Charlotte DE KERPOISSON
Hello and welcome to this podcast by BNP Paribas Wealth Management. My name is Charlotte De Kerpoisson. Today I'm joined by Edmund Shing, Global Chief Investment Officer, who will unveil his key convictions for 2026. Hello Edmund.
Edmund SHING
Hello, Charlotte.
Charlotte DE KERPOISSON
My first question is about global mining. Can you please explain why you like this sector?
Edmund SHING
Why do we like global mining ? Well, quite simply, because we believe we're in a commodity bull market more generally, particularly for metals. Certainly, 2025 has been a very strong year for two groups of metals, precious metals: gold and silver on the one hand, and secondly, strategic industrial metals such as copper and aluminium on the other. We believe that the global mining sector is a very good way to invest in this, either through MSCI world or through European listed miners, because they are diversified and they include exposure both to precious metals as well as to industrial metals. And that way, we get a good coverage of both of these types of metals in the ongoing bull market, which we expect to continue in 2026.
Charlotte DE KERPOISSON
And, Edmund, why do you like the pharmaceuticals sector?
Edmund SHING
The pharmaceutical and biotech sectors have been somewhat left behind for the first part of 2025. However, we've seen a complete change of momentum since September. The threats that Donald Trump had posed in terms of pricing for the sector have diminished, and it's quite clear that even though they may accept slightly lower pricing for US medications, there is a compensation in terms of higher volumes. So in the end, they still make very good profits. On top of that, we should see that drug pipelines are forthcoming. New potential blockbuster drugs are very full, both from the pharmaceutical side and from the biotech side. And of course, from a valuation aspect. The sector, which has been a very strong defensive growth sector in history, is actually very reasonably valued today. So you have a combination of defensive growth on the one hand, reasonable valuation and finally momentum, all of which are pushing the pharmaceutical and biotech sectors. The final element mentioned is that we believe that these sectors will be the early beneficiaries of adoption of AI throughout their business model. So we expect to see greater growth and productivity because they are adopting AI in the very near term.
Charlotte DE KERPOISSON
In fixed income. Can you tell me why you like emerging market bonds?
Edmund SHING
If we look at the fixed income universe today, it's difficult to find a lot of yields because sovereign bond yields are relatively low, US, Europe and China equally. Well, if we look at corporate bond yields, we find the same phenomenon where credit spreads are very tight. So there is not a lot of obvious yield ideas around in the fixed income universe. However, one area we do like, which does offer higher yields of of the order of 6% or more, are emerging markets sovereign bonds in local currency, which comprises the sovereign bonds issued by countries in the Middle East, in Latin America, and of course, in Asia, this group of bonds have performed well in 2025. We like the local currency exposure because again, these currencies in general are appreciating, particularly against the US dollar, notably the Mexican peso and Brazilian rail, to name two examples. And on top of that, as the Federal Reserve in the US reduces their benchmark interest rates, we expect central banks around the world in emerging markets to equally be able to reduce their benchmark interest rates, which is a very good positive support for these emerging markets, sovereign bonds. So absolutely look for 6% plus yields in emerging markets, sovereign bonds in local currency.
Charlotte DE KERPOISSON
Turning now to commodities. Which commodity do you like at the moment, Edmund?
Edmund SHING
We believe in a commodity bull market generally, particularly led by metals and certain forms of energy. And if we look at the metals that have performed very well, as I said previously, precious metals, gold and silver have led the way. However, in the last few months, copper has been the outstanding performer. We have now reached $11,000 a tonne on the London Metals Exchange, which is the highest ever level recorded for copper in London. We have a target price of $13,000 per tonne in 2026, so we expect a near 20% gain for the copper price itself. We like the exposure of copper, of course, to electrification, data centres, but of course also the building out of electricity infrastructure to meet growing demand in the US, in China and in Europe. And copper is an essential metal for all of these critical applications. You can either buy physical copper or indeed you can buy funds and ETFs of copper miners globally. Both, we think, will do very well in 2026.
Charlotte DE KERPOISSON
And my final question, Edmund, why do you like renewable energy infrastructure?
Edmund SHING
We love the infrastructure asset class, particularly in an environment where US inflation will likely remain around 3% and where you see modest global growth. Secondly, infrastructure. It delivers good yields at the moment and has good growth prospects, particularly in the energy complex, because we expect electricity demand globally and, in the US, to continue to grow. One area of infrastructure we think will benefit in particular is renewable energy infrastructure. So that includes solar panels in particular and also industrial battery storage. And these two areas we think will benefit from the need to add more electricity generation, not only in China where they're installing solar panels an incredible pace, but more importantly in the US, where the installation of data centres requires much more electricity generation. And in the short term, it can only be generated by two additional sources: natural gas or solar panels. And so we believe that renewable energy infrastructure, predominantly through solar plus battery storage, is an excellent means to add electricity generation. It is performing well, and it's a segment we expect to perform very well again in 2026.
Charlotte DE KERPOISSON
Thank you very much, Edmund. Thank you to our audience for following this podcast. Please like, share and subscribe to our weekly podcast and visit our website to discover our investment themes for 2026. Goodbye.