18/06/2025

BIZ & FINANCE WEDNESDAY | JUNE 18, 2025

16

Emerging market bonds could end decade-long drought

China’s online literature expands overseas readership BEIJING: China counted over a half billion consumers of online literature last year – a record – according to an official report, while the number of overseas users also jumped as authorities promoted the industry as a cultural export and soft power tool. China’s online literature, which includes web novels in a variety of genres accessible via smart phones, tablets and e-readers, has seen a boom over the past decade with the number of authors and readers soaring. A report by the Chinese Literature Institute, under the Chinese Academy of Social Sciences, said on Sunday that the growth was driven by younger consumers. Readers aged 26 to 45 accounted for half the total readership, the report said. The number of online literature consumers in China grew 10.6% year on year in 2024 to 575 million, or nearly half of all citizens. The number of overseas users, meanwhile, reached 352 million, including readers from more than 200 countries, with the market growing 16.5% year on year to a value of 5.07 billion yuan (RM3 billion). The report called online literature a new channel for “telling Chinese stories well and deepening exchanges and mutual learning among civilisations”, adding that it had improved the “country’s cultural soft power”. Science fiction in particular was developing rapidly, it added. With a growth rate of 180%, Japan was the fastest developing foreign market. Britain, Greece, Spain, Brazil, France and Germany also showed strong growth, it said. Chinese online literature has the largest readership in Asia, which accounts for about 80% of all readers globally and over 50% of global market share by value, the report said. China Literature Ltd, a leading Chinese online literary reading and writing platform owned by Tencent, has turned many of its online literature works into television and web series, movies and games. – Reuters

2010, and it was under his ownership that the Foxes secured their Premier League title in 2016. AOT, which runs Thailand’s biggest international airports, said it would consider its options within 60 days, and will discuss with King Power for fastest possible conclusion. King Power could not be reached for comment. – AFP diversify,” he said, adding he expected small but steady flows – and double-digit returns on local currency at the end of the year in dollar terms. The money is part of the closely watched global effort on the part of some international investors to diversify away from US dollar holdings, and American assets, after years of outsized returns that lured the bulk of the world’s cash. “So far this year to date, local currency has performed very well,” said Carlos de Sousa, portfolio manager at Vontobel. “That’s a really direct, automatic effect” from the drop in the dollar. The fact that most emerging market central banks are broadly on a rate cutting trajectory – even as the outlook for the US Federal Reserve’s actions remain more mixed – is also adding to momentum. Phoenix Kalen, global head of emerging markets research at Societe Generale, called it “a rare moment of goldilocks for local assets”. Local currency bonds, Kalen said, offer “compelling value”, including in the Philippines, Czech Republic, Hungary, South Africa, Turkiye, Brazil and Colombia. The current shift, Goulden, Hauner and others say, has not come close to reversing the years of outflows, and Hauner said it was more a “trickle” so far than a flood. But even small flows can have an outsized impact. “EM as an asset class is much smaller. So if you take out 1% from the US, that is basically the equivalent of 20% in emerging markets. “So the impact of this flow could be quite meaningful,” Hauner said. – Reuters

o US dollar slipped to weakest in three years in recent days

LONDON: A weakening US dollar is lifting a long-neglected asset class – emerging market local currency debt – after a more than decade-long drought. Emerging market local currency bond funds saw a new record of inflows in the week to Wednesday, according to EPFR data, notching eight straight weeks of inflows. The nascent flows remain small – and the uncertainty of tariffs, war and other global turmoil are stemming some flows. But investors expect they will continue, giving a boost to local debt markets in large emerging markets from Brazil and Mexico to Indonesia and India. “Many of the big emerging markets tell us about all the foreign buying of debt, and that is starting to pick up across some countries,” said Jonny Goulden, head of emerging market fixed income strategy at JPMorgan. “This could be a potential turning point.” Yields on the JPMorgan GBI Emerging Market local currency index are at their lowest since 2022 – partly a sign of flows of international cash. Emerging market local currency government bonds have enjoyed returns of more than 10% since the start of the year – more than double the around 4% delivered by the hard-currency peers, according to JPMorgan indexes. The weaker US dollar, and questions over the years-long American exceptionalism trade – when investors parked cash in

booming assets of the world’s largest economy – is nudging international investors to look elsewhere for bigger returns. The greenback slipped to its lowest level in more than three years last week. Slower global growth – and lower interest rates across the developed world – are adding to the hunt for yields. “The dollar is going to be much, much weaker. Bond yields or interest rates will fall – so there is a search for yield,” said Luca Paolini, chief strategist at Pictet Asset Management. Emerging market bonds look set to be one of the main beneficiaries of that momentum, he said. The dynamics combined are helping to end the foreign investor flight from emerging markets’ local currency bonds that Goulden said has lasted for some 14 years. In that time, JPMorgan estimates, the asset class has more than doubled from roughly US$6 trillion (RM25 trillion) to US$13 trillion, with mainly local investors, and some global bond funds, buying. David Hauner, head of global emerging markets fixed income strategy at Bank of America, said that after years of a dollar bull market, and the US exceptionalism trade, allocations to emerging markets were “absolutely rock bottom” – and had much space to grow. “This has been completely neglected for a long period of time, and now, people have to

Duty-free giant King Power seeks to quit Thai airports BANGKOK: Thai duty-free giant King Power is seeking to terminate its concessions at the kingdom’s major international airports, citing falling numbers of Chinese tourists, the terminals’ operator has said. King Power, shirt sponsors for English football club Leicester City, has a monopoly on duty-free outlets at Bangkok’s Suvarnabhumi and Don Mueang airports, as well as those in Phuket, Chiang Mai and Hat Yai.

Aside from airport stores, the King Power Group also operates retail outlets around Thailand, as well as hospitality services. King Power founder Vichai Srivaddhanaprabha led a consortium that bought Leicester City in

Airports of Thailand (AOT) told the Stock Exchange of Thailand (SET) on Monday that King Power had requested a discussion of the possible termination of its duty-free concession contracts.

Singapore’s exports in May unexpectedly fall 3.5% year-on-year SINGAPORE: Singapore’s non-oil domestic exports fell 3.5% in May from the same month a year earlier, government data showed yesterday, bucking analyst estimates as shipments to the United States fell sharply a month after Washington announced tariffs. annual terms in May, while exports to the United States, Thailand and Malaysia decreased. The outlook for the financial hub remains uncertain as global trade is expected to slow because of tariffs imposed by the United States.

A view of high-rise buildings in the financial district of Raffles Place in Singapore. – AFPPIC

Singapore downgraded its GDP forecast for 2025 to 0% to 2% from 1% to 3% in April, with officials saying the city-state faces a risk of recession and job losses. Trade Minister Gan Kim Yong said in May that while the US was not going to budge on the 10% tariff imposed on Singapore, the nation was negotiating for concessions on pharmaceutical tariffs that President Trump has threatened to implement. As one of the world’s most open economies, Singapore is often seen as a bellwether for global growth as its international trade dwarfs its domestic economy. – Reuters

The fall compared with a Reuters poll forecast of 8.0% year-on-year growth, and followed a 12.4% rise in April. Shipments of electronics rose slightly but petrochemicals, non-monetary gold and specialised machinery fell. Maybank economist Brian Lee said that an earlier boost to exports due to frontloading appears to be cooling, as seen in the 20.6% decline in exports to the United States from a year earlier after five months of expansion. The economist said the fall could have been exacerbated by a high year ago base. Exports to Taiwan, Indonesia, South Korea and Hong Kong increased in