potential adjustments to the scope and implementation timeline [20][21]. - There is uncertainty regarding the worst-case scenario of the provision's implementation, with estimates of revenue generation potentially being significantly underestimated if all foreign-held assets are taxed [18][19].

Group 1: Hong Kong IPO Market - The total scale of Hong Kong IPOs in 2025 has reached $9.8 billion, nearing the total of $11.3 billion for the entire year of 2024 [3] - New stock placement financing has totaled $14.9 billion, approaching the combined total for the years 2022 to 2024, indicating high activity in the Hong Kong market [3] - The trend of "A+H" listings is on the rise, with 23 A-share companies planning to list in Hong Kong, covering various industries including new energy and biomedicine [3][4] Group 2: Market Dynamics and Regulatory Changes - Since 2019, the Hong Kong Stock Exchange has continuously optimized trading rules, enhancing market vitality and facilitating faster new stock issuances [5] - The simplification of the refinancing process for overseas-listed companies has significantly improved the convenience of refinancing in Hong Kong [5][6] - The flexibility of the Hong Kong market has increased, allowing companies to manage their market value and capital planning more effectively [6] Group 3: Return of Chinese Companies - The return of Chinese companies to Hong Kong is driven by geopolitical uncertainties, with many choosing to issue stocks solely in Hong Kong for refinancing [8][9] - The liquidity in the Hong Kong market has surpassed that of the U.S. market, making it a more attractive option for companies listed in both regions [9][10] - The valuation of companies in the Hong Kong market is becoming increasingly competitive, especially for those seeking financing [11] Group 4: M&A Activity - UBS's Asia-Pacific M&A business has ranked first globally, with a significant increase in M&A activity driven by geopolitical factors and policy support [12][13] - The "six guidelines for mergers and acquisitions" introduced at the end of 2024 have simplified processes and accelerated approval speeds, aligning with the needs of the Chinese economy [13] - As the number of quality companies that have completed IPOs increases, the demand for refinancing is expected to rise, potentially surpassing IPO volumes in some years [14]

Core Viewpoint - The introduction of Section 899 of the "Big Beautiful Act" poses a significant threat to Wall Street, potentially leading to the largest capital tax impact in history, particularly affecting foreign investors in the U.S. market [1][2]. Tax Implications - Section 899 introduces a "progressive penalty tax" for investors from countries deemed to have "discriminatory" tax policies, starting with a 5% increase in tax rates, escalating by 5% annually, with a maximum additional burden of 20% [2]. - The scope of this tax is extensive, potentially impacting passive income, real estate investments, business profits, and even foreign central banks and sovereign wealth funds that previously enjoyed tax exemptions [2]. Market Impact - The ambiguity surrounding whether financial assets will be included in the tax scope raises concerns among experts, despite current indications suggesting fixed income assets may be excluded [3]. - As of December 2024, U.S. liabilities to foreign entities are projected to reach $39.8 trillion, accounting for 134% of nominal GDP, with securities holdings comprising 83% and long-term securities at 96% [3]. Foreign Investment Dynamics - Foreign official investors hold a significantly larger share of U.S. fixed income markets compared to equities, meaning any tax policy changes could directly affect U.S. Treasury yield curves [6]. - The report indicates that foreign private investors tend to hold longer-term Treasuries, while official investors prefer shorter maturities, suggesting that rising tax costs could lead to greater selling pressure on long-term bonds [8]. Regional Effects - Europe is likely to be the biggest "victim" of these tax changes, with $3.5 trillion of the $5.39 trillion in foreign direct investment in the U.S. coming from Europe, making Eurozone countries the largest holders of U.S. fixed income and equity securities [11]. Currency and Credit Market Effects - The tax implications signal a negative outlook for the U.S. dollar, as the 4% current account deficit heavily relies on foreign capital inflows, and the new tax could deter foreign investment, leading to a weaker dollar against G10 currencies [14]. - In the corporate bond market, liquidity pressures and credit spreads may widen, with foreign investors holding about 25% of U.S. corporate debt, which could face volatility if additional tax burdens are imposed [14]. Securitized Products and Real Estate - Foreign investors show a stronger demand for agency bonds compared to securitized credit; unfavorable tax policies on non-government-backed assets could benefit GNMA mortgage-backed securities (MBS) [15]. - In commercial real estate (CRE), where foreign buyers account for 5-10% of transactions, tax changes could have a more pronounced impact on valuations compared to residential real estate [15]. Hedge Fund Risks - The definition of "applicable persons" in the tax clause could significantly affect hedge funds, as a 20% tax rate increase could eliminate arbitrage opportunities, fundamentally disrupting the business models of quantitative hedge funds reliant on U.S. markets [17]. Legislative Outlook - The likelihood of the worst-case scenario materializing from Section 899 remains uncertain, with the primary aim of the clause being to provide leverage in tax and trade negotiations [18][21]. - The Senate is seen as a potential "lifeline" to clarify the applicability of Section 899, with expectations that it may review the details, including income scope and applicable entities [22].

