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Praetorian Capital Q2 2026 Investor Letter
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During the second quarter of 2026, the Praetorian Capital Fund LLC (the “Fund”) depreciated by 4.39% net of fees. Given the Fund’s concentrated portfolio structure and focus on asymmetric opportunities, I anticipate that the Fund will be rather volatile from quarter to quarter. During the second quarter, our core portfolio positions depreciated moderately, while the Event-Driven book also experienced declines.
*Net return varies from gross return as it accounts for management fees and incentive allocations. Please see the additional disclaimers on the final page of this document.
Markets Are Complex
Six months ago, if you had asked me what would happen during a Mid-East war, I’d have guessed that gold and US Treasuries would rally on a global flight to safety. Nope, they declined—markets are complex. I would have guessed that if we drew more than a billion barrels of global commercial inventories, oil would scream out of control. Nope, it’s effectively unchanged since the conflict began—markets are complex. If you asked me how our core book would do, I’d have told you that we’d likely outperform given our heavy weighting towards volatility and inflation beneficiaries. Nope, we’ve given up ground—markets are complex.
I’ve always been of the view that in the short run, markets can trade at literally any price level. Throughout my career, I have repeatedly been humbled by securities that have exceeded even my wildest expectations of where they could trade. While the overall decline in our portfolio was quite moderate by this Fund’s standards, I remain humbled, as I really would have expected our book to have performed better in a Mid-East war that saw increased volatility and inflation readings. Markets are complex.
It’s worth taking a step back and trying to frame what happened. As you know, I’m firmly of the view that we’re in a Feudalist economic system . Rather than rehash my view of Feudalism again, just think of it this way: the oligarchs of foreign countries underpay their workers to produce products for our citizens to consume. Their resulting dollar earnings are then recycled into US Dollar risk assets, leading our currency and assets to be overvalued, our businesses unable to compete globally outside of a handful of sectors like technology, and our economy effectively hollowed out. Our overpriced assets then allow increased consumption, and the cycle begins anew. This ecosystem benefits the top few percent of families in both nations, while impoverishing everyone else. Economic Feudalism.
When Hormuz was closed, some unique trends happened, briefly alleviating Feudalism globally. As Asian Mercantilists were unable to procure affordable energy products, they chose to ration supply to their industries. Products that had been subsidized by cheap loans and labor for decades suddenly traded up to free-market levels, and US industries suddenly became competitive again. There was then a wave of hiring across dozens of US industries, as Asia was unable to produce competing products. You could say that the Iranians undertook the anti-involution campaign that China keeps talking about, yet never seems to pursue. The global economy upticked dramatically, and the global recession took a pause, as the chains of Feudalism were briefly broken. The result was that many of our portfolio’s trends reversed—we’re long Feudalism. Many years ago, they used to talk about Risk-on or Risk-off trades. I think in terms of Feudalism and Run-It-Hot. Main Street actually had a few good months due to the war, but our book is not positioned for that. Now with the war seemingly trailing off (or maybe not??), our positions are beginning to bounce back.
For better or worse (mostly worse), Feudalism is the dominant mindset amongst elites globally—in many ways, our domestic economic policies are simply a mirror reflection of our trading partners’ imbalances. We all suffer together economically, though it is quite good for those at the top. Last April, Trump tried to put up trade barriers and reverse this situation, but to undo Feudalism, US equities would decline dramatically. As I like to remind people, during the Trade War, Main Street won for 6 days. Trump couldn’t even take that much pain. Hence my confidence in Feudalism accelerating, until both sides make a political decision to undo it. But why would they?? Everyone at the top is winning—hence it will continue, with brief pauses along the way. In our portfolio, we continue to double down on Feudalism (though we do have a large refinery position to hedge this exposure, and it hedged beautifully), while focusing on eliminating positions that are tied to real GDP growth. The most recent quarter was a short-lived speed bump in this process, but even the Iranians have a stock market—maybe they also prefer Feudalism??
Thoughts on the Event-Driven Book
Ever since Trump returned to power, our Event-Driven book (ED) has underperformed my expectations. I’m used to a world where securities trend, and I can use very tight risk profiles to manage the exposures within this book. The staccato nature of Trump tweets leads to an extreme level of disjointed market action, which doesn’t really work well with many of our strategies. During the second quarter, we gave back the majority of the gains from the first quarter, before I chose to cut off the ED book for the summer (risk discipline says that when you’re taking losses, you stop what you’re doing). We’re roughly flat for the year on the ED book, which is annoying for something that’s almost always been a profit center. While it hasn’t caused harm, the recent performance of the ED book is certainly not what I’d normally underwrite in our Fund’s return profile, especially as we’ve now had seven consecutive years where the ED book has been additive to returns.
The book did poorly during Trump’s first term, only to excel when events moved beyond his control during COVID. When I reboot the book during the fall, I plan to target more single-stock situations, where we’ve done well over the past year and change, avoiding macro-type situations, where Trump frequently creates discontinuous markets. This is quite similar to what worked during the last Trump Presidency. Unfortunately, sometimes I need to relearn the old lessons.
