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Despite an up market, fashion had a mixed year on Wall Street, when leadership won out.

Both bulls and bears were out on Wall Street last year.

While the market overall was up — the S&P 500 gained 23.3 percent for the year, buoyed by a stable economy and lower interest rates — fashion had its mix of winners and losers.

There were some broad trends. Luxury shares, in particular, were hit hard by the high-end slowdown and weakness in China, delivering share losses to even the mighty LVMH Moët Hennessy Louis Vuitton, which fell 11.7 percent. Other high-end players in turnaround mode, like Kering, Burberry and Versace-owner Capri, were hit even harder.

“You could see a lot of those luxury manufacturers suffering in terms of stock price,” said consultant Greg Portell, senior partner and global markets lead at Kearney. “They may have pushed the consumer a bit too far and started to get the value to price equation out of whack.”

Luxury brands reaped big rewards as they jacked up prices over the pandemic, when consumers spent big on goods and pulled back on services and experiences.

But those companies paid the price in 2024 as even wealthy shoppers began to balk at the level of increases.

But many fashion stocks were driven not as much by broader trends as their own circumstances.

“The market rewards growth trajectory almost more than profit and the ability of those companies to seize market opportunity and drive revenue growth is being rewarded in the stock valuation,” Portell said.

The larger message Portell drew from a decidedly mixed year for fashion was how a strong management team can help a company pull away from its peers.

And across the spectrum, brands were all at once looking to get fresh faces at the top.

A WWD tally last month found more than 50 companies across fashion, retail and beauty that named a new chief executive officer, including Burberry, Nike, Gucci, Estée Lauder, Macy’s, H&M, Michael Kors, Kate Spade and more.

Some of those CEO shifts have brought big changes.

Take Elliott Hill, the Nike veteran who returned to the company in October, taking the CEO reins from John Donahoe.

Nike’s stock fell 29.1 percent last year and Hill is now looking to turn that around. He diagnosed the problem in part by saying the sports giant had gotten away from creating demand and was instead “capturing the demand through performance marketing for our digital business.”

“We lost our obsession with sport,” the CEO said. “Moving forward, we will lead with sport and put the athlete at the center of every decision. The sharpness in each sport is what differentiates our brand and our business and fuels our culture.”

CEO decisions mattered in 2024, which was not a rising-tide-lifts-all-boats kind of year.

Portell said: “This is the first opportunity in a long time that we’ve had to really see the results of strong management and strong management execution. Over the past five to 10 years it’s either been the pandemic or it’s been a great consumer that’s universally helped all boats rise. Now we’re starting to see the differentiation and we’re really starting to see the power of strong management choices.”

But there’s something better than just a good CEO — a good CEO with a system and a team.

“Good talent is spiky and can have hits and misses,” Portell said. “A good operating system starts to connect those dots in ways that are unique and does require a team that is well constructed, knows how to work together, knows where to push the limits.”

Portell pointed to Walmart as “a great example of an operating system.”

“They are able to take whatever direction they want and they feel is right and move it through a massive organization to execution almost flawlessly,” he said. “That doesn’t mean they don’t have their challenges, but they have a very consistent way of choosing a path.”

Walmart is in the midst of a tricky reworking, evolving from being just the brick-and-mortar giant to a much more complicated approach that includes an online marketplace, a digital advertising business and a truly omnichannel positioning.

So far, Walmart is doing that well. The company’s stock rose 74 percent last year, adding $301 billion to its market cap, which tops $725 billion.

An operating system indeed.

Now Walmart just has to keep it up and most of the rest of the industry has to catch up.

The Bottom Line is a business analysis column written by Evan Clark, deputy managing editor, who has covered the fashion industry since 2000. It appears every other Thursday.

Sun Art deal is ecommerce group’s second major divestment of bricks-and-mortar assets in less than a month

Alibaba has agreed to sell its entire stake in China’s largest hypermarket operator at a steep discount, as it sharpens its focus on core ecommerce operations amid intensifying competition.

The Chinese tech group will sell its 73.7 per cent stake in Sun Art Retail to private equity firm DCP Capital at HK$1.75 per share, the company disclosed in a filing on Wednesday evening, after the shares had closed the day at $2.48.

The sale is expected to raise gross proceeds of up to $1.7bn, but will mean a loss of Rmb13.2bn ($1.8bn) for Alibaba shareholders when the deal is completed, it added.

Sun Art’s Hong Kong-listed shares plunged as much as 35 per cent on Thursday before narrowing losses to 17 per cent. Alibaba’s shares slipped 0.7 per cent.

The Sun Art deal came after Alibaba’s exit from Intime Retail Group in December, marking Alibaba’s second major divestment of bricks-and-mortar assets in less than a month. The department store chain was sold to a consortium including clothes retailer Youngor Group and Intime’s management team for $1bn, less than half what Alibaba had paid for it seven years earlier.

