We moved to a new baseline oil scenario: $105 avg March, $115 April, tapering to $80 year-end. This results in lower GDP, higher inflation, currency weakness.

Passed through earnings models, taking down numbers more in South Asia (India, Philippines) than North Asia.

Uncertainty means lower risk appetite, higher risk premium, lower valuations and target prices. We remain constructive on North Asia, especially Korea (130% earnings growth forecast, <8x P/E).

Our base case is priced in, but there's more downside risk. Duration of the shock matters for second-order effects like fertilizer prices and demand destruction.

For investors with a longer view, focus on themes bolstered or not impeded by the war: energy security, defense spending, US reindustrialization (Asia supply chain), and the semiconductor memory cycle.

We downgraded India because we cut 2026 earnings growth from 16% to 8%. Consensus is still mid-teens, so more downside. The rupee is under pressure, RBI may hike 50bps.

Higher oil intensifies pressure on GDP, inflation, fiscal deficit, and current account. In a bad scenario, India is hit more; in a good scenario, others like Korea rally more.

We are overweight China. It offers diversification (8% correlation to S&P), policy support for domestic equities, and PPI turning positive could help animal spirits.

Foreigners own only 4% of A-shares. The 15th five-year plan focuses on advanced manufacturing.