Yahoo Finance discusses everything from SeaWorld to President Obama with the CEO of the largest alternative investment firm in the world.
Yahoo Finance discusses everything from SeaWorld to President Obama with the CEO of the largest alternative investment firm in the world.
(Bloomberg) -- International Holding Co., which has transformed itself into the United Arab Emirates’ second most-valuable listed company, has become one of the biggest shareholders in Abu Dhabi’s largest property developer.Abu Dhabi-based IHC said on Monday it had bought a 45% stake in Alpha Dhabi Holding, but didn’t provide details of the transaction. With the deal, IHC will become a shareholder in Aldar Properties PJSC as Alpha Dhabi acquired a 12.2% stake in the developer last month.“The acquisition of a substantial stake in Alpha Dhabi Holding will add a significant scale to IHC,” Chief Executive Officer Syed Basar Shueb said in a statement. “The move will increase and diversify our investment vertical, as we continually seek strategic partnerships with local and international players.”IHC had started talks to buy Alpha Dhabi, then known as Trojan Holding, in March. The company has amassed a portfolio spanning real estate to utilities and health care to food services through a flurry of deals and its shares have soared more than 100% this year. Its market capitalization of about $43 billion is higher even than the country’s biggest bank.IHC is ultimately controlled by the Royal Group, a conglomerate that lists Sheikh Tahnoon Bin Zayed Al Nahyan as chairman. Sheikh Tahnoon is the brother of Abu Dhabi’s crown prince, Mohammed bin Zayed al Nahyan, who is considered the emirate’s de facto ruler.About Alpha Dhabi:Established in 2008 with a focus in the real estate and construction sectorEmploys more than 22,000 peoplePortfolio manages entities within the construction, hospitality, industrial and capital verticalsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- India’s deepening coronavirus crisis slammed the nation’s stocks and currency on concern it will deliver a fresh blow to an economy that’s only just recovering from the worst contraction in nearly seven decades.The Indian rupee dropped past 75 to a dollar for the first time since August 2020, while the benchmark S&P BSE Sensex Index declined 3.4%, the most in almost two months. India reported a record 168,912 new infections for a day, taking the tally to 13.53 million cases, the government said Monday.Many provinces across the nation, from the financial hub Mumbai to capital New Delhi, are bringing back stricter restrictions on movement of people to curb the surge in cases. Reports are emerging of hospital beds running short and immunization centers turning away people as they run out of vaccines.That and a vaccine shortage “are unnerving markets and no one is sure whether lockdowns will help bring cases under control,” said Deepak Jasani, head of retail research at HDFC Securities. Given the uncertainty, “the incentive to try and bottom-fish at this point is limited for traders.”Taking a BeatingThe NSE Nifty 50 Index dropped 3.5%, making India’s key stock indexes the worst performers in Asia on Monday. All 19 sector sub-indexes compiled by BSE Ltd. slipped, led by a gauge of property and industrial shares.India’s virus resurgence has prompted some brokerages to reconsider their preference for stocks, which are most sensitive to the economic recovery. Nomura cut the weight of financials and cement shares in its model portfolio, while Jefferies downgraded Indian banks to underweight from overweight.Not everyone is pessimistic. India’s long-term outlook remains strong and any decline in equities due to infections should be used as an entry point by investors, according to Prabhudas Lilladher Ltd. India’s gross domestic product is forecast to grow by as much as 12.5% this fiscal year, which would make it the world’s fastest-growing major economy.Bonds held on to last week’s gains, with the yield on the benchmark 10-year notes near the lowest since mid-February, amid optimism the central bank may keep its policy accommodative for long to support the economy. The rupee fell 0.4% to close at 75.0550 per dollar on Monday.“We expect the rupee to weaken versus the USD as have other EM currencies,” and given the slow progress of vaccination, the economy “will be slower to recover,” R Venkataraman, managing director at IIFL Securities, wrote in a note.(Updates with closing prices; adds IIFL analyst’s comment in last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China just slapped a record antitrust fine on Alibaba Group Holding Ltd. The company thanked the government and investors breathed a sigh of relief.Alibaba’s American depositary receipts climbed 9.3% on Monday in New York, their biggest jump in almost four years. For Jack Ma, the founder of the e-commerce giant, it meant his fortune increased by $2.3 billion to $52.1 billion, according to the Bloomberg Billionaires Index.The $2.8 billion fine is less severe than some investors feared and is based on only 4% of the company’s 2019 domestic sales, far less than the maximum 10% allowed under Chinese law. While the internet giant will have to adjust the way it does business, its vice chairman said regulators won’t impose a radical overhaul of its e-commerce strategy and its chief executive officer declared Alibaba ready to move on.