By Li Gu and Clare Jim

SHANGHAI/HONG KONG (Reuters) – China Vanke’s bonds gained on Monday after the state-backed developer said it would redeem its 2027 notes worth 1 billion yuan ($137.68 million) early in March.

Vanke’s announcement boosted investor confidence on its ability to repay its near-term financial debt, including a 3 billion yuan onshore bond due on Monday. Unlike the redemption of the 2027 notes, the company is not required to make a disclosure on Monday’s repayment.

Worries over Vanke’s liquidity have intensified this month as it faces several looming debt maturity deadlines. It has a total $3.4 billion due this year.

A state media report earlier this month alleged the developer’s CEO had been detained and that it could be subject to a takeover or reorganisation. The report was deleted within hours of its publication.

In a filing on Friday, Vanke said it would exercise its rights to redeem the 2027 callable bond in March.

Analysts said investors were taking the early redemption as a sign it would have no problem meeting its more immediate obligations.

“Announcing the redemption of the last bond for the first quarter is equivalent to declaring that all bonds for the quarter are free from default concerns,” said Yao Yu, founder of credit analysis firm Ratingdog.

Vanke’s May 2028 onshore bond was quoted 15% higher on Monday morning at 73 yuan versus a 100 yuan par value.

Bids for its May 2025 dollar bond also rose to 80.608 cents on the dollar from around 75.7 cents on Friday.

Some analysts say a debt default is inevitable this year without fresh liquidity support as Vanke’s monthly sales fall to below break-even levels and it faces difficulties in borrowing from banks and disposing assets. It fell to fifth by sales value last year from second in 2023.

The government in the southern city of Shenzhen, where Vanke has its headquarters, is stepping up meetings and coordination with local state enterprises on plans to contain the company’s debt risk and on asset disposals, Reuters reported last week.

The developer has been trying to sell a number of assets, including its stakes in logistics platform GLP and property management unit Onewo, to ease liquidity pressure, sources have said.

It is in advanced talks to sell a controlling stake in VX Logistics to Singaporean sovereign wealth fund GIC, and a deal could be finalised as soon as next month, a source told Reuters last week.

All three global rating agencies have downgraded the developer deeper into junk this month, citing its eroding financial flexibility and 2025’s uncertain sales outlook.

($1 = 7.2634 Chinese yuan renminbi)

By Kevin Buckland

TOKYO (Reuters) – U.S. stock futures and Asian shares outside China slumped on Monday as investors weighed the implications of Chinese startup DeepSeek’s launch of a free, open-source artificial intelligence model to rival OpenAI’s ChatGPT.

Meanwhile, the dollar rose after U.S. President Donald Trump slapped Colombia with retaliatory levies and sanctions for turning away military aircraft carrying deported migrants.

U.S. Nasdaq Composite futures tumbled 1.8% as of 0158 GMT and S&P 500 futures sank 0.9%.

Japan’s Nikkei dropped 0.3%, reversing an initial advance. New Zealand’s equity benchmark slipped 0.6% and Singapore’s Straits Times index lost 0.2%.

At the same time, Hong Kong’s Hang Seng rallied 0.9% and mainland blue chips added 0.2%, even after data showed a surprise contraction in manufacturing this month.

DeepSeek “has raised the spectre of disruption in the tech landscape, with its emergence suggesting that China can continue to make strides in the AI race despite US restrictions,” Yeap Jun Rong, a strategist at IG, wrote in a note.

It “seems to instil some concerns over U.S. tech dominance”, putting “tech companies’ lofty valuation back under scrutiny”, he said.

In currencies, the dollar jumped 0.3% against the Chinese yuan in offshore trading, and rallied 0.4% versus the Aussie and 0.5% versus the New Zealand dollar, with the antipodean currencies tending to act as more liquid proxies for China’s currency due to close trade ties.

The Mexican peso slumped 1% and the Canadian dollar eased 0.3%. The Colombian peso had yet to trade against the dollar, but had rallied 3.4% over the previous three sessions.

DOLLAR STRENGTH FLEETING

China, Mexico and Canada face a nervy wait with Trump last week earmarking Feb. 1 for additional tariffs on the United States’ top trading partners.

However, Nomura strategist Naka Matsuzawa expects dollar strength on tariff worries to be fleeting.

“As a trend, Trump is taking a more realistic, less aggressive stance on tariffs,” Matsuzawa said.

“Bottom line: Trump doesn’t want big tariffs because he’s worried about inflation,” he said. “The dollar will be overall weaker.”

Trump last week soothed market concerns by saying he wanted to avoid tariffs on China, and said he could reach a trade deal.

