The week in investor relations: Republicans fight Nasdaq diversity plans, flying taxi fraud denial and a 30-year high in Japan
– Republicans on the US Senate Banking Committee urged the SEC to reject a proposed rule from Nasdaq requiring public companies to adopt new racial and gender diversity standards for their boards, according to Bloomberg. They argue Nasdaq should not use its ‘quasi-regulatory authority to impose social policies’ and say the proposal would cost companies money and discourage closely held firms from going public.
– EHang Holdings, one of China’s largest drone makers and a company that makes flying taxis, was forced to dismiss fraud allegations made by activist short-seller Wolfpack Research, reported the South China Morning Post. The claims, made in a report by the short-seller, saw the company’s US share price shed nearly two thirds of its value on Tuesday. Nasdaq-listed EHang said in a statement issued on the same day that Wolfpack’s report about the firm was ‘deceptive’ and contained ‘numerous errors, unsubstantiated statements and misinterpretation of information’ – though it did not elaborate.
– Japanese shares hit an almost 30-year high this week, reported Reuters. The Nikkei index reclaimed ‘the psychologically important’ 30,000 level for the first time since August 1990, with energy, healthcare and industrial shares leading the gains. The broader TOPIX also rose to close at its highest since June 1991, added the news outlet. Shares in companies that had already reported positive earnings were up, with sectors expected to do well as the global economy begins its coronavirus recovery also benefiting.
– A boom in iron ore fueled by China’s economic recovery led to bumper payouts for investors. ‘BHP’s iron fist smashes dividend record,’ wrote Australia’s Financial Review, as the world’s largest mining company ‘smashed its interim dividend record by 55 percent.’ Rio Tinto also announced a record payout, with The Guardian reporting that the world’s second-largest mining firm is set to pay a record $9 bn in dividends for 2020 – the biggest in the company’s 148-year history.
– Singapore Exchange (SGX) is on the hunt for mergers and acquisitions to drive its ambitions as a multi-asset exchange, CEO Loh Boon Chye told Bloomberg in an interview. The exchange is looking for deals that bulk up its foreign exchange, fixed income, data and capital markets connectivity businesses. ‘SGX had previously set a goal to have the fixed income, currencies and commodities segment along with data, connectivity and indices double [their] revenues by about 2025,’ noted Bloomberg, with Loh telling the news outlet that the exchange could reach that goal before the target date.
– BlackRock said oil companies and other polluting industries should disclose their carbon emissions and set targets to cut them to net-zero, The Guardian reported. All companies in which BlackRock invests will be expected to disclose direct emissions from their operations and from energy they buy, known respectively as Scope 1 and Scope 2 emissions. Fossil fuel extractors should base targets to cut emissions on the carbon released when their products are burned, known as Scope 3 emissions, BlackRock said. The move is the ‘latest sign of the rapid reassessment of climate risks by asset managers,’ noted the paper.
– The SEC has signaled a ‘more aggressive stance’ toward Wall Street, reported the Wall Street Journal (paywall). SEC acting chair Allison Herren Lee said recently the agency would roll back a policy giving publicly traded companies greater certainty about whether they will be able to maintain access to key regulatory exemptions after settling securities law violations. The move is seen as a shift toward a tougher approach to enforcement. The SEC is currently waiting for Gary Gensler, President Joe Biden’s nominee, to be confirmed as head of the commission.
– Former UniCredit chief Jean Pierre Mustier and LVMH founder Bernard Arnault are creating a Spac to invest in European financial firms, reported City AM. The Spac, which will list in Amsterdam, is set to focus on alternative asset management platforms, fintechs, and insurance companies. It will be only the second to list in Europe, as the boom in the IPO alternative slowly spreads outside the US.
– Kanabo became the second medical cannabis company to list in London this month when it went public on Tuesday, reported The Guardian. Taking advantage of a rule change by the Financial Conduct Authority last year, the Tel Aviv-based firm joins Australia’s MGC Pharmaceuticals on the LSE. Neil Wilson, chief market analyst at Markets.com, is widely quoted as saying the listings could signal a coming boom time for such companies in Europe. ‘[The FCA’s decision] could create a major European trading hub for cannabis companies which is currently dominated by Toronto and New York,’ he said.