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Feb 24, 2023

The week in investor relations: Anti-ESG politician runs for US presidency, BlackRock launches metaverse EFT and EU commission bans TikTok for staff

Our pick of the IR stories from around the web you might have missed this week

According to the Financial Times (paywall) Vivek Ramaswamy, the 37-year-old fund manager who has denounced ‘woke’ corporations and emerged as a leader in the rightwing backlash against ESG investing, filed paperwork to run for US president. Ramaswamy is the latest Republican to challenge Donald Trump for the party’s nomination in 2024. The author of two books – Woke, Inc and Nation of Victims – Ramaswamy co-founded Strive Asset Management last year with the backing of billionaire PayPal founder Peter Thiel and US senator JD Vance. 

– Meanwhile, Reuters (paywall) reported that a coalition of Republican-led states asked a federal judge to block a Biden administration rule allowing retirement plans to consider ESG factors when selecting investments, pending the outcome of their legal challenge.

– BlackRock launched an ETF that will concentrate on tech companies linked to the metaverse, despite the sector’s struggle to achieve mass adoption across a wide user base.-  According to Yahoo!Finance, the iShares Future Metaverse Tech and Communications ETF will invest in firms that could directly or indirectly impact the technology associated with the metaverse. These sectors include virtual platforms, social media, gaming, 3D software, digital assets and virtual and augmented reality.

– Staff working at the European Commission (EC) were ordered to remove the TikTok app from their phones and corporate devices, BBC News reported. The commission said it was implementing the measure to ‘protect data and increase cyber-security’. TikTok, owned by Chinese company ByteDance, has faced allegations that it harvests users’ data and hands it to the Chinese government. TikTok insists it operates no differently from other social media.

EU spokesperson Sonya Gospodinova said the EC’s corporate management board made the decision for security reasons. TikTok said the commission’s decision was based on mistaken ideas about its platform.

– Retail investors are routing most of their orders to just a handful of market-makers and it’s time to ‘breathe more competition’ into the stock market, said SEC boss Gary Gensler. Markets Insider reported Gensler as saying that while stock markets use competitive auctions in some settings, more than 90 percent of individual traders are routing their orders to a small group of wholesalers. Those off-exchange market-makers don’t have the same transparency and competition as an auction system, which directs trades to the highest bidder. That results in hefty losses for retail traders, who may be losing $1.5 bn a year due to the lack of competition in trading.

– The Financial Times (paywall) reported that China secured its grip on proposed offshore listings with new rules that bankers and lawyers say will favor Hong Kong and domestic Chinese markets over Wall Street. The rules, which come into effect at the end of March, come nearly two years after Beijing slammed the brakes on IPOs in Hong Kong, New York and other offshore jurisdictions as part of a sweeping regulatory crackdown.

‘We might see some recovery in US IPOs from Chinese companies but it’s hard to envision flows returning to their prime,’ said Zhan Kai, a Shanghai-based senior counsel at Chinese law firm Yuanda. ‘The US capital market is irreplaceable in a way but many Chinese companies haven’t fully healed from the trauma of geopolitical conflicts between China and the US.’

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