The quick sales of Sun Art — the biggest hypermarket operator by number of stores and staff — and Intime at significant discounts underscore the urgency of Alibaba’s pivot back to its ecommerce roots in a bid to sustain growth and strengthen competitiveness.

Once a dominant force in Chinese ecommerce, Alibaba is now racing to counter heightened competition from rivals such as Temu owner Pinduoduo, while retreating from unprofitable expansions into non-core businesses that have weighed on returns.

Alibaba said in its filing that the sale of Sun Art represented “a good opportunity to monetise non-core assets and redeploy proceeds to focus on developing its core businesses and enhancing shareholder returns”.

The group first invested in Sun Art in 2017, with it later taking majority control in 2020 in a HK$28bn (US$3.6bn) deal with France’s Mulliez family. The move was part of its ambitious strategy begun in 2016 to create a “new retail” model blending online and offline shopping experiences.

However, the vision of a retail empire that connects ecommerce and physical stores faltered amid the shock of the pandemic and an economic slowdown that curbed consumer spending in China.

In November, Alibaba announced plans to merge its domestic and international ecommerce operations into a single unit under chief executive Jiang Fan, a move viewed as key to Alibaba’s future strategy.

Alibaba still retains smaller holdings in other traditional Chinese retailers including Suning.com. It is also restructuring the business strategy of its grocery chain Hema, or Freshippo, to increase profitability.

Companies also offered discounts to meet annual sales targets

BYD sold a record number of electric and hybrid vehicles in December, leading a host of Chinese peers benefiting from a government trade-in program in the world’s largest market for EVs.

China’s top domestic EV maker said late Wednesday that it sold 514,809 vehicles in the final month of 2024, notching a third consecutive month of sales over the 500,000 mark and lifting full-year sales 41% higher to 4.3 million vehicles. The company was also helped by robust overseas sales, which rose 58% to more than 57,000 vehicles in 2024.

BYD’s local rivals also posted higher December sales. Li Auto sold a record 58,513 vehicles, bringing full-year sales to 500,508. NIO’s December sales rose 73% to 31,138 vehicles and the carmaker delivered 221,970 units in 2024, while XPeng delivered a record 36,695 units in December, up 82% compared with a year earlier. It delivered 190,068 units in 2024.

Newcomer Xiaomi said it delivered more than 25,000 vehicles in December and more than 135,000 units in 2024 after debuting its first model in late March.

BYD rival Tesla is expected to release its fourth-quarter sales numbers later Thursday.

EV sellers saw stronger demand in China in the fourth quarter, helped by government incentives for consumers to trade in old cars to purchase new ones. Companies also offered discounts last month to meet annual sales targets.

Bocom International analyst Angus Chan said December sales were in line with expectations, although he cautioned that the first quarter of 2025 could be another story given a “potential price war and front-loading sales at the year-end.”

Chinese EV stocks were largely in red by midday Thursday as robust sales have been mostly priced in and there was no surprise from the sales data, Nomura analyst Joel Ying said. BYD’s shares fell 2.7% in Hong Kong.

Investors are watching to see if the trade-in program will be extended this year.

Crypto industry dreams of a golden era under Trump

The sector expects lighter regulation and wider adoption under the president-elect, but some worry about systemic risks

In mid-December, two jubilant groups came together to celebrate their recent, interconnected turns in fortune: the freewheeling cryptocurrency industry and the family of the victorious US president-elect Donald Trump.

Trump’s second son, Eric, was the star attraction at the Bitcoin Mena 2024 conference in Abu Dhabi on December 10. In front of a whooping crowd of industry figures, Eric Trump assured them that his father would keep his promises to be “the most pro-crypto president” yet. Indeed, he drew a link between the two movements as victims of the same establishment.

“The nastiness in the system . . . guys, they made our life miserable,” he said, of the US government. “But had it not been for those attacks, I don’t think my eyes would have been as open to the crypto industry . . . I saw them come after you. I saw them strip your bank accounts.”

The dawn of Trump’s second term promises to mark a turning point for crypto, bringing it out of the shadows and into the mainstream — and without the levels of regulatory scrutiny it has faced in recent years.

The industry believes the president-elect — whose family has a personal investment in the crypto story with its platform World Liberty Financial — and his Republican-controlled Congress will unleash a golden era for them.

On the campaign trail, Trump promised to create a strategic bitcoin stockpile, which would in effect turn it into a reserve asset, and to install a crypto advisory council. He has nominated Paul Atkins, a pro-crypto businessman, to lead the Securities and Exchange Commission.

Crypto owners are euphoric. When bitcoin broke through the $100,000 level for the first time, a month after the election, Eric Trump called his father at 6am to relay the news. In Dubai, a yellow Lamborghini roared through the emirate’s streets, its bonnet crudely spray-painted with the words: “BTC 100K THANKS TRUMP”.