The volatility across asset classes kicks off a crucial week for markets that will see the Federal Reserve and European Central Bank – among others – set monetary policy.

At the same time, many bourses have extended holidays this week for the lunar new year. Among them, South Korea is closed Monday and Tuesday, while Taiwan is shut all week. Mainland China is away from Tuesday until Wednesday of next week. Australia is closed on Monday for Australia Day.

Meanwhile, crude oil prices slumped after Trump on Friday reiterated his call for OPEC to cut oil prices.

Brent crude futures dropped 1.2% to $77.60 a barrel, while U.S. West Texas Intermediate crude lost 1.2% to $73.78 a barrel.

Gold sank 0.6% to $2,755.85 per ounce.

Leading cryptocurrency bitcoin slid 3.5% to $101,415.12.

(This story has been corrected to say that the US dollar-Colombian peso pair had yet to trade on Monday, not rose 1.2%, in paragraph 9)

Investing.com– Most Asian stocks fell on Monday after U.S. President Donald Trump’s imposition of trade tariffs on Colombia rattled risk appetite with the possibility of more such moves.

Chinese markets were a mixed bag, as investors bought some local technology names on optimism over DeepSeek R1- a new artificial intelligence model that could potentially disrupt development in the sector.

But further gains in China were stymied by weaker-than-expected purchasing managers index data, which highlighted a sustained decline in China’s economy. 

Regional markets took a weak lead-in from Wall Street, with U.S. stock index futures falling in Asian trade as speculation over DeepSeek battered major technology stocks, especially Nvidia (NASDAQ:NVDA). The stock sank over 5% in 24 hour markets, RobinHood data showed. 

China tech rises on DeepSeek hype, but PMIs disappoint 

Hong Kong’s Hang Seng index was an outlier among its Asian peers on Monday, rising 0.6% on gains in heavyweight internet stocks. 

Majors Baidu (NASDAQ:BIDU) Inc (HK:9888), Alibaba Group Holding Ltd (HK:9988) and Tencent Holdings Ltd (HK:0700) rose between 0.9% and 3.5%.

Sentiment towards Chinese internet stocks was boosted by the release of DeepSeek R1, a large-language model that claimed to rival offerings from OpenAI and Meta (NASDAQ:META) at a fraction of the cost.

The LLM ramped up hopes that Chinese firms could offer competitive AI products despite a lack of access to cutting-edge AI tech from majors such as Nvidia. 

Major Chinese chipmaking stocks- such as Semiconductor Manufacturing International Corp (HK:0981) and Sunny Optical Technology Group Co Ltd (HK:2382) had rallied last week on this notion, although they fell amid some profit-taking on Monday. 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were less upbeat, rising only marginally. Sentiment towards broader Chinese markets was dented by softer-than-expected PMI data for January, which showed an unexpected contraction in manufacturing activity and a sharp slowdown in non-manufacturing growth. 

The reading indicated that China’s economy was struggling despite recent supportive measures from Beijing, and that the government will likely have to dole out more support. The prospect of higher U.S. trade tariffs also bodes poorly for China. 

Chinese markets will be closed for the week-long Lunar New Year holiday from Tuesday.

Asia stocks rattled by Trump jitters, Fed caution

Broader Asian markets retreated on Monday, although regional trading volumes were muted before several regional holidays this week. Beyond China, markets in Singapore, South Korea, and Hong Kong will also be closed this week. 

Risk appetite was rattled by Trump imposing 25% trade tariffs on Colombia, which spurred fears that he could also make good on his tariff threats against Canada, Mexico, and China. 

Japan’s Nikkei 225 fell 0.4%, while the TOPIX rose 0.5%.

Singapore’s Straits Times index fell 0.3%, while South Korea’s KOSPI was flat. 

Futures for India’s Nifty 50 index pointed to a weak open, as local markets face several key events this week, including major earnings and the Union Budget.

Australian markets were closed for a holiday. 

Broader market focus is also on a Federal Reserve meeting this week, where the central bank is widely expected to keep rates steady.

Investing.com– Meta Platforms Inc (NASDAQ:META) is on high alert as DeepSeek, a conversational AI developed by a Chinese hedge fund, challenges its dominance in artificial intelligence, The Information reported on Sunday citing two Meta employees familiar with internal discussions.

Meta’s AI leaders, including infrastructure director Mathew Oldham, have expressed concerns that the upcoming version of Meta’s Llama AI may fall short compared to DeepSeek’s groundbreaking performance, the report stated.

DeepSeek has quickly gained attention for outperforming established AI systems like OpenAI’s GPT models and Meta’s Llama, while operating at a fraction of their costs.

