WSJ : Hong Kong Sees Flurry of Year-End Listing Plans

Hong Kong Sees Flurry of Year-End Listing Plans
The offerings come as the appetite for new listings in the city grows

Chinese companies ranging from a toy maker and a chemical material supplier to a simulation specialist commenced public offerings in Hong Kong, part of a flurry of end-year activity with investor demand for listings picking up in the Asian financial hub.

Chinese toy maker Bloks Group on Tuesday said it will market shares at a range of 55.65 Hong Kong dollars to HK$60.35 to raise net proceeds of about HK$1.29 billion, equivalent to US$166.1 million, ahead of a Jan. 10 debut, while fine chemical materials supplier Anhui Conch Material Technology set a price range of HK$3.00 to HK$3.30 for its Jan. 9 listing, seeking net proceeds of around HK$417.6 million.

Beijing Saimo Technology, which focuses on simulation technology, said it will market shares at between HK$12.00 and HK$18.00, raising net proceeds of about HK$427.9 million ahead of a Jan. 15 debut. Recreational vehicle maker New Gonow, targeting a Jan. 13 debut, set a HK$1.24-HK$1.64 target range to raise net proceeds of around HK$292.6 million. And Chinese environmental solution provider ContiOcean Environment Tech said it will market shares at HK$31.80-HK$39.80, raising net proceeds of around HK$312 million and beginning trade on Jan. 9.

Other companies, including health technology platform We Doctor and traditional Chinese medicine specialist Beijing Tong Ren Tang Healthcare Investment filed preliminary listing documents on Tuesday, a day after four other companies did the same.

The offerings come as the appetite for new listings in Hong Kong is growing.

The local exchange’s benchmark index rose 18% in 2024, making it one of Asia’s best-performing markets. Hong Kong is expected to have recorded 69 IPOs raising approximately HK$87.6 billion this year, according to a report by Deloitte earlier this month. That would mark an 89% increase in proceeds from HK$46.3 billion in 2023, it said.

This year’s biggest Hong Kong listing was Chinese appliance maker Midea, whose offering in September raised the equivalent of more than US$4 billion.

>>> What to look at today - 31st of December 2024

Asian shares struggled for direction on the last trading day of 2024, on course for their first quarterly loss this year after a weak showing on Wall Street. Equities fell in Australia and mainland China, with those in Hong Kong flat. US futures were steady, following declines for both the S&P 500 and the Nasdaq 100 overnight.  A gauge of regional stocks looks poised to finish the fourth quarter in the red, snapping a four-quarter winning streak. Despite the latest weakness, it remains on track to gain for a second consecutive year.  The cautious tone Tuesday partly reflects lingering concerns about the stamina of Wall Street’s rally this year that was predominantly driven by the so-called Magnificent Seven cohort of US tech giants. It’s also an indication of uncertainties facing investors in 2025, ranging from President-elect Donald Trump’s protectionist policies to the Federal Reserve’s outlook and the health of China’s economy. The Bloomberg Dollar Spot Index was steady and on course for its best year since 2015 in a rally fueled by Trump’s reelection in November and the Fed’s less dovish policy pivot. An index of US Treasuries looks set to eke out a small gain for the year. Tuesday’s trading is also thin because markets including South Korea, Indonesia, Thailand, and the Philippines are shut for a public holiday. Stock exchanges in Hong Kong and Singapore are open for half day, while Japanese markets are closed through Jan. 6. There’s also no cash trading in Treasuries in Asia. On the economic front, China’s factory activity expanded for a third straight month in December, bolstering expectations the economy will reach its annual growth target after Beijing’s stimulus blitz. In the latest sign of simmering tensions between Beijing and Washington, the US Treasury Department said it was hacked by a Chinese state-sponsored actor through a third-party software service provider. The flip side of a strong dollar has been a selloff in Asian currencies, with a Bloomberg index for the latter on track for a fourth consecutive annual loss. The yen and Korean won have registered the biggest declines in the region this year, with the former under additional pressure in recent weeks amid the country’s political turmoil.  In the latest development in Korea, a local court on Tuesday issued an arrest warrant for embattled President Yoon Suk Yeol, who has been suspended from power over his short-lived martial law declaration, according to investigators. As for commodities, gold was flat and set for one of its biggest annual gains this century. Oil pushed higher on the latest sign of economic recovery in China, the world’s top crude importer. US After Hours Quiet session; ACAD +9.5% jumps on S&P SmallCap 600 inclusion; DAVE -6.8% down on FTC referring its case to DOJ

