FinanceMonthly July Edition
July Edition
31 July 2024
HSBC names Jonathan Bingham as interim CFO -
HSBC Holdings on Wednesday named Jonathan Bingham as its interim group chief financial officer, effective September 2. The appointment comes two weeks after the 160-year-old bank appointed finance head Georges Elhedery as its new Chief Executive Officer A process to identify the next permanent group CFO is underway, the bank said in an exchange filing.
UBS sues Bank of America for $200 million over crisis-era mortgage costs -
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UBS sued Bank Of America for $200 million on Wednesday, saying the second-largest U.S. bank refused to cover its legal costs related to risky mortgages issued before the 2008 global financial crisis. The Swiss bank bundled mortgages from Countrywide Financial, which Bank of America bought in 2008, into securities, and said Countrywide agreed to indemnify it against claims that the mortgages were underwritten poorly or fraudulently. UBS reached an $885 million settlement in 2013 with the U.S. Federal Housing Finance Agency and a confidential settlement in 2016 with the Federal Home Loan Bank of San Francisco over Countrywide's loans. It said that despite extended talks with Bank of America about indemnification, including for about $53 million of legal costs, the Charlotte, North Carolina-based bank "ultimately refused to comply with its indemnification obligations."
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30 July 2024
US-listed crypto stocks retreat following Trump-fueled spike -
Shares of New York-listed crypto firms fell on Monday as bitcoin dipped after breaching the $70,000-mark for the first time since mid-June. The sell-off erased gains from earlier in the session, when optimism fueled by Republican presidential candidate Donald Trump's pro-crypto speech lifted stocks. The volatile cryptocurrency has often seen pullbacks after reaching key milestones as investors book profits. The industry, however, cheered Trump's promise of friendlier regulations. "Any 'Trump trade' into U.S election should include greater allocation to bitcoin and bitcoin-linked stocks," Bernstein analysts wrote in a note.
Buffett cuts Bank of America stake, sales top $3 billion -
Warren Buffett's Berkshire Hathaway sold more Bank of America shares, boosting sales to more than $3 billion this month, taking profits after a big run-up in the second-largest U.S. bank's stock price. Berkshire sold 18.4 million Bank of America shares for $767 million between July 25 and 29, according to a Monday night regulatory filing. It has sold 71.2 million shares for $3.05 billion since July 17, reducing its holdings in the Charlotte, North Carolina-based lender by 6.9% to 961.5 million shares. Buffett's conglomerate remains Bank of America's largest shareholder, with a 12.4% stake worth $39.5 billion as of Monday's close. It must report sales until the stake falls below 10%. Berkshire and Bank of America declined to comment on Tuesday. Shares of Bank of America rose as much as 1.9% in morning trading, but have fallen since Berkshire's selling began. Bank of America's stock price has risen by nearly two-thirds since late October. The stock trades at 1.2 times book value, after trading below book value for most of the last decade.
29 July 2024
US stock turbulence throws spotlight on Big Tech's valuations -
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A bruising selloff in U.S. stocks is putting a sharper focus on valuations of the tech names such as Nvidia and Microsoft that have driven markets higher for most of this year. Despite a recent pullback, the S&P 500 tech sector s trading at 29.5 times 12-month earnings estimates, near a two-decade high reached earlier this month. The overall market is also elevated historically, with the benchmark S&P 500 index trading at 20.7 times forward estimates, compared to its long-term average of 15.7, data from LSEG Datastream showed. "Markets today are pretty expensive to us at a broad level," said Philip Straehl, chief investment officer, Americas, at Morningstar Wealth.
Britain shakes up listings rules to attract investment -
Britain's biggest reform of company listing rules in over three decades takes effect on Monday on the London Stock Exchange, a measure intended to help it compete more effectively with New York and the European Union after Brexit. The reforms, part of government efforts to attract more private investment into the British economy, have divided opinion. Shareholders say their rights will be eroded, but supporters say the reform aligns Britain with practices elsewhere and will make London cheaper and more competitive for companies to raise cash and allow bigger risk appetite to boost.
28 July 2024
Mitsubishi Motors to join Honda-Nissan alliance as market share in US and China falls -
Japan's Mitsubishi Motors is set to join an alliance between Honda Motor and Nissan Motor, creating a tie-up between automakers with combined sales of more than 8 million vehicles, the Nikkei newspaper said on Sunday. Mitsubishi Motors, which is 34% owned by Nissan, will work with Honda and Nissan to finalize the details of their strategic partnership, Nikkei said, adding the three firms intend to standardize in-vehicle software that controls cars. Mitsubishi Motors declined to comment on the report, while a Nissan spokesperson would only say the report was not based on something either of the companies had announced. Spokespeople for Honda did not respond to a request for comment.
