BCA Indicators/Model

Weekly Performance Update For the week ending Thu Aug 05, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 0.16% 0.24% Top Contributors   IT:US ANAT:US IPG:US TX:US DELL:US Weekly Return 37 bps 17 bps 13 bps 7 bps 5 bps Top Detractors   EOG:US SCCO:US EPD:US COKE:US GPC:US Weekly Return -12 bps -12 bps -11 bps -10 bps -9 bps Top Prospects   TX:US SC:US ESGR:US SIM:US MPLX:US BCA Score 98.74% 97.90% 97.72% 95.28% 95.08% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.66% 0.34% Top Contributors   DCBO:CA CSU:CA LNF:CA RUS:CA L:CA Weekly Return 23 bps 13 bps 12 bps 10 bps 6 bps Top Detractors   POU:CA CS:CA PXT:CA QBR.A:CA TOU:CA Weekly Return -30 bps -27 bps -18 bps -17 bps -15 bps Top Prospects   CS:CA ELF:CA CFP:CA TOU:CA PXT:CA BCA Score 99.08% 97.59% 97.07% 95.45% 94.41% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 1.51% 0.71% Top Contributors   MXCT:GB EMG:GB SXS:GB GROW:GB DOTD:GB Weekly Return 27 bps 24 bps 21 bps 20 bps 19 bps Top Detractors   BAKK:GB DRX:GB RIO:GB DEC:GB RMG:GB Weekly Return -23 bps -14 bps -12 bps -7 bps -5 bps Top Prospects   SVST:GB VVO:GB NLMK:GB POLR:GB CTH:GB BCA Score 99.35% 98.65% 96.88% 96.06% 95.95% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI 1.14% 1.26% Top Contributors   HLAG:DE ERF:FR ARTO:FR ALESK:FR VGP:BE Weekly Return 48 bps 40 bps 28 bps 19 bps 14 bps Top Detractors   FDJ:FR FLUX:BE TFI:FR ROTH:FR STR:AT Weekly Return -16 bps -13 bps -10 bps -8 bps -7 bps Top Prospects   STR:AT FDJ:FR IPS:FR EDNR:IT TFI:FR BCA Score 98.58% 98.38% 98.08% 97.05% 96.87% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI -1.12% 0.08% Top Contributors   4694:JP 5021:JP 8595:JP 7716:JP 8630:JP Weekly Return 20 bps 15 bps 8 bps 8 bps 7 bps Top Detractors   1419:JP 3459:JP 2208:JP 9945:JP 2124:JP Weekly Return -40 bps -25 bps -24 bps -15 bps -11 bps Top Prospects   9436:JP 6960:JP 2208:JP 5930:JP 4966:JP BCA Score 99.88% 99.75% 99.73% 99.55% 99.02% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI 1.06% -0.42% Top Contributors   316:HK 6118:HK 691:HK 973:HK 98:HK Weekly Return 48 bps 33 bps 20 bps 15 bps 12 bps Top Detractors   1083:HK 3799:HK 990:HK 148:HK 590:HK Weekly Return -16 bps -14 bps -12 bps -10 bps -5 bps Top Prospects   1277:HK 98:HK 215:HK 691:HK 2877:HK BCA Score 99.96% 98.79% 98.24% 97.99% 97.44% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 0.19% 1.10% Top Contributors   MAQ:AU OCL:AU JLG:AU BLX:AU EZL:AU Weekly Return 36 bps 26 bps 20 bps 19 bps 16 bps Top Detractors   GRR:AU MGX:AU MHJ:AU MAU:AU IDX:AU Weekly Return -61 bps -34 bps -26 bps -22 bps -14 bps Top Prospects   MGX:AU GRR:AU MHJ:AU BFG:AU EZL:AU BCA Score 99.48% 99.45% 99.25% 97.33% 96.44%

Highlights The rapid spread of the COVID-19 delta variant in Asia will re-focus precious metals markets anew on the possibility of another round of lockdowns and the implications for demand, particularly in Greater China and India, which account for 33% and 12% of global physical demand for gold (Chart of the Week).1 Regulatory crackdowns across various sectors in China will continue to roil markets over coming months.  Policy uncertainty around these crackdowns is elevated in local financial markets, and could spill into global markets.  This will support the USD at the margin, which creates a headwind for gold and silver prices. Ambiguous and contradictory signaling from Fed officials following the July FOMC meeting re its $120-billion-per-month bond-buying program also adds uncertainty to precious-metals and general commodity forecasts. Despite this uncertainty, we remain bullish gold and silver.  More efficacious jabs will become available, which will support the global economic re-opening, particularly in EM economies.  In DM economies, vaccination uptake likely increases as risks become more apparent.  We continue to expect gold to trade to $2,000/oz and silver to trade to $30/oz this year. Feature Markets once again are focused on the possibility lockdowns will follow rising COVID-19 infections and deaths, as the delta variant – the most contagious variant to date – spreads through Asia and elsewhere. Chart of the WeekCOVID-19 Delta Variant Rampages Chart 2COVID-19 Infections, Deaths Rising Infection and death rates are moving higher globally (Chart 2). COVID-19 infections are still rising in 78 countries. Based on the latest 7-day-average data, the countries reporting the most new infections daily are the US, India, Indonesia, Brazil, and Iran. The countries reporting the most deaths each day are Indonesia, Brazil, Russia, India, and Mexico. Globally, more than 42% of infections were in Asia and the Middle East, where ~ 1mm new infections are reported every 4 days. We expect more efficacious jabs will become available, which will support the global economic re-opening, particularly in EM economies. In DM economies, vaccination uptake likely increases as risks become more apparent. China's Regulatory Crackdown Markets also are contending with a regulatory crackdowns across multiple sectors in China, which is part of a years-long reform process initiated by the Politburo.2 Industries ranging from internet, property, education, healthcare to capital markets will have new rules imposed on them under China's 14th Five-Year Plan as part of this process. Our colleagues in BCA's China Investment Service note the pace of regulatory tightening will not moderate in the near term, as policymakers transition from an annual planning cycle focused on setting economic growth targets to a multi-year planning horizon. "This allows policymakers to have a higher tolerance for near-term distress in exchange for long-term benefits," according to our colleagues. The overarching goal of this reform process is to introduce more social equality in the society. Of immediate import for precious metals markets is the potential for spillover effects outside China arising from the policy uncertainty that already is emanating from that market. Uncertainty boosts the USD and gold. This makes its effect uncertain. In our most recent modeling of gold prices, we have found strong two-way feedback between US and Chinese policy uncertainty.3 We also find that broad real foreign exchange rates for the USD and RMB exert a negative influence on gold prices, while higher economic uncertainty pushes gold prices higher (Chart 3). In addition, across markets – Chinese and US economic policy uncertainty – have similar effects, suggesting economic uncertainty across these markets has a similar effect as domestic uncertainty at home (Chart 4).4 Chart 3Domestic Uncertainty, Real FX Rates Strongly Affect Gold Prices... Chart 4...As Do Cross-Border Uncertainty, Real FX Rates This is yet another reason to pay close attention to PBOC and Fed policy innovations and surprises: they affect each other in similar ways within and across borders. Fed Officials Add Uncertainty Following the FOMC meeting at that end of last month, various Fed officials expressed their views of Chair Jerome Powell's post-meeting remarks, or again resumed their campaigns to begin tapering the US central bank's bond-buying program. Chair Powell's remarks reinforced the data-dependency of the Fed in directing its bond buying and monetary accommodation. He emphasized the need to see solid improvement in the jobs picture in the US before considering any lift-off of rates. As to the Fed's bond-buying program, this, too, will depend on progress on reducing unemployment in the US. Powell also reiterated the Fed views the current inflation in the US as transitory, a point that was emphasised by Fed Governor Lael Brainard two days after Powell's presser. Some very important Fed officials, most notably Fed Vice Chair Richard Clarida, are staking out an early position on what will get them to consider reducing the Fed's current accommodative policies, chiefly an "overshoot" of PCE inflation, the Fed's favored gauge, above 3%. Other Fed officials are urging strong action now: St. Louis Fed President James Bullard is adamant that tapering of the Fed's bond-buying program needed to begin in the Autumn and should be done early next year. Bullard is supported by Governor Christopher Waller. The Fed's bond-buying program is more than a year old. Beginning in July 2020, the Fed started buying $80 billion of Treasurys and $40 billion of mortgage-backed securities every month, or ~ $1.6 trillion so far. This lifted the Fed's balance sheet to ~ $8.3 trillion. Thinking about this as a commodity, that's a lot of asset supply removed from the Treasury and MBS market, which likely explains the high cost of the underlying debt instruments (i.e., their low interest rates). It is understandable why the gold market would get twitchy whenever Fed officials insist the winddown of this program must begin forthwith and be done in relatively short order. The loss of that steady stream of buying could send interest rates higher quickly, possibly raising nominal and real interest rates in the process, which, given the sensitivity of gold prices to US real rates would be bearish (Chart 5). While it is impossible to know when the tapering of the Fed's asset-purchase program will end, these occasional choruses of its imminent inauguration add to uncertainty in the US, which also depresses precious metals prices, as Chart 5 indicates. A larger issue attends this