Category: 3. Business

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is a managing partner and head of research at Axiom Alternative Investments

The AT1 bond market does not have many friends. When Swiss authorities controversially wiped out $17bn of the Additional Tier 1 bonds issued by Credit Suisse, many claimed that the market was dead. As the argument went: “Surely no one would be foolish enough to read the terms and conditions and still buy bonds that can be worth zero overnight?”

Lots of people were, it turned out: since lows hit in the wake of the failure of Credit Suisse, a Bloomberg index of the price of the bonds is up 50 per cent. And 2024 still saw a near 60 per cent increase in issuance to €46bn, according to Barclays. This year issuance has reached €34bn.

AT1s were introduced as a form of supplementary bank capital, designed to be wiped out in a crisis to cover losses. They are crucial to reduce banks cost of equity and increase their capacity to lend. The issue with the Credit Suisse AT1s is whether the bonds were wiped out fairly. The Swiss Federal Court ruled on Tuesday that the treatment of the bonds was unlawful — a decision my investment firm supports as we own some bonds affected and are taking separate legal action. Now we are hearing a similar argument to the one made at the time of the Credit Suisse failure, only in reverse: if you cannot wipe out AT1 capital when an entity is a “gone concern”, the asset class is dead.

But the circumstances of the Credit Suisse saga are idiosyncratic. To simplify, Swiss regulator Finma argued that it had basically three grounds to wipe out the bonds: two contractual grounds based on the terms of the bonds, and one general legal right, as an authority overseeing the bank’s resolution. The court dismissed the contractual grounds with a reasoning that is strictly limited to the specifics of this case. The terms and conditions allowed the wipeout in two situations: i) a notification by Finma of the non-viability of the bank and request by it for the wipeout of both AT1 and Tier 2 bonds or ii) necessary state aid improving the capital of the bank. On the first point, the court noted that Finma issued no such notification and, incomprehensibly, did not wipe out Tier 2 bonds. It could have done so. On the second point, the court says that Credit Suisse only received liquidity, and liquidity does not improve capital.

The last nail in the coffin? Finma argued that, as AT1 eligible bonds, the terms were maybe unclear but should have allowed the wipeout. The court answered that Finma should not have authorised the bonds if they did not meet AT1 requirements.

The discussion on the “general legal right” is also very intriguing. There were many ways for the Swiss authorities to zero the bonds. Swiss banking law gives huge discretion to Finma as a resolution authority and the court points that it explicitly refused to declare a resolution event and wipe out the bonds, presumably to protect the shareholders who received $3.2bn from UBS in the takeover of Credit Suisse and would have been left with nothing in a resolution. Under the Swiss constitution, an infringement on property rights requires a law and emergency ordinances can only be used as a substitute if no law is readily available.

None of this has direct implications for the rest of Europe. European authorities have already proved that swift and strict application of resolution laws can be done with little litigation risk. Sberbank Europe was wound down in 2022 and even the fall of Banco Popular in 2017 did not leave many pathways for AT1 bondholders to pursue redress in court.

Where does this leave UBS? Our firm has an interest in the outcome as we own UBS bonds but hold short positions on the stock. It’s the big unknown, and the Swiss court was very careful to point out that it was not answering that question — yet. This is why it calls its own decision “partial”. But the full text of the ruling hints at three possibilities.

Ruling that the ordinance wiping out the bonds is null could simply mean that the bonds are reinstated and reintroduced in UBS’s balance sheet. Whether UBS could receive indemnification from the Swiss government, in the middle of the current tense discussion on massive new capital requirements for the bank is another story. But the court could also rule that the AT1s remain void and that its decision only opens the right to seek indemnification from Finma or from the now combined Credit Suisse-UBS.

Who pays what in that scenario remains highly speculative — not to mention that this complex decision is not final and Finma will appealed against it. The Credit Suisse AT1 saga is far from over.

Investors in the $2tn leveraged loan market have warned that the abrupt collapse of First Brands Group is an early sign of trouble for a market where hasty deals and hurried due diligence have become commonplace.

First Brands was among the largest issuers of loans bought by collateralised loan obligations, investment vehicles that buy up small slices of hundreds of individual corporate loans.

CLOs have become popular with insurers and other big investors who bet that by spreading their lending across many different companies they are protected from the pain of defaults in one or two businesses.

But the rapid bankruptcy of First Brands, a maker of antifreeze, windshield wipers and brake pads, has raised concerns over the rapid growth of the CLO market, which has provided almost unquenchable demand for the leveraged loans that private equity firms often use to finance their acquisition sprees. Some fund managers worry that a spate of CLO losses could cause Wall Street’s securitisation machine to sputter.

“Inside credit markets for more than a year, there has been a grudging recognition that there was and is a series of credit problems that could be substantial and could be dangerous to the overall economy,” said Andrew Milgram, chief investment officer of Marblegate Asset Management, a distressed-debt investor.

