Financial Breakfast Update – March 25, 2025
1. Central Bank Actions: The central bank announced it will conduct a 450 billion yuan MLF operation on March 25 and will shift from a single price bidding system to a multiple price bidding system starting this month. This month, 387 billion yuan in MLF matured, resulting in a net increase of 63 billion yuan, marking the first net increase since July 2024. Experts suggest that the elimination of a unified bidding rate signifies a complete exit of the policy nature of MLF rates, which will help reduce banks’ funding costs and alleviate net interest margin pressures.
2. BYD’s Financial Report: BYD released its financial report for 2024, showing record highs in key metrics. The report reveals that BYD achieved a revenue of 777.1 billion yuan, a 29% increase year-on-year, and a net profit of 40.254 billion yuan, up 34% from the previous year. The company plans to distribute 39.74 yuan per 10 shares, totaling approximately 12.077 billion yuan in dividends. The annual report also indicated that BYD has made comprehensive preparations for several core components and systems of AI robots. Furthermore, BYD announced plans to invest up to 60 billion yuan of idle funds in wealth management. In related news, Samsung Electronics Chairman Lee Jae-yong visited BYD’s headquarters in China.
Global Markets: Major US stock indices closed higher, with the Dow Jones up 1.42% at 42,583.32 points, the S&P 500 rising 1.76% to 5,767.57 points, and the Nasdaq increasing 2.27% to 18,188.59 points. Amazon saw an increase of over 3%, while Home Depot also rose more than 3%, leading the Dow. The index of the seven major US tech companies rose 2.57%, with Tesla soaring nearly 12% and Facebook up over 3%. Chinese concept stocks showed mixed results, with Lotus Technology up over 38% and Linklogis down over 10%.
European indices closed slightly lower, with the DAX down 0.17% at 22,852.66 points, the CAC 40 down 0.26% at 8,022.33 points, and the FTSE 100 down 0.1% at 8,638.01 points.
In Asia-Pacific, major indices had mixed results. The Nikkei 225 fell 0.18% to 37,608.49 points, while India’s SENSEX 30 rose 1.4% to 77,984.38 points. The Korean Composite Index dropped 0.42% to 2,632.07 points. The Australian S&P 200 Index gained 0.07% to 7,936.9 points, while New Zealand’s S&P 50 Index increased by 0.12% to 12,128.21 points. The Straits Times Index in Singapore rose 0.25% to 3,936.33 points, while Malaysia’s composite index dipped 0.11% to 1,503.82 points.
International oil prices rose across the board, with West Texas Intermediate crude for May up 1.29% at $69.16 per barrel and Brent crude for June up 1.13% at $72.42 per barrel. Precious metals futures had mixed results, with COMEX gold futures down 0.13% at $3,017.6 per ounce and COMEX silver futures up 0.12% at $33.525 per ounce.
In agricultural futures, soybean futures fell 0.27% to 1,007 cents per bushel, corn futures rose 0.05% to 464.5 cents, while wheat futures dropped 1.93% to 547.5 cents. Basic metals on the London Metal Exchange had mixed results, with copper up 0.8% at $9,934.5 per ton and zinc up 0.36% at $2,938.5 per ton, while nickel fell 0.32% to $16,005 per ton and aluminum dropped 0.31% to $2,614.5 per ton.
US Treasury yields generally rose, with the 2-year yield up 8.65 basis points at 4.0324%, the 3-year yield up 8.73 basis points at 4.0097%, and the 5-year yield increasing by 8.3 basis points to 4.0913%. The 10-year yield rose by 8.26 basis points to 4.3346%, while the 30-year yield increased by 6.98 basis points to 4.6627%.
In currency markets, the dollar index rose 0.15% to 104.31, with mixed performances from non-dollar currencies. The euro fell 0.14% against the dollar to 1.0801, while the pound rose 0.06% to 1.2923. The Australian dollar increased by 0.23% to 0.6286, and the yen fell 0.92% to 150.69, while the Swiss franc dipped 0.02% to 0.8830. The offshore yuan depreciated by 57 basis points to 7.2636 against the dollar.