topic: economic policy uncertainty is not contained within national borders. Above, we noted there is a two-way feedback between US and China economic policy uncertainty. There also is a long-term relationship in levels of economic policy uncertainty re China and Europe, which makes sense given the trading relationship between these states. Changes in the two measures of economic policy uncertainty exhibit strong co-movement (Chart 6). Chart 5Taper Talk Makes Precious Metals Markets Twitchy Chart 6Economic Policy Uncertainty Goes Across National Borders Investment Implications The increase in COVID-19 infection and re-infection rates, and death rates, is forcing commodity markets to reevaluate demand projections and the likelihood of continued monetary accommodation globally. This ultimately affects the prospects for commodity prices. Conflicting interpretations of the state of local and the global economies increases uncertainty across markets, especially precious metals, which are exquisitely sensitive to even a hint of a change in policy. This uncertainty is compounded when top officials at systematically important central banks provide sometimes-contradictory interpretations of the state of their economies. Despite this uncertainty we remain bullish gold and silver, expecting efficacious vaccines to become more widely available, which will allow the global recovery to regain its footing. We are less sanguine about the prospects for the winding down of the massive monetary accommodation globally, particularly that of the US, where data-dependent policymakers still feel compelled to provide almost-certain policy prescriptions in an increasingly uncertain world.This is a fundamental factor driving global uncertainty. We remain long gold expecting it to trade to $2,000/oz this year, and long silver, expecting it to hit $30/oz.   Robert P. Ryan Chief Commodity & Energy Strategist rryan@bcaresearch.com Ashwin Shyam Research Associate Commodity & Energy Strategy ashwin.shyam@bcaresearch.com   Commodities Round-Up Energy: Bullish While US crude oil inventories rose 3.6mm barrels in the week ended 30 July 2021 gasoline stocks fell 5.3mm barrels, contributing to an overall decline in crude and product inventories in the US of 1.2mm barrels, according to the US EIA's latest tally (Chart 7). US crude and product stocks have been falling throughout the COVID-19 pandemic, and now stand ~ 13% below year earlier levels at 1.7 billion barrels. Crude oil stocks, at 439mm barrels, are just over 15% below year-ago levels. This reflects the decline in US domestic production, which is down 7.1% y/y and now stands at 11.2mm b/d. US refined-product demand, however, is up close to 9% over the January-July period y/y, and stands at 21.2mm b/d. Base Metals: Bullish Workers at the world's largest copper mine, Escondida in Chile, are in government-mediated talks with management that end on Saturday to see if they can avert a strike. There is a chance talks could be extended five days beyond that date, under Chilean law. The mine is majority owned by BHP. Workers at a Codelco-owned mine also voted to strike and will enter government-mediated talks as well. These potential strikes most likely explain why copper prices have been holding relatively steady as other commodities have come under pressure, as markets reassess the odds of a demand slowdown brought about by surging COVID-19 infections, which are hitting Asian markets particularly hard (Chart 8). Chart 7 Chart 8   Footnotes 1     We flagged this risk in our July 8, 2021 report entitled Assessing Risks To Our Commodity Views, which is available at ces.bcaresearch.com. 2     Please see Pricing A Tighter Regulatory Grip published on August 4, 2021 by our China Investment Strategy.  It is available at cis.bcaresearch.com. 3    We measure this using Granger-Causality tests. 4    These broad real FX rates are handy explanatory variables, in that they combine two very important factors affecting gold prices – inflation and broad FX trade-weighted indexes.  Additional modelling also suggests these broad real FX rates for the USD and RMB coupled with US real 2- and 5-year rates also provide good explanatory models for gold prices. Investment Views and Themes Strategic Recommendations Tactical Trades Commodity Prices and Plays Reference Table Trades Closed in 2021 Summary of Closed Trades

Weekly Performance Update For the week ending Thu Jul 29, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 3.04% 1.20% Top Contributors   TX:US JLL:US NUE:US KOF:US GOOG.L:US Weekly Return 39 bps 30 bps 30 bps 22 bps 18 bps Top Detractors   SIG:US VZ:US FLO:US ENBL:US ET:US Weekly Return -5 bps 0 bps 0 bps 0 bps 1 bps Top Prospects   TX:US ESGR:US ANAT:US BRK.A:US GOOG.L:US BCA Score 97.19% 96.51% 95.94% 95.89% 94.88% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI 1.14% 1.13% Top Contributors   CS:CA LNF:CA TCL.A:CA CRON:CA WIR.UN:CA Weekly Return 37 bps 13 bps 12 bps 9 bps 9 bps Top Detractors   MG:CA WEED:CA GIB.A:CA BB:CA QBR.A:CA Weekly Return -7 bps -6 bps -5 bps -4 bps -3 bps Top Prospects   CS:CA CFP:CA LNF:CA ELF:CA TOU:CA BCA Score 98.26% 97.64% 96.54% 93.43% 92.34% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 2.15% 1.62% Top Contributors   FDEV:GB GLTR:GB NVTK:GB EMIS:GB DEC:GB Weekly Return 25 bps 21 bps 21 bps 21 bps 19 bps Top Detractors   HFD:GB BAKK:GB PZC:GB RMG:GB NFC:GB Weekly Return -14 bps -10 bps -7 bps -7 bps -6 bps Top Prospects   SVST:GB VVO:GB TUNE:GB ROSN:GB NLMK:GB BCA Score 99.04% 97.11% 96.41% 94.58% 94.15% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI 1.49% 1.58% Top Contributors   APAM:NL MELE:BE ATS:AT STR:AT SON:PT Weekly Return 36 bps 27 bps 25 bps 17 bps 17 bps Top Detractors   094124453:BE CNV:FR FDJ:FR TL5:ES POST:AT Weekly Return -25 bps -14 bps -12 bps -10 bps -8 bps Top Prospects   STR:AT POST:AT FDJ:FR SOLV:BE GIMB:BE BCA Score 98.84% 97.16% 95.14% 95.08% 94.70% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI 0.51% 1.22% Top Contributors   3132:JP 9543:JP 5021:JP 7994:JP 3459:JP Weekly Return 23 bps 15 bps 13 bps 13 bps 9 bps Top Detractors   6345:JP 8060:JP 8979:JP 3539:JP 6960:JP Weekly Return -15 bps -12 bps -10 bps -10 bps -6 bps Top Prospects   6960:JP 9436:JP 4966:JP 3468:JP 3291:JP BCA Score 99.66% 99.47% 99.40% 97.68% 97.42% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI -3.79% -5.08% Top Contributors   323:HK 329:HK 468:HK 28:HK 3308:HK Weekly Return 15 bps 12 bps 6 bps 2 bps 0 bps Top Detractors   215:HK 2877:HK 1919:HK 1898:HK 506:HK Weekly Return -57 bps -43 bps -32 bps -24 bps -22 bps Top Prospects   1277:HK 98:HK 990:HK 857:HK 1606:HK BCA Score 99.92% 98.95% 98.61% 98.01% 98.01% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 1.29% 0.47% Top Contributors   GRR:AU SDG:AU ZIM:AU RUL:AU DDR:AU Weekly Return 41 bps 28 bps 27 bps 21 bps 17 bps Top Detractors   FLN:AU CVW:AU CAJ:AU SGLLV:AU AST:AU Weekly Return -17 bps -16 bps -9 bps -8 bps -5 bps Top Prospects   GRR:AU BFG:AU BLX:AU BSE:AU SOL:AU BCA Score 99.02% 98.62% 97.96% 97.14% 96.64%

Weekly Performance Update For the week ending Thu Jul 22, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 0.37% 0.18% Top Contributors   AN:US IPG:US JLL:US DELL:US ESGR:US Weekly Return 42 bps 19 bps 12 bps 7 bps 6 bps Top Detractors   SIG:US LPX:US FLO:US MTZ:US PEG:US Weekly Return -13 bps -9 bps -8 bps -6 bps -5 bps Top Prospects   TX:US MPLX:US BRK.A:US ESGR:US ANAT:US BCA Score 97.25% 95.16% 95.13% 93.88% 91.26% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.95% -0.42% Top Contributors   ONEX:CA RCH:CA QBR.A:CA SMU.UN:CA TCL.A:CA Weekly Return 13 bps 12 bps 6 bps 6 bps 3 bps Top Detractors   IFP:CA CS:CA CFP:CA CRON:CA CNQ:CA Weekly Return -25 bps -21 bps -15 bps -13 bps -10 bps Top Prospects   LNF:CA CS:CA IFP:CA CFP:CA ELF:CA BCA Score 98.98% 98.62% 98.50% 96.76% 93.76% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 0.73% -0.61% Top Contributors   FDEV:GB FDM:GB HFD:GB SVST:GB GLTR:GB Weekly Return 42 bps 26 bps 12 bps 12 bps 10 bps Top Detractors   SPI:GB RMG:GB TUNE:GB CMCX:GB MNOD:GB Weekly Return -18 bps -11 bps -10 bps -9 bps -8 bps Top Prospects   SVST:GB ROSN:GB GROW:GB NLMK:GB RMG:GB BCA Score 99.11% 96.58% 95.14% 93.80% 93.56% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI 0.22% 0.25% Top Contributors   CNV:FR MONT:BE REY:IT PHA:FR ROVI:ES Weekly Return 20 bps 16 bps 10 bps 9 bps 8 bps Top Detractors   ATS:AT RWAY:IT LOUP:FR PMAG:AT SON:PT Weekly Return -12 bps -11 bps -9 bps -7 bps -7 bps Top Prospects   STR:AT TESB:BE SOLV:BE BB:FR FDJ:FR BCA Score 99.74% 97.33% 96.76% 96.66% 96.57% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI -0.77% -1.81% Top Contributors   7593:JP 8117:JP 6960:JP 6413:JP 3459:JP Weekly Return 8 bps 7 bps 6 bps 4 bps 4 bps Top Detractors   5021:JP 5020:JP 3291:JP 7994:JP 6641:JP Weekly Return -19 bps -14 bps -13 bps -12 bps -12 bps Top Prospects   4966:JP 6960:JP 9436:JP 6641:JP 8117:JP BCA Score 99.72% 99.39% 99.01% 98.49% 98.41% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI -0.77% -0.97% Top Contributors   215:HK 2380:HK 316:HK 990:HK 323:HK Weekly Return 30 bps 26 bps 14 bps 12 bps 11 bps Top Detractors   220:HK 3600:HK 468:HK 856:HK 2232:HK Weekly Return -29 bps -25 bps -24 bps -22 bps -19 bps Top Prospects   1277:HK 2232:HK 857:HK 1606:HK 990:HK BCA Score 99.81% 99.47% 99.25% 98.76% 98.51% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 0.10% 0.56% Top Contributors   NEC:AU RUL:AU JLG:AU SGF:AU GRR:AU Weekly Return 22 bps 17 bps 16 bps 15 bps 12 bps Top Detractors   AGI:AU FLN:AU BLX:AU DDR:AU PSQ:AU Weekly Return -47 bps -12 bps -8 bps -8 bps -8 bps Top Prospects   GRR:AU BFG:AU PIC:AU BLX:AU SOL:AU BCA Score 99.09% 98.31% 97.86% 97.46% 97.33%