Nikkei Closed Hang Seng +0.09% CSI -0.95% Shanghai -1.00% Shenzen -1.75%

Eur$ 1.0407 CNH 7.3162 CNY 7.2983 JPY 156.21 GBP 1.2553 CHF 0.9029 RUB 110.50 TRY 35.3360 WTI$ 71.59 +0.70% Gold 2,606 BTC 92,577 ETH 3,340

S&P -0.12% Nasdaq -0.16% EuroStoxx Close FTSE -0.25% Dax Close SMI Closed

Macro :
- LNG Exports Grow at Slowest Pace Since 2015, Kpler Data Shows
- NYC Congestion Pricing Set to Start on Sunday, MTA Says: NBC
- US Natural Gas Surges 16% as Forecasters Warn of Arctic Blast

Keep an eye on :
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- ICAD FP : Casino Group to Sell Property Portfolio to Icade for EU50m
- IFX GY : Beijing Pushes to Use China-Made Chips in Its EVs - WSJ
- LHA GY : Lufthansa Fined for Using United Air Code in Prohibited Airspace
- PFE US : Pfizer Ends Sangamo Partnership for Hemophilia Therapy
- RECSI NO : REC Silicon to End Production at Site in Moses Lake, Washington
- SGMO US : Sangamo Falls After Pfizer Ends Pact -56% in After Hours
- TSLA US : Tesla’s Shanghai Megafactory Kicks Off Trial Production: Xinhua
- SEAT US : Vivid Seats Shares Jump on Bloomberg Report It’s Exploring Sale
- TIT IM : Telecom Italia May Look to Move Up Sparkle Deal: Messaggero

WSJ : Africa Has Entered a New Era of War

Africa Has Entered a New Era of War
A surge in conflicts has gone largely unnoticed amid higher-profile wars in Ukraine and the Middle East

An unprecedented explosion of conflicts has carved a trail of death and destruction across the breadth of Africa—from Mali near the continent’s western edge all the way to Somalia on its eastern Horn.

Older wars, such as the Islamist uprisings in northern Nigeria and Somalia and the militia warfare in eastern Congo, have intensified dramatically. New power contests between militarized elites in Ethiopia and Sudan are convulsing two of Africa’s largest and most populous nations. The countries of the western Sahel are now the heart of global jihadism, where regional offshoots of al Qaeda and Islamic State are battling both each other and a group of wobbly military governments.

This corridor of conflict stretches across approximately 4,000 miles and encompasses about 10% of the total land mass of sub-Saharan Africa, an area that has doubled in just three years and today is about 10 times the size of the U.K., according to an analysis by political risk consulting firm Verisk Maplecroft. In its wake lies incalculable human suffering—mass displacement, atrocities against civilians and extreme hunger—on a continent that is already by far the poorest on the planet.

Yet, these extraordinary geopolitical shifts in sub-Saharan Africa have been overshadowed by higher-profile conflicts in Ukraine and the Middle East. That has led to less attention from global policymakers—especially in the West—grossly underfunded humanitarian-aid programs and fundamental questions over the futures of hundreds of millions of people.

Africa is now experiencing more conflicts than at any point since at least 1946, according to data collected by Uppsala University in Sweden and analyzed by Norway’s Peace Research Institute Oslo. This year alone, experts at the two institutes have identified 28 state-based conflicts across 16 of the continent’s 54 countries, more than in any other region in the world and double the count just a decade and a half ago. That tally doesn’t include conflicts that don’t involve government forces, for instance between different communities, and whose number has also doubled since 2010.

