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Bloomberg
10 hours ago
- Business
- Bloomberg
SoFi Shares Tumble in Wake of $1.5 Billion Stock Offering
SoFi Technologies Inc. dropped in late trading Tuesday, mostly wiping out earlier gains, after the provider of consumer financial services said it's selling $1.5 billion of stock. Goldman Sachs Group Inc. will underwrite the offering and SoFi plans to use the proceeds for general corporate purposes, 'including working capital and other business opportunities,' the San Francisco-based company said Tuesday in a statement.
The Star
2 days ago
- Business
- The Star
Global money chases hot S. Korean stock market
SOUTH KOREAN stocks, already this year's best performers among the world's major markets, are becoming a magnet for foreign investors as bold regulatory reforms to lift valuations and empower minority shareholders gain traction. Just this month, policymakers voted in favour of pivotal law changes to make board members legally accountable to all shareholders. They are now focusing on the next wave of reforms – including improvements to the voting system for selection of board members, and reducing treasury stock holdings – all with the goal of reining in the nation's many family-run conglomerates, or chaebols. From Wall Street to London, investors are taking notice. Overseas funds, which dumped South Korean stocks for nine straight months through April, are piling back into the market. Strategists at global banks including Goldman Sachs Group Inc, JPMorgan Chase & Co, Citigroup Inc and Morgan Stanley are among those who have upgraded South Korea since the start of June. The benchmark Kospi has surged 33% in 2025, helping propel the equity market's value above US$2 trillion for the first time in three years. Culture shift Reforms 'will contribute to the continuation of a culture shift already underway and will reduce the ability of controlling shareholders to compel restructurings that benefit them at the expense of minority shareholders,' said Jonathan Pines of Federated Hermes, whose US$4.5bil Asia Ex-Japan equity fund has beaten 92% of its peers over one year. 'We remain very significantly 'overweight' on South Korean stocks.' South Korean authorities have been seeking to replicate the success seen in Japan, where a push for corporate reforms helped boost valuations and spur a world-beating equity rally. Optimism that the nation is serious about tackling the so-called 'South Korea discount' has grown since newly elected President Lee Jae Myung made raising governance standards and improving stock-market returns one of his top priorities. Net inflows from foreign funds have crossed US$3bil in July alone. That's more than their combined purchases in the previous two months. 'We're seeing a big change in the corporate governance,' said Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong Ltd, noting more capital discipline, buybacks and dividends. 'This does not require a great global environment. 'These are things that are almost like a bit of self-help.' After having discussed the latest round of commercial code revisions earlier this month, lawmakers plan on voting for them on Aug 4. During this round, they will be pushing to mandate a cumulative voting system for listed firms in an effort to promote board diversity. Cumulative voting has become a cornerstone of the ruling Democratic Party's corporate governance agenda. In such a system, a shareholder typically receives votes equal to the number of shares they hold multiplied by the number of board seats up for election. This would enable minority shareholders to pool votes and elect at least one board member aligned with their interest – such as advocating for more share buybacks or dividends. Another proposal that will be considered for this round would be to cap the number of audit committee members that major shareholders can nominate. Treasury stock Then there is the issue of treasury shares, which have become a flashpoint in South Korea. Such stock can be transferred by companies to friendly parties, such as family members or affiliates – who then can vote with them to give the controlling family more power without increasing actual ownership. While not directly part of the agenda for this round of corporate code revisions, a proposal to mandate the cancellation of treasury stock remains a key focus for Lee and his allies as they pursue their ambitious goal of 'Kospi 5000.' The proposal has drawn strong opposition from conglomerates. It should be phased in 'to avoid instability,' Lee Han-joo, a senior aide to Lee and the head of the State Affairs Planning Committee, told Bloomberg in a recent interview. At a minimum, companies may push to preserve existing treasury shares while agreeing to cancel those acquired going forward, said Seokkeun Ha, chief investment officer at Eugene Asset Management. 'That would disappoint the market,' he said. Authorities are discussing various options in this regard, according to a person familiar with the matter. Options range from creating a model similar to that of Germany's to using a more stringent approach that requires all existing treasury shares to be retired within six months, the person said, asking not to be identified as negotiations are ongoing. The German model requires companies to sell treasury shares that exceed 10% of the capital stock within three years of purchase, according to information on a government website. 'If we're aiming for Kospi 5,000, I believe treasury share cancellation is essential,' Ha said. 'That's how return-on-equity increases and higher return of equity drives up the price-to-book ratio.' Lee's crusade to protect minority shareholders' rights relies on lawmakers delivering substantive changes at a credible pace while resisting pushback from entrenched interests. With markets having rallied so hard on expectations, the bar for disappointment is low. In a recent survey of 300 listed companies released by the South Korea Chamber of Commerce and Industry, about 77% said further commercial code revisions could have 'negative impact on business growth.' 'Big bang gains were quite a bit driven by sentiment, and that's gone,' said Xin-Yao Ng, investment director at Aberdeen Investments. 'Going forward, we'll need better delivery of legislation to incentivise value-up and companies themselves delivering actual changes.' — Bloomberg Sangmi Cha and John Cheng write for Bloomberg. The views expressed here are the writers' own.