Dear Client, We will be presenting our quarterly webcast next week, and, as a result, will not be publishing on 29 July 2021.  We will cover our major calls for the quarter and provide a look-ahead.  I look forward to the Q+A, and am hopeful you will tune in. Bob Ryan Chief Commodity & Energy Strategist   Highlights Chart Of The WeekOPEC 2.0's Hand Strengthened By Production Agreement The deal crafted by OPEC 2.0 over the weekend to add 400k b/d of oil every month from August preserves the coalition, and sends a credible signal of its ability to raise output after its 5.8mm b/d of spare capacity is returned to market next year.1 KSA and Russia will remain primi inter pares, but the position of OPEC 2.0's core producers – not just the UAE, which negotiated an immediate baseline increase – was enhanced for future negotiations. This deal explicitly recognizes they are the only ones capable of increasing output over an extended period. We assume the revised production baselines for core OPEC 2.0 effective May 2022 reflect the coalition's demand expectations from 2H22 onward. Our modeling indicates core OPEC 2.0's output will almost converge on the revised baseline production of 34.3mm b/d by 2H23, when we expect these producers to be at ~ 33.4mm b/d. Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast. We expect Brent to average $70/bbl in 2H21, with 2022 and 2023 averaging $74 and $80/bbl (Chart of the Week). Feature The deal concluded by OPEC 2.0 over the weekend will do more than add 400k b/d of spare capacity to the market every month beginning next month. It also does more than preserve the producer coalition's successful production-management strategy.  The big take-away from the deal is the clear message being sent by the coalition's core members – KSA, Russia, Iraq, UAE and Kuwait – that they are able to significantly increase output after their 5.8mm b/d of spare capacity has been returned to the market over the next year or so. It does so by raising the baselines of the core producers starting in May 2022, clearly indicating the capacity and willingness to raise output and keep it there (Table 1). Table 1Baseline Increases For Core OPEC 2.0 What OPEC 2.0's Deal Signals Internally, the deal is meant to recognize the investment made by the UAE in particular, which was not being accounted for in its current baseline. Externally – i.e., to competitors outside the coalition – the deal signals OPEC 2.0's successful production management strategy will continue, by raising the likelihood the coalition will remain intact. This has kept the level of supply below demand over the course of the COVID-19 pandemic (Chart 2), and is responsible for the global decline in inventories (Chart 3). Chart 2OPEC 2.0 Durability Increases Chart 3Inventories Will Remain Under Control Specifically, the massive spare capacity still to be returned to the market between now and 2H22 can be accomplished with minimal risk of a market-share war breaking out among the core OPEC 2.0 members seeking to monetize their off-the-market production before the other members of the coalition. Most importantly, the revised benchmark production levels that becomes effective May 2022 signal the coalition members with the capacity to increase production can do so. Longer-Term Forward Guidance We assume the revised production baselines for core OPEC 2.0 effective May 2022 reflect the coalition's demand expectations from 2H22 onward. Our modeling indicates core OPEC 2.0's output will approach the revised baseline reference levels of 34.3mm b/d, hitting 33.4mm b/d for crude and liquids output by 2H23 (Table 2).  Table 2BCA Global Oil Supply - Demand Balances (MMb/d, Base Case Balances) To Dec23 This implies the core group expects to be able to cover production declines within the coalition and to meet demand increases going forward. The estimates are far enough into the future to prepare ahead of time to increase production. Our estimates for core OPEC 2.0 production reflects our assumption the revised baseline levels do reflect demand expectations of the coalition. In estimating the coalition's production, we rely on historical data from the US EIA, which allows us to estimate future production using regressors we consider reliable (e.g., GDP estimates from the IMF and World Bank).  Non-OPEC 2.0 Production We use EIA historical data for non-OPEC 2.0 production as well. In last week’s balances, we substituted the EIA's estimates for non-OPEC 2.0 producers ex-US for our estimates, which resulted in lower supply numbers throughout our forecast sample.  This threw off our balances estimates in particular, as we did not balance the decrease in supply from this group using the new data set with an increase from another group. We corrected this oversight this week: We will continue to use EIA estimates for non-OPEC 2.0 ex-US countries, but will balance the decrease in oil production from this cohort with increased supply from other countries. Chart 4US Shales Are The Marginal Barrel For US oil production, we will continue to estimate it as a function of WTI price levels, the forward curve and financial variables – chiefly high-yield rates, which serve as a good proxy for borrowing costs for the marginal US shale producer, which we view as the quintessential marginal producer in the global price-taking cohort (Chart 4). Our research indicates US shale producers – like all producers, for that matter – are prioritizing shareholder interests first and foremost. This means they will focus on profitability and margins. While we have observed this tendency for some time, it appears it is gaining speed, as oil and gas producers are now considering whether they want to retain their existing exposure to their hydrocarbon assets.2   There appears to be a reluctance among resource producers generally – this is true in copper, as we have noted – to substantially increase capex. This could be the result of covid uncertainty, demand uncertainty, monetary-policy uncertainty or a real attempt to provide competitive returns. We think it is a combination of all of these, but the picture is clouded by the difficulty in separating all of these uncertainties. Income Drives Oil Demand Chart 5Income Drives Oil Demand Our demand estimates will continue to be driven by estimates of GDP from the IMF and the World Bank. We have found the level of oil consumption is highly correlated with GDP, particularly for EM states (Chart 5). Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast.  This week, we also will adjust our inventory calculations, which will rely less on EIA estimates of OECD stocks. In the recent past, these estimates played a sizeable role in our forecasts. From this month on, they will play a smaller part. This is why, even though our supply estimates have risen from last week, there is not a significant change to our inventory levels. Investment Implications Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast. We expect Brent to average $70/bbl in 2H21, with 2022 and 2023 averaging $74 and $80/bbl. We remain bullish commodities in general, given the continued tightness in these markets. We expect this to persist, as capex remains elusive in oil, gas and metals markets. This underpins our long S&P GSCI and COMT ETF commodity recommendations, and our long MSCI Global Metals & Mining Producers ETF (PICK) recommendation.   Robert P. Ryan  Chief Commodity & Energy Strategist rryan@bcaresearch.com Ashwin Shyam Research Associate Commodity & Energy Strategy ashwin.shyam@bcaresearch.com   Commodities Round-Up Energy: Bullish US natural gas exports via pipeline to Mexico averaged just under 7 bcf/d in June, according to the EIA. Exports hit a record high of 7.4 bcf/d on 24 June 2021. The record high for the month was 7.4 Bcf/d on June 24. The EIA attributes the higher exports to increases in industrial and power demand, and high temperatures, which are driving air-conditioning demand south of the US border. Close to 5 bcf/d of the imported gas is used to generate power, according to the EIA. This was up close to 20% y/y. Increases in gas-pipeline infrastructure are allowing more gas to flow to Mexico from the US. Base Metals: Bullish China reportedly will be selling additional copper from its strategic stockpiles later this month, in an effort to cool the market. According to reuters.com, market participants expect China to auction 20k MT of Copper on 29 July 2021. This will bring total sales via auction to 50k MT, as the government earlier this month sold 30k MT at $10,500/MT (~ $4.76/lb). Prior to and since that first auction, copper has been trading on either side of $4.30/lb (Chart 6). Market participants expected a higher volume than the numbers being discussed as we went to press. In addition to auctioning copper, the government reportedly will auction other base metals. Precious Metals: Bullish Interest rates on 10-year inflation-linked bonds remain below -1%, as U.S. CPI inflation rises. US 10-year treasury yields have rebounded since sinking to a five-month low at the beginning of this week. The positive effect of negative real interest rates on gold is being balanced by a rising USD (Chart 7). Safe-haven demand for the greenback is being supported by uncertainty caused by COVID-19’s Delta variant. Gold prices are still volatile after the Fed’s ‘dot shock’ in mid-June.3 This volatility is reducing safe-haven demand for the yellow metal despite rising economic and policy uncertainty. Ags/Softs: Neutral Hot, dry weather is expected over most of the grain-growing regions of the US for the balance of July, which will continue to support prices, according to Farm Futures. Chart 6Copper Prices Going Down Chart 7Weaker USD Supports Gold   Footnotes 1Please see 19th "OPEC and non-OPEC Ministerial Meeting concludes" published by OPEC 18 July 2021. 2Please see "BHP said to seek an exit from its petroleum business" published by worldoil.com July 20, 2021.  3Please refer to ‘“Dot Shock” Continues To Roil Gold; Oil…Not So Much’, which we published on  July 1, 2021 for additional discussion. It is available at ces.bcaresearch.com. Investment Views and Themes Strategic Recommendations Tactical Trades Commodity Prices and Plays Reference Table Trades Closed In 2021 Summary of Trades Closed

