Asian IPO Market Stalls as Trade War and Tariff Concerns Cloud Outlook

Economic

Summary:

Amid rising global trade tensions and US tariff measures, many companies across Asia are delaying IPO plans, especially in markets more exposed to higher retaliatory duties....

IPO Momentum in Asia Falters Amid Growing Trade Uncertainty

The Asian initial public offering (IPO) market, once buoyed by a strong pipeline in early 2025, is now entering a state of pause as companies reassess listing strategies in response to intensifying global trade tensions. According to financial experts, firms across the region are holding back IPO launches due to declining investor appetite, largely triggered by the escalating tariff war initiated by the United States under President Donald Trump.

Manishi Raychaudhuri, Managing Director at Emmer Capital Partners in Hong Kong, observed that while Q1 2025 saw pockets of IPO optimism, markets underestimated the Trump administration’s determination to pursue wide-ranging reciprocal tariff policies. This miscalculation has led to a sharp pivot in sentiment.

Trade Disputes Undermine Market Confidence and IPO Demand

The catalyst for the current unease came in early April when the US introduced aggressive new tariff measures, followed by a limited trade deal with the UK. Although this suggested willingness to negotiate, skepticism remains high. Investors continue to worry about prolonged volatility and the growing possibility of a US economic slowdown. Raychaudhuri noted that “companies are unlikely to enter a market where investor commitment is weak,” highlighting a mutual hesitation from both issuers and backers.

Q1 Activity Strong in Select Regions, But Risks Intensify

According to EY, Asia-Pacific led the world in IPO volume in Q1 2025, outperforming even the US. Hong Kong and South Korea drove much of this momentum, while activity in Japan, India, and ASEAN countries saw notable declines. Despite this early strength, current projections suggest a sharp deceleration due to macroeconomic risk.

Chan Yew Kiang, Head of IPO Services at EY ASEAN, emphasized that most companies planning IPOs are now adopting a "wait-and-see" approach, given the unpredictable trajectory of the trade war and the wide-reaching implications of tariff changes for Asian economies.

Tariff Exposure Creates Regional Disparities

The effects of trade friction are not uniformly felt across Asia. Abhineet Kaul from Access Partnership pointed out that countries with lower US tariff exposure may fare better. For example, Singapore, with a base US import tariff of 10%, is positioned more favorably than peers like Thailand and Malaysia, which are subject to retaliatory rates of 24% or higher. This variation has direct implications for market stability and IPO prospects within the region.

Despite broader caution, Hong Kong remains one of the few IPO markets showing signs of durability. Louis Lau, Head of Capital Markets at KPMG Hong Kong, described the outlook as “cautiously optimistic.” As of March 31, 120 companies had filed for IPOs in Hong Kong—a 38% increase year-on-year—highlighting sustained supply interest.

Several structural advantages underpin this resilience. The Hong Kong Stock Exchange has eased IPO requirements for select sectors, particularly tech, and established dedicated listing channels. Pamela Chung from Vistra added that favorable policy shifts in mainland China supporting tech and private firms are further boosting interest in Hong Kong listings.

Hong Kong’s role as a dual-listing hub for mainland Chinese firms and its currency peg to the US dollar offer additional stability. These factors collectively echo the IPO surge experienced during Trump’s first term, suggesting that the city may again serve as a strategic listing venue even in turbulent times.

Asia’s IPO landscape is entering a cautious phase, shaped by trade policy shifts, investor wariness, and divergent regional exposures to tariffs. While markets like Japan, ASEAN, and India face growing constraints, relatively shielded economies such as Singapore and structurally favored markets like Hong Kong may maintain IPO momentum. The coming months will test the region’s ability to adapt to geopolitical shocks and capitalize on regulatory flexibility to keep capital markets active.

Source: Nikkei Asia

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Fiona Harper

Central Bank

Economic

Cryptocurrency

Key Points:

● Goldman Sachs adjusts Fed rate cut timing to December 2025.

● Implications for financial markets and cryptocurrencies like BTC and ETH.

● Market participants anticipate changes in asset pricing and investor sentiment.

Goldman Sachs has adjusted the timing for the anticipated Federal Reserve rate cut to December 2025, diverging from an earlier prediction for July. This adjustment follows strong employment data and potential macroeconomic shifts.

