Core Viewpoint - India's competition watchdog has identified that major steel companies, including Tata Steel, JSW Steel, and state-run SAIL, along with 25 other firms, have violated antitrust laws by colluding on steel selling prices, which may lead to significant fines for these companies and their executives [1] Company Summary - Tata Steel, JSW Steel, and SAIL are among the market leaders implicated in the antitrust investigation [1] - A total of 28 firms, including the aforementioned companies, are involved in the alleged price-fixing scheme [1] Industry Summary - The steel industry in India is facing scrutiny due to collusion on pricing, which raises concerns about market competition and regulatory compliance [1] - The findings from the competition watchdog could lead to increased regulatory actions and potential financial penalties within the industry [1]

Core Viewpoint - Australian conglomerate SGH, led by media billionaire Kerry Stokes, has made a A$13.15 billion ($8.83 billion) bid for BlueScope, aiming to broaden its industrial footprint and push into the steelmaking sector [1] Group 1: Company Strategy - SGH's acquisition of BlueScope is part of a strategic move to expand its industrial operations [1] - The bid reflects SGH's intent to diversify its portfolio and enhance its presence in the steel industry [1] Group 2: Financial Details - The proposed bid amounts to A$13.15 billion, equivalent to $8.83 billion [1] - This financial commitment indicates SGH's confidence in the potential growth and profitability of BlueScope [1]

Overview - SGH Ltd has submitted a Non-Binding Indicative Offer (NBIO) to acquire 100% of BlueScope Steel Ltd (BSL) in partnership with Steel Dynamics, Inc. (SDI) [1] Proposal Details - The acquisition proposal includes a cash consideration of AUD$30.00 (USD$20.04) per share, representing a total equity value of AUD$13.2 billion (USD$8.8 billion) for BSL [3][6] - SGH and SDI plan to sell BSL's North American operations to SDI while retaining BSL's Australian and other international operations [2] - The proposal is subject to customary conditions, including due diligence and regulatory approvals [4] Strategic Rationale - SGH and SDI believe that BSL's operations in Australia and North America are not strategically compatible and would benefit from being standalone businesses [5] - The acquisition is expected to provide significant value for BSL's shareholders and other stakeholders, including team members and local communities [7] Financial Aspects - The proposal offers a 27% premium to BSL's closing share price at the time of the NBIO submission and a 33% premium to both the 3-month and 52-week volume-weighted average share prices [6] - SGH and SDI will fund the transaction through existing cash reserves and debt financing, with no equity required to be raised [11] Management and Governance - SGH intends to offer one or two board positions to current BSL directors to ensure continuity and effective knowledge transfer [8] - Key management from BSL will be retained to support the Australian and North American operations [8] Next Steps - SGH and SDI are committed to conducting confirmatory due diligence and have engaged financial and legal advisors to assist in the process [13]

Core Viewpoint - The proposal involves SGH acquiring all shares of BlueScope and subsequently selling BlueScope's North American businesses to Steel Dynamics [1] Group 1 - SGH plans to fully acquire BlueScope [1] - The acquisition will include the divestiture of BlueScope's North American operations [1]

Core Viewpoint - U.S. stocks are starting the new year with strong momentum, driven by easing inflation, improving growth expectations, and positive earnings forecasts, particularly influenced by advancements in artificial intelligence [2][3] Market Overview - The stock market has experienced volatility due to trade concerns, policy uncertainty, and changing interest rate expectations, but has shown resilience with cooling inflation and better-than-expected earnings [3] - Heavy investments in AI, data centers, and cloud infrastructure are providing a strong underlying support for the market [3] Investment Strategy - A relative price strength strategy is recommended, focusing on stocks that are outperforming the market, as they are likely to continue their upward trend [4] - Stocks such as Jabil Inc. (JBL), Ciena Corporation (CIEN), Commercial Metals Company (CMC), and Plains All American Pipeline LP (PAA) are highlighted as potential investment opportunities [4] Stock Screening Parameters - Stocks should be evaluated based on their earnings, valuation ratios, and relative price performance compared to peers and industry averages [5][6] - Stocks that outperform their respective industries or benchmarks are more likely to yield significant returns [6] - A focus on stocks with positive earnings revisions and strong fundamentals is essential for identifying growth potential [7][8] Featured Stocks - **Jabil Inc. (JBL)**: Market cap over $25 billion, expected EPS growth of 18.5% year-over-year for fiscal 2026, shares up 58% in a year [12] - **Ciena Corporation (CIEN)**: Expected EPS growth rate of 41.8% over three to five years, shares up 191.2% in a year, with a fiscal 2026 EPS estimate indicating 97.7% growth [13][14] - **Commercial Metals Company (CMC)**: Market cap of $8 billion, expected EPS growth of 125.2% for fiscal 2026, shares up 42.4% in a year [15] - **Plains All American Pipeline LP (PAA)**: Market cap nearly $13 billion, with a 6.8% upward revision in earnings estimates for 2026, shares up 3.6% in a year [16][17]