Weekly Performance Update For the week ending Thu Jul 15, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 0.73% 0.92% Top Contributors   TX:US ESGR:US AN:US ANAT:US PSB:US Weekly Return 31 bps 27 bps 17 bps 13 bps 7 bps Top Detractors   DELL:US ET:US SIG:US LPX:US ENBL:US Weekly Return -16 bps -16 bps -14 bps -14 bps -13 bps Top Prospects   ESGR:US MPLX:US ANAT:US BRK.A:US TX:US BCA Score 98.82% 95.52% 95.26% 94.88% 94.47% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.92% 0.61% Top Contributors   CS:CA RUS:CA GIB.A:CA NWH.UN:CA CSU:CA Weekly Return 18 bps 10 bps 7 bps 5 bps 5 bps Top Detractors   CFP:CA IFP:CA BB:CA WEED:CA CRON:CA Weekly Return -34 bps -30 bps -23 bps -17 bps -14 bps Top Prospects   LNF:CA IFP:CA CFP:CA CS:CA LNR:CA BCA Score 99.21% 99.11% 97.65% 96.46% 95.82% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 0.42% -0.27% Top Contributors   TUNE:GB SVST:GB NLMK:GB AGRO:GB MNOD:GB Weekly Return 34 bps 26 bps 22 bps 20 bps 18 bps Top Detractors   HFD:GB FDEV:GB DEC:GB PZC:GB NVTK:GB Weekly Return -25 bps -18 bps -16 bps -14 bps -12 bps Top Prospects   SVST:GB NLMK:GB GLTR:GB ROSN:GB GROW:GB BCA Score 98.36% 97.66% 95.92% 95.79% 93.68% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI -0.27% 1.28% Top Contributors   APAM:NL POST:AT ATS:AT SOLV:BE US:IT Weekly Return 18 bps 11 bps 7 bps 6 bps 6 bps Top Detractors   CNV:FR ROTH:FR PHA:FR GTT:FR REY:IT Weekly Return -33 bps -11 bps -9 bps -8 bps -8 bps Top Prospects   STR:AT FDJ:FR ROTH:FR SOLV:BE TESB:BE BCA Score 99.81% 98.29% 97.59% 97.45% 97.16% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI 1.70% 1.00% Top Contributors   7994:JP 9543:JP 6960:JP 8133:JP 8630:JP Weekly Return 20 bps 19 bps 17 bps 13 bps 12 bps Top Detractors   8117:JP 8979:JP 3468:JP 3539:JP 4326:JP Weekly Return -17 bps -4 bps -3 bps -2 bps -0 bps Top Prospects   4966:JP 8117:JP 6960:JP 9436:JP 8133:JP BCA Score 99.95% 98.90% 98.70% 98.13% 97.70% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI 1.03% 3.11% Top Contributors   2877:HK 3600:HK 1898:HK 323:HK 148:HK Weekly Return 64 bps 54 bps 31 bps 25 bps 24 bps Top Detractors   1919:HK 316:HK 329:HK 43:HK 990:HK Weekly Return -56 bps -51 bps -40 bps -29 bps -25 bps Top Prospects   1277:HK 98:HK 857:HK 1606:HK 990:HK BCA Score 99.86% 99.31% 99.04% 98.80% 98.67% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 0.42% 0.02% Top Contributors   GRR:AU RUL:AU JLG:AU AST:AU SDG:AU Weekly Return 50 bps 22 bps 18 bps 10 bps 8 bps Top Detractors   TLX:AU NEW:AU PSQ:AU CVW:AU SGF:AU Weekly Return -22 bps -18 bps -17 bps -16 bps -13 bps Top Prospects   BSE:AU BFG:AU GRR:AU AGI:AU SGF:AU BCA Score 98.77% 98.47% 98.41% 98.34% 97.32%

Highlights Global oil demand will remain betwixt and between recovery and relapse through 3Q21, as stronger DM consumer spending and increasing mobility wrestles with persistent concerns over COVID-19-induced lockdowns in Latin America and Asia. These concerns will be allayed as vaccines become more widely distributed, and fears of renewed lockdowns – and their associated demand destruction – recede.  Going by US experience – which can be tracked on a weekly basis – as consumer spending rises in the wake of relaxed restrictions on once-routine social interactions, fuel demand will follow suit (Chart of the Week). OPEC 2.0 likely will agree to return ~ 400k b/d monthly to the market over the course of the next year and a hal. For 2021, we raised our average forecast to $70/bbl, and our 2H21 expectation to $74/bbl. For 2022 and 2023, we expect Brent to average $75 and $78/bbl. These estimates are highly sensitive to demand expectations, particularly re containment of COVID-19. Feature For every bit of good news related to the economic recovery from the COVID-19 pandemic, there is a cautionary note. Most prominently, reports of increasing demand for refined oil products like diesel fuel and gasoline in re-opening DM economies are almost immediately offset by fresh news of renewed lockdowns, re-infections in highly vaccinated populations, and fears a new mutant strain of the coronavirus will emerge (Chart 2).1 In this latter grouping, EM economies feature prominently, although Australia this week extended its lockdown following a flare-up in COVID-19 cases. Chart of the WeekUS Product Demand Revives As Economy Reopens Chart 2COVID-19 Infection And Death Rates Keep Markets On EdgeOur expectation on the demand side is unchanged from last month – 2021 oil demand will grow ~ 5.4mm b/d vs. 2020 levels, while 2022 and 2023 consumption will grow 4.1 and 1.6mm b/d, respectively (Chart 3). These estimates reflect the slowing of global GDP growth over the 2021-23 interval, which can be seen in the IMF's and World Bank's GDP estimates, which we use to drive our demand forecasts.2 Weekly data from the US seen in the Chart of the Week provide a hint of what can be expected as DM and EM economies re-open in the wake of relaxed restrictions on once-routine social interactions. Demand for refined products – e.g., gasoline, diesel fuel and jet fuel – will recover, but at uneven rates over the next 2-3 years. The US EIA notes the recovery in diesel demand, which is included in "Distillates" in the chart above, has been faster and stronger than that of gasoline and jet fuel. This is largely because it reflects the lesser damage done to freight movement and activities like mining and manufacturing. The EIA expects 4Q21 US distillate demand to come in 100k b/d above 4Q19 levels at 4.2mm b/d, and to hit an all-time record of 4.3mm b/d next year. US gasoline demand is not expected to surpass 2019 levels this year or next, in the EIA's forecast. This is partly due to improved fuel efficiencies in automobiles – vehicle-miles travelled are expected to rise to ~ 9mm miles/day in the US, which will be slightly higher than 2019's level. Jet fuel demand in the US is expected to return to 2019 levels next year, coming in at 1.7mm b/d. Chart 3Global Oil Demand Forecast Remains Steady Quantifying Demand Risks We use the recent uptick in COVID-19 cases as the backdrop for modelling demand-destruction scenarios in this month’s oil balances (Chart 2). We consider different scenarios of potential demand destruction caused by the resurgence in the pandemic (Table 1). Last year, demand fell by 9% on average, which we take to be the extreme down move over an entire year. In our simulations, we do not expect demand to fall as drastically this time. Table 1Demand-Destruction Scenario Outcomes We modelled two scenarios – a 5% drop in demand (our low-demand-destruction scenario) and an 8% drop in demand (our high-demand-destruction scenario). A demand drop of a maximum of 2% made nearly no difference to prices, and so, we did not include it in our analysis. In both cases, demand starts to fall by September and reaches its lowest point in October 2021. We adjusted changes to demand in the same proportion as changes in demand in 2020, before making estimates converge to our base-case by end-2022. The estimates of price series are noticeably distinct during the period of the simulation (Chart 4). Starting in 2023, the low-demand-destruction prices and base-case prices nearly converge, as do their inventory levels. Prices and inventory levels in the high-demand-destruction case remain lower than the base-case during the rest of the forecast sample. OPEC 2.0 and world oil supply were kept constant in these scenarios. World oil supply is calculated as the sum of OPEC 2.0 and Non-OPEC 2.0 supply. Non-OPEC 2.0 can be broken down into the US, and Non-OPEC 2.0, Ex-US countries. Examples of these suppliers are the UK, Canada, China, and Brazil. OPEC 2.0 can be broken down into Core-OPEC 2.0 and the cohort we call "The Other Guys," which cannot increase production. Core-OPEC 2.0 includes suppliers we believe have excess spare capacity and can inexpensively increase supply quickly. Chart 4Brent Forecasts Rise As Global Economy Recovers COVID-19 Demand Destruction Scenarios OPEC 2.0 Remains In Control We continue to expect the OPEC 