—— China Cuts Benchmark Lending Rates; Alibaba Abruptly Names New CEO; Korea Wealth Fund Bets on Private Credit; Masayoshi Son Reappears After 7 Months; India’s Byju’s Cuts 1,000 Jobs; Northvolt Secures $400 Million Funding; IndiGo Places Record Plane Order
1. China Cuts Benchmark Lending Rates
Today, the People’s Bank of China (PBOC) announced a 10 basis point cut to the one-year Loan Prime Rate (LPR), bringing it down to 3.55%, marking the first rate cut in nearly a year to stimulate economic growth.
The LPR is set by major Chinese banks and determines borrowing costs for businesses and households.
Six months after the full reopening, China’s economy has yet to show a strong recovery as expected, mainly due to a sluggish property sector.
Marcella Chow, global market strategist at JPMorgan Asset Management, said the priority now is to rebuild market and consumer confidence, making macroeconomic data and real estate recovery especially critical.
With China cutting rates while the US raises them, this divergence has been one factor contributing to the US dollar’s ongoing strength.
______
2. Alibaba Abruptly Names New CEO
Amid slowing post-pandemic growth and market share losses, Alibaba announced a leadership change, replacing Chairman and CEO Daniel Zhang.
Executive Vice Chairman Joseph Tsai will assume the role of Chairman, while Taobao and Tmall President Eddie Wu will become CEO.
Kenny Wen, head of investment strategy at KGI Asia, noted that Tsai and Wu are both Alibaba co-founders with close ties to Jack Ma, suggesting that Ma remains a spiritual leader and major strategic shifts are unlikely.
The appointment of long-time insiders Tsai and Wu could offer Alibaba a potential turning point.
______
3. Korea Wealth Fund Bets on Private Credit
Seoungho Jin, CEO of Korea Investment Corp. (KIC), said in an interview that the fund plans to allocate 25% of assets to alternative investments such as real estate, credit, private equity, and hedge funds by 2025, up from 22.8% at the end of last year.
Jin emphasized the importance of portfolio diversification and sees private credit as a promising area for growth.
Last year, KIC posted a 14% loss—its worst since 2008. However, it reported a 5.4% return in Q1 this year and expects a 7% to 8% return in the current quarter, excluding alternative assets, which are slower to price.
Managing $169 billion, KIC saw double-digit investment losses in 2022.
______
4. Masayoshi Son Reappears After 7 Months
At SoftBank Group’s annual shareholders meeting on Tuesday, founder Masayoshi Son made his first public appearance in months.
Son declared that a massive innovation revolution is coming and that SoftBank will not be discouraged by short-term investment losses, given its substantial holdings in tech companies.
He revealed he has spent the past months exploring how 400 portfolio companies can leverage the AI boom and has been in frequent discussions with OpenAI’s CEO about integrating ChatGPT into Japan’s Z Holdings.
SoftBank will focus on Arm as its growth driver and move away from defensive investment strategies.
______
5. India’s Byju’s Cuts 1,000 Jobs
Facing severe financial and legal challenges, India’s largest online education firm Byju’s plans to cut 1,000 jobs.
Sources noted that the company, which serves 150 million students, has already laid off thousands of employees since last year.
Once a darling of India’s startup ecosystem with backing from Tencent and Tiger Global, Byju’s has struggled alongside the broader decline in post-pandemic valuations.
As the pandemic-era boom fades, Indian startups—including Byju’s—face declining valuations and legal troubles.
______
6. Northvolt Secures $400 Million Funding
Today, Canadian pension giant IMCO announced a $400 million investment in Swedish battery startup Northvolt through convertible bonds.
Founded in 2017, Northvolt has emerged as Europe’s leading domestic battery manufacturer, aiming to rival Asian heavyweights.
Northvolt is aggressively expanding its Arctic Circle operations and plans an IPO as soon as next year.
Alexander Hartman, CFO of Northvolt, said he is honored to partner with IMCO’s infrastructure team to build the future of clean energy and sustainable batteries.
______
7. IndiGo Places Record Plane Order
This week, Airbus secured a record-breaking order from India’s IndiGo for 500 narrowbody A320 aircraft, surpassing Air India’s 470-plane order earlier this year.
Airbus did not disclose the financial details of the order.
IndiGo CEO Pieter Elbers said that no one anticipated such a massive order, highlighting the explosive growth potential of India’s aviation market.
Founded in 2006, IndiGo has become India’s largest passenger airline, with a 56.8% market share and now a historic $billions order for 500 A320s.
______
This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.