Aurelia Butler

HONG KONG/SINGAPORE (Reuters) -New shades of capitalism are emerging in China’s tuckered out stock market as companies, at Beijing’s behest, buy back their shares and pay record dividends to investors lying in wait for a so-far evasive rebound.Investors say the record spree of share buybacks and dividend payouts mark a cultural shift in the market, turning the spotlight on shareholder returns akin to the ongoing corporate governance makeover in Japan. The dividend yield on Chinese stocks has risen to around 3%, the highest since 2016, rewarding investors who have bravely stayed invested in a market that has been limp for years and faces more stress after Donald Trump’s return as U.S. president.”China’s regulators and policymakers are trying to engineer this culture of shareholder return,” said Jason Lui, head of Asia-Pacific equities and derivatives strategy at BNP Paribas (OTC:BNPQY).”If that can be successfully engineered, it will change the makeup of the capital market, and you’ve seen some early sign of that,” referring to increased shareholder returns.The buybacks and dividends were introduced as part of proposals by Chinese authorities in September to lift stock prices and boost consumer sentiment.The benchmark CSI 300 index has struggled in recent years, down more than 27% since 2021 against a 65% rise for the S&P 500. The market value of Chinese stocks has stagnated for a decade at around $11 trillion.Lingering concerns over the indebted property sector, deflationary pressures, lack of big stimulus and geopolitical tensions have hurt sentiment, causing a foreign investment exodus. The threat of tariffs from Trump is another worry. Even after Beijing showed willingness to boost the market in September, stock prices have lost momentum. The CSI300 index surged 40% in the two weeks after the first stimulus announcements but disappointment with the degree and pace of implementation has seen gains halve since then. “The simple way to look at it, you should be paid enough of a dividend … for you to take the pain of the fact that the recovery might not happen in valuations,” said Bhaskar Laxminarayan, chief investment officer for Asia at Julius Baer (SIX:BAER). “You’re being paid for that patience. If you’re not, then it’s not worth it.”BIG DATAChinese firms distributed dividends totalling a record 2.4 trillion yuan ($329.7 billion) in 2024. Share buybacks too rose to a record high 147.6 billion yuan last year, data from regulators showed.Wu Qing, head of the China Securities Regulatory Commission, said on Thursday that more than 310 companies are expected to pay out dividends totalling more than 340 billion yuan in December and January. That is a 9-fold increase in the number of companies and a 7.6-fold rise in dividend amount versus the same period last year.In a sign of how the market is maturing into one where shareholder return is becoming a differentiator, investors have been steadily pouring into dividend-themed exchange-traded funds (ETFs), with nearly $8 billion of inflow since 2020, compared with just $273 million in the previous five years, LSEG Lipper data showed. The CSI Dividend Index – comprised of traditional energy, financial and material companies that yield high dividends – is up 20% in the past five years compared with a drop of about 8% for the blue-chip CSI300 index.The CSI growth index sank 25% in the same period. CULTURAL SHIFTPolicy measures, including a 300 billion yuan share buyback financing programme and guidelines requiring mainland companies to improve shareholder returns and valuations, have helped sharpen the focus on higher-yielding firms. “China was never a dividend-yielding asset class as a whole, because it was always seen as a growth-oriented play. But now I think we’re in a nice sweet spot where you have both growth and yield,” said Nicholas Chui, China portfolio manager at Franklin Templeton.Roughly two-thirds of the stocks in Chui’s portfolio are now yielding at least 2%, which is “not just a deliberate allocation on my part, but really the entire market has gone up in yield,” Chui said. “It’s a change in culture.”Rising dividends also prevent income-seeking mainland investors from rushing into bonds, as they have done for months. The dividend yield is now well above the 1.7% they can earn on 10-year government bonds.Shares of battery maker Contemporary Amperex Technology and e-commerce behemoth Tencent rose after the companies announced buybacks or dividend payouts. Goldman Sachs estimates Chinese companies listed at home and abroad could return a total 3.5 trillion yuan to shareholders in 2025, a jump of over 17%. “Companies don’t know where to put their cash, so they return it now to shareholders. This is a very big shift in mindset,” said Herald van der Linde (NYSE:LIN), head of equity strategy for Asia-Pacific at HSBC. “I think 10 years ago, you wouldn’t have expected this.” ($1 = 7.2798 Chinese yuan) More