2.0 producer coalition led by the Kingdom of Saudi Arabia (KSA) and Russia to maintain its so-far-successful production policy, which has kept the level of supply below demand through most of the COVID-19 pandemic (Chart 5). This allowed OECD inventories to fall below their pre-COVID range, despite a 9% loss of global demand last year (Chart 6). We expect this discipline to continue and for OPEC 2.0 to continue restoring its market share (Table 2). Chart 5OPEC 2.0 Production Policy Kept Supply Below Demand Chart 6...And Drove OECD Inventories Down Table 2BCA Global Oil Supply - Demand Balances (MMb/d, Base Case Balances) Our expectation last week the KSA-UAE production-baseline impasse will be short-lived remains intact. We expect supply to be increased after this month at a rate of 400k b/d a month into 2022, per the deal most members of the coalition signed on to prior to the disagreement between the longtime GCC allies. This would, as the IEA notes, largely restore OPEC 2.0's spare capacity accumulated via production cutbacks during the pandemic of ~ 6-7mm b/d by the end of 2022 (Chart 7). It should be remembered that most of OPEC 2.0's spare capacity is held by Gulf Cooperation Council (GCC) states, which includes the UAE. The UAE's official baseline production number (i.e., its October 2018 production level) likely will be increased to 3.65mm b/d from 3.2mm b/d, and its output in 2H21 and 2022 likely will be adjusted upwards. As one of the few OPEC 2.0 members that actually has invested in higher production and can increase output meaningfully, it would, like KSA, benefit from providing barrels out of this spare capacity.3 Chart 7OPEC 2.0 Spare Capacity Will Return As we noted last week, we do not think this impasse was a harbinger of a breakdown in OPEC 2.0's so-far-successful production-management strategy. In our view, this impasse was a preview of how negotiations among states with the capacity to raise production will agree to allocate supply in a market starved for capital in the future. This is particularly relevant as US shale producers continue to focus on providing competitive returns to their shareholders, which will limit supply growth to that which can be done profitably. We see the "price-taking cohort" – i.e., those producers outside OPEC 2.0 exemplified by the US shale-oil producers – remaining focused on maintaining competitive margins and shareholder priorities. This means maintaining and growing dividends, and returning capital to shareholders will have priority as the world transitions to a low-carbon business model (Chart 8).4 For 2021, we raised our average forecast to $70/bbl on the back of higher prices lifting the year-to-date average so far, and our 2H21 expectation to $74/bbl. For 2022 and 2023, we expect Brent to average $75 and $78/bbl (Chart 9). These estimates are highly sensitive to demand expectations, which, in turn, depend on the global success in containing and minimizing COVID-19 demand destruction, as we have shown above. Chart 8US Shale Producers Focus On Margins Chart 9Raising Our Forecast Slightly Investment Implications In our assessment of the risks to our views in last week's report, we noted one of the unintended consequences of the unplanned and uncoordinated rush to a so-called net-zero future will be an improvement in the competitive position of oil and gas. This is somewhat counterintuitive, but the logic goes like this: The accelerated phase-out of conventional hydrocarbon energy sources brought about policy, regulatory and legal imperatives already is reducing oil and gas capex allocations within the price-taking cohort exemplified by US shale-oil producers. This also will restrict capital flows to EM states with heavy resource endowments and little capital to develop them. Our strong-conviction call on oil, gas and base metals is premised on our view that renewables and their supporting grids cannot be developed and deployed quickly enough to make up for the energy that will be foregone as a result of these policies. Capex for the metals miners has been parsimonious, and brownfield projects continue to dominate. Greenfield projects can take more than a decade to develop, and there are few in the pipeline now as the world heads into its all-out renewables push. In a world where conventional energy production is being forced lower via legislation, regulation, shareholder and legal decisions, higher prices will ensue even if demand stays flat or falls: If supply is falling, market forces will lift oil and gas prices – and the equities of the firms producing them – higher. As for metals like copper and their producers, if supply is unable to keep up with demand, prices of the commodities and the equities of the firms producing them will be forced to go higher.5 This call underpins our long S&P GSCI and COMT ETF commodity recommendations, and our long MSCI Global Metals & Mining Producers ETF (PICK) recommendation. We will look for opportunities to get long oil and gas producer exposure via ETFs as well, given our view on oil and metals spans the next 5-10 years.   Robert P. Ryan Chief Commodity & Energy Strategist rryan@bcaresearch.com Ashwin Shyam Research Associate Commodity & Energy Strategy ashwin.shyam@bcaresearch.com   Commodities Round-Up Energy: Bullish The US EIA expects growth in large-scale solar capacity will exceed the increase in wind generation for the first time ever in 2021-22. The EIA forecasts 33 GW of solar PV capacity will be added to the US grid this year and next, with small-scale solar PV increasing ~ 5 GW/yr. The EIA expects wind generation to increase 23 GW in 2021-22. The EIA attributed the slow-down in wind development to the expiration of a $0.025/kWH production tax credit at the end of 2020. Taken together, solar and wind generation will account for 15% of total US electricity output by the end of 2022, according to the EIA. Nuclear power will account for slightly less than 20% of US generation in 2021-22, while hydro will fall to less than 7% owing to severe drought in the western US. At the other end of the generation spectrum, coal will account for ~ 24% of generation this year, as it takes back incremental market share from natural gas, and ~ 22% of generation in 2022. Base Metals: Bullish Iron ore prices continue to trade above $215/MT in China, even as demand is expected to slow in 2H21. Supply additions from Brazil, which ships higher quality 65% Fe ore, have been slower than expected, which is supporting prices (Chart 10). Separately, the Chinese government's auction of refined copper earlier this month cleared the market at $10,500/MT, or ~ $4.76/lb. Spot copper has been trading on either side of $4.30/lb this month, which indicates the Chinese market remains well bid. Precious Metals: Bullish The 13-year record jump in the US Consumer Price Index reported this week for the month of June is bullish for gold, as it produced weaker real rates and sparked demand for inflation hedges. Fed Chair Powell continued to stick to the view that the recent rise in inflation is transitory. The Fed’s dovish outlook will support gold prices and likely will lead to a weaker US dollar, as it reduces the possibility that US interest rates will rise soon. A falling USD will further bolster gold prices (Chart 11). Chart 10 Chart 11     Footnotes 1     We highlighted this risk in last week's report, Assessing Risks To Our Commodity Views, which is available at ces.bcaresearch.com. Two events – in the Seychelles and Chile, where the majority of the populations were inoculated – highlight re-infection risk. Re-infections in Indonesia along with lockdowns following the spread of the so-called COVID-19 Delta variant also are drawing attention. Please see Euro 2020 final in UK stokes fears of spread of Delta variant, published by The Straits Times on July 11, 2021. The news service notes that in addition to the threats super-spreader sporting events in Europe present, "The rapid spread of the Delta variant across Asia, Africa and Latin America is exposing crucial vaccine supply shortages for some of the world's poorest and most vulnerable populations. Those two factors are also threatening the global economic recovery from the pandemic, Group of 20 finance ministers warned on Saturday." 2     Please see the recently published IMF World Economic Outlook Reports and the World Bank Global Economic Prospects. 3    If, as we suspect, KSA and the UAE are playing a long game – i.e., a 20-30-year game – this spare capacity will become more valuable as investment capex into oil production globally slows. Please see The $200 billion annual value of OPEC’s spare capacity to the global economy published by kapsarc.org on July 17, 2018. 4    Please see Bloomberg's interview with bp's CEO Bernard Looney at Banks Need ‘Radical Transparency,’ Citi Exec Says: Summit Update, which aired on July 13, 2021. In addition to focusing on margins and returns, the company – like its peers among the majors – also is aiming to reduce oil production by 20% by 2025 and 40% by 2030. 5    This turn of events is being dramatically played out in the coal markets, where the supply of metallurgical coals is falling as demand increases. Please see Coal Prices Hit Decade High Despite Efforts to Wean the World Off Carbon published by wsj.com on June 25, 2021.   Investment Views and Themes Strategic Recommendations Tactical Trades Commodity Prices and Plays Reference Table Trades Closed in 2021 Summary of Closed Trades

