Weekly Top Ten

1. HONG KONG ALPHA PORTFOLIO: (September 2025)

By David Mudd

• Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.
• The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.
• At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.

2. UK: Lending Looks Stimulated

By Phil Rush, Heteronomics

• Lending activity is sustaining beyond the levels prevailing before the stamp duty tax hike distortion. Only housing transaction volumes are down, but by less than before.
• New loan rates have fallen by 23bp since then, for a 110bp cumulative fall. New rates are close to the outstanding stock. Many borrowers are refinancing for similar deals.
• Past tightening has broadly passed through, but the strength in broad money growth signals that monetary conditions are settling at a slightly stimulative setting.

3. EA: Core Excess Revealed In Sep-25

By Phil Rush, Heteronomics

• Inflation’s break above target to 2.23%, within 1bp of our forecast, came as past energy price falls dropped out to reveal the more resilient underlying pressures.
• Small upside surprises in large countries, like Germany and Italy, were balanced in number and contribution by larger surprises in small ones, like Greece and Estonia.
• We expect less negative payback in October and January, preventing our profile from languishing below the target through 2026, like the consensus view does.

4. UK: Government Leads Imbalances

By Phil Rush, Heteronomics

• Household saving and inflation have eroded their debt burden while corporates remain prudent. A lack of imbalances to correct starves the UK of fuel for a recession fire.
• Persistent fiscal and current account deficits highlight where the UK’s primary risk lies. If the market regime focuses on fiscal issues, the corrective pressures could be fierce.
• We don’t expect that correction to occur, but the Chancellor should tread carefully, while doves need not worry about a recession arising from healthier other UK sectors.

5. Australian Equities: Where are we now, and what’s next?

By MAGELLAN – IN THE KNOW, Magellan Asset Management

• Australian economy remains sluggish, but some positives include recovery in small caps and resilience of Australian consumers
• Market volatility and narrow leadership driving unhappiness among active investors
• Resilience of Aussie consumer and strong retail results stood out in recent reporting season, with small caps and US housing exposure also notable themes

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

6. HEW: Watching What Didn’t Happen

By Phil Rush, Heteronomics

• The US government shutdown removes the potential for official statistics to damp dovish concern, raising the likelihood of October’s cut, especially with other weak data.
• EA unemployment’s rise reflected rounding rather than substance. UK national accounts revealed healthy balance sheets, aside from the government, and bullish lending stats.
• Next week’s calendar stays thin with US releases suspended and Europe’s cycle focusing on the following week. The RBNZ, BoT, BSP and Peru announce rates next week.

7. Gold Mania, Niobium Dreams, and Antimony Nightmares (Datt)

By Money of Mine, Money of Mine

• US monetary policy is accommodative and markets are buoyant, especially in commodities
• Investors need to be cautious about being overly bullish in current environment
• Similarities seen with 2006-2007 period, particularly in disruptions in copper supply and new technologies in metal recovery; investors should be wary of hype and potential risks involved

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

8. Get Ready to Buy the Dip, But Not Yet

By Cam Hui, Pennock Idea Hub

• We remain intermediate-term bullish on stocks, but the market is at risk of a correction.
• If last week’s weakness is the start of a pullback, short-term trading indicators point to further downside potential.
• Investors should be prepared to buy the dip, but not yet.

9. Indian Market: WANT TO BUY THE DIP, THINK AGAIN !!

By David Mudd

• India’s markets continue to underperform Asia since our insight last November recommending investors to “Fade the Market”.
• Foreign investors continue to exit the market this year with the largest net outflow since COVID.
• The Trump administration is pressuring India in trade negotiations with reciprocal tariffs (25%), additional tariffs for importing Russian oil (25%), pharma tariffs (100%), and new restrictions on H-1B visas.

10. EA: Rounding Jobs For Migrants

By Phil Rush, Heteronomics

• A surprise rise in EA unemployment reflects rounding rather than alarming weakness, with labour supply and demand still surging. Finland’s woes are more idiosyncratic.
• Supply has trended much faster post-pandemic, sustaining demand at its old trend without extreme capacity constraints. Migration has more than accounted for the rise.
• Ukrainians are dominating the flow and complicating the read through to disinflationary spare capacity. Wage growth is an even more critical signal when supply is uncertain.

1. Broadly Slower Services PMIs

By Phil Rush, Heteronomics

• PMIs broadly disappointed and declined relative to August, but absolute levels mostly remain robust or at least expansionary. We are not concerned by these noisy moves.
• Such broad slowing seems shocking relative to the past few months, but it is historically a regular occurrence. Five of the previous twelve were at least as broadly bad.
• The labour market remains tight in the euro area, softened in the UK, and steady in the US. Slower activity does not mean disinflationary slack. We stay relatively hawkish.