Let’s Talk AI
Clearly, AI has been the biggest market trend for the past few years. I’m embarrassed to say that not only did we miss participating, but we actively sought out ways to fade it. To date, I remain of the view that most of the capital invested in this sector will be impaired. I think of AI much like other massive multi-year capex programs over the past two centuries: the canals, the railroads, and the fiber buildout. Great expenditures of capital produced only bankruptcy and loss for those who spent the capital.
When looking at AI, I frequently think of the Panama Canal, which bankrupted the French, before getting completed by the US government. To date, it is unclear if the canal has even earned its construction cost in inflation-adjusted terms, much less a positive return on capital, and that is for one of the most strategic and monopolistic assets in the world. On the other hand, the railroads and the fiber buildouts suffered from endless competition, overcapacity and high fixed costs, necessitating endless discounts to gain share. They’ve been even worse investments. At the same time, they’ve been great value creators for those who were adjacent. As I look around my office, I see many items that transited the Panama Canal or rode the rails. This communication is likely reaching you through fiber that was laid down by a now-bankrupted telecom. We are all beneficiaries of this malinvestment, while the shareholders who funded it have suffered the consequences. Unfortunately, I used my history lens to contemplate AI, rather than join in the orgy of speculation.
If you think of the railroad buildout, two types of players won. On one hand, you have Carnegie, Frick and the other suppliers to the railroad buildout. On the other hand, you have Rockefeller and the agriculturalists who played the railroads off each other to procure cheap transport. We should have owned the suppliers to AI, which have been phenomenal trades. Unfortunately, I kept thinking that eventually adult supervision would step in and end this overspending. Why would asset-light tech companies pivot to become asset-heavy capital immolators?? No one wants to be a shale company . In that vein, I was wrong—or at least early in seeing AI for what it is. The buildout continues, even though there’s a dawning realization that the economics are brutally awful ( much as I intimated almost a year ago ) . It has gone on for three years longer than I ever thought possible, but I now think that we’re nearing a crossroads in terms of the ability to continue growing capex spend at the current rate—the rate of change in spend is indeed inflecting lower. As a result, those funds chasing the AI bottlenecks will be painfully surprised when new supply magically comes online, just as growth slows, in my opinion. It was an amazing run (which we missed). However, I think these cyclical industries will ultimately return to their roots and be cyclical—crushing the hopes and dreams of shareholders. I have feared this moment, and missed out on the AI capex plays—much to our detriment, as they’ve been one of the strongest macro trends in a market that has been surprisingly devoid of deep and liquid trends to play over the past few years.
Having missed out on being Carnegie, I want to focus on being Rockefeller. What industries will use AI to dramatically reduce their costs?? Who will find ways to grow revenue by utilizing AI?? We have some interesting ideas, and I’m sure we’ll think of more. Taking it a bit further along in this process, if corporates become focused on using AI to reduce headcount, who else benefits as millions of workers need to reskill?? We’ve purchased shares of the two largest technical colleges in the US (more below in the positions section), as I believe that they’ll be dramatic beneficiaries of this reskilling trend. I’m sure there are other ancillary trends for us to try and capture, and we’re actively seeking them out as AI continues to evolve.
We’re decidedly an anti-tech fund. We watch tech as it drives trends, but we rarely invest in tech itself—instead I want to seek out the second-order beneficiaries, as tech is a really tough place to make money . The corollary is that in a market that’s driven by a handful of tech names, we’re likely to lag on the performance side. In a complete AI mania, as we’ve just witnessed, I’d expect us to lag even worse, hopefully catching up through outperformance on the flip side as AI names surrender their gains. It’s too soon to tell if the bubble has reached its peak, but for the first time since it began, I am recognizing a growing realization that much of the capital invested in AI has been squandered. If that becomes the accepted wisdom, I’d expect that the spending will slow, followed by the deluge.
It’s worth remembering that the AI buildout represents between 2 and 3% of GDP before including the multiplier effects inherent in any massive capex program. The Wealth Effect is many multiples larger. I feel fully justified in saying that this bubble now supports in excess of 10% of US GDP, with many other countries also benefitting mightily. I don’t mince words when I say that if this goes in reverse, it will be a mess. The fiber buildout within the internet bubble was a little more than 1% of US GDP, with a far smaller Wealth Effect. Even then, the unwind led to a mild recession, which coincidentally caused the S&P to decline by 49% and the NASDAQ to decline by 78%. I think the AI unwind could lead to a deeper recession and a nasty decline from much higher starting valuations.
In fact, it’s so scary to contemplate that I expect the government to step in and halt the decline. This will officially kick off phase II of “Project Zimbabwe.”
