Investor Relations Week: Fidelity, Schwab, and Citadel Securities Plan New Crypto Exchange, Biden Focuses on Foreign Transactions, and Germany Takes Over Rosneft Refineries
– The Wall Street Journal (paywall) reported that a “consortium of financial heavyweights,” including e-commerce giant Citadel Securities and brokerage firms Fidelity Investments and Charles Schwab, has announced plans to launch a new cryptocurrency exchange. The launch of the exchange, which will be called EDX Markets, is a sign that Wall Street continues to see opportunities in digital assets despite this year’s crisis, the WSJ said.
Other backers of the new exchange include high-speed trading firm Virtu Financial and venture capital firms Sequoia Capital and Paradigm. Although it did not give a launch timeline, EDX said in a press release that it would aim to serve both retail and institutional investors, adding that the technology to run its exchange would be provided by Members Exchange. , a fledgling exchange founded in 2019 by some of the same companies that back EDX, including Citadel Securities, Fidelity, Schwab, and Virtu.
– US President Joe Biden has asked a government investment screening committee to focus more on foreign transactions involving personal data and advanced technology, the report reported. South China Morning Post, in a move he said appeared to be “targeting the national security risks the United States sees in China.” Without altering the legal authority of the Committee on Foreign Investment in the United States, which reviews purchases of U.S. assets by foreign entities for national security risks, the Biden administration wants it to take a closer look at the deals to several specific issues, the White House said.
According to an official quoted by the paper.
– The German government has taken control of three refineries belonging to the Russian oil company Rosneft, said the FinancialTimes (paywall), in what he described as “a major escalation in the energy war between Moscow and the West sparked by Russia’s invasion of Ukraine.”
The move is part of efforts by Olaf Scholz’s government to shield the German economy from the effects of an EU-wide embargo on Russian crude, which will come into effect in December and aims to deprive the Russian President Vladimir Putin of income to finance the Ukrainian war, continues the newspaper. The measure secures PCK, a Rosneft-owned refinery in the northeastern German town of Schwedt whose future had been thrown into question by the impending oil embargo.
– In a similar vein, the EU plans to raise around 140 billion euros ($139.6 billion) by imposing windfall taxes on the “abnormally high profits” of energy companies and redirecting the profits to households and businesses struggling with skyrocketing bills. The Guardian reported that the “long-awaited emergency measures” to tackle rising electricity prices were described by Frans Timmermans, the EU’s green transition official, as a necessary response to electricity shortages energy supply and high prices.
“The era of cheap fossil fuels is over. And the sooner we switch to cheap, clean and local renewables, the sooner we will be safe from Russia’s energy blackmail,” Timmermans said.
The paper further revealed that British Gas owner Centrica planned to voluntarily cap booming profits in a bid to reduce household bills and “defuse outrage”.
– The Guardian also reported that the Bank of England (BofE) has designed a new stress test for the UK’s biggest banks, with the financial health check focusing on the impact of defaults linked to the energy crisis. The UK’s biggest banks will be tested on their ability to withstand a rise in defaults linked to sky-high energy prices, as part of BofE’s delayed health check of the financial sector.
The newspaper said it understands the bank has crafted a new stress scenario that will feature a deep economic downturn, punctuated by soaring energy bills that could make it harder for some borrowers – especially businesses – to repay their loans. It comes as UK businesses await details of Prime Minister Liz Truss’ £150bn ($171bn) energy bill bailout, whose new leader has pledged to temporarily cap bills exorbitant prices for businesses that might otherwise be forced to close.
– Goldman Sachs Group begins its biggest round of job cuts since the start of the pandemic, reported Bloomberg (pay wall). The “Wall Street titan” plans to cut several hundred positions starting this month, the outlet said, citing people with knowledge of the matter. Although the total number is lower than some previous cycles, Bloomberg noted that the cuts are “a resumption of Goldman’s annual culling cycle that it largely paused during the pandemic.”
– General Electric has set the first week of 2023 for the completion of the spinoff of its healthcare unit and appointed a new board of directors for the planned independent company, according to Reuters (pay wall). New board members for the unit, which will be called GE Healthcare, include CEO Peter Arduini and executives from Honeywell International and Amazon Web Services. Including GE CEO Larry Culp as non-executive chairman, the board will have 10 members.
“With this first group of directors, we have a highly skilled and capable board that will get GE Healthcare up and running,” Culp said.
– Bloomberg reported that the NYSE is adding tools for its publicly traded companies to track their progress on workforce equality “as part of a broader push to take action on issues ESG”. The NYSE has partnered with workplace equity platform Syndio to provide companies with tools that measure pay and opportunity gaps, the news agency said. As members of the NYSE, companies will have access to Syndio’s software to help them identify potential biases.
“The social element of ESG has been harder to sustain and is often less defined for companies, but [is] an area of growing attention at the board level, among employees, and with legislatures and regulators,” NYSE COO Michael Blaugrund said in an interview.
– ‘A plummeting pound and a revival of the fossil fuel industry’ won’t be enough to reverse a long-term trend and bring investors back to the UK stock market, a leading UK fund manager has told The Daily Mail. FT. Richard Buxton, UK equity investment manager at London-based Jupiter, said in an interview: “What could bring people back to major investments in the UK?” I don’t have the heart to provide a bunch of convincing answers.
Investors have withdrawn £6.6bn from UK equity strategies this year, making 2022 already the biggest year of capital outflows in a decade, according to data from trade body Investment Association. This figure exceeds the £4.8 billion withdrawn in 2016, the year of the Brexit referendum. UK-focused funds have seen net outflows every year since then, the newspaper added.
– Media Markets reported a new initiative to strengthen ESG disclosure in Singapore. Singapore Exchange (SGX Group) and the Monetary Authority of Singapore (MAS) have jointly launched ESGenome, a digital disclosure portal allowing SGX-listed companies to report ESG data in a structured and efficient manner, and investors to access to this data in a consistent and comparable format,” Markets Media said.
“ESGenome is designed to capture corporate sustainability insights in a simple and effective way that is useful to investors and the broader capital market ecosystem,” said insights provider Michael Syn, Senior Managing Director and Head of Equities at SGX Group. “We are optimistic that by pioneering ESG data disclosure through ESGenome, our listed companies will be in a better position to raise capital and attract international investors who are actively seeking leading ESG companies.”