Core Points - The benchmark stock indices Sensex and Nifty ended slightly higher during the special one-hour Muhurat trading session, marking the beginning of the new Samvat Year 2082 positively amid strong global cues [1][4] - The BSE Sensex rose by 62.97 points (0.07%) to close at 84,426.34, while the NSE Nifty increased by 25.45 points (0.10%) to close at 25,868.60 [3][4] - In the previous Samvat Year 2081, the BSE Sensex increased by 4,974.31 points (6.26%) and the Nifty climbed by 1,637.8 points (6.76%) [5] Market Performance - During the Muhurat trading session, the BSE Sensex reached a high of 84,665.44 and a low of 84,286.40 [3] - Among the major gainers in the Sensex, Bajaj Finserv rose by 1.42%, followed by Axis Bank (0.80%), Infosys (0.72%), and others [7] - The broader markets also advanced, with BSE Midcap rising by 0.23% (106.95 points) to close at 46,787.20 and BSE SmallCap gaining 0.91% (486.81 points) to settle at 53,842.85 [8] Sector Performance - Sectoral indices showed positive movement, with Industrials rising by 0.53%, Telecommunication by 0.51%, and Commodities by 0.47% [8] - Conversely, Bankex and Realty sectors ended marginally lower [10] Institutional Activity - Foreign Institutional Investors (FIIs) purchased equities worth ₹790.45 crore, while Domestic Institutional Investors (DIIs) acquired shares worth ₹2,485.46 crore, indicating strong domestic buying [10]

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Market Performance - Equity benchmark indices Sensex and Nifty ended higher on October 20, 2025, marking the fourth consecutive day of gains, driven by buying in blue-chip Reliance Industries and sustained foreign fund inflows [1][5] - The 30-share BSE Sensex increased by 411.18 points or 0.49% to settle at 84,363.37, with an intraday high of 84,656.56, a jump of 704.37 points or 0.83% [1] - The 50-share NSE Nifty surged by 133.30 points or 0.52% to reach 25,843.15 [1] Company Performance - Reliance Industries saw a rise of 3.52% after reporting a 9.6% year-on-year increase in net profit for the September quarter, attributed to strong performance in its retail and telecom sectors, along with a recovery in its oil-to-chemicals segment [2] - Other gainers included Bajaj Finserv, Axis Bank, State Bank of India, Tata Consultancy Services, Titan, and Bharti Airtel [2] Foreign and Domestic Investment - Foreign Institutional Investors (FIIs) purchased equities worth ₹308.98 crore, while Domestic Institutional Investors (DIIs) bought stocks worth ₹1,526.61 crore on the same day [4] Global Market Influence - A sharp rally in global markets contributed to the optimism in the Indian markets, with Asian markets such as South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng all closing higher [3] - European markets were also trading positively, and U.S. markets ended in positive territory on the preceding Friday [3] Upcoming Events - The Indian market is expected to continue its upward trend with a special Muhurat trading session scheduled for Tuesday, which will be held between 1:45 p.m. and 2:45 p.m. [6]

Core Viewpoint - Brookfield Corporation is positioning itself to capitalize on the significant investment opportunity in AI infrastructure, estimating a need for $7 trillion in related investments over the next decade [1][5]. Investment Strategy - The company plans to invest heavily across all aspects of AI infrastructure development, including data centers and renewable power, to ensure robust growth and strong returns [2][11]. - Brookfield aims to leverage its expertise in real estate, infrastructure, power, and capital solutions to support the buildout of AI infrastructure [11]. Infrastructure Requirements - AI technology requires specialized infrastructure, including data centers equipped with GPUs, CPUs, and advanced cooling systems, necessitating substantial capital investment [4][5]. - The estimated spending on AI infrastructure is projected to exceed $1 trillion by the end of 2029, with hyperscalers increasing their capital expenditures by 50% to $400 billion this year due to the high computing power demands of AI workloads [5]. Brookfield's Capabilities - Brookfield Infrastructure has a global data infrastructure platform with investments in over 300,000 telecom towers, two semiconductor manufacturing foundries, and more than 140 operating data centers with over 1.7 gigawatts of contracted capacity [7]. - The company has the potential to develop an additional 3.6 gigawatts of data center capacity, representing a 50% increase from its current development potential [7]. Renewable Energy Contributions - Brookfield Renewable is becoming a key partner in supplying renewable energy to support AI infrastructure, with significant agreements with major tech companies like Google and Microsoft for carbon-free power [8]. - The company signed a hydro framework agreement with Google to potentially supply up to 3 gigawatts of hydropower and a corporate power deal with Microsoft to deliver 10.5 gigawatts of renewable power by 2030 [8]. Future Growth Potential - Brookfield Corporation sees the potential to invest $200 billion in building AI factories across North America and Europe, believing that AI infrastructure will become the largest business within its platform [9]. - The company anticipates achieving 25% annualized earnings-per-share growth over the next five years due to its investments in AI infrastructure [10].