There is no single driver for the emergence and escalation of so many different conflicts across a huge and diverse geography. But, experts say, many of the most-affected states were left vulnerable after failing to settle on a strong mode of governance after independence—whether as functioning democracies or established authoritarian systems—or were destabilized during moments of once-in-a-generation political transitions.

The former French colonies in the Sahel—Mali, Burkina Faso and Niger—for decades were democracies in name only, regularly disrupted by military coups. Congo’s central government in Kinshasa, like Nigeria’s in Abuja, never managed to exert control over vast territories, opening the door for local and foreign leaders to compete for resources and power, often through violence.

In Ethiopia, Prime Minister Abiy Ahmed’s efforts to centralize power after ending decades of dominance by the Tigray People’s Liberation Front in 2018 have sparked a series of rebellions and clashes between regional militias. In Sudan, two powerful generals turned into rivals after ousting longtime strongman Omar al-Bashir in 2019 and, two years later, a civilian government that was supposed to move the country to democracy.

One inflection point was the year 2011, when, amid the pro-democracy uprisings of the Arab Spring, militaries from the North Atlantic Treaty Organization intervened in Libya to support rebel forces fighting the country’s dictator Moammar Gadhafi. With Gadhafi’s death and Libya’s descent into chaos, thousands of armed men moved south into Mali, reigniting a Tuareg rebellion against the government in Bamako that coincided with the global expansion of extremist ideologies promoted by al Qaeda and Islamic State.

“With the Sahel, it’s clearly a problem of Libya’s collapse and the highway of arms and ideology that that creates,” says Ken Opalo, a Kenyan academic and associate professor at Georgetown University’s School of Foreign Service. “So you get weak states, lots of guns and young men leaving Libya and ideologies coming all the way from Pakistan. Then everything is on fire.”

From Mali, the jihadist insurgency spread across porous borders into Burkina Faso and Niger, where new military juntas frustrated with the failure to defeat the militants have kicked out French and other Western troops. It now threatens coastal West African states such as Benin and Ghana. Today, 86% of the territory of Burkina Faso is affected by fighting between jihadists and state forces, according to Verisk Maplecroft’s analysis of incidents collected by the U.S.-based nonprofit monitoring service Armed Conflict Location and Event Data. For Nigeria, that number is 44%.

Counting the dead in African conflicts is notoriously difficult. Access to the front lines for journalists and aid groups is often restricted. Phone-service and internet shutdowns that accompanied the wars in Sudan and Ethiopia’s Tigray region complicate efforts to track specific events and their death tolls. Many people don’t die in the fighting itself but from hunger and the breakdown of medical services.

For Ethiopia, for instance, experts at the University of Ghent in Belgium have estimated that the two-year war between the government and the TPLF caused the deaths of between 162,000 and 378,000 civilians. Acled, whose analysts scour local news sources and contacts for real-time conflict data, counted fewer than 20,000 war fatalities from the fighting itself.

What is clear from the data is that civilians are much more likely to be deliberately targeted in conflicts in Africa than in many wars elsewhere. In Ukraine, for instance, fewer than 7% of violent events Acled has recorded since February 2024 targeted civilians—compared with more than a third for African conflicts.

“More people are living with violence than ever before, and more people are continuously exposed to armed groups than ever before,” says Clionadh Raleigh, the founder of Acled and a professor of Political Violence and Geography at the University of Sussex in the U.K.

The consequences go beyond the immediate loss of life. Stalled development, delayed elections and a broader sense of impunity are all reinforced by protracted conflict, Raleigh says.
The intensifying conflicts have displaced a record number of Africans—most of them inside their own countries. The continent is now home to nearly half of the world’s internally displaced people, some 32.5 million at the end of 2023. That figure has tripled in just 15 years.

Displacement makes civilians, especially women and children, more vulnerable to the collateral effects of war. In the east of the Democratic Republic of Congo, local officials and health workers estimate that 80% of the women in displacement camps around Goma have been raped—many of them multiple times. In Sudan, home to the world’s first confirmed famine since 2017, the most hungry are people who have been ripped from their home communities and the jobs or fields that sustained their livelihoods.