Didi Steiner, a 26-year-old Austrian who used his first army pay cheque to buy bitcoin, says it is “gigabullish” that Trump is considering bitcoin as a reserve asset.

“Because it’s so rare, the potential buying pressure from nations and states and companies could be so immense,” Steiner says, a red “MAKE BITCOIN GREAT AGAIN” cap shading his face from the Abu Dhabi sun. “With Trump, we come many steps closer.”

Crypto’s revival marks a dramatic change in fortune from only two years ago, when the collapse of Sam Bankman-Fried’s exchange FTX in late 2022 triggered a global crisis that sent the price of bitcoin plummeting to just $16,000 and prompted many to shun the industry for fear of getting burnt.

“This is a turnaround of near-mythical proportions, miraculous proportions, and really not something that could ever have been contemplated, even at the start of this year,” says Yesha Yadav, associate dean at Vanderbilt University Law School.

A more crypto-friendly administration could encourage record inflows, more deals and institutional money, as traditional financial players worry less about being caught out by regulators.

Yet the crypto industry has a long and colourful history of attracting criminals and facilitating scams. Many executives in the sector have been slapped with civil charges or served jail time in recent years. Crypto’s embrace by Washington and potentially Wall Street too, heightens the risks that ordinary and institutional investors will eventually be hurt once again.

“The combination of greater legitimacy and light regulation is what I really worry about,” says Eswar Prasad, senior fellow at the Brookings Institution. “The broader adoption of crypto at both the retail and institutional level certainly could pose some risks,” he adds.

As more investors are enticed back into the volatile market, the impact of a price crash could be even more detrimental than previous crypto downturns if the asset becomes increasingly entwined with the traditional financial system.

“Not only is [the crypto industry] back, it is going to become institutionalised,” Yadav says.

Throughout President Joe Biden’s administration, the crypto industry felt vilified by US authorities.

Under the leadership of Gary Gensler, whose name elicited boos at the Abu Dhabi bitcoin conference, the SEC maintained that companies should abide by existing rules governing the financial markets.

The regulator launched a slew of lawsuits against big-name crypto companies including exchanges Coinbase, and Kraken, software firm Consensys and payments company Ripple, largely accusing them of selling unregistered securities. The US Department of Justice and other authorities also launched legal actions against several companies.

“That kind of stuff is going to come to a screeching halt [under Trump],” says Coy Garrison, partner at Steptoe and former SEC counsel.

Gensler has said he will resign on Trump’s inauguration day, after the president-elect said firing him would be a top priority — to jubilation from the industry.

“This is a new beginning in many ways,” says Bill Hughes, senior counsel at Consensys, which was hit with a lawsuit in the summer. “The last administration took a scorched-earth position with respect to crypto,” he adds, and Trump’s election marks “an evolution from the very antagonistic way things are now to a coherent, pro-market stance”.

Crypto chief executives are rushing to woo Trump, with Kris Marszalek, head of exchange Crypto.com, the latest to meet the president-elect in Florida.

As well as Trump’s own rhetoric, crypto devotees are excited by the views of the people around him, many of whom have emphatically backed digital currencies.

Atkins, who served as SEC commissioner from 2002 to 2008, sits on the advisory boards of blockchain company Securitize and crypto trade group The Digital Chamber.

Trump’s choice for commerce secretary, Howard Lutnick, heads Wall Street firm Cantor Fitzgerald, which has deep ties with stablecoin giant Tether. His Treasury secretary pick Scott Bessent has vocally supported the digital asset industry, saying this summer that “crypto is about freedom”.

Elon Musk, one of Trump’s closest confidants and a long-standing crypto advocate, is running the Department of Government Efficiency — a new advisory group whose name is a nod to the memecoin Doge.

Meanwhile, venture capitalist David Sacks is set to lead crypto and artificial intelligence efforts in an advisory role.

“[Sacks] knows how to build and understands policy,” says Tyler Winklevoss, co-founder of crypto exchange Gemini. “He was also super early in crypto and supporting Trump to make America pro-business, pro-innovation and pro-crypto.”

“When the people around the table all like our industry, you’ve got to think good things are coming,” says Mike Novogratz, founder of crypto group Galaxy.

The new embrace of crypto in Washington is no accident. Trump’s election marks the culmination of months of targeted lobbying and hundreds of millions of dollars spent by investors to secure the victory of amenable politicians in Washington and across the US.

Tech titans from venture capitalists Andreessen Horowitz and Sequoia Capital donated to Trump’s campaign, alongside Jesse Powell, co-founder of crypto venue Kraken, and Tyler Winklevoss and his twin brother, Cameron, also of Gemini.

Coinbase, Ripple and Andreessen Horowitz led the funding of pro-crypto group Fairshake, which grew into one of the biggest Super Pacs in this US election cycle, spending about $135mn of the $170mn it raised.

Donations came from venture capital firms Paradigm and Multicoin Capital, stablecoin operator Circle, Cathie Wood’s Ark, and market makers Cumberland and Jump Crypto, underscoring the depth and scale of Fairshake’s backing.

