21/08/2025

BIZ & FINANCE THURSDAY | AUG 21, 2025

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US recalls shrimp over potential radioactivity scare WASHINGTON: US health authorities announced on Tuesday a recall of frozen shrimp potentially contaminated with radioactivity. The seafood imported from a company in Indonesia has been marketed in 13 states by retail giant Walmart, the Food and Drug Administration (FDA) said on its website. The recall follows the detection of the radioactive isotope Cesium 137 in shrimp imported through the company called PT. Bahari Makmur Sejati, the advisory said. The level of radioactivity detected was minimal and the product would not pose “an acute hazard”to consumers, FDA said. No shrimp imported by the firm and stocked for sale in US stores has tested positive for radioactivity, the agency said. But shrimp from the firm “appears to have been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with Cs-137 and may pose a safety concern”. Over the long term, even low-dose Cesium exposure is linked to an elevated risk of cancer, it added. The FDA asked Walmart to stage a recall of the shrimp and urged people who already bought the product to throw it away. – AFP WELLINGTON: New Zealand’s central bank yesterday cut its benchmark interest rate to a three-year low, seeking to inject momentum into the country’s “stalled” economy. The Reserve Bank of New Zealand lowered the official cash rate by 25 basis points to 3%, a mark not seen since September 2022. “New Zealand’s economic recovery stalled in the second quarter of this year,” the bank said in a statement. “Spending by households and businesses has been constrained by global economic policy uncertainty, falling employment, higher prices for some essentials, and declining house prices.” Finance Minister Nicola Willis said New Zealand appeared to be through the worst of an inflation crisis felt around the world. “I know many families are still doing it tough, but the Reserve Bank’s view is that we are through the worst of it and the economy is starting to pick up,”she said in a statement. – AFP NZ economy ‘stalled’ in Q2

Indonesia’s central bank surprises with rate cut

JAKARTA: Indonesia’s central bank cut interest rates again in a surprise move yesterday and flagged it could cut some more, as it stepped up support for Southeast Asia’s largest economy against the backdrop of global uncertainties. Bank Indonesia (BI) trimmed the benchmark 7-day reverse repurchase rate by 25 basis points to 5.00%, its fifth rate cut since September, taking it to its lowest level since late 2022. Only five of 29 economists polled by Reuters had expected a cut. The rest expected rates to be kept steady. Governor Perry Warjiyo told a press conference that the decision was in line with expectations of low

o Governor upbeat about growth prospects in second half

as the lack of capital distribution from IPOs and M&A deals fuels supply. Quality China assets are being sold in the secondary market at 40%-50% discounts to net asset value (NAV), said Coulter. That compares with the roughly 10% to 20% discounts to NAV for US assets in the secondary market, industry sources said. The improved market sentiment in China should be conducive to PE secondary deals, industry sources said. China’s onshore benchmark CSI 300 is up 7% so far this year, while Hong Kong’s Hang Seng Index is up 25%. “We believe the sentiment of investors about China has generally improved,”said Mingchen Xia, co-head of Asia investments at advisory firm Hamilton Lane. – Reuters 5.12% in the second quarter, the fastest annual pace in two years, driven by robust investment and household spending. Some economists questioned the strength of that data, pointing to indicators showing weakening domestic demand, while others have taken note of looming headwinds to growth caused by US tariffs. “First-half growth may have come in stronger than expected, but the second half holds challenges given higher US tariffs and still-fragile consumer confidence,” said Maybank economist Brian Lee. Indonesia’s exports to the United States have been subject to a 19% tariff since Aug 7, the same level as Thailand, Malaysia, the Philippines and Cambodia. In a sign of demand remaining soft in the current quarter, July loan growth slowed to 7.03%, the lowest since March 2022. BI blamed this on banks preferring to park excess liquidity in securities instead of lending and reducing their lending rates at a slower pace. “Bank Indonesia is clearly keen to support economic growth and, so long as inflation remains contained and the rupiah holds up well, there is probably scope for a bit more monetary easing over the coming months,” Jason Tuvey, Capital Economics’ analyst wrote in a note, predicting further cuts taking the benchmark to 4.50% by year-end. Maybank’s Lee forecast cuts of 50 bps more this year and another 50 bps next year to bolster growth, noting the government’s 5.4% growth target for 2026, which President Prabowo Subianto unveiled last week. Prabowo proposed to parliament a US$234 billion (RM988 billion) budget for 2026, a 7.3% increase from this year’s budget outlook, with a large increase in spending for defence and his flagship food and nutrition programmes. – Reuters

