Report by AAS Economics

Frank Shostak updates China as rotating into the defensive Stage 4 of the business cycle, where early monetary headwinds emerge. With cyclical momentum turning fragile, Frank expects risk assets to face stiffer hurdles and advocates an explicit pivot towards defensive equity sectors relative to cyclicals. The monetary environment now proves far more beneficial for risk-averse debt, such as government bonds, over corporate credit and high-yield debt. In contrast, domestic liquidity measures are beginning to strengthen, suggesting that equity market momentum may be supported ahead. For August, the Chinese strategy gained 5%, outperforming the SSE Composite Index return of 4%. To manage the downturn, commodity exposures are eliminated entirely, setting allocations to basic materials alongside oil and gas to zero. Tactical portfolio parameters mandate 50% in 10-year government bonds, while remaining equity exposure is divided equally between utilities at 25% and healthcare at 25%.

Report by Grey Investment

The Shanghai Composite’s (3,534) monthly chart features two major chart patterns: a 17.5-year+ symmetrical triangle and a 9.5-year rectangle. Chris Roberts’ main focus is on the 9.5-year rectangle, the resistance zone at 3,450-3,685 is once again being tested. Other advances have failed in the zone, or after minor moves above the zone. A confirmed breakout from the 9-year rectangle would be viewed as an exciting buying opportunity, leading to a test of the area of the 6,124 peak, set in 2007. The biggest risk Chris continues to see is that the 2007 peak is akin to Japan’s 1989 major top, and that the secular bear market is not yet complete, but this is not his base case.

Technology

Report by Rosenblatt Securities

Rosenblatt’s July survey of 100+ senior IT managers reveals a surprisingly robust IT spending outlook, with two-thirds of budgets being revised higher since the start of 2025, despite macro concerns. GenAI is the top investment priority, with 60% increasing spend and nearly 70% expecting a material organisational impact. Over 75% expect developer staffing cuts of 10%+. Cybersecurity remains a defensive spending priority with investment flowing towards securing modern, distributed environments (Cloud, SASE/SSE) and data itself - benefitting CrowdStrike, CyberArk, Palo Alto, Zscaler and Fortinet. AWS fared much better, ranking first in "cloud service provider best positioned in AI", with 28% (vs. 16% in Dec 24), surpassing Google and Microsoft. Infrastructure names like Snowflake, Rubrik and MongoDB are also well-positioned amid data estate modernisation.

Industrials

Report by Smart Insider

Angela Strank (Non-Executive since 2020) buys £70,000 of stock at £2.69, increasing her stake by 60%. She has made a series of purchases into rising prices since her first buy at £1.44 in Oct 2021 and it's notable to see her now make her largest purchase post strength. It is also her largest purchase across her Director roles at Mondi, Severn Trent and SSE. Stuart Bradie (Non-Executive since May 2023) recently bought £248,000 of stock in his first purchase since joining in 2023. Smart Insider ranks the stock +1 (highest rating).