Positioning
In the Q1/26 letter, I noted that many of our names were breaking out to new highs, and that experience taught me that I should expect them to continue to trend higher—especially as I expected that many of them would report strong calendar Q1 earnings. While I was correct on the second part of this view (with few exceptions, earnings were quite strong), I was wrong about new highs. You could say that a quick pause in Feudalism was responsible, as we mostly saw a bifurcation in performance, and our only “Run-It-Hot” sector, refiners, powered higher. Unfortunately, this was offset by pullbacks in our Precious Metals basket (somehow war is bad for precious metals??) and our Emerging Markets basket, as war is potentially bad for them. Fortunately, Marex (MRX – USA) powered higher on elevated volatility, though our Event-Driven book gave back prior gains. In all, it was an uneventful quarter compared to many others, though frustrating all the same, as things seemed like they were setting up to blast off.
With the war seemingly on-again/off-again, depending on what middle-of-the-night posting Trump sends out on any given day, I remain hopeful that prior trends in motion can resume their upwards motion.
My Own Exposure to This Fund
I would never ask you to invest in this Fund, if I didn’t have the vast majority of my own capital also invested in this Fund. Due to an accident of history, for the past 8 years, I have had a large personal investment in a publicly traded company, Mongolia Growth Group (MGG) that I couldn’t figure out what to do with, as I couldn’t figure out how to liquidate the assets in Mongolia.
In 2025 after much toil and heartache, we started the process of returning capital to shareholders and during May of 2026, that process was completed. I personally received a large cash distribution, and invested almost all of it into the Fund as of July 1, excluding a portion that was used to pay off a loan tied to the office building that our Fund operates out of (you could say that paying off this loan was an investment in strengthening our Fund’s management company).
Subsequent to these transactions, my only investments outside of the fund are 50 Class B shares of Berkshire Hathaway (BRK/B – USA)—the legacy of a single share I bought while in college, so that I could attend the annual meetings, and my residual shares of MGG. At this point, MGG has a small pool of capital and is seeking to merge with some other company. Should we find an attractive merger partner, I will likely step down as Chairman of the company, ending a 15-year journey in public markets—I have already stepped down as CEO. Hopefully, this will complete a process to concentrate all of my personal investments through this fund.
I want you to know that there are positives and negatives to having the fund’s CIO with such a focused personal investment. On one side, I’m rather highly incentivized to get it right. On the other side, I’m likely to be rather risk-averse. Unlike anyone else in this fund, I do not have other investments to balance out my investment in this fund, and I literally cannot afford to get it wrong. This risk discipline can cut both ways, hence why I flag it. However, I want you to know that after many years, I’ve finally concentrated all of my personal investments into this fund.
Position Review (Top core position weightings at quarter end from largest to smallest)
Emerging Markets Basket
For the past decade and change, Emerging Markets have been in a relative bear market, as investor capital has migrated to US markets. In the process, many Emerging Markets have gotten quite cheap when looking at them from a valuation perspective. This Fund has a sweet spot for cheap assets, but Emerging Markets have been cheap for quite some time now. You could have said the same thing years ago and would likely be sitting on paper losses today, while having tied up capital. What you need is a catalyst that unlocks this value. I believe that catalyst is a potential decline in the US Dollar, tied to policy changes emanating from the Trump Administration. For MAGA policies to work, the US needs to follow a weak-dollar policy. At the same time, Emerging Markets, which frequently borrow in US Dollars, are hamstrung by a strong Dollar, but a weakening Dollar is a boon to their economies. As a result, I’ve built up positions in various Emerging Markets that are highly impacted by the US Dollar, with the view that a weakening Dollar should be a catalyst for asset values.
Precious Metals Basket
In an inflationary world with loss of faith in Central Banks, precious metals tend to do well. We own two companies that should be beneficiaries of precious metals either appreciating or at least staying at elevated prices. Neither of these companies is directly in the mining business, which is risky and capital-intensive—though one is a service provider to miners.
Technical Colleges; Lincoln Educational Services (LINC – USA) and Universal Technical Institute (UTI – USA)
These two technical colleges are helping to train the next generation of skilled tradespeople and medical workers. As AI reduces the demand for office workers, many millions of existing workers must be reskilled, while high school graduates will naturally seek out better job opportunities that offer higher wages, with less career risk.
LINC and UTI are the two largest technical colleges in the US. I expect them to continue opening new campuses and growing student counts. Based on management guidance, they’re both quite cheap looking out a few years, net of startup costs for new campuses. I think they’ll dramatically overshoot guidance in terms of new student starts, utilization and recruitment costs, leading to substantial margin growth on relatively fixed-cost structures.
Refiners
Refiners have suffered for over a decade (excluding the immediate aftermath of the Ukraine war), leading many Western refiners to shut, rather than invest substantial capital in upgrades to meet spurious mandates. Meanwhile, China flooded the world with refined product, destroying economics for everyone. Over the past few years, China has chosen to shut so-called teapot refiners and pivot larger refiners to petrochemicals. At the same time, demand for refined products has continued to grow, and for the first time in very many years, the crack spread has become elevated on a forward basis, indicating a tightness in the markets.
On the supply side, we have relatively good visibility in terms of which new refineries will come online, with some uneconomic ones still slated to shut. On the demand side, most data providers assume a rather balanced market with demand growth staying anemic. I don’t think this is a bad assumption, as the world is in a recession.