Indonesian Stock Market: Following last week’s significant drop, the Indonesian stock market was further impacted on Monday, with the composite index falling more than 4% at one point, breaching the 6,000-point mark for the first time since 2021. By the close, the index was down 1.55% at 6,161.22 points. Since reaching a historical high of 7,910 points in September last year, the Indonesian stock market has declined over 22%, making it one of the worst-performing markets globally.
Macroeconomic Updates: The State Council has announced the issuance of regulations for implementing the Anti-Foreign Sanctions Law, including enhancing countermeasures and collaboration among departments. The revised Regulations on Guaranteeing Payments to Small and Medium Enterprises will take effect on June 1, 2025, and will increase payment deadlines and penalties for violations. Additionally, the Ministry of Commerce met with executives from Apple and Qualcomm, emphasizing that there are no winners in trade wars and that cooperation is essential for creating a stable policy environment.
The Ministry of Human Resources and Social Security has included small business owners in the scope of special loan support for job stabilization. The central bank conducted a 135 billion yuan reverse repurchase operation, with significant maturities resulting in a net withdrawal of 346 billion yuan. The Ministry of Finance reported that public budget revenues from January to February totaled 43,856 billion yuan, reflecting a 1.6% year-on-year decline.
The Deputy Minister of Civil Affairs stated that China has entered a moderately aging society and will draft policies to address population aging. The silver economy is expected to grow from 6% to 9% of GDP by 2035. Scholars at the China Development Forum 2025 noted the potential for China’s economic development through a combination of short-term growth stabilization and long-term structural adjustments.
Domestic Stock Market: The three major indices in the A-share market showed a V-shaped rebound, with the Shanghai Composite Index closing up 0.15% at 3,370.03 points. The Shenzhen Component Index increased by 0.07%, while the ChiNext Index rose by 0.01%. The market turnover was 1.47 trillion yuan, with the TMT sector rebounding. The Hang Seng Index closed up 0.91% at 23,905.56 points, with significant net buying from southbound funds.
The Shanghai Stock Exchange has updated its action plan for index business, focusing on enhancing the supply of high-quality indices suitable for long-term investment. The China Securities Association plans to amend rules for IPO offline investors to include wealth management companies. The upcoming “April Decision” in the A-share market is expected to guide investments for the year.
Recent fluctuations in the A-share market have led to cautious investor sentiment, with strong performances from sectors supported by earnings. Industry analysts believe the shift back to fundamental pricing does not change the overall macroeconomic policies, and they remain optimistic about the equity market.
Sunny Optical Technology reported a 20.9% increase in revenue for 2024 to 38.29 billion yuan and a net profit growth of 145.5% to 2.7 billion yuan, achieving record highs. Xiaomi Group is planning to place 750 million shares at a price range of HKD 52.8 to HKD 54.6 to raise up to HKD 53 billion.
Taiwan Semiconductor Manufacturing Company will accept orders for 2nm wafers starting April 1, aiming to be the first globally to mass-produce 2nm chips. Baidu has launched China’s first conversational application development platform, allowing users to generate complete functional code through natural language.
International Updates: Former President Trump announced a 25% tariff on countries purchasing Venezuelan oil and gas, effective April 2. The US government is reportedly working to facilitate a ceasefire between Russia and Ukraine by April 20, although significant differences remain. Atlanta Federal Reserve President Bostic indicated he now expects only one rate cut this year, down from two previously expected.
Japan’s central bank governor expressed openness to selling government bonds if market operations require it, while the finance minister warned that Japan has not yet overcome deflation. In the US, March’s manufacturing PMI was reported at 49.8, a three-month low, while the services PMI was at 54.3. In the Eurozone, manufacturing PMI hit a 26-month high at 48.7, with similar positive trends in Germany and France.
In the Chinese commodity futures market, energy and chemical products generally rose, with crude oil up 1.03%. Significant fluctuations in gold prices have led to adjustments in buying limits at various banks. Furthermore, a new shale oilfield discovered in Shandong Province has geological reserves exceeding 140 million tons.