First Brands’ downfall, just weeks after subprime auto lender Tricolor filed for bankruptcy amid allegations of fraud, has stoked concerns that the failures are unlikely to be isolated incidents.

“You’re not paid to do due diligence in this market,” an executive at a former lender to First Brands said.

First Brands had issued more than $5bn of senior and junior loans, which were bought up and held in dozens of CLOs issued by asset managers including PGIM, Franklin Templeton, Blackstone, CIFC, Oaktree and Wellington, according to a Morgan Stanley analysis.

Most of those vehicles have already realised their losses, selling out of the loans as First Brands’ problems came to light over the past two weeks. The loans are now changing hands at just cents on the dollar, with an implied loss of more than $4bn.

Those losses will principally hit the returns of CLO equity holders, which includes the managers of the structured credit vehicles themselves. CLOs are often 10 times leveraged, with $50mn of equity supporting a $500mn loan portfolio, for example. Defaults such as First Brands’ cut into that equity cushion, which exists to take the first loss and protect higher-rated investment grade tranches of the CLO.

Trading of those equity tranches is opaque, but investors said they had not yet seen money managers dumping those positions in secondary trades.

The sell-off in First Brands debt has started to weigh on the broader market, with PitchBook LCD data showing the US leveraged loan market is on pace for its biggest monthly loss since 2022.

“The two successive defaults of [First Brands] and Tricolor Auto brought into highlight potential irregularities and underwriting challenges in the credit market,” Bank of America strategist Pratik Gupta said. “The market has started to take a dim view of credit fundamentals.”

Despite the troubles at First Brands and Tricolor and pockets of weakness starting to appear in the US economy, the strong demand for higher-yielding investments such as leveraged loans has kept spreads on risky corporate debt at near-record low levels.

Leveraged loan issuance hit a record in the third quarter at $404bn, according to PitchBook LCD. However, investors say this feverish pace of issuance has meant deals — which a few years ago may have taken weeks or more to line up — are now often raced through.

When First Brands raised more than $750mn in March 2024 to fund an acquisition, it announced it was in the market for the debt financing on a Monday morning. Investors were allocated the loans before lunch on Friday of the same week. In total, more than 80 CLOs were exposed to First Brands, bankruptcy filings showed.

Demand has persisted despite some of the worst investor protections on record, according to Covenant Review. Lawyers for the industry say they have little power to push back against weak protections when willing buyers are so numerous.

First Brands debt offered attractive rates, with an interest rate 5 percentage points over the floating rate benchmark for the US dollar loans it issued in March 2024. When accounting for discounts investors received at the time of the capital raise, the loans yielded roughly 11 per cent.

Investors who have suffered losses on the loans say due diligence was not made a priority, with some investors taking comfort from the fact that larger managers with bigger teams of credit analysts had bought in.

But others saw red flags they said steered them away from the debt. The company was perpetually buying up smaller businesses and raising more debt to fund those takeovers. Investors said that made it difficult to assess how the underlying business was faring. Others pointed to the difference between the cash flows that First Brands generated and the profits it reported it was earning.

“Everything was adjusted,” one investor who decided against investing in First Brands debt said, referring to its profit statement. “Nothing tied to cash so it was virtually impossible” to analyse.

Josh Easterly, the chief investment officer of investment group Sixth Street, pointed to the fact that many CLO investment firms have just a handful of analysts covering their entire credit portfolios, which can include hundreds of different investments. Moody’s estimates roughly 2,000 companies issue debt that is bought by CLOs in the US.

“When the tide goes out . . . things are going to come out,” Easterly said, noting that investors would see “who has done their work and who hasn’t.”

While defaults in the leveraged loan market have picked up this year from 2024, the pace remains low by historical standards, according to PitchBook LCD data. But concerns about the lack of due diligence in a frothy market are starting to mount.

“With [Tricolor] and First Brands, the problems of the credit market are starting to percolate into the general Wall Street psyche,” Milgram said. “Are we entering a period where those [CLO market’s] assumptions will be tested?”

The top-rated AAA tranches in CLOs have proven their mettle during prior market sell-offs and economic downturns, given how diversified the vehicles are. Investors said defaults would need to rise dramatically to begin to impair investors in even the lower-rated portions of the vehicles.

Money managers are nonetheless keenly aware of the problem that First Brands might cause the broader market.

Asset manager Silver Point this month began the marketing of its first euro CLO by highlighting one point in investor materials seen by the FT.

It said: “Silver Point has zero First Brands exposure.”

Additional reporting by Robert Smith

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Venture Global is seeking to quell accusations from major energy clients that it plans to sell liquefied natural gas cargoes on spot markets rather than honouring supply contracts from its new export terminal in Louisiana.

The US LNG supplier wrote to clients on Thursday affirming its commitment to deliver on contractual obligations, after selling more than 100 cargoes from its Plaquemines facility before having declared it operational. Such a declaration triggers legal obligations to begin delivering on contracts.

