The yield on the 10-year Treasury note ended the week at about 4.73%, while the 30-year yield stood near 5.27%, according to market data reported by The Wall Street Journal (WSJ). Both remain close to their highest levels in years. The latest rise came despite the Treasury Department’s decision to increase its purchases of outstanding long-dated government bonds in an attempt to steady the market.

The intervention briefly pushed yields lower, but the relief did not last. Investors quickly returned their attention to the forces driving the sell-off: persistent inflation, heavy government borrowing, geopolitical risks and uncertainty over the Federal Reserve’s future interest-rate path.

The episode highlights a growing problem for Washington. The US government can influence the supply and maturity of Treasury debt, but it cannot easily dictate the return investors demand to hold it. As deficits expand and the stock of federal debt rises, investors increasingly want compensation for inflation and fiscal risk.

That pressure is becoming more significant as the national debt has passed USD 40 trillion for the first time. Reuters reported this week that the milestone is intensifying concern over the government’s rising interest bill, which is already competing with major federal spending programmes.

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In a blog published on Monday (August 17), ECB researchers said historical experience from technological revolutions pointed towards a boom-bust pattern in asset prices. They compared the current AI enthusiasm with the railway boom of the 19th century, the expansion of electricity and radio in the 1920s and the dot-com boom of the 1990s.

The warning comes as investors continue to pour money into companies expected to benefit from AI. US equity valuations, measured by the cyclically adjusted price-to-earnings ratio, are close to historical peaks, while the so-called Magnificent Seven — Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla — have become increasingly important to global indices.

The ECB’s argument, however, is more nuanced than simply calling the AI boom a bubble. It said a correction could occur even if current valuations are rational and AI proves highly successful.

Early in a technological revolution, uncertainty is concentrated among individual companies and can be diversified across the wider economy. As AI adoption becomes widespread, that uncertainty becomes economy-wide. Investors may then demand a higher risk premium, putting downward pressure on valuations even while AI continues to increase corporate cash flows.

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ANZ, Deutsche Bank, RBC Capital Markets, and TD Securities have emerged as the joint lead managers on the transaction.

The three-year and five-year bonds could be reportedly issued with fixed or floating rates, while the 10- and 20-year bonds would be issued with fixed rates.

Alphabet, earlier this month, raised USD 25 billion in dollar bonds following an almost USD 85 billion equity capital raise in June. The tech giant’s heightened market movements come amid its global peers increasingly moving towards capital markets to fund their massive AI spending, after typically relying on their large cash reserves to fund investments.

The ‌firms ⁠are expected to spend more than USD 730 billion this year primarily on AI, and the outlay is already squeezing cash flows. Alphabet posted its first ever negative free cash flow in its second-quarter report in late July.

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The chipmaker said it had struck partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to create “compute financing platforms” aimed at funding data centres, AI factories and other infrastructure required to support the rapid expansion of AI.

The USD 500 billion is not committed funding or money that has already changed hands. It represents the potential amount the platforms could mobilise over time, with the companies having signed memorandums of understanding and final agreements still to be concluded.

At the heart of the initiative is Nvidia’s attempt to establish its graphics processing units (GPUs) as an investable asset class. The company argues that its chips are widely used, transferable and capable of generating predictable economic returns, allowing lenders to provide financing against the hardware.

“In AI, compute is revenue,” Nvidia chief executive Jensen Huang said, describing computing capacity as a critical form of infrastructure.

Goldman Sachs said its role would include creating a market for credit backed by Nvidia compute, effectively allowing the chips to serve as collateral for loans.

The move comes as technology companies pour unprecedented sums into AI. Major Nvidia customers, including Microsoft, Amazon, Google, Meta, OpenAI and Anthropic, have collectively spent more than USD 1 trillion on AI projects and infrastructure over the past three years, with spending expected to rise further.

The new financing could help AI companies and cloud operators build more data centres and acquire the chips needed to power increasingly demanding models and services.

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Thirteen such companies listed in the first half of this year, against eight in the previous three years put together. Between them, A+H and specialist technology deals accounted for more than 70% of everything raised.

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Revenue for the quarter ended June 30 came in at USD 7.81 billion, up 92% from USD 4.1 billion a year earlier and roughly USD 900 million ahead of the USD 6.93 billion consensus.

