SoftBank Sinks After Nvidia Stake Sale | Bloomberg: The Asia Trade 11/12/25

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Key Concepts

• Asian Stock Markets: Positive opening influenced by hopes of US government shutdown ending and restored economic data access.
• NVIDIA: SoftBank's sale of its entire stake to fund AI investments, impacting tech stocks.
• AI Investments: Significant funding directed towards AI initiatives, with OpenAI being a major recipient.
• US Government Shutdown: Potential end of the shutdown and its implications for economic data release and market sentiment.
• South Korea Jobs Numbers: Latest figures showing 2.6% unemployment, with weak hiring in construction.
• Singtel Earnings: Strong first-half results driven by portfolio effects, despite uncertainties with its Australian unit, Optus.
• Data Centers: Singtel's strategic pivot towards data centers as a key growth area.
• Cryptocurrency: Fragile state of Bitcoin, with a rebound but still below its 200-day moving average.
• Singapore as a Crypto Hub: Balancing consumer protection with fostering responsible innovation in the crypto space.
• Agentic Commerce: Visa's focus on enabling AI-powered agents to make payments, transforming the commerce ecosystem.
• China's Economy: Strong Singles' Day sales, but lingering concerns about loan growth and the property sector.
• India-Pakistan Tensions: Deadly blasts in both capitals raising concerns about renewed tensions.
• Japanese Government Bonds (JGBs): Tepid demand at auctions and concerns about fiscal year policy.
• Carry Trade: Continued pressure on the Japanese Yen against the US Dollar.
• Gold Prices: Holding above $4100, with expectations of rate cuts supporting prices.

Market Overview and US Government Shutdown

Asian stocks opened positively, buoyed by optimism that the US government shutdown might end, which would restore access to crucial economic data and clarify the Federal Reserve's outlook. The shutdown has led to a lack of official economic data, forcing investors to rely on private indicators. The potential end of the shutdown is expected to lead to equity rallies and continued market gains, supported by robust corporate earnings and growing AI spending.

NVIDIA and AI Investment

A significant development impacting the tech sector was SoftBank's revelation that it sold its entire stake in NVIDIA, netting approximately $5.83 billion. This move is intended to bankroll SoftBank's substantial investments in Artificial Intelligence (AI), including initiatives with OpenAI and Oracle. While this sale has put pressure on NVIDIA shares, it highlights the massive capital being funneled into AI. The transcript touches upon the broader debate surrounding an "AI bubble," with SoftBank's CFO declining to comment on whether the market is experiencing one. SoftBank's own earnings reported a surprisingly strong net income of 2.5 trillion yen ($16.2 billion) for the fiscal second quarter, exceeding Wall Street estimates and marking the highest profit since 2020. The company also announced a four-for-one stock split effective January 1st, aimed at making the stock more accessible to retail investors.

South Korea's Economic Data

Breaking news from South Korea revealed the latest jobs numbers, with the unemployment rate at 2.6%, in line with estimates but rising from the previous month. Weak hiring was observed in the construction sector, and the overall recovery has been slow, with 193,000 jobs added. Tech stocks in Korea have also been under watch, with some weakness noted.

US Market Action and Fed Outlook

Overnight on Wall Street, the ADP report indicated that US companies shed jobs in late October, leading to a rise in Treasury bond futures and a slip in the Dollar Index to a two-week low. The market is showing resilience, with optimism around potential rate cuts and the reopening of the US government. The lack of official data due to the shutdown makes it difficult to gauge the Federal Reserve's stance, but the prevailing sentiment favors rate cuts.

Currency Dynamics and the Euro

The Dollar Index has been struggling to rebound, trading at its weakest level in about two weeks. The Euro is showing support, and there's a growing sentiment that the European Central Bank might be on hold, with some discussions about potential tightening. The key to the Euro's next move will be whether it moves higher or lower, with a potential reopening of the US government and lower interest rates making the Eurozone the most interesting economy. The Yen is also expected to benefit.

Japan's Debt Concerns and Yen Weakness

Japanese stocks have been losing ground, and the Japanese Yen is at its lowest level since February. There are concerns about debt monetization in Japan, with tepid demand observed at the 30-year debt auction. The bid-to-cover ratio was lower, indicating investor scrutiny of the long bond issuance and the Bank of Japan's fiscal year policy. Investors are worried about the interest rate outlook for Japan and whether the Bank of Japan will hike rates quickly enough to reflect economic conditions.

