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As Japan and the United States place fresh curbs on Chinese technology firms, local investors are scooping up shares of those firms and state companies, and reaping handsome rewards. New fund launches will potentially channel money into China's technology and chipmaking leaders, including ZTE Corp (000063.SZ), Unisplendour Co (000938.SZ), Montage and Cambricon Technologies (688256.SS). Cutting-edge innovation requires huge and long-term investment, which is beyond the ability of private companies, "but SOEs can do it," Yang said. For example, China's chipmaking sector is now trading at 60 times earnings, compared with 16 for the broad market. But "China needs high valuation in some sectors ... Why don't you put down your wager, while also supporting the country's development?"

☆ Morning Bid: Rehash on rates ahead as ECB, BOE and Fed speak
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

[1/2] Flowers are seen outside the Bank of England in the City of London financial district in London, Britain May 11, 2023. REUTERS/Henry NichollsA look at the day ahead in European and global markets from Vidya RanganathanSeveral key central bankers, including Fed Chair Jerome Powell, appear at a variety of events today, ensuring investors have plenty of commentary, and nearly similar synopses. The messaging from the BOE after last week's 12th rate rise has been consistent: It isn't done, the labour market is tight, quantitative tightening might even pick up pace. Wall Street, Treasury yields, implied U.S. interest rates and the dollar all rose on Thursday. G7 leaders kicked off a three-day summit in Hiroshima on Friday, and the focus there is on fresh sanctions against Russia and what they say about China.

As doubts grow about the strength of its economic recovery, foreign money has left China's markets and the currency has fallen 4% against the dollar since late January. Analysts at Nomura and Societe Generale say the yuan could soon head for 7.3, which as last plumbed in November. Reflecting that, the trade-weighted CFETS basket against which the People's Bank of China (PBOC) manages the currency, has dropped to 99 from 100 in February. THE CHEAP CURRENCYBecky Liu, head of China macro strategy at Standard Chartered Bank, expects the yuan will continue to depreciate. "The interest rate gap remains wide, so many hedge funds continue to use yuan as a funding currency," Liu said.

☆ Morning Bid: Europe has a data fest, and growth worries
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Vidya RanganathanTuesday's a busy day for European markets. We get preliminary growth numbers for the euro zone, inflation in Italy, jobless data for Britain and, crucially, the German economic sentiment ZEW survey. No surprises are seen in euro zone GDP data - rather, analysts assume the tepid pace seen in the fourth quarter hasn't picked up. That leaves the German ZEW survey for May in the spotlight. UK labour market data is a biggie too for sterling this week, offering insight into the headline pay growth that the hawkish Bank of England is eyeing.

☆ Chinese company earnings reveal lopsided economic recovery
▼ + stars: | 2023-05-10 | by ( Summer Zhen | ) www.reuters.com time to read: +4 min

Restaurants and tourism businesses recovered, with travel-related consumer services sector earnings surging 155%, data from China International Capital Corp (CICC) showed. Food-and-beverage sector earnings jumped 18% and automobiles were up a smaller 8%. Several analysts believe the first quarter will be the low point for 2023 and full-year earnings will reach double digits. Refinitiv data forecasts full-year earnings growth of 26% for companies listed on the Shanghai Stock Exchange. The materials sector posted the worst results, with earnings in steel and building materials tumbling more than 60%, respectively.

May 9 (Reuters) - Digital stablecoin tether is winning the race for the title of the crypto world's "least risky" asset. Tether is already the top performer among stablecoins -- digital tokens pegged to some fiat asset like the dollar -- and has seen its market value soar since March. Buying tether and bitcoin is really a vote against the U.S. system," says Jensen. On CoinMarketCap's database of 23,891 tokens, tether has risen to number 3 with a market cap of $82 bln and a share of 6.83%. NO NEWS IS GOOD NEWSTo be sure, tether has long been dogged by doubts about its peg being backed by dollar reserves.

☆ Morning Bid: German data in the rear-view mirror
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Vidya Ranganathan. The euro is digesting a widely anticipated hawkish quarter-point rate rise from the European Central Bank, and is off its one-year highs. While ECB President Christine Lagarde was clear more tightening will come, markets are paring back their expectations for further rate rises . In the background, there's also evidence that travellers from a reopened China flocked to Europe during their May Day break early this week. Reuters GraphicsKey developments that could influence markets on Friday:Economic data: German March industrial orders, Swiss forex reserves, UK PMI, US non-farm payrolls.

