by Samuel Mbaki | Jun 22, 2023 | Banking
Key Points
- Stocks in the Eurozone have plummeted as the Markets anticipate a decision from BoE over the interest rates policy.
- Market sentiment is sour after US Federal Reserve Chair Jerome Powell forecasted more rates hike for 2023
Eurozone has received news on the necessity for further rate hikes in a sour way making the stocks plummet as they await today’s decision from BoE. The Benchmark Stoxx 600 was down 0.92% at the open Thursday markets, with all sectors trading in the red.
Eurozone stocks plummet ahead of expected rates hike
Inflation rates in the US and the UK are still way above the targets of 2% by the end of the year. As such, more action is needed from the banking heads to keep the economies floating while driving down inflation. While the US has paused rates hike for June 2023, the UK is expected to hike its rates following a positive report from its jobs markets.
This decision will cause more pain in the markets as borrowing money will be more expensive. As a result, the Eurozone Stock market has reacted negatively as it digests the information, with key stocks like the STOXX 600 index falling by almost 1%. All sectors also traded in the red section, with the Automobiles sector falling by 1.55% as banks topped with 1.9%.
The STOXX 600 index has posted declines in all sessions this week.
“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” Powell said in remarks prepared for testimony before the House Financial Services Committee Wednesday.
UK investors now focus on the Bank of England decision, which is set to hike rates by around 25 or 50 basis points as inflation rates remain stubbornly high. These developments came when the Swiss National Bank announced a 25 basis point rate rise, its fifth consecutive hike on Thursday, pushing its rates policy to a 1.75% high.
Analysts are calling for investors to be more cautious with the markets as it will be a long road to reducing current inflation rates. As such, more pain is expected to hit the markets as uncertainty about the total recovery period looms as ‘key’ economies like the US and China are also distressed. Keep watching Fintech Express for more updates on banking and Fintech-related developments and news.
by Samuel Mbaki | Jun 22, 2023 | Regulation
Key Points
- Ripple has confirmed that it has received “in principle” approval to offer digital assets services in Singapore
- The new approval allows the company to legally scale on-demand liquidity for XRP users in the country
Ripple has scored another regulatory win as it acquires an in-principle license to serve customers in Singapore. The Monetary Authority of Singapore (MAS) approved the approval per a June 22 statement.
Ripple to legally scale on-demand liquidity for XRP in Singapore
Ripple officially allowed to use its subsidiary, Ripple Markets Asia Pacific, to further scale its On-Demand Liquidity. The ODL will help XRP Ripple customers move their cryptos around the world without banks’ intervention as intermediaries.
Ripple had applied for the institutional Payment license under Singapore’s Payment Service Act, with CEO Brad Garlinghouse praising the Singaporean regulator for its pragmatic approach to crypto regulation. He added that the city-state would provide a prominent gateway for Ripple’s business operations in the Asia Pacific region.
The firm’s Chief Legal Officer, Stu Alderoty, also weighed in on the matter, saying that Singapore’s “early leadership” will pave the way for other regulators to develop a clear crypto regulatory framework.
In his words, he said:
“MAS has built a workable framework that truly unites consumer protection, market integrity and innovation. They’ve also outlined a clear taxonomy to classify and regulate digital assets – making it possible for companies like Ripple to build and offer compliant products.”
“It’s been said many times, but bears repeating – regulatory clarity is what will help drive crypto utility for real-world use cases.”
This win comes when the firm is battling the US SEC in court for regulatory uncertainties. The firm is defending that XRP is not a security against a hawkish regulator that is going after crypto organizations vehemently. The US SEC has also started legal proceedings against Binance and Coinbase; however, the odds are getting smaller for its win after the expose of Hinman documents.
Hinman was a key executive of the regulator who showed arrogance and dismissal of law in a 2018 anti-crypto speech. Since then, the regulator has gone after different crypto organizations on claims that they were evading being regulated. As a result of public dissatisfaction, a bill has also been tabled to restructure the SEC and make its operations more transparent.
Keep watching Fintech Express for updates on crypto regulation and other Fintech-related developments.
by Samuel Mbaki | Jun 21, 2023 | Regulation
Key Points
- A group of US lawmakers has introduced a bill (National AI Commission Act) to establish a commission to oversee AI development and usage.
- The bill was introduced on June 20 in a bipartisan effort to make the AI industry safer.
US lawmakers are pushing a bipartisan bill (National AI Commission Act) to regulate the emerging Artificial Intelligence industry and catch up with competitors like the EU while dealing with the risks involved. The bill seeks to create a commission under the Federal government and oversee AI building, distribution, and usage.
US lawmakers pushing to Catch up with AI Regulation
The National AI Commission Act closely follows the recently passed and signed EU AI Act. The EU AI Act monitors how generative AI like GPT4 is built and released commercially. It also protects users by inhibiting live recording, detailing, and other facial recognition systems.