UltraTech to acquire 32.72 % additional stake in India Cement for ₹3,954 crore -
Leading cement manufacturer UltraTech will acquire an additional 32.72 per cent stake in India Cements Ltd from the promoters of the South-based company for ₹3,954 crore. The board of the Aditya Birla firm on Sunday approved the proposal to acquire the promoters' 32.72 per cent stake at ₹390 per share, UltraTech said in a regulatory filing on Sunday. It has entered into three share purchase agreements to acquire 32.72 per cent of the equity share capital of ICL from the promoter family led by Srinivasan N and Gurunath, along with the holding entities. After the completion of the ₹3,954 crore deal, UltraTech's stake in India Cements Ltd (ICL) will reach over 55 per cent, mandating it to go for an open offer as per the Sebi regulations.
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27 July 2024
Nasdaq says top shareholder Thoma Bravo to sell shares worth $2.8 billion -
Nasdaq said on Friday that private equity firm Thoma Bravo will sell 41.6 million shares in the transatlantic exchange operator through a secondary public offering. The announcement sent Nasdaq shares down 2.8% after the bell. Last year, Nasdaq struck a $10.5 billion cash-and-stock deal to buy fintech firm Adenza from Thoma Bravo, giving the private equity firm a sizeable stake in the exchange operator. Based on Nasdaq's last close, the offering will raise $2.79 billion for top shareholder Thoma Bravo and reduce its stake to 7.4%, or 42.8 million shares. Thoma Bravo currently has a nearly 14.9% stake in Nasdaq, according to LSEG data. After the stake sale, it will become the fifth-largest shareholder in the exchange. The exchange said Thoma Bravo's remaining shares in the company will be subject to an existing contractual lock-up until May 1, 2025.
Six banks settle European bond price fixing litigation in New York-
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Six banks including Bank of America and Citigroup agreed to pay $80 million to settle antitrust litigation in New York accusing them of conspiring to rig prices of European government bonds. A preliminary settlement with Bank of America, Citigroup, Jefferies, NatWest, Nomura was filed late Friday in Manhattan federal court, and requires a judge's approval. Investors led by three public pension funds accused the banks of having colluded, including in online chatrooms, to bid high prices at bond auctions to ensure a dominant market share, and then to sell the bonds at inflated prices to mutual funds, pension funds, insurers and other investors. The alleged collusion occurred between 2007 and 2012. All six banks denied wrongdoing in agreeing to settle.
26 July 2024
Metro Bank sells residential mortgage portfolio to NatWest for $3 billion -
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Britain's Metro Bank Britain's Metro Bank or up to 2.4 billion pounds ($3.1 billion) in cash, it said on Friday.
The sale is expected to reduce Metro's risk-weighted assets by approximately 824 million pounds, leading to an improvement in the British lender's Common Equity Tier 1 (CET1) ratio of about five basis points, its statement said. Metro Bank launched to challenge the dominance of the Britain's big banks in the wake of the global financial crisis, but struck a 925 million pound rescue deal last year and has since implemented cost cuts to heal its balance sheet. The bank said the sale of the mortgage portfolio was in line with its strategy to "reposition its balance sheet and enhance risk-adjusted returns on capital". However, Metro Bank said the mortgage book had been originated when interest rates were lower and it would realize a 105 million pound loss on completion of the sale.
G20 agree to work on Brazil's 'billionaire tax' idea, implementation seen difficult -
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The world's 20 biggest economies (G20) agreed on Thursday to work together to ensure the ultra rich are effectively taxed, in a declaration that seeks a balance between national sovereignty and more cooperation on tax avoidance. The declaration, which will be published on Friday, was a priority for Brazil, chairing talks of the G20 this year, whose leader Luiz Inacio Lula, a former factory worker, was pushing to include the "billionaire tax" on the G20 agenda. "With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed," the G20 tax declaration, seen by Reuters, said. "Cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices," it said. Brazil has spurred discussion of a proposal to levy a 2% wealth tax on fortunes over $1 billion, raising estimated revenue of up to $250 billion annually from 3,000 individuals.
25 July 2024
Logistics giant Lineage raises $4.44 billion in biggest IPO of 2024-
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Lineage - the world's largest operator of cold-storage warehouses, raised $4.44 billion in its U.S. initial public offering, setting it up for the biggest stock market debut globally this year, the company said on Wednesday. The Novi, Michigan-headquartered company priced just under 57 million shares in New York at $78 apiece, the upper end of its previously indicated range of $70 to $82. Earlier in the day, Reuters exclusively reported the pricing of the IPO, citing sources, and said that Lineage had initially planned to sell 47 million shares and sold more because of strong demand. The $4.44 billion IPO values Lineage at more than $18 billion and is the biggest since chip designer Arm's $4.87 billion offering last September. Its shares will begin trading on Nasdaq on Thursday.