Core Viewpoint - The sudden drop in Hong Kong and A50 indices is attributed to multiple factors, including the reintroduction of U.S. steel tariffs, a general decline in the Asia-Pacific stock market, and warnings from Morgan Stanley regarding the U.S. dollar and economic conditions [1][2][5]. Group 1: Market Reactions - The Hong Kong stock market and A50 index experienced significant declines, with Hong Kong's drop exceeding 2.5% [1]. - The overall sentiment in the Asia-Pacific region was negative, with major indices like the Hang Seng Tech Index and the National Enterprises Index falling nearly 3% [2]. Group 2: Influencing Factors - The reintroduction of U.S. tariffs on steel has raised concerns about global trade dynamics, contributing to market volatility [1]. - Morgan Stanley's report indicated potential weakness in the U.S. dollar due to interest rate cuts and sluggish economic growth, adding to market uncertainty [5]. - The presence of short-selling activities intensified the market's downward trend, as there were no substantial positive developments during the holiday period [5]. Group 3: Outlook for A-shares - A-shares are expected to open lower due to the negative sentiment from the Hong Kong and A50 declines, but a significant drop is not anticipated [7]. - Despite the expected weak performance, there may be support from mysterious funds aimed at stabilizing the market and preventing excessive declines [7]. - Positive influences from the Dragon Boat Festival holiday, such as the central bank's 700 billion yuan reverse repurchase operations, could provide support for A-shares [7].

Group 1 - US Treasury Secretary Janet Yellen stated that US government bonds "will never default," despite warnings from industry leaders about a potential collapse in the bond market [1][3] - Jamie Dimon, CEO of JPMorgan Chase, expressed concerns at the Reagan National Economic Forum, indicating that excessive fiscal spending and quantitative easing could lead to cracks in the bond market, although he is uncertain when a crisis might occur [3] - Goldman Sachs President John Waldron highlighted that the focus is shifting from tariff disputes to the rising government debt, identifying the budget debate and fiscal condition as the biggest macroeconomic risks [3] Group 2 - The US government debt ceiling is set at $36.1 trillion, which was reached in early January, leading the Treasury to rely on "extraordinary measures" to avoid default [4] - Analysts predict that the fiscal deficit for the 2026 fiscal year could reach $2.2 trillion, with a deficit rate of 7%, exceeding market expectations, which may increase supply pressure on US bonds [4] - The rising deficit is expected to push up US bond yields and exacerbate the fiscal burden, potentially becoming a source of ongoing volatility for dollar assets [4]

Group 1 - Goldman Sachs suggests long-term investors should overweight gold and underweight oil over the next five years due to shifts in the global economic and financial landscape [1] - The recommendation to overweight gold is driven by concerns over the credibility of U.S. institutions and increasing global central bank demand for gold, reflecting worries about the reliability of the U.S. dollar [1][3] - The expansion of U.S. fiscal policy, rising debt levels, and the Federal Reserve's struggle to balance inflation and economic growth contribute to skepticism regarding U.S. institutional credibility [1][3] Group 2 - The importance of gold as a hedge against risk is emphasized, especially in the context of a weakening global economy and the potential for further dollar devaluation [3][4] - Historical data shows that gold tends to perform better than oil during periods of negative real returns in stocks and bonds, reinforcing its status as a safe-haven asset [4] - The actions of prominent investors, such as Jim Rogers, who have moved away from U.S. equities in favor of cash and gold, signal a growing concern about the risks in the U.S. stock market [4][5]