However, should there be economic growth, even just some wisps of growth as the Dollar declines and Emerging Markets (which have a huge marginal propensity to consume petroleum products as they see growth) recover, energy demand could exceed estimates.
This had previously been my energy thesis, basically that 8 billion people want the same standard of living that 1 billion in the First World have today. Now, I believe I’ve found a better way to express it, as it takes many years to build a new refinery. Meanwhile, new oil supply can come online far faster, leading to a bottleneck that extracts most of the pricing economics in a demand recovery.
We own two diversified refining companies with clean balance sheets, a strong propensity for buybacks, and a valuation that is at a substantial discount to replacement cost of their refineries. I think this trade works if governments return to pro-growth policies or the US Dollar weakens enough that EM energy demand can increase.
Think of this position as a hedge should global economic growth accelerate, though it can also experience periods of excess earnings should geopolitical volatility change global trading patterns and increase domestic crack spreads.
St. Joe (JOE – USA)
JOE owns approximately 165,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be “dead money.”
Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities.
The oddity of the current disdain for so-called “value investments” is that many of them are growing quite fast. I believe that JOE may grow revenue at a rapid rate for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), while substantial asset value is tossed in for free.
Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation. More importantly, I believe we are witnessing a massive population migration as people with means choose to flee big cities for somewhere peaceful.
I suspect that every convulsion of urban chaos and/or tax-the-rich scheming will launch JOE shares higher, and it will ultimately be seen as the way to “play” the stream of very wealthy refugees fleeing for somewhere better.
In summary, our names mostly suffered a setback this quarter, despite putting up strong first quarter earnings results in the aggregate. I expect continued positive results for the second quarter, to be reported over the coming weeks.
On the flip-side, there is a growing realization that the AI buildout was a massive misallocation of capital. Should this buildout slow, I think we will get a steep decline in equity markets and finally set the stage for “Project Zimbabwe.” My plan remains to keep exposures lower than normal and await such a smash before deploying capital at bargain levels.
Sincerely,
Harris Kupperman
Appendix
*Net return varies from gross return as it accounts for management fees and incentive allocations. Please see the additional disclaimers on the final page of this document.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
Thames Water’s main lenders are offering the government a “golden share” and more control for local authorities in a bid to stop the troubled supplier from being nationalised.
The government recently rejected a previous rescue proposal, and the BBC understands the lenders are preparing a legal challenge in case the new Andy Burnham-led government takes the firm into public hands.
In his first speech as prime minister on Monday, Burnham said he wanted to see greater public control of “life’s essentials”.
The new proposal offers local authorities greater involvement in the firm, similar to the relationship between United Utilities and Greater Manchester agreed when Burnham was the city’s mayor.
The London & Valley Water (L&VW ) consortium of lenders had already proposed a £10bn deal to prevent Thames Water from entering administration. It would involve writing off nearly half of its debt and injecting new cash in return for leniency on future pollution fines.
The deal was rejected by the government in June, with then-environment secretary Emma Reynolds saying it did not do enough for consumers or the environment.
Sources close to the new deal said the creditors had sweetened it with hundreds of millions in new money on top of the existing offer. A golden share would give the government veto power over decisions.
The government has been contacted for comment.
L&VW said on Tuesday that the new offer had “material improvements” on the old one, and would benefit customers.
A spokesperson said: “We continue to believe that the L&VW plan is by far the fastest and most reliable route to solving Thames Water’s complex problems and improving outcomes for customers and the environment.”
They said the new deal “achieves this without any government funding or cost to taxpayers”.
Fears first emerged three years ago that Thames Water could collapse and it has recently warned it could run out of cash by November.
The company, which supplies water and wastewater services for 16 million people across London and parts of southern England, was handed a £122.7m fine last year, the biggest ever issued by the industry regulator Ofwat, for breaching rules on sewage spills and shareholder payouts.
Sources close to the creditors have previously told the BBC that in the event of full nationalisation, they would pursue payment in full of the outstanding debts as has happened in previous cases, which could leave the government with a multi-billion-pound bill.
If the company does go bust, households will still have drinking water and sewerage services.
Truist Financial: Deep Value Based On Fee Growth (Rating Upgrade)
“Fundamental Options” would be the title of my investing style, because I combine fundamental analysis with the power of options. I use Fundamental Analysis to quantitatively and qualitatively assess individual stocks and ETFs, and I pursue various strategies: Income oriented, especially BDCs, but also Utilities; Growth At A Reasonable Price, especially Tech, having a background in Software Development; Deep Value, based on Discounted Cash Flow and / or other industry specific valuation methods; Dividend Aristocrats.While I usually invest in stocks for long-term, I also have 20-25 strategies involving options that I use for various purposes: hedging stocks; bullish stock / ETF substitutes with improved risk / reward; neutral trades; trading volatility; earnings-related trades.Teaching is another passion of mine, I used to be a formal on non-formal teacher or coach in different areas of life, including authoring of a free local investing newsletter in the last years.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of CAI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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KOSPI Jumps 3.56%, Triggers Trading Halt as Samsung and SK Hynix Lead Sharp Chip Rebound Rally Today
SEOUL — South Korea’s benchmark KOSPI index surged 3.56%, or 231.68 points, to close at 6,747.95 on Tuesday, snapping a two-day losing streak as investors returned in force to beaten-down semiconductor stocks and the country’s bourse operator briefly halted program trading amid the sharp rebound.