Summary of Key Points from the Conference Call Industry Overview - The report primarily discusses the **Chinese market** and its economic indicators, particularly in the context of ongoing trade tensions with the United States. The **MXCN/CSI300** indices experienced declines of **4.1%** and **2.2%** respectively, influenced by threats of additional tariffs from President Trump on Chinese goods starting November 1 [1][2][3]. Core Insights and Arguments - **Trade Relations**: President Trump has threatened a **100% tariff** on Chinese goods, which has led to market volatility. This is in response to China's export controls on rare earth materials [1]. - **Economic Indicators**: - **Trade Growth**: September trade growth exceeded expectations, with exports and imports increasing by **8.3%** and **7.4%** year-over-year respectively [1]. - **PPI and CPI**: Producer Price Index (PPI) deflation eased, while Consumer Price Index (CPI) deflation continued, particularly due to food prices [1]. - **Investment Flows**: There were significant inflows into the Southbound Connect, totaling **US$156 billion** year-to-date [5]. - **Future Meetings**: A meeting between President Trump and President Xi is scheduled, which may influence future trade policies [1]. Earnings and Valuations - **Market Performance**: - Offshore financials outperformed with a **4.1%** increase, while IT sectors lagged with a **7.8%** decline [2]. - A-share performance showed energy sectors outperforming with a **6.2%** increase, while IT and growth sectors lagged [3]. - **Earnings Forecasts**: The forward price-to-earnings ratios for MXCN and CSI300 are **12.9x** and **14.4x** respectively, with consensus EPS growth estimates for 2025/26 at **1%/16%** for MXCN and **15%/13%** for CSI300 [9]. Policy and Regulatory Environment - The Ministry of Commerce indicated that new policies to stabilize foreign trade will be introduced [1]. - The **14th Five-Year Plan** discussions are anticipated in the upcoming 4th Plenary Session, which may impact future economic strategies [1]. Additional Insights - **Sector Performance**: Historical data indicates that sectors such as energy and materials typically outperform following announcements of Five-Year Plans [12][13]. - **Investor Sentiment**: The report suggests that retail sentiment in A-shares is not overly stretched compared to previous periods of strong sentiment [32]. - **Market Strategy**: The report indicates a modest outperformance of A-shares over H-shares in the next three months based on proprietary models [23]. Conclusion - The current economic landscape in China is heavily influenced by trade tensions with the U.S., with significant implications for market performance and sectoral growth. Investors are advised to monitor upcoming policy announcements and trade negotiations closely, as these will likely shape the investment climate in the near term.

Investment Rating - The report indicates a positive investment sentiment with a focus on buying the dip in US equities, particularly in single stocks, which saw significant inflows [9][18]. Core Insights - Institutional and retail clients were net buyers of US equities, with a notable $4.1 billion inflow into single stocks, marking the fifth highest weekly inflow since 2008 [9][18]. - The report highlights a shift back to large-cap stocks, with inflows observed across all market cap sizes, particularly in Communication Services and Health Care sectors [9][18]. - Hedge funds continued to sell US equities for the fifth consecutive week, contrasting with the buying behavior of institutional and retail clients [9][18]. Summary by Sections Client Flows - Institutional clients led the buying activity, marking the largest weekly inflow since November 2022, while retail clients also participated after a period of selling [9][18]. - Hedge funds were the largest net sellers, with cumulative flows showing a significant outflow trend [5][22]. Sector Performance - Inflows were recorded across all 11 sectors, with Communication Services and Health Care leading the way, alongside notable inflows in the Energy sector [9][18]. - The report notes that clients sold equity ETFs for a second week, with outflows primarily from Tech and Materials sectors, while defensive sectors like Health Care and Real Estate saw inflows [9][18]. Size Segmentation - All market cap segments (large, mid, small) experienced inflows, with small caps showing resilience with inflows in five of the last seven weeks [9][18]. - The report indicates a preference for small-cap and value ETFs, contrasting with the outflows from large and mid-cap ETFs [9][18]. Corporate Buybacks - Corporate buybacks have slowed but are expected to pick up during the earnings season, with a focus on Tech and Financials dominating the buyback activity over the last three months [9][18].

Core Insights - The investment strategy focuses on acquiring strong businesses at undervalued prices, emphasizing the importance of quality and economic fundamentals [1] Investment Focus - The company has diversified its portfolio across various industries, including telecom, banking, payments, and technology, with a current emphasis on high-quality businesses [1] - There is a particular interest in big tech companies that have extensive user bases and content libraries, highlighting the potential for cross-selling opportunities [1] Valuation Approach - The preferred valuation method is at the EBIT plus R&D level, reflecting a belief in the potential of certain R&D investments [1] Performance Metrics - The annual return from February 2019 to October 2024 is reported at 11.4% CAGR, which is below the market's 15.18% CAGR, indicating a need for improved performance [1] - The investment philosophy aims to minimize portfolio turnover, suggesting that most profits will come from holding existing investments rather than frequent trading [1] Investment Philosophy - The company does not endorse traditional "Buy" and "Sell" recommendations, instead advocating for a "Strong Buy" threshold for exceptional businesses, with everything else categorized as "Strong Sell" to free up capital for new opportunities [1] - A "Hold" position may be initiated for high-quality businesses if their pricing is not favorable [1]