President Gwynne Shotwell noted 78 Falcon launches in the first half and 1,041 tonnes delivered to orbit, most of it the company’s own hardware.

Beyond that sits mobile. Starlink has struck direct-to-cell partnerships with SoftBank, NTT DoCoMo and Spark New Zealand, and the FCC has cleared the transfer of EchoStar spectrum, which Shotwell called a foundational advantage.

Satellites capable of a standalone service are targeted for 2027, with first customers by the end of that year and an explicit ambition to become a fourth US carrier.

American telecom shares fell on Wednesday morning. Shotwell also put a crewed lunar landing in 2028, and Musk repeated a USD 100 billion annualised revenue run rate by December and USD 1 trillion of annual revenue by 2030, a year earlier than previously signalled.

Every item on that list is capital before it is cash flow, which is precisely the tension the quarter exposed.

What the analysts are saying
Deepwater Management’s Gene Munster was the loudest bull, posting on X during the session that the market was “missing the point”.

The rest of the Street scattered. Morgan Stanley’s Adam Jonas has stayed Overweight with a USD 300 target on the view that the AI business is undervalued. Piper Sandler trimmed to USD 140 from USD 156 and Wells Fargo to USD 215 from USD 230, while Bank of America turned more constructive and UBS reiterated a buy.

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Goldman Sachs estimates that hedge funds returned an average of 7% net in the six months to June, comfortably ahead of the ten-year first half average of 4.1%.

Allocator level numbers were stronger still. Institutional investors reported average hedge fund portfolio returns of 7.3%, while private capital investors, including family offices and private banks, came in at 8.8%.

Only the first halves of 2020 and 2021 have been better, and this marks the sixth consecutive half year in which the industry has beaten its long run average.

That is a striking result given how the period actually felt. Equity markets sold off for five straight weeks in February and March, dropped sharply again in early April, then staged the best quarter since 2020.

Anyone who simply held on finished ahead. The interesting question is how hedge funds, which are supposed to earn their fees in exactly this kind of environment, actually made the money.

The AI trade became a rotation rather than a bet
The headline driver is artificial intelligence, but the detail matters more than the label. Goldman’s assessment is that managers have spent the past few years moving methodically through the AI supply chain rather than sitting on one crowded position.

Exposure travelled from semiconductor manufacturers to power infrastructure and data centres, and over the last twelve months shifted decisively towards memory stocks.

That rotation shows up in the positioning data. Hedge fund allocations to semiconductor shares climbed from around 10% of net equity exposure early in the year to as much as 24% in June, before easing back to 18%. Goldman characterised the pullback as a reset rather than a retreat.

Managers were also more selective within the megacap complex than the word “boom” suggests. Hazeltree’s first half crowding report, drawn from anonymised positioning across more than 600 global funds and roughly 16,000 securities, found continued heavy long exposure to the largest technology names, with Alphabet, Apple and Meta attracting stronger long interest over the six months.

Amazon saw weaker long positioning and heavier shorting. Short interest in Nvidia rose even as long exposure to semiconductors broadly increased, which is a fairly clear signal that funds were expressing views on winners and losers inside the theme rather than buying the theme wholesale.

Dispersion did the heavy lifting
Equity long/short funds returned an average of 12.9% in the first half and, according to Goldman, had already passed their record 2025 alpha by the end of June. The reason is technical rather than directional.

Single stock volatility was unusually high while correlation between individual stocks stayed low, which is close to the ideal environment for a stock picker. Technology, media and telecoms specialists benefited most, but consumer focused funds nearly doubled their returns year on year.

The flip side is brutal. Hedge Fund Research found the top decile of managers in its Fund Weighted Composite Index returned an average of 36.4% while the bottom decile lost 8.2%, a spread of 44.6 percentage points against 30.1 points in the previous quarter. The 7% industry average is a midpoint between outcomes that had almost nothing in common.

Context helps here. A passive 60/40 portfolio returned 5.7% over the same period, helped by an equity rally that offset softer fixed income, while the S&P 500 closed the half up close to 10%. On a headline basis, most hedge funds did not beat the index.

That is the wrong comparison for an industry that sells risk adjusted returns and low correlation, but it is the comparison allocators keep making, and it is why the alpha figures matter more to the sector’s pitch than the raw performance numbers do.

