Stephen Dover

Samsung Electronics and SK Hynix are still attractively valued compared to US peers. SK Hynix trades at a forward P/E of about 7 while Nvidia is around 22; even if Korean chip stocks were to double, their valuations would only reach levels that are not excessive by US standards. The two stocks' high weight in the index has been beneficial, forcing passive foreign inflows that lift the whole market.

Samsung Electronics and SK Hynix are still attractively valued compared to US peers. SK Hynix trades at a forward P/E of about 7 while Nvidia is around 22; even if Korean chip stocks were to double, their valuations would only reach levels that are not excessive by US standards. The two stocks' high weight in the index has been beneficial, forcing passive foreign inflows that lift the whole market.

Taiwan, alongside Korea, is a standout in emerging markets, benefiting from AI-driven semiconductor demand and strong corporate earnings growth. Taiwan and Korea together make up about half of the MSCI Emerging Markets index, and are still undervalued compared to developed markets. The speaker is explicitly optimistic on Taiwan as part of the EM allocation call.

The Korean stock market benefits from a narrowing Korea Discount driven by market reforms and the government's push to close the valuation gap. Foreign investors, constrained by position limits on individual stocks, are forced to use passive strategies that buy the whole index, lifting all Korean equities as money flows in. The market remains discounted relative to developed markets and has room to rerate.

Franklin Templeton is overweight Chinese technology stocks with conviction. Chinese AI models are built on open-source and lower-cost foundations, and could become a surprising winner. However, due to governance leakage and the state's ability to divert corporate profits, these stocks must be bought at sufficiently cheap valuations to compensate for the risks.

Franklin Templeton maintains a year-end S&P 500 target of 7800, implying about 5% further upside. Despite geopolitical headwinds, strong earnings growth is the main driver; valuations have not expanded meaningfully because earnings have risen sharply. As long as earnings growth continues, the market can advance without becoming more expensive.

Global energy infrastructure represents a major investment opportunity as countries permanently rewire their energy supply chains after the Strait of Hormuz crisis. Nations are investing in pipelines and alternative routes to reduce dependence on vulnerable sea lanes, creating a long-term capex cycle in energy infrastructure.

India is well known as dependent on oil. Of course, India is probably less known, but also dependent on natural gas and fertilizer as well... harder hit than other countries. Because India imports the vast majority of its energy through the Strait of Hormuz, the blockade directly cripples its economy, causing the Rupee to hit record lows, forcing commercial gas rationing, and triggering foreign capital flight. India's structural reliance on imported Middle Eastern energy makes its equity markets highly vulnerable to the ongoing geopolitical blockade. Diplomatic negotiations securing safe passage for Indian tankers could rapidly alleviate the energy shortage, sparking a massive relief rally in Indian equities.

We're in essence, short duration... we don't think any more that there are going to likely be interest rate cuts. A 30% spike in oil prices acts as a tax on growth while simultaneously pushing headline inflation up by roughly 25 to 30 basis points. This stagflationary environment forces the Fed to abandon rate cuts, which destroys the value of long-duration bonds. Short-term Treasury bills provide a safe, high yield without the duration risk associated with sticky inflation and delayed central bank easing. If the energy shock causes a severe, immediate recession that destroys demand, the Fed may be forced to cut rates anyway, causing long-duration bonds to outperform cash.