“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said in an open letter. “For this, we are full of gratitude and respect.”Ma, who up until last year was China’s richest person, has lost billions since his nation’s regulators began an anti-monopolistic campaign, halting the initial public offering of his Ant Group Co. payments company just two days before it was scheduled to go public. He is now China’s third-richest person after Zhong Shanshan of bottled-water company Nongfu Spring Co. and Tencent Holdings Ltd.’s Pony Ma.Separately, China’s central bank ordered Ant to become a financial-holding company that will be regulated more like a bank. The move, announced on Monday, will have far-reaching implications for the firm’s growth and its ability to press ahead with an initial public offering. Alibaba shares opened 3.4% higher in Hong Kong on Tuesday.(Updates to include Ant overhaul and stock move in last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Mobility is being redefined. Joby Aviation, which is going public through a merger with Reinvent Technology Partners (NYSE: RTP), has aggressive plans to put 1,000 electric, vertical take-off and landing passenger aircraft (eVTOLs) in service by 2026. And the best part: you’ll be able to order one from your smartphone. Toyota Motor Corporation, Uber Technologies, […]
Nearly half of all oil pipelines from the Permian basin, the biggest U.S. oilfield, are expected to be empty by the end of the year, analysts and executives said. Pipeline companies went on a construction spree throughout 2018 and 2019 to handle blistering growth in U.S. crude production to a record 13 million barrels per day (bpd). Major pipeline companies are exploring ways to ship other products in those lines and considering selling stakes in operations to raise cash.
(Bloomberg) -- Bitcoin neared an all-time high on Monday as bullish sentiment gathered steam ahead of a listing by the largest U.S. cryptocurrency exchange.The token rose as much as 2.6% to $61,229, the highest in nearly a month, before falling back to trade little changed. On March 13, Bitcoin reached a record of $61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is fanning interest. Coinbase is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance’s, known as BNB, rose 23% Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.“A crypto company moving to IPO is a big milestone,” said Nick Jones, CEO and co-founder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”A growing list of companies are looking at or even investing in Bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.Elsewhere, Goldman Sachs Group Inc. has said it’s close to offering investment vehicles for Bitcoin and other digital assets to private wealth clients. Morgan Stanley plans to give rich clients access to three funds that will enable crypto ownership. The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc. and Visa Inc. have begun using cryptocurrencies as part of the payments process.A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1% allocation to Bitcoin in a diversified multi-asset portfolio could be beneficial given its resemblance to gold and its near zero correlation to other asset classes.“In recent months, a clear and emphatic narrative that Bitcoin is becoming a store of value in the form of digital gold has developed,” according to Jeroen Blokland, a portfolio manager at Robeco.Other cryptocurrencies, such as second-ranked Ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed $2 trillion.(Adds paragraph about exchange tokens)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The regulator's statement offers the most detailed look so far at how companies like Alibaba use a controversial business tactic.
Helping to pressure the U.S. Dollar were higher-than-expected weekly initial claims, but this was somewhat offset by a jump in producer prices.
Singapore state investor Temasek Holdings and BlackRock, world's largest asset manager, said on Tuesday they have launched a partnership to invest in firms with products and technologies that will reduce carbon emissions. BlackRock and Temasek are committing a combined $600 million in initial capital to invest in multiple funds launched by the partnership, called 'Decarbonization Partners', which has a fundraising target of $1 billion for its first fund and will also raise third-party capital, the companies said in a joint statement.
Bitcoin prices have doubled this year, but several major altcoins have risen by many multiples.