Trading the tariff calendar rather than the politics
The trade shock of the year arrived on February 20, when the US Supreme Court ruled six to three in Learning Resources v Trump that the International Emergency Economic Powers Act does not give the president authority to impose tariffs. Duties covering roughly 70% of the American tariff architecture were terminated four days later.

Within hours the administration invoked Section 122 of the Trade Act of 1974, imposing a flat 10% global surcharge for a statutory maximum of 150 days.

The Court of International Trade ruled against that measure on May 7, the decision went to appeal, collections continued, and the authority lapsed on July 24. Expedited Section 301 investigations and a widening set of Section 232 actions are now being used to rebuild the wall.

For hedge funds, the value was in the mechanics rather than the headlines. The dates were knowable, the statutory limits were knowable, and the sequencing of legal challenge, replacement and expiry created a calendar that could be traded.

Around USD 166 billion in collected duties became a live refund question, turning importer balance sheets into event driven and special situations material.

Sector relative value trades opened up between companies with tariff exposure and those without, and each legal turn refreshed the single stock dispersion that stock pickers were feeding on.

Looking through the Iran war, up to a point
The geopolitical shock was larger. American and Israeli forces struck Iran on February 28, killing Supreme Leader Ali Khamenei and senior military figures. Retaliation spread across the Gulf, war risk insurance seized up, and more than 200 oil and LNG vessels anchored outside the Strait of Hormuz.

Brent broke above USD 80 within days and pushed towards three figures during the worst of it. A fragile ceasefire in the summer was punctured by fresh American strikes in July.

Equity focused funds largely traded through it. Hazeltree’s data shows managers maintained their preference for equities and kept adding technology exposure while markets swung, on the view that the AI capital cycle was not a function of the Gulf.

Macro desks did not get off so lightly. Interest rate volatility around the Iran war produced losses that many discretionary macro managers had not fully recovered by midyear, making the strategy the clearest laggard of the half.

Quantitative managers also found the macro backdrop difficult despite continued strong inflows, and systematic long/short strategies suffered their worst five day stretch since December 2023 in late June as positions unwound.

Small funds humbled the giants
Among the large multi-strategy platforms, Point72 finished the half at 14.5% and Citadel’s tactical trading fund at 14.3%, with Citadel’s equities fund at 11.2% and its flagship Wellington fund at 5.7%.

Millennium returned 10.5% and Schonfeld’s flagship 8.4%, with its fundamental equities vehicle at 12.3%. Qube Research and Technologies’ Torus fund managed 18.6%.

Smaller specialists went further. Asia focused equity funds TAL China Focus and Keystone returned 95.1% and 62.7% respectively, Whale Rock gained 72.5%, CastleKnight 42.3% and Melqart Opportunities 29.1%.

Money is following the numbers
Global hedge fund capital reached a record USD 5.6 trillion in the second quarter, a fifteenth consecutive quarterly increase.

Assets grew by USD 409.3 billion in the quarter, the largest rise ever recorded and well past the previous high of USD 290.4 billion set in late 2020.

Every major strategy attracted fresh capital in the first half, the first time that has happened in five years.

Demand looks durable. In a July survey of 341 allocators overseeing more than USD 1.5 trillion in hedge fund exposure, close to half planned to increase allocations in the second half against just 3% planning cuts, with net demand for the asset class at a record and running ahead of private equity and real estate.

The second half will test whether that confidence is earned. Semiconductor exposure remains elevated, the Section 301 replacement tariffs are still landing, and American forecasts suggest Hormuz traffic may not normalise until early 2027. Dispersion has been generous to the industry this year. It cuts in both directions.

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By the close on July 22, investors betting against SpaceX were sitting on USD 15.5 billion of paper profit. The company had been publicly traded for six weeks.

Nothing about the listing pointed that way. SpaceX priced 555.6 million shares at USD 135 on June 11 and raised USD 75 billion, rising to USD 85.7 billion once underwriters took up their overallotment. It was the largest flotation ever completed anywhere, more than double the USD 29.4 billion Saudi Aramco raised in 2019.

The stock opened at USD 150 the next morning and closed its first session 19% above the offer price. Four days later it touched USD 225.64 intraday, valuing the rockets-to-AI conglomerate at roughly USD 2.1 trillion and making Musk the world’s first trillionaire.

The turn
The reversal since has been close to total. SpaceX closed at USD 113.50 on Monday (July 27), a record low, before recovering to USD 116.41 the following session. That leaves it around 48% below the June peak and some 14% under the price at which shares were sold to the public.