☆ Morning Bid: Next up ECB - Will it be a hawkish 25 or dovish 50?
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

[1/2] Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. REUTERS/Wolfgang Rattay/File PhotoA look at the day ahead in European and global markets from Vidya Ranganathan. The spotlight moves swiftly from the Fed's "possible pause or pivot" message overnight to the European Central Bank, where the direction of rates is not in question. It will be a seventh rate rise for the ECB, the central bank for a 20-country zone whose headline inflation is 7%, and it has so far dismissed the ongoing banking crisis as U.S.-specific. Will the ECB go for a heavier 50 basis-point hike and signal a possible pause, allowing President Christine Lagarde to echo Fed Chair Jerome Powell's "credit tightening" excuse?

☆ Stock markets nervous about Fed pivot and banking sector
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +4 min

"The Fed decision was widely expected, so it didn't provide much of a shock to financial markets," Tina Teng, market analyst at CMC Markets, in Auckland. "However, I think the whole economic playout is not positive, especially the recent banking rout from the regional banks, and those big banks taking over the smaller banks. It's not a good sign, and risks are spreading out into the wider banking system, which worries investors." E-mini futures for the S&P 500 fell 0.22%, reflecting the dramatic slide in regional banking shares after the close of U.S. markets. The Fed is trying to indicate a direction, and the market is looking further down the path than the Fed's willing to communicate."

☆ Global issuance of mortgage-backed securities falls to a 23-year low
▼ + stars: | 2023-05-04 | by ( Patturaja Murugaboopathy | ) www.reuters.com time to read: +3 min

May 4 (Reuters) - The issuance of global mortgage-backed securities (MBS) slumped to a 23-year low in the first four months of this year, highlighting the turmoil in the real estate sector as higher mortgage rates hit property sales and refinancing. According to Refinitiv data, global MBS issuance stood at $100 billion in the first four months of this year, the lowest since 2000. Reuters GraphicsThe property sector, often a leading indicator for other economic activity, has seen a slump this year due to a spike in mortgage rates as global central banks increased interest rates to tame inflation. MBS consist of pools of home loans and other real estate debt and typically carry higher yields than U.S. Treasuries. The refinancing of existing mortgages may also be affected, as there may be fewer lenders available to refinance existing loans leading to private lenders and higher rates."

☆ PacWest, Western Alliance hit as US banking concerns widen
▼ + stars: | 2023-05-04 | by ( Medha Singh | ) www.reuters.com time to read: +3 min

PacWest (PACW.O) slumped 37% in premarket trade, after having lost 29% since Monday. Reuters had reported on Wednesday that PacWest was exploring strategic options including a potential sale or capital raising, which the lender confirmed late in the day. Zion Bancorporation (ZION.O), KeyCorp (KEY.N), Valley National Bancorp (VLY.O), Comerica (CMA.N) and First Horizon (FHN.N) dropped between 2% and 6%. The SPDR S&P Regional Banking ETF (KRE.P) shed 2.8%. PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

Apparently they can in some parts of the world, such as Argentina and Turkey, where soaring prices and tumbling local currencies have forced people to seek refuge in digital coins. Trading volumes for spot bitcoin are highest during U.S. opening hours, with little change from 2022, Kaiko data showed. If dollar to crypto volumes are excluded, then the next most dominant currency is South Korea's won . Crypto trading volumes in South Korea are back to levels seen in first quarter and second quarters of 2022 after a weak fourth quarter in 2022, analysts at crypto investment firm Matrixport said. "This is in stark contrast to other crypto exchanges where bitcoin and Ethereum account for the majority of the volume."

SHANGHAI/SINGAPORE, April 28 (Reuters) - Chinese banks are ramping up efforts to promote international use of the yuan, and reporting a surge in cross-border yuan business from the country's booming trade with Russia and deepening ties with the Middle East. Harbin Bank Co (6138.HK), in China's Heilongjiang province neighboring Russia, saw its cross-border yuan business grow nine-fold last year to a record, as the Sino-Russia trade grew briskly after the Ukraine war began. Industrial Bank Co (601166.SS), whose cross-border, corporate payment business jumped 50% last year, has also been actively promoting CIPS, China's own global payment system. The bank said it currently helps 153 foreign and Chinese banks connect to CIPS, to advance China's yuan internationalisation strategy. "Increasing the use of yuan in pricing, and settling cross-border oil and gas trade will give a boost to yuan internationalization."