The index’s rally came after the KOSPI had lost 10.5% over the two preceding trading sessions, a stretch that had left the benchmark down more than a quarter from its record closing high reached June 22. Tuesday’s session began on shakier footing, with the index initially losing ground in early trading before sharply reversing course around midday and continuing to climb into the close.
A trading halt as the rally accelerated
The strength of Tuesday’s rebound prompted the Korea Exchange to activate what is known locally as a buy-side sidecar, a trading curb triggered when the Kospi 200 Futures index rises 5% or more within a one-minute window. Program trading for Kospi-listed shares was suspended for five minutes starting at 12:41 p.m. local time as the rally accelerated, with the index briefly touching an intraday high above 6,821 before settling to its final close of 6,747.95.
Chip stocks lead the recovery
Semiconductor giants Samsung Electronics and SK Hynix led Tuesday’s gains, with Samsung climbing 5.94% and SK Hynix rising 6.4% as bargain hunters moved back into technology shares that had been battered during the preceding sessions of the broader AI-related market correction. SK Square also posted strong gains, up 6.97%, while other notable advancers included KB Financial Group, up 3.02%, Kia Corporation, up 2.64%, Shinhan Financial Group, up 3.34%, Hanwha Aerospace, up 2.17%, Doosan Enerbility, up 2.93%, and SK Inc, up 3.28%.
Trading volume for the session came in at a moderate 387.8 million shares, worth approximately 24.5 trillion won, or roughly $16.6 billion. By investor type, foreign investors and institutions were both net buyers during the session, while individual retail investors were net sellers, according to Korea Exchange data.
Strong export data fuels investor confidence
Beyond the technical rebound in chip stocks, Tuesday’s rally was further supported by unexpectedly strong export figures. South Korea’s exports during the first 20 days of July climbed more than 50% year-over-year, driven in large part by a roughly 180% surge in semiconductor shipments tied to sustained global demand for artificial intelligence infrastructure. That data reinforced investor confidence in the earnings outlook for the country’s dominant memory chip manufacturers, further bolstering the case for Tuesday’s rebound.
A pullback that analysts describe as technical
The KOSPI’s steep decline over the prior two sessions has drawn attention from major international banks assessing whether the pullback represents a lasting shift in sentiment or a more temporary correction. Citi analysts characterized the recent sell-off as largely technical in nature. “We think the recent share price pullback of KOSPI equities, led by KR memory suppliers, is more of a technical correction driven by market-wide profit-taking and therefore could represent a potential buying opportunity,” the analysts wrote in a note.
Citi’s assessment echoed a broader narrative in which South Korea’s stock market, the best-performing major global index in 2025, saw its momentum disrupted more recently by concerns over the sustainability of global AI infrastructure spending, concentration risk tied to its two largest listed companies, and speculative trading activity among the country’s large base of domestic retail investors.
Easing geopolitical tensions add to the positive tone
Beyond the chip sector-specific catalysts, easing concerns over the conflict between the United States and Iran also contributed to improved investor sentiment across South Korean markets Tuesday. While lingering worries about the Middle East conflict kept some investors cautious, reports of renewed mediation efforts between Iran and the United States helped support broader risk appetite, encouraging buying across a wide range of sectors beyond just technology and semiconductors.
The won strengthens alongside the equity rally
South Korea’s currency also firmed against the U.S. dollar as part of Tuesday’s broader market rebound, easing back from a 10-week high reached during the recent period of equity market weakness. The combination of a strengthening currency and a sharply higher stock market reflected a broader improvement in investor sentiment toward South Korean assets following the difficult stretch that preceded Tuesday’s session.
A volatile year for Korean markets overall
Despite the recent turbulence, the KOSPI remains up substantially over the past year, trading roughly 112.87% higher than the same point in 2025, according to available trading data, even after declining nearly 26% over the trailing month amid the sharp AI-related correction. The index’s dramatic rise over the past year has been driven substantially by South Korea’s dominant position in global memory chip production, particularly high-bandwidth memory chips essential to artificial intelligence data center infrastructure, a theme that has periodically fueled both sharp rallies and equally sharp pullbacks throughout 2026.
With Tuesday’s rebound helping stabilize sentiment following the recent two-day rout, investors are likely to continue closely watching both South Korea’s export data trends and developments in the broader global AI infrastructure investment cycle for further signals about the durability of the current rally. At the same time, the trajectory of the U.S.-Iran conflict remains a key variable for both energy prices and broader risk sentiment, with any further progress toward diplomatic resolution likely to provide additional support for South Korean equities in the sessions ahead.