Retail investors who took allocations at USD 135 are under water, and anyone who bought at the top has lost close to half their money. SpaceX and Tesla together have shed USD 1.2 trillion of market value in July alone.

The timing of that record low is the part the bulls should find uncomfortable. It came days after Starship Flight 13, a near-flawless test and the clearest operational win the company has had since listing. The stock fell anyway.

Short sellers, meanwhile, have been adding rather than banking. Bloomberg put their paper gains at USD 3.88 billion on July 15. Ortex Technologies had it at USD 8.7 billion the following day, when the stock first traded through its offer price, and at USD 15.5 billion by July 22. Almost USD 12 billion arrived inside five sessions.

Reading the position data
The build-up has been fast. Short interest sat at roughly 40 million shares at listing, between 5% and 7% of tradable stock and unremarkable for a hot debut. By end-June it was near 83 million. S3 Partners now counts more than 206 million shares short, about 32% of the float and roughly USD 25 billion of notional exposure.

Ortex reads it slightly lower at close to 196 million, and adds that around 49% of the free float is out on loan. Peter Hillerberg, who co-founded Ortex, called the speed of it unusual for a stock less than a month old.

Anyone quoting those numbers should know where they come from. FINRA’s settlement data, the official record, showed roughly 110 million shares short at the end of June, close to half the vendor estimates. The gap reflects method rather than error.

The official figures appear twice monthly and with a lag, while Ortex and S3 model stock-lending flows nearer to real time. It also means SpaceX does not show up on the standard most-shorted screens, which rank on FINRA data. Groupon leads that table at 59.1% of float, ahead of ImmunityBio and RH.

Measured in dollars rather than percentages the comparison is not close. At roughly USD 25 billion of notional exposure, the SpaceX short book is worth more than most of that list combined, and has been widely called the most heavily shorted newly listed stock Wall Street has tracked.

Why the float made it possible
Most of what has happened traces back to one decision about supply.

SpaceX released fewer than 5% of its shares into public hands at listing. A company carrying a USD 2 trillion valuation was trading on a base of a few hundred million shares, and into that thin base came buyers with no discretion.

FTSE Russell added the stock to its US indices in late June, and Nasdaq moved it into the Nasdaq-100 on July 7 under revised rules for new listings. Every tracker fund and ETF benchmarked to those indices had to buy, whatever the price.

That is a good environment to sell into. It is a much worse one to own, because the price it produces is not really a price. It is a queue.

What followed was the more considered part of the trade. Rather than a single cliff-edge expiry, SpaceX adopted a staggered unlock in tranches of roughly 7% at days 70, 90, 105, 120 and 135 after listing.

The first meaningful wave lands two trading days after the maiden earnings report, releasing up to 911.5 million shares unconditionally on 6 August.

A further 455.8 million, worth about USD 62 billion, unlock only if the stock closes at or above USD 175.50 on five of the ten sessions before results. Near USD 116 that is effectively dead, which points to the smaller tranche being the one in play.

For a short seller this is close to ideal. The supply event is dated, the size is disclosed and the arithmetic is public.

The balance sheet the prospectus only hinted at
Two disclosures in the fortnight after listing did the rest of the damage, both concerning commitments the company had already made.

On June 22, ten days after the debut, SpaceX launched its first bond sale, pricing USD 25 billion across five tranches maturing between 2031 and 2056. The paper is investment grade at Moody’s, Fitch and S&P, and the proceeds repay in full the bridge loan used to buy xAI in February.

That bridge had a hard maturity of September 2027, so the refinancing was always coming. The shares fell 16% regardless. What unsettled the market was not fresh borrowing so much as confirmation that SpaceX had entered public life carrying debt the equity story had glossed over.

Four trading days after listing the company had also exercised its option to acquire Cursor for USD 60 billion, entirely in stock, diluting holders by around 3.4% and signalling that newly minted equity would be spent as acquisition currency straight away. The deal should close in the third quarter.

Against that, a Starship launch abort in mid-July that took roughly USD 100 billion off the market value looks almost incidental. Borrowing the stock has cost about 1.95% throughout, cheap enough that none of these views had to be right quickly.

The other side
None of which makes the position comfortable.

