by Samuel Mbaki | May 4, 2023 | Finance
European Markets are trading lower this Thursday as new bank rate decisions are being waited for from the European Central Bank. The market reacts this way as investors digest the latest rates hike by the U.S. Federal Reserve on May 3 2023, by 25 bps.
European Markets react to U.S. latest rates hike
The ECB is widely expected to raise its interest rates yet again as it attempts to tame the inflation rates that are running wild. Most market watchers expect a similar hike with the U.S. Federal Reserve of 25 basis points, though a bigger hike may also be ruled out.
The new rates decision is set to be published at 1.15 p.m. London time, with ECB President Christin Lagarde giving a statement shortly after. The markets seem wary of a major hike, as the U.S. got one yesterday. The federal funds rate ranges from 5% to 5.25%, the highest range since August 2007.
However, the Fed has hinted at a rate hike pause. In its post-meeting statement, the Fed said that its committee anticipates that some additional policy firming would be appropriate for it to hit its 2% inflation goal.
This means it may pause or pivot rate hikes fueled further by the U.S. bank’s collapse. Keep watching Fintech Express for more updates on Finance and banking stories.
by Fintech Express | May 2, 2023 | Finance, Technology
Uber reported its Q1 results on Tuesday, showing higher performance than analysts’ expectations. It has recorded a revenue increase of 29% YoY
Uber revenue rises 29% for Q1 2023 YoY
Taxify company Uber gained 9% in its shares pre-market trading Tuesday after it released a financial report showing that it had registered a massive growth in Q1 2023 against analysts’ expectations.
Here is how it performed:
- Loss per share: 8 cent loss vs the expected 9 cents
- Revenue: $8.82B vs. $8.72B expected revenue
- Mobility (gross bookings): $14.98 billion, up 40% year-over-year
- Delivery (gross bookings): $15.02 billion, up 8% year-over-year
The company noted that it had registered a net loss of $157 million for the quarter but had a net profit of $320 million due to unrealized gains on equity investments. This report is much different and encouraging for the market, unlike the $5.9 billion loss it registered in the same period last year.
Its CEO, Dara Khosrowshahi, said Uber had showcased a strong start to the year. He added that the company’s global scale gives it an advantage over its competitors, allowing it to onboard AI solutions for both the consumer and earner sides of its business model.
He added that the company is already using AI to predict highly accurate arrival times for rides and deliveries and expediting driver onboarding via processing documents more reliably and cost-efficiently.
“We are still in the early stages of using large data models to power improved user experiences and efficiencies across our platform, with much more to come,” he added.
The Q1 report was impressive compared to last year. The company expects to report gross bookings of between $33 and $34 billion for Q2 2023. It also expects an adjusted EBITDA of $800 million to $850 million.
by Fintech Express | Apr 13, 2023 | Banking, Finance
The social media giant, Twitter, has partnered with financial services provider eToro to allow crypto and stock trading. This development comes after Elon Musk recently revealed that he wants the social media platform to be the most significant financial establishment alongside providing other services to its users.
Elon Musk’s Twitter eyes the finance sector
Twitter has partnered with the financial services platform eToro to allow its users to trade stocks and cryptos. The new functionality will take effect on April 14, 2023, and will be a giant leap in the Billionaire’s dream of making the platform a giant in financial services provision and eventual “Super app” level.
A new feature will be rolled out on Thursday to allow Twitter users to view market charts and get access to an expanded range of financial tools. It will connect users to trade stocks and other financial assets traded on eToro, per an exclusive report by the social media giant CNBC.
At the time of writing, Twitter had already integrated real-time market charts from TradingView on index funds like S&P 500 and some major companies like Tesla. To access this information, a user must use Twitter’s “Cashtags” feature to search for a crypto/stock ticker symbol and insert a dollar sign informed of it. The UI will show price information from TradingView.
According to the report, the new partnership will expand the Twitter hashtags to cover more asset classes. It will also have a button to redirect the users to eToro’s site, where they can trade them.
“As we’ve grown over the past three years immensely, we’ve seen more and more of our users interact on Twitter [and] educate themselves about the markets,” Yoni Assia, eToro’s CEO, told CNBC in an interview.
“There is very high quality content, real-time content on financial analysis of companies and what’s happening around the world. We believe this partnership will enable us to reach those new audiences [and] connect better the brands of Twitter and eToro.”
Keep watching FintechExpress for updates on this and other finance-related stories.
by Samuel Mbaki | Apr 13, 2023 | Finance
Group of Seven (G7) finance heads have promised to take action to strike stability of the global financial system following the recent banking collapse. They have stated that they will give low and middle-income countries a more significant focus on diversifying supply chains to make them more resilient.
