AGP Executive Report

China’s Economy: Manufacturing PMI slipped to 49.3 in October, signaling contraction, though high-tech manufacturing continued to expand. India Credit: Commercial-sector funding rose 55.4% to ₹17.5 lakh crore in April–August, led by bank lending; corporate bond issuance fell as yields climbed. Bank Security: AU Small Finance Bank is investigating a possible leak of limited vehicle-loan customer data. Salesforce said it found no related platform vulnerability; the bank says its own systems and services are unaffected. Private Credit: TVS Capital is entering the market with a proposed ₹750-crore fund, plus a ₹500-crore option, to lend to performing mid-market firms. Cross-Border Finance: Georgia’s central bank and Bank of China signed an agreement tied to investor access to China’s interbank bond market. Japan Rates: The Bank of Japan held its key rate at 1.25%, while saying underlying inflation had reached its 2% target.

China–Switzerland Trade: The countries signed an upgraded free-trade deal that will eventually remove tariffs on 99.8% of Swiss goods exports to China and widen access to services, including financial services. India’s Investment Pipeline: Private-equity and venture-capital investment rose 46% year on year to $17.1 billion in Q3. A separate energy-storage report says long-duration storage and proposed FY2028 funding will be vital to India’s 500GW clean-energy goal; grid constraints led to 2.3TWh of solar curtailment in 2025. Banking Pressures: Indian banks’ reported deposit growth averaged 21.1% in the September quarter, but an analysis of 10 lenders puts growth at 12.2% after adjusting for special foreign-currency inflows. Credit growth remains ahead of deposits. Markets and Policy: The Bank of Japan held rates and signalled further tightening, while India’s foreign-exchange reserves fell $1.27 billion to $719.75 billion. India’s Poverty Trend: The World Bank estimates 496 million people moved above its lower-middle-income poverty line between 2011 and 2023, and projects the poverty rate will decline further by 2028.

Market Mood: Asian chipmakers report strong AI demand, but stocks fell as investors questioned whether heavy AI spending will deliver returns; the sell-off spread across global markets. Central Banks & Currency: The Bank of Japan held its policy rate at 1.25% as inflation reached its 2% target, while the yuan climbed to a more than four-year high. India Investment: PE and VC inflows rose 46% year on year to $17.1 billion in Q3, led by large deals. Jio Platforms’ debut also drew heavy leverage: investors borrowed ₹2,228 crore to buy shares. Regional Financing: The ADB projects $104.5 billion in commitments for Asia-Pacific in 2027–29, including funding for private businesses. In Australia, Neoen secured A$1.8 billion from 13 lenders for renewable energy assets. Banking Risks: AU Small Finance Bank is investigating a possible leak involving limited vehicle-loan customer data held on a Salesforce-hosted platform; it says its own systems are unaffected.

India Outlook: The finance ministry estimates Q2 FY27 real GDP growth at 7.35%, above the RBI’s 7.2% forecast, but warns that oil prices, food inflation and crop uncertainty pose risks. Tech Earnings: Indian IT firms held or improved margins as AI-driven efficiency offset weak client spending; HCLTech’s advanced AI revenue rose 78% year on year. Markets & Insurance: China Pacific Insurance’s third-quarter profit fell 68% as market volatility hit investment returns, while a sharp selloff in Chinese AI stocks rattled investors. Banking: The CBI searched locations linked to a Pune media company over an alleged ₹81.66 crore fraud against SBI, involving claims of falsified accounts and diverted funds. Cross-Border Finance: Bangladesh’s Bank Asia plans a Hong Kong subsidiary to expand trade finance and tap growing Bangladesh-China business.

Singapore Finance: Northern Trust marked 30 years in Singapore, pointing to new unit-trust and liquidity services as it expands support for Asia-Pacific asset owners, fund managers and family offices. Currencies: The ringgit edged higher ahead of Bank Negara Malaysia’s policy meeting, while the yuan touched a four-year high against the dollar after the Fed held rates. India Markets: Jio Platforms surged 21% in its market debut after a record $3.2 billion IPO, reaching a reported $137 billion valuation. Japan Deals: South Korea’s Mirae Asset is returning to Japan with a $35.6 million acquisition of brokerage Sanko Securities and plans to fund further expansion. China Banking: Fitch affirmed ratings for China’s six largest state-owned banks and raised their viability ratings.

