BENGALURU/BEIJING (Dec 26): The World Bank raised on Thursday its forecast for China's economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would keep weighing it down next year.

The world's second-biggest economy has struggled this year, mainly due to a property crisis and tepid domestic demand. An expected hike in US tariffs on its goods when US President-elect Donald Trump takes office in January may also hit growth.

"Addressing challenges in the property sector, strengthening social safety nets, and improving local government finances will be essential to unlocking a sustained recovery," Mara Warwick, the World Bank's country director for China, said.

"It is important to balance short-term support to growth with long-term structural reforms," she added in a statement.

Thanks to the effect of recent policy easing and near-term export strength, the World Bank sees China's gross domestic product growth at 4.9% this year, up from its June forecast of 4.8%.

Beijing set a growth target of "around 5%" this year, a goal it says it is confident of achieving.

Although growth for 2025 is also expected to fall to 4.5%, that is still higher than the World Bank's earlier forecast of 4.1%.

Slower household income growth and the negative wealth effect from lower home prices are expected to weigh on consumption into 2025, the Bank added.

To revive growth, Chinese authorities have agreed to issue a record three trillion yuan (US$411 billion or RM1.84 trillion) in special treasury bonds next year, Reuters reported this week.

The figures will not be officially unveiled until the annual meeting of China's parliament, the National People's Congress, in March 2025, and could still change before then.

While the housing regulator will continue efforts to stem further declines in China's real estate market next year, the World Bank said a turnaround in the sector was not anticipated until late 2025.

China's middle class has expanded significantly since the 2010s, encompassing 32% of the population in 2021, but World Bank estimates suggest about 55% remain "economically insecure", underscoring the need to generate opportunities.

Source: Theedgemarkets

Source: Bloomberg

Key players, worth trillions of won in corporate value — including subsidiaries of major conglomerates — are aiming to go public in 2025. However, according to market watchers on Thursday, it remains uncertain whether they can revive the current slump in market sentiment.

LG CNS is among the most anticipated initial public offerings (IPO) of 2025. The information technology subsidiary of LG will commence its IPO process next month, starting with demand forecasting for institutional investors. The offering is projected to raise up to 1.19 trillion won ($812 million), making it the largest public offering in three years since LG Energy Solutions.

Lotte Global Logistics, a logistics subsidiary of Lotte, plans to proceed with its stock market debut upon receiving the Korea Exchange's review results later this month. The company is targeting a market capitalization of 1 trillion won.

Other companies cautiously timing their IPOs, including Kbank, Seoul Guarantee Insurance (SGI) and DN Solutions, are also preparing for public offerings during the first half of 2025.

The subdued end-of-year IPO market has bolstered the interest of companies in pursuing IPOs next year.

In the first quarter of this year, newly listed stocks posted an average first-day return of 119.93 percent. This figure dropped to 65 percent in the second quarter and further declined to 22.99 percent in the third quarter. By November, the trend has reversed entirely, with newly listed stocks recording a 9.58 percent loss.

"The overheated IPO market has lost its momentum and entered a cold spell (in 2024)," an industry official said. "Several companies that are financially and operationally strong prepared for listings in the second half (of this year), but many have postponed their public offerings due to weakened investor confidence."

In October, Kbank, an internet-only bank, delayed its IPO process for the second time, citing weaker-than-expected investor interest. DN Solutions and SGI, despite receiving preliminary approval from the Korea Exchange, have postponed submitting their securities registration statements, citing unfavorable domestic stock market conditions.

Whether IPO market sentiment will improve in 2025 remains uncertain. Recent political developments, including the botched imposition of martial law and the subsequent impeachment of the president, have further eroded investor confidence.

Market watchers believe LG CNS' listing next month will set the tone for the IPO market in the first half of 2025.

"Rising market volatility is causing retail investors to lose interest in the IPO market," Eugene Investment & Securities analyst Park Jong-sun said. "The trend of distinguishing between strong and weak stocks has intensified."