Africa’s current conflicts haven’t prompted the outpouring of sympathy in the West that accompanied Russia’s invasion of Ukraine or the outrage ignited by Israel’s war in Gaza. There has been no equivalent to the Live Aid concerts motivated by the Ethiopian famine in the 1980s, the protest marches over the genocide in Darfur in the early 2000s or even the #BringBackOurGirls campaign linked to the abduction of 276 schoolgirls from the Nigerian town of Chibok 10 years ago.

That lack of popular attention has translated into a dearth of political action to resolve wars in Africa or alleviate the suffering. Africa’s share of official development aid from rich, mostly Western countries in the Organization for Economic Cooperation and Development is at its lowest level since at least 2000, according to an analysis by the nonprofit One Campaign.

And while funding for humanitarian aid, which makes up just a small slice of overall development aid, has increased, it hasn’t kept pace with expanding needs. The United Nations received just half of the $2.6 billion it said it needed in 2024 to provide humanitarian aid in Congo. Its appeals for Sudan were 64% funded, while Nigeria has received just 57% of its target.

It has also meant that diplomatic pressure on the United Arab Emirates, which, according to Wall Street Journal reporting, is supplying weapons and fighters to one of Sudan’s rival generals, has consistently taken a back seat to America’s desire to maintain the country’s support in the Middle East. U.S. Secretary of State Antony Blinken has visited Africa just four times since 2021—compared with 43 trips to Europe and 22 to the Middle East.

In the absence of the U.S. and other Western governments, other powers have doubled down—and often to the detriment of local populations.

Russia has sent mercenaries to fight in Mali and the Central African Republic, deployments that, according to rights groups, have resulted in more violence against civilians. While the U.A.E. is supporting Sudan’s Rapid Support Forces, the country’s military is backed by Egypt, Iran and, most recently, Russia, allowing each side to keep on fighting. In Congo, Rwanda’s military is fighting alongside the insurgent March 23 Movement in a campaign that has displaced more than two million people.

Data from Uppsala University shows a sharp surge in internationalized civil wars in Africa and that those wars with foreign meddling are deadlier than civil conflicts without outside interference.

The U.S. remains the leading funder of humanitarian aid in Africa despite the distractions in Europe and the Middle East. Washington contributed 47% to the U.N.’s Sudan emergency response plan in 2024 and nearly 70% of that for Congo.

Other traditionally large donors, including Germany and the U.K., have already cut their aid budgets amid the crisis in Ukraine and economic problems at home. And many experts expect substantial changes to U.S. foreign and aid policy under the incoming Trump administration, especially toward U.N. agencies—and a further waning of American influence.

The U.S. and the U.N. “were able to hold a line about what would be considered beyond acceptable for some cases,” says Acled’s Raleigh. “With the Trump administration coming in, that line will disappear. And so the self-interested conflicts that we’re seeing and the people creating violence across the continent will not be checked.”

WSJ : Beijing Pushes to Use China-Made Chips in Its EVs

Beijing Pushes to Use China-Made Chips in Its EVs
U.S. objects to rival’s push for self-sufficiency in $80 billion business and opens trade probe

SINGAPORE—China isn’t satisfied with becoming the world’s dominant maker of electric vehicles. It wants the chips inside to be Chinese-made too.

Not long ago, almost all the chips in Chinese cars relied on manufacturing by the likes of Texas Instruments TXN -1.68%decrease; red down pointing triangle and Germany’s Infineon IFX -1.32%decrease; red down pointing triangle. Today, the use of homemade chips has risen to around 15%, say people involved in the industry, and it is poised to rise further.

Last week, the U.S. opened an investigation into China’s production of chips made with mature technology that are often used in areas such as autos and defense. U.S. Trade Representative Katherine Tai said there was evidence China used “extensive anticompetitive and non-market means” to achieve self-sufficiency, and the Commerce Department has said subsidized low-cost Chinese chip makers might flood the global market and drive down prices.

