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When the chips go up: Big banks bet on S. Korea, Taiwan stocks for 2023

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When the chips go up: Big banks bet on S. Korea, Taiwan stocks for 2023

Dec 1 (Reuters) – World banks are turning bullish on South Korean and Taiwanese shares, anticipating a revival in semiconductors to drive a rally subsequent yr, whereas they see Japan’s market as resilient thanks partly to its weak forex.

The calls come as U.S. charges are nonetheless rising, with most markets world wide eyeing their worst annual returns because the 2008 international monetary disaster and with chipmakers’ earnings cratering.

Goldman Sachs says South Korean shares are the financial institution’s prime “rebound candidate” for 2023 because of low valuations, made cheaper by a nosediving Korean gained, and as corporations profit from an anticipated restoration in Chinese language demand. It expects a 2023 return in greenback phrases of 30%.

Morgan Stanley additionally offers Korea prime billing. Along with Taiwan, it’s the finest place to be, says the financial institution, as the 2 markets have a fame as “early-cycle” leaders within the demand restoration.

Financial institution of America, UBS, Societe Generale and Deutsche Financial institution’s wealth supervisor DWS are all bullish on Korean shares, with analysts’ conviction in that commerce mendacity in sharp distinction to its divided view on India and China.

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“Within the semiconductor space, demand ought to backside within the first quarter of subsequent yr and the market all the time begins to run earlier than that,” stated DWS’ Asia-Pacific chief funding officer, Sean Taylor, who added Korean publicity in latest months.

“We expect (Korean shares) bought off an excessive amount of in September and August.”

South Korea’s benchmark KOSPI index (.KS11) has misplaced about 17% thus far this yr and the gained has declined 9%, although each have proven indicators of restoration in latest months.

Goldman Sachs additionally famous that 5 years of promoting has pushed international possession of Korean shares to its lowest stage since 2009, however inflows of about $6 billion since end-June “signifies a flip in international curiosity” that might carry the market additional.

Societe Generale’s suggestion for buyers to extend their publicity to Korea and Taiwan comes on the expense of China, India and Indonesia. Goldman’s desire for Korean shares comes because it has recommended a discount in Brazil publicity. Morgan Stanley downgraded its view on Indian publicity in October, when it upgraded its suggestion for South Korea.

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Morgan Stanley is most bullish on chipmakers turning out commoditised low-cost chips in addition to chips destined for shopper items – together with corporations resembling Samsung Electronics (005930.KS) or SK Hynix (000660.KS). Morgan Stanley has a worth goal for SK Hynix about 50% above the present share worth.

Semiconductors drive rebound

RISK-REWARD

Taiwan and Japan provide points of interest for some comparable and a few novel causes. Like South Korea, Taiwan (.TWII) is one other heavily-sold and chip-maker dominated market – although tensions with China make some buyers a bit much less enthusiastic.

Goldman Sachs is underweight Taiwanese shares, citing geopolitical danger, whereas Financial institution of America is impartial and its most up-to-date survey of Asian fund managers exhibits they’re bearish.

Japan (.N225) additionally provides chips publicity in addition to some safety and diversification, with the weak yen additionally a tailwind for exporters and sometimes a boon for equities.

“A sustained keep at such undervalued ranges, as anticipated by our FX strategists, augurs properly for Japan equities,” stated Financial institution of America analysts, who advocate obese allocation to Japan. Morgan Stanley, DWS, UBS are additionally optimistic, as is Goldman Sachs, particularly for the second half when it forecasts inflows.

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There may be much less settlement with regards to China, the place large buyers appear to be in a wait-and-see mode, or India the place funding homes really feel an 8% rally for the benchmark Sensex (.BSESN) has left valuations a bit expensive.

To make certain, a lot of the banks’ funding calls relaxation on assumptions that U.S. rates of interest ultimately cease going up and China ultimately relaxes its COVID guidelines.

In the meantime, Taiwan and South Korea are each geopolitical flashpoints – however analysts argue no less than a few of that’s already within the worth.

“There was some political concern in each Korea and Taiwan for a very long time,” stated Societe Generale’s head of Asia fairness technique, Frank Benzimra.

“Issues can all the time worsen,” he stated. “However when it comes to the risk-reward, what we discover is that a lot of the lowly valued markets, whether or not it is Korea or Taiwan … have extra restricted draw back due to the buildup of dangerous information that we now have seen during the last 12 months.”

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Reporting by Harish Sridharan in Bengaluru; Enhancing by Ana Nicolaci da Costa

Our Requirements: The Thomson Reuters Belief Rules.

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Cambodia's prime minister bans musical horns on vehicles to curb dangerous street dancing

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Cambodia's prime minister bans musical horns on vehicles to curb dangerous street dancing
  • Cambodian Prime Minister Hun Mane has issued a ban on musical horns after videos on social media depicted people dancing on roadsides.
  • Mane instructed the Ministry of Public Works and Transportation and police nationwide to remove tune-playing horns from vehicles.
  • The ban has already been put into effect by provincial authorities, and Hun Manet voiced its nationwide enforcement.

Cambodian Prime Minister Hun Mane has ordered a ban on musical horns, after videos posted on social media showed people dancing on roads and roadsides as passing trucks blasted rhythmic little tunes.

Hun Manet, who last year took over the wheel of government from his father, Hun Sen — who led Cambodia for 38 years — called on the Ministry of Public Works and Transportation and police across the country to immediately take action against any vehicle whose normal horn has been replaced by a tune-playing one by ripping it out and restoring the standard honking type. 