Coinbase-backed lobby group Stand With Crypto celebrated the wins of 294 pro-crypto politicians in Congress, compared with 134 anti-crypto members. “Fairshake has proved its worth,” says Stuart Alderoty, general counsel at Ripple.

Josh Vlasto, spokesperson for Fairshake, said its work would have “a clear and immediate impact” on Congress’s ability to approve favourable crypto regulation.

The group targeted anti-crypto politicians, although few of its adverts actually mentioned digital tokens, instead focusing on issues such as border security. It is already preparing for the next set of elections, having raised $78mn for the 2026 midterms, with a fresh $25mn from Ripple.

Campaigns are often framed as a battle for a financial and personal revolution against the tired, old establishment, reflecting crypto’s aim to be seen as a transformative power.

“Who will defend crypto in America?” Stand With Crypto asked on its website.

Now that the money has been spent and the politicians elected, crypto executives are turning their attention to getting the actions they want in place.

“​​The industry has paid a lot of people a lot of money and is going to expect to see the receipts,” says Hilary Allen, professor at the American University Washington College of Law.

Top of the wish list is a friendlier SEC. The nomination of Atkins was celebrated by the crypto industry, which sees him as more understanding and open to creating digital asset rules.

“He definitely gets the industry,” says Carlos Domingos, chief executive of Securitize, who has worked with Atkins since 2019. “Paul has been an advocate of streamlining regulation . . . [he is] a person that listens and takes decisions based on feedback and [doesn’t have] this animosity towards the industry.”

Domingos says that the mood has already changed within the SEC. After meeting a few commissioners in December, “the tone is very, very different, it’s about, ‘Tell us what your problems are’, ‘how can we fix those problems?’”

Investors say they want rules stating which crypto tokens are deemed securities and therefore regulated as such under US law — and would largely prefer all crypto tokens not to be considered securities.

Executives want “clear rules of the road to follow, to be assured they’re not going to face enforcement actions”, says Garrison. “And the benefits for the crypto holders is that you have a certain baseline set of protections that you know these companies are abiding by.”

In an effort to push crypto more into the mainstream, enthusiasts are also keen to repeal SAB 121, the accounting rule that stipulates that institutions holding digital tokens for customers must treat them as liabilities on their own balance sheets.

Custodied assets are normally accounted as off-balance sheet items so the rule has made big Wall Street banks and fund managers wary of holding tokens. Advocates hope that repealing the rule will make them more open to holding tokens and usher in a new wave of Wall Street acceptance.

Congress passed the repeal this summer but it was later vetoed by Biden. Executives now hope Trump will waive through the rule and entice big firms into the market.

Gaining access to banking services is another focus area. Crypto companies have loudly decried their inability to use the services of top US banks, dubbing it “Operation Chokepoint 2.0” and blaming Biden’s government for turning big lenders against them.

“The incoming administration has the opportunity to reverse so many poor crypto policy decisions, chief among them politically motivated regulatory decisions like Operation Chokepoint 2.0,” says Paul Grewal, chief legal officer at Coinbase, whose company published redacted letters from the Federal Deposit Insurance Corporation which asked lenders in 2022 to “pause all crypto asset-related activity”.

Meanwhile, fresh legislation covering stablecoins — tokens typically pegged to sovereign currencies — is also on the agenda, with executives hoping that guardrails will be put in place to regulate their issuance. The stablecoin market has ballooned to more than $200bn, according to CCData.

“Filling that void is really critical,” says Dante Disparte, head of global policy at stablecoin operator Circle. “Digital dollars will have more legal clarity in Europe than they do in the US,” he says, referring to the EU’s landmark crypto legislation that covers stablecoins and is set to come into force in 2025.

“I cannot imagine an America-first administration who allows that international vacuum to happen,” he adds.

The changing regulatory environment has investors excited by the prospect of a flood of large, traditional asset managers rushing into crypto, pushing it into the mainstream.

“It’s gone from being an asset class for some enthusiasts to one where officials are backing it, politicians are backing its mainstreaming,” Yadav says.

In truth, the mainstreaming has already begun. Last year, the SEC approved the launch of spot bitcoin and ether exchange traded funds — regulated products into which investors have ploughed money to gain exposure to crypto tokens.

The largest, BlackRock’s bitcoin fund, has ballooned to hold nearly $60bn in assets. Other regions have followed, and Hong Kong launched its own bitcoin ETFs last April.

Pension funds including the State of Wisconsin Investment Board and State of Michigan Retirement System have already started holding bitcoin through the funds, according to filings.

The price of bitcoin topping $100,000 has also spurred Fomo — fear of missing out — in the market, with many of those who sat on the sidelines now rushing back in.

“Institutionalisation has started, and that momentum will be even stronger going into 2025,” says Richard Teng, chief executive of Binance, the world’s biggest crypto exchange.