Bloomberg
5 days ago
- Business
- Bloomberg
Goldman Says Diesel Margins to Stay High on Refining Tightness
Diesel-refining margins may cool off a touch from very high levels, but are still likely to end up above long-run averages given a crunch in global processing capacity, according to Goldman Sachs Group Inc. The industrial fuel has been on a tear recently, with global stockpiles declining and so-called financial demand surging, analysts including Yulia Zhestkova Grigsby said in a note released on Thursday. Unexpected outages at refineries in Europe, plus a dearth of the types of crude that yield distillates — including from Venezuela, Canada, and OPEC+ — exacerbated the situation, they said.
The Star
14-07-2025
- Business
- The Star
Xi's campaign against price wars creates a buzz
An aerial view shows Chinese-made cars parked at a port in Nanjing, in China's eastern Jiangsu province, on July 11, 2025, before being loaded onto a ship for export. (Photo by AFP) / China OUT Beijing: For strategists at JPMorgan Chase & Co and Goldman Sachs Group Inc as well as money managers in Hong Kong and Singapore, an opaque term has suddenly emerged as the catchphrase for deciphering Chinese policy intentions and navigating the stock market. The term 'anti-involution' has cropped up in government documents over the past year, but gained prominence earlier this month when President Xi Jinping chaired a high-level meeting that pledged to regulate 'disorderly' price competition. It refers to efforts to root out China's industrial malaise, marked by cut-throat price wars and overcapacity that have hurt profitability in sectors ranging from solar, electric vehicles (EVs) to steel. Investors are hopeful that a more coordinated policy response to tackle the drivers of deflation is on its way, though Beijing hasn't yet released any plan. Analyst reports on the theme have flooded the market, while solar and steel stocks have rallied in July. Morgan Stanley strategists changed their preference to onshore shares from those in Hong Kong last week. 'One of the biggest issues that investors have investing in China is that of excessive competition,' said Min Lan Tan, head of the Asia Pacific chief investment office at UBS AG. 'It's actually a very positive development that top down the government is now recognising it and directly saying that destructive competition has to stop. It's a powerful policy signal.' The Chinese term for involution, neijuan, literally means rolling inwards. In practice, it's used to describe a system of intense competition that yields little meaningful progress. Huge spending on building capacity has helped Chinese firms enhance their global standing. The nation's companies now dominate every step of the solar supply chain, while its EV makers have toppled Tesla's dominance. Yet, ending destructive competition has rarely been more important. Producer deflation is worsening, and trade tensions mean China can no longer unleash some of its overcapacity to other countries. 'With foreign markets closing off Chinese trade routes, part of the competition is forced to return to the domestic market,' said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia. The campaign seems to be helping improve investor sentiment for the mainland market, where policy drivers have a stronger sway and industrial stocks have bigger weighting. The onshore CSI 300 Index has risen 2% so far in July, outperforming the Hang Seng China Enterprises Index after lagging it for most of the year. Solar stocks Xinjiang Daqo New Energy Co and Tongwei Co have advanced at least 19% this month. Liuzhou Iron & Steel Co Ltd has surged more than 50% while Angang Steel Co has gained about 16%. Glass, cement and chemicals shares have also jumped. It's still early stages but if the reforms pan out, 'there'll be consolidation in China and there'll be slightly better pricing and margins, and there'll be better valuation,' said Wendy Liu, head of China and Hong Kong equity strategist at JPMorgan. — Bloomberg
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Business Standard
13-07-2025
- Business
- Business Standard
Xi Jinping's price-war campaign creates a buzz in China's stock market
