26/06/2026

BIZ & FINANCE FRIDAY | JUNE 26, 2026

FOLLOW

ON YOUTUBE

16

Malaysian Paper

/theSunMedia /

China’s tech push sparks VC boom, bubble fears

KOBE: The Bank of Japan (BOJ) should raise interest rates once every few months and stand ready to speed up the pace of hikes, hawkish board member Naoki Tamura said, highlighting the bank’s focus on inflationary risks from the Middle East conflict. The remarks came in the wake of the central bank’s decision this month to raise its policy rate to a 31-year high of 1%, as the Iran war-induced energy shock adds to price pressures from a tight labour market and rising import costs from a weak yen. In a speech yesterday, Tamura said companies were passing on rising import costs more quickly, significantly and broadly than in the aftermath of Russia’s invasion of Ukraine in 2022 due GECF: Global gas markets to stabilise after Middle East war HOUSTON: Global natural gas markets were on track to stabilize during the third quarter with the reopening of the Strait of Hormuz following the ceasefire between the US and Iran, Philip Mshelbila, secretary- general of the Gas Exporting Countries Forum (GECF), said at the Reuters Global Energy Forum in New York on Wednesday. “If we assume that the Strait (of Hormuz) is now open and will remain open, our view is actually that in the course of this next quarter we will begin to see some re stabilization in the market,“ Mshelbila said. The GECF represents some of the world’s leading gas-exporting countries including Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela, accounting for about 70% of the world’s proven gas resources. The war in Iran disrupted oil and gas exports from major suppliers in the Middle East and boosted global energy prices to their highest levels in years. In response, governments around the world took steps to protect consumers from soaring prices by tapping strategic reserves and encouraging homes and businesses to conserve energy. Before the US and Israel started bombing Iran on Feb 28, most analysts projected global gas supply and demand would keep hitting record highs over the next decade as countries, especially in Asia, switch from coal to gas-fired power plants. Mshelbila expects both flows and prices to revert closer to pre-conflict levels in the fourth quarter, though Asian prices may remain elevated in the short term. In March 2026, gas prices in Europe and Asia soared to their highest level since the 2022-2023 crisis caused by Russia’s invasion of Ukraine. The US is the world’s largest exporter of the superchilled gas followed by Qatar and Australia, but there are several African countries that are likely to emerge as LNG producers in the coming years and put downward pressure on prices, Mshelbila said. The GECF official said that China, meanwhile, will continue growing its LNG demand even though it has other options, including domestic energy production. Mshelbila said China has taken steps to diversify its energy supplies with a significant build out of renewables, pipeline gas from Russia and increased gas production. “Coal to gas switching is going to continue, and we do believe that the growth in the LNG demand of China will continue to grow,“ he said. – Reuters

Newly registered venture capital funds in the world’s second-largest economy totaled 154 billion yuan during the first five months of 2026, already in excess of last year’s total, according to China’s fund industry association. “The level of frenzy (in China) is something I have never seen in my entire career,” said Yan Kai, a veteran venture capitalist and partner at Ivy Capital in Shanghai. A startup with no revenue can raise billions in a first funding round and before that deal is completed, investors line up for the second while talks have already started for the third, said Yan, whose firm makes tech-focused investments. A pickup in venture capital investments comes as Beijing has highlighted the need to bolster its “future industries,” a grouping that also includes biomanufacturing and hydrogen energy, in its next five-year plan, published in March. The development blueprint also identified sectors like robotics and aerospace as strategic emerging industries earmarked for priority development. China also published rules this month to support domestic stock market listings of “future industry” startups, typically firms working on frontier technologies that have no profit or revenue. “Our strategy is to move with the trend – follow guidance of national strategy, while selecting investment targets using a market approach,” said Huang Yan, co-founder of Shanghai-based Lantern Capital. Huang, who expects a return of nearly 100 times from his decade old investment in LandSpace – China’s closest answer to SpaceX – said “the key is to marry what that state wants with what the market needs.” Raymond Feng, a partner at Atom Ventures, said competition among venture funds to invest is fierce in the areas of nuclear fusion, quantum tech and embodied AI, as “everyone is throwing money at future industries.” – Reuters “Exchange-rate moves are among key factors affecting Japan’s economy and prices. With corporate wage- and price-setting behaviour having changed, currency fluctuations have a bigger impact on inflation than in the past,“ Tamura said. Political pressure, however, could complicate further tightening. Japan’s government will call for monetary policy that bolsters private demand, a draft of its long-term economic blueprint seen by Reuters showed, signalling its preference for the central bank to keep borrowing costs low. A Reuters poll taken before the June hike showed most economists projecting a rate increase to 1.25% in the fourth quarter.