When crypto prices crashed in 2022 following the collapse of exchange FTX, it was mainly ordinary investors and the venture capital firms that backed FTX that got burnt. This time round, more institutions may be at risk.

Now, the advent of friendly US supervisors means crypto advocates are hoping that relaxed rules will spur the at-scale involvement of Wall Street banks, pension funds, hedge funds and others, unleashing billions of dollars — and pushing crypto prices ever higher.

This brings a whole host of risks.

“Right now, the fact that the SEC has imposed relatively tight [oversight] on their ability to operate is certainly a constraint,” says Prasad.

“What the crypto industry wants is to be subject to government oversight but to have that oversight be quite weak because that gives them exactly what they want,” he adds. “It allows them to encourage much broader adoption.”

Stablecoins in particular pose systemic financial risks, given the scale of US Treasuries backing the tokens. If there is a run on stablecoins, “it could set off a chain of events that end up destabilising various parts of the traditional financial system”, says Prasad. Big money managers and retail investors may end up facing significant losses in the next downturn.

Global regulators and central banks are conscious of this. “Most economists argue that bitcoin is a speculative bubble that will burst at some point,” European Central Bank officials wrote recently.

As crypto becomes more entwined with the traditional financial system, vulnerabilities from a collapse in their prices “could create stronger spillovers to traditional financial markets and contribute to systemic risk”, the Federal Reserve Bank of New York stated in a recent review.

“The concern I have is that as this becomes more integrated, we sub out mortgage-related assets from 2008 and sub in crypto, which are only more volatile,” says Allen, the academic. “Mortgage-backed securities somehow somewhere were tied to a house whereas crypto assets are made up out of thin air,” she adds.

There is also, finally, an element of paradox in the idea that an industry borne out of the desire to forge an alternative financial system away from the prying eyes of the state is now jubilant at being accepted by arguably the biggest establishment of all: the US government.

“The prices are being pushed [upward] by this state-backed institutionalisation,” says Yadav. “There’s a massive irony in it.”

The Erdoğan whisperer behind Turkey’s economic pivot

Vice-president Cevdet Yılmaz has played a crucial backstage role managing the turn to financial orthodoxy

When Turkish President Recep Tayyip Erdoğan appointed Cevdet Yılmaz as vice-president in 2023, the former bureaucrat’s eastern hometown of Bingöl burst into celebration: revellers set off fireworks, pounded on drums and waved flags showing the ruling party’s lightbulb-shaped logo.

The fanfare marked a rare flourish in a long career during which Yılmaz, a soft-spoken veteran of Erdoğan’s Justice and Development party (AKP), has quietly established himself as one of the strongman’s most trusted lieutenants and a linchpin in Turkey’s sweeping economic overhaul.

Much global attention has focused on Mehmet Şimşek, the finance minister and former Merrill Lynch banker who has been received like a rock star on the international financial circuit as he tries to persuade investors Erdoğan has truly abandoned the policies that ignited a prolonged inflation crisis.

But Yılmaz, who has held key government posts throughout the president’s more than two decades in power, has quietly played a central role in keeping the pivot on track at home, according to current and former officials, business executives and analysts.

“Cevdet has been communicating with the president, businesspeople, the public, telling them we have a programme running and things are under control,” said a former top policymaker. “The president needs to hear from people that he trusts about the programme.”

“In the palace, Yılmaz is essentially keeping the Şimşek programme on track,” said Emre Peker, Europe director at political risk consultancy Eurasia Group. He added that “Yılmaz is a very experienced hand” and that “he is trusted by Erdoğan because he has been in the AKP from the start”.

Yılmaz, who was born in 1967 in the hilly Bingöl province, served in Erdoğan’s first government 21 years ago as general director of EU relations. Local media said at the time of his appointment as minister of state in 2009 that he was the first person from Bingöl to serve in such a senior government position.

Yılmaz, who holds a masters degree from Denver university and a doctorate from Ankara’s Bilkent University, was also an AKP MP and chaired the influential Planning and Budget Commission. He became vice-president following the May 2023 general election, which Erdoğan won despite the most vigorous attempt by Turkey’s opposition to unseat him in years.

Şimşek is widely considered to be the leading architect of Turkey’s economic overhaul, which began shortly after the 2023 election as concerns grew over the trajectory of the $1tn economy. But a senior Turkish official said Yılmaz had been instrumental in convincing Erdoğan of economic policy points about which the president was undecided.

He said Yılmaz acted as a sounding board for domestic businesses, hearing out complaints about the new economic policy. Erdoğan’s business allies, such as construction magnates, were among the biggest beneficiaries of the president’s previous approach of pumping up economic growth with ultra-low borrowing costs, and some are growing impatient with the new programme.

“Şimşek knows the real economy well, but when it comes to speaking with captains of industry, he isn’t as good as Cevdet Yılmaz,” said Atilla Yesilada, an Istanbul-based analyst at the consultancy GlobalSource Partners.