BofA payments app for businesses handled record $500 billion by mid-year -
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Bank Of America's corporate clients approved a record $500 billion in payments through its CashPro app by mid-year, up almost 40% versus the same period in 2023, the company said in a statement on Thursday. Payments on the app are projected to exceed $1 trillion this year from $802 billion last year, BofA said. Banking giants are investing in apps that allow corporations to manage their money using tools that resemble those used by consumers on their phones and tablets. Banks aim to capitalize on surging payments revenues worldwide, which jumped to a record in 2022, according to a McKinsey report last year. Global payments revenues rose to more than $2.2 trillion in 2022, with commercial accounts generating 53% of the total, the report showed. "Payments are cool again," Mark Monaco, head of BofA's global payments solutions business, told Reuters in an interview earlier this year.
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24 July 2024
KKR-backed OneStream prices US IPO above range to raise $490 million -
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Financial software maker OneStream which is backed by private equity firm KKR priced its U.S. initial public offering (IPO) above its indicated range on Tuesday, raising $490 million, people familiar with the matter said. The company, whose software offerings assist organizations with tasks including planning, budgeting and forecasting, and its shareholders sold 24.5 million shares, priced at $20 each, the sources said, requesting anonymity as the discussions are confidential. The share sale values OneStream at $4.6 billion. OneStream had aimed to price its IPO between $17 and $19 per share. OneStream and KKR did not immediately respond to requests for comment. OneStream's IPO represents a climb-down from the $6 billion valuation at which the company raised funding from investors, including D1 Capital Partners and Tiger Global Management, in 2021.
Fortune 500 firms to see $5.4 billion in CrowdStrike losses, says insurer Parametrix -
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U.S. Fortune 500 companies, excluding Microsoft will face $5.4 billion in financial losses from the recent CrowdStrike outage, insurer Parametrix said on Wednesday.
CrowdStrike's faulty update to its security software crashed computers powered by Microsoft's Windows operating system, disrupting internet services across the globe and affecting a broad swathe of industries including airlines, banking and healthcare. Hatzor estimated that financial losses globally from the outage could total around $15 billion, as companies struggle to get their computers back up to speed. Global insured losses could total around $1.5-3 billion, Hatzor added.
23 July 2024
A Harris presidency would carry baton on financial industry crackdown -
A potential Democratic administration led by Vice President Kamala Harris would likely advance President Joe Biden's agenda of tough financial rules, an unwelcome prospect for Wall Street banks, crypto companies and other players that have chafed under the current administration.
Harris is the frontrunner to win the Democratic nomination after Biden exited the race on Sunday and endorsed her. While Harris has had a low profile when it comes to the administration's financial policies, her track record taking on Wall Street banks and voting against deregulation suggests she would continue with Biden's ambitious agenda, said analysts. "Harris is farther to the left than Biden, but the Biden administration has proven to be incredibly progressive, so there shouldn't be much daylight between a second Biden administration and a first Harris administration," Isaac Boltansky, director of policy research at brokerage BTIG, wrote in a note on Monday.
Barclays tries to slash UK investors' $720 million 'dark pool' lawsuit -
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On Monday asked London's High Court to more than halve a shareholders' lawsuit worth up to 560 million pounds ($720 million) accusing the British bank of misleading the market about its private "dark pool" trading platforms. Hundreds of institutional investors are suing after more than 2 billion pounds was wiped off Barclays' value in 2014, when New York's attorney general filed a complaint against the lender over a trading system known as "Barclays LX". The investors say Barclays misled its clients about Barclays LX – a "dark pool" trading venue where orders are not visible to other traders until they are executed – and that the bank did not publish relevant information to shareholders. Barclays settled the New York case in 2016, agreeing to pay a $70 million fine, admit violating securities laws, and install an independent monitor.
22 July 2024
France urges Europe to step up work on faster stock market settlements -
The Bank of France and the country's financial market regulator urged Europe on Monday to step up work on halving the time needed to settle a stock trade, which would allow Europe to catch up with Wall Street. The joint statement from the Bank of France and the AMF regulator concerned the so-called T+1 settlement cycle, which will cut the time needed to complete a stock trade on European exchanges to one business day - T+1- down from two at present. "The Autorité des Marchés Financiers (AMF) and the Banque de France call for a well-coordinated and efficient transition to a T+1 settlement cycle for transactions on securities across the EU," said their joint statement. EU officials have said legislation may be needed for this halving of the time required to settle a stock trade in the European Union.
Bank of England plans expanded repo facilities to avert money market crunch -
The Bank of England said on Monday that banks should get ready to make greater use of its repo facilities as it sells down its government bond holdings, and that it plans a major expansion of its current six-month repo operation. Repos, or repurchase agreements, allow banks to temporarily swap bonds and other collateral they own for cash from the central bank, helping to keep market interest rates in line with the bank's policy rate. "The point at which the banking system will actively need to obtain reserves, including directly from the Bank's repo operations is now firmly in sight," the BoE's Executive Director for Markets, Victoria Saporta, said in a speech in London to the Association for Financial Markets in Europe. Britain's central bank is reducing at a pace of 100 billion pounds ($129 billion) a year its holdings of government bonds, which it bought between 2009 and 2021 as part of its quantitative easing stimulus.
