Aurelia Butler

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The People’s Bank of China said that it would prioritise “the role of interest rate adjustments” and move away from “quantitative objectives” for loan growth, as it embarks on a programme of interest rate reform that government advisors have called “an arduous task.”China’s main rate is its seven-day reverse repo rate, which it last cut from 1.7% to 1.5% in late September. During a high-level economic agenda-setting meeting in December, China’s top leaders vowed to cut interest rates “in a timely manner” and reduce the amount of capital banks must hold in reserve, as part of a broader effort to spur lending and investment in the ailing economy.The country’s top policymakers also pledged at the Central Economic and Work Conference to increase the budget deficit and loosen monetary policy, as the world’s second-largest economy braces for more trade tensions with the United States as Donald Trump returns to the White House.China’s economy showed an over-reliance on manufacturing and exports last year, with household demand disappointing as a severe property market crisis erodes consumer wealth and most government stimulus goes to producers and infrastructure.Government advisers are recommending Beijing keeps its growth target unchanged this year, but have also called for more forceful fiscal stimulus to bolster depressed domestic demand.Chinese President Xi Jinping said on Tuesday that China’s 2024 gross domestic product is expected to exceed 130 trillion yuan ($17.81 trillion), and added that policymakers would implement more proactive policies to promote growth over 2025. ($1 = 7.2994 Chinese yuan renminbi) More

The PBOC said it will cut interest rates from the current level of 1.5% “at an appropriate time” in 2025, the FT reported. The central bank will also streamline its monetary policy in adopting a more singular means of adjusting interest rates over its current practice of setting multiple rates for different sectors. A shift in the PBOC’s policy stance comes as China grapples with sluggish economic growth, with lower interest rates and steady liquidity measures having so far provided little support to the economy. Slowing growth has also furthered the case for monetary policy reform in the country, especially as credit demand slumped amid a property market slowdown over the past three years. The PBOC steadily trimmed its bank reserve requirement ratio and its loan prime rates over the past two years. But the moves provided limited support to the economy. This trend is also expected to drive the PBOC’s policy shift towards a more streamlined, market-centric approach to interest rates.The central bank had signaled last year that its main policy instrument will be the seven-day reverse repo rate. More

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LONDON/NEW YORK (Reuters) -Some of the world’s largest hedge funds finished 2024 with comfortable double-digit returns, benefiting from chaotic markets, central bank policy changes and a tight U.S. presidential election race. Hedge funds, which trade several different asset classes from stocks to commodities, navigated volatile markets with some degree of success. Macro (BCBA:BMAm) hedge fund Discovery (NASDAQ:WBD) Capital ended 2024 up 52%, after gains across equities, currencies, rates and credit, a source familiar with the performance said, with trades in both emerging and developed countries. In terms of sectors, the fund led by Rob Citrone, had profitable bets in financials and technology, media and telecom (TMT) for instance. British hedge fund Marshall Wace, which manages almost $71 billion, returned double-digit gains in several of its funds, a source close to the matter told Reuters on Thursday. Co-founded by British financier Paul Marshall, the firm returned around 14% in its Eureka fund, a source said. Hedge fund manager Bridgewater Associates’ flagship Pure Alpha 18% volatility fund gained just over 11% in 2024 through Dec. 27, a source familiar with the matter said on Thursday.Large U.S. multi-strategy firms also posted double-digit gains.Schonfeld’s flagship hedge fund Strategic Partners was up 19.7% in 2024.Citadel’s flagship fund Wellington posted a 15.1% gain, while Millennium Management returned 15% in 2024, according to people familiar with the results. Citadel offered clients the option to cash out Wellington’s profits. Very few clients took up the offer, with redemptions totaling only roughly $300 million out of billions in profit.Two of D.E. Shaw’s multi-strategy funds posted double-digit returns including its flagship Composite fund, which gained 18% in 2024 and its more macro-oriented fund Oculus, which posted a 36% return in the same period, its best-ever annual performance, said another person close to the matter. Millennium and D.E. Shaw’s results were first reported by the Financial Times and Bloomberg, respectively.Jon Caplis, CEO of hedge fund research firm PivotalPath, said there was “a resurgence of the multi-strat space across 2024,” and he expects to see more inflows to the strategy.Last year’s gains came as rate cuts from the likes of the U.S. Federal Reserve helped push stocks higher, while a decisive presidential election win for Donald Trump and Bank of Japan rate hikes were other catalysts for big market swings.Hedge funds in 2023 averaged a 5.7% return in the year through November, according to PivotalPath.TRACKING TRENDSQuantitative hedge funds, which use algorithms and coding to track markets, benefited from big moves in several markets including equities, currencies, grains and soft commodities such as cocoa and coffee, which both surged last year.For the $728-million Dunn Capital Management, these were all positive drivers for the Dunn WMA trading program, which returned 7.28% for the year despite negative drivers in energies, metals and European equities, said a source with knowledge of the matter. Hedge fund CFM (Capital Fund Management), also a quantitative investment manager, returned 12.01% in its Discus Fund and 14.22% in its Stratus Fund, another source with knowledge of the matter told Reuters. British fund Winton saw a roughly 10% return on investment in its multi-strategy systematic fund. Overall, the hedge fund manages around $13 billion. Transtrend’s Diversified Trend Program returned 5.90% for 2024. Fund name Percentage rise in 2024 Marshall Wace – Eureka 14.32* Marshall Wace – Market Neutral Tops 22.59* Marshall Wace – Alpha Plus 15.86* Winton – Multi-strategy systematic fund 10.3 Bridgewater Associates* – Pure Alpha 18% 11.2 vol Bridgewater Associates* – China Total (EPA:TTEF) 35 Return D.E. Shaw – Oculus 36.1 D.E. Shaw – Composite 18 Millennium Management 15 CFM Discus 12.01 CFM Stratus 14.22 CFM Systematic Global Macro 13.32 CFM Cumulus 14.12 CFM IS Trends 18.94 CFM IS Trends Equity Capped 12.42 DUNN WMA program 7.28 Transtrend 5.9 Citadel Wellington 15.1 Citadel Tactical 22.3 Citadel Equities 18 Citadel Global Fixed Income 9.7 Schonfeld Strategic Partners 19.7 Schonfeld Fundamental Equity 21.1 Discovery Capital 52 * result as of Dec. 27Sourcing: several people with knowledge of the matter. Firms declined to comment on the matter. More