Weekly Performance Update For the week ending Thu Jul 08, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI -1.33% 0.06% Top Contributors   TX:US IT:US PSA:US TGT:US GOOG.L:US Weekly Return 15 bps 7 bps 7 bps 6 bps 6 bps Top Detractors   SIG:US WES:US MTZ:US SEM:US LPX:US Weekly Return -22 bps -16 bps -15 bps -14 bps -13 bps Top Prospects   ESGR:US MPLX:US ANAT:US TX:US BRK.A:US BCA Score 98.48% 97.38% 96.24% 94.71% 94.62% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.62% -0.43% Top Contributors   WIR.UN:CA EMP.A:CA SMU.UN:CA NWC:CA H:CA Weekly Return 8 bps 8 bps 8 bps 7 bps 5 bps Top Detractors   WEED:CA CRON:CA IMO:CA LNR:CA BB:CA Weekly Return -26 bps -17 bps -17 bps -13 bps -13 bps Top Prospects   LNF:CA CS:CA IFP:CA RUS:CA NWC:CA BCA Score 99.30% 99.18% 98.93% 98.46% 96.93% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI -0.37% -1.25% Top Contributors   PZC:GB OXIG:GB SRE:GB BYG:GB FDM:GB Weekly Return 22 bps 16 bps 16 bps 14 bps 9 bps Top Detractors   SPI:GB HFD:GB DEC:GB NFC:GB NVTK:GB Weekly Return -28 bps -26 bps -11 bps -10 bps -9 bps Top Prospects   SVST:GB NLMK:GB GROW:GB GLTR:GB MNOD:GB BCA Score 99.78% 99.55% 98.11% 98.07% 95.26% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI -0.37% -1.66% Top Contributors   ALTA:FR MONT:BE ATS:AT PHA:FR LOUP:FR Weekly Return 27 bps 20 bps 12 bps 5 bps 4 bps Top Detractors   OMV:AT BB:FR US:IT TESB:BE CNV:FR Weekly Return -17 bps -16 bps -15 bps -12 bps -10 bps Top Prospects   STR:AT SOLV:BE FDJ:FR TESB:BE ROTH:FR BCA Score 99.79% 98.01% 97.87% 97.25% 96.82% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI -0.31% -0.97% Top Contributors   6960:JP 8979:JP 9543:JP 4694:JP 3468:JP Weekly Return 17 bps 10 bps 9 bps 8 bps 7 bps Top Detractors   8595:JP 3291:JP 3539:JP 7593:JP 4966:JP Weekly Return -33 bps -15 bps -9 bps -8 bps -8 bps Top Prospects   4966:JP 8133:JP 3291:JP 6960:JP 8117:JP BCA Score 99.91% 99.20% 98.35% 97.57% 97.49% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI -2.28% -5.43% Top Contributors   990:HK 856:HK 215:HK 43:HK 2380:HK Weekly Return 33 bps 26 bps 18 bps 7 bps 4 bps Top Detractors   3600:HK 6100:HK 329:HK 857:HK 468:HK Weekly Return -29 bps -27 bps -24 bps -22 bps -22 bps Top Prospects   1277:HK 1839:HK 98:HK 2232:HK 857:HK BCA Score 99.98% 99.35% 99.32% 99.19% 98.85% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 0.12% 0.98% Top Contributors   GRR:AU ZIM:AU YAL:AU NHC:AU PSQ:AU Weekly Return 72 bps 23 bps 22 bps 11 bps 10 bps Top Detractors   FLN:AU NEC:AU BLX:AU RIC:AU TLX:AU Weekly Return -38 bps -27 bps -23 bps -17 bps -15 bps Top Prospects   BFG:AU AGI:AU BSE:AU ZIM:AU JLG:AU BCA Score 99.07% 99.04% 98.90% 97.03% 97.01%

Special Report

Highlights Complementing the US Political Strategy Quantitative Presidential Election Model, we introduce our revised Quantitative Senate Election Model. Our senate election model measures the probability of the incumbent party (Democratic Party) to retain the Senate in the 2022 midterm election. The model predicts that Democrats are slightly favored to retain control of the Senate, though it is too early to call, which in combination with the high likelihood that the GOP will retake the House, points to a US political gridlock from 2023 to 2025. The “Blue Sweep” policy setting will end as early as the end of the year as Democrats pass Biden’s signature legislation. Post-midterm gridlock implies that taxes unlikely to rise further from 2023 while spending will not be subjected to cuts. While markets will not be alarmed if growth keeps up, near term surprises from potential tax hikes, rate hikes, and China’s slowdown warrants a more defensive positioning. Feature 2020 was not only the year of a highly contested US Presidential election, but also a close-knit battle for control of the US Senate, which had 351 seats up for reelection. The Republican party initially retained control of the Senate at the start of 2021 and the 117th congress, but this was short-lived. The Democrats secured victories in both run-off triggered Senate races in the state of Georgia, putting them at an even 50-50 hold with Republicans in the Senate. The inauguration of Vice President Kamala Harris who too became the Senate President, was the tie breaker the Democrats needed to take control of the Senate, and ultimately secure a “blue sweep” of holding the House of Representatives, the Senate and the White House. We recently introduced BCA US Political Strategy readers to our quantitative presidential election model. If you have not yet read it, you can access it here. In this week’s report we introduce our US Political Strategy Senate election model. We acknowledged that it was still early days in the presidential election cycle when we published our presidential election model but there were however some interesting takeaways from an early model forecast. For control of the Senate, however, the cycle is much shorter, with voting of one third of the Senate taking place every two years. The mid-term elections of 2022 are not that far-out, and with 34 seats up for reelection, we believe that introducing our readers to our Senate election model now will start to provide valuable insight going forward. Like our presidential election model, our Senate election model is a state-by-state model that uses both economic and political variables to predict the number of seats the incumbent party will win in the 2022 Senate election. Our Senate model covers a large sample size, consisting of 19 Senate elections (1984 to 2020), across 50 states, amounting to 950 observations. The Six Variables Our Senate model is based off a Probit regression that produces a probability that each state will remain under the control of the incumbent party. The dependent variable (classified as “elected”) is stated as follows: 1 = Incumbent party wins the Senate election in each state; or 0 = Incumbent party did not win the Senate election in each state. This method allows us to measure the probability that a state with certain characteristics will fall into one of two categories above. We can then predict the probability of the incumbent party winning all the Senate seat/s in each of the 50 states (although this is only relevant to one-third of the states that have a Senate seat up for election in 2022). State economic health. Specifically, we use the Federal Reserve Bank of Philadelphia State Coincident Index for each of the 50 states. The coincident index combines four of a given state’s economic indicators to summarize current economic conditions in a single statistic. The four indicators are nonfarm payroll employment; average hours worked in manufacturing by production workers; the unemployment rate; and wage and salary disbursements plus proprietors' income deflated by the consumer price index (US city average). In other words, it captures job growth, manufacturing wages, joblessness, and real household income. The incumbent party’s margin of victory in previous Senate elections in each state Senate race. This is measured as the incumbent party’s share of the popular vote minus the non-incumbent party’s share. If the incumbent party failed to secure a solid win in each state in the previous Senate election, the probability of securing a solid win in the current election becomes smaller. Moreover, the larger the margin of victory in a previous Senate election race, the more likely that incumbent party will win re-election in said state. Net average approval level of the incumbent president in a Senate election year. This is the difference between the incumbent president’s approval and disapproval level in a Senate election year, from the start of the year up until the end of October of that year – taken as an average. Generic congressional ballot (net support rate). The generic congressional ballot asks people which party they are likely to vote for in Congress. We take the average net support rate in a Senate election year (that being whichever party leads the other in congressional ballot polling). Democrats are usually favored in congressional generic ballot voting, so the net rate is more predictive than the gross rate Dummy variable for congressional ballot. A dummy variable is assigned to variable number four. For example, dummy takes the value of 1 when Democrats have a positive net support rate in generic congressional ballot voting, and 0 when Republicans have a net positive support rate. We assign only one dummy variable to avoid a dummy variable trap.2 A “time for change” variable, a categorical variable indicating whether the incumbent party has controlled the Senate for three or more terms (six or more years). If the Senate has been controlled for three or more terms, the model will “punish” the incumbent party, as we would expect to see a change in control of the Senate the longer one incumbent party controls it. Democrats Retain Control Of The Senate As it stands, our election model predicts that Democrats will retain control of the Senate in 2022 (Chart 1). The Democrats are predicted to win 49 seats, a gain of one seat over the 2020 Senate election outcome,3 and when coupled with the two seats of Independent Senators, give them a majority