The government says a typical home will save about £45 a year when VAT is cut from 5% to 0%.
Former Chrysler Chairman and CEO Bob Nardelli joins ‘Mornings with Maria’ to discuss why he believes President Donald Trumps agenda is boosting the economy, lowering energy costs and strengthening U.S. defense.
A group representing America’s manufacturers on Tuesday released a report marking one year since the enactment of the 2025 tax law that includes examples of the legislation’s impact on the manufacturing sector in all 50 states.
The One Big Beautiful Bill Act (OBBBA) was passed by Republicans in Congress and signed into law by President Donald Trump last July, and the legislation contained a number of provisions aimed at boosting the manufacturing industry – such as 100% expensing of newly built factories and immediate depreciation of machinery – and preventing tax hikes.
The National Association of Manufacturers (NAM) released an analysis that estimated the number of jobs protected by the provisions of the OBBBA, along with the amount of economic growth and wages it preserved. It also chronicled how a manufacturer in each state used the tax law.
“Tax policy is far more than numbers on a spreadsheet and these stories – across all 50 states – show the real-world impact of pro-growth policies that have given manufacturers the confidence to invest, hire, raise wages and expand facilities,” said National Association of Manufacturers CEO Jay Timmons.
NAM’s report highlighted the tax law’s impact on jobs, economic growth and wages in all 50 states. (Emily Elconin/Bloomberg via Getty Images)
Timmons added the tax reform law is “one of the most consequential pieces of legislation in a generation,” and said that “Congress and the administration delivered the permanent, pro-growth tax code manufacturers needed to invest in their people, purchase new equipment and plan confidently for the future.”
NAM’s analysis found that in California, the law saved 708,000 jobs, $134 billion in GDP and $67 billion in wages – the most in each category among the 50 states. Commercial helicopter manufacturer Robinson Helicopter said it’s taking advantage of immediate research and development expensing to deploy new R88 helicopters as control centers for fire surveillance drones.
“These types of innovative solutions require a significant amount of research and development spend,” said Will Fulton, vice president of business development at Robinson Helicopter, adding that the immediate R&D deduction “accelerates our ability to innovate and increases the ability with which we can bring these property and lifesaving innovations to market.”
TRUMP TURNS NATO SPENDING FIGHT INTO WIN FOR US DEFENSE COMPANIES
The OBBBA made it easier for manufacturers to deduct R&D expenses as well as new capital expenditures. (Michael Tercha/Chicago Tribune/Tribune News Service via Getty Images)
Texas’ totals ranked the second highest at 547,000 jobs, $107 billion in GDP and $51 billion in wages saved by the OBBBA, per NAM’s analysis. WilliamsRDM said the tax law’s R&D expensing allowed it to continue to invest in engineering, prototyping, testing and design improvements to deploy new tech for aerospace, defense, fire suppression, energy and security firms.
Florida, which NAM estimated had 399,000 jobs and $36 billion in wages saved by the OBBBA, has seen Johnson & Johnson invest more than $1 billion to expand operations in Jacksonville.
J&J’s chief technical operations and risk officer, Kathy Wengel, said that the “investments reflect our sustained commitment to advancing American innovation, enabled by a strong and stable corporate tax rate.”
GOOGLE PARTNERS ON AI TRAINING FOR THOUSANDS OF AMERICAN MANUFACTURING WORKERS
Manufacturers cited the newfound certainty of the tax law as giving them confidence to invest. (Andrew Magnum/Bloomberg via Getty Images)
Snap-On CEO and NAM Vice Chair for Tax and Finance Policy Nick Pinchuk said that he’s seen firsthand how “long-term tax uncertainty translates into workforce certainty,” adding that the law was “an investment in the American worker.”
“It reaffirms, for all to see, the critical importance of manufacturing to our nation’s future and it assures that prosperous tomorrow by giving manufacturers, including small- and family-owned businesses, a significant boost to their capabilities and the confidence to making lasting investments in their people – to recruit, train and retain skilled workers, strengthen career pathways, and create good paying jobs in communities across the country,” Pinchuk said.
“When I first started drafting the One, Big, Beautiful Bill, I made it clear: permanent, pro-growth tax policy was a top priority. If we were truly going to make a lasting impact for manufacturers, we had to deliver legislation that gave them the confidence to invest in equipment, hire workers, and plan for the long term — and that’s exactly what we did. By preventing a massive tax hike and locking in permanent, pro-growth tax policies, we gave manufacturers the certainty they needed to grow. One year later, we’re seeing the results, with success stories from manufacturers in all 50 states.”
House Ways and Means Committee Chairman Jason Smith, R-Mo., said in a statement that when drafting the OBBBA, his top priority was a “permanent, pro-growth tax policy.”
“If we were truly going to make a lasting impact for manufacturers, we had to deliver legislation that gave them the confidence to invest in equipment, hire workers, and plan for the long term – and that’s exactly what we did,” he said. “By preventing a massive tax hike and locking in permanent, pro-growth tax policies, we gave manufacturers the certainty they needed to grow. One year later, we’re seeing the results, with success stories from manufacturers in all 50 states.”