Its development raises significant capital expenditure (capex) questions for AI companies investing heavily in expensive infrastructure to support their models.

Meta, like its competitors, has spent billions on AI advancements, including scaling computational resources and optimizing model training. However, DeepSeek’s ability to achieve similar or better results with lower costs has raised concerns about the sustainability of such heavy investments.

Smaller firms aiming to compete in the AI space may face further challenges, as DeepSeek sets a new standard for cost-effective innovation.

The competition underscores the shifting landscape of AI development, where performance is no longer the sole metric of success. Cost efficiency and accessibility are becoming increasingly critical, putting pressure on industry leaders like Meta, NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), Alphabet, (NASDAQ:GOOG) and other tech leaders.

(Reuters) – Investment firm Carlyle said on Monday it had appointed Citi executive Brad McCarthy as the new managing director and Asia Pacific chief of its global wealth division.

McCarthy will be responsible for expanding Carlyle’s wealth platform across Asia Pacific with a focus on enhancing client offerings, the company said.

Before joining Carlyle, McCarthy headed Alternative Investment Sales for Asia Pacific at Citi Private Bank and Global Wealth. He has also worked for British investment firm Permal and Australian wealth management company BT Financial Group, among others.

Listings in the region have picked up in the last few months, with Carlyle-backed Rigaku Holdings raising around 129 billion yen ($829.10 mln) in its Tokyo offering in October 2024.

U.S. buyout firm Carlyle is also considering an initial public offering of engineering services firm Quest Global Service in India where it could raise about $1 billion, Bloomberg reported last month, citing people familiar with the matter.

($1 = 155.5900 yen)

Investing.com– NVIDIA Corporation (NASDAQ:NVDA) shares fell over 5% in 24 hour markets, RobinHood data showed on Sunday evening, amid growing questions over the need for major capital spending on artificial intelligence after the release of China’s DeepSeek. 

Nvidia slid 5.2% to an indicated $135.20, RobinHood data showed, with shares extending a 3.2% loss from Friday.

The AI darling was rattled by the release of DeepSeek R1- a large-language model that claims to rival offerings from ChatGPT and Meta (NASDAQ:META) while using a fraction of their budgets. 

DeepSeek- which is funded by Chinese quant fund High-Flyer- reportedly had access to about 50,000 of Nvidia’s H100 AI GPUs, which are from the last generation of advanced AI chips. 

DeepSeek’s release raised concerns that technology firms could adopt leaner, more capital-efficient approaches to AI development, necessitating lower amounts of capital expenditure on data centers and advanced AI chips.

Yardeni Research analysts said that while major tech firms could learn from DeepSeek to design cheaper AI systems, “it might not be a happy development for Nvidia.” 

JPMorgan analysts argued that concerns over higher AI budgets were “overdone,” adding that DeepSeek’s efficiency came more from necessity, especially in the light of strict U.S. export controls on China’s chip industry. 

Six of Wall Street’s so-called Magnificent 7 firms- which make up a bulk of Nvidia’s biggest customers- are set to report quarterly earnings this week, and are widely expected to announce increased capex in AI development.

AI giant OpenAI had last week also announced a joint $500 billion investment in U.S. AI infrastructure. 

Investing.com– Activist investor Ancora Holdings is preparing to launch a proxy battle against U.S. Steel, aiming to overhaul its leadership and redirect its strategy following the collapse of its $14 billion merger with Japan’s Nippon Steel Corp (TYO:5401), the Wall Street Journal reported on Sunday citing sources.

Ancora plans to rally shareholders around a proposal to replace U.S. Steel’s CEO and abandon litigation aimed at salvaging the blocked Nippon Steel deal, the report stated.

However, U.S. Steel is not interested in pursuing a sale to another party, the report added.

The activist investor, which has not disclosed its stake in U.S. Steel, is advocating for operational improvements and financial reforms over a sale or further legal entanglements.

Ancora has nominated nine nominees for U.S. Steel’s 12-member board including former Stelco (TSX:STLC) CEO Alan Kestenbaum, who previously revitalized the Canadian steelmaker before its acquisition by Cleveland-Cliffs (NYSE:CLF), according to the report.

The Nippon Steel merger faced heavy resistance from U.S. regulators, including a veto by President Joe Biden on national security grounds earlier this year.

Nippon Steel, which agreed to pay $55 per share and faces a $565 million breakup fee if the transaction fails, has proposed appointing a U.S.-majority board to address these concerns, according to the WSJ report.

Ancora contends the company must prioritize restoring shareholder value through internal changes rather than seeking external rescue, the report said.

