For most of 2026, the market's bearish logic on US power companies can be summarized in one sentence: no company was willing to sign long-term power purchase agreements (PPAs) for data centers in the PJM (Principal-Jackson Interconnected Region) grid area. Last week, Amazon broke this deadlock. This Tuesday, Google joined in, and its deal is more than five times the size of Amazon's. Goldman Sachs analyst Wijaya said after the Amazon agreement was announced: "We all know how quickly the market winds in the power industry can change." And now, in just one week, the market winds have changed twice. More importantly, the real key catalyst has yet to arrive. On October 12, the Federal Energy Regulatory Commission (FERC) is expected to rule on the regulatory framework for large-scale electricity loads in PJM. If the IRAS mechanism is ultimately approved and largely retains the currently proposed regulatory requirements, then starting in mid-2027, all large data centers built in the PJM grid area must secure their own additional power supply, or they will have to accept priority power curtailment in the event of a grid emergency. However, the number of existing nuclear reactors in the United States is ultimately limited, and the nuclear power resources available for long-term power purchase agreements are not inexhaustible. Therefore, we believe that Google's purchase of 3,590 megawatts is likely only the lower limit of its future procurement scale, not the upper limit. Within just seven days, two hyperscale cloud computing companies have successively signed long-term agreements with the largest nuclear power operator in the United States. Meanwhile, the valuation of independent power generator (IPG) stocks in the United States remains at only about 7 times EBITDA, and investor positions in uranium-related stocks are also low. The market is currently facing two diametrically opposed assessments. One possibility is that the market pricing is correct: political factors and regulatory agencies will continue to restrict the development of IPG, keeping this sector at a long-term valuation discount. The other, which we believe is much more likely, is that other large technology companies will soon join the competition, queuing up for the same batch of nuclear power resources. Of course, regulatory risks still exist. After all, FERC has already postponed the implementation of the RBP mechanism once, and it is entirely possible that the relevant decision will be postponed again, which requires continuous monitoring.

The Trump administration announced measures to adjust the Permanent Worker Certification Program (PERM). This program allows companies to sponsor foreign workers holding H-1B and other visas who are already working in the U.S., helping them obtain legal permanent resident status. Given the importance of H-1B visas to the U.S. IT outsourcing business, this policy change may have some impact on India and Indian IT companies; however, it should be noted that the reliance of these companies on H-1B visas has generally decreased in recent years. Furthermore, according to the Financial Times, OpenAI's current annualized revenue is about $20 billion lower than the company's previously released expectations, which may partly explain the recent weakening of investor sentiment in semiconductor stocks. Overall, the Asian macroeconomy has so far shown strong resilience. Taiwan's exports in September increased sharply by 61% year-on-year, and South Korea's current account surplus remains high, equivalent to about 20% of GDP at an annualized rate. Our baseline forecast is that export growth will slow moderately in the future, but given that current economic activity remains at a high level, we expect the trend of artificial intelligence investment to continue until 2027, or even longer.

Shell (SHEL.N): We continue to monitor Hurricane Isaias to assess its potential impact on our assets and operations in the Gulf of Mexico.

On its first day of trading, Hong Kong-listed ESW Computing (01256.HK) opened 0.65% lower. The company offered approximately 1.57 billion H shares globally at an issue price of HK$1.55, raising a total of HK$2.434 billion. The company is a Chinese provider of chip products based on the RISC-V architecture.

The Hang Seng Index (HSI) opened 155.47 points higher, or 0.65%, at 23,941.26 on Friday, October 9th; the Hang Seng Tech Index opened 11.81 points higher, or 0.29%, at 4,085.19 on Friday, October 9th; the Hang Seng China Enterprises Index opened 46.84 points higher, or 0.58%, at 8,057.42 on Friday, October 9th; and the Hang Seng Red Chip Index opened 15.29 points higher, or 0.38%, at 4,045.1 on Friday, October 9th.

The yield on Japan's two-year government bonds fell 1.5 basis points to 1.915%.