Trump ordered his Administration to introduce “emergency 25% tariffs on all goods coming into the United States,” which will be raised to 50%” in one week.According to Trump, these measures are necessary as the decision by Colombian President Gustavo Petro has put U.S. national security at risk. The retaliatory actions include tariffs, visa restrictions, and other measures.Trump communicated his decision on his social media platform, Truth Social, stating that these actions were just the start.“These measures are just the beginning. We will not allow the Colombian Government to violate its legal obligations with regard to the acceptance and return of the Criminals they forced into the United States!” Trump wrote on Truth Social.He expressed his disapproval of the Colombian government’s breach of legal obligations concerning the acceptance and return of migrants they allegedly forced into the U.S.Earlier on Sunday, President Petro stated that his government would not accept flights carrying deported migrants from the U.S. until the Trump administration establishes a protocol that ensures their dignified treatment.Petro’s announcement was made in two posts, one of which featured a news video showing migrants reportedly deported to Brazil walking on a tarmac with restraints on their hands and feet. More

(Reuters) – A look at the day ahead in Asian markets. A big week for world markets kicks off in Asia on Monday with investors still navigating the blizzard of headlines around U.S. President Donald Trump’s likely economic agenda, while trying to gauge whether the “U.S. exceptionalism” narrative may be losing its luster.The dollar fell 1.8% last week, its worst week since November 2023. If the greenback is consolidating, it shouldn’t really be a surprise – it hit a two-year high earlier this month and hedge fund net ‘long’ position was the biggest in nine years.The dollar and U.S. stocks have been closely correlated, lifted by the huge wave of global capital inflows as investors bet heavily on the American AI, tech, growth and returns boom.But if the dollar’s slide is a sign that the “U.S. exceptionalism” flame is starting to flicker, is Wall Street primed for a cooling off period too? The S&P 500 hit a new high last week and the Nasdaq came close. Index levels are historically high, valuations are stretched, and big event risk looms this week in the shape of the Fed’s policy meeting and ‘Big Tech’ earnings.Scrutiny on U.S. tech is intensifying as ripples from a Chinese AI startup called DeepSeek spread. DeepSeek recently launched a free, open-source AI model it claims is at least the equal of more established models like ChatGPT on many levels, but built at a fraction of the cost. It’s early days but if this shines a critical light on the huge sums being spent on AI by U.S. tech firms, Wall Street could wobble.The Asian calendar on Monday is dominated by China’s ‘official’ manufacturing and service sector purchasing managers index reports for January. A Reuters poll suggests the manufacturing PMI will be unchanged from the previous month at 50.1. On the one hand, that would represent the fourth straight month of expansion in the sector. It would also indicate almost no growth at all for the second month in a row. Data on Friday showed Chinese state-owned firms’ profits last year virtually evaporated, rising only 0.4% on the previous year. Wider industrial sector profits figures are due this week, perhaps as early as Monday, and are expected to confirm that 2024 was the worst year in decades. Investors will give their second day verdict on Friday’s Bank of Japan’s rate hike. The initial take seemed to be that it was a ‘hawkish hike’, but Japanese money markets are still pricing in only another 25 basis points of tightening this year, unchanged from pre-Friday levels. This suggests BOJ guidance was actually pretty neutral, and Japanese stock futures are pointing to a strong rise on Monday.Meanwhile, South Korean markets will be sensitive to the news that prosecutors on Sunday indicted impeached President Yoon Suk Yeol on charges of leading an insurrection with his short-lived imposition of martial law on Dec. 3. Here are key developments that could provide more direction to markets on Friday:- China ‘official’ PMIs (January)- Japan leading indicator (November)- Germany Ifo index (January) More