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(Reuters) -OpenAI on Friday outlined plans to revamp its structure, saying it would create a public benefit corporation to make it easier to “raise more capital than we’d imagined,” and remove the restrictions imposed on the startup by its current nonprofit parent. The acknowledgement and detailed rationale behind its high-profile restructuring confirmed a Reuters report in September, which sparked debate among corporate watchdogs and tech moguls including Elon Musk. At issue were the implications such a move might have on whether OpenAI would allocate its assets to the nonprofit arm fairly, and how the company would strike a balance between making a profit and generating social and public good as it develops AI.Under the proposed plan, the ChatGPT maker’s existing for-profit arm would become a Delaware-based public benefit corporation (PBC) – a structure designed to consider the interests of society in addition to shareholder value.OpenAI has been looking to make changes to attract further investment, as the expensive pursuit of artificial general intelligence, or AI that surpasses human intelligence, heats up.Its latest $6.6 billion funding round at a valuation of $157 billion was contingent on whether the ChatGPT-maker could upend its corporate structure and remove a profit cap for investors within two years, Reuters reported in October. The nonprofit, meanwhile, will have a “significant interest” in the PBC in the form of shares as determined by independent financial advisers, OpenAI said in a blog post, adding that it would be one of the “best resourced nonprofits in history.” OpenAI started in 2015 as a research-focused nonprofit but created a for-profit unit four years later to secure funding for the high costs of AI development. Its unusual structure gave control of the for-profit unit to the nonprofit and was in focus last year when Sam Altman was fired as CEO only to return days later after employees rebelled. ‘CRITICAL STEP'”We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness,” the Microsoft-backed startup said on Friday. “The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission.”Its plans to create a PBC would align the startup with rivals such as Anthropic and the Musk-owned xAI, which use a similar structure and recently raised billions in funding. Anthropic garnered another $4 billion investment from existing investor Amazon.com (NASDAQ:AMZN) last month, while xAI raised around $6 billion in equity financing earlier in December.”The key to the announcement is that the for-profit side of OpenAI ‘will run and control OpenAI’s operations and business,'” DA Davidson & Co analyst Gil Luria said.”This is the critical step the company needs to make in order to continue fund raising,” Luria said, although he added that the move did “not necessitate OpenAI going public.”The startup could, however, face some hurdles in the plan.Musk, an OpenAI co-founder who later left and is now one of the startup’s most vocal critics, is trying to stop the plan and in August sued OpenAI and Altman. Musk alleges that OpenAI violated contract provisions by putting profit ahead of the public good in the push to advance AI.OpenAI earlier this month asked a federal judge to reject Musk’s request and published a trove of messages with Musk to argue that he initially backed for-profit status for OpenAI before walking away from the company after failing to gain a majority equity stake and full control.Meta Platforms (NASDAQ:META) is also urging California’s attorney general to block OpenAI’s conversion to a for-profit company, according to a copy of a letter seen by Reuters.Becoming a benefit corporation does not guarantee in and of itself that a company will put its stated mission above profit, as that status legally requires only that the company’s board “balance” its mission and profit-making concerns, said Ann Lipton, a corporate law professor at Tulane Law School.”The only reason to choose benefit form over any other corporate form is the declaration to the public,” she said. “It doesn’t actually have any real enforcement power behind it,” she said.In practice, it is the shareholders who own a controlling stake in the company who dictate how closely a public benefit company sticks to its mission, Lipton said. More