Notable market news this past week (23-Mar-25)
Here is the Skeptivest roundup of the latest market headlines for the week
🇮🇩 Southeast Asian markets face heightened volatility as investors turn back to China
Capital outflow from Southeast Asia, back to China: Investors are withdrawing from Southeast Asia amid concerns over its largest economies, redirecting capital to Chinese equities. Indonesia and Thailand have seen significant outflows, with their markets among the year’s worst performers. “It’s hard to take a strong call on south-east Asian markets when China is back in the equation,” said Daniel Ng, Asian equities investment manager at Aberdeen.
Trading halted in Indonesia this week: The MSCI Indonesia (MXID) has corrected 11% YTD on US$1.8bn net foreign market outflow including US$150mn outflow on 18 March 25. Circuit breaker (i.e. trading halted) was enacted because of this. This was triggered by rumours of the finance minister resigning (which she has since declined), but really at the back of deeper concerns over the government's policy, fiscal position and growth prospects.
Investors concern over Indonesia: 1) Investor concerns over Indonesia have intensified amid President Prabowo’s push for greater state involvement, the management of state firms, the launch of sovereign wealth fund Danantara, and rising fiscal risks. 2) Plans to expand the military’s role in civilian institutions have further unsettled markets. 3) Weakening purchasing power and declining consumer confidence are adding to concerns over Indonesia’s growth, alongside fiscal risks. President Prabowo’s proposed $28bn annual free meals program has further fueled worries over fiscal discipline.
🏦 Central bank hold rates
Major central banks hold rates: Major central banks, including the Fed, BoJ, BoE, PBoC, BI, and Riksbank, held rates steady amid global uncertainty, while the Swiss National Bank cut rates by 25bps.
PBoC, Riksbank: China hinted at potential monetary easing as deflationary pressures persist and officials lowered the annual CPI target to 2%. Sweden cited geopolitical and trade risks but maintained its stance, expecting a balanced impact from increased EU defense spending.
Fed/BoE: The Fed reaffirmed its expectation of two rate cuts this year despite inflationary pressures linked to tariffs, while the BoE emphasized the need for prolonged restrictive policy to manage inflation and sluggish growth.
☕️ Quick fire happenings to note
🌏 Global macro
- BofA survey reveals record rotation out of US stocks: Bank of America’s latest survey shows a significant rotation out of U.S. equities, with investor allocation to stocks falling by 40% in March, the largest monthly drop on record. This shift, driven by concerns over stagflation, trade wars, and the end of US economic dominance, has led investors to increase cash holdings. Despite this, fears of an imminent recession are muted, with cash allocations rising only to 4.1%—well below levels that typically signal downturns. Investors are shifting focus to cheaper stocks like healthcare and materials while avoiding high-priced tech.
- Germany approves historic $547bn spending plan: Germany’s lower house of Parliament approved a bill loosening borrowing limits to create a $547 billion fund aimed at boosting military strength and revitalizing its economy. The deal, backed by both the Christian Democratic Union and Social Democratic Party, was spearheaded by Chancellor-in-waiting Friedrich Merz. With the economy stagnating due to infrastructure issues and a manufacturing slump, the fund is seen as crucial for economic recovery.
- China’s property woes deepen: New home prices fell at a faster pace in February for the first time in six months, signaling continued weakness despite government support. Used-home prices also declined in major cities, the first drop since September, highlighting persistent deflationary pressures in a sector crucial to household wealth.
- Trump signs executive order to reduce Education Dept: President Trump signed an order to downsize the Department of Education, potentially disrupting the management of the $1.6 trillion student loan portfolio. The reduced department would still manage student loans, Pell Grants, special education, and civil rights enforcement. With staff cut by half, responsibilities may shift to other agencies like the Justice Department and Treasury, raising concerns over delays and reduced effectiveness.
- UBS may shift HQ: UBS is considering moving its headquarters if Switzerland enforces a $25 billion capital hike, which could push its key capital ratio to 20% from 14%, making it less competitive globally. Regulators seek stricter rules to prevent another Credit Suisse-style collapse, but UBS views the move as excessive and potentially untenable.
🏦 Individual stocks/companies
- Nike (-5.64% past 5 days) selloff hits Europe: Nike’s share decline is weighing on European peers, with JD Sports down 6.5%, while Puma and Adidas fell 2.9% and 0.5%, respectively. Nike’s revenue dropped 9% to $11.3 billion in the latest quarter, beating Wall Street’s forecasted 11% decline. A 17% drop in China sales contributed significantly to the decrease.
- Google to acquire Wiz for $32bn, strengthening cloud security: Google has signed a $32 billion deal to acquire cybersecurity firm Wiz, marking its largest acquisition ever. Wiz’s services monitor data across multiple clouds and protect against potential breaches, making it a valuable asset for Google Cloud, which is expanding rapidly. This acquisition, following previous investments in cybersecurity, aims to enhance Google’s competitive edge in the fast-growing cloud market, especially as AI-driven cloud services increase demand for robust security.
- Pepsi buys Poppi for $2bn: PepsiCo is acquiring the prebiotic soda brand Poppi for nearly $2 billion, hoping to capitalize on the growing trend of functional beverages. With health-conscious consumers moving away from traditional sodas, Poppi's low-calorie offering is poised to fill a niche in the market. The deal includes performance-based milestones, indicating Pepsi’s belief in Poppi’s potential
- BYD unveils superfast charger, revolutionizing EV charging: Chinese automaker BYD has unveiled its Super e-Platform, capable of fully charging its EV batteries in just 5 minutes, matching the time it takes to refuel a gasoline car. With charging speeds of up to 1,000 kilowatts, BYD's technology far surpasses Tesla’s superchargers, which take around 15 minutes for a similar charge. While China leads in both charging speed and infrastructure, the U.S. lags behind, with the government recently halting funding for EV-charging projects. BYD plans to install 4,000 ultra-fast charging stations across China to support its breakthrough.
- BYD vs Tesla: In January, 27% of EVs sold in China were produced by BYD, while Tesla captured just 4.5%, placing it sixth in market share. Tesla's 2024 sales in China dropped 19% year over year.
- Klarna partners with Walmart ahead of IPO: larna has secured a major partnership with Walmart, replacing Affirm in providing buy-now-pay-later (BNPL) services through Walmart’s OnePay platform. This marks a significant development for Klarna as it prepares for its U.S. IPO, targeting a $15 billion valuation. Affirm, on the other hand, loses a lucrative deal that accounted for a notable portion of its revenue in 2024.
- DoorDash also partners with Klarna: DoorDash has teamed up with Klarna to offer buy now, pay later (BNPL) options for food orders, allowing customers to defer payments interest-free. Klarna, which earned $2.8 billion in revenue last year, filed for an IPO with a target valuation of $15 billion. This collaboration enables users to align payments with their paycheck schedules.
- Reddit (RDDT) shares dropped 12.3% after analysts at Redburn Atlantic initiated coverage with a "sell" rating, citing slowing user growth and heavy reliance on changes to Google's search algorithm.
🇸🇬 Singapore related
- Economists keep Singapore’s 2025 growth forecast at 2.6% as trade tensions rise: Private sector economists have maintained Singapore’s 2025 growth forecast at 2.6%, slower than the 4.4% in 2024, with risks including geopolitical tensions, trade policies, and weaker growth in China. Inflation is expected to ease to 1.7%, and unemployment is forecast to fall to 2%. The outlook remains influenced by factors such as a potential rebound in China’s economy, the tech sector’s performance, and easing trade tensions. The Monetary Authority of Singapore may adjust its currency policy in April, potentially slowing the pace of Singapore dollar appreciation.