The customers are fearing a repeat of Venture Global’s conduct when it launched its first facility, Calcasieu Pass, from which it sold more than 400 cargoes on spot markets before fulfilling deliveries to customers. The move has led to growing legal and financial pressure on the group after an international arbitration panel ruled last week that the company breached its obligations.

In a filing to US regulators last month, Venture Global requested a delay of its in-service date for Plaquemines by several months to the end of 2027, raising concerns among customers that the company could delay supplying cargoes to them as it did at its Calcasieu Pass facility.

In that case, the company declared force majeure on its contractual commitments in March 2023 on the grounds that the Calcasieu Pass facility’s power supply equipment needed repair, even though it was able to supply cargoes to the spot market amid a price surge following Russia’s invasion of Ukraine.

Spot markets are again priced far higher than long-term supply contracts would fetch.

Saul Kavonic, head of energy research at MST Marquee, said: “Venture Global stands to make over double the revenue by selling cargoes on the spot market compared to selling under their long-term contracts.”

The clients are so-called foundational customers, whose long-term contracts enable Venture Global to raise the money to build its LNG terminals.

Last week the International Chamber of Commerce found Venture Global breached its obligations to BP by failing to deliver cargoes from Calcasieu Pass. It now faces damages claims worth more than $1bn from the UK oil major, as well as four additional arbitration cases filed by customers that could lead to similar judgments.

Rating agency Fitch on Thursday revised its outlook on the company to “negative”, from “stable”, saying “any significant damages are likely to further pressure the company’s financial position in a period of elevated leverage”.

Venture Global’s request for an extension of its in-service date for Plaquemines, which the Federal Energy Regulatory Commission approved on Thursday, prompted two customers, Chevron and Orlen, a Poland-based energy company, to ask the regulators to intervene in the case.

Orlen, which is one of Plaquemines largest customers with a contract to buy 4mn tonnes of LNG a year, said it had “concerns regarding the intentions of Plaquemines parent company” in its submission to US energy regulators.

Shell, also a foundation customer, told the Financial Times it was “closely monitoring activities at the Plaquemines facility to ensure adherence to our contracted commercial operation date”.

When contacted for comment about its letter to customers, Venture Global said its recent filing to US regulators requesting a delay of its in-service date for Plaquemines to the end of 2027 would not change the date it would begin shipping cargos to long-term customers.

“Our request for an extension is a case of aligning our permits with our actual construction schedule,” it said. “To be clear, this request will have no impact on our expected commercial operations date, which remains unchanged from what has been communicated and agreed upon with our customers.”

Researchers at Embry-Riddle Aeronautical University and Brazil’s Instituto Tecnológico de Aeronáutica (ITA) will combine forces on one of the main challenges of electric aircraft — controlling the heat spikes they generate at takeoff.

The collaboration is supported by a $450,000 National Science Foundation International Research Experiences for Students (NSF IRES) grant.

“Both sides have been working on the heat management challenge, so there are some real synergies,” said Dr. Sandra Boetcher, the interim department chair and professor of Mechanical Engineering  and principal investigator on the project. Boetcher is working with co-principal investigator Dr. Mark Ricklick, associate professor of Aerospace Engineering, as well as Brazilian colleagues Dr. Guilherme Borges Ribeiro and Dr. Elisan dos Santos Magalhães.

The collaboration is intended to offer hands-on research training to students, preparing them to tackle the issue of heat management on electric aircraft, considered key to reducing the aviation industry’s carbon footprint. The project will involve three cohorts of five Embry-Riddle students over the next three years spending eight to ten weeks between May and August in Brazil at ITA.

Boetcher said the heat management research that she and Ricklick undertake tends to be fundamental, developing prototypes, for example, that can be further tested. Similar research out of ITA, which is affiliated with the Brazilian Air Force and the Brazilian multinational aerospace corporation Embraer, tends to be applied.

One of the main technologies the researchers from both countries are exploring relates to phase-change materials, which convert from a solid to a liquid at certain temperatures and are capable of absorbing large amounts of heat during the process.

Drs. Sandra Boetcher and Mark Ricklick, standing in front of an aircraft turbine, received a $450,000 NSF grant to offer a student research collaboration with Brazilian colleagues on heat management of electric aircraft. (Photo: Sandra Boetcher)In a phase-change process, energy, in this case heat, is expended on overcoming the molecular forces holding a solid structure together, changing the material to a liquid. No temperature rise occurs during the change. This happens in everyday phase changes, Boetcher explained.

“It’s like you’re melting an ice cube,” she said. “The ice cube is melting, but the temperature stays the same,” until the ice cube becomes water and the water’s temperature starts to climb.

The phase-change materials being investigated by the researchers capitalize on the phenomenon and can be applied as a slab under an aircraft’s electrical circuit to keep it under a certain temperature.

