Financial Data and Key Metrics Changes - IT services revenue for Q2 FY 2026 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% [6][18] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [6][19] - Net income and EPS grew by 1% year on year, while operating cash flows remained higher than net income at 104% for Q2 [23] Business Line Data and Key Metrics Changes - Americas One grew 0.5% sequentially and 5% year on year, while Americas Two declined 2% sequentially and 5% year on year [20] - Europe reported a sequential growth of 1.4% but a year-on-year decline of 10.2% [21] - APMEA grew 3.1% sequentially and 2.6% year on year, with strong performance in India, Australia, and Southeast Asia [21] - BFSI sector showed sequential growth of 2%, driven by Europe and APMEA [85] Market Data and Key Metrics Changes - The healthcare sector is undergoing structural changes, impacting performance, but remains a strong performer for the company [9][88] - Consumer, energy, and manufacturing sectors are facing tariff uncertainties, leading to reevaluation of supply chains [9] Company Strategy and Development Direction - The company is focusing on AI adoption and vendor consolidation as key strategies for growth [9][10] - Wipro Intelligence, a unified suite of AI-powered platforms, is being introduced to enhance client capabilities [13][14] - The company aims to maintain operational discipline while converting a strong backlog into revenue [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth, particularly in BFSI, as large deals begin to ramp up [30][31] - The company anticipates a sequential IT services revenue growth of -0.5% to +1.5% in constant currency for Q3 [16][24] - Management acknowledged headwinds from large deal ramp-ups and seasonal factors affecting Q3 performance [35] Other Important Information - The Harman Digital Transformation Solutions acquisition is expected to close in the upcoming quarter, but revenues from this acquisition are not included in current guidance [24] - The company is actively investing in growth, which may pressure margins in the short term [19][35] Q&A Session Summary Question: Thoughts on deal to revenue conversion and future growth - Management noted that large deal wins in BFSI are expected to ramp up in Q3, contributing to future growth [28][29] Question: Margin outlook and transition costs - Management indicated that while there are headwinds from large deals, operational improvements and currency fluctuations have positively impacted margins [32][34] Question: Sustainability of year-on-year growth in line with peers - Management expressed confidence in sustaining growth, focusing on executing deal wins and maintaining a robust pipeline [50][52] Question: Clarity on renewal deals and their impact - Management clarified that renewal deals are a mix of renewals and expansions, with some deflationary pressures expected [95][96] Question: Impact of bankruptcy on revenue - Management confirmed that there was no impact on Q2 revenue from the bankruptcy provision made [99]

周四，美联储官员就降息节奏出现不同声音，理事沃勒主张维持每次25个基点的谨慎降息步伐以应对疲 软的劳动力市场，而临时担任美联储理事的米兰则呼吁采取更激进的50个基点降息。 沃勒周四在接受媒体采访时表示，美联储可以继续以25个基点的幅度逐步降低利率。沃勒表示： 你不想犯错，所以避免错误的方法是谨慎小心地行动，降息25个基点，观察会发生什么，然 后你就能更好地判断下一步该怎么做。 沃勒表示，过去六周内情况没有太大变化，民间部门数据持续反映劳动力市场疲软。目前通胀率估计在 2.5%左右，似乎没有什么迹象表明通胀会大幅上升。褐皮书并未显示经济形势乐观和繁荣，年底GDP 可能走弱。 关于AI的影响，沃勒表示，对AI的担忧在于它是否会导致劳动力需求的结构性变化，而美联储的周期 性工具无法解决这个问题。 他表示，关税不确定性以及对AI对生产力可能影响的疑问，使得企业CEO招聘意愿不强。企业投资主 要集中在AI领域，并未广泛分布。一旦扣掉AI，企业固定投资是下降的。 关于美联储主席的选拔，沃勒还表示，与贝森特的面试非常顺利，进行得很快。尚未与特朗普总统通 话，不清楚是否会通话。 分歧的核心在于政策调整的速度，Waller强调 ...