21 July 2024
RBI sells $406 million in Indian Bonds as Index Inclusion boosts inflows -
India’s central bank sold ₹34 billion ($406 million) of bonds in the secondary market, likely to absorb excess cash in the banking system resulting from inflows into the nation’s debt after being included in a global index, according to Bloomberg report. The Reserve Bank of India's bond sales occurred over four days, according to the monetary authority’s weekly statistical supplement. Foreign investments in local bonds have surpassed $1 billion so far in July following the inclusion of India’s bonds in JP Morgan Chase flagship emerging market bond index late last month. This has increased local rupee liquidity, as the central bank absorbed the inflows to boost reserves. The RBI added $9.7 billion to its reserves that week, the data showed.
All of the Major news in the Indian Stock Market -
The Indian stock market ended yet another session on a positive note on Tuesday amid broad-based buying and firm global cues. The S&P BSE Sensex jumped 511 points or 1.37 per cent to settle at 37,930, with Power Grid (up over 6 per cent) being the top gainer and Bajaj Finance (down over 4 per cent) the biggest loser. Reliance Industries (RIL) was the major contributor to the index's gains, followed by HDFC, ICICI Bank, Maruti, and HDFC Bank. NSE's Nifty rallied 140 points or 1.27 per cent to end at 11,162 levels. Of 50 constituents, 32 advanced and 18 declined. Among individual stocks, Vodafone Idea ended over 8 per cent lower at Rs 8.31 on the BSE after after the Supreme Court on Monday reserved its order on timeline of staggered payment of adjusted gross revenue (AGR) related dues by telecom operators. Bajaj Finance ended over 4 per cent lower at Rs 3,293 on the BSE after the company informed the exchanges that Rahul Bajaj has decided to step down as the chairman.
20 July 2024
JP Morgan says majority of ATMs operating normally amid outages -
JP Morgan and Chase said it is working to restore service to automated teller machines (ATMs) affected by a global digital outage while a majority of its ATMs are operating normally, according to an emailed statement on Friday. The largest U.S. bank declined to comment on how many of its ATMs were offline. It has 16,000 ATMs across the U.S. and 4,800 branches. Financial firms were among many snarled by a global digital outage on Friday that caused hours long disruptions to computer systems at hundreds of companies. Branches have remained open, and at the sites affected by the outages, customers were able to access banking services by making manual transactions with tellers or using ATMs, a source familiar with the situation said.
Berkshire sells around $1.48 billion Bank of America shares, filing shows -
Berkshire Hathaway sold about 33.9 million shares of Bank of America for around $1.48 billion over multiple transactions this week, a regulatory filing showed. After the sale, Berkshire owned about 999 million BofA shares.
Berkshire is one of the Charlotte, North Carolina-based lender's largest shareholder. It also invests in several other banks, including Wells Fargo & Co and JP Morgan and Chase. The conglomerate, owned by Warren Buffett, began investing in Bank of America in 2011, purchasing $5 billion of preferred stock plus warrants to buy 700 million common shares, at a time many investors worried about the bank's capital needs.
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19 July 2024
Citi reaches settlement with Montreal Exchange on options reporting -
Citigroup reached an agreement with the Bourse de Montreal to resolve allegations that it failed to report positions on options contracts exceeding a certain threshold, the exchange said on Thursday.
The bank failed to establish and maintain a system to supervise employees to comply with reporting rules, the exchange said, adding that Citi will pay a $138,000 fine and $10,600 for related costs as part of the settlement. Last week, U.S. banking regulators fined Citigroup $136 million for making "insufficient progress" in fixing data management issues identified in 2020 and required the bank to demonstrate it was putting enough resources toward those efforts. Citigroup declined to comment.
UK clears Nationwide Building's $3.75 billion Virgin Money deal -
Britain's competition regulator said on Friday it has cleared Nationwide Building Society's proposed 2.9-billion-pound ($3.75 billion) all-cash deal to buy Virgin Money UK The deal, which was announced in March and is expected to close in the fourth quarter, could create the country's second-largest savings and mortgage provider, after Lloyds Banking Group he owner of Halifax. The Competition and Markets Authority said it has found that the proposed deal does not give rise to a realistic prospect of a substantial lessening of competition. ($1 = 0.7732 pounds)
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18 July 2024
Insurance broker TWFG's shares rise nearly 30% in market debut -
Insurance broker TWFG's shares gained nearly 30% in their Nasdaq debut on Thursday, signaling strong investor demand for new stocks as the U.S. initial public offering market aims for a recovery.
IPOs in the U.S. are attempting to stage a meaningful recovery in 2024 as high-profile companies begin testing investor appetite, following a two-year downturn due to rising interest rates and geopolitical turmoil. TWFG shares began trading at $22 apiece, compared with the IPO price of $17 each. The company, backed by reinsurer Renaissance Re sold 11 million shares in the offering to raise $187 million. Texas-based TWFG, which works with more than 300 insurance carriers, is present in 41 states and the District of Columbia. Its business operates within the broader property and casualty (P&C) insurance market.