of 51 seats. Chart 1Quant Model Gives Democrats 54% Chance Of Retaining The Senate The additional seat for Democrats stems from our model allocating both North Carolina and Pennsylvania (which are currently occupied by Republicans) to the Democrats (+ two seats) and allocating one of Georgia’s seats occupied by Raphael Warnock4 back to Republican control. The Democrats overall probability of retaining control of the Senate is 54%, three percentage points higher than early market predictions (Chart 2). The market implied odds highlight another close battle between Democrats and Republicans to control the Senate in 2022. Chart 2Market Narrowly In Favor Of Democratic Senate Control North Carolina is the only toss-up state,5 with a 51% chance of a Democratic victory. Pennsylvania will switch to Democrats and Georgia to Republicans. Note that North Carolina and Pennsylvania are both currently under Republican control. Both incumbents have decided not to run again. While both Georgia Senate run-off races were won by Democrats earlier this year, the sum of first-round voting in November 2020 was higher for Republican candidates than for Democrats. There was also extra-ordinary voter turnout in favor of Democrats for both run-offs, which ultimately played a big role in Democrats securing victory. Voter turnout was largely spurred on by voting against Republicans, and ultimately Donald Trump. This may not be the case come 2022, if turnout for Democrats is unmatched to 2020/2021. Our model’s prediction will evolve over time as new data become available, which could produce more toss-up states, or swing the prediction in favor of the opposing party. For now, the model provides us with a preliminary prediction as we draw nearer to the 2022 midterm elections. Senate Races Of Interest Comparing our model’s prediction to online betting markets, we group nine races into a category of “interest”. All nine races have varying degrees of probability for a Democratic win, ranging from approximately 30% to 60%. Five races are overestimated, and four races are underestimated by consensus (Chart 3). The remaining 25 races are decidedly in favor of either Democrat or Republican control, according to our model, so are therefore excluded from this analysis. Betting markets are overestimating Nevada, Arizona, Pennsylvania, Georgia, and Wisconsin, while underestimating New Hampshire, North Carolina, Florida and Ohio. Chart 3Senate Odds Compared With The Bookies All nine of these races are precariously balanced, even at this stage of the mid-term election cycle. Small or local factors could ultimately decide the outcome. This is an important limitation on our macro model, highlighting our ultimate emphasis on qualitative analysis. For example, it is not at all clear that Democrats will win Georgia. Our model gives Democrats a 43% chance of victory. Betting markets are a lot more optimistic, penning a 55% chance of a Democratic win. But even by our model’s standard, Georgia remains a toss-up. Georgia may not be as close of a race as it was in 2020/2021, if voters are not as motivated as they were to vote Democrat. Will turnout be as large in 2022? That remains to be seen. One or two races with unique makeup can contribute to maintaining or shifting the balance of power in the Senate come 2022. Back Testing Our Model Our Senate model performs at an acceptable level during in-sample and out-sample back testing. For in-sample testing, we test our model over our entire sample period (1984 – 2020) and find that 74% of Senate elections (control of the Senate) are correctly predicted, with the model predicting the outcome of the last five Senate elections correctly (Chart 4). Chart 4In-Sample Back Testing Results During out-sample back testing, we look at a sample period of 2000 – 2020, comprising of 11 Senate elections, where our model correctly predicts 73% of actual outcomes. The previous five Senate elections are predicted correctly too (Chart 5). Chart 5Out-Sample Back Testing Results In comparison to our presidential election model, prediction accuracy of our Senate model is lower across its sample period. Predicting control of the Senate can sometimes be more uncertain than that of the White House. Both statistical and event based (Senate elections) reasons give way to a lower accuracy rate in this case. For example, there could be several idiosyncratic state-level variables not captured by our model, which could have played a leading role in determining any one state’s Senate election outcome over our sample period, and ultimately, control of the Senate. Where To From Here? In comparison to the presidential election cycle, we are a lot closer to election day. That means that Senate races will begin to heat up as we move closer toward November 8, 2022 – the date of the midterm elections. For now, our model ratifies the current control of the Senate, that is, Democratic. Our Model also suggests that come 2022, the Democrats will retain control of the Senate. But this is all but an early forecast. If any long-standing conclusion can be drawn right now, it is that the battle for control of the Senate in 2022 will be highly contested. From a qualitative point of view, our model may be overestimating the Democrats’ odds in 2022 as things stand today. Midterm elections have historically seen the sitting president’s party lose seats in the Senate and House of Representatives. We already expect Republicans to retake the House after a poor showing by Democrats in 2020. This narrative may play into the Republicans taking the Senate too – and is plausible given how closely the battle for the Senate is wound. But congressional approval has ticked higher lately under a Democratic run congress (Chart 6). Most likely, the American public have largely approved of COVID-19 government relief, and the Democrats will pass at least one more major piece of legislation covering infrastructure. Republicans are deeply divided, so there is some chance that they underperform in 2022. Nevertheless, the historical pattern clearly favors the opposition. The takeaway is to expect the GOP to retake the house but to monitor the Senate closely with both quantitative and qualitative tools. Chart 6US Public Approving Of Congress ?!? Lastly, and importantly, we should note that in both the case of the presidential and Senate models, a probability between 50% and 55% for the incumbent party retaining control of the White House or Senate is indicative of an outcome “too close to call.” Both models are touting Democratic wins, but high conviction views about either the 2024 presidential election or 2022 Senate election are not warranted at this time. Investment Takeaway Unless 2022 is one of the rare cases of an incumbent party legislative victory after a national shock, like 1934 and 2002, Republicans will take the House at least. This is likely notwithstanding our model’s slight tilt in favor of Democrats in the Senate. This means that the “Blue Sweep” policy setting will cease as early as 2023, but de facto it would cease as early as the end of this year when Biden’s signature legislation is passed, since Congress will get little done in 2022. Our model suggests Republicans are slightly disfavored in the Senate. The truth is that as long as they gain one chamber of the legislature then US fiscal stimulus will virtually freeze. Taxes will no longer be able to rise from 2023 but spending will not be subject to cuts. Gridlock is reinforced by our presidential quant election model’s slightly higher odds of Democrats retaining the White House, which we think is underestimated at present. Hence Biden will retain veto power even if Democrats squander the Senate and House in 2022. Gridlock is thus looming from 2023 until at least 2025. The financial markets will not be alarmed by this forecast as long as growth keeps up. In the very near term, however, the clouds on the horizon of tax hikes, Fed rate hikes, and China’s tight-fisted economic policy pose rising headwinds to US equities in 2022 — and hence markets should respond negatively sooner than later. We are tactically growing more defensive.   