Research notes from Sunrise Global Investments, Muscat. 2026-10-04T00:00:00Z https://sunriseglobalinvestments.com/ Sunrise Global Investments 2026-10-04T00:00:00Z https://sunriseglobalinvestments.com/research/china-infrastructure/

Overall infrastructure investment in China fell 4.0% in the first eight months of 2026, while grids, energy storage, information networks and civil aviation grew. We regard the theme as a set of regulated, plan-backed segments.

<p>China's infrastructure investment profile is evolving, with aggregate volumes moderating and capital increasingly directed towards specific regulated segments. Recent data highlight a sharper focus on power networks, digital infrastructure and advanced transport, even as overall outlays decline.</p> <h2>Aggregate infrastructure investment is contracting</h2> <p>China's overall infrastructure investment fell 4.0% in the first eight months of 2026, according to the National Bureau of Statistics (16 September 2026). This contraction in total spending is occurring as state-led plans target particular sectors. State Grid, for example, has announced intentions to invest up to RMB 4 trillion in the national power network between 2026 and 2030, equating to about RMB 800 billion annually (SASAC, 22 January 2026). While headline investment is lower, the allocation of capital is becoming more concentrated.</p> <h2>Growth is concentrated in power, digital and transport</h2> <p>Despite the aggregate decline, investment in information networks, electricity supply and civil aviation expanded at double-digit rates in the same period, with civil aviation up 16.7% (NBS). New-type energy storage capacity reached 153 GW at the end of June 2026, a 61% increase year on year and up from 3 GW in 2020 (SCIO). The public infrastructure REIT market continues to broaden, with 79 listed vehicles and a combined market value of RMB 221.3 billion at 31 March 2026 (Cushman &amp; Wakefield, 21 September 2026). These trends reflect a move towards regulated, plan-backed segments such as grids, storage, computing and transport.</p> <p>We believe the mix of infrastructure investment in China is changing more rapidly than the aggregate total. Exposure to these segments is available through listed utilities, Hong Kong listings and the expanding public infrastructure REIT market. We remain selective in mainland China.</p> 2026-10-02T00:00:00Z https://sunriseglobalinvestments.com/research/india-data-centre-build-out/

India's data-centre capacity is forecast to rise from 1.6 GW to 6 GW by 2029. In our view, the clearest exposure lies with the suppliers of power, cooling, electrical equipment and precision components.

<p>India's data-centre sector is entering a new phase of growth, underpinned by a forecast increase in capacity from 1.6 GW in mid-2026 to 6 GW by 2029. This expansion is supported by more than US$50bn in commitments from hyperscale cloud providers, according to JLL India (July 2026). Government initiatives such as the IndiaAI Mission, with a budget of ₹10,372 crore, and the India Semiconductor Mission, which has approved 12 projects worth about ₹1.64 lakh crore, are also directing capital towards digital infrastructure (Digital India, 29 September 2026, and PIB, 27 June 2026).</p> <h2>Measurable exposure through suppliers</h2> <p>We find that the most direct participation in India's data-centre build-out lies with suppliers of power, cooling, electrical equipment and precision components. These segments already show visible demand, and company-level EBITDA margins range from about 4% to almost 16% among India's contract electronics manufacturers (Zerodha, The Daily Brief, 20 May 2026). This dispersion highlights the importance of focusing on companies at the upper end of the margin range, where audited cash flow provides a clearer basis for valuation. The sector average does not capture the variability in performance among individual suppliers.</p> <h2>The application layer remains at an early stage</h2> <p>In contrast, the application layer of AI in India remains at an early stage. Although government funding is increasing affordable computing capacity, we consider it too early to identify the AI application providers that will establish durable positions.</p> <p>In our view, company selection within the supply chain is more significant than exposure to the theme itself. We continue to favour suppliers with strong margins and transparent cash flow, as these offer the most measurable exposure to India's data-centre expansion.</p> 2026-10-02T00:00:00Z https://sunriseglobalinvestments.com/research/india-and-china-different-rhythms/

Over five years, Indian and Chinese equities moved almost independently, with a correlation of 0.07 in US-dollar terms. Holding both broadens the sources of growth in a portfolio.

<p>India and China, Asia's two largest equity markets, have shown low correlation over the past decade. Our analysis of monthly US-dollar returns from October 2016 to September 2026, based on index-fund prices, highlights the divergence in their patterns and the implications for global portfolios.</p> <h2>Correlations between Indian and Chinese equities have remained low</h2> <p>Over the ten-year period, the correlation between Indian and Chinese equities stood at 0.22, falling to 0.07 in the most recent five years. This contrasts with the correlation between Indian and European equities, which was 0.60 over the same period. These figures indicate that Indian and Chinese markets have not moved closely together, reflecting their distinct economic drivers and market structures.</p> <h2>Diversification benefit of a combined allocation</h2> <p>An equal-weighted allocation to Indian, Chinese and European equities exhibited annualised volatility of 15.2%, about a fifth less than the average single market's volatility of 19.5%. This reduction in volatility demonstrates the diversification benefit of combining markets that are influenced by different factors.</p> <p>We observe that Indian equities have been shaped by domestic consumption, the growth of services and the expansion of capital markets, while Chinese equities have been more sensitive to the country's industrial upgrade and policy cycle. In our view, the low correlation between the two markets indicates that exposure to both broadens the sources of growth in a portfolio and reduces its overall volatility. We note that correlations can shift over time, and this remains a risk to the diversification thesis.</p>