The EU has aimed to reduce its dependence on Russia as a gas supplier, but despite its best efforts to diversify supply, Russia continues to have significant strategic advantages
(Bloomberg) -- Vingroup JSC is considering a U.S. initial public offering of its car unit VinFast that could raise about $2 billion, according to people familiar with the matter.The biggest carmaker in Vietnam is working with advisers on the potential offering that could take place as soon as this quarter, the people said. An offering could raise as much as $3 billion, said the people, who asked not to be identified as the information is private. The company is seeking a valuation of at least $50 billion after a listing, one of the people said.At $2 billion, VinFast’s IPO would be the biggest ever by a Vietnamese company after Vinhomes JSC’s $1.4 billion first-time share sale in 2018, according to data compiled by Bloomberg. The carmaker could also become the first Vietnamese company to list in the U.S. if successful.Shares in Vingroup climbed as much as 5.3% on Tuesday to a record high. They have risen 27% this year, giving the company a market value of about $20 billion.Details of VinFast’s IPO including size and timeline could change as deliberations are ongoing, the people said. A representative for Vingroup declined to comment.VinFast, founded by billionaire Pham Nhat Vuong, began delivering gasoline-powered autos to Vietnamese consumers with BMW-licensed engines in 2019. The carmaker plans a Vietnam roll-out of electric cars later this year and said last month it has received 3,692 local orders. The startup aims to deliver its first electric vehicles to the U.S., Canada and Europe next year and is looking to open a factory in the U.S.(Updates with Vingroup shares in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A growing number of Chinese tech start-ups are cancelling plans to list on Nasdaq-style markets at home with some eyeing Hong Kong share sales instead, as regulators tighten scrutiny of IPO applicants after the halting of Ant Group's $37 billion float. Over 100 companies have voluntarily withdrawn applications to list on Shanghai's STAR Market and Shenzhen's ChiNext since Ant's termination of its initial public offering (IPO) in November, according to Reuters review of exchange filings. The unprecedented withdrawals come against the backdrop of sharply intensified grilling of listing prospects by regulators, leading to IPO delays, outright rejection or even penalties, say bankers and company executives.
Traders took a pause after the S&P 500 and Dow logged fresh record highs last week.
HSBC and Huawei Technologies' Chief Financial Officer Meng Wanzhou have reached an agreement in a dispute about the publication of documents relating to U.S. fraud allegations against her, their lawyers told a Hong Kong court. The legal dispute reached the Hong Kong court last month after a British judge in February blocked the release of internal HSBC documents relating to the fraud allegations against Meng.
(Bloomberg) -- Walmart Inc.’s e-commerce unit, Flipkart Online Services Pvt., signed a pact with tycoon Gautam Adani’s conglomerate to build one of the largest retail warehouses in India as the U.S. giant gears up to battle Amazon.com Inc. and homegrown rivals in the South Asian nation.The partnership marks the entry of Adani, India’s fastest-rising billionaire, into the three-way fight for domination of India’s online shopping space. Up against the Walmart-Adani alliance is not just Amazon, but also Reliance Industries Ltd., the conglomerate owned by Mukesh Ambani, India and Asia’s richest man.They all want a slice of a market estimated to generate $200 billion in sales by 2026 -- turbocharged by pandemic restrictions that are keeping people away from brick-and-mortar stores.Adani Logistics Ltd., a unit of Adani Ports & Special Economic Zone Ltd., will build a 534,000-square-feet fulfillment center in its upcoming logistics hub at Mumbai and lease it to Flipkart, the companies said in a joint statement Monday. Expected to be operational in the third quarter of 2022, this warehouse -- roughly the size of 11 football fields -- can store 10 million units of inventory, the firms said.Bengaluru-based Flipkart will also develop its third data center at the AdaniConnecX facility in Chennai to help the e-commerce company keep its data within India, according to the statement. Adaniconnex Private Ltd. is a joint venture between U.S.’s EdgeConneX Inc. and Adani Enterprises Limited., the conglomerate’s flagship listed unit.Financial terms of the partnership were not disclosed.More CompetitiveAmazon has already invested heavily in fulfillment centers in India, and its data-centric approach enables it to offer next-day delivery for select products in large cities, according to Utkarsh Sinha, managing director at Mumbai-based consultancy Bexley Advisors. “It will be critical to see if Walmart’s plans follow a similar tech-first infrastructure approach, which could make Flipkart’s delivery and fulfillment more competitive.”The new fulfillment center being planned is likely to be larger in area than the ones operated by Amazon in India so far, underscoring the potential size of the Indian market.