GLOBAL EQUITY RESEARCH: INTERNATIONAL FIRST TO MARKET

Research evidence excerpt

GLOBAL EQUITY RESEARCH: INTERNATIONAL FIRST TO MARKET

Global Equity Research

International First to Market 20 July 2026

Top Stories

Equity Strategy (Mislav Matejka, CFA)

The maturing stage of AI/momentum unwind; Inflation rates rolling; Earnings to offer a support

In the past few weeks various AI groups had a challenging spell of performance. From last month’s high, Korea is down 25%,

SOX 20%, stocks such as Samsung, Micron and others anywhere between 20 and 50%. Mag-7 price relative is stabilizing of

late, but it is still lagging the market on the year. AI at risk baskets continue underperforming by 20%+ ytd. We are proponents

of rotation, and of broadening in 2H - see our market update report from mid June, we maintain medium term concerns over

the monetization of extreme hyperscalers’ capex surge, and stay fundamentally bearish on Software, Business services and

Media - AI cannibalization groups - see our Year Ahead. Rotations and momentum factor unwinds have in their initial stages

tended to lead to increased overall market volatility.

European Cement (Elodie Rall/Jean-Xavier Hecker)

EU announces ETS review; CBAM allocations phase-out extended until 2038

The European Union has today announced its ETS Review and stated that it would update its Linear Reduction Factor (LRF) of

3.7% for 2031-2035 and 1.7% for 2036-2040, making the trajectory more gradual. The 1.7% LRF post 2036 represents a

significant reduction vs. what was originally envisaged. As a reminder, in a note earlier this week published alongside our

Sustainable Investing Research team – we had flagged that a reduction of the LRF to between 3-4% per year was being

discussed). Importantly for the European Cement sector, the EU has stated that for sectors covered by the CBAM, the