Modeling to optimize the performance of phase-change materials with computer simulations can be time-consuming, with computational fluid dynamics problems taking as long as two weeks to solve.

Magalhães brings coding expertise that could “speed up the process of solving the problem,” Boetcher said.

The researchers will also look at other technologies to manage heat in electric aircraft, including ones that could provide active cooling rather than passive heat absorption.

Boetcher said she thinks the students who travel to Brazil will benefit deeply, even apart from participating in the technological innovations that could result.

“It’s dealing with other cultures, with other collaborators, how they view things, how they operate, how they work,” she said. “There’s a lot of maturing when you get to have these opportunities abroad.”

Dr. Jeremy Ernst, vice president for research and doctoral programs, further emphasized the value of the collaboration.

“The IRES program is impactful in creating research exposure and authentic international experience,” Ernst said. “The work led by Dr. Boetcher and Dr. Ricklick is of high value to students, offering enhanced cultural immersion in Brazil within its rich aviation and aerospace environment. This experience allows students to develop skills that are directly transferable to the global workforce.”

Vietnam’s upgrade to Emerging Market status by FTSE Russell is a green flag for global investors and a step towards greater financial market integration. The 2025-2027 reforms can translate into easier capital access and disclosure transparency for businesses looking at a long-term foothold in Vietnam.

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FTSE Russell announced on October 7, 2025, that Vietnam will be upgraded from Frontier to Secondary Emerging Market (EM) status, from September 21, 2026, after a final review scheduled for March 2026. The decision comes after nearly seven years of gradual reform since Vietnam was first placed on the FTSE watchlist in 2018.

Vietnam’s upgrade to Secondary Emerging Market status places it alongside China, India, Indonesia, the Philippines, and Qatar. It ranks below Advanced Emerging Markets such as Thailand and Malaysia, and Developed Markets like Singapore.

Understanding the FTSE classification and upgrade process

FTSE Russell’s Equity Country Classification Framework evaluates markets based on a set of quantitative and qualitative indicators that measure openness and regulatory quality.

The Secondary Emerging Market status hinges on countries satisfying these primary criteria:

• Market accessibility for foreign investors;
• Settlement and custody infrastructure;
• Transaction transparency and liquidity; and
• Market size, free float, and institutional participation.

Vietnam successfully met all these conditions and addressed many longstanding barriers that were limiting investor participation. The country addressed two critical technical barriers that previously prevented the upgrade, including:

• Settlement cycle and pre-funding requirements

In November 2024, the Ministry of Finance issued Circular 68/2024/TT-BTC, which introduced the Non-Pre-funding Solution (NPS) model. Before, foreign institutional investors were required to fully pre-fund equity purchases before execution, a rule that discouraged global funds accustomed to T+2 settlement systems. Under the NPS, securities firms now bear the responsibility of assessing and managing payment risk under the contracts.

• Failed trade processing mechanism

Vietnam implemented a mechanism for handling settlement failures to improve transparency in post-trade activities. It ensures the timely resolution of settlement failures and brings Vietnam’s back-office procedures closer to international standards.

Interim review and pending conditions

Although Vietnam has met the requirements for EM classification, the March 2026 interim review will evaluate one remaining area, which is direct access for global brokerage firms.

FTSE Russell noted that this is not a mandatory criterion for maintaining EM status, but it remains crucial for Vietnam’s index and for aiding participation by major global institutional investors.

Projected capital inflows and portfolio effects

The upgrade is expected to catalyze a lot of foreign capital inflows. Analysts have made various investment projections, some of which like:

• FTSE Russell estimates inflows of around US$6 billion from passive index trackers that replicate the FTSE Emerging Market Index;
• The World Bank projects short-term inflows of approximately US$5 billion before and after the upgrade from passive and active investors, and long-term potential inflows could reach $25 billion by 2030; and
• HSBC forecasts range from US$3.4 billion (active funds) to US$10.4 billion (total including passive funds).

Vietnam is expected to account for approximately 0.5 percent of the FTSE Emerging Market Index once the reclassification takes effect.

Active fund participation

According to HSBC, approximately 38 percent of Asia-focused funds and 30 percent of global emerging market funds already hold Vietnamese equities, which suggests that beyond passive index flows, Vietnam could attract new active fund allocations too.

Liquidity, valuation, and trading depth

Vietnam’s stock market has demonstrated strong liquidity in 2025. In July 2025, average daily trading volume reached over 1,422 million shares as average daily turnover reached VND 34,993 billion (US$1.32 billion). The market hit historic liquidity records with total trading value on the Ho Chi Minh City Stock Exchange (HOSE) as it approached VND 78.2 trillion (US$2.9 billion) in early August 2025. As of May 2025, Vietnam Exchange posted nearly US$18 billion in monthly trading value, overtaking Malaysia (US$12.1 billion) and Indonesia (US$15.3 billion)

Anticipation of the FTSE announcement has already influenced domestic equity performance. The VN-Index has risen from 1,100 points in April 2025 to nearly 1,700 points by October 2025, which is a 50 percent jump and a 33 percent year-to-date gain; thus, Vietnam has become the best-performing market in Southeast Asia.