“We see this as a great opportunity to serve Flipkart’s physical as well as digital infrastructure needs,” said Karan Adani, chief executive officer of Adani Ports.The partnership is another sign of Adani’s rising clout: his coal mining-to-data centers conglomerate has rapidly expanded and diversified across sectors, adding $24 billion to his net worth this year. Riding a massive rally in his companies’ shares, Adani’s wealth has jumped to almost $58 billion -- the fastest rise in wealth globally.(Updates with analyst comments in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The Permian Basin, the U.S.’s most prolific shale patch, will produce crude oil at levels not seen since the start of the pandemic in the latest sign the global economy is heating back up.Higher prices are buoying drillers’ confidence. Benchmark Nymex oil gained nearly 35% in the past four months after OPEC and its alliance cut production to strike a balance between demand and supply. The fossil fuel is also getting a bump as Covid-19 vaccinations progress and Americans travel again, boosting gasoline consumption.Output in the basin will reach 4.466 million barrels a day in May, the most in a year, and rig counts have touched a one-year high, according to the latest data from the Energy Information Administration. By comparison, production peaked at over 13 million barrels a day last year before the global pandemic crushed oil prices, forcing scores of drillers to file for bankruptcy and shutter wells.The increase is also coming from explorers who are trying to complete the drilling and finishing of wells that were disrupted by the extreme cold weather that swept across the U.S. south last month, while trying to meet targets for this quarter, said Artem Abramov, head of shale research for Rystad Energy. The company’s own supply estimates for next month are slightly higher than the government’s forecasts.Before the interruptions in February, output in the Permian was recovering, with drillers finishing wells at 57% of their pre-pandemic speed, or about 250 a month. The patch should return to a path of increasing output if producers can sustain the current momentum, BNEF analyst Tai Liu said in a note to clients last week.But growth across the U.S. shale patches will likely be kept in check by producers seeking to limit spending in tune with promises to shareholders to boost dividends instead of supply.“It would be very hard for the US oil and gas industry to get back to over 13 million barrels a day. I don’t think that’s going to happen,” Occidental Petroleum Corp. Chief Executive Officer Vicki Hollub said at a conference Tuesday. “Too much investment would be required.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Nasir Jones’ QueensBridge Venture Partners invested in 2013. A source familiar with the matter confirmed QueensBridge is still on the Coinbase cap table.
(Bloomberg) -- Bond traders searching for a chink in the armor of central banks are starting to look Down Under, where a likely showdown over yield-curve control is set to test the power of policy makers to contain the next wave of reflation bets.The global trading day for bonds begins in earnest in Sydney each morning, giving developments in Australia’s $600 billion sovereign debt market an out-sized impact on sentiment. It was the scene of a dramatic “flash crash” last year when the yield program was announced, illustrating the potential for turmoil.While the Reserve Bank of Australia has largely tamed markets since then, as the economy’s recovery strengthens, wagers against the RBA’s ability to keep yields lower look poised to rise.“If inflation expectations do start to un-anchor, then I think the RBA will be one of the first central banks to be tested by bond traders,” said Shaun Roache, an economist at S&P Global Ratings in Singapore. “The RBA is a canary in the coal mine for central banks as it is ahead in its labor market recovery.”The RBA brought short-sellers quickly to heel when the global bond rout emboldened them to test its grip on yield control in February. After weeks of aggressive positioning by traders, the bank nudged up the cost of speculating on rising rates and the yield on benchmark three-year bonds fell neatly back into line with its 0.1% target.But keeping the market at bay next time may prove more difficult, as vaccination campaigns gather pace in major economies and the U.S. recovery nears an “inflection point,” emboldening traders. Pressure is already apparent in Australia’s three-year swap rate, which is increasing the costs of managing interest-rate risks for corporate borrowers.If yield control fails in Australia, it may fade away as a potential option for other monetary authorities in need of more policy ammunition. Especially because yield control’s record in Japan -- the only other country to officially employ it -- is patchy.Pinning the rate of one key bond maturity has helped the