Covid Test, Vaccine Maker Stocks Jump as Cases Surge in Asia
Shares of Covid test kit and drug makers in Asia rose following a surge of cases.
South Korean diagnostic kit maker Sugentech Inc. was among the top performers, jumping as much as 29% on Monday. In Japan, shares of Covid vaccine maker Daiichi Sankyo rose as much as 7.4% after its price target was raised at UBS. In Hong Kong, shares of Shanghai Junshi Biosciences Co., which also makes Covid jabs, gained as much as 4.3%.
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UPI
6 minutes ago
- UPI
Analysis: Business model of Asia's top private equity fund questioned
Kim Yeong-hee works at a Homeplus Geumcheon branch. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation photo by Jeon Heoo-Kyun/EPA-EFE SEOUL, June 20 (UPI) -- Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, founded MBK Partners in 2005. Over the next two decades, he built it into one of Asia's leading private equity funds through aggressive mergers and acquisitions. It now manages up to $30 billion in assets. However, Chairman Kim and MBK face challenges, because of its major investments in Home Plus, South Korea's No. 2 discount chain, and Lotte Card, the country's fifth-largest card issuer. This prompts experts to question the business model of the buyout fund. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation process. The firm stated that "All $1.8 billion worth of common shares held by MBK in Home Plus will be canceled without compensation." This means that MBK is ready to walk away from the Home Plus investment empty-handed, although it poured billions of dollars to take over the supermarket chain. In 2015, MBK acquired Home Plus from Tesco in a $5.1 billion deal financed through a combination of equity and debt. But the rise of e-commerce and the impact of the COVID-19 pandemic severely undermined its performance. Since 2021, Home Plus has reported losses for four consecutive years, and its debt-to-equity ratio surged to nearly 500% this year. It filed for corporate rehabilitation in March, and MBK eventually decided to relinquish all management rights and claims while receiving nothing in return. Yet, MBK is under pressure to do more, as the National Assembly Speaker Woo Won-shik noted during his visit to a Home Plus outlet in Seoul on Wednesday. He accused MBK of showing an irresponsible stance. "The livelihoods of some 100,000 people, who are directly and indirectly employed by Home Plus, are now at risk. The damage is already severe," Woo wrote on social media. "Even after initiating rehabilitation procedures, MBK failed to assume responsibility, instead shifting the burden to workers and merchants through delayed payments, asset sales, and store closures," he added. Woo hinted at potential legislative action, including a parliamentary hearing and new regulations targeting private equity funds. Lotte Card up for grabs There are other crucial tasks for MBK and its Chairman Kim, particularly regarding Lotte Card. In 2019, MBK partnered with Woori Bank to channel $1 billion for a 79.8% interest on Lotte Card. MBK holds 59.8% and Woori has the remaining 20%. MBK tried to sell its stake in Lotte Card in 2023, but failed. The fund strives to divest its stake once again by reportedly sending teaser letters to multiple potential bidders, including Hana Financial Group, last month. UBS is managing the sales, with preliminary bids expected to open as early as mid-July. It remains to be seen whether MBK will be able to dispose of Lotte Card this time. But the sale price is predicted to go down due to the recent setbacks of the company. Lotte Card's net profit for 2024 more than halved to $100 million compared to $269 million in 2023. During the first quarter of 2025, it netted $10 million in profit, down 42.4% from a year before. Two years ago, MBK reportedly hoped to secure at least $2.2 billion for its stake, but the price is feared to decrease substantially now, which may significantly reduce MBK's potential profit. "MBK's business model has been very successful over the past 20 years as shown by the fact that its founder Kim has become the wealthiest man in the country," Seoul-based consultancy Leaders Index CEO Park Ju-gun told UPI. "But, its business model is now being put to the test. The company would have to worry about its damaged reputation and growing political momentum for regulating private equity funds," he added. In the 2025 Forbes billionaire list, Kim was second to none among South Koreans with $9.5 billion in wealth, surpassing $8.2 billion of Samsung Electronics Chairman Lee Jae-yong. Park expected that the country's unicameral parliament might introduce an act curbing highly leveraged buyouts and banning private equity funds from directly managing companies after acquisition. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, echoed the concerns, although he opposed excessive regulations. "MBK has played a key role in developing Korea's capital market. But buyout funds have often been criticized for seeking short-term gains at the cost of long-term growth for a fast exit. We may need a reform," he said in a phone interview. "Highly leveraged acquisitions are also problematic. Still, I am against the idea of prohibiting private equity funds from managing their portfolio firms. It would fundamentally deny the very essence of the business," he said.