A stock with 32% of its float short on vendor numbers, and half that float lent out, is crowded, and crowding is its own risk. Ortex calculates that every one-dollar move shifts the value of outstanding short positions by more than USD 300 million.

Should sentiment turn, the bears must buy back stock they do not own, out of a float that is small for the same reason it was easy to attack. Hillerberg has described the position as a considerable amount of fuel if it tips into a squeeze.

The bull case has not gone quiet. Morgan Stanley’s Adam Jonas has reiterated a buy with a USD 300 target. Consensus across 31 analysts surveyed by TipRanks sits at USD 235.18, far above the market but drifting lower all month, so read it as a direction rather than a destination.

Cathie Wood’s ARK funds have put close to USD 115 million into the stock in July alone. Musk posted on microblogging platform X (formerly Twitter) that the survival probability of firms holding significant short positions in SpaceX is very low, a remark that costs nothing to make and has occasionally proved expensive to ignore.

August
SpaceX reports quarterly results as a public company for the first time after the US close on August 4. Two days later, up to 911.5 million shares come free.

Those results will be the first look at how the three businesses inside the company perform against one another. SpaceX reports across Space, Connectivity and AI, the last arriving with xAI and covering Grok, X and the compute behind them.

Analysts have modelled Starlink economics and frontier-model spending from the outside, with no segment history to work from. Both the valuation argument and the debt argument rest on figures nobody has seen.

Six weeks in, the bears have been right about the valuation and right about the timing, which is a rarer combination than it sounds. What they have not yet had is a day when the news went the other way and the market cared.

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A float in September or October is the widely reported working assumption, although the pace of the past fortnight has put an August debut within reach. Goldman Sachs, Morgan Stanley and JPMorgan are joint sponsors.

The number that stands out is the valuation. Shein was worth USD 98.2 billion after a private round in 2022 and USD 64 billion after another in 2024.

It is now seeking USD 40 billion to USD 50 billion, and some shareholders have reportedly pushed for a figure closer to USD 30 billion. A draft prospectus published in late July explains the argument.

What Shein actually does
Shein sells very cheap clothing, and a great deal else, straight to shoppers through an app and website. It was founded in China in 2012 by Sky Yangtian Xu, who remains chairman and chief executive, and is now headquartered in Singapore.

It owns almost no factories. Instead it runs a network of mostly Chinese suppliers, feeds them live demand data and orders tiny production runs.

The listing document calls the system large-scale automated test and reorder, or LATR. New products typically launch in batches of 100 to 200 units, response is tracked in real time, and anything that sells can be restocked in as little as five days. Anything that does not is quietly dropped.

That machinery served about 273 million active customers across roughly 160 markets in 2025, up from 186 million in 2023. Clothing remains the core, although its share of revenue has slipped from 68.8% in 2023 to 63.8% in 2025 as beauty, homeware and small electronics have grown.

A third-party marketplace now sits alongside Shein’s own label, and service revenue from those sellers has jumped from USD 868 million in 2023 to USD 4.7 billion in 2025.

Growth that ran into a wall
The growth was real. Revenue climbed from USD 32.1 billion in 2023 to USD 38.8 billion in 2024 and USD 41.9 billion in 2025, a compound annual rate of 14.2%. Shein overtook H&M on revenue and closed in on Inditex, the owner of Zara, in barely a decade.

Then the rules changed. In May 2025 Washington scrapped the de minimis exemption for parcels from China and Hong Kong, and by that August had removed the waiver for every country.

Shipments worth under USD 800 had for nearly a decade entered the United States duty free with light customs scrutiny. A 2023 congressional report estimated Shein and Temu were together behind more than 30% of all such packages arriving daily. The exemption was not a bonus. It was part of the model.

Europe followed. From 1 July 2026 the European Union scrapped its own €150 duty waiver, replacing it with a flat 3 euro charge per item type, an interim measure running to 2028 while a permanent system is built. Nearly 5.9 billion low-value items entered the bloc duty free in 2025, more than four times the 2022 figure.

The financials investors will pick over
Growth has now stalled. First-quarter revenue in 2026 rose just 1.1% to USD 9 billion. Operating profit fell 26% to USD 258 million as marketing and fulfilment costs climbed against flat sales, dragging the operating margin to 2.9% from 3.9%. Net income for 2025 had already fallen 39% to USD 2.06 billion.