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Senate Finance Committee Chairman Mike Crapo, R-Idaho, added in a statement that, “One year in, the results are clear – the Working Families Tax Cuts are strengthening our economy, boosting American manufacturing and creating greater opportunities for workers for years to come.”
Voters in the Secret Harbour by-election will have to wade through the names of 16 candidates – including several perennial wannabe politicians – when they go to polling booths on August 29.
The AMC’s shares listed at Rs 610 on the BSE, a 6.27% premium to the IPO price of Rs 574, giving the company a market capitalisation of Rs 1.24 lakh crore at debut.
SBI Funds Management IPO GMP
Despite the decent debut, SBI Funds Management’s listing fell short of grey market expectations. Ahead of listing, the unlisted shares of SBI Funds Management were trading with a grey market premium (GMP) of 16-18%, according to data on sites tracking the grey market.
Read More: SBI Funds Management Share Price Live
The much-awaited listing of SBI Funds Management comes after its IPO drew robust investor demand between July 14 and July 16, with the issue being subscribed nearly 42 times. Qualified Institutional Buyers (QIBs) led the response, subscribing their quota more than 140 times, while the portions reserved for Non-Institutional Investors (NIIs) and Retail Individual Investors (RIIs) were subscribed 22.5 times and nearly 4 times, respectively.
The IPO, launched to raise Rs 9,795 crore at a price band of Rs 545-574 per share, entirely comprised an offer for sale (OFS) of 17.10 crore shares by existing shareholders State Bank of India (SBI) and Amundi. Since there was no fresh issue, SBI Funds Management will not receive any proceeds from the IPO, with the entire amount going to the selling shareholders.
Here’s what brokerages and analysts are advising investors to do after the much-awaited listing of SBI Funds Management on Dalal Street.
Emkay on SBI Funds Management shares
Before the listing, Emkay Global Financial Services had initiated coverage on SBI Funds Management shares with a ‘Buy’ call and a target price of Rs 750 apiece, implying 31% upside from the IPO price of Rs 574 apiece. The brokerage said that its positive view rests on three pillars.
The first among them is SBI’s brand and distribution, coupled with significant under-penetration of SBI MF within the SBI Bank channel. Secondly, the sustained shift in asset mix toward higher-yielding assets such as equity and alternate investments (AIF/PMS) is likely to support revenue yields. Lastly, the economies-of-scale-led operating leverage is expected to drive a 17% EBITDA CAGR over FY26-29, according to the brokerage.
“As the savings and investment needs of Indians evolve, the middle class is increasingly embracing mutual funds as its core investment vehicle, and SBI AMC has all the ingredients to become ‘the asset manager to every Indian,’ just as its parent has become ‘the banker to every Indian’,” Emkay said.
Also read | SBI Funds Management gets 2 buy calls before listing. Why Equirus, Emkay see up to 31% upside
Equirus Securities on SBI Funds Management shares
Equirus Securities initiated coverage on SBI Funds Management shares with a ‘Long’ rating and a March 2027 target price of Rs 675. The target implies an upside of about 18% from the issue price of Rs 574. The brokerage noted that the company is one of the strongest franchises in India’s asset management industry, backed by scale, SBI’s distribution network, sticky SIP flows and strong profitability.
It believes that SBI Funds Management is well placed to benefit from India’s financialisation trend, as more household savings move into mutual funds, SIPs and market-linked products.
What other analysts are suggesting?
Analysts said investors who were allotted shares in SBI Funds Management IPO can either book listing gains or stay invested, depending on their holding period. “We expect the stock to list at 15% premium, and investors with a short-term horizon may consider booking profits if they plan to participate in upcoming IPOs. Given the company’s strong fundamentals, long-term investors can consider holding the stock for 1-2 years for healthy returns,” said Geetanjali Kedia, IPO expert at SPTulsian Investment Advisers.
Vaqarjaved Khan, senior fundamental analyst at Angel One, meanwhile had suggested that allotted shareholders can consider holding the stock due to its strong fundamentals, healthy margins, ROEs, and leadership in the AMC segment. “However, fresh investors should avoid chasing the stock at elevated post-listing levels,” he said.
Narendra Solanki, head of fundamental research at Anand Rathi Share and Stock Brokers, also had said that investors who were allotted shares in the IPO should consider holding the stock for the long term, given its strong growth prospects.
Also read | SBI Funds pays razor-thin banker fees on top India IPO of 2026
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Britain’s business owners are quietly Googling their way through VAT season. Searches for “VAT definition” have jumped 23 per cent in the past week, new research from Hiscox shows, as firms with VAT quarters ending 30 June face a 7 August filing deadline.
Searches for “VAT meaning” are up 11 per cent over the same period, and the tax generates 17,500 definition-related searches every month, enough to make it one of the UK’s most searched business acronyms. Only KPI, on 60,800 monthly searches, along with the likes of GDPR, CRM and EBITDA, rank higher.