Politico
24 minutes ago
- Politico
How the Israel-Iran conflict could hit the economy
Presented by As the U.S. weighs intervention in Israel's conflict with Iran, Wall Street has been skittish, eyeing the potential fallout for oil prices and inflation. To get a better sense of what's driving the oil market and what economic risks might lie ahead, MM caught up with Rory Johnston, an oil market analyst at research service Commodity Context who's been following all of this closely. A takeaway from that conversation: The price jump has been notably large for a market that has become desensitized to political risks after safely weathering multiple shocks over the last few years, including Covid and the Russia-Ukraine war. Now, 'even a numb cynical oil market sees Israel bombing Tehran and says, 'OK, maybe worry a bit here,'' he said. Conflict with Iran is the 'No. 1 risk scenario that people talk about, and now we're living in it,' he added. A worst-case scenario would be if Tehran is driven to close off the Strait of Hormuz, a channel through which about a fifth of the world's oil passes. Experts including Johnston say it's unlikely Iran would do that unless pushed to the brink — such a move would run the risk of hurting its own economic lifeline, as well as antagonizing its neighbors in the region — but the shockwaves would be significant. For now, what struck your host is that this conflict is helping prop up prices at a time when they'd really started to drop, and that could help boost U.S. oil production, which had previously been forecast to contract in 2026. But the exact trajectory of all this is highly unclear. 'This is usually the lead-up to summer driving season, so gasoline prices were set to rise anyway,' POLITICO's resident oil market expert Ben Lefebvre told MM. 'Because of the current Middle East situation, they'll rise further than they might have when oil was still around $60 a barrel. But when compared to what U.S. drivers experienced even last year, it won't be too far off recent norms … if there is such a thing as 'recent norms.'' 'The interesting thing is whether this spurs U.S. oil companies to drill more,' he added. 'They might just see this as a temporary boost and not something they want to get too far ahead of.' Rewind to before the current Israel-Iran conflict escalated. OPEC, the cartel of major oil-exporting countries, had been holding back production but then ramped up output earlier this year. That move was taken, in part, to get ahead of the effects of President Donald Trump's tariffs, which had raised fears that demand for oil would crater amid a global slowdown. That was leading to forecasts of oversupply later this year, Johnston said, reducing incentives for oil companies to produce. Now, Israel's attacks on Iran have likely led to fear-buying, as well as speculative trading, that has pushed up prices as much as 15 percent. Fighting so far has spared infrastructure that would significantly crimp the outflow of crude. 'While theoretically on its face, nothing that's happened so far has changed anything physical about supply and demand, part of the way … price formation has occurred is you have physical participants — a refinery, whatever — that's all of a sudden worried they're not going to be able to get cargos next month or the month after,' Johnston said. For prices to stay high or go higher, there likely would have to be some actual damage to key oil infrastructure, he said. But in the meantime, the scope for economic disruption is still significant. The largest price increases have been for diesel, a key input for shipping and therefore a potential risk to inflation in many sectors. 'It might not seem as harsh at the pump, but your shipping and your route delivery is going to feel the pinch of diesel far more,' Johnston said. More broadly, John Fagan, co-founder of Markets Policy Partners and the former markets head at the Treasury Department, said this oil price shock feeds the narrative that the U.S. is going to have slower growth and higher prices: stagflation. 