Investors are hopeful that a more coordinated policy response to tackle the drivers of deflation is on its way, though Beijing hasn't yet released any plan Bloomberg Bloomberg News For strategists at JPMorgan Chase & Co. and Goldman Sachs Group Inc. as well as money managers in Hong Kong and Singapore, an opaque term has suddenly emerged as the catchphrase for deciphering Chinese policy intentions and navigating the stock market. The term 'anti-involution' has cropped up in government documents over the past year, but gained prominence earlier this month when President Xi Jinping chaired a high-level meeting that pledged to regulate 'disorderly' price competition. It refers to efforts to root out China's industrial malaise, marked by cutthroat price wars and overcapacity that have hurt profitability in sectors ranging from solar, new energy vehicles to steel. Investors are hopeful that a more coordinated policy response to tackle the drivers of deflation is on its way, though Beijing hasn't yet released any plan. Analyst reports on the theme have flooded the market, while solar and steel stocks have rallied in July. Morgan Stanley strategists changed their preference to onshore shares from those in Hong Kong last week. 'One of the biggest issues that investors have investing in China is that of excessive competition,' said Min Lan Tan, head of the Asia Pacific chief investment office at UBS AG. 'It's actually a very positive development that top down the government is now recognizing it and directly saying that destructive competition has to stop. It's a powerful policy signal.' The Chinese term for involution, 内卷 (neijuan), literally means rolling inwards. In practice, it's used to describe a system of intense competition that yields little meaningful progress. Huge spending on building capacity has helped Chinese firms enhance their global standing. The nation's companies now dominate every step of the solar supply chain, while its EV makers have toppled Tesla's dominance. Yet, ending destructive competition has rarely been more important. Producer deflation is worsening, and trade tensions mean China can no longer unleash some of its overcapacity to other countries. 'With foreign markets closing off Chinese trade routes, part of the competition is forced to return to the domestic market,' said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia. The campaign seems to be helping improve investor sentiment for the mainland market, where policy drivers have a stronger sway and industrial stocks have bigger weighting. The onshore CSI 300 Index has risen 2% so far in July, outperforming the Hang Seng China Enterprises Index after lagging it for most of the year. Solar stocks Xinjiang Daqo New Energy Co. and Tongwei Co. have advanced at least 19% this month. Liuzhou Iron & Steel Co Ltd. has surged more than 50% while Angang Steel Co. has gained about 16%. Glass, cement and chemicals shares have also jumped. It's still early stages but if the reforms pan out, 'there'll be consolidation in China and there'll be slightly better pricing and margins, and there'll be better valuation,' said Wendy Liu, head of China and Hong Kong equity strategist at JPMorgan. Sectors that are likely to benefit include autos, battery, solar, cement, steel, aluminum and chemicals, she said. To seasoned China watchers, the current rhetoric recalls the supply-side reforms of 2015-2018, when a government-led push to cut outdated capacity in sectors such as coal and steel helped drive up prices in the following years. This time, however, key differences may limit the campaign's effectiveness. A decade ago, oversupply was mostly concentrated in upstream and construction-related sectors. It's become more pervasive today, encompassing the most promising industries of solar, EV and battery to downstream consumer sectors such healthcare and food. That point is illustrated by the intensifying price war among technology giants listed in Hong Kong — China's private sector leaders. Shares in Meituan, Alibaba Group Holding Ltd. and Inc. have slumped more than 20% from their March highs as they jostle for delivery market expansion. 'This time the overcapacity is concentrated in industries mostly dominated by private firms, so the challenges are going to be greater than when SOEs ruled and could just buy up the private firms and shut them down,' said Li Shouqiang, a fund manager at Shenzhen JM Investment Management. Addressing the supply-demand imbalance will also require measures to reflate the economy by boosting consumption — a tall order the government has struggled to deliver on. For now, investors seem hopeful that a bigger supply-side reform is in the offing. Morgan Stanley strategists said sentiment has improved with the government's message, and added they now prefer A-shares over offshore ones. 'When senior policymakers change some policy tone, there should be some actionable items or something to follow through,' said Louisa Fok, China equity strategist with Bank of Singapore. It won't be a quick overnight fix, but it's 'definitely positive' that the government is aware of the problems, she added.