HSBC analysts, however, caution that front-loading, the tendency of investors to buy in anticipation of future reclassification, may limit further short-term upside. Profit-taking could occur after the announcement, as observed in other markets following index upgrades. Nevertheless, most research expects active funds to disburse gradually between March and September 2026.

Domestic reforms enabling the upgrade

Vietnam’s reclassification is a cumulative result of regulatory and structural reforms that have improved its foreign access.

Central counterparty and post-trade reforms

The State Securities Commission (SSC) has given a roadmap to launch a central counterparty (CCP) system for Vietnam’s equity market by Q1 2027. Milestones on the way are:

• Q1-Q2 2026: SSC and the Vietnam Securities Depository and Clearing Corporation (VSDC) will issue a new circular to replace Circular 119/2020/TT-BTC on registration, custody, and settlement;
• Q3 2025-Q1 2026: Establishment of a VSDC subsidiary to handle CCP functions;
• Q3 2025-Q4 2026: Introduction of a revised accounting framework to replace Circular 89/2019/TT-BTC;
• 2026: IT system upgrades, staff training, and simulation testing; and
• Q1 2027: Full-scale operation of the CCP.

CCP will help foreign institutional investors reduce currency risk during the payment cycle and provide safer mechanisms against payment risks.

Technology infrastructure modernization

Vietnam launched the KRX trading platform on May 5, 2025, in partnership with the Korea Exchange (KRX). The platform addresses several bottlenecks and expands derivative products available to investors with these new features:

• Same-day trading (T+0) and short selling;
• Faster settlement processing; and
• Support for options contracts and CCP clearing.

Disclosure and transparency

From January 1, 2025, all VN30 companies (the 30 largest listed firms) have been required to publish disclosures in Vietnamese as well as English. By the end of 2026, all approximately 2,000 listed and registered trading companies must complete the transition to English-language disclosures. Currently, only about 25-30 percent of listed companies provide complete English disclosures.

Other reforms

Other transformative reforms include:

• Removal of pre-funding obligations: As noted above, Circular 68/2024/TT-BTC eliminated the full pre-funding requirement for foreign investors.
• Foreign ownership liberalization: Decree 245/2025/ND-CP, issued on September 11, 2025, removed provisions that allowed listed companies to set foreign ownership limits below the legal maximum. All public companies must now publicly disclose their maximum allowable foreign ownership ratio within 12 months of the decree’s coming into force.
• Simplified trading code issuance: Foreign investors can now receive an electronic securities trading code (ESTC) and commence trading immediately without submitting physical paperwork.
• Accelerated IPO and listing timelines: The period for securities to be traded after listing approval was shortened from 90 days to 30 days, and the overall listing process was reduced by 3-6 months.

Remaining reform gaps

Despite its upgrade, Vietnam continues to face structural challenges that must be addressed to sustain investor confidence.

• Currency convertibility: The Vietnamese Dong is not freely convertible and cannot be remitted overseas. Foreign exchange transactions remain subject to State Bank of Vietnam (SBV) controls.
• Global broker access: The March 2026 interim review will specifically assess progress in this area.
• ESG disclosure: Only 25 percent of listed companies publish environmental, social, and governance (ESG) reports, most without external assurance.

Integration with global finance

The FTSE upgrade is a part of a series of efforts Vietnam is taking for global financial integration and capital market openness. Vietnam’s Finance Minister Nguyen Van Thang stated that “the official recognition and upgrade of Vietnam’s securities market is clear evidence of the country’s sound development path and its growing capacity to integrate deeply into the global financial system”.​

The government has set an ambitious target of 8 percent GDP growth for 2025 and aims to achieve double-digit growth between 2026 and 2030. The present roadmap for Vietnam’s stock market development goes up to 2030. The market can aim for medium-term targets for MSCI Emerging Market upgrade between 2026 and 2027 and can have long-term goals for FTSE Advanced Emerging Market status by 2029 and 2030.

Monetary and currency management

Vietnam’s GDP growth recorded an 8.23 percent year-on-year rise in Q3 2025, the fastest since 2022. The Purchasing Manager’s Index was 50.4 in September 2025, and total trade volume reached US$680 billion, with exports up 14.8 percent to US$262.44 billion.

The SBV maintains an inflation target of 4.5 percent for 2025. As of mid-year, consumer prices rose 3.27 percent, and core inflation stood at 3.16 percent. Refinancing rates remain at 4.5 percent (at an accommodative policy stance).

The Federal Reserve’s rate cuts in 2025 have provided room for Vietnam to maintain low domestic interest rates without pressuring the dong. As we noted, the Vietnamese Dong is not freely convertible as foreign exchange transactions still are subject to SBV controls.