Core Insights - Sony's banking division, Sony Bank, has applied to establish a national crypto bank under its subsidiary "Connectia Trust," aiming to issue a U.S. dollar-backed stablecoin [1][2] - If approved, Sony would be the first major global technology company to receive a U.S. bank charter specifically for stablecoin issuance, joining other firms like Coinbase and Ripple in seeking OCC approval [2][4] - The move reflects the evolution of stablecoins into mainstream financial instruments, particularly following the passage of the GENIUS Act, which established a federal framework for stablecoin issuers [3] Company Plans - The application details plans to issue a U.S. dollar-pegged stablecoin, maintain reserve assets, and provide digital asset custody and management services [2][4] - Sony Bank intends to engage in permissible digital asset activities, including the issuance of stablecoins and maintenance of reserve assets, as well as non-fiduciary digital asset custody services [5] Regulatory Context - The OCC is the sole regulator that can issue a national bank charter, allowing firms to operate banking activities across all U.S. states under one license, which is crucial for crypto firms seeking legitimacy [6] - An OCC charter provides access to the Federal Reserve's payment systems and enhances credibility with institutional partners [6]

Core Viewpoint - The article discusses the behavioral patterns of investors, highlighting a tendency to be overly tolerant of losses while being quick to take profits, leading to a cycle of small gains and significant losses [1]. Group 1: Market Overview - The funding environment is balanced and slightly loose, with the central bank conducting a 2,360 billion yuan reverse repurchase operation, resulting in a net withdrawal of 3,760 billion yuan [3]. - The interbank funding rates remain stable, with DR001 around 1.31% and DR007 around 1.42% [4]. - The stock market experienced a pullback after reaching near previous highs, influenced by ongoing US-China trade tensions and a slight decline in interest rates [6]. Group 2: Bond Market Dynamics - The bond market showed stability, with the 10-year government bond yield fluctuating around 1.7575%, reflecting a slight downward trend [6]. - The "old friends" in the bond market, referred to as "old Deng stocks," have been performing well, indicating a potential shift in investor sentiment towards bonds [7]. - The yield on long-term bonds has shown a stronger performance, with the 10-year bond yield decreasing to approximately 1.753% [6][7]. Group 3: Interest Rate Trends - The weighted rates for various repurchase agreements indicate a slight increase in R007 to 1.48%, while R001 remains stable at 1.35% [5]. - The interest rates for government bonds across different maturities show a mixed trend, with some rates experiencing slight declines [9].

Core Insights - The Federal Reserve is planning to expand the operational days of the Fedwire Funds Service and the National Settlement Service to include Sundays and some holidays, with implementation expected by 2028 at the earliest [8]. Group 1: Payment Systems Overview - The Fedwire Funds Service processes approximately $4.7 trillion in global commerce daily and allows electronic transfers of up to $10 million [3]. - The National Settlement Service provides clearing services for private-sector clearinghouses [3]. Group 2: Operational Changes - Current operational hours will remain unchanged, with Fedwire Funds operating 22 hours per day and NSS for 21.5 hours per day, closing a half-hour earlier [4]. - The Federal Reserve has considered expanding operational hours to seven days a week since 2019, with public input sought on this proposal [5][6]. Group 3: Congressional Influence - A bipartisan group of congressional members has urged the Federal Reserve to expedite the expansion of payment services, emphasizing the importance of swift action [6][7].

Market Performance - In 3Q 2025, U.S. stock indices experienced significant gains, with the Dow rising 5%, S&P 500 up 8%, Nasdaq increasing by 11%, and small-caps (Russell 2000) jumping 12% [2] - The S&P 500 set 28 all-time closing highs through the end of 3Q, reflecting a strong market performance [2] - The S&P 500 climbed over 30% in the six months leading up to October 6, 2025, but historical data suggests such gains may be difficult to sustain [3] Market Concentration - The rally was uneven, with an equal-weight version of the S&P 500 rising only 4% in 3Q, indicating that gains were concentrated among a few large companies [4] - Currently, 10 stocks account for over 40% of the S&P 500, marking an unprecedented level of concentration [4] Federal Reserve and Economic Policy - Changing expectations regarding the Federal Reserve's willingness to cut interest rates have been a major driver of the recent market advance [5] - The Trump administration's pressure on the Fed to cut rates more aggressively has raised concerns about the central bank's independence [6] Corporate Earnings and Consumer Behavior - Corporate earnings for 2Q exceeded expectations, with momentum likely carrying into 3Q despite tariff headwinds [7] - Consumer spending growth is steady at around 5% year-over-year, supporting the economy, but signs of strain are emerging among lower-income households [18][26] Global Market Trends - Asian markets posted double-digit gains in 3Q, with Japan's Nikkei up 11.0%, Hong Kong's Hang Seng up 11.6%, and China's Shanghai Composite up 12.7% [9] - The Consumer Staples sector was the only S&P 500 sector to decline in 3Q, losing almost 3%, while Technology and Communication Services sectors performed well [10] Artificial Intelligence and Market Dynamics - The AI trade continues to drive market performance, with mega-cap companies like Apple, Alphabet, and NVIDIA leading the way [11] - The performance of the so-called Magnificent Seven has varied significantly, with NVIDIA gaining 39% while Amazon remained flat [11] Housing Market Insights - The U.S. faces a structural housing shortage, needing over 16 million new homes by 2033, which could impact economic growth [20] - Housing accounts for about 3%–5% of GDP, and easing mortgage rates could stimulate demand and new construction [22][21] Emerging Markets - Emerging market equities have outperformed, up 28% year-to-date through early October, driven by a weaker dollar and resilient growth in several countries [36][39] - However, risks remain, including sensitivity to commodity cycles and political instability, particularly in China [36] Valuation Concerns - The S&P 500 trades at about 23 times expected earnings, a level reached only twice this century, indicating stretched valuations [25] - Investment-grade bonds are yielding historically low premiums over Treasuries, raising concerns about risk compensation [26]