Singtel's Financial Performance and Optus Uncertainties

Singtel reported strong first-half results, with underlying profits up 14% year-on-year, driven by its portfolio effect, including strong performance from Airtel in India and AIS in Thailand, as well as its IT services business, NCS. However, uncertainties surrounding its Australian unit, Optus, due to recent service outages, remain. Optus contributes nearly 50% of Singtel's group revenue but less than 10% of underlying profits. Singtel is taking the incident seriously, with an independent inquiry panel established to conduct a review by year-end. The company is accelerating transformation initiatives in risk management, process governance, and resilience. Regarding potential financial penalties for Optus, Singtel's CFO stated it's too early to determine the exact amount, but provisions will be made if certainty arises.

Singtel's Strategic Pivot to Data Centers

Singtel is strategically pivoting towards digital infrastructure, with its data center business being a significant contributor. The company is in discussions through STT (Singapore Technologies Telemedia) as part of a consortium for data center acquisitions. Singtel believes in the demand-supply dynamics in Asia for data centers and aims to leverage its existing communication services business and strong regional partnerships. The company is also actively managing its capital, with a pipeline of $9 billion to recycle by mid-2030, having already achieved $5.6 billion. This includes selling a small stake in Airtel to equalize its stake with its Indian partner.

China's Economic Landscape and Singles' Day

Singles' Day shopping festival saw a significant surge in orders, jumping nearly 60% from last year, with a notable increase in overseas sales. This strong performance, however, masks the domestic market's performance to some extent. Competition among e-commerce platforms is intense, with Alibaba offering discounts and consumer vouchers. Lingering concerns about a slowdown in loan growth persist in China, despite the PBOC downplaying these concerns and attributing them to the economy's transition to high-quality growth. Goldman Sachs has pushed back its forecast for PBOC rate cuts to the first quarter of next year.

Geopolitical Tensions: India and Pakistan

Deadly blasts in the capitals of India and Pakistan have raised concerns about renewed tensions between the nuclear-armed neighbors. A suicide bomber detonated himself outside a court building in Islamabad, following a car explosion in New Delhi. Pakistan quickly accused India, risking a flare-up of tensions. The investigation into the New Delhi incident is ongoing, with no group claiming responsibility yet.

Cryptocurrency Market Dynamics

The cryptocurrency market is showing a fragile rebound, with Bitcoin trading above $107,000 on Monday before falling back below $104,000. Bitcoin remains below its 200-day moving average, indicating ongoing downside pressure following a liquidation event last month. This suggests weak risk sentiment across assets. Singapore is positioning itself as a crypto hub, focusing on responsible innovation, stablecoins, and tokenization, while tightening rules on offshore crypto companies.

Agentic Commerce and Visa's Role

Visa is actively involved in the emerging space of agentic commerce, where AI-powered agents can make decisions and payments. The company is introducing trusted payment credentials for agents, aiming to build trust on both sides of a transaction – for buyers and merchants. Visa's network, built on trust, security, and acceptance, will be tailored to enable agentic commerce. Tokenization is a core technology enabling this transformation. Asia is expected to be a leader in agentic commerce adoption, potentially leapfrogging other regions.

Coreweave's Revenue Forecast and Supply Chain Challenges

Coreweave's shares tumbled after it cut its annual revenue forecast due to a delay in fulfilling a major customer contract. The company is working to diversify its supplies and clients. The CEO highlighted efforts to diversify clients, with no single client exceeding 35% of revenue. On the supply side, Coreweave is also diversifying data center providers, with no single provider exceeding 20% of its power delivery. The company is also building its own data centers and developing internal expertise to mitigate future delays.

Japanese Equities and Corporate Earnings

Japanese stocks are showing resilience, supported by strong corporate earnings. Despite downside pressure on SoftBank due to its NVIDIA stake sale, the broader market is performing well. Companies like Sony and Toyota have reported strong earnings, though some automakers, like Nissan, are facing expected losses. The Topix is showing gains against the Nikkei, indicating a potential shift towards value stocks.

Conclusion and Key Takeaways

The transcript highlights a complex and dynamic global economic landscape. Key themes include the ongoing impact of the US government shutdown on data availability and Fed policy expectations, the significant capital flowing into AI and its implications for tech valuations, and the evolving dynamics of currency markets. Geopolitical tensions remain a concern, while emerging markets present opportunities for tactical exposure. The rise of digital assets and agentic commerce signals a transformative period for the financial and commerce sectors. Companies are navigating supply chain challenges and strategic pivots to adapt to these evolving trends.