Beijing is making little secret of its industrial policy, reasoning that controlling the brains inside the world’s most important consumer product is too important to be left to market forces. It is setting targets for homegrown chips and supporting domestic chip makers through state semiconductor funds including a $47 billion one started in May.

Foreign companies in the car-chip business, which has annual revenue of more than $80 billion, face a choice of producing more in China or losing sales. Many are choosing the former, upending the lean and efficient global supply chain for chips.

“If the world wants to decouple, you can do China for China and non-China for non-China,” said Texas Instruments’ chief executive, Haviv Ilan, at a December investor briefing. “If the world stays open, and I hope it will, you can continue to have this diverse supply chain.”

The U.S. and Europe are also promoting domestic semiconductor production. A 2022 U.S. law passed under President Biden is funding tens of billions of dollars in subsidies.

Industry executives said many of the integrated circuits China produces for vehicles are low-end commodity chips, and it is years away from complete self-sufficiency. Even so, China’s progress shows how it can make strides in producing items for which it previously relied on the U.S., Europe and Japan.

“It is very foolish to underestimate the ability of the Chinese to be competitive,” said Handel Jones, founder of consulting firm International Business Strategies, who has worked with Chinese chip companies. “To get the automotive market in China, the strategy has to be: designed and made in China for the China market.”

Semiconductors have become one of the main battlegrounds in the U.S.-China tech rivalry, for both commercial and national-security reasons. In recent weeks, the two nations have engaged in a tit-for-tat bout of sanctions over high-end chips and raw materials.

The rise of Chinese auto chips doesn’t stem solely from government fiat. The concentration of the world’s biggest EV-manufacturing industry in China acts as a gravitational force for anyone who makes EV parts.

Today’s gasoline-engine cars often contain more than 700 chips to power automatic doors, run entertainment systems and control the brakes, among many other tasks, and EVs need more than twice that number. Typically those chips use mature or “legacy” technology.

Semiconductors used in automotive applications accounted for about 15% of the $530 billion semiconductor market in 2023, up from 8% in 2020, according to researcher Gartner. In addition to longstanding U.S., European and Japanese makers, Qualcomm and Nvidia have entered the market with an eye on autonomous driving systems.

U.S. curbs on exports of chips to China generally don’t hit legacy chips. But Beijing still prefers self-sufficiency. China was the world’s biggest buyer of semiconductor-making equipment in 2024, snapping up machines able to produce these commodity chips.

China’s state-backed automobile association earlier this month cautioned companies against buying American processors, calling them unsafe and unreliable, the first time it had issued such a message publicly.

Earlier in 2024, officials from China’s Ministry of Industry and Information Technology asked major carmakers to report every quarter how many locally made chips they bought, according to people briefed on the matter.

China leads the world in the rollout of electric and plug-in hybrid vehicles. About half of the 20 million vehicles sold in China in 2024 through November fell into one of those two categories.

That gives local semiconductor makers an opportunity. A government-backed automotive chip association, founded in 2020, took out a booth at China’s premier car exhibition in April for the first time and showcased dozens of China-made processors.

Chinese automakers say they prefer to source locally to ensure steady supply. Some also find it easier to work with chip designers at home who can move quickly and are more willing to make customized products. This is critical because Chinese carmakers are accustomed to refreshing their EV lineups frequently like smartphones, rather than like gasoline cars updated every five years or so.

The first Chinese chips to gain share are analog and power semiconductors controlling simpler parts such as windshield wipers. As more advanced locally produced semiconductors are tested and qualified, analysts say Western rivals will begin to feel the squeeze.

Beijing-based Horizon Robotics, a rival to Nvidia and Qualcomm in car chips, said it had 25 automaker customers as of June 2024, up from 14 in 2021. Horizon said domestic suppliers could “better cater to the demand and preference of the Chinese customers.”

A teardown by researchers at UBS in 2023 found that all of the power semiconductors in the BYD Seal, a popular sedan in China, came from Chinese suppliers.

