Warren Buffett favourite BYD to hike EV prices

Today's top stories include a look at price increases at electric vehicle maker BYD, how Tencent’s decision to add Korean content to its streaming platform is boosting the country's film distributors, and how FTX’s collapse is impacting other crypto firms. Elsewhere, the S&P 500 is predicted to end the year flat, while China is expected to deliver growth.

BYD hikes EV prices

Warren Buffett favourite BYD [1211.HK] is hiking the price of its electric vehicles (EVs) and hybrids from 1 January as a result of rising input costs and China curtailing its EV subsidy programme, which ends on 31 December. This is in stark contrast to Tesla [TSLA], which slashed prices in the country by up to 9% last month. Meanwhile, General Motors [GM] is planning to release 15 EV models in the country by 2025.

China streams Korean content again

Chinese streaming platform Tencent [0700.HK] Video has started showing Korean content after a six-year suspension. Andrew Gilholm, director of analysis for China and north Asia at Control Risks, told Bloomberg that the move is “another ‘green shoot’ that will raise hopes Beijing intends a foreign policy reset in Xi’s third term”. However, in the scheme of things, it’s “a very low-cost, low-impact kind of gesture”. Shares in Korean film distributor Showbox [086980.KQ] closed up 15% yesterday.

China set for growth despite risks

Xi Jinping’s re-election sent shudders through China’s tech stocks as investors remain cautious about the regulatory overhang. Covid-19 cases are rising and lockdowns have reached a record level. Nonetheless, Goldman Sachs believes that China could be the only major economy to generate upward growth next year, reported Barron’s. The iShares China Large-Cap [FXI] has climbed over 20% this month, and holds shares of the country’s top companies.

S&P 500 to end 2023 flat

David Kostin, chief US equity strategist at Goldman Sachs, has forecast the S&P 500 to end 2023 flat. It expects the index to close next year at 4,000, a 1% increase from Monday’s closing price. The Fed’s tightening should end in May, but failing to achieve a soft landing will increase the risk of recession. In a note seen by CNBC, Kostin advised that “investors should remain cautious”.

FTX collapse spills over

The FTX [FTT-USD] collapse has spooked the broader crypto industry. Although it was a result of risk management failures rather than problems with the underlying blockchain technology, analysts are expecting contagion for several weeks to come. Needham analyst John Todaro wrote in a note to clients seen by CNBC that crypto exchanges like Coinbase [COIN] and SoFi [SOFI] will come under pressure. Expect lower cryptocurrency prices and transaction volumes amid the increased risk, Todaro added. 

Australia’s carbon transition gathers pace

Australia is one of the biggest consumers and exporters of coal in the world. The country has been slow to shift away from fossil fuels and received further criticism at the recent COP27 meetings over a mismatch between its verbal commitments and actual policies. There are signs that the energy industry is changing. Activist investor Mike Cannon-Brookes has successfully shaken up AGL’s [AGL.AX] board as he bids to accelerate the firm’s carbon transition.

Esports receives EU recognition

The EU parliament recently voted to recognise and fund esports, which is likely to drive innovation in Europe’s games industry. While the resolution won’t impact video game companies directly, it’s a clear sign that esports is now being taken seriously. In the near-term, video game subscriptions and live services, such as Electronic Arts’s [EA] FIFA Ultimate Team, could be under pressure as consumers reduce their discretionary spending.