Bank of Japan reduce borrowing costs in general and also allowed it to slow the pace of bond purchases. But it has come at a cost. The nation’s debt market is lambasted as dysfunctional and an economic recovery strong enough to revive inflation looks as far away as ever.Widening GapBeneath the surface, problems are building Down Under too. While the RBA has its thumb on one specific bond line, there is a large gulf between the yield on this security and those maturing slightly later. There’s also a widening gap to rates on the suite of derivatives linked to three-year yields that flow through into borrowing costs for companies and consumers.The three-year swap rate surged through February and March, rising to four times the RBA’s target for three-year bonds amid pressure from higher U.S. yields and a rebounding economy at home.Australia’s bond futures tell a similar story. The yield implied by three-year futures doubled in the two weeks to Feb. 26 and remains elevated, even after retreating from its high point.“Lack of liquidity, a central bank that’s digging its heels in -- all that, for us, means there’s going to be more volatility in Aussie rates,” said Kellie Wood, a fixed-income portfolio manager at Schroders Plc’s Australian unit. “The RBA has succeeded in terms of round one. But we are starting to see cracks,” said Wood, who expects the market to challenge the 0.1% target again.Stephen Miller, an investment consultant at GSFM, an arm of Canada’s CI Financial Corp., agrees that higher yields may arrive in Australia sooner than the RBA thinks. “It will be powerless if the U.S. curve shifts upwards and other rates markets follow,” said Miller.Not everyone is prepared to bet against the RBA.For Fidelity International’s Anthony Doyle, taking on the RBA may be a recipe for steep losses if past lessons from the European Central Bank and U.S. Federal Reserve are anything to go by.Nine years ago, then ECB President Mario Draghi vowed to do “whatever it takes” to save the euro, leading to quantitative easing and bond purchases that are still in place. The Fed said more than a year ago that it would buy unlimited amounts of Treasuries to keep borrowing costs at rock-bottom levels, and it’s still holding firm.Holding the Cards“I don’t think it’s ever wise to fight anyone that has a printing press,” said Doyle, a cross-asset investment specialist at Fidelity in Sydney. “The RBA as a house holds all the cards. If they want yields lower, they’ll get it.”This caution is shared by JPMorgan Asset Management’s Kerry Craig.For now, the central bank “definitely has enough dry powder,” said Craig, a strategist in Melbourne. But he is concerned that with monetary policy and markets around the world moving in sync, “you can only fight so much if U.S. rates or global rates go higher -- it’s going to drag Australian ones up.”Yet Governor Philip Lowe isn’t doing everything he could to damp doubts over the RBA’s resolve. His reluctance to make an early switch in the yield target to bonds maturing in November 2024, from ones due in April 2024, is fueling debate about how soon the policy could be wound back.Lowe said at the conclusion of the latest board meeting on April 6 that a decision would be made later this year, without being more specific. He also indicated that the RBA expected to maintain “highly supportive monetary conditions” until at least 2024, even though the number of Australians with a job has returned to pre-pandemic levels.“We don’t think they’ll extend yield-curve control” beyond the current April 2024 bond, said Wood, who warned of potential taper tantrums.Lowe’s February win against short sellers, and a slide in yields at home and abroad over recent weeks, has given the RBA space to breathe. But it’s likely only a matter of time before bond traders come back for round two.“Everybody’s watching how this is going to unfold,” said S&P’s Roache. “The RBA may not want this role, but it is taking quite a starring role I think among global central banks.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- No matter the asset class, the outlook is turning bleak for China’s financial markets.The nation’s stocks, bonds and currency are losing their shine after an impressive start to the year, overshadowed by a stronger dollar, higher U.S. Treasury yields and a domestic campaign to cut financial risk.China’s benchmark stock index remains 13% below a 13-year high in early February, following a brutal selloff that wiped out more than $1.3 trillion in market value. The yuan just suffered its worst month in a year in March, erasing all its 2021 gains against the greenback. Chinese sovereign bonds, a sanctuary during the recent global rout, saw foreign investors lower their holdings last month for the first time in more than two years.The sharp reversal of fortunes came as confidence grew in a strong U.S. economic recovery that is reclaiming the allure of dollar assets around the world. The latest underperformance of Chinese markets also resulted from Beijing’s decision to resume a battle on debt that was interrupted by the trade war with Washington and the pandemic.Concerns about inflation and tighter monetary conditions mean appetite for Chinese shares will likely remain subdued, while the country’s government debt market faces the test of a supply glut later this year, investors and analysts say. The yuan could weaken further as the dollar extends its global resurgence.