India’s IPO Boom: Jio Platforms jumped about 27% on debut after its roughly $3 billion IPO, reaching a $137 billion valuation and becoming India’s second-most valuable listed company. Regional Finance Deals: South Korea’s Mirae Asset plans to enter Japan’s proprietary trading market by acquiring Okasan Securities’ brokerage unit in a deal worth up to $32 million. India’s TVS Motor will also separate its consumer-finance business into a new listed entity. Japan’s Tax Debate: The government is weighing a corporate tax increase to fund higher defense spending, drawing business concerns that it could curb investment. Debt and Budgets: The Maldives is due to present its 2027 budget as it manages heavy debt obligations; Mozambique, after rescheduling some Chinese debt, is seeking further relief and $528 million in external funding. Commodity Outlook: The World Bank forecasts global commodity prices will rise 23% in 2026, with higher energy costs and disrupted grain shipments adding pressure to inflation and food affordability.

India’s IPO Surge: Jio Platforms jumped 21% on its Mumbai debut after a $3.2 billion IPO, reaching a $131.5 billion valuation and making it India’s second-most valuable company. Korea’s Dollar Holdings: Residents’ foreign-currency deposits hit a record $154.7 billion in September, as exporters and brokerages added funds for overseas bond investments. Nature Finance: The Asian Development Bank unveiled a bond and project incubator to draw private capital into conservation, against an estimated $1.3 trillion annual global funding gap. Cross-Border Finance: ICBC and Standard Bank introduced 10 measures to expand renminbi payments and trade finance between China and Africa. Energy Resilience: Cambodia secured a $200 million Japanese loan to support stable energy supplies and cushion economic shocks. India Real Estate: Private equity investment fell 31% to $1.66 billion in January–September, while domestic investors supplied 85% of the total.

India Investment: New Delhi is considering simpler foreign-investment paperwork for firms with less than 10% Chinese ownership, while targeting about US$220 billion in renewable-energy financing from 2027 to 2030. China Markets: Foreign investment inflows showed signs of stabilizing, and industrial profits rose 15.5% in the first nine months, led by high-tech sectors. But China’s STAR 50 index has fallen 40% in four months, wiping out roughly US$480 billion in market value as AI-stock valuations reset. Regional Capital: Bangladesh says Japan’s private sector plans to invest about US$6.34 billion over five years, with projects expected to support jobs and infrastructure. Pakistan is preparing a private-equity framework aimed at attracting US$10 billion to US$15 billion. Banking and Payments: Japanese banks and fintech firms are advancing digital-currency systems for trade settlements, while Hong Leong Bank customers can now use QR payments at more than 120 million merchant touchpoints in China.

China’s Economy: Industrial profits rose 15.5% in the first nine months, powered by more than doubled earnings in electronics, though weaker sectors show the recovery remains uneven. The PBOC also launched a swap facility to support non-bank investors and steady bond markets. Markets: The dollar firmed as investors awaited rate decisions from the Fed, ECB and Bank of Japan; all three are expected to hold rates, with guidance in focus. Cross-Border Investment: Japan expects its companies to invest 1 trillion yen in Bangladesh over five years, under a wider push to deepen industrial and infrastructure ties. India Finance: Blackstone opened a second Indian office in Bengaluru to expand its operations, while Brookfield agreed to sell a minority stake in La Trobe Financial to OMERS and retain control. Hong Kong: The city’s first five-year development plan could help coordinate efforts to protect its role as a global financial centre while maintaining open markets.

China Markets: The People’s Bank of China launched a swap facility to provide liquidity directly to nonbank financial firms during bond-market stress, aiming to curb forced selling. Separately, a draft MOFCOM rule would let Beijing penalize foreign entities over alleged trade-secret violations tied to national interests, adding uncertainty for cross-border investors. India’s Financial Infrastructure: Prime Minister Narendra Modi inaugurated the RBI’s new data centre and cybersecurity training institute in Odisha to strengthen payment-system resilience and banks’ defenses against cyber threats. Regional Investment: GCC and ASEAN officials called for deeper economic integration to boost investment flows and build more resilient supply chains. Banking Results: Indian Overseas Bank reported a 56% rise in quarterly net profit and plans a QIP in the fourth quarter; India’s overseas investment commitments, meanwhile, fell 37% to $4.34 billion in September. Energy Finance: Asia may need as much as $1 trillion in annual energy investment for 15 years as governments seek greater energy security and meet rising demand.

Banking Outlook: Sticky inflation and volatile bond markets are squeezing Asia-focused banks’ profits and capital as HSBC, Standard Chartered and DBS prepare to report quarterly results. China Finance: Beijing approved Citi’s wholly owned securities unit, opening the door to brokerage, underwriting and trading; Chinese shares ended flat ahead of central bank meetings. Digital Markets: Hong Kong cleared secondary trading in tokenized money-market funds, allowing investors to trade beyond standard market hours. Rates & FX: Japan’s Sumitomo Life will keep its JGB investment pace steady but monitor long-term yields closely; it expects Bank of Japan rate hikes in December and April. India Markets: Foreign investors withdrew ₹48,056 crore from Indian equities in October as market selling continued, with traders also bracing for central bank decisions and earnings.