Better measures to be taken to calm the finance sector
The finance heads who met on the sidelines of the International Monetary Fund and the World Bank meetings in Washington said they had been discussing recent financial turmoil concerning the collapse of Silicon Valley Bank and Credit Suisse.
“We commit to jointly empowering low- and middle-income countries to play bigger roles in supply chains through mutually beneficial cooperation by combining finance, knowledge, and partnership, which will help contribute to sustainable development and enhance supply chain resilience globally.”
G7 Finance Ministers and Central Bank Governors
Shunichi Suzuki, Japan’s Finance minister, said they would continue monitoring the finance sector as they have seen their efforts are paying off.
“We will continue to closely monitor financial sector developments and stand ready to take appropriate actions to maintain the stability and resilience of the global financial system.”
Shunichi Suzuki, Japan’s Finance Minister
The officials noted that the supply chains needed now should be more efficient and resilient. They added that they need to diversify the current “highly concentrated” ones but particularly said that their actions are not in any way aimed at affecting China.
This meeting and deliberations come after Brazil, Russia, India, China, and South Africa (BRICS) have gained strength by pulling their efforts together and attracting other nations like UAE and Mexico. There have been reports that these world powers may seek to topple the US Dollar.
The international monetary fund has released economic forecasts warning that the fragmentation of the global economy owing to geopolitics will reduce longer-term growth potential and said only 3% growth is expected in 2028. Their prediction is the lowest five-year projection since it started the service in 1990.
by Samuel Mbaki | Apr 4, 2023 | Finance
Virgin Orbit stocks sank 14% in premarket following news that the company was filing for Chapter 11 bankruptcy proceedings. The company also plans to lay off nearly all its workers after failing to secure funding for its space missions.
Is Virgin Orbit out of business?
California-based satellite launch company Virgin Orbit filed for Chapter 11 bankruptcy proceedings on April 4, 2023, due to funding issues. It submitted its decrement to the U.S. Bankruptcy Court in Delaware, looking to liquidate all its assets.
Dan Hart, the company’s CEO, spoke about the matter, saying that the steps taken are currently best for the company despite their previous efforts.
“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,” he added; at this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.”
The company added that it had obtained $31.6M in funding from Virgin Investments via “debtor in possession” financing. This financing process allows businesses that have filed for Chapter 11 bankruptcy protection to keep operating.
Why did the company go under?
A series of difficult situations befell Virgin Orbit, forcing it to want to cease operations. The company was founded in 2017 by Richard Branson, who also owns a 75% stake. The second largest stakeholder is Abu Dhabi sovereign wealth fund Mubadala.
The space company designed its rockets to be set in orbit by modified Beoing 747 jets. It has launched six missions since 2020, with four successes and two failures. However, its last mission suffered mid-flight failure resulting in the rocket’s crash into the ocean.
Since then, it failed to secure funding for several months, with its majority owner Richard Branson unwilling to fund it further. As a result, it reached the inevitable point of filing for bankruptcy. Keep watching Fintech Express for more finance-related news.
by Fintech Express | Mar 29, 2023 | Banking, Finance
Bank of England (BoE) Governor Andrew Bailey has asked banks to be vigilant as the current market is unfavorable, echoing President Joe Biden’s latest sentiments that the ongoing banking collapse is not anywhere near its end.
Bank of England Governor Andrew Bailey asks banks to be vigilant
Financial and political leaders are actively touching on the ongoing financial collapse. Banking stocks are nose-diving globally following a series of Bank collapses that were started by the fall of Silicon Valley bank.
Now, the BoE Chief, Andrew Bailey, has come out to tell the banks to brace themselves as the current market will not be easy. He made these comments on March 28, 2023, where he vowed to be vigilant amid the current market shake, which he termed a “testing out” to find banks’ weaknesses.
Bailey revealed to U.K.’s Treasury Select Committee that the U.S. is clearing its mess in regional banking and that Credit Suisse was an institutional issue that is not widespread in the U.K. He also added that the country’s banking system is strong and has good liquidity.
Bailey compared the U.K. and the U.S. banking systems saying that the set regulations for the treatment of interest rate risk in the banking book (IRRBB)- that refers to the prospective risks to bank capital and earnings from adverse movements in interest rates-as the main reason why the British banking system still stands while US one is on shaky ground.
President Biden says the banking crisis is not over yet
At around the same time, U.S. President Joe Biden said that the White House’s response to the banking crisis is not over. He said he believes his team has handled the crisis well but is still watching to see what happens even though they are convinced they are moving in the right direction.
Biden also explained that his administration looked at legislative changes to ensure such a crisis would never happen again. However, he expressed concerns that it may be difficult to do so as they have a split Congress. Keep watching Fintech Express for updates on macro-finance and other related developments.
