CGS International, April 16, 2026
Excerpt from CGS International report.
Report Summary
- Key Idea: The report recommends investors remain defensive in asset allocation and asset selection due to ongoing risks, especially from the Middle East conflict, inflation, and leverage unwinding.
- Action: No specific actionable BUY or SELL calls or target prices for individual stocks are provided in this report.
- Sector Highlights:
- Energy sector: Structural bullish case due to long-term undersupply, trades at 7x cash flow (vs. 17x for MSCI AC World).
- Financials & Technology: MSCI US and Asia Financials trade at a large discount, pricing in downside risk.
- Gold: Highlighted as the most effective hedge against inflation; bonds are not seen as a hedge.
- Country Highlights:
- Underweight India due to expensive stock valuations and vulnerability to AI disruption.
- EM/Asia: Challenging outlook amid Middle East conflict; AI supply chain (Korea & Taiwan) remains resilient.
- China: Relatively strong energy security, modest EPS impact, positive surprises from share buybacks/dividends.
- Risks: Inflation is the most pernicious risk, and fiscal sustainability is a concern for developed sovereigns.
- Investment Theme: Opportunity may emerge in cyclical sectors; maintain defensive positioning.
- Report Ratings Framework:
- Add: Expected total return >10% in next 12 months.
- Hold: Expected total return between 0% and 10%.
- Reduce: Expected total return <0%.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgs-cimb.com