Group 1: South Korean Won and Foreign Investment - Foreign investors are increasing hedges against the South Korean won due to concerns over a $350 billion investment pledge to the US, which may not be fully reflected in the currency market [2][8] - Seoul is negotiating a currency swap deal with Washington to stabilize its foreign exchange market, as the all-cash investment could strain foreign exchange reserves [3][8] - The US has softened its demand for an entirely cash-based investment, indicating ongoing financial complexities for South Korea [3][8] Group 2: Household and Corporate Loans in South Korea - The Bank of Korea reported a ₩2.0 trillion increase in household loans in September, down from ₩4.1 trillion in August, marking the seventh consecutive month of growth [4] - The growth in household lending is primarily driven by mortgage loans and increased housing transactions, despite regulatory tightening [4] Group 3: Australian Job Market and Monetary Policy - Australia's unemployment rate rose to 4.3% in June, the highest since November 2021, presenting a challenge for the Reserve Bank of Australia (RBA) [7][9] - RBA Governor Michele Bullock noted that easing labor market conditions align with the bank's forecasts, suggesting potential interest rate cuts may be necessary to support the economy [9] Group 4: Thai Banking Sector Stability - Fitch Ratings indicated that asset quality at Thai banks remains weak, particularly in retail and SME segments, but robust capital buffers are expected to maintain stability [10] - The non-performing loan (NPL) ratio is projected to improve slightly to 3.5% in 2025 from 3.3% in 2024, with Fitch adjusting its outlook on the Thai banking industry to "Stable (Neutral)" [11] Group 5: Cybersecurity Threats - A state-backed Chinese hacking group, "Salt Typhoon," has been implicated in a significant breach of a major US cybersecurity provider, expanding its targets to critical data infrastructure [12][13] - This incident is described as one of the most severe national security threats from a nation-state actor in recent history, highlighting escalating cybersecurity risks [13] Group 6: Commodity Market Trends - Chicago corn futures have risen for a third consecutive session, supported by limited sales of newly harvested crops, with the most-active corn contract increasing by 0.1% to $4.17-1/4 per bushel [14] - This rise in corn prices occurs despite USDA projections of a record harvest, with strong ethanol demand identified as a key driver [15]

October 15, 2025 11:51 AM GMT China Economics | Asia Pacific Cooling Credit, Stalled Household Deposit Migration Key Takeaways Slowing credit amid fading fiscal impulse: Broad credit moderated for a second month, and is likely to reach ~8.5% by year end, given: 1) weak private credit demand amid continued debt-deflation loop; and 2) sharply reduced government bond issuance in 4Q25. To offset some of the fiscal drag, Beijing announced a Rmb500bn "new policy-based financial tool" in late September to replenis ...