The WSJ earlier reported that Cleveland-Cliffs and Nucor (NYSE:NUE) were exploring a joint bid for U.S. Steel once its agreement with Nippon Steel expires in June, though the fate of America’s third-largest steelmaker remains uncertain.

(Reuters) – Activist investor Ancora Holdings is preparing to wage a proxy battle at U.S. Steel and wants the company to drop its merger agreement with Japan’s Nippon Steel, the Wall Street Journal reported on Sunday, citing sources.

Ancora also intends to rally shareholders around a plan to oust U.S. Steel’s top boss David Burritt, the report said.

The activist investor is not interested in pursuing a sale of the American steelmaker to another party, the WSJ reported, adding that Ancora has nominated nine director candidates to the company’s 12-person board, including Stelco (TSX:STLC)’s former chief Alan Kestenbaum.

Ancora, U.S. Steel and Nippon Steel did not immediately respond to Reuters’ request for a comment outside regular business hours.

Earlier this month, former U.S. President Joe Biden blocked Nippon Steel’s $14.9 billion deal for U.S Steel, and delayed an order until June for Nippon to abandon the bid.

The companies have sued the Biden administration for blocking the acquisition of U.S. Steel by the Japanese company.

Investing.com– Elon Musk has requested a federal judge to dismiss a proposed class-action lawsuit alleging that his $1 million-a-day election giveaway to support the U.S. Constitution was an illegal lottery under Texas law.

The lawsuit, filed on November 5, 2024, by Arizona resident Jacqueline McAferty, claims that Tesla Inc (NASDAQ:TSLA) CEO Musk and his political action committee, America PAC, misled participants by suggesting winners would be chosen randomly.

In his defense, Musk argued that participants were fully aware that signing the petition provided an opportunity to earn funds as America PAC spokespeople, not through a random lottery. He emphasized that providing personal information did not cause harm, as alleged in the lawsuit.

The lawsuit seeks $5 million in damages for petition signers, alleging that the giveaway was deceptive and violated state laws.

Musk’s initiative, which was part of his support for Donald Trump’s 2024 presidential campaign, involved daily $1 million prizes to registered voters in swing states who signed a petition supporting the U.S. Constitution. The legal debate centers on whether this constitutes an illegal inducement or a legitimate promotional activity.

Investing.com– Artificial intelligence darling Nvidia’s shares fell on Friday following the launch of Chinese generative AI program DeepSeek last week, which claimed to be able to outperform rival offerings at a fraction of their cost. 

NVIDIA Corporation (NASDAQ:NVDA) shares fell more than 3% to $142.62 on Friday, although they still ended higher for the week. 

DeepSeek- which is funded by Chinese quant firm High-Flyer- made its R1 LLM open source, and also released a paper outlining how advanced LLMs can be built on much smaller budgets. 

DeepSeek had access to about 50,000 Nvidia H100 AI GPUs- the previous generation of Nvidia’s AI GPUs, which are set to be replaced by the Blackwell series. It was unclear to what extent the company had leveraged this access for its LLM. 

But the biggest point of contention over DeepSeek R1 was that the LLM was able to achieve competitive results despite its rivals, such as OpenAI’s ChatGPT and Meta’s Lama, having access to substantially bigger budgets and more advanced technology. This notion was relevant in the light of recent U.S. export controls on chip technology to China, as well U.S. President Donald Trump announcing $500 billion in private spending to build more U.S. AI infrastructure. 

DeepSeek R1 raised questions about just how justified the billions of capital expenditure, undertaken by Wall Street’s technology giants, was necessary for AI advancements. 

Of the so-called Magnificent 7 stocks, Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Alphabet (NASDAQ:GOOGL) have announced rapidly increasing capital expenditures in recent quarters to further their AI ambitions. Analysts expect this to remain the case when they report their December quarter earnings this week. 

“It might be good news for the Mag-7 that can learn from DeepSeek to design AI systems with cheaper GPUs. That would reduce their capital spending and boost their profits. It might not be a happy development for Nvidia,” Yardeni Research said in a note.

Nvidia has benefited greatly from increased AI investment in the past two years, seeing exponential growth in sales as tech giants sought to bolster their AI development by increasing their data center capabilities. 

But DeepSeek’s success raises questions over whether AI developers can achieve progress by building leaner, more efficient models that don’t require as much investment in chip technology. 

JPMorgan’s Joshua Meyers said concerns over higher AI budgets were “overdone,” while noting that DeepSeek’s efficiency may have been out of necessity, given that Chinese firms are blocked from access to advanced U.S. chip technology. 

“If DeepSeek can reduce the cost of inference, then others will have to as well, and demand will hopefully more than make up for that over time,” Meyers wrote in a short note dated to Saturday.