☆ Analysis: China's small steps on offshore use of yuan are starting to add up
▼ + stars: | 2023-04-27 | by ( Tom Westbrook | ) www.reuters.com time to read: +5 min

SINGAPORE, April 27 (Reuters) - China's yuan currency is slowly but surely being adopted for more international payments, which analysts say could lay foundations for a trade system running parallel to the dominant U.S. dollar. True global yuan adoption is unlikely, given expectations that Beijing will want to keep a tight grip on the currency. "Their cooperation could draw other countries to renminbi payments over time and cumulatively, this group could lift the renminbi at the expense of the dollar," he said. "This kind of renminbi internationalisation may achieve Beijing's goals, including reducing China’s exposure to exchange rate fluctuations and mitigating China’s vulnerabilities to U.S. financial sanctions." "Therefore, if exporters want to use yuan to settle trades, they must persuade foreign importers to pay in yuan, which often takes a long time."

☆ Morning Bid: Wowed by tech, worried by banks
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +1 min

That makes investors wary of such provisions at the likes of HSBC (HSBA.L), Lloyds (LLOY.L) and NatWest Group (NWG.L), all of which are due to report earnings in the coming weeks. Across the Atlantic, First Republic Bank's (FRC.N) plunging deposits and tumbling shares are rippling through the U.S. regional banking sector. U.S. recession fears have also resurfaced after consumer confidence hit a nine-month low, alongside some weak earnings. In a week packed with tech sector earnings, the focus moves from artificial intelligence to advertising revenues as Facebook-parent Meta Platforms (META.O) and streaming device maker Roku Inc (ROKU.O) report. Key developments that could influence markets on Wednesday:U.S. durable goods orders, Germany and France consumer confidenceEarnings: Meta Platforms, Boeing, GSK, Deutsche Boerse, Roku IncEditing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

Shares of state-owned enterprises (SOEs) have risen sharply since November, when top securities regulator Yi Huiman called for a new model to price them. Mainland-listed state telecom operators China Mobile and China Telecom have jumped more than 50% each this year and China Petroleum & Chemical Corp (600028.SS) has soared 44%, compared with a 5% gain in the benchmark index (.CSI300). More than 10 mutual fund companies have applied to launch nearly a score of SOE-dedicated funds since March, state media reported. E Fund Management Co this week launched a mutual fund, aiming to raise up to 8 billion yuan ($1.16 billion) to be ploughed into shares of strategically important SOEs. State companies' shares have so far outperformed the broader market, delivering what investors term a rare "SOE alpha".

The London Stock Exchange Group (LSEG) (LSEG.L) and UK trade officials visited several cities in China to promote UK capital markets recently. Wilson Xu, a banking veteran from CITIC Securities pioneering the Stock Connect programme, said liquidity will improve when there is a critical mass of Chinese listings. The Shanghai-London Stock Connect was launched in 2019 and the link was expanded last year to include Shenzhen and Switzerland. Even arrangements by SIX to allow roughly 2.5 hours of trading in a session for Chinese GDRs didn't help. Chinese companies, however, have been positive in public disclosures about their forays in Europe which have given them an alternative channel to raise funds and access foreign currency for their operations abroad.

☆ China funds flock to Hong Kong to sate mainland investors
▼ + stars: | 2023-04-20 | by ( Summer Zhen | ) www.reuters.com time to read: +3 min

HONG KONG, April 20 (Reuters) - Large China-based fund managers are setting up shop in Hong Kong for the first time, seeking to fill Chinese investors' appetite for U.S. dollar-based products and international exposure after the country reopened its borders. As mainland-based funds are yuan denominated, fund managers need to set up in Hong Kong to be able to offer foreign currency products. "We are optimistic about Hong Kong as the global asset management hub. "Foreign managers are getting licenses and issuing funds in China - it's natural for us to go overseas," said Jason Yim, managing director of QX Asset Management in Hong Kong. Wealth management firms such as Noah Holdings (NOAH.N), China's largest independent wealth manager, are also aggressively expanding teams in Hong Kong.