'Demand is not collapsing, and oil prices are not unbelievably high, so you don't have that pop and drop kind of dynamic' when prices rise above where the market can support, he said. 'And if the dollar can't rally, that's supportive of [higher] oil prices.' HAPPY FRIDAY — Hope many of you got to have a restful day off yesterday. Send thoughts about the economic outlook to vguida@ and as always, send MM tips and pitches to Sam Sutton, who is back next week: ssutton@ Driving the day Deputy Treasury Secretary Michael Faulkender speaks at the Council on Foreign Relations at 12:30 p.m. Debt warnings fall on deaf ears — Republicans are largely ignoring a host of reports warning that their bill would worsen the nation's fiscal trajectory in a serious way, our Ben Guggenheim reports. The Congressional Budget Office estimates Tuesday led to an unusual finding. Usually tax cuts tend to cost less under so-called dynamic scores that include economic effects. Not so here: The $2.8 trillion figure released Tuesday outstripped the CBO's prior $2.4 trillion estimate that did not include economic analysis — mostly because the bill would increase interest rates. But the GOP is relying instead on estimates from the White House that Kyle Pomerleau of the American Enterprise Institute called 'outrageous' and 'way higher than everyone else's.' Your MM host chatted last week with Joe Lavorgna, who joined the Treasury Department this month as a counselor to Secretary Scott Bessent, and he had thoughts on CBO's projection that the economy would grow at an average rate of 1.8 percent over the next 10 years. 'Once the One Big Beautiful Bill passes, it's going to lock in the gains that we saw in the first Trump administration, when we were growing at nearly 3 percent,' he told your MM host. 'Then, you could make a case because of AI,' productivity growth will be much higher. 'The trailing 10-year growth rate of GDP is 2.5 percent. Why aren't we using that? .. 1.8 is unbelievably pathetically slow.' On the pods: Hear from CBO Director Phillip Swagel himself on Bloomberg's Big Take podcast. Sober news on entitlements — The longterm financial health of Social Security and Medicare worsened last year, our Michael Stratford reports. 'Annual reports released by the Treasury Department on Monday show that Social Security's reserve funds, if combined, would run out of money to fully pay beneficiaries in 2034 — a year sooner than projected last year,' Stratford writes. 'And the trust fund that pays Medicare's hospital bills would be depleted in 2033 — three years earlier than expected.' Trump calls for 'clean' Senate crypto bill to pass — Late Wednesday, Trump called on House Republicans to move 'LIGHTNING FAST' to send Senate-passed stablecoin legislation to his desk, dialing up pressure on GOP lawmakers in the lower chamber to adopt the measure without any changes, our Jasper Goodman reports. The Economy ICYMI: Fed holds rates steady — Federal Reserve officials announced Wednesday that they will hold interest rates steady, ignoring repeated calls from President Donald Trump to dramatically lower borrowing costs. In fact, projections from the central bank's policymakers suggest they're less confident they will be able to significantly decrease rates than they were in March. Vibe check: Here was Trump's response on Truth Social Thursday morning: ''Too Late' Jerome Powell is costing our Country Hundreds of Billions of Dollars. He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit. Europe has had 10 cuts, we have had none. We should be 2.5 Points lower, and save $BILLIONS on all of Biden's Short Term Debt. We have LOW inflation! TOO LATE's an American Disgrace!' Jobs report Carolyn Davis is now director of comms at Better Markets. She previously was director of external comms at Leadership for Educational Equity. Mike Spratt has joined the ICI as an associate general counsel. He previously was assistant director in the Division of Investment Management Disclosure Review office at the SEC. He also served as counsel to former SEC Commissioners Kara Stein and Elisse Walter.