Yılmaz is viewed as a level-headed bureaucrat who adheres to conventional economic theories. He backed the central bank’s huge rises in borrowing costs, which has brought interest rates from 8.5 per cent in June 2023 to as high as 50 per cent, while also cautioning that the government does not want to slow growth too aggressively.

“We want to see more price stability and financial stability, but we do also want to continue with a reasonable rate of growth and employment because we are a developing country,” Yılmaz told the Financial Times in 2023. He declined to be interviewed for this article.

He has repeatedly pledged his full backing to Şimşek’s programme even as public discontent over the state of the economy has grown.

“While combating inflation, you may face some temporary challenges,” Yılmaz said in a recent speech to Turkish industrialists. “However, let us not forget that without reducing inflation, you cannot achieve predictability, reduce uncertainties, or fully prevent those who exploit the foggy environment created by inflation to act opportunistically.”

Erdoğan, who has previously called high rates the “mother and father of all evil”, has supported the tighter monetary policy stance. But investors caution that the president has abruptly changed course in the past, sacking previous central bank chiefs for increasing borrowing costs.

Şimşek had quit as deputy prime minister in 2018 when Erdoğan anointed his son-in-law as finance minister, an abrupt shake-up that deeply unnerved foreign investors and sent the lira tumbling.

Yılmaz’s presence on Turkey’s economic team has been an important bulwark at a time when AKP members who espouse unorthodox policies are still circling Erdoğan, analysts said. The senior Turkish official noted that Yılmaz’s long-standing ties to the AKP also made it easy for him to co-ordinate policies between government departments.

“Yılmaz’s co-ordination and sincere ownership of the economy programme is very important,” the chief executive of a Turkish lender said.

Yılmaz’s interventions come as many Turks are growing weary of the years-long economic crisis. The government had previously sought to dull pain through huge stimulus packages, particularly ahead of the 2023 election, helping Erdoğan win but also inflaming inflation.

The government’s policies to cool demand, which have included rises in VAT and petrol taxes, and a decision to raise the minimum wage by only 30 per cent for 2025, have won plaudits from Wall Street banks, rating agencies and international institutions such as the EU and IMF.

But they have also heaped pressure on households. Fewer than one in five Turkish residents polled by Ankara-based Metropoll this summer said they approved of Şimşek. “Nobody trusts him,” one Ankara-based taxi driver told the FT.

This is where Yılmaz, one of the very few people who has survived so long working with the mercurial president, could play a crucial role. Yet, as economic pain for Turkish voters lingers, analysts warn that Erdoğan’s patience for the reforms will not be endless. “If you look at those who have followed Erdoğan’s long march from exile to leadership, very few are left,” Yesilada said.

Gold set to rally further this year, say Wall Street banks

Yellow metal expected to continue to benefit from buying by global central banks

The price of gold is set to rise further in 2025, say Wall Street analysts, although the pace of gains is likely to slow after last year’s bumper 27 per cent rally.

Gold is expected to climb to about $2,795 per troy ounce by the end of the year, according to the average forecast by banks and refiners surveyed by the Financial Times. That is about 7 per cent above current levels.

The yellow metal is expected to continue to benefit from buying by global central banks, which have been diversifying away from the dollar since the US imposed sanctions on Russia following its 2022 full-scale invasion of Ukraine.

Interest rate cuts by the US Federal Reserve, concerns about growing US government debt levels under president-elect Donald Trump and conflicts in the Middle East and Ukraine are also forecast to lift prices. Such factors were behind bullion’s biggest annual gain since 2010 last year.

“We think central bank interest will be a strong base for the buying next year,” said Henrik Marx, global head of trading at Heraeus Precious Metals, which forecast that gold could touch highs of $2,950 per troy ounce this year.

He added that Trump’s second presidential term was also likely to be supportive for gold prices. “Whatever he announces will increase debt, leading to a weaker dollar and increased inflation. That is usually a nice mixture for gold.”

The World Gold Council said in a report that this year’s growth would be “positive but much more modest”.

The most bullish call among those surveyed is from Goldman Sachs, which expects prices to reach $3,000 by the end of 2025. The bank cites central bank demand and expected rate cuts by the Fed.

The most bearish forecasts were from Barclays and Macquarie, which both expect gold to sink to about $2,500 per troy ounce by the end of the year — a roughly 4 per cent drop from current levels.

“Our base case into 2025 is for gold to initially face ongoing pressure from US dollar strength, but be supported by improved physical buying and steady official sector demand,” wrote Macquarie analysts in their year-end outlook.

Global central banks bought 694 tonnes of gold during the first nine months of 2024. The People’s Bank of China announced in November that it was resuming gold purchases after a six-month hiatus.