☆ Analysis: Investors seek to break through Japan Inc's 'value trap'
▼ + stars: | 2023-04-20 | by ( Ankur Banerjee | ) www.reuters.com time to read: +5 min

SINGAPORE, April 20 (Reuters) - Corporate governance in Japan has suddenly become a cause celebre, rousing the world's third-largest stock market out of decades of lethargy and drawing in hordes of foreign investors. Japan's stock market has long been seen by investors as a 'value trap' where companies focus on market share, hoard cash and care little about shareholder returns. What has prompted investors globally to sit up and take notice is an endorsement from legendary billionaire investor Warren Buffett. The MSCI Japan Value index (.dMIJP0000VPUS) is up 9% since August 2020 versus a 9% drop for the MSCI Japan growth index (.dMIJP0000GPUS). "I think the value trap that was Japan is no longer."

April 18 (Reuters) - Beleaguered bitcoin miners are finally feeling the spring sunshine after a cold, hard crypto winter. At the current bitcoin price, these companies' cash flows have substantially improved and most of them should have no problem paying their obligations," said Jaran Mellerud, analyst at bitcoin mining services company Luxor. Bitcoin mining is the process by which a network of computers validates a block of transactions on the blockchain. "The bitcoin price increase has bought these companies time, but it would be detrimental for these companies if it were to fall back down to $20,000," he said. A rapid rise in power prices or a fast fall in bitcoin could usher in a new cold spell.

"I don't have the brain for stock investments, and I am waiting to redeem mutual fund products once they break even. The interest in precious metals is a worrying indicator that China's efforts to revive its economy via domestic spending, after years of strict COVID curbs, may not be working. Households savings grew by 9.9 trillion yuan in the January-March period, after rising a record 17.8 trillion yuan in 2022. In 2021, they grew by 9.9 trillion yuan. "Economic fundamentals, risk aversion and the recovery of domestic consumption all drive the investment demand for jewellery and precious metals," said Pang Xichun, research director at Nanjing RiskHunt Investment Management Co.

Bitcoin peaked at $30,438 in Asian trade and was last up 1.4% at $30,070. It has gained nearly 6% since the start of the month, after rising 23% in March. This brings digital asset flows back into positive territory for the year, the report showed. "If (bitcoin) can survive the week over $30,000, we are going higher." While Shapella is not likely to directly drive sell pressure on ether, there could be heightened volatility around the event, Bank of America strategist Alkesh Shah said.

☆ Bitcoin pushes past $30,000 as investors eye end of rate rises
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +2 min

SINGAPORE, April 11 (Reuters) - Major cryptocurrency bitcoin breached the key $30,000 level for the first time in 10 months on Tuesday, adding to its steady gains as investors raised bets that the U.S. Federal Reserve will soon end its aggressive monetary tightening campaign. Bitcoin peaked at $30,438 in Asian trade and was last 2% higher at $30,262. It has gained about 6% since the start of the month, after rising 23% in March. "Bets for a sooner Fed pivot on rate hikes have been dramatically strengthened following the bank turmoil in early March." Reporting by Rae Wee; Editing by Vidya Ranganathan and Jamie FreedOur Standards: The Thomson Reuters Trust Principles.

Vahia is one among India’s young and aspirational 1.4 billion population, whose propensity for online spending has attracted global companies and digital platforms. And as private consumption underpins economic growth in India, financial investors are targetting new ways to tap into it. India's per capita consumption of food was at $314 in 2020 compared to $884 for China, while that of clothing stood at $53.9 versus $212.9 for China, data from CLSA showed. FOREIGN INVESTORS JUMP INWith private consumption accounting for 60% of India's $3.5 trillion GDP, foreign portfolio investors have been quick to latch on. To be sure, it has not been all smooth sailing for investors as they chased India's consumption boom.

Yet investors aiming to amp up their bets face an ominous obstacle: a lack of liquidity that could trigger wild price swings. Slippage, a liquidity measure describing how much prices change between the placement and execution of a trade, has also increased. The vanishing liquidity can be traced back to the collapse of Sam Bankman-Fried's FTX exchange and hedge fund Alameda Research. Until then, "liquidity is probably going to get worse and worse", said Joseph Edwards, investment adviser at Enigma Securities. "Even if some players haven't left the place, they are on the sidelines right now because of what's happening with banking turmoil," Edwards said.

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