Nike's stock plummets after cutting its full-year guidance. SoftBank raises $1.86 billion in foreign bond sales for AI investments. Tokyo saw inflation rise in June, potentially prompting a Bank of Japan rate hike. Foreign investors exit Chinese stocks. SpaceX will guide the ISS to burn up in 2030, funded by an $843 million NASA contract. All this and more on this edition of World Street.
Guidance Gloom
Nike's stock took a significant hit after the company slashed its full-year guidance. It now anticipates a 10% drop in sales for the current quarter, citing weak sales in China and "uneven" consumer trends worldwide. The athletic footwear giant now projects a mid-single-digit decline in fiscal 2025 sales, starkly contrasting analysts' expectations of a 0.9% increase.
Bond Bonanza
SoftBank Group Corp. secured approximately $1.86 billion through dollar and euro bond sales, marking its first foreign currency debt deal since 2021. This fundraising effort aims to invigorate the Japanese tech firm's investments in artificial intelligence (AI), reported Bloomberg.
Billionaire Masayoshi Son's company announced pricing for two dollar tranches totaling $900 million and two euro tranches raising €900 million ($964 million). The proceeds will be used to retire debt and support operational activities.
Tokyo Tick
Inflation in Tokyo accelerated in June due to rising energy prices, while industrial output surpassed expectations in May. These trends may prompt the Bank of Japan to consider an interest rate hike as early as July.
Consumer prices, excluding fresh food, rose by 2.1% in the capital, up from 1.9% in May, according to the Ministry of Internal Affairs report. This figure exceeded the consensus estimate of 2%.
Dragon Doldrums
Foreign investors are once again pulling out of Chinese stocks, ending four months of inflows. Concerns about the slowing economy and earnings are outweighing policy optimism.
Global funds sold 49.4 billion yuan ($6.8 billion) of onshore shares via Hong Kong trading links in June through Wednesday, setting the market up for its first monthly outflow since January, according to Bloomberg report.
Billion-Dollar Bloat
SK Inc., South Korea's second-largest conglomerate, has grown too big following a $21 billion acquisition spree, reported Bloomberg. Chairman Chey Tae-won is set to meet with top executives overseeing $240 billion worth of assets, ranging from AI chip suppliers to mobile carriers and battery manufacturers, on Friday.
Analysts suggest this could initiate the most significant shake-up of the group since Chey took over more than two decades ago.
Cosmic Cleanup
Elon Musk’s SpaceX has been chosen by NASA to construct a spacecraft that will guide the International Space Station out of orbit, leading to its eventual burn-up in Earth’s atmosphere after its retirement in 2030. NASA announced that the contract is valued at up to $843 million.
Bond Boom
India is poised to attract billions more in inflows as JPMorgan Chase & Co. adds the nation's government bonds to its emerging markets index on Friday, unlocking a $1.3 trillion market for a wider range of investors.
Global funds have already invested nearly $11 billion into index-eligible bonds since JPMorgan's announcement in September. The US bank anticipates an additional $20 billion to $25 billion in the next 10 months, increasing foreign ownership from 2.5% to 4.4%.
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