Vietnam’s sovereign credit ratings remain below investment grade but stable:

• Standard & Poor‘s BB+ with stable outlook (affirmed August 2025);
• Fitch’s BB+ with stable outlook (affirmed June 2025); and
• Moody’s: Ba2 with stable outlook (unchanged since 2022).

The EM reclassification could fuel investor appetite for Vietnamese sovereign bonds, which could potentially lower long-term borrowing costs. Vietnam now stands at the threshold of deeper global integration. Despite global headwinds, Vietnam’s domestic reforms and foreign investors’ belief in its robustness can provide a much-needed boost for double-digit growth.

Read more: Vietnam’s Rising Purchasing Power: 2024 Household Living Standards Survey

(US$1 = VND 26,349.5)

 

It’s known to be China’s biggest online shopping event – taking place on 11 November each year.

But this year, Single’s Day sales have already begun in mid-October, as part of efforts by Chinese retailers to boost spending in a sluggish market.

China has been plagued with issues like growing youth unemployment , a prolonged property crisis, steep government debt and an ongoing trade war with the US – all of which is making the country’s consumers cut back on spending.

The Chinese government has been spending billions – through family subsidies, more wages and discounts for consumer goods in a bid to counter this, but retail sales growth is still failing to meet expectations.

Originally created by Alibaba as a Chinese shopping festival, Singles’ Day is akin to Amazon’s Prime Day or Black Friday promotions elsewhere in the world.

A major revenue driver in the final quarter of the year, the event is marked with deep discounts online and in stores, with most retailers in the country competing for sales.

Over the years, the sales window has evolved from a single day to one of the year’s biggest shopping events, often ushered in with extravagant opening events featuring popstars like Jessie J.

But this year, retailers launched their sales campaigns in October, coinciding with the end of China’s Golden Week holiday.

Platforms like Taobao, JD.com and Douyin are actively promoting “11.11” sales, with banners on their apps showing discounts and vouchers.

Alibaba, which runs e-commerce platforms Taobao, Tmall and AliExpress, said in its newshub that it is kicking off this years “11.11 Global Shopping Festival” on 15 October.

The firm is also tapping artificial intelligence in its search and recommendation tools to make it easier for shoppers to navigate its sprawling sites and suggest relevant products.

Chinese consumers have adopted more cautious spending habits since the Covid-19 pandemic – a trend that has continued as the country continues to battle deflation.

The spending crunch has hit high-end retailers especially hard. Fashion brands like Louis Vuitton and Burberry reported a drop in sales in recent months in China, which accounts for around a third of global luxury sales.

However, investors seem optimistic about a rebound in China’s market, as shares of luxury brands like LVMH and Moncler rose this week, lifted by signs of improved demand in the region.

This article was first published in The Business Times on October 9, 2025. It was co-authored with Julia Bingler, Fellow at the Council on Economic Policies.

Authorities must revise capital frameworks and integrate resilience into monetary operations to tackle challenges

In just the last few months, novel risks have crystallized across ASEAN+3.

Grab merchants in Singapore began accepting stablecoin payments; Typhoon Bualoi flooded Philippine and Vietnamese ports and factories, paralyzing entire provinces; and US tariff increases are forcing regional economies to recalibrate supply chains.

These disruptions share a common thread: traditional economic frameworks cannot keep pace. Digital assets are reshaping monetary systems, social tensions are threatening political and economic stability, climate extremes are disrupting supply chains, and geopolitical shifts are upending trade patterns.

Policymakers must now simultaneously respond swiftly to immediate crises, such as rising living costs, geopolitical pressures and extreme weather events, while steering deeper structural changes involving demographic shifts, digital currencies, artificial intelligence (AI) and the transition to sustainable economies.

The prosperity of ASEAN+3 economies–the 10 Southeast Asian nations plus China (including Hong Kong), Japan and South Korea–hinges on whether policymakers, central banks and financial supervisors can navigate an increasingly complex landscape of novel risks that cut across food security, labor markets and infrastructure resilience, potentially undermining economic welfare and financial stability.

The rising likelihood of compound shocks adds complexity. But if tackled strategically, such policies can become catalysts for sustainable prosperity.

New risks require new approaches

Novel risks are not simply variations of known shocks. Most are cross-border, systemic and fraught with deep uncertainties, with a high likelihood of materializing concurrently.

Because they challenge conventional governance and risk management approaches, these risks require more adaptive and targeted instruments to safeguard financial stability, as well as to ensure price stability and sustainable long-term prosperity.

Conventional financial risk assessment models based on historical data and unrealistic assumptions cannot capture novel risks appropriately. Backward-looking stress testing is increasingly unviable. By their nature, these are risks that economies have not faced before, making forward-looking risk management and analysis essential.