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17 July 2024
Capital One pledges $265 billion in lending, philanthropy as it tries to clinch Discover deal:
Capital One will commit $265 billion over five years to lending, philanthropy and investment if its takeover of Discover Financial Services Under a plan agreed with four community groups, Capital One has promised to maintain the combined entity's lending to low-and-moderate income (LMI) consumers and communities at $200 billion over five years. It will retain Discover's sole branch in Delaware and will not close any branches as a result of the deal. Capital One will also maintain 30% of branches and cafes in LMI neighborhoods, and has promised no front-line staff cuts. The McLean, Virginia-based Capital One has also committed over $35 billion to support affordable housing for LMI communities and individuals, a 30% increase over what the banks had previously planned, among other small business lending, product and education pledges.
Investors ride the 'Trump trade' as expectations grow for a second term:
Rising expectations that former President Donald Trump will regain the White House in November are supercharging the so-called Trump trade, on views that his policies will lift corporate profits even while spurring worries about the country’s long-term fiscal health. The two sides of the trade have been evident in recent weeks, as investors price in greater odds of a win by the Republican challenger following a disastrous performance by President Joe Biden in a late June debate and after last weekend’s assassination attempt on Trump. Treasury markets tell a different side of the story, with some investors lightening positions in longer-dated bonds as they fret about the fiscal consequences of lower tax revenues and more budget spending. UK merchant banking firm Close Brothers estimated that a second Trump term could usher in from $4 trillion to $5 trillion of extra government borrowing over 10 years, potentially boosting inflation and weighing on bond prices.
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Citi appoints James Morris as new head of UK commercial bank :
Cold storage REIT Lineage targets up to $19.2 billion valuation in blockbuster US IPO:
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15 July 2024
KKR-backed OneStream seeks $4.38 billion valuation in US IPO:
PayPal fined $27.3 million by Polish watchdog for ambiguous clauses:
Poland's antitrust and consumer protection watchdog imposed a fine of 106.6 million zlotys ($27.3 million) on PayPal Europe for failing to spell out to consumers in its contractual clauses activities for which they may be fined, UOKiK said on Monday. UOKiK said that prohibited activities which could incur penalties were described in an unclear way and users may not understand exactly what was not allowed and what action the company could take in such cases. The decision is not final and PayPal has the possibility to appeal to a court, UOKiK said.
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14 July 2024
Elon Musk endorses Trump in presidential race, calls him "tough":
Elon Musk, the billionaire CEO of Tesla, publicly endorsed Donald Trump for the first time in the U.S. presidential race, calling the Republican former president "tough." Musk, the world's richest person, posted the endorsement with a video of Trump with blood on his face pumping his fist after multiple shots rang out at Trump's rally in Pennsylvania on Saturday. Trump was safe "I fully endorse President Trump and hope for his rapid recovery," Musk posted on X. Musk later posted a photograph of Trump at the event, followed by: "Last time America had a candidate this tough was Theodore Roosevelt."
Wall St Week Ahead Expected US rate cuts have investors looking beyond Big Tech:
Looming U.S. interest rate cuts are presenting investors with a tough choice: stick with the Big Tech stocks that have driven returns for more than a year or turn to less-loved areas of the market that could benefit from easing monetary policy. Owning massive tech and growth companies such as Nvidia, Microsoft, Amazon has been a hugely profitable strategy for investors since early 2023, even as the stocks' market dominance has drawn comparisons to the dot-com bubble of the late 1990s. Market action at the end of the week showed a nascent shift may have already begun. The tech-heavy Nasdaq 100 suffered its biggest drop of the year on Thursday while the small-cap Russell 2000 had its best day of 2024. The Nasdaq 100 has gained about 21% this year while the Russell 2000 is up just 6%."The trade got too one-sided and we're seeing some reversal of this," said Walter Todd, chief investment officer at Greenwood Capital.
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13 July 2024
China's vice commerce ministry meets Walmart CEO McLay:
China's Vice Minister of Commerce Wang Shouwen met the chief executive officer of Walmart Inc , Kathryn McLay, on Friday, the commerce ministry said in a statement. The two sides exchanged views on China-U.S. economic and trade relations, Walmart's development in China and other issues, the statement said. China is the biggest source of Walmart's imported goods.
Musk donates to group working to elect Trump, Bloomberg reports:
Billionaire Elon Musk, who has been ramping up criticism of U.S. President Joe Biden, has donated to a political group working to elect rival presidential candidate Donald Trump, Bloomberg reported on Friday, citing sources. The report did not indicate how much Musk donated but added it was "a sizable amount" given to a group called America PAC. Bloomberg reported that the PAC - a group that can receive unlimited contributions for political activity - is next required to disclose its list of donors on July 15. In March, Trump, a former U.S. President who is expected to be formally nominated next week as the Republican Party's candidate for the Nov. 5 election, met with Musk and other wealthy donors. In response to reports of the meeting, South Africa-born Musk posted on X: "Just to be super clear, I am not donating money to either candidate for US President."