Cross-Border Investment: SoftBank is discussing a $50 billion Malaysia investment focused on AI and data centres, while Gulf and ASEAN officials are seeking deeper ties in investment, infrastructure and trade. Markets: Brent crude ended the week at $117.38 a barrel as West Asia tensions stoked supply fears; investors now watch the Fed’s October 27–28 decision and Jio’s market debut. Foreign investors pulled ₹48,056 crore from Indian equities in October. Bank Earnings: Kotak Mahindra Bank’s quarterly profit rose 29% and IDFC First Bank’s nearly tripled to ₹1,045 crore. Yes Bank has yet to decide on its AT-1 bond coupon payment. Financial Risk: Central Bank of India reported ₹13.97 crore in unauthorised transfers from its RBI settlement account, underscoring vulnerabilities in payment operations. Meanwhile, investors are pulling back from debt issued by some AI data-centre builders, raising concerns about whether future revenues can support their borrowing.

India Markets: Foreign investors withdrew ₹48,056 crore from Indian equities in October amid high oil prices, inflation concerns and weak earnings, though selling eased late in the week. The ₹30,213-crore Jio Platforms IPO also absorbed liquidity. Banking: IDFC First Bank’s second-quarter profit nearly tripled to ₹1,045 crore, while Kotak Mahindra Bank’s rose 29% to ₹4,212 crore. Investment: India’s private capex pipeline grew 39% year on year to ₹99.7 lakh crore, but lenders face risks from project concentration and delays. Five IPOs are due to open this week, targeting nearly ₹2,600 crore. Regional Finance: Malaysia’s Islamic finance sector now accounts for 48% of financial assets; Bank Negara says it could exceed half in coming years. China & Capital Flows: China’s retail sales grew just 1.1% in January–August, underscoring the challenge of boosting household demand, while proposed US curbs on investment in Chinese AI and biotech firms drew Beijing’s opposition.

India’s Bank Earnings: Kotak Mahindra Bank’s Q2 profit rose 29%, while IDFC First Bank’s nearly tripled to ₹1,045 crore, with bad-loan ratios also improving. IPO Momentum: Reliance Jio Platforms’ offering drew a record 10 million applications and bids exceeding 20.5 times the shares on offer, underscoring strong retail demand. China–US Investment Tensions: Beijing condemned a proposed US expansion of restrictions on American investment in China and warned it could respond, raising uncertainty for cross-border business. Property Slowdown: India’s real-estate deal value fell 76% year on year in Q3, while private-equity investment dropped 35%, pointing to a sharp pullback in large transactions. Regional Banking: Japan’s Shiga Bank and Senshu Ikeda Holdings are exploring a merger, part of continued consolidation among regional lenders. Asia-Pacific Policy: APEC finance ministers adopted pledges aimed at supporting sustained growth amid economic uncertainty.

Banking: Japan’s Shiga Bank and Senshu Ikeda Holdings are weighing a merger that would create the Kansai region’s largest banking group, with assets topping ¥14 trillion. India Markets: Jio Platforms’ ₹30,213-crore IPO drew bids for 22.19 times the shares on offer, setting a record for an Indian public issue. The RBI said currency in circulation grew 13.5% year on year to ₹43.46 trillion by October 15, a five-year high. Regional Outlook: China’s economy grew 4.6% in the first three quarters, while financial services expanded 5.8%. Investment Flows: The U.S. Treasury proposed tighter curbs on American investment in Chinese AI, biotech and other high-tech sectors, adding a new compliance risk for cross-border investors. German firms are also looking to expand manufacturing and research in India, with the proposed India-EU trade pact expected to support investment and supply-chain ties.

Banking & Payments: Bank of India expects proposed UPI fees on select high-value merchant transactions to bring in nearly ₹100 crore a quarter. Lender Results: IndusInd Bank posted Q2 profit of ₹1,242 crore and expects margins to recover, while Shriram Finance’s profit jumped 59% to ₹3,677 crore as overdue gold loans rose to 3.12% of its portfolio. Market Moves: Reliance’s Jio IPO drew more than 10 million applications, a record for an Indian offering. Regulation: The RBI reiterated that upper-layer NBFCs with public funds must list, keeping pressure on Tata Sons to comply. Investment Rules: The US Treasury proposed broader restrictions on American investment in sensitive technologies in China and other countries of concern. Economic Pulse: India’s core-sector output grew 7.9% in September, led by iron ore, electricity, coal and refinery products.