From Gold Outperforming the S&P to PDD Holdings to ESR Group here's what you need to know this week.

The Smartkarma Weekly Starter is a newsletter published every Sunday and pulls together the top research notes published over the last 7-days from across our platform.

In this week's edition of the Smartkarma Weekly Starter, we get a quick rundown on the top engaged insights for the week.

Start your week off on the right foot with:

GOLD: Rocks Or Stocks! Why Gold Continues to Outperform the S&P?

Gold continues to rise in the face of traditionally negative influences on its price.? Gold price reflects lower real rates than market estimates.? Gold to move higher as FED rate cuts begin.

• Gold's price advance is idiosyncratic moving against historical norms of estimated inflation and real rates.
• Demand from large central banks is not currently a factor in price discovery as the PBOC has stopped buying.? Gold's safe-haven status has also declined since GFC in 2008/09.
• Easier monetary policy from the Fed and higher actual inflation continue to fuel lower real rates and provide substantial support for Gold's price.?

By David Mudd in Thematic (Sector/Industry)

Shift (3697): Profitability Rebound Underway

Japan's massive shortage of IT professionals and Shift's dominance of the IT labor market should sustain 20% annual sales growth. Profit could grow more than 50% next year, but the stock is down 70%.

• A massive shortage of IT professionals combined with Shift's overwhelming dominance of the labor market should drive 20% annual revenue growth through 2030.?
• But Shift missed consensus profitability estimates 3 consecutive quarters, and the share price is down 67% in 12 months, compared to an 18% rise in the median peer.?
• In our view, a recovery in profitability is already underway, and shares are at least 45% undervalued

By Michael Allen in Equity Bottom-Up

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 26)

ETF flows were again led by China. Stella International reported a surge in earnings and AIA announced new policy growth exceeded expectations. Lufax reported declining loans and Yancoal disappointed.

• ETF flows in the Asian region continued their positive momentum during August with Southbound Connect positive again for the week.
• Stella International (1836 HK) will increase its dividends and buybacks after positive earnings surprise. AIA Group Ltd (1299 HK) saw a surge in new policies from mainlanders in HK.
• Lufax Holding (6623 HK) reported an earnings miss with declining loan volume. Yancoal Australia (3668 HK) reported a decline of 57% in earnings which was below analysts' estimates.

By David Mudd in Equity Bottom-Up

Silverlake Axis (SILV SP): Voluntary Unconditional Offer

While not declared final, the offer is reasonable but not a knockout bid. The offeror is likely to use the voluntary delisting method to privatise Silverlake.

• Silverlake Axis (SILV SP) has disclosed a voluntary unconditional offer from the Goh family and Ikhlas Capital. The default cash consideration is S$0.36, a 20.0% premium to the undisturbed price.
• The combi consideration is S$0.30 in cash and one new redeemable preference share (RPS) in the offeror, which will be mandatorily redeemed after five calendar years at S$0.18 per RPS.
• While not declared final, the offer is reasonable but not a knockout bid. The offeror is likely to use the voluntary delisting method to privatise Silverlake.

By Arun George in Event-Driven

ESR Group (1821 HK): A Rumoured Offer Price Surfaces

The rumoured price is not a knockout bid. However, the price and structure would be sufficient to get the support of the major shareholders. The odds of a near-term binding proposal remain high.

• A media outlet that Reports on Deals reported that the consortium will offer HK$14.50 per share, a 22.1% and 61.8% premium to the last close (HK$11.88) and undisturbed price (HK$8.96).
• While not a knockout offer, the consortium’s impending binding proposal suggests confidence that the offer price and structure would gain the support of the substantial shareholders.?
• The downside to a deal break is low as ESR’s valuation is undemanding. Its forward EV/EBITDA multiple is at a 30% discount to the median peers’ multiple.

By Arun George in Event-Driven

India to Become Next China?

India's strong economic performance sparks debate on whether it can replace China as the next global economic powerhouse.

• India's rapid economic growth, coupled with China's recent economic challenges, has fueled discussions about whether India can become the next global economic power, as China has done for decades.
• China and India, Asia's two largest economies, have taken different economic paths in recent years.
• Analysts at UBS Global Research pointed out: "China's post-epidemic economic recovery is weak, while India's performance is strong."

By Alex Ng in Macroeconomics

Gold: Fakeout or Generational Buying Opportunity?

Gold has reached another all-time high at 2500, will history repeat itself? Is this another generational buying opportunity or a bull trap fakeout?

• Gold has reached another all-time high at 2500, will history repeat itself? Is this another generational buying opportunity or a bull trap fakeout?
• We conclude that the upside breakout in gold prices has more room to run, though the market is extended and could pull back at any time.
• A long-term point and figure analysis of monthly prices using a 5% box and 3-box reversal shows a measured objective of 4406.

By Cam Hui in Cross Asset Strategy

PDD Holdings (PDD US): Earnings Call Spooks Investors. Is There More than Meets the Eye?

Key excerpts of Investor call. Comments on greater uncertainty,? non business factors, need to give back to better adapt to a changing time etc puzzled investors more than weak profit guidance.

• PDD Holdings (PDD US) stock price nosedived 28.5% yesterday wiping away more than USD55 billion in market cap following Management's call with investors.
• During the call, the management guided towards weakening profits in the next quarters and stated that high revenue growth was unsustainable in the long term.
• Investors however seemed to be spooked not by negative guidance on profitability/growth but by comments on impact of non-business factors and need to adapt to changing times etc.

By Devi Subhakesan in Equity Bottom-Up

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