22/07/2025

BIZ & FINANCE TUESDAY | JULY 22, 2025

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China embarks on world’s largest hydropower dam

India’s investment trusts to expand debt fundraising MUMBAI: Debt fundraising by India’s asset-backed investment trusts is expected to keep rising after exceeding 178 billion rupees (RM8.8 billion) in the first half of 2025, as falling interest rates continue to fuel strong investor demand, analysts said. The real estate investment trusts (REIT) and infrastructure investment trusts (InvIT) raised over 178 billion rupees in January-June, compared with 56 billion rupees in the same period last year, according to data aggregator Prime Database. “Bonds offer a lower cost of capital compared to traditional bank financing, especially for highly rated trusts with stable, long-term cash flows,”Arka Mookerjee, partner at JSA Advocates and Solicitors, which provides legal advice to corporates. “The predictable income profiles of REITs and InvITs make them well-suited to debt financing, attracting institutional investors seeking yield-bearing, asset-backed instruments.” Corporate bond yields have tumbled over the last few months, as the central bank infused liquidity and slashed interest rates by 100 basis points, while banks have lagged in lowering their lending rates. Embassy Office Parks REIT, IndiGrid Infrastructure Trust, Cube Highways Trust and Nexus Select Trust are among the firms that have tapped the bond market. Embassy REIT is planning another bond issue, Reuters reported last week, while others are also in early talks. Bonds typically have fewer restrictions than bank loans, allowing REITs to use the fund across multiple properties within the portfolio, said Lata Pillai, India senior managing director at JLL, a global real estate services firm. The trusts, which need to disburse at least 90% of net distributable cash flows to unit holders, say cheaper funding allows them to provide better returns. – Reuters

investors interpreted the news as part of China’s economic stimulus. The project, overseen by the newly formed state-owned China Yajiang Group, marks a major boost in public investment to help bolster economic growth as current drivers show signs of faltering. “Assuming 10 years of construction, the investment/GDP boost could reach 120 billion yuan (RM70.7 billion) for a single year,” said Citi in a note. “The actual economic benefits could go beyond that.” China has not given an estimate on the number of jobs the project could create. The Three Gorges, which took almost two decades to complete, generated nearly a million jobs, state media reported, though it displaced at least a similar number of people. Authorities have not indicated how many people would be displaced by the Yarlung Zangbo project. The Yarlung Zangbo becomes the Brahmaputra River as it leaves Tibet and flows south into India and finally into Bangladesh. NGOs say the dam will irreversibly harm the Tibetan Plateau and hit millions of people downstream. Arunachal Pradesh chief minister Pema Khandu said earlier this year that such a colossal dam barely 50km from the border could dry out 80% of the river passing through the Indian state while potentially inundating downstream areas in Arunachal and neighbouring Assam state. Some experts also express concerns for a project in a seismically active zone. – Reuters

without having a major effect on downstream water supplies or the environment. Operations are expected sometime in the 2030s. China’s CSI Construction & Engineering Index jumped as much as 4% to a seven-month high. Power Construction Corporation of China and Arcplus Group PLC surged by their 10% daily limit. “From an investment perspective, mature hydropower projects offer bond-like dividends,” Wang Zhuo, partner of Shanghai Zhuozhu Investment Management said, while cautioning that speculative buying into related stocks would inflate valuations. The project will drive demand for construction and building materials such as cement and civil explosives, Huatai Securities said in a note to clients. Shares of Beijing-listed Hunan Wuxin Tunnel Intelligent Equipment Co, which sells tunnel construction equipment, surged 30%. So did shares of Geokang Technologies Co Ltd, which makes intelligent monitoring terminals. Cement maker Xizang Tianlu Co Ltd and Tibet GaoZheng Explosive Co, producer of civil explosive materials, both jumped their maximum 10%. The Chinese premier described the dam as a “project of the century” and said special emphasis “must be placed on ecological conservation to prevent environmental damage”, Xinhua said on Saturday. Government bond yields rose across the board yesterday, with the most-traded 30-year treasury futures falling to five-week lows, as

SHANGHAI: China’s Premier Li Qiang announced construction had begun on what will be the world’s largest hydropower dam, on the eastern rim of the Tibetan Plateau, at an estimated cost of at least US$170 billion (RM720 billion), Xinhua news agency said. Commencement of the hydropower project, China’s most ambitious since the Three Gorges Dam on the Yangtze, was seized by Chinese markets as proof of economic stimulus, sending stock prices and bond yields higher yesterday. Made up of five cascade hydropower stations with the capacity to produce 300 billion kilowatt-hours of electricity annually, equal to the amount of electricity consumed by Britain last year, the dam will be located in the lower reaches of the Yarlung Zangbo. A section of the river tumbles 2,000m in a span of 50km, offering huge hydropower potential. India and Bangladesh have already raised concerns about its possible impact on the millions of people downstream, while NGOs warned of the risk to one of the richest and most diverse environments on the plateau. Beijing has said the dam will help meet power demand in Tibet and the rest of China o Start of construction fuels surge in engineering, related shares in stock market The Japanese markets are closed for the day leaving the yen as an indicator of investor angst. Prime Minister Shigeru Ishiba’s Liberal Democratic Party returned 47 seats, short of the 50 seats it needed to ensure a majority in the 248-seat upper chamber in an election where half the seats were up for grabs. The yen firmed to 148.32 per dollar in early trading, staying close to the 3-1/2-month low it hit last week as the election result was mostly priced in by investors. It firmed a bit against the euro to 172.64. While the ballot does not directly determine whether Ishiba’s administration will fall, it heaps political pressure on the embattled leader who also lost control of the more powerful lower house in October. Chris Weston, head of research at Pepperstone, said the LDP coalition could still partner with the Democratic Party for the People (DPP) to get the 50 seats required, and “that is helpful for the yen”. “However, most importantly, Ishiba has been defiant in his stance to stay the course as PM, but his hand has been sufficiently weakened.” The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with US President Donald Trump before an Aug 1 deadline. Japanese government bonds (JGBs) plunged last week, sending yields on 30-year debt to an all-time high, while the yen slid to multi-month lows against the US dollar and the euro. If Ishiba resigns, the political maelstrom could be a trigger for foreign investors to sell Japanese shares and the yen, analysts said.

Yen firms as investors gird for political uncertainty TOKYO: The yen firmed yesterday after Japan’s ruling coalition lost its majority in the upper house as investors braced for a period of policy paralysis and market tumult in the world’s fourth-largest economy ahead of a deadline on tariff negotiations with the US

Voters looking at posters of candidates for the upper house election outside a polling station in Tokyo. – REUTERSPIC

below economists’ forecasts, leading markets to raise the chance of a rate cut next month given the broader economic weakness. In cryptocurrencies, bitcoin fell 1% to US$116,939, holding below a record US$123,153 reached last week. – Reuters

trading, while sterling last fetched US$1.13417. The dollar index, which measures the US currency against six others, was at 98.352. The New Zealand dollar eased 0.18% to US$0.5951 after annual consumer inflation accelerated in the second quarter but stayed

Elsewhere, investor focus has been firmly on Trump’s global tariff salvos, with a Financial Times report last week indicating the US president was pushing for steep new tariffs on European Union products. The euro was steady at US$1.163225 in early