Summary of ZTE Conference Call Company Overview - **Company**: ZTE Corporation (0763.HK) - **Industry**: Telecommunications and AI Infrastructure Key Points and Arguments Financial Performance - ZTE's server and storage revenues increased by **200% YoY** in 1H25, with AI servers contributing **55%** of total revenues [1][2] - Projected **3Q25 revenues** are expected to grow **26% YoY**, compared to **21% YoY** in 2Q25, with a gross margin stabilizing at **31%** [1] - Estimated **net income** for 3Q25 is projected to be **Rmb2.4 billion**, reflecting a **12% YoY** growth [1] Market Position and Growth Drivers - ZTE is positioned as a major beneficiary in the telecom and enterprise AI data center market, supplying GPU servers, general servers, storage, and networking cards [2] - Recent procurement wins include: - **Rmb3 billion** general server procurement from ICBC [2] - **Rmb1.9 billion** PC server procurement from China Mobile [2] - **Rmb5 billion** AI inferencing server procurement from China Mobile [2] - The demand for AI and general computing infrastructure in China is increasing, with ZTE benefiting from comprehensive product lines and long-term customer relationships [2] Capital Expenditure Trends - Chinese Cloud Service Providers (CSPs) are expected to increase capital expenditures by **65%** in 2025, **20%** in 2026, and **9%** in 2027 [2][8] Earnings Revisions - 2026-27E net income estimates have been revised up by **1%** and **2%** respectively due to higher revenue expectations [11] - Revenue estimates for 2026E and 2027E have been increased by **1%** and **2%** respectively [11] Valuation and Price Target - The 12-month target price for ZTE's H-shares has been raised by **14%** to **HK$43.6**, reflecting a market re-rating of AI infrastructure players [1][12] - The target P/E multiple for H-shares is now **19.2x**, up from **17.0x** [11] - The 12-month target price for A-shares is raised by **13.6%** to **Rmb67.6** [12] Risks and Considerations - Key risks include faster or slower-than-expected demand in telecom infrastructure and potential non-operating gains or losses that could impact earnings estimates [22] Revenue Mix - ZTE is seeing an increasing contribution from non-telecom business segments, indicating diversification in revenue sources [13] Additional Important Information - The company maintains a **Neutral rating** due to fair valuation despite positive growth outlook [1] - The report emphasizes the importance of considering ZTE's normal earnings power without factoring in non-operating items, which have historically varied significantly [22]

Economic Indicators - China's aggregate financing for September reached 30.09 trillion CNY, exceeding the estimated 29.905 trillion CNY and the previous month's 26.556 trillion CNY, indicating stronger-than-expected credit expansion [3][8] - New yuan loans for September were 14.750 trillion CNY, slightly below the estimated 14.919 trillion CNY but an increase from the prior month's 13.459 trillion CNY [3][8] - The M2 money supply grew by 8.4% year-over-year, slightly missing the 8.5% estimate and down from the previous 8.8% [4] - M1 money supply saw a robust increase of 7.2% year-over-year, exceeding the 6.1% estimate and the previous 6.0% [4][8] - M0 money supply rose by 11.5% year-over-year, matching the previous month's growth [4] U.S. Government Shutdown - The U.S. federal government is in its 15th day of shutdown due to a failure to pass appropriations legislation for the 2026 fiscal year, resulting in furloughs for approximately 900,000 federal employees and 700,000 working without pay [5][8] European Telecommunications Sector - Altice France rejected a €17 billion ($19.7 billion) bid from a consortium led by Bouygues for its SFR mobile unit, highlighting ongoing challenges in the French telecom market [6][8] UK Financial Regulation Changes - The UK's financial regulators announced plans to cut the bonus deferral period for senior bankers from eight to four years, effective October 16, 2025, aiming to enhance competitiveness and align with other jurisdictions [9][8] European Defense Initiatives - The European Union is advancing a military plan for 2026, focusing on drone and air defense projects amidst rising security concerns and a push for increased industrial integration [7][8]

Core Insights - Bharti Airtel has partnered with IBM to enhance its cloud services, responding to the growing demand for cloud computing solutions [1][2] - The collaboration will enable Airtel Cloud customers to utilize IBM's AI-ready servers, particularly benefiting regulated sectors like banking, healthcare, and government [2] - Two new Multizone Regions (MZRs) will be established in Mumbai and Chennai to ensure secure and uninterrupted cloud operations [3] Company Developments - Airtel Cloud was launched by Bharti Airtel's digital unit Xtelify in August, marking a significant step in the company's digital transformation [2] - The partnership with IBM is part of a broader strategy to expand Airtel's cloud offerings and improve service reliability [1][2] Industry Trends - The demand for cloud computing services is on the rise, prompting telecom operators like Bharti Airtel to enhance their service portfolios [1] - IBM is actively expanding its AI capabilities through various partnerships, indicating a trend towards integrating AI in cloud services [4] - Google is also investing heavily in AI infrastructure in India, highlighting the competitive landscape in the cloud and AI sectors [5]