WASHINGTON (Reuters) -The Trump administration urged U.S. Agency for International Development (USAID) workers to join the effort to transform how Washington allocates aid around the world in line with Trump’s “America First” policy. It threatened “disciplinary action” for any staff ignoring the administration’s orders.A sharply-worded memo sent on Saturday to more than 10,000 staff at USAID offered further guidance to Friday’s “stop-work” directive that effectively put a sweeping freeze on U.S. foreign aid worldwide. The memo, reviewed by Reuters, laid out expectations for the workforce on how to achieve Trump’s goals.”We have a responsibility to support the President in achieving his vision,” Ken Jackson, assistant to the administrator for management and resources wrote in the internal memo, titled “Message and Expectation to the Workforce.””The President has given us a tremendous opportunity to transform the way we approach foreign assistance for decades to come,” the memo said. Reuters confirmed the authenticity of the memo with several sources.Since taking office last week, Trump has taken steps toward fulfilling his vow to remake a federal bureaucracy he believes was hostile to him during his 2017-2021 presidency. He has reassigned or fired hundreds of federal workers in simultaneous moves against a swath of agencies.Hours after taking office, Trump ordered a 90-day pause in foreign aid to review if it was aligned with his foreign policy priorities. On Friday, the State Department issued a stop-work order worldwide even for existing and appropriated assistance, calling into question billions of dollars of life-saving aid.The United States is the largest single donor of aid globally. In fiscal year 2023, it disbursed $72 billion in assistance. It provided 42% of all humanitarian aid tracked by the United Nations in 2024.USAID and the White House National Security Council (NSC) did not respond to a request for comment on this story.Friday’s memo shocked the humanitarian groups and communities conducting development aid across the globe. While the scope of the directive appears far-reaching, uncertainties linger over how it will be carried out.The memo on Saturday offered only partial clarity.The pause on foreign aid spending means “a complete halt,” it said. The only exceptions are for emergency humanitarian food assistance and for government officials returning to their duty stations. Waivers allowing delivery of emergency food during the review period will require “detailed information and justification.”The memo said further waivers would require two layers of approval – one from USAID leadership and another by U.S. Secretary of State Marco Rubio.”Any waiver must be thoroughly justified to demonstrate that the specific assistance for which the waiver is sought is necessary for lifesaving purposes, cannot be performed by current U.S. direct hire staff, or would otherwise pose significant risks to national security,” the memo said.All foreign assistance programs will undergo “comprehensive review” during the pause in spending, the memo says. “It is important to emphasize that it is no longer business as usual. Every program will be thoroughly scrutinized.”Saturday’s directive also banned any communications outside the agency, including between USAID and the State Department, unless they are approved by the former’s front office.”Failure to abide by this directive, or any of the directives sent out earlier this week and in the coming weeks, will result in disciplinary action,” it said.USAID began sending a notice to contractors ordering them to “immediately issue stop-work orders” and to “amend, or suspend existing awards.” VULNERABLE POPULATIONSHumanitarian organizations and other donors are scrambling to understand how the directive will impact life-saving operations in countries across the globe. It is too soon to tell whether or what specific services will have to be paused, they said.Among the places the U.S. plays a crucial life-saving role is famine-stricken Sudan, where at least 24.6 million people urgently need food assistance, according to a December report from the Integrated Food Phase Classification (IPC), a global food security watchdog. The U.S. provided 45% percent of humanitarian aid recorded by the U.N. for Sudan in 2024.”Any reduction in funding would inevitably affect the most vulnerable people relying on humanitarian operations in Sudan,” said a spokesperson for the United Nations Office for the Coordination of Humanitarian Affairs (OCHA).Even if the policy does allow emergency food assistance to continue, it does not mention other life-saving services required to treat people suffering the effects of acute malnutrition and starvation.“Hunger doesn’t just leave people with an empty stomach. It weakens the body’s ability to fight off infections and diseases, making them so much more vulnerable to illness, which can lead to serious health problems or even death,” said Deepmala Mahla, chief humanitarian officer for the relief organization CARE.“This is not just about funding,” she said. “It is about the very survival of the most vulnerable in conflict zones.” More

Switzerland has historically had balanced budgets although began reporting larger deficits from 2020 due to extra costs tied to the COVID-19 pandemic. In 2024, the projected deficit was 2.6 billion Swiss Francs, a government website showed.”In total, there is around 2 billion Francs that were not budgeted for in the 2026 budget,” said Keller-Sutter in an interview published in SonntagsZeitung and Tages-Anzeiger on Sunday.”We do have additional income from profit taxes, but they can’t compensate for everything,” she said, referring to high profits reported in 2022 and 2023 by Geneva-based commodity trading houses.Swiss voters decided in a referendum last year to increase pension payments for older people despite government warnings that it is financially unsound.The neutral country is also upgrading its defences after the Ukraine war, buying new fighter aircraft and missile systems as well as building new data centres to make it less vulnerable to cyber attacks.Keller-Sutter, who took on the rotating one-year presidency earlier this month, said in the same interview that the government was working on consultation procedure documents for new banking regulations after the release last month of an inquiry into the collapse of Credit Suisse.She said such regulations might include new powers for regulators to wield fines for banks as well as individuals plus possible claw-backs for banker bonuses.Asked whether new measures would prevent future government bail-outs, she indicated there was no guarantee. “We in Switzerland…have to do our homework (on banking regulation). But one shouldn’t claim 100% security,” she said.($1 = 0.9057 Swiss francs) More