—— China Property May See L-Shaped Recovery; UBS Finalizes Credit Suisse Merger; Nio Cuts All Car Prices by ¥30,000; Nasdaq Acquires Financial Software Firm; CalPERS Expands Venture Capital Investments; India Inflation Hits 2-Year Low; Twitter Refuses Rent, Goldman Gets Burned
1. China Property May See L-Shaped Recovery
Goldman Sachs released a study suggesting that China’s property market may experience an “L-shaped” recovery in the coming years—indicating that the government may not stimulate the economy by reviving real estate, but instead aims to reduce national dependence on the sector.
As property demand weakens, the government may strategically support other key industries.
During the past three years of the pandemic, China’s property sector avoided total collapse, though demand remains sluggish. In May, home sales rose 6.7% year-on-year, down from 29% in previous months.
An L-shaped trend means China’s real estate market may remain sluggish for several years before recovering.
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2. UBS Finalizes Credit Suisse Merger
Today, UBS and Credit Suisse officially completed their merger, marking the largest banking industry deal since the 2008 financial crisis and the end of Credit Suisse’s 167-year history as an independent bank.
In March, the Swiss government rushed the merger to rescue Credit Suisse. Government backing was crucial since UBS lacked sufficient time for due diligence.
UBS CEO Sergio Ermotti said the top priority is to cut heavily overlapping business areas between the two banks and decide which side to reduce.
UBS plans to scale back investment banking risks and tighten loan underwriting standards across multiple sectors.
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3. Nio Cuts All Car Prices by ¥30,000
A few days after reporting worse-than-expected quarterly losses, Chinese EV maker Nio announced it would slash ¥30,000 (about $4,200 USD) off the prices of all its models.
From January to May, EV and hybrid vehicle sales in China rose only 41%, down from 120% during the same period last year. Tesla-led price wars have failed to meaningfully boost EV demand.
In April and May, Nio’s monthly car sales fell below 13,000 units, compared to 31,000 in Q1. The company aims to sell 250,000 vehicles this year, but Q1 losses widened to RMB 4.74 billion, more than double last year’s RMB 1.78 billion.
China is the world’s largest EV market, but sales growth has slowed significantly this year.
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4. Nasdaq Acquires Financial Software Firm
Nasdaq Inc. has agreed to acquire financial software firm Adenza for $10.5 billion in cash and stock, making it the largest acquisition in Nasdaq’s history.
The seller, private equity firm Thoma Bravo, will receive a 14.9% stake in Nasdaq and a seat on its board of directors.
Nasdaq CEO Adena Friedman said she wants to strengthen the company’s software business, which accounts for over one-third of recurring revenues.
Adenza sells compliance and risk management software to banks, exchanges, and asset managers.
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5. CalPERS Expands Venture Capital Investments
The largest public pension fund in the U.S.—CalPERS—plans to increase the share of venture capital in its $52 billion private equity portfolio, aiming to boost returns through higher-risk bets.
Fund officials said CalPERS may inject $5 billion in new capital, potentially making it the largest venture capital investor in the country.
According to Crunchbase, total VC funding fell 35% last year to $445 billion.
Anton Orlich, head of CalPERS private equity, said many top private equity firms have a higher share in venture capital. Currently, 73% of CalPERS’ portfolio is allocated to buyouts, while VC makes up just 1%.
As of March this year, CalPERS’ private equity returns were down 4.7% year-over-year.
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6. India Inflation Hits 2-Year Low
India’s statistics bureau reported today that CPI rose 4.25% year-on-year in May, the smallest increase in 25 months and below economists’ forecast of 4.32%.
Food prices, which account for nearly half the CPI, rose 2.91% in May. Fuel and energy prices rose 4.64%, while clothing and footwear rose 6.64%.
India’s central bank targets inflation between 2% and 6% and paused rate hikes for the second time in a row last week.
The lower-than-expected CPI print eases pressure on the Reserve Bank of India.
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7. Twitter Refuses Rent, Goldman Gets Burned
According to Goldman Sachs’ commercial real estate division, overdue commercial property loans surged 612% in Q1 to $840 million—far above the 30% increase to $12 billion seen across the broader U.S. banking industry.
FDIC data shows that as of Q1, Goldman held $8.4 billion in commercial real estate loans—far below Wells Fargo’s $91 billion and Bank of America’s $60 billion.
Goldman, Citigroup, and Deutsche Bank had provided a $1.7 billion loan to REIT Columbia Property, backed by collateral including Twitter’s San Francisco HQ.
However, Elon Musk stopped paying rent in November, and Columbia Property defaulted on the loan in February this year.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.