round of financing are expected to get returns of 26.7 times.” The aggressive fundraising pitch highlights a scramble among what Beijing refers to as China’s “strategic emerging and future industries,” which include startups focusing on space, quantum technology, nuclear fusion and brain-machine interfacing. While the rush to raise funds by companies like Tectronic is creating potentially lucrative opportunities for local venture firms – struggling to recover from a years-long downturn – the fever is also inflating startup valuations and stirring fears of a forming bubble. In China, venture capital and private equity investments in the first five months of this year totaled 620 billion yuan, jumping nearly 60% from a year earlier, according to ChinaVenture Investment Consulting.

o Space, quantum and AI startups attract flood of investment as Beijing backs ‘future industries,’ raising valuation concerns

SHANGHAI: Just two days after SpaceX made its historic market debut, a Chinese space startup held an investor roadshow for its maiden fundraising round by touting a mission to help China catch up with the US in the race to the heavens. The mission for Tectronic Maritime Space Systems, a Shanghai-based company that focuses on launching rockets from the sea, is to “build the Maersk of global commercial space flight,” finance manager Gu Mei told roughly 50 venture capital (VC) investors.

To achieve that goal, Tectronic, established just three months ago, needs to raise 150 million yuan (RM91 million) at a valuation of 1.5 billion yuan, according to its investor presentation. It plans three additional funding rounds totaling 3 billion yuan over five years before targeting a 2032 listing at a valuation of about 50 billion yuan – more than 30 times its current level, the presentation showed. “Demand is inelastic, supply is limited and the clock is ticking,” Gu said at the event on June 14. “Investors participating in this

Valuations are soaring across China’s emerging technology sectors, raising questions over whether today’s investment frenzy can be justified by tomorrow’s profits. – PEXELS PIX Hawkish Bank of Japan official urges regular rate hikes

forecasts that markets will parse for signals on the timing of the next hike. A former commercial banker, Tamura was among the three board members who proposed unsuccessfully to raise rates in April. While Tamura’s views are likely more hawkish than others on the board, they underscore growing attention within the bank to mounting price pressures that have kept consumer inflation around the bank’s 2% target for nearly four years. Though the de-escalation of the Middle East conflict has pushed down crude oil prices, the yen’s slide to near a four-decade low keeps the BOJ under pressure to raise rates and avoid widening the rate differential with the US, analysts say.

frequency or size of rate hikes,“ he said. When asked whether consecutive rate hikes could become an option, Tamura told a news conference that the BOJ could do so if risks for an inflation overshoot materialise. But he ruled out the need for immediate consecutive hikes, saying the basic approach would be to assess the impact of each move on economic, price and financial conditions before proceeding with the next increase. “If the likelihood of inflation risks materialising heightens, the BOJ may need to raise rates frequently or at a bigger scale. But I don’t see such a need for now,“ he said. The BOJ next meets on July 30-31, when it is widely expected to hold rates steady but will update quarterly

to changes in companies’ price-setting behaviour. Underlying inflation has already reached 2% and upside risks to prices warrant attention regardless of developments in the Middle East, Tamura said, warning that inflation expectations remain on the rise. “Considering the recent increase in upside risks to prices, what I envisage as a baseline path is raising the policy interest rate by 0.25 percentage points at intervals of a few months towards the neutral interest rate level of 2%,“ Tamura said in a speech to business leaders in Kobe, western Japan. “If the chance of upside price risks materialising heightens, it’s necessary to accelerate the pace of rate hikes without hesitation by increasing the