Summary of Key Points from the Conference Call Industry Overview - The report discusses the **World Portfolio**, which encompasses all investable assets globally, currently estimated at approximately **US$250 trillion**, or **200% of world GDP** [6][21][25]. Core Insights and Arguments 1. **Asset Allocation Trends**: - The equity weight relative to bonds has significantly increased since the Global Financial Crisis (GFC), although it remains below levels seen in the 1990s [6][8][13]. - The US has gained a dominant position in both equities and bonds, with US assets becoming increasingly prevalent in global investor portfolios [6][11][35]. - Alternatives such as private markets, Gold, and cryptocurrencies have seen growth relative to public equities and bonds, but they still represent a small portion of the overall portfolio [6][8][11]. 2. **Benchmarking Issues**: - The World Portfolio serves as a major influence on investor asset allocations, but following such benchmarks may not yield optimal results. Historical performance has varied significantly with macroeconomic conditions [6][8][69]. - A simple 60/40 portfolio or a risk parity strategy has historically outperformed the World Portfolio on a risk-adjusted basis since 1950 [8][104]. 3. **Strategic Recommendations**: - The report suggests managing the equity/bond/Gold mix and US exposure, including foreign exchange (FX) hedging, to improve risk/reward profiles compared to the World Portfolio [6][8]. - A new strategic tilting framework is introduced to better align with realistic benchmark tilts and to capture diversification benefits from smaller assets and alternatives [6][8]. 4. **Performance Metrics**: - The World Portfolio has delivered a nominal return of **7.8%** and a real return of **4.1%** annually since 1950, with variations in performance during different macroeconomic regimes [24][33]. - Since 1990, the World Portfolio's returns have slowed to **6.4% nominal** and **3.7% real** [24][33]. 5. **Regional and Sectoral Dynamics**: - The US equity market currently holds a **65%** weight in the MSCI AC World index, reflecting the dominance of the US Tech sector [64][65]. - Non-US markets have lower weights, largely due to free-float adjustments, particularly in China [64][69]. Additional Important Insights - The report highlights the growing trend of passive investing, with more than half of assets under management in equity funds now being passive [69]. - There is a notable home bias in US investor allocations, with non-US investors allocating less to US equities and bonds compared to their weights in the World Portfolio [95][97]. - The report emphasizes the importance of understanding the historical context of asset allocations, as shifts in investor behavior often mirror past trends in the World Portfolio [70][73]. This comprehensive analysis provides valuable insights into the current state of global asset allocation, the influence of benchmarks, and strategic recommendations for investors navigating the complexities of the market.

Market Overview - Global equity markets experienced positive returns in Q3, driven by progress in U.S. tariff negotiations and expectations of Federal Reserve rate cuts, with the MSCI World Growth Index up 8.6% compared to 7.3% for the MSCI World Index and 5.8% for the MSCI World Value Index [2] - Emerging markets showed notable strength, particularly in China, Mexico, and Brazil, with China's tech giants like Tencent and Alibaba contributing to optimism in AI development [5][6] - Developed markets saw Japan leading returns due to clarity on trade policy and confidence in economic resilience, while the eurozone lagged due to political volatility and infrastructure spending debates [6] Quarterly Performance - The ClearBridge Global Value Improvers Strategy generated positive absolute returns but underperformed its benchmark, with industrials and energy holdings detracting from performance [7][19] - Negative stock selection in industrials was primarily due to CNH Industrial's decline amid weaker agricultural demand, while Hitachi remained a strong performer in Japan [8] - Energy stock selection faced challenges from declining commodity prices, with EQT's shares affected by high storage inventories and concerns over demand growth [9] - IT sector stock selection was a strong contributor, particularly Oracle, which gained market share among hyperscalers [10] - In healthcare, CVS and AstraZeneca saw strong performance due to better-than-expected earnings and reduced tariff concerns [11] Portfolio Positioning - New positions were initiated in Lloyds Banking Group, expected to deliver higher normalized returns and a double-digit shareholder yield, and Alphabet, which is positioned to benefit from generative AI developments [13][14] - The strategy exited its position in Novo Nordisk due to lowered full-year guidance and management changes [15] Outlook - Market confidence is bolstered by clarity around tariffs and fiscal policy, although valuations have returned to elevated levels [16] - The focus remains on undervalued companies with distinct growth drivers or restructuring catalysts [16] Energy Sector Insights - Structural shifts in energy demand and efficiency present compelling opportunities, particularly in renewables and energy storage [17] - Companies like Vertiv and Johnson Controls are positioned to benefit from rising energy costs and net-zero goals, with efficiency becoming a competitive advantage [26] ESG Highlights - Carbon capture and sequestration (CCS) technologies are critical for heavy industries, with ClearBridge holdings actively developing CCS capabilities [22][23] - Linde is well-positioned in clean hydrogen production, leveraging its technology to drive emissions savings and business growth [24][30] - Green Plains is focusing on carbon capture initiatives to decarbonize its biorefineries, partnering on projects to sequester significant CO2 emissions [38][40]