Global systemic challenges at this level cannot be hedged or diversified away. When they crystallize, there will be wide cross-border implications.

Novel risks also put monetary policy under pressure. Stablecoins and climate change weaken monetary transmission channels and exacerbate existing vulnerabilities.

While fully pegged stablecoins promote financial inclusion for the under-banked and bridge traditional finance with the digital economy, they also amplify currency devaluation and weaken central banks’ ability to set monetary policy in line with domestic economic conditions. They could trigger capital flow volatility, liquidity shortfalls, and sudden devaluations that wipe out savings.

Climate change, meanwhile, will damage productive capacity, alter investment patterns and create inflationary pressures through supply shocks.

Financial authorities must step up

Finance ministers, central bankers and financial supervisors need new approaches to address these challenges.

Price and financial stability must now take into account forces that threaten stability beyond traditional business cycles. Without such adaptation, economic and financial governance frameworks risk losing their effectiveness.

Novel risks demand strategically recalibrated monetary policy, resilience-focused financial regulation and forward-looking supervision. Policymakers, central banks and financial regulators already possess powerful tools that – if deployed early and strategically – can help financial markets navigate these risks more effectively.

Several ASEAN+3 central banks are already leading the way with initiatives to manage the digitalization of financial services, strengthen regional payment systems, develop human capital, promote financial inclusion and support the transition to climate-resilient economies.

The Bank of Korea has created a virtual asset committee to monitor crypto developments and support legislation; the Bank of Thailand has completed consultation on its AI risk management policy; and the Monetary Authority of Singapore is developing a generative AI risk framework through Project MindForge. Japan has amended the Payment Services Act to introduce stablecoin licensing requirements, and Bank Negara Malaysia has launched a Climate Finance Innovation Lab while integrating climate risks into supervision.

However, these initiatives remain fragmented and often modest in scale relative to the magnitude of the risks ahead. The time has come to scale up, systematize the implementation of these measures and regionalize them.

Supervisors and regulators need to revise capital adequacy frameworks to reflect novel risks, and issue explicit guidance on how institutions must incorporate them into strategies.

Disclosures must deliver decision-useful, forward-looking information. Systemic capital buffers need calibration to reflect the likelihood of risks materializing simultaneously. Regional collaboration will be critical to avoid regulatory arbitrage and fragmentation.

For monetary policy, central banks need to integrate resilience directly into refinancing operations and asset purchase programs. They must reflect novel risks in collateral frameworks and balance sheet management, including foreign reserve holdings.

Regional cooperation essential

ASEAN+3, as a region of diverse economies bound by deep interdependence, faces unique challenges.

Risk spillovers are inevitable, and no single nation’s measures will suffice. A prolonged heatwave in one country disrupts food supply chains in another. Capital mispriced in one jurisdiction creates vulnerabilities across the regional financial system. A rapid shift to US dollar stablecoins could weaken monetary policy effectiveness and create sudden liquidity shortfalls.

To deal with these risks, both individually and simultaneously, the region must monitor developments, meet regularly to coordinate policy actions, and develop internal capacity to understand and manage them.

By pooling expertise as well as developing common standards and interoperable regulatory frameworks, ASEAN+3 policymakers can transform a patchwork of responses into a regional architecture of resilience.

Finance ministries and central banks have long been the guardians of economic and financial stability. In this new age, they must also become architects of resilience and enablers of economic transitions.

Aligning financial supervision and monetary policy with novel risks is not a technocratic exercise. It is a strategic choice that will define whether regional economies can achieve sustained growth, mitigate emerging risks, enhance social welfare, and benefit from climate-resilient prosperity in the decades ahead.

ASEAN+3 can provide an example of global best practice, leading in setting the framework and institutional arrangements necessary to monitor and manage novel risks.

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(Bloomberg) — Asian stocks fell after shares of US regional banks tumbled on rising concerns about lending standards. Government bonds rose and gold was poised for a ninth week of gains.

The MSCI Asia Pacific Index fell 0.8%, with financial companies among the biggest losers. US equity-index futures fell 0.3%, after the underlying gauges dipped Thursday. Contracts indicated European shares were also set for a weaker open. Regional lenders slid in the US after the fallout from the collapse of subprime auto lender Tricolor Holdings spread beyond Wall Street.

As investors positioned for safe havens, gold and silver hit new all-time highs, powered by fears about credit quality in the US economy and heightened American frictions with China. Treasuries extended gains with the two-year yield falling to the lowest level since 2022 and the 10-year yield below 4%. An index of the dollar declined, while the yen strengthened past the 150 against the greenback.

The moves highlighted growing concerns about the US credit market, serving as the clearest evidence of the nervous undercurrents recently plaguing Wall Street, after stocks rallied to record high levels. That’s adding to a list of worries facing investors, including the US government shutdown, fears of an AI bubble and renewed US-China trade tensions.