The forecast shift by Goldman Sachs suggests significant implications for both financial markets and the cryptocurrency sector. Market participants anticipate changes in asset pricing and investor sentiment, with particular attention on BTC and ETH sensitivity to US rate policies.

Goldman Sachs Extends Fed Rate Cut Expectation to Q4 2025

Goldman Sachs, a major US financial player, has revised its Federal Reserve rate cut projection, now anticipating the next cut in December instead of July. This change comes amid a landscape of easier financial conditions and macroeconomic recalculations. The expected rate cut delay aligns with improved employment statistics and an updated growth outlook. Goldman Sachs analysts have increased the US 2025 fourth-quarter GDP growth estimate by 0.5 percentage points. They also predict a 3.6% peak in core personal consumption expenditure inflation, fostering better economic prospects.

Market sentiment has shifted with these adjustments. Notable individual insights come from Raoul Pal, CEO of Real Vision, paraphrasing that the expected pause and potential cut may catalyze risk asset rotations, prominently including cryptocurrencies. Community sentiment across social platforms reflects cautious optimism, pending definitive Fed actions.

“The pause, and more so, the eventual first cut, will trigger a huge rotation into risk assets. Crypto will move fast and hard once the Fed signals—it’s about the liquidity, stupid.” - Raoul Pal, CEO, Real Vision.

Crypto Response: BTC and ETH Under Rate Pressure

Did you know? In past instances where the Fed delayed cuts, similar to 2019, BTC and ETH experienced notable short-term volatility, underscoring the close relationship between macroeconomic policy shifts and crypto market dynamics.

Bitcoin's current data: trading at $102,929.11 with a market cap of $2.04 trillion, according to CoinMarketCap. Despite a 1.07% decline over 24 hours, Bitcoin saw growth of 8.56% in seven days, and a broader upward trend with a 30-day increase of 20.62%. Trading volume reached $64.05 billion, clearly impacting market engagement and investor strategies.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 23:49 UTC on May 12, 2025.

Insights from the Coincu research team emphasize the potential ripple effects on technological sectors and crypto product innovations. Delayed monetary easing creates interim pressure but historically catalyzes post-adjustment asset influxes. Such contexts illustrate opportunities for strategic positioning in risk-on environments.

Source: CryptoSlate

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Risk Warnings and Disclaimers

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Michelle Reid

May 12 (Reuters) - U.S. President Donald Trump signed a broad executive order on Monday directing drugmakers to lower the prices of their prescription drugs to align with what other countries pay.

White House officials said the government will give drugmakers price targets in the next month, and will take further action within six months if the companies do not make "significant progress" toward the goal of lower prices.

WHAT IS TRUMP'S STANCE ON PRESCRIPTION DRUG PRICES?

Trump has sharply criticised the pharmaceutical industry for years over the price of medicines in the United States. He has also chided other wealthy nations for "freeloading" on U.S. pharmaceutical innovation.

During his first term, in 2017, he accused the industry of "getting away with murder" in the prices they charge the government for prescription drugs.

Trump's proposed international reference pricing program was blocked by a court in 2020.

During his 2024 presidential campaign, Trump said Americans were being overcharged for medicines compared to other nations and pledged to take action.

On Monday, he said he wants to "equalize" prices with other countries by implementing tariffs.

ARE U.S. DRUG PRICES MORE EXPENSIVE?

Yes. The U.S. pays the most for prescription medicines in the world, often nearly three times that of other developed nations.

Top-selling blood thinner Eliquis from Bristol Myers Squibb (BMY.N), opens new tab and Pfizer (PFE.N), opens new tab carries a U.S. list price of $606 for a month's supply. The previous administration of Democratic President Joe Biden negotiated that down to $295 for Medicare, which goes into effect in 2026, but the drug costs $114 in Sweden and just $20 in Japan.

WHAT IS TRUMP GOING TO DO ABOUT IT?

Since taking office in January, Trump has reiterated that he wants to end this inequity. On Sunday, he announced on Truth Social that he would sign an executive order to pursue "most favoured nation" pricing.

Also known as international reference pricing, it seeks to narrow the gap between the U.S. and foreign drug prices. Reuters reported in April such a policy was under consideration.