In September, Wilmington, Mass.-based Analog Devices said it lost some market share in 2023 owing to China’s push for indigenous chips but conditions stabilized in 2024. “It is still a growth market, but we’re unsure if it’s the fastest growth market going forward,” said Michael Lucarelli, the company’s vice president for investor relations.

For now, Western players are trying to keep their edge in China. Switzerland-based STMicroelectronics formed a joint venture to produce chips for cars and industrial power sectors with a state-linked company in 2023, while Dutch chip maker NXP said in November it wanted to localize production of processors for Chinese automakers.

Chief Executive Kurt Sievers said the market has turned upside down from the days when Western carmakers were NXP’s lead customers and the company would sell the resulting products to Chinese customers.

Now, with Chinese carmakers leading in self-driving vehicles and electrification, “we start to use them and leverage them as lead customers and eventually sell them to the West,” Sievers said.

FT : Stockpicking funds suffer record $450bn of outflows

Stockpicking funds suffer record $450bn of outflows
Shift into passive strategies and ETFs has accelerated as performance of pricier mutual funds lags behind benchmarks

Investors pulled a record $450bn out of actively managed stock funds this year, as a shift into cheaper index-tracking investments reshapes the asset management industry.

The outflows from stockpicking mutual funds eclipse last year’s previous high of $413bn, according to data from EPFR, and underline how passive investing and exchange traded funds are hollowing out the once-dominant market for active mutual funds.

Traditional stockpicking funds have struggled to justify their relatively high fees in recent years, with their performance lagging behind the gains for Wall Street indices powered by big technology stocks.

The exodus from active strategies has gathered pace as older investors, who typically favour them, cash out and younger savers turn instead to cheaper passive strategies.

“People need to invest to retire and at some point they have to withdraw,” said Adam Sabban, a senior research analyst at Morningstar. “The investor base for active equity funds skews older. New dollars are much more likely to make their way into an index ETF than an active mutual fund.”


Shares in asset managers with large stockpicking businesses, such as US groups Franklin Resources and T Rowe Price, and Schroders and Abrdn in the UK, have lagged far behind the world’s largest asset manager BlackRock, which has a large ETF and index fund business. They have lost out by an even wider margin to alternatives groups such as Blackstone, KKR and Apollo, which invest in unlisted assets such as private equity, private credit and real estate.

T Rowe Price, Franklin Templeton, Schroders and $2.7tn asset manager Capital Group, which is privately owned and has a large mutual fund business, were among the groups that suffered the largest outflows in 2024, according to Morningstar Direct data. All declined to comment.

The dominance of US big tech stocks has made it even tougher for active managers, which typically invest less than benchmark indices in such companies.

Wall Street’s so-called Magnificent Seven — Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla — have driven the bulk of the US market gains this year.

“If you’re an institutional investor you allocate to really expensive talented teams that are not going to own Microsoft and Apple because it’s hard for them to have a real insight into a company that’s studied by everyone and owned by everyone,” said Stan Miranda, founder of Partners Capital, which provides outsourced chief investment officer services.

“So they generally look at smaller, less-followed companies and guess what, they were all underweight the Magnificent Seven.”

The average actively managed core US large company strategy has returned 20 per cent over one year and 13 per cent annually over the past five years, after taking account of fees, according to Morningstar data. Similar passive funds have offered returns of 23 per cent and 14 per cent respectively.

The annual expense ratio of such active funds of 0.45 percentage points was nine times higher than the 0.05 percentage point equivalent for benchmark-tracking funds.

The outflows from stockpicking mutual funds also highlight the growing dominance of ETFs, funds that are themselves listed on a stock exchange and offer US tax advantages and greater flexibility for many investors.

Investors have poured $1.7tn into ETFs this year, pushing the industry’s total assets up 30 per cent to $15tn, according to data from research group ETFGI.

The rush of inflows shows growing use of the ETF structure, which offers the ability to trade and price fund shares throughout the trading day, for a wider variety of strategies beyond passive index-tracking.

Many traditional mutual fund houses, including Capital, T Rowe Price and Fidelity, are seeking to woo the next generation of customers by repackaging their active strategies as ETFs, with some success.