Warjiyo was upbeat about growth prospects in the second half, citing the impact of BI’s monetary easing and the acceleration of government spending. Wednesday’s rate cut was BI’s fifth since last September, with a total reduction of 125 basis points. It was the first time during the easing cycle that it has made cuts at consecutive meetings. The decision followed data earlier this month showing that economic growth accelerated to

inflation and a stable rupiah, as well as the need to bolster economic activity. GDP growth is expected to accelerate to around 5.1% or higher in 2025, above the midpoint of BI’s official outlook range of 4.6% to 5.4%, Warjiyo said, and compared with 5.03% in 2024. “The capacity of the economy is still larger than the demand. That is why we have lowered interest rates ... and we will continue to assess room for further rate cuts.”

Construction workers riding on a covered pickup truck to work near Nusantara, Indonesia’s planned new capital, in East Kalimantan. – AFPPIC

China private equity secondary deals set to surge HONG KONG: Secondary trades of private equity assets in China are poised to accelerate after a robust first half, with Canada’s No. 2 pension manager and a China-focused buyout fund among those looking to divest such assets worth potentially billions of dollars, sources said. to find trade buyers or float the assets on public markets due to economic headwinds and geopolitical risks. The people, who are familiar with the matter, did not wish to be identified as the talks are confidential. A total of 731 secondary trades involving yuan-denominated funds were completed in the first half of 2025, hitting a record 77.3 billion yuan (RM46 billion) and logging an 89% year-on-year growth, according to Chinese data provider Zerone. Data for secondary trades

“We expect the majority of capital we are going to deploy in China in the short to medium term to be via secondaries,”Doug Coulter, LGT’s Hong Kong-based partner and co-head of Asia Pacific private equity, told Reuters. LGT announced in June that it was the co-lead investor in continuation vehicles worth a total of US$500 million for a portfolio of 13 assets managed by China-focused venture capital fund IDG Capital. Singapore sovereign wealth fund GIC also invested in IDG’s continuation vehicles, primarily buying shares of social media company Bytedance, said the two people. Globally, secondary market deals have also hit record volumes, reaching US$103 billion in the first half, according to a report by investment bank Jefferies,

Canada’s Caisse de dépôt et placement du Québec (CDPQ), for example, which stopped making PE investments in China two years ago, is considering selling about US$2 billion (RM8.45 billion) worth of assets via secondary trades, most of which are from China, said two people. China-focused buyout fund CDH Investments is also aiming to raise a multi-asset continuation vehicle to allow some investors to cash out from its existing fund’s portfolio, they said. A continuation fund is a new investment vehicle created by a PE firm to transfer holdings of some existing investments, which allows investors to maintain or exit their stakes in the assets.

A private equity (PE) secondary trade refers to the buying and selling of PE fund portfolios or their direct shareholdings in private companies, allowing investors to exit their positions outside the typical investment cycle. The steep discounts being offered by the selling funds are expected to attract buyers who have confidence in China’s longer-term economic prospects, industry sources said. Many of the selling funds have to repay their investors and are struggling

involving US dollar-denominated assets in China is not publicly available, industry sources said. It is a good time for investors who have a long-term view on China to buy quality assets on the cheap with reduced regulatory risks, global alternative asset investor LGT Capital Partners said in an industry insight white paper published in July.