20/06/2025

BIZ & FINANCE FRIDAY | JUNE 20, 2025

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China’s 618 shopping fest fails to stir excitement o Subsidy suspension may impact June retail sales, analysts say

TDK acquires smart glasses company SoftEye

and 40-year bond sales to reflect shrinking demand from life insurers who mostly completed purchases of longer-dated bonds to comply with new solvency regulations. But as the worsening finances of advanced economies drew more market scrutiny, super-long JGBs became a target of a global bond selloff last month. “It was a (positive) surprise to the market that the government is not increasing sales of five-year JGBs in the revision,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management. “But heavier reliance on shorter-term bonds is a sign of Japan’s falling credit quality. “Essentially, it’s not the Ministry of Finance’s responsibility but lawmakers’ to carry out debt management with a sense of crisis,” Inadome said. – Reuters TOKYO: Japan’s TDK said yesterday it has acquired US-based SoftEye, which makes software and hardware for smart glasses, as the smartphone battery maker looks for growth drivers linked to artificial intelligence. SoftEye, based in San Diego, California, develops technology that facilitates eye tracking and object recognition. Its founder and CEO, Te-Won Lee, was an executive at Samsung Electronics and Qualcomm. The deal is worth less than US$100 million (RM426 million), a source familiar with the matter said. Technology firms are looking to hardware beyond smartphones, with Facebook owner Meta and others focusing on smart glasses that use AI to facilitate interaction between users and the environment. Social media company Snap has said it will launch smart glasses for consumers next year, and last month Alphabet’s Google demonstrated smart glasses at its developer conference. Chipmaker Qualcomm also demonstrated a processor for smart glasses this month. TDK, which was once well known for its cassette tapes, is a major manufacturer of electronic components and supplies batteries for smart glasses. – Reuters Vietnam can borrow more from foreign lenders if needed, central bank says HANOI: Vietnam has room to borrow more from foreign lenders if needed to boost economic growth, central bank governor Nguyen Thi Hong told Parliament yesterday. The Southeast Asian industrial hub is in need of investment funds to speed up its infrastructure development, including new power plants, a high-speed railway system, airports and highways. The central bank may also raise its 16% target for credit growth for this year if needed, Nguyen said, as Vietnam seeks to boost investment to achieve its economic growth goal of at least 8% this year. “We can arrange sufficient funding (for investment) while ensuring the safety of public debt and foreign debt.” However, the governor said it would be “too risky to continue to rely on funding from the domestic banking system”, noting that total lending by local banks was equivalent to 134% of GDP as of the end of 2024. – Reuters

BEIJING: China’s biggest mid-year shopping festival, 618, ended on Wednesday evening without much fanfare after more than a month of promotional events aimed at enticing consumers to part with more of their hard-earned money. Originally a single-day celebration marking the founding of e-commerce giant JD.com on June 18, the festival has expanded to include all e-commerce platforms with ever-lengthening sales periods. This year, presale for JD.com and Alibaba kicked off on May 13, making the shopping festival longer than a month. China’s retail sector continues to struggle due to concerns over employment stability, stalled wage growth and the ongoing property crisis, leaving shoppers in no mood to splurge. Retailers and the government have sought to lift subdued spending by deepening discounts and expanding consumer subsidies. Though extending the sales period is likely to help overall sales growth for this year’s 618 period, analysts say, longer festivals and year-round discounts on e-commerce platforms have dampened excitement for these kinds of events. “I don’t have anything special to buy during the 618 shopping festival. Because there are always great deals, I can buy whatever I need whenever,” said Xu Binqi, who works in Beijing’s film industry. “Take skincare products as an example, I buy them whenever I run out, and the prices are no higher than during the 618 festival.” Rachel Lee, general manager of market research firm Worldpanel China and co-author of Bain & Co.’s recent China Shopper Report , said that when consumers are budget-conscious, they seek affordable alternatives, and discounts play a lesser role. “Standalone promotional discounts will find it increasingly difficult to drive volume growth,” she said. Major e-commerce platforms have not disclosed overall sales figures for 618 in recent years, but according to data provider Syntun, sales during the mid-year festival last year fell for the first time in 2024, down 7% at 742.8 billion yuan (RM440 billion) from the year before.

