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Dec 16, 2022

The week in investor relations: Fed’s monetary policy forecast, US and UK export rules hit China and HSBC pulls the plug on oil and gas investments

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

– According to Reuters (paywall), some investors believe an expected recession will force the Fed to loosen monetary policy next year, even as the central bank projects it will raise rates higher than previously anticipated and keep them there longer as it fights to crush inflation. The dynamic came into stark focus after the Fed’s monetary policy meeting earlier this week, when it delivered a widely expected 50 basis-point rate increase and projected that borrowing costs will rise by an additional 75 basis points by the end of 2023.

– The SEC voted this week to advance the biggest changes to US stock market rules since the mid-2000s, aiming to give small investors better prices on their trades and reduce some advantages enjoyed by high-speed trading firms. The Wall Street Journal (paywall) reported that Democratic commissioners, who hold three of the SEC’s five seats, supported moving forward on each of the four proposals. Republican commissioners voiced objection to two of the measures.

– In China, tech giant Alibaba Group Holding has been prevented from buying some of the most advanced chip designs, reported Reuters via the Financial Times. The news comes after the SoftBank-owned British chip tech firm Arm determined that the US and the UK would not approve licenses to export technology to China. This is the first known time that Arm has decided it could not export its most cutting-edge designs to China, the report said, citing people familiar with the matter.

– Funds raised by companies listing in London plunged by more than 90 percent this year, according to new research, CNBC reported. Analysts said the market had cooled due to weak economic growth forecasts, rising interest rates and wariness around the performance of British firms. Year to date, 40 firms have floated on the London Stock Exchange’s main and alternative investment markets, according to data published by KPMG. Total funds raised dropped from £14.3 bn ($17.7 bn) to £1 bn, the research noted. The development comes amid a broader slowdown in IPOs, which S&P Global found were down 45 percent year on year during the first three quarters globally.