The confusion runs deeper than one tax. More than half (52 per cent) of business owners admit they do not feel confident in their understanding of common business and financial terminology. When they hit an unfamiliar term, 16 per cent say they feel frustrated, 13 per cent intimidated and 12 per cent overwhelmed.
Where do they turn? Over two-thirds (69 per cent) reach for a search engine. Some 16 per cent use social media platforms such as TikTok and LinkedIn for short-form explanations, a figure that rises to 31 per cent among under-30s. And one in six (15 per cent) now ask AI tools such as ChatGPT to decode unfamiliar concepts.
That last habit comes with a health warning. “AI tools can help to provide quick explanations, but they’re not always consistent with how information is sourced or explained,” cautions Nick Thornhill, Direct and Partnerships Director at Hiscox. “As these tools are becoming more widely used in day-to-day business decision-making, it becomes increasingly important that business owners cross-check their understanding, especially when terminology feeds into financial, operational or compliance decisions.”
The stakes are not trivial. HMRC’s latest figures put the total tax gap for 2024/25 at £59.2 billion, with VAT accounting for a fifth of that shortfall, and failure to take reasonable care and simple error the two biggest behavioural causes. Small businesses represent the largest slice of the gap, at 62 per cent.
Getting it wrong is expensive at an individual level too. Inaccuracies judged to show a lack of reasonable care can attract penalties of up to 30 per cent of the extra tax due.
Clare March, founder of Her Business Counts, argues the real problem is not remembering what the acronym stands for but understanding what it means in practice. Misjudging VAT’s impact on cash flow, she warns, can lead to decisions that “look fine on the surface but quietly put you in a really difficult position.”
For SMEs, VAT is rarely just an admin line. The tax shapes behaviour to the point that firms are deliberately curbing growth to stay under the £90,000 registration threshold, and it remains politically live, with ministers scrapping VAT on electricity bills only this month. Add the demands of Making Tax Digital and the shift towards e-invoicing, and the terminology burden keeps growing.
In response, Hiscox has partnered with business mentor Jonathan Cooper on four tips for building financial confidence, including finding trusted sources of guidance and avoiding common mistakes, and has launched an interactive quiz letting owners test themselves on the UK’s most searched acronyms.
“Business owners are expected to know and use a wide range of terms across finance, operations and compliance on a daily basis, but our research suggests that many are still having to look them up as they go,” says Thornhill. “Business language can be complicated and having an understanding of these terms is important for decision-making and communication with advisors, investors and teams.”
One note of reassurance for anyone panicking about 7 August: not every business files that day. VAT deadlines depend on your accounting period, and returns are normally due one calendar month and seven days after the quarter ends. Checking your own date, rather than Googling someone else’s, is a sensible place to start.
Amy Ingham
Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College’s journalism school. Her recent reporting includes British Steel’s nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.
Pre-provision operating profit (PPOP) rose 36.15% YoY to Rs 1,096 crore from Rs 805 crore, while net interest income increased 31.76% YoY to Rs 1,423 crore from Rs 1,080 crore.
Net interest margin (NIM) improved to 4.34% from 3.86% in the year-ago quarter. The cost of deposits declined by 32 bps to 5.45% from 5.77%, while the yield on advances increased by 11 bps to 10.11% from 10%, the company said in a regulatory filing.
Commission and fee income rose 7.57% YoY to Rs 270 crore from Rs 251 crore. Operating expenses increased to Rs 769 crore from Rs 721 crore in the corresponding quarter last year, while the cost-to-income ratio improved to 41.24% from 47.24%.
Karur Vysya Bank asset quality
On asset quality, gross non-performing assets (GNPA) stood at 0.74% of gross advances as of June 30, 2026, compared with 0.66% a year earlier, though the ratio was lower by 1 bp QoQ. In absolute terms, GNPA stood at Rs 772 crore, up from Rs 593 crore as of June 30, 2025. Net NPA (NNPA) remained at 0.19%, unchanged from a year earlier, while the absolute figure stood at Rs 196 crore compared with Rs 170 crore. The provision coverage ratio (PCR) stood at 96.21% as of June 30, 2026, compared with 96.76% a year earlier.
Karur Vysya Bank’s total business stood at Rs 2.27 lakh crore as of June 30, 2026, up 15.94% YoY from Rs 1.96 lakh crore a year earlier, an increase of Rs 31,243 crore. Total deposits rose 14.94% YoY to Rs 1.22 lakh crore from Rs 1.06 lakh crore, while total advances grew 17.13% YoY to Rs 1.04 lakh crore from Rs 89,374 crore, an increase of Rs 15,306 crore.
Also read:SBI Funds Management shares list at 7% premium over IPO price
Karur Vysya Q1 management commentary
Ramesh Babu B, Managing Director and CEO of Karur Vysya Bank, said the bank’s performance indicators were in line with its earlier guidance. He said the bank had front-loaded growth in the first quarter of the financial year, in line with its approach in recent years. He added that consistent performance across growth, profitability and asset quality reflected the strength of the bank’s performance since the start of the year.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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