Falling US interest rates have contributed to gold’s rally in the second half of last year, and the pace of further cuts could be crucial to the outlook for the yellow metal. Gold prices pulled back slightly after the Fed lowered rates in December but indicated that borrowing costs will fall more slowly than previously expected in 2025.

Because gold is a non-yielding asset, it typically benefits from lower interest rates, because the opportunity cost of holding it is less.

Trump’s election win in November has provided one of the most favourable scenarios for gold, due to the likelihood of elevated US fiscal spending and increased geopolitical uncertainty, said Michael Haigh, head of commodities research at Société Générale.

“Momentum is taking back over, combined with geopolitical tensions, which is going to add more fuel to the fire,” said Haigh, who expected gold prices to rise to $2,900 per troy ounce at the end of 2025.

Shipowners switch to smaller vessels as world trade reroutes from China

Attacks on Red Sea ships have also hit demand for bulkiest carriers

The rerouting of global trade from China to ports elsewhere in Asia is leading shipowners to move on from the era of ordering ever-larger vessels and switch to smaller crafts instead.

Just six container ships capable of carrying the equivalent of more than 17,000 20-foot containers, known in industry parlance as TEUs, are due to be delivered in 2025, against 17 delivered in 2020, according to shipbroker Braemar.

At the same time, 83 mid-sized vessels measuring between 12,000 TEUs and 16,999 TEUs are set to be completed in 2025, almost five times the number five years earlier.

“The 16,000-TEU ship will become the popular workhorse for liner companies,” said Jonathan Roach, container market analyst at Braemar, who added that “tepid” global trade and a saturation of “massive ships” had also reduced the appetite for these vessels.

The threat of environmental regulations and trade disruptions — including last year’s attacks on ships in the Red Sea — have also hit demand for the bulkiest carriers, said industry insiders.

That disruption is expected to continue with Donald Trump’s return to the White House this month. The incoming president has threatened to turbocharge tariffs on imports from China.

“We definitely see increased interest away from sourcing only your products from China,” said Peter Sand, chief analyst at shipping market tracker Xeneta, who added that supply chains were spreading to smaller manufacturing hubs elsewhere in Asia.

Sand added: “You can only make economic sense out of ships [of the largest] size if you have got the cargo to fill that up. If you don’t, you are losing money.”

A senior executive at one of Asia’s biggest container shipping lines echoed Sand’s remarks. With manufacturing shifting to India and Vietnam, “it probably makes less sense to expect the largest vessels [to be] filled up in two or three ports”, he said.

The shift follows decades of shipowners ordering ever-larger vessels as global trade boomed — a trend that came to widespread attention when the 220,000-tonne, 20,000-TEU Ever Given ship ran aground and blocked the Suez Canal for six days in 2021.

While mid-sized ships had overtaken the largest in popularity, demand for vessels bigger than 18,000 TEU had picked up again as profits in the container shipping industry soared in 2024.

Seventy-six ships of this size were on order at the start of December, compared with 45 at the same point in 2023, according to Braemar. Mediterranean Shipping Company, the industry leader, alone ordered 10 ships measuring 21,000 TEU in September, according to reports in the shipping trade press.

Shipowners’ earnings have surged after Yemen’s Houthi militant group launched a flurry of attacks on vessels near the Suez Canal, leading liners to divert ships and driving up the cost of shipping as the supply of available vessels dwindled.

But experts said the attacks, launched in a demonstration of support for Palestinians during the war in Gaza, had only emphasised the growing importance of flexibility in the industry.

Ultra-large ships are predominantly used to ferry large Asia-Europe trades through the Suez Canal but would struggle to transit other critical passages such as the Panama Canal.

“The shutting of the Suez Canal has had a serious impact on container shipping,” said William MacLachlan, a partner at law firm HFW who advises clients on shipbuilding. “Smaller ships can respond to macroeconomic events more readily.”

He also pointed to considerable uncertainty over which fuel future ships should be built to run on, with limited supplies of green alternatives.

Shipowners are also unsure about what requirements the International Maritime Organization, the industry regulator, will set to achieve its target of net zero emissions by about 2050.

“I suspect smaller shipowners are thinking: can I justify that investment [in an ultra-large ship]?” said MacLachlan. “The smaller cost of the smaller ships means people are probably less concerned.”

Collapse in demand triggers wave of bankruptcies in industry’s most important European market

Germany’s residential solar panel industry is facing “a lot of distress” after a collapse in consumer demand triggered a wave of bankruptcies and lay-offs in Europe’s biggest and most important market for the sector.

Many companies distributing and installing rooftop panels have gone bust, been taken over or forced to adopt changes in strategy.

While the bust and resulting glut of panels have led to a sharp fall in prices for consumers, industry figures warn that they have hit sentiment among investors and are threatening to damage a sector that is crucial to meeting Europe’s ambitious climate targets.

Dries Acke, deputy chief executive of industry lobby group SolarPower Europe, described the situation as “not a positive trend”. 