The executive order on Monday differed from what drugmakers had been expecting. Lobbyist sources had told Reuters ahead of the order's signing on Monday that they expected the "most favored nation" pricing to apply to drugs for Medicare patients. But the order appeared to apply to all medicines.

Separately, Trump has also pushed for drugmakers to boost U.S. manufacturing. His administration is conducting an investigation into imports of pharmaceuticals in a bid to levy tariffs on grounds that reliance on foreign production of medicine threatens national security.

HOW DOES THIS DIFFER FROM PREVIOUS PRICE REDUCTION EFFORTS?

Biden's Inflation Reduction Act allows the government to negotiate the price of its most expensive drugs within Medicare.

The prices for the first 10 prescription drugs it negotiated were still on average more than double, and in some cases five times, what drugmakers had agreed to in four other high-income countries, Reuters previously reported.

WHAT IS THE PHARMA INDUSTRY'S RESPONSE?

The industry is strongly opposed to the prospect of dramatically lower drug prices in the United States, the world's largest pharmaceuticals market.

Two industry sources told Reuters last month that any such policy was more concerning to the industry than other potential government moves such as tariffs on imported medicines.

The main U.S. lobby group for drugmakers, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, said, "to lower costs for Americans, we need to address the real reasons U.S. prices are higher: foreign countries not paying their fair share and middlemen driving up prices for U.S. patients."

"Most favored nation is a deeply flawed proposal that would devastate our nation's small- and mid-size biotech companies," said John Crowley, CEO of BIO, the main U.S. trade group for biotechnology companies, in a statement.

WHAT ARE THE CHALLENGES IN CARRYING OUT THE ORDER?

Experts warn that referencing prices from other countries is complex, as many drugs sold in the U.S. are not available abroad, and some nations do not publish what they pay for drugs or take years to negotiate prices.

The U.S. does not buy drugs directly for a national health system, as countries such as England and Germany do, instead relying on the private sector to manage drug price negotiations for both government and private health plans.

Analysts said implementing the broad order would be difficult.

The executive order is also likely to face legal challenges, particularly for exceeding limits set by U.S. law, including on imports of drugs from abroad, legal experts said.

Reporting by Maggie Fick in London; Editing by Josephine, Mason, Caroline Humer and Bill Berkrot

Source: Reuters

Risk Warnings and Disclaimers

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Edward Lawson

China–U.S. Trade War

Toys made by Mattel, Hasbro and others are seen at a Macy's store in New York.

Shares of major toy makers rallied on Monday after the U.S. agreed to temporarily reduce tariffs on China.

The agreement will pause most tariffs and other trade barriers for 90 days, including reducing the 145% levy President Donald Trump had in place on Chinese imports to 30%.

Shares of Mattel jumped more than 10% Monday, Hasbro traded up 6.5%, Jakks rose more than 15% and Funko soared a whopping 46.4%.

The rally pushed shares of Hasbro above their trading level from early April, before Trump first announced his so-called "reciprocal tariffs" on dozens of trade partners. The rest of the toy stocks are still trading below their April 1 closing prices.

The stocks had been hammered by Wall Street as investors anticipated manufacturing hiccups and price hikes resulting from the tariff scheme. The toy industry is heavily reliant on supply chains in China, leaving toy makers at the mercy of trade policy. Bank of America estimates that both Mattel and Hasbro source around 40% of their U.S. product from China.

Last month, Hasbro estimated that it would see as much as a $300 million hit to its bottom line if Trump's 145% China duty held.

Mattel, too, warned last week that it was taking mitigating actions to fully offset costs associated with Trump's trade war with China, including raising prices in the U.S.

Both companies had previously issued forecasts that assumed 25% tariffs on Chinese imports. Mattel retracted its guidance earlier this month, citing macroeconomic volatility and uncertainty surrounding U.S. tariffs. Hasbro, meanwhile, maintained the full-year guidance it issued last quarter, but warned investors about the uncertainty of the current tariff environment.

Representatives from Hasbro, Mattel, Jakks and Funko did not immediately return CNBC's request for comment.

Source: CNBC

Risk Warnings and Disclaimers

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Catherine Richards

Economic

Political

Republicans in the U.S. House of Representatives on Monday proposed killing the electric vehicle tax credit and repealing fuel efficiency rules designed to prod automakers into building more zero-emission vehicles as part of a broad-based tax reform bill.