“China’s bull run is being tested,” said Adrian Zuercher, head of global asset allocation of UBS Chief Investment Office. “Volatility will stay elevated in the near term.”Subdued TradingAfter delivering a world-beating rally earlier in the year, Chinese shares have reversed course since February, when it became increasingly clear that policymakers were shifting their priority to taming asset bubbles and reducing financial leverage.The broader de-risking campaign also includes a crackdown on the country’s internet and fintech giants. In the latest of such moves, the authorities slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. over the weekend after an anti-monopoly probe found it abused its market dominance.While the penalty triggered a relief rally of as much as 9% in Alibaba’s shares in Hong Kong, those of its peers including Tencent, JD.com and Baidu fell by at least 2.7% amid concerns that they could be among the next targets of Beijing’s clampdown.The onshore benchmark CSI 300 Index fell 1.4% at Monday’s midday break, bringing its year-to-date loss to 4.7% and down 14.5% from a peak in February.The world’s second-largest stock market is $838 billion smaller than at its February peak and trading interest has been waning. Daily average turnover on China’s two stock exchanges was 670 billion yuan ($102 billion) so far this month, the lowest since May, according to data compiled by Bloomberg.UBS’ Zuercher said he expects rising Treasury yields to be a major source of near-term volatility in China’s equity market, as it will continue to exert pressure on valuations of the country’s growth stocks and trigger rotation.Echoing the view, Herald van Der Linde, HSBC Holdings Plc’s head of Asia Pacific equity strategy, said there remains downside risk to Asian equities in the near term and “China is no exception”.Domestically, a central bank unwilling to keep funding conditions too loose, a contrast to its peers in other major economies, has also disappointed stock investors. Apart from its deleveraging campaign, signs of inflationary pressures, as shown in March’s consensus-beating 4.4% jump in China’s producer prices, could prompt Beijing to further dial back its pandemic-induced economic stimulus.“We believe monetary policy might be tightened,” Hanfeng Wang, a strategist at China International Capital Corp., wrote in a note this week, adding that investors should pay attention to policy signals from the next meeting of the Politburo, the Communist Party’s top decision-making body.Bonds PressuredWhile Chinese government bonds outpaced their competitors in the first quarter as their haven status helped them stand out as a bulwark amid the global slump, they are facing a host of challenges in the coming months.In addition to a longer-than-expected phase-in period for the inclusion in FTSE Russell’s World Government Bond Index, a surge in bond supply from local governments and a narrowing China-U.S. yield gap also threaten to reduce the appeal of Chinese debt.Now at 3.21%, yields on China’s benchmark 10-year sovereign notes are expected to rise to 3.5% by the end of this quarter, according to Becky Liu, head of China macro strategy at Standard Chartered Plc.As China’s yield premium over Treasuries thinned, global investors last month trimmed their holdings of Chinese government debt for the first time since February 2019, a trend that is expected to continue for some time. The yield gap fell to 144.8 basis points on March 31, the narrowest since Feb. 24, 2020 when it was 144.2 basis points.Weaker YuanThe dollar’s renewed strength, the tighter yield gap, as well as Beijing’s latest move to boost capital outflows also have prompted analysts, including ING’s, to lower their forecasts on the Chinese currency.After rising nearly 7% against the dollar last year and reaping further gains earlier this year, the yuan suffered its worst selloff in a year last month, arresting a steady advance since May.Read: Yuan Erases Year’s Gains Against Dollar as PBOC Steps AsideAlso weighing on the yuan is the slowing speed of capital inflows: Cross-border currency flows tracked by Goldman Sachs totaled $1.5 billion in the week ended on April 7, compared with about $3 billion in the previous week.“It’s about how views on the U.S. dollar have changed rapidly,” said Zhou Hao, an economist from Commerzbank AG. “People believe the U.S. economy will recover strongly in the next two years and that’s what stocks and bonds have been pricing in.”Zhou said he expects the yuan to weaken to 6.83 per dollar by the end of this year, from around 6.56 Friday.(Updates with performance of broader stock market and tech shares in the ninth and 10th paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.