Guy Russell Research Analyst GuyR@bcaresearch.com   Statistical Appendix Some clients may be curious as to how our US Political Strategy Senate election model differs from our Geopolitical Strategy model used in the 2020 elections, and where it has made improvements in its predictive accuracy. We discuss these improvements herein. Changes To The Geopolitical Strategy Senate Election Model A notable property in our dependent variable data requires a brief discussion. Our dependent variable classified as “elected” takes the form of a binary outcome. This data, however, is what’s called “unbalanced,” since incumbent Senators are re-elected approximately 80% of the time. This means that most outcomes in our dependent variable are coded as “1,” with fewer “0’s” because of the strong incumbency effect in Senate races. There are many data sets that exhibit this type of property, such as events like wars, vetoes, cases of political activism, or epidemiological infections, where non-events occur rarely. To alleviate this statistical property in the data, we estimate our model using a weighted maximum likelihood estimate as opposed to the ordinary maximum likelihood estimate usually used in a Probit regression.6 This method assigns more weighting to the unbalanced data, or what is known theoretically as “rare event” data, to aid the Probit regression in assigning higher probabilities to “0” outcomes. Through this process, we effectively deal with our unbalanced dependent variable data. The last update to the BCA Geopolitical Strategy Senate election model was published on January 6, 2021. Our model suggested that Republican’s would retain control of the Senate. Our model was limited in dealing with a unique twin Georgia run-off race that ultimately swung Senate control into the hands of the Democrats. The Geopolitical Strategy, which we will refer to as the 2020 model, only missed the Republican victory in Maine, but correctly predicted losses in Arizona and Colorado. The model missed both Georgia races, signaling they would remain red states – this was proven otherwise. Also, our model has become a better predictor in terms of in and out-sample forecasting (compared to our 2020 model). The 2022 version correctly predicts 74% (vs 72%) of in-sample and 73% (vs 70%) of out-sample outcomes. Methodology And Variables Our Senate model retains the methodology and suite of economic and political variables used in the model we first introduced in 2020. For long-time clients and those who are new to the US Political Strategy and Geopolitical Strategy service, the first version of our model can be found here. The one and only economic variable is now transformed by a six-month change to each state’s coincident index, capturing the improvement or deterioration of the state’s economy. The six-month change results in the best statistical fit for the overall model this time round. In the 2020 model, we transformed the variable by a three-month change. A fast-changing economic environment coupled with a then-higher statistical impact in our model led us to this decision. We still weight the transformation of our economic variable in the same manner as we did in last year’s updated model. We take a weighted average of the six-month change of all the monthly state coincident indices in the term preceding a Senate election. Later months are weighted heavier than earlier months as the most recent context will have a greater impact on voter opinion in the election. In terms of our political variables, they all remain the same as the 2020 model. Model Performance Classification The 2022 model correctly classifies predicted outcomes at a rate of exactly 81%. That is, when the model makes a prediction of a certain state’s Senate election outcome from 1984-2020, it is correct 81% of the time. This level of classification is higher than our 2020 model, which classified outcomes at a rate of 79% (Table 1). Table 1New Model Classifies Outcomes At A Higher Rate … Sensitivity And Specificity – Receiver Operating Characteristic Curve A Receiver Operating Characteristic (ROC) curve is a performance measurement for classification problems of binary modelled outcomes, among others. An ROC curve tells us how much the model is capable of distinguishing between classes. In our case, we have two classes: the dependent variable (classified as “elected”) is stated as 1 = Incumbent party wins the Senate election in each state; or 0 = Incumbent party did not win the Senate election in each state. The higher the area under the curve (AUC), the better our model is at predicting 0 classes as 0 and 1 classes as 1. A robust model has an AUC near to one. A poor model has an AUC near to zero, which means it has the worst measure of classifying classes correctly, labelling zeros as ones and vice versa. In fact, at a level of zero AUC, the model is reciprocating incorrect classes by predicting zeros as ones and ones as zeros. Statistically, more AUC means that the model is identifying more true positives while minimizing the number/percent of false positives. Chart 7Receiver Operating Characteristic Curve Of 2022 Model Table 2… Is A Better Fit … The ROC curve for our 2022 model has an AUC of 0.9609 (Chart 7), a higher AUC than our 2020 model (Table 2). This means that the true positive rate for classifying outcomes is high and the false positive rate is low, improving on our model’s robustness. F1 Scores A final grading of the 2022 model is by means of the F1 score. The F1 score is a measurement that considers both precision (specificity in the above ROC curve) and recall (sensitivity in the above ROC curve) to compute the score. The F1 score can be interpreted as a weighted average of the precision and recall values, where an F1 score reaches its best value at 1 and worst value at 0. The 2022 model produces a higher F1 score compared to our 2020 model (Table 3). Table 3… And Is More Accurate Than The 2020 Model Considering the improvement in forecast accuracy and overall better model specification over our 2020 model, we accept our 2022 model as our new base case Senate election model, premised on its improvement in accuracy at predicting election outcomes in the past, as well as its ability to correctly classify outcomes as they were realized. Appendix Tables Table A1USPS Trade Table Table A2Political Risk Matrix Chart A1Presidential Election Model Table A3APolitical Capital: White House And Congress Table A3BPolitical Capital: Household And Business Sentiment Table A3CPolitical Capital: The Economy And MarketsTable A4Political Capital Index Footnotes 1     Two of which were open Senate seats for the state of Georgia. 2     A dummy variable trap is a scenario in which the independent variables are multicollinear — a scenario in which two or more variables are highly correlated; or, in simple terms, in which one variable can be predicted from the others. To avoid such a trap, we must exclude one of the categorical variables. Since there are two categorical variables that can be represented here (Republican or Democrat), we use k-1 (where k = the number of categorical variables). 3    In reference to the Senate election outcome after the Georgia run-off races which concluded in early January 2021. 4    This seat formed part of the 2020 special Senate election race which was decided by a run-off election between Raphael Warnock and Kelly Loeffler. The seat was always up for reelection in 2022 no matter which party won it in the 2020 special election. 5    Toss-ups are defined as having a probability between 45% and 55% according to our model. 6    Weighted maximum likelihood estimation is a reasonable approach in dealing with dependent variables that show significant imbalance in their data set. See: King, G. and Zeng, L., 2001. Logistic regression in rare events data. Political analysis, 9(2), pp.137-163.  

Weekly Performance Update For the week ending Thu Jul 01, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 1.13% 1.27% Top Contributors   TX:US AN:US UHAL:US LH:US IT:US Weekly Return 24 bps 18 bps 16 bps 15 bps 13 bps Top Detractors   ENBL:US JLL:US PSB:US ET:US ESGR:US Weekly Return -7 bps -7 bps -6 bps -6 bps -5 bps Top Prospects   ESGR:US ANAT:US MPLX:US BRK.A:US TX:US BCA Score 97.67% 97.62% 97.18% 96.50% 95.46% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.24% -0.13% Top Contributors   TOU:CA CCA:CA CS:CA CFP:CA QBR.A:CA Weekly Return 21 bps 19 bps 12 bps 8 bps 6 bps Top Detractors   IMO:CA CRON:CA LNR:CA BB:CA LNF:CA Weekly Return -17 bps -12 bps -10 bps -10 bps -7 bps Top Prospects   LNF:CA CS:CA RUS:CA IFP:CA NWC:CA BCA Score 99.30% 99.16% 98.35% 98.15% 97.74% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 0.87% 0.23% Top Contributors   NVTK:GB DEC:GB NFC:GB CMCX:GB TUNE:GB Weekly Return 28 bps 21 bps 17 bps 17 bps 16 bps Top Detractors   NLMK:GB FDEV:GB SVST:GB RMG:GB GROW:GB Weekly Return -14 bps -11 bps -7 bps -6 bps -5 bps Top Prospects   SVST:GB NLMK:GB GLTR:GB GROW:GB N91:GB BCA Score 99.74% 99.62% 98.33% 97.69% 95.88% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI 0.52% -0.67% Top Contributors   TL5:ES STR:AT ROVI:ES TESB:BE CNV:FR Weekly Return 17 bps 13 bps 12 bps 10 bps 9 bps Top Detractors   FDJ:FR FLUX:BE IPN:FR MONT:BE LOUP:FR Weekly Return -14 bps -9 bps -6 bps -6 bps -6 bps Top Prospects   STR:AT CNV:FR FDJ:FR POST:AT LOUP:FR BCA Score 99.56% 98.38% 97.45% 97.13% 96.28% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI 0.80% -0.29% Top Contributors   3468:JP 9543:JP 8595:JP 8979:JP 4326:JP Weekly Return 16 bps 16 bps 12 bps 11 bps 10 bps Top Detractors   3291:JP 9532:JP 5122:JP 4966:JP 6345:JP Weekly Return -11 bps -6 bps -5 bps -5 bps -3 bps Top Prospects   4966:JP 8133:JP 3291:JP 8117:JP 6960:JP BCA Score 99.28% 99.12% 98.82% 98.25% 97.84% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI 0.08% 0.01% Top Contributors   316:HK 2380:HK 28:HK 1606:HK 2877:HK Weekly Return 41 bps 13 bps 11 bps 10 bps 10 bps Top Detractors   468:HK 1898:HK 3600:HK 1277:HK 98:HK Weekly Return -25 bps -22 bps -11 bps -10 bps -10 bps Top Prospects   1277:HK 98:HK 1839:HK 2232:HK 857:HK BCA Score 99.98% 99.06% 98.97% 98.49% 98.28% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 1.10% 0.17% Top Contributors   GRR:AU JLG:AU FLN:AU HVN:AU CAJ:AU Weekly Return 28 bps 27 bps 20 bps 18 bps 17 bps Top Detractors   NEW:AU PSQ:AU ORG:AU NEC:AU NHC:AU Weekly Return -17 bps -12 bps -12 bps -10 bps -9 bps Top Prospects   ZIM:AU BSE:AU AGI:AU BFG:AU PIC:AU BCA Score 98.58% 97.70% 97.27% 96.91% 96.82%