The proposal, which is set for a House Ways and Means Committee hearing on Tuesday, would repeal a $7,500 new-vehicle tax credit and a $4,000 used-vehicle credit on Dec. 31, although it would maintain the new-vehicle credit for an additional year for automakers that have not yet sold 200,000 EVs.

The president of the Electric Drive Transportation Association, Genevieve Cullen, criticized the proposal, saying that plans "to abandon U.S. leadership in energy innovation by gutting federal investment in electrification are catastrophically short-sighted."

The proposal, she said, would deliver "an enormous market advantage" to competitors like China and threaten U.S. manufacturing and jobs.

The U.S. Treasury in 2024 awarded more than $2 billion in point-of-sale rebates for EVs.

The proposal leaves in place a key battery production tax credit for automakers and battery makers, but a new provision would bar the credit for vehicles produced with components made by some Chinese companies or under a license agreement with Chinese firms.

The provision, which would take effect in 2027, could bar credits for cars powered by Chinese battery technology licensed by American companies such as Ford Motor or Tesla.

House Republicans also propose to kill a loan program that supports the manufacture of certain advanced technology vehicles. It would rescind any unobligated funding and rescind corporate average fuel economy standards and greenhouse gas emission rules for 2027 and beyond. That portion will be taken up by the Energy and Commerce Committee.

Among outstanding loans finalized in President Joe Biden's last weeks in office are $9.63 billion to a joint venture of Ford Motor and South Korean battery maker SK On for construction of three battery manufacturing plants in Tennessee and Kentucky; $7.54 billion to a joint venture of Chrysler-parent Stellantis and Samsung SDI for two EV lithium-ion battery plants in Indiana; and $6.57 billion to Rivian for a plant in Georgia to begin building smaller, less expensive EVs in 2028.

Source: Yahoo Finance

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Diana Wallace

China–U.S. Trade War

Economic

Political

Stocks

Wall Street's buoyant rebound in risk appetite following the easing of US-China tariffs is poised to spill into Asia trading Tuesday.

Futures showed Tokyo's equity benchmark may rise more than 2% at the open, with hefty gains also earmarked for Shanghai and Sydney. A gauge of US-listed Chinese stocks surged 5.4% on Monday in its best session in over two months. The S&P 500 closed more than 3% higher, while the dollar climbed the most since its November post-election rally.

Diminished expectations of a recession drove the US stock benchmark above President Donald Trump's April 2 “Liberation Day” level. A surge in big techs put the Nasdaq 100 back into a bull market just about a month after it plunged 20% from a previous record. Amid a potential reset in inflation expectations, Treasury yields climbed as traders lowered their Federal Reserve wagers to just two rate cuts in 2025.

For big investors shocked into defensive measures at the height of April's chaos, the swift recovery in markets has been a mixed blessing. Shorting the dollar, going long stock volatility and piling on bets premised on multiple Fed rate cuts were among the most popular trades in mid-April. Now, their unwinding may be adding fuel to the bounce-back.

After two days of high-stakes talks in Switzerland, trade negotiators from the world's biggest economies announced Monday a massive de-escalation in tariffs. In a carefully coordinated joint statement, the US slashed duties on Chinese products to 30% from 145% for a 90-day period, while Beijing dropped its levy on most goods to 10%.

“No one had these low China tariff rates on their bingo cards. This is a big positive surprise,” said Jeff Buchbinder at LPL Financial. “Risk remains that tariffs go back up from current levels as the pauses end, though taking worst-case scenarios off the table is reassuring.”

The S&P 500 breached its 200-day moving average. The Nasdaq 100 rallied 4%. The Dow Jones Industrial Average added over 1,000 points. A gauge of megacaps soared 5.7%. Trump said he spoke with Apple Inc.'s Tim Cook, just as the iPhone maker was reported to be considering price hikes. Drugmakers bounced on bets they averted the worst-case scenario as the president targets price cuts.

The two-year yield climbed 11 basis points to around 4%. The Bloomberg Dollar Spot Index rose 1%.

“Things could easily turn out a bit bumpier in future trade negotiations — but clearly the US administration has altered its tone such that future episodes of weakness should be used as buying opportunities, in our view,” HSBC Bank Plc strategists including Max Kettner wrote in a note to clients.