Core Viewpoint - BlueScope Steel has received an indicative takeover offer from a consortium of Australian and U.S. companies, valuing the company at A$13.15 billion (approximately $8.78 billion) [1] Company Summary - The indicative takeover offer was made in December [1] - The valuation of A$13.15 billion reflects the interest from a consortium, indicating potential strategic moves in the steel industry [1]

Core Perspective - The EU carbon border adjustment mechanism (CBAM) aims to enhance the competitiveness of European manufacturers against non-EU companies with less stringent emissions regulations, with China being the first to threaten retaliation [1][4]. Group 1: Mechanism Overview - The CBAM was created to address the high costs associated with the EU's stringent emission-reduction standards, which have made European products like steel and cement less competitive compared to cheaper imports from countries like China [2][3]. - The mechanism imposes a price on carbon dioxide emissions from goods produced in exporting countries, establishing default emission values and benchmarks for specific products [6]. Group 2: Reactions from Major Exporters - China's Ministry of Commerce criticized the CBAM as "unfair" and "discriminatory," indicating that it would take necessary measures to counteract what it perceives as unfair trade restrictions [4]. - The CBAM is unpopular among major exporters to the EU, but it has been effective in encouraging countries to develop or expand their carbon pricing initiatives, marking a significant policy shift for the EU [5]. Group 3: Implications for Competitiveness - The implementation of the CBAM is intended to ensure that cheaper imported steel, cement, and electricity are not as competitively priced, thereby protecting European industries [3]. - China's existing carbon market, established in 2021, complicates the situation as it seeks to maintain its competitiveness in the face of the new EU regulations [5].

Core Insights - Warren Buffett is no longer the CEO of Berkshire Hathaway but remains chairman and involved in major decisions [1] - Buffett's investing wisdom continues to be relevant, particularly his two-step test for stock evaluation [2][4] Investment Strategy - The first step in Buffett's test is to determine if earnings can be estimated for at least five years [5] - The second step involves checking if the stock's valuation is reasonable relative to the lower end of the projected earnings range [6] - Buffett emphasizes focusing on stocks within one's "circle of competence" to improve the accuracy of earnings projections [8] Market Analysis - As of early 2026, there are limited stocks that pass Buffett's test, with Berkshire holding a record-high cash stockpile [10] - AbbVie is highlighted as a strong candidate, having navigated its Humira patent cliff and expected to deliver robust earnings growth, with a current market cap of $405 billion and a dividend yield of 2.86% [11][12] - Nucor is another potential stock, benefiting from data center construction and infrastructure investments, with a low forward price-to-earnings ratio of 14.5 [11][12]

Market Performance - Equity benchmark indices Sensex and Nifty increased nearly 1 percent on the final trading session of 2025, following days of range-bound trading due to sustained buying by domestic institutional investors [1] - The BSE Sensex rose by 545.52 points, or 0.64 percent, closing at 85,220.60, with an intraday high of 85,437.17, marking a surge of 762.09 points, or 0.90 percent [3] - The NSE Nifty climbed 190.75 points, or 0.74 percent, finishing at 26,129.60 after four consecutive days of decline [3] Yearly Performance - In 2025, the Sensex experienced a rally of 7,081.59 points, or 9 percent, while the Nifty increased by 2,484.8 points, or 10.50 percent [6] - The Indian equity markets concluded the year positively, with a bullish sentiment while respecting key resistance levels [6] Sector Performance - Among the 30 Sensex firms, Tata Steel, Kotak Mahindra Bank, Reliance Industries, Axis Bank, Titan, and Trent were the top gainers [4] - Conversely, Tata Consultancy Services, Tech Mahindra, Infosys, Bajaj Finance, and Sun Pharma were identified as laggards [4] Investor Activity - Foreign Institutional Investors (FIIs) sold equities worth ₹3,844.02 crore, while Domestic Institutional Investors (DIIs) purchased stocks worth ₹6,159.81 crore [8] - The session reflected a gradual improvement in risk appetite driven by short covering and selective buying rather than aggressive new positions [7]

Core Viewpoint - Shares of major steel companies in India experienced a significant increase, ranging from 2% to 4.5%, following the imposition of import tariffs on certain steel products by the Indian government to limit low-cost imports from China [1] Group 1: Market Reaction - Major steel companies in India saw their stock prices rise between 2% and 4.5% on Wednesday [1] - The increase in share prices occurred a day after the government announced new import tariffs [1] Group 2: Government Action - The Indian government has implemented import tariffs on specific steel products [1] - The primary objective of these tariffs is to curb the influx of inexpensive steel shipments from China [1]