A JD.com advertisement for the 618 festival on display at a shopping mall in Beijing. – REUTERSPIC

extended 618 festival front-loaded consumer demand, encouraging earlier spending and smoothing consumption trends into May. “A longer 618 festival with low prices helps sustain engagement across weeks and has contributed materially to May’s strong retail performance,” Cooke said. Analysts warn that a pause in subsidy programmes in several regions, as central government allocations dry up, could weigh on 618 sales and overall consumption this month, though more funds are likely to be allocated for those programmes in July. “Rapid sales growth of key subsidy categories (such as home appliances) driven by the 618 shopping festival starting from May ... have quickly depleted funds,” HSBC analysts wrote in a note. “Suspension of national subsidies in selected regions may affect 618 sales and June retail sales,” the analysts added. Eve Wang, 32, reflected on the shift in spending habits: “In the past, for example during events like Singles’ Day and 618, I used to spend a lot of money on stockpiling goods, but now ... I only buy what I need.” Wang did not participate in this year’s 618 shopping festival. “I didn’t buy anything at all.” – Reuters

This year, JD.com said the number of users placing orders for the 618 event has more than doubled year-on-year, with over 2.2 billion orders across its online, offline and food delivery platforms. Alibaba said that 453 brands surpassed 100 million yuan in gross merchandise volume (GMV) over the 618 period. Brands that surpassed one billion yuan in GMV included Apple , Xiaomi, Huawei, Nike, Adidas, L’Oréal and Lululemon, Alibaba added. GMV is a metric used by e-commerce companies roughly analogous to sales revenue. While the retail environment in China remains difficult, there are signs that consumption overall has picked up in recent months. Retail sales growth surpassed expectations in May, with official data showing a 6.4% increase, the fastest growth since December 2023. Analysts pointed to the earlier start of 618, along with government consumer subsidies for goods such as home appliances and mobile phones, as twin drivers. Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, said the

Japan to cut super-long bond sales by 10% to calm markets TOKYO: Japan’s government plans to cut sales of super-long bonds by about 10% from its original plan in a rare revision to its bond programme for the current fiscal year, trimming overall bond issuance as a result, a draft document seen by Reuters showed. back some previously issued super-long JGBs with low interest rates to better balance supply and demand. 20-year JGB sales by ¥900 billion to ¥11.1 trillion, 30-year JGBs by ¥900 billion to ¥8.7 trillion and 40-year JGBs by ¥500 billion to ¥2.5 trillion. This means starting next month, sales of each of these tenors will be cut by ¥100 billion at every auction.

The planned reduction in 20-, 30- and 40-year super-long bond sales would be partly offset by increased issuance of shorter-term notes, as well as bonds specifically designed for households. As a result, the total Japanese government bond (JGB) scheduled sales for the year through next March are set to fall by ¥500 billion (RM14.7 billion) to ¥171.8 trillion, according to the draft of the revised bond programme. Issuing a larger amount of shorter-term bonds, however, would require a careful balancing act as the government would need to roll over debt more frequently and make its finances more vulnerable to bond market swings. Specifically, the revised plan calls for reducing

Instead, the government will boost sales of two-year debt, one-year and six-month treasury discount bills by ¥600 billion each. At every auction starting October, sales of two-year debt will be raised by ¥100 billion to ¥2.7 trillion. The government will also increase issuance of principal-guaranteed JGBs for households by ¥500 billion. Debt markets rallied on the news with an auction of five-year JGBs seeing the highest demand in almost two years. The original plan had called for cuts in 30-

The move aims to soothe market oversupply concerns, after weak demand at recent auctions and a surge in super-long yields to record highs last month rattled the bond market. The step also follows the Bank of Japan’s decision this week to slow its tapering of bond purchase from next fiscal year, signalling caution as it removes remnants of its massive and decade-long monetary stimulus. The revised issuance plan will be presented to primary dealers for discussion at a meeting today. Additionally, there are also proposals to buy