2. EM Fixed Income: (EM) Credit where credit’s due

By At Any Rate, At Any Rate

• Despite a mixed Fed meeting, EM markets continue to rally in FX and rates
• EM local markets still in a good place with upside potential in growth and improving flow picture
• Sovereign credit markets have had a strong performance year to date, with investors feeling optimistic but also acknowledging the need to be humble in assessing macro risks and valuations.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

3. HEW: Resilience Reminders Roil Doves

By Phil Rush, Heteronomics

• Bullish GDP revisions and jobless claims provided further reminders that the economy is much more resilient than market pricing has dovishly assumed, causing a hawkish shift.
• Nonetheless, the Riksbank surprised with a 25bp rate cut, but projected that as the terminal rate before hikes start reversing the stimulative setting in 2026.
• Next week’s US payrolls data dominates the calendar, given the potential to break market conviction in an October Fed cut. EA inflation should rise back above the target.

4. Asian Equity: Relative Valuations Have Mostly Converged; Korea the Only Large Rerating Candidate

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• Most large Asian markets’ forward PE multiples are significantly higher than their long-term averages. But their valuations relative to Asia-ex-Japan are mostly at the averages, only Korea’s is significantly lower.
• HK/China’s relative PE is slightly lower than average, Taiwan’s is slightly higher. ASEAN markets’ relative PE are sharply lower than their averages, but we think most lack rerating catalysts.
• We think Korea and Philippines deserve to get rerated. India’s relative PE, though at its long-term average, could decline slightly further, to reach its recent bottoms.

5. Will AI save the US Economy?

By Alastair Newton, Heteronomics

• European policymakers and investors see Donald Trump’s economic policies harming Republican prospects in the 2026 midterms and the 2028 general election.
• The Trump Administration is placing a good deal of faith in AI as a panacea. But the US may not have the skilled labour or the power-generating capacity to fuel an AI boom.
• Nor is it clear whether the current Administration is preparing for the related socio-economic disruption from which the MAGA faithful would be far from immune.

6. Resilience Is Reinstating

By Phil Rush, Heteronomics

• Falling US jobless claims and bullish GDP revisions are reinstating evidence of ongoing resilience. Underlying GDP only slowed by about 0.1pp in H1, or 15% of 2024’s average.
• Risk management rate cuts to balance the higher costs of being wrong on the downside raise the probability that easing proves premature and swiftly ends.
• The ECB already sees the transmission of its past cuts trending loan growth higher. It may reach pressures consistent with hikes next year, and it already clashes with easing.

7. Asian Equities: Foreign Flows Come Roaring Back in September; India, ASEAN Still Getting Sold

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• Fed’s “risk management cut” and a dovish outlook of 2 more cuts in 2025 are driving foreign flows back to Asia. US$11.5bn inflows in September till date underscores the sentiment.
• Korea (US$4.94bn) and Taiwan (US$7.5bn) grabbed the Asian flows entirely, driven by the rejuvenated AI capex theme. India (-US$904m) continues to be sold, though the selling pace has diminished.
• FIIs bought Indonesia (US$672m) in August and sold almost identical amount in Thailand. Philippines, despite being cheap and having a few sectors with upward earnings inflection, continues to be sold.

8. US Tariff Policy: A.K.A. WHACK A MOLE!

By David Mudd

• The U.S. continues to play “Whack-A-Mole” using tariffs to threaten and/or negotiate on many economic and geopolitical issues.
• The Trump tariff policy, which may be declared illegal by the Supreme Court next month, has caused manufacturers to hold off on hiring and expansion plans.
• Although tariff revenue for the U.S. government is at an all-time high, the U.S. will still record its highest trade deficit in history this year.

9. SLBs in 2025: Where Step-Ups Create Event-Driven Alpha

By Evan Campbell, CFA, Leaf & Ledger Limited

• Set-Up and scale: 245 SLBs face 2025 KPI tests; applying a 19% 2024 miss rate implies ~50 step-ups of ~25 bps, worth ~20–60 bps PV. >$80bn notional, heaviest in Q4.
• Trade design, credit and equity: Pre-position where slippage exists and no pre-test calls; run structure pairs; trade post-print drift; for equities, SLB misses flag delivery shortfalls and funding-cost creep.
• Why the market is inefficient: ESG KPIs hide in footnotes and annexes, overlooked by analysts. Verification lags and slow vendor updates delay repricing, so step-up structures stay mis-weighted and mispriced.

10. Indonesia : Sri Mulyani’s Exit Compounds Fiscal Risks

By Priyanka Kishore, Asia Decoded

• The exit of Indonesia’s veteran Finance Minister, Sri Mulyani Indrawati, marks a turning point in the country’s fiscal regime.
• With her out of the picture, it is only a matter of time before the government revises the 3% deficit ceiling higher to accommodate Prabowo’s large spending plans.
• This is a slippery slope and an indiscriminate push for spending, without concomitant tax reforms, could put debt on an unsustainable path.