Source: Koreatimes

BENGALURU (Dec 26): Emerging Asian currencies were mostly lower against a resilient dollar and stock markets weaker on Thursday, as investors continued to focus on the Federal Reserve's rate cut path in a holiday-thinned trading week.

The South Korean won, which is among the worst performing Asian currencies this year amid domestic political turmoil and US President-elect Donald Trump's tariff threats, fell as much as 0.6% to it lowest level since March 2009.

The Thai baht fell 0.3% and China's yuan hovered near a 13-month low, not far from the psychologically important 7.3 per dollar mark.

The Indian rupee dropped to a lifetime low.

Poon Panichpibool, a markets strategist at Krung Thai Bank said the impact of Trump 2.0 policies could support the US economy and keep the dollar strong under the "US exceptionalism" theme, exerting more selling pressures on EM assets.

The won, baht and Malaysian ringgit are considered more vulnerable to Trump's policies because of the countries' export-driven economies and sensitivity to China's growth.

Panichpibool added that the Fed's policy rate outlook was also significant because of its potential impact on Asian central banks' monetary policy decisions and rate differentials between the currencies.

Last week, Fed policymakers lowered their rate cut projections for 2025 to 50 basis points from 100 basis points, and raised their inflation forecast.

Markets are now pricing in only about 35 basis points of easing for 2025, which sent US treasury yields surging, and the dollar near a two-year peak.

Higher US rates could create problems for emerging markets, including capital outflows, currency weakness, inflation and volatility.

The central banks in Indonesia,Thailana, and Taiwan kept rates steady last week to address currency and global economic uncertainty concerns, while the Bangko Sentral ng Pilipinas cut rates.

Among other currencies, the Philippine peso rose 1.1% and was on track for its best day since November 2023. The ringgit, the only Asian currency to log a yearly gain this year, rose 0.4%.

Equities in Kuala Lumpur gained 0.5%, while those in Manila, Singapore and Bangkok lost between 0.1% and 0.2%.

Markets in Indonesia were closed for a holiday.

Source: Theedgemarkets

(Dec 26): Bitcoin rose on Thursday after the digital asset’s stockpiler MicroStrategy announced a plan to issue more shares, a move that would allow it to buy even more tokens. 

The digital asset was up 0.32% at US$98,747 (RM441,276) as of 11.30am in Singapore, off its intraday high of US$99,876.70. A broader gauge of cryptocurrencies comprising smaller tokens including Ether, Solana and meme-coin favourite Dogecoin was up 0.2%, recovering from losses on Wednesday. 

“The announcement that MicroStrategy will issue more shares next year to buy more bitcoin is pushing up the prices,” said Sean McNulty, a director of trading at liquidity provider Arbelos Markets. “The market is being forward looking about MicroStrategy’s bitcoin buys, and that’s been the single biggest reason for market to go up. Watching MicroStrategy news is becoming a big part of my day.”

MicroStrategy Inc is seeking permission to increase the number of authorised shares of Class A common stock and preferred stock, according to a Dec 23 filing with the US Securities and Exchange Commission. Such a move would provide the company, which has transformed itself from a software maker into a bitcoin accumulator, more firepower.

MicroStrategy announced earlier this week it had purchased an additional US$561 million of the digital token at an average price near last week’s record high. That marked the seventh week in a row of purchases.  

Bitcoin has risen 135% so far this year, exceeding returns from traditional investments such as global stocks and gold. 

Some traders cautioned that markets could turn volatile in the coming day on massive expiries of open interest in bitcoin and Ether derivatives. 

On Friday, a record US$43 billion of open interest including US$13.95 billion in bitcoin options and US$3.77 billion in Ether options will expire on derivatives exchange Deribit. 

“Market makers could unwind their hedges and short bitcoin strikes which might make it a choppy market on Friday,” McNulty said.

Source: Theedgemarkets