The National AI Commission Act, introduced by Representatives Ted Lieu, Ken Buack, and Anna Eshoo, proposes creating a national body responsible for forming a comprehensive AI regulatory framework. It aims to address the potential risks associated with AI.
If the proposed commission is built, it will bring together experts, government officials, industry representatives, and labor stakeholders to deliberate and decide on the best approaches to streamline the industry. Merve Hickok, the President of the Centre for AI and Digital Policy, voiced support for the National AI Commission, saying that the proposal is timely and crucial.
She expressed that the bill would introduce essential regulations that would bring everyone together to make the industry better and safer. These efforts by EU and US lawmakers come at a time when innovators and remarkable individuals like Elon Musk have been calling for regulating the AI Industry.
Though some people claim that the influential CEOs want lawmakers to slow down AI so they can catch up, there has been genuine concern over the need for regulation in the industry. After the release of GPT AI, others have cropped up, with some being used for military purposes. In the US, one AI even killed its militant operator in a simulation for doing contrary to what was expected of him.
As such, it comes with genuine concern that the industry needs to be regulated. Keep watching Fintech Express for updates on AI and other Technology and regulation-related stories and developments.
by Samuel Mbaki | Jun 21, 2023 | Technology
Key Points
- India’s Prime Minister has confirmed the visit of Elon Musk to the country
- The two had business deliberations geared towards economics and businesses to boost investment in the country.
- Musk is looking forward to investing in the country.
Elon Musk has met with India’s Narendra Modi for deliberations on business and investment opportunities as he gears up to invest in the country. The meeting occurred on June 21, 2023, days after he visited France, Italy, and China for similar purposes.
India wants Elon Musk to invest there
Tesla and Twitter CEO Elon Musk has confirmed visiting India to have talks with the serving Prime Minister Narendra Modi. He was on a business trip in the country that involved figuring out the available investment opportunities.
Word is out that Elon Musk is looking for a place to set up a new Tesla Gigafactory, preferably in Asian or European countries. Therefore, he has been visiting potential countries to build good business ties and evaluate the validity of his project there.
It doesn’t come without saying that countries also seek him to start his factories and invest with them. He was in France earlier this month for the VivaTech summit. He met with President Emanuel Macron and the Digital Minister during his visit.
The Minister revealed that the country is seeking him to build his Tesla Gigafactory there, saying that the country is also investing in EV batteries and would welcome EV manufacturers there. The same case went for Italy’s Prime Minister, who met with him earlier this month to lure him into investing in the country.
Musk had also traveled to China to inspect the work in his installments in the country. Now, he is in India for a business trip. However, it doesn’t mention the wanting conditions of India’s infrastructure.
Recently, a train accident happened, claiming the lives of hundreds. Now, observers were keen on the Tesla auto drive being implemented in the country.
Some told Elon Musk that the congestion in the area could be a hindrance, but he brushed it off, saying that the cars are good and computers view obstacles and traffic via slow motion making them less risker.
However, no official information has been released on whether he will set up the next mega project there. Keep watching Fintech Express for updates on the top investors and other Fintech-related developments.
by Samuel Mbaki | Jun 20, 2023 | Finance
Key Points
- Weeks ago, Warren Buffett’s Berkshire Hathaway was offloading some of its stocks selling $13.3B worth of stocks in Q1 2023.
- Now, Berkshire Hathaway is going hard on Japanese stocks after its gamble in Japan’s markets raked in over $17B
Berkshire Hathaway seems pretty convinced by Japanese markets after bagging over $17B to add its stakes in five different Japanese trading firms. Berkshire Hathaway said on June 19 that its wholly-owned subsidiary National Indemnity Company had increased its stake in five Japanese trading firms to average more than 8.5%.
Berkshire Hathaway filling its bags again
Berkshire has confirmed that it’s upping its stakes in five Japanese companies: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. It said it intends to hold its Japanese investments long-term, with CEO Warren Buffett pledging that the company will only purchase up to 9.9% of any of the five firms.
This purchase was made by National Indemnity Company, a subsidiary of Berkshire Hathaway, with a drive to average the stakes in the five firms at 8.5%. The company said that the aggregate value of the five interests surpasses that of Berkshire-holed stocks in any country outside the U.S., making them highly promising.
As such, the company is looking at the investment long-term. Warren Buffett visited Japan in April 2023 and promised Berkshire Hathaway would boost its investments in various Japanese trading houses to 7.4%. It was then disclosed that he had hit this level in August 2022.
These five stocks almost tripled after Warren Buffett started investing in them. They have gained an average of 181% ever since his original disclosure. That led to an upshot from $6 billion to about $17 billion in the present day. Now, Japanese stocks rank as Berkshire’s largest position.
Keep watching Fintech Express for updates on investors like Warren Buffet and other Fintech-related developments.