He said the measure has already been implemented by provincial authorities, but he wanted to announce it publicly to make sure it was enforced nationwide.

CAMBODIA’S PIONEERING POST-KHMER ROUGE ERA PHNOM PENH POST NEWSPAPER WILL STOP PRINT PUBLICATION

He commented on his Facebook page on Monday that recent social media posts had shown “inappropriate activity committed by some people, especially youth and children, dancing on the roadside to the musical sounds from trucks’ horns.”

Cambodian Prime Minister Hun Manet greets garment workers on Aug. 29, 2023, at Prey Speu village outside Phnom Penh, Cambodia. Mane has ordered a ban on musical horns, after videos posted on social media showed people dancing on roads and roadsides as passing trucks blasted rhythmic little tunes. (AP Photo/Heng Sinith, File)

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Hun Manet said such dancing affects public order and poses a traffic hazard that is a threat to life and limb, not least of all to the dancers themselves. 

2 ANTI-GOVERNMENT ACTIVISTS IN CAMBODIA CHARGED WITH INSULTING KING ON SOCIAL MEDIA

One video shows three young people dancing in the middle of a road while a large trailer truck coming their way lays down a beat.

For Cambodians, there will be no more dancing in the street.

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Biotech strategy launch, Newsletter

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Biotech strategy launch, Newsletter

Key diary dates

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Tuesday 19 March: European Parliament’s committee vote on the reform of EU pharmaceutical rules.

Wednesday 20 March: Presentation of the European Commission‘s first ‘EU Biotech and Biomanufacturing Initiative’.

Tuesday 19-Friday 22 March: European Commission organises Digital Markets Act workshops with gatekeepers.

In spotlight

This Wednesday (20 March) the European Commission is expected to unveil a new ‘EU Biotech and Biomanufacturing Initiative’ .

Despite half-hearted attempts at regulatory simplification in the sector in the past, life science technologies are increasingly drawing attention from policymakers.

Last month Euronews first reported on the health component of this initiative based on a leaked draft document that highlighted a focus on the vibrant biopharmaceutical sector – responsible for providing breakthrough messenger RNA (mRNA) molecules playing an essential role in COVID-19 vaccines.

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But biotech applications are not limited to the health sector, ranging from sustainable sourcing of advanced materials to climate-smart production and other components essential to a fossil-free and circular economy.

A ‘blue’ biotech is also emerging, with new research on aquatic organisms and microalgae fermentation ready for commercial exploitation – not to mention the potential of new genomic techniques (NGTs) for food production, already under discussion by EU lawmakers.

The main goals of this initiative will be to survey the status quo and track future challenges facing the biotech sector to orientate policy efforts in readiness for the next legislative mandate.

Some policy ideas are likely to be proffered, such as a one-stop shop to permit and authorise biotech manufacturing – while a controversial proposal for an R&I tax credit for biotech companies is rumoured to have been shelved for the moment.

This first dedicated attempt to address the sector won’t be the last, with economic security and strategic autonomy likely to be key buzzwords for the next commission.

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Biotech is expected to be a new beat to keep a close eye on and it has already been listed as a critical technology for the continent, together with semiconductors and artificial intelligence.

The defence imperative dominating current commission thinking involves European independence from military aircraft to sourcing these critical new technologies.

Policy newsmakers

@Hahn                                                                                                                   @Wiewiórowski

Commission under data notice

The European Commission was ordered last week to bring its use of Microsoft 365 office programs in line with its own rulebook, after European Data Protection Supervisor (EDPS) Wojciech Wiewiórowski found following an investigation that the commission breached EU rules on transfers of personal data outside the EU. The commission now needs to suspend all data flows resulting from its use of Microsoft 365 to Microsoft and to its affiliates and sub-processors located in countries outside the EU/EEA that are not covered by a data transfer agreement. The commissioner responsible for admin, Johannes Hahn, will have to demonstrate compliance with the orders by 9 December 2024.

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Subscribe here to see the results of last week’s poll and stay informed on the latest EU policy developments with our weekly newsletter, “The Policy Briefing”. Your weekly insight on European rulemaking, policy issues, key events, and data trends.

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Reuters Institute: Research shows women only make 24% of news top editors / FIP

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Reuters Institute: Research shows women only make 24% of news top editors / FIP

New research by the Reuters Institute analyses the gender representation of senior editors in major news outlets across five continents, recording that women fill only 24% of senior editorial roles in the markets surveyed. The findings highlight how gender inequalities can reinforce misperceptions, imbalances, and perceived differences both within journalism and as covered by journalists.

The research “Women and leadership in the news media 2024: Evidence from 12 markets” took examples from five continents, and analysed the gender breakdown of editorial leaders.  Two hundred and forty major online and offline news outlets provided data. 

According to the factsheet, among the 33 news top editors appointed across brands covered this year and last, 24% are women. In some of these countries, however, women outnumber men among working journalists.

Reuters contrasts its new findings with data from the past five years. The proportion of women among the top editors has increased by only 2% since 2020, going from 23% to 25% in 2024. The Institute’s analysis anticipates that, at this pace, gender parity will be reached in such positions only by the year 2074.

Change is not consistent throughout countries, however. If the percentage has increased relative to 2020 in six countries (name them all), it has decreased in Germany by 2% and it has highly decreased in South Africa, from 47% to 29%. 

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Reuters Institute makes clear that “top editorial leadership matters both in terms of how journalism is practised and how it appears in society,” insisting on  how top editors represent the wider public “in all its difference and diversity.”

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