“This US banking shock is more about market sentiment and liquidity than a systemic credit collapse,” said Dilin Wu, a strategist at Pepperstone Group Ltd. “It’s a good case of global risk aversion at the moment — fundamentals are okay, but fear is dominating the trading desks.”

In other corners of the market, shares in Hong Kong dropped more than 1%, leading losses in the region as tensions with the US continued to weigh on sentiment. Technology shares retreated with Taiwan Semiconductor Manufacturing Co. dropping 1.7% in Taipei trading as traders locked in gains.

The Treasury 10-year yield dropped two basis points to 3.96%, while similar-maturity Australian yields fell four basis points to 4.11%.

Earlier, the S&P Regional Banks Select Industry Index plunged 6.3% on Thursday, its biggest decline since April’s tariff-induced selloff and an echo of the losses that rocked the sector during a crisis in 2023.

Zions Bancorp fell 13% after a $50 million charge-off tied to a California Bank & Trust loan, while Western Alliance Bancorp dropped 11% after revealing exposure to the same borrowers.

Two high-profile collapses in short order — last month’s implosion of auto lender Tricolor and the bankruptcy of auto-parts supplier First Brands Group — have put traders on alert for more bad news waiting in the wings. Asian bank stocks dropped as well.

What Bloomberg strategists say…

Asia stock investors look more inclined to take money off of the table than to make bold positional moves, heading into the event horizon of another weekend of potential geopolitical bumps. The overall lack of conviction is neatly encapsulated so far by gold’s failure to sustain strong moves in either direction.

— Garfield Reynolds, Markets LIV Team Leader. Click here for full analysis.

“It will be creating some cautious pullback, taking risk off the table,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank. “Investors in Asia may be cautious of exposures or liabilities on the books in Asia that may get hurt.”

In trade news, the White House is poised to ease tariffs on the US auto industry, a move that would deliver a major win for carmakers that have aggressively lobbied to stem the fallout from record-level import duties.

US-China trade tensions are once again emerging as a drag on equities, and the selloff in Asia and emerging markets could overshoot expectations given their stretched valuations, according to Morgan Stanley.

“Recent client marketing in the US indicates seasoned investors are positioning more defensively, seeking quality and yield,” strategists including Jonathan Garner wrote in a note.

Meanwhile, Bank of Japan Governor Kazuo Ueda indicated that the bank will continue normalizing policy if confidence in achieving its economic outlook strengthens — keeping the door open for a near-term interest-rate hike.

Also in Japan, the likelihood of Japan’s ruling Liberal Democratic Party forming a new coalition with opposition party Ishin is 50-50, the leader of the smaller party said Friday, as key talks continue ahead of a parliamentary vote on who will lead the nation.

In geopolitical news, President Donald Trump and his Russian counterpart Vladimir Putin agreed to meet in Budapest during a two-hour phone call. The conversation took place a day before Trump’s White House meeting with Ukrainian President Volodymyr Zelenskiy.

Oil headed for a third weekly decline as investors focused on oversupply and the fallout from renewed US-China trade tensions. Brent was near $61 a barrel as Trump said he would hold a second meeting with Putin, raising the prospect that an increase of barrels from the OPEC+ member will exacerbate a global glut.

Corporate News:

Meta Platforms Inc. is set to seal an almost $30 billion financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record. Apple Inc. is preparing to finally launch a touch-screen version of its Mac computer, reversing course on a stance that dates back to co-founder Steve Jobs. Infosys Ltd. raised the lower end of its forecast for yearly revenue, banking on a revival in spending on technologies such as artificial intelligence. Nintendo Co. has asked suppliers to produce as many as 25 million units of the Switch 2 by the end of March 2026. Taiwan Semiconductor Manufacturing Co. shares drop as much as 2.4% in Taipei, despite the chipmaker raising its revenue outlook on strong AI demand. Some investors are seen taking profits after a run-up in the stock in recent months. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.4% as of 12:46 p.m. Tokyo time Nikkei 225 futures (OSE) fell 1.5% Japan’s Topix fell 0.9% Australia’s S&P/ASX 200 fell 0.8% Hong Kong’s Hang Seng fell 1.6% The Shanghai Composite fell 1% Euro Stoxx 50 futures fell 0.8% Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1710 The Japanese yen rose 0.3% to 150.00 per dollar The offshore yuan was little changed at 7.1255 per dollar The Australian dollar fell 0.3% to $0.6465 Cryptocurrencies

Bitcoin rose 1% to $109,000.08 Ether rose 2% to $3,928.49 Bonds

The yield on 10-year Treasuries declined three basis points to 3.94% Japan’s 10-year yield declined three basis points to 1.625% Australia’s 10-year yield declined six basis points to 4.09% Commodities

West Texas Intermediate crude fell 0.3% to $57.31 a barrel Spot gold rose 0.7% to $4,355.68 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Mark Cranfield and Abhishek Vishnoi.

©2025 Bloomberg L.P.