INTERNATIONAL FIRST TO MARKET

Research evidence excerpt

INTERNATIONAL FIRST TO MARKET

simply too conservative. Capital expenditure plans, supported by the promotion of growth investment

under the revised Corporate Governance Code, were significantly higher for domestic investment, especially among large

enterprises (large manufacturers: from 2.7% to 10.1% YoY in FY2026). Software investment forecasts were also revised up

and will likely support earnings in machinery and software-related sectors. Companies raised their outlook for inflation from the

previous survey, moving even further away from the BoJ’s 2% target. Looking at the long-term trend, the insufficiency of

production capacity has worsened, so we expect the capital expenditure cycle to continue expanding for several more years.

Examining the employment conditions DI, labor shortages remain at levels second only to the bubble era, but the recurring

margin has continued to reach new record highs since 2022, confirming growth in corporate earnings amid a major

normalization of the economy.

MENA Consumer & Retail (Elena Jouronova, CFA)

Feedback from investor meetings in Saudi: cautious optimism on Rasan, constructive stance on

food, little appetite for pharma

Following our investor meetings in Saudi earlier this week, we summarize the key debate points across our MENA Consumer

and Retail coverage. Rasan, recently initiated with OW (full note here) dominated discussions, and our conversations also

spanned food inflation and pass-through dynamics, consumer sentiment, competitive dynamics and M&A in food delivery,

Wasfaty dispensing guidelines, and the optionality of a fuel margin increase for Aldrees (N). Overall, we found local investors

positive on Rasan but to a lesser extent vs. international investors due to lower conviction on success of the loan aggregation