The headline USD 99 million quarterly loss is less alarming than it looks in isolation. Most of it stems from a USD 328 million non-cash fair-value charge on convertible redeemable preferred shares, which convert to ordinary stock at listing. Strip that out and the company is still profitable.

The harder problem is the underlying trend, a business earning under three cents of operating profit on every dollar of sales while its two largest markets tighten import rules simultaneously.

There is a second signal. Customer numbers keep climbing, but each shopper still places about four orders a year, as in 2023, slipping to 3.9 in the twelve months to March 2026. Shein is recruiting customers, not getting more out of them.

Europe is now the biggest market
The geographic shift is the filing’s most consequential detail. Europe overtook the United States as Shein’s largest market in 2024, with revenue rising from USD 10.2 billion in 2023 to USD 14.8 billion in 2025, or 35.4% of the total. American revenue fell to 24.1% in 2025 and dropped a further 14% to USD 2 billion in the first quarter of 2026.

Europe is not simply a fallback. Shein reported 155.7 million average monthly users across the bloc for the six months to January 2026, comfortably ahead of Temu, with France, Spain and Italy supplying the largest user bases and Germany the most revenue.

Even here the pace has eased, with user growth slowing to 6.9%. The awkward part is that Europe is now the market applying the tightest regulatory pressure, and the euro 3 duty landed weeks before the prospectus.

The rest of the world now accounts for the largest slice of all at 40.5%, or USD 16.9 billion. Brazil is the standout, although the local manufacturing programme Shein began there in 2023 has been bumpier than planned, with many factories walking away over pricing and turnaround demands.

What Shein has that its rivals do not
Against Temu, the advantage is depth rather than breadth. Temu runs a managed marketplace matching existing inventory to buyers. Shein sits inside the production process itself, which tightens control over design, cost and restocking, and locks suppliers in.

Against Zara, H&M and Primark, the advantage is inventory risk. Traditional retailers commit to seasons months ahead. Shein commits to a few hundred pieces.

Both advantages are built on the Guangdong supplier cluster, and both are harder to replicate abroad, as Brazil has shown. The field is crowding regardless, with AliExpress, Amazon’s discount tier and TikTok Shop chasing the same young, mobile-first shopper. What still separates Shein is that it is a fashion platform first.

Five things to watch in the IPO
It’s important to look at margins over revenue. At 2.9%, the operating margin leaves almost no cushion for further duty increases.

Pricing discipline in the book. Analysts widely doubt Shein will secure much uplift on its 2024 private valuation of USD 64 billion.

IDG Capital and HSG, the rebranded Sequoia Capital China, are the two largest institutional holders at 7.9% and 5.8%, ahead of Tiger Global, General Atlantic, Boyu, Coatue and DST. A soft debut would sting all of them.

Governance is also worth keeping an eye on. Donald Tang, previously executive chairman and the public face of the company in Washington and London, does not appear among directors or senior management.

Regulators in Europe are another hurdle. The European Commission opened Digital Services Act proceedings against Shein in February 2026 over illegal product listings and addictive design. France moved to suspend the platform in late 2025. Mandatory product identifiers arrive in November 2026.

Whether growth outside the West holds is also a big question. Europe and the United States together make up more than half of revenue and both are slowing, leaving the near-term story to Latin America, the Middle East and Asia.

Will US-China tensions derail it
Not the listing itself. That is the point of Hong Kong. New York and London proved impossible precisely because of political scrutiny, and a Hong Kong float sidesteps the American disclosure regime entirely. The trade-off is a narrower investor base and a valuation that reflects it.

The business is a different matter, and the exposure is severe. Shein does not control the rules that set its cost base. The current US-China truce, which cut the effective tariff rate on Chinese goods from around 41% to 31%, runs only to November 10 2026, weeks after Shein expects to list.

Both sides have been working to preserve it, including talks on agricultural tariffs in July, but a lapse would hit Shein’s American unit economics immediately.

The deeper risk is that de minimis repeal is not a US-China issue at all. Europe has done the same thing for its own reasons, and Britain follows in 2028. Shein’s answer is to push more inventory into local warehouses, expand its marketplace and lean on markets where tariffs are not yet the binding constraint.

Investors will decide within weeks whether that answer is worth USD 40 billion.

The post IF Insights: Shein’s Hong Kong IPO faces its hardest sell yet appeared first on International Finance.