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12 July 2024
Bunge, Viterra offer to sell EU assets seeking EU approval for $34 billion merger:
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U.S. grains merchant Bunge and Glencore-backed Viterra have offered to divest assets in two EU countries aimed at winning EU antitrust approval for their $34 billion merger, people with direct knowledge of the matter said on Friday. The companies announced their merger a year ago to better compete with global giants Archer-Daniels-Midland and Cargill. Bunge and Viterra had initially hoped to secure unconditional EU clearance after the regulators' preliminary review of the deal but the EU competition enforcer subsequently cited concerns on specific European issues, the people said.
US court rejects challenges to FCC approval of SpaceX satellites:
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A U.S. appeals court on Friday upheld the decision of the Federal Communications Commission to approve a SpaceX plan to deploy thousands of Starlink satellites to provide space-based broadband internet service. The U.S. Court of Appeals for the District of Columbia rejected a legal challenge from DISH Network and an environmental group composed of amateur astronomers and dark-sky enthusiasts. DISH had argued the FCC did not adequately consider the risk of signal interference with other satellites, while the astronomer group said the FCC had not followed an environmental law in its approval. The court in 2022 rejected a separate challenge to SpaceX's plan to deploy satellites at a lower Earth orbit than planned.
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11 July 2024
Russia's VTB Bank carries out reverse share split:
Russia's second largest bank, VTB has carried out a reverse share split that will raise the value of each individual share to 50 roubles ($0.57) from 0.01 roubles, the bank said on Thursday.
A reverse share split, or stock merge, consolidates the number of existing shares held by shareholders into fewer shares. The reverse share split was designed to make it easier for investors to trade VTB's shares, CFO Dmitry Pyanov said. "We hope that the temporary suspension of trading in the bank's shares on Moscow Exchange due to the procedure will not cause our investors inconvenience and we expect that trading with a new nominal value will start from July 15," Pyanov said. ($1 = 87.5000 rubles)
US regulators fine Citi $136 million for failing to fix longstanding data issues:
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U.S. bank regulators fined Citigroup $136 million for making "insufficient progress" fixing data management issues identified in 2020 and required the bank to demonstrate it was putting enough resources toward those efforts.
The joint enforcement action from the Federal Reserve and Office of the Comptroller of the Currency (OCC) concerns Citi's efforts to repair data management problems and implement controls to manage ongoing risks, the Fed said on Wednesday. The fines are the latest blows for CEO Jane Fraser as she tackles the bank's regulatory failings and streamlines its structure after laying off thousands of employees. The regulators fined Citi $400 million in 2020 after identifying "ongoing deficiencies" in its handling of various areas of risk management and internal controls, including data quality management.
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10 July 2024
Judge trims First Citizens claims that HSBC poached Silicon Valley Bank workers:
A federal judge in California has dismissed most of First Citizens Bancshares $1 billion lawsuit accusing HSBC of poaching more than 40 employees of Silicon Valley Bank after its high-profile collapse. U.S. Magistrate Judge Laurel Beeler in San Francisco late Tuesday said that she lacked the ability to hear some of the claims by First Citizens, which acquired Silicon Valley Bank when it failed last year, because they alleged conduct that occurred outside California. Beeler also tossed claims against several HSBC entities and former Silicon Valley Bank employees who joined HSBC, saying First Citizens had not shown illegal conspiracy to poach workers and trade secrets.
Exonerated trader settles $150 million lawsuit against Deutsche Bank:
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A former Deutsche Bank trader whose conviction in New York for rigging the Libor interest rate benchmark was overturned has settled his $150 million lawsuit accusing the German lender of making him a scapegoat by lying to prosecutors. Matthew Connolly, who once led Deutsche Bank's pool trading desk, voluntarily dismissed his lawsuit accusing Deutsche Bank of malicious prosecution on Wednesday, a filing in Manhattan federal court showed. A spokeswoman for Deutsche Bank said "the matter has been resolved," without providing details. Lawyers for Connolly did not immediately respond to requests for comment. Connolly and London-based colleague Gavin Black were convicted in 2018 for rigging Libor, with Connolly sentenced to six months of home confinement and a $100,000 fine. But an appeals court overturned both convictions in January 2022, citing a lack of evidence of guilt.
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9 July 2024
Exclusive: India's Paytm gets government panel nod to invest in payments arm, sources say:
India's beleaguered Paytm has secured approval from a government panel that oversees investments linked to China to invest 500 million rupees ($6 million) in a key subsidiary, three sources with direct knowledge of the matter said.