Yahoo
an hour ago
- Yahoo
South Korea's Record Surplus With US Adds Strain to Tariff Talks
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown South Korea's current account surplus with the US surged to a record high last year, highlighting the challenge President Lee Jae Myung faces as he seeks to secure a trade deal with Donald Trump. The surplus reached $118.2 billion in 2024, the highest on record, the Bank of Korea said Friday. The figure has increased every year since 2019, reflecting deepening trade ties — and now potential friction — with Washington. The data serve as the latest reminder of the scale of South Korea's surplus with the US, with the Asian economy already on Trump's top 10 list of nations amplifying the US trade deficit. Lee, who secured the presidency earlier this month after protracted political turmoil following the impeachment of Yoon Suk Yeol, must now engage in trade negotiations with a US administration that favors hardline tactics and unilateral pressure. The two leaders were poised to talk on the sidelines of the Group of Seven summit in Canada this week, but the meeting was called off at the last minute as Trump left the event early amid rising tensions in the Middle East. Lee's nominee for prime minister said the Korean president is hoping to reach an agreement ahead of a July deadline that'll ramp up the baseline tariff rate the country faces. Exports remain vital to South Korea's economy, equivalent to more than 40% of gross domestic product last year. Its supplies of chips, smartphones, cars and batteries are also key elements for global supply chains. With so-called reciprocal tariff rates of 25% still on the table, the stakes for the negotiations are high. 'There's considerable uncertainty around how Trump or other nations will respond,' said Joonyoung Hur, an associate professor of economics at Sogang University. 'The impact on GDP could be significant, but it's hard to quantify with so many variables in play.' Hur estimates that such tariffs may shrink Korea's overall exports by 2%, adding that the maximum estimated impact on GDP growth could reach 0.7 percentage point. The US is Korea's second-largest export destination after China, accounting for 18.7% of outbound shipments worth $127.8 billion last year. The Office of the US Trade Representative said the country ran a $66 billion trade deficit with Korea in 2024, its eighth-largest bilateral gap. That was bound to draw the attention of Trump, who has framed persistent trade shortfalls as a national emergency. The reciprocal tariffs — if reinstated at 25% as announced on the so-called Liberation Day — could slash US-bound shipments by more than half, potentially dragging down Korea's GDP by over 1% by 2030, according to Bloomberg economist Hyosung Kwon. Even if Seoul manages to strike a deal, fallout may still follow. Closer alignment with the US could strain Korea's relationship with China, its biggest trading partner, which took in $133 billion worth of exports last year. Sector Implications Trade exposure underscores Korea's dependence on exports in a few key sectors. Semiconductor shipments totaled $141.9 billion in 2024, accounting for about 21% of South Korea's total exports, according to the Trade Ministry. Automobiles, the second-largest export item, exceeded 10%, while steel products neared 5%. Autos, which make up more than a quarter of Korea's exports to the US, are particularly exposed. Hyundai Motor Co., the country's top carmaker, faces greater risk than peers with local production due to its reliance on South Korean factories. It's already made efforts to mitigate that threat, announcing in March plans for a $21 billion investment in the US for vehicle production and other projects. Automobile exports are expected to be the most severely affected by US tariffs in both the short and long term, the BOK said in a May report. The central bank projected the nation's total goods exports to drop by 0.6%, with automobile shipments to the US sliding by as much as 4%. It also warned of longer-term risks as companies may relocate production to the US to avoid tariffs. Semiconductors have so far avoided direct sectoral tariffs, but face rising scrutiny as Washington considers broader tech-related trade measures. The US Commerce Department is expected to announce within weeks the results of its Section 232 investigations into industries deemed critical to national security, including semiconductors. Battery makers are also in the crosshairs. Despite building US-based joint ventures, South Korean firms rely heavily on components produced at home, exposing them to tariffs that could disrupt electric vehicle rollout plans for both South Korean and American automakers. In May, South Korea's trade surplus with the US fell to its lowest since July 2024, even as America's deficits with other Asian economies widened — a possible sign of shifting trade flows and strategic recalibration. South Korean companies in the automobile, semiconductor and battery industries invested billions of dollars to build out their supply chains in the US during the Biden administration in order to qualify for tax credits. Those investments are now poised to help partially shield them from Trump's tariffs, and may ultimately lead to a drop in goods exports from Korea to the US, narrowing the trade surplus. At the same time, growing direct investment by Korean firms in the US has led to increased income from dividends and interest, contributing to a larger surplus in the primary income account. Primary income also surged to a record last year, accounting for almost 16% of South Korea's surplus with the US, the BOK said. 'The impact of US tariff policy is gradually emerging,' Kim SungJun, director at the BOK's balance of payments team, said at a briefing Friday. 'And it is expected to become more pronounced in the second half of this year.' Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? 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