The report further highlighted that Saudi Aramco remained the single largest dividend payer in the global index, underlining the Kingdom’s importance in global shareholder returns.

“Global dividends rose to USD 424.5 billion in the first quarter of 2026, up 10.1% year-on-year. Dividend growth was broad-based, with meaningful increases across North America, Europe, Japan, and the United Kingdom, despite a noisy macroeconomic backdrop,” Janus Henderson said.

The Middle East distributed USD 29.2 billion in dividends during the quarter, with underlying payouts rising 4.0% year-on-year.

Janus Henderson’s new index further expands the global asset management group’s long-running dividend research to include share buybacks, providing a more complete picture of how the world’s largest companies return capital to shareholders. It also introduces dedicated analysis of Middle East markets. In Q1, global buybacks reached USD 425.7 billion, marginally ahead of dividend payments, but fell 3.1% from the same period in 2024, suggesting companies are becoming more selective in their approach to shareholder returns.

“The first quarter showed a divergence between dividends and buybacks. Dividend payments accelerated, supported by resilient corporate earnings, while buybacks softened against a backdrop of higher-for-longer interest rates, trade uncertainty, and geopolitical risk,” Janus Henderson noted.

North America continued to dominate global shareholder returns, with the United States alone contributing USD 183.5 billion in dividends, accounting for 46.3% of the index total. Uncle Sam also repurchased USD 266.7 billion of shares, making the world’s largest economy by far the largest market globally for both dividends and buybacks. US dividend growth was broad-based across sectors, with technology, financials, and energy among the key contributors.

“Europe, excluding the United Kingdom, paid USD 67.4 billion in dividends in Q1, up 35.5% year-on-year, boosted by currency and timing effects. Switzerland was the continent’s largest payer, distributing USD 27.3 billion, followed by Denmark at USD 9.4 billion,” the report said.

“The Middle East distributed USD 29.2 billion in dividends during the first quarter, with underlying dividend growth of 4.0% year-on-year. Headline dividends were 5.0% lower, primarily because of calendar effects rather than weaker corporate distributions,” it added further.

While Saudi Arabia was the region’s largest dividend payer, Qatar ranked second by distributing USD 2.0 billion in dividends. The UAE paid USD 1.7 billion in dividends during the quarter. While headline UAE payouts were lower than a year earlier, Janus Henderson cited the timing of the Dubai Islamic Bank’s dividend payment as the main reason behind it, instead of blaming the weaker underlying dividend activity.

“Financials remained the largest contributor to global dividends in Q1, distributing USD 90.8 billion. The sector also led global buybacks, with USD 110.7 billion of repurchases, accounting for more than a third of the index total,” Janus Henderson said.

“Basic materials saw the strongest dividend growth of any industry, with payouts rising 47.1% over the period surveyed. This was driven by elevated demand for critical minerals such as copper and lithium, which are important inputs for data centers, semiconductors, and AI infrastructure,” it added further.

Technology provided the largest amount of the shareholder returns by distributing USD 43.7 billion in dividends. The sector also carried out USD 66.6 billion of buybacks in Q1, underlining the continued importance of major technology companies to global capital returns.

Janus Henderson forecasts global dividend growth of 8.3% in 2026, up from 6.8% in 2025. By contrast, global buybacks are expected to decline 1.1% this year, after rising 6.1% in 2025.

“The outlook for dividends remains supported by resilient earnings, although Janus Henderson notes that higher-for-longer interest rates, geopolitical risk, and pressure on consumer-facing sectors remain important risks. Buybacks are expected to remain more cyclical, providing companies with flexibility if conditions deteriorate,” the agency noted.

Jane Shoemake, Client Portfolio Manager on the Global Equity Income Team at Janus Henderson, said, “Amidst what feels like an increasingly uncertain macro backdrop, the surprise has been the strength of earnings around the world. Those earnings almost always result in higher dividends, and that’s exactly what we’re now seeing across a range of industries and regions.”

“Buybacks add another layer to the story. The absolute level of repurchases remains substantial, broadly in line with dividends in Q1, but the modest year-on-year decline also shows why they should be treated differently. Dividends are generally long-term board decisions based on sustainability, while buybacks are more discretionary and cyclical in nature. In that sense, dividends remain the stronger signal of confidence, while buybacks act as a more flexible shock absorber,” she concluded.

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