“To some extent this is consolidation after a few exceptional years,” he said. But he added: “You cannot have a green transition with red numbers. The sector needs to be profitable.”

Demand for photovoltaic panels in Germany boomed in the wake of Russia’s full-scale invasion of Ukraine in 2022, as consumers confronted with soaring energy bills turned to solar power.

Manufacturers and distributors grew rapidly, increasing production and distribution capacity, hiring staff and training installers.

Germany installed 15 gigawatts of solar capacity in 2023, according to SolarPower Europe — up from 7.4GW the previous year and a record for any European country.

Solar start-ups in Germany “were expecting the double-digit growth rate to continue and for each of them to individually capture a significant market share”, said Dina Darshini, who heads LCP Delta’s solar and battery division. 

“But actually, the opposite has happened — the market has shrunk in 2024, there are more players, and everyone is trying to vie for a smaller market.”

The drop raises questions about Germany’s target of installing 19GW of new solar capacity per year between now and 2030 as part of a drive for Europe’s biggest economy to be carbon-neutral by 2045.

After five years of rapid acceleration across all types of solar, the pace of growth in the world’s fifth-biggest market for photovoltaic panels slowed in 2024. Germany added 16GW in new solar capacity in 2024, compared with 15GW in 2023 and 7GW in 2022.

The slump in demand — which has also hit solar markets in Belgium and the Netherlands — has partly been caused by higher interest rates that have pushed up the cost of the consumer financing deals that usually form part of a solar package. 

At the same time, the flooding of the European market with cheap solar panels and components from China has created fierce competition. That has heaped pressure on European manufacturers such as Switzerland’s Meyer Burger, which in September announced it would cut a fifth of its workforce, and squeezed the margins of companies offering rooftop installations. Generous government subsidies have also been gradually reduced.   

Zolar, a start-up that has raised close to €300mn in funding since its inception in 2016, announced in September that it was abandoning its business of selling solar panels to homeowners and cutting more than 50 per cent of its 350-strong workforce.

Chief executive Jamie Heywood described a “peculiar” situation where the cost of installing a solar system has fallen significantly but, owing to lower energy prices, customers also have fewer incentives to turn to solar panels. “Although customers can save money within the life of their system by moving to solar, the payback is less attractive than it was,” he told the Financial Times. 

The company, whose investors include Singaporean sovereign wealth fund GIC, has decided to pivot to offering services to the thousands of small local businesses that hold about 80 per cent of the German solar installation market. “While I’m excited about opportunities in the installer space, it’s been a difficult decision to have to take,” Heywood said.

Zolar is not the only company to have struggled. Berlin-based Eigensonne, a solar panel supplier, declared bankruptcy at the end of 2023. ESS Kempfle, a solar panel supplier in southern Germany, warned in August of “dark clouds” over the industry as it announced a restructuring plan including job losses. 

Industry insiders expect Germany’s biggest players, which include prominent start-ups such as Enpal and 1Komma5, to survive the turmoil. But they have not been immune from the pain.

Growth plans at Enpal, which is backed by SoftBank and TPG and was valued at €2.2bn in 2023, have been affected by a “turbulent year”, according to the company’s “chief evangelist” Wolfgang Gründinger.

He said the company had been able to capitalise on the upheaval to double its market share in the solar sector, and had also benefited from diversifying into heat pumps and smart meters and launching an electricity trading platform.

However, Gründinger cautioned, “if many companies go bankrupt it’s not good for us either. Investors see it and say: the market is going bust. And you can’t plan.”

Another big player is 1Komma5, valued at €1bn in 2023, which bills itself as a one-stop shop for residential green energy, including solar systems. 

Chief executive Philipp Schröder said that despite the difficult market, the company’s orders continued to grow in 2024, thanks mainly to its AI-driven tool for optimising energy use in homes. But it has scaled back M&A for the time being, preparing instead “to advance more aggressively” into batteries as well as energy optimisation.

There have still been some bright spots for the solar sector in 2024. Demand has continued to grow for mini photovoltaic systems that are installed on balconies. 

Industry figures remain optimistic about the medium to long term, pointing to the fact that although 3mn residential rooftops in Germany are equipped with a solar system, there is room for much more.

“We expect the market will recover,” said Darshini of LCP Delta, pointing to a large well of untapped demand from corporate customers and rising electrification rates as German households and businesses continue a drive to decarbonise. 

“It is unlikely to come back to the height it was in 2022-23 — unless there is a major stimulus package or event. You’re more likely to see a slow gradual uptick towards 2030.”

That was echoed by Fabian Heilemann, a Berlin-based venture capital investor whose fund Aenu has backed companies including Zolar. 

“Mid to long term the market is intact,” he said, insisting that even with concerns about the re-election of Donald Trump and the rise of populist parties in Germany, “the energy transition is not going to go into reverse”. But he warned: “In the next 12 to 36 months there will be a lot of distress.”