The risk-on move suggests that investors had not expected such a positive outcome so quickly, according to Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. The deal is consistent with her firm's base-case that the effective US tariff on Chinese imports will settle around 30-40%.

“Investors will now be focused on signs that the temporary fix can be turned into a lasting agreement,” she said.

Regardless, the reverberations of Trump's trade war will continue to affect global markets in the months to come. In Japan, Prime Minister Shigeru Ishiba said Monday that his government won't accept any initial trade agreement with the US that excludes an accord on autos. Top trade negotiator Ryosei Akazawa said the nation will continue to seek a reprieve from all the tariff measures imposed by the US.

In China, there was a sense of relief on Monday that the trade negotiations between the two biggest economies had quickly borne fruit. The Hang Seng China Enterprises Index and Hong Kong's benchmark Hang Seng Index both closed the day 3% higher.

To Matt Maley at Miller Tabak, the news of a trade agreement between the US and China is certainly positive for the stock market. The question now is whether this change will be enough to help earnings growth reverse higher in a significant way or not.

“Think of this like a trade embargo being lifted, at least for now,” said Callie Cox at Ritholtz Wealth Management. “Tariffs are still high, Americans will likely feel the sting of higher prices, and companies probably won't make different strategic decisions in the wake of this deal. But trade between the US and China could open up more, which means more shipping and fewer empty shelves (for now).”

Investors who followed Trump's advice on social media in the past month have enjoyed one of the biggest rallies in the S&P 500 under his leadership.

Having slumped on Trump's “Liberation Day” tariff announcement, the benchmark soared in the month after he said it was “a great time to buy” on April 9 — hours before he paused some of the harshest levies in a century. He reiterated that on May 8, telling reporters the economic outlook warranted piling into stocks.

With good news on the trade front giving a boost to stocks at the start of the week, it will be up to inflation data, retail sales, and earnings to sustain the momentum, according to Chris Larkin at E*Trade from Morgan Stanley.

“There's still debate about how much tariffs have already disrupted supply chains and potentially slowed growth,” Larkin said. “While numbers that feed into the stagflation narrative could certainly derail the bullish mood, the economy still appears to be on solid ground, as Jerome Powell noted last week.”

Swaps that track upcoming central bank meetings showed just 56 basis points of easing by December, down from near 75 basis points last week. Traders still see the first quarter-point cut in September.

Fed Governor Adriana Kugler said the Trump administration's tariff policies are likely to boost inflation and weigh on economic growth, even with the recently announced reduction in levies on China.

“Trade policies are evolving and are likely to continue shifting, even as recently as this morning,” Kugler said Monday in remarks prepared for an event in Dublin. “Still, they appear likely to generate significant economic effects even if tariffs stay close to the currently announced levels.”

Source: Bloomberg Europe

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Manuel

Central Bank

Forex

Brazil's central bank said Monday it will sign a currency swap agreement with the People's Bank of China, with a maximum outstanding value of 157 billion reais ($27.69 billion) and a five-year term.

The agreement, to be signed on Tuesday in Beijing during Brazilian central bank governor Gabriel Galipolo's visit to China, aims to provide liquidity to support financial markets in times of stress, the bank said.

The announcement marks another step in strengthening ties between Latin America's largest economy and China, amid heightened global volatility triggered by sweeping trade tariffs imposed U.S. President Donald Trump.

It follows Monday's announcement of more than $4.5 billion in planned Chinese investments in Brazilian sectors ranging from auto manufacturing and renewable energy to pharmaceuticals and semiconductors, as leftist President Luiz Inacio Lula da Silva visits the country.

Washington and Beijing reached a deal to temporarily ease tariffs, but even before tensions escalated between the two, Lula had long emphasized China's global importance, saying on Monday that "if it's up to my government, our relationship with China will be indestructible."

Brazil's central bank noted it already has a similar currency swap arrangement with the U.S. Federal Reserve, made permanent in 2021, which allows the Brazilian monetary authority to access U.S. dollars through repurchase operations backed by U.S. Treasury securities.

The bank added it is also in talks with other counterparts to establish similar agreements, which it said have become common since the 2008 global financial crisis.

China is Brazil's largest trading partner, while the U.S. remains Brazil's biggest source of foreign investment.