The approval, which still has to be vetted by the finance ministry, will remove the main stumbling block to the unit, Paytm Payment Services, resuming normal business operations. All in all, Paytm has been waiting for the nod from the government panel for about two years and without it, it would have had to also wind down its payment services business, which was forbidden from taking on new customers in March 2023. Once the approval has been formalized, it will be able to seek a so-called "payment aggregator" license from the Reserve Bank of India.
Germany needs $325 billion of power grid investments by 2050, KFW says:
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Germany needs investments of around 300 billion euros ($325 billion) by the middle of the century to equip its power grids for decarbonisation, state bank KfW (KfW.UL) said on Tuesday.
"The necessary expansion of renewable energies makes suitable and flexible transmission and distribution networks necessary and requires high investment," KFW said at a capital markets conference at its headquarters in Frankfurt.
8 July 2024
M&G bond veteran Jim Leaviss to leave after nearly three decades:
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Jim Leaviss, one of Britain's most prominent bond investors, has decided to leave asset manager M&G o pursue studies after a 27-year stint at the company, the firm said in a statement on Monday. Leaviss oversaw M&G's 139 billion pound ($178 billion) fixed income division and was also known for founding the company's "Bond Vigilantes" blog. Schroders' head of fixed income Andrew Charlton has been hired to succeed Leaviss, who is leaving later this year to study for a history of art master's degree, M&G said.
China's central bank tweaks liquidity operations:
China's central bank said on Monday it would start conducting temporary bond repurchase agreements or reverse repos to make open market operations more efficient and keep banking system liquidity ample. Market participants and analysts believe the move paves the way for a new interest rate corridor, with the seven-day reverse repo rate serving as a central guide, giving the bank more leeway to manage cash conditions and interest rates amid hot demand for bonds. That also comes after the central bank's governor said the seven-day rate "basically fulfils the function" as the main policy rate. The temporary repos and reverse repos will be loans with overnight tenors and will be conducted depending on market conditions. The interest rates of the temporary and reverse repos will be 20 basis points below and 50 basis points above the seven-day reverse repurchase operations, or 1.6% and 2.3%, respectively.
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7 July 2024
Revolut CEO to sell part of stake in $500 million share sale, Sky News reports:
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British fintech company Revolut's CEO Nikolay Storonsky will cash in part of his multibillion dollar stake in the company as part of a $500 million share sale, Sky News reported on Sunday. The Financial Times reported last month that the digital finance app is working with bankers on the share sale, including shares held by employees, which could value it at more than $40 billion. The size of Storonsky's stake in the company is unclear, the report added, and the scale of any disposal would depend on the valuation that Revolut is able to attract from new investors as well as final allocation decisions by the company.
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6 July 2024
China regulator vows to clamp down harder on capital market fraud:
5 July 2024
China's central bank has hundreds of billions of yuan of bonds at its disposal to cool long rally:
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China's central bank has hundreds of billions of yuan worth of bonds at its disposal to borrow, and will sell them depending on market conditions, the bank told Reuters on Friday, part of a plan markets see as an effort to cool a powerful bond rally. The People's Bank of China (PBOC) will borrow the medium- and long-term bonds on an open-ended unsecured basis and sell them depending on market conditions, as it has signed agreements with several major financial institutions regarding bond borrowing, according to the bank. The official remarks come at a time China's sovereign bonds have performed strongly this year, with yields hitting record lows, as a wobbly economy and volatile stock markets pushed savers into fixed-income safe haven investments.
Visa, Mastercard to extend non-EU card fee caps to 2029, EU says:
Visa and Mastercard will extend caps on tourist card fees agreed five years ago with EU antitrust regulators by another five years to 2029, the European Commission said on Friday. Visa, the world's largest payments network operator, and its closest rival Mastercard, in 2019 agreed to a 0.2% fee cap on non-EU debit card payments carried out in shops and a 0.3% fee limit on credit card payments to settle an EU antitrust investigation and avoid hefty fines. The fee caps are due to end in November this year. The move followed a long-running investigation by the EU competition enforcer triggered by a 1997 complaint by business lobby Euro Commerce. The Commission, which acts as the EU antitrust watchdog, said the two companies volunteered to continue the fee caps beyond 2024.
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4 July 2024
Japanese insurers, banks to sell Honda shares worth $3.3 billion, filing shows:
Japanese financial groups including Tokyo Marine, Sompo and 2 MS&AD units will sell Honda Motor shares worth 535 billion yen ($3.3 billion) to unwind cross-shareholdings, a regulatory filing showed on Thursday. Mitsubishi UFJ and Mizuho Japan's first- and third-largest financial groups, also plan to participate in the sale, a sign that the unwinding of cross-shareholdings is catching pace as part of Japan's corporate governance reforms. Cross-shareholding, or companies holding shares in each other, has long been seen as a way to reinforce business ties in Japan. But governance experts and foreign investors said it leads to lax governance by protecting management from shareholders. The secondary share offering from a total of 10 financial institutions would come up to 300 million shares including over-allotment, with the price yet to be decided. Honda's shares ended at 1,791 yen on Thursday, valuing the offering at about 535 billion yen.
UK's Barclays to sell German consumer finance business :
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Barclays is selling its German consumer finance business to Austrian bank BAWAG Group AG or a small premium to net assets, it said on Thursday, as the British lender aims to simplify its business. The sale of the Hamburg-based Barclays unit to BAWAG will give the Austrian bank the ability to expand its loan book and customer base in the region. Reuters had reported that BAWAG was a leading contender in bidding that included other European banks and private equity firms. The cash sale by Barclays Europe is expected to release about 4 billion euros ($4.32 billion) of risk-weighted assets and will increase the CET1 ratio - which measures capital strength - by about 10 basis points, Barclays said. It did not give the sale price. The German business, called Consumer Bank Europe, serves customers in the German and Austrian markets and had gross assets of 4.7 billion euros at March-end, primarily in card and loan receivables.
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3 July 2024
Electric car charging point firm Zunder secures 225 million euro Santander loan:
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Zunder, a company developing charging points for electric vehicles across Europe, has secured a 225 million euro ($242.9 million) loan from Spanish bank Santander. European car industry body ACEA said in April that the European Union needed to install almost eight times more electric vehicle charging points per year than it did in 2023 to meet demand. Zunder said its 225 million euro loan would help finance plans to install more than 3,000 new charging points in European countries such as France, Portugal and Italy. ($1 = 0.9262 euros)
Swiss National Bank open to expanding digital currency project:
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The Swiss National Bank is open to expanding its pilot project with wholesale central bank digital currencies, governing board member Antoine Martin said on Wednesday. "We would like to see a pilot which develops, with more banks joining and a higher volume of transactions," Martin told the Point Zero Forum event in Zurich. The SNB will continue providing a wholesale central bank digital currency (CBDC) for at least two more years, it said last month, extending a pilot called Project Helvetia III which began last year. Six banks, including UBS and Commerzbank are already taking part in the project which has seen six digital bond issuances for a total value of 750 million Swiss francs ($830.38 million). ($1 = 0.9032 Swiss francs)
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2 July 2024
China's BYD forms European partnership with France's Ayvens:
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Ayvens the car leasing unit of French bank Society General and Chinese electric vehicles company BYD announced on Tuesday a partnership for the European market. The companies said in a joint statement that their memorandum of understanding would see BYD's range of electric vehicles used for Ayvens' international and local corporate clients in Europe. This partnership comes just weeks after the European Commission imposed provisional tariffs on Chinese-made electric vehicles and just before the Commission is due to release details of its investigation into the likes of BYD.
Britain's Revolut surges to record profit as it seeks $40 billion valuation:
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British fintech company Revolut made a record pretax profit of 438 million pounds ($553.81 million) in 2023 on strong user growth and soaring interest-related income, it said on Tuesday, as it looks to cement its place as Europe's most valuable startup. The results, filed ahead of a September deadline, were the first to be published on time in three years, after Revolut had delayed publication of both its 2021 and 2022 accounts. The company has faced problems with its financial reporting previously, drawing scrutiny from regulators, but is hoping Tuesday's numbers are a step forward. Revolut has signaled its aim to list publicly but the company's interim chief financial officer Victor Stinga declined to comment on any timeline for an IPO.
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Italy picks KPMG to value digital payment platform PagoPA, sources say:
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Italy's Treasury has picked accounting firm KPMG to put a price tag on PagoPA, a company handling digital payments to the public administration, as it prepares to sell the business to the state mint and postal service Poste Italians people close to the matter said. The prospect of PagoPA changing hands, though it would remain under state-controlled entities, has spread alarm in Italy's crowded banking sector, where many small lenders are struggling to keep up with rapid changes in the payments sector. Banks look with concern at the increasing presence of non-bank digital payment providers such as Apple, Google owner alphabet or PayPal and fear that Poste could use PagoPA to strengthen its position in the digital payments market. The appointment of KPMG is however a key step in a project that will see Poste becoming a minority shareholder in PagoPA, the sources said, asking not to be named due to the sensitivity of the matter.
EuroLeague Basketball draws interest from BC Partners, EQT and General Atlantic - sources:
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Europe's top men's basketball competition EuroLeague has drawn interest from private equity firms including EQT, BC Partners and General Atlantic, according to two sources with knowledge of the matter. EuroLeague Commercial Assets (ECA), the entity which owns the EuroLeague and EuroCup, have been sounding out investor interest to buy a stake in the company, and is aiming for a valuation of one billion euros ($1.07 billion) in a potential sale, the two sources and a third one said. Private equity firms including BC Partners, EQT and General Atlantic have expressed interest in buying a stake in recent weeks, according to two of the people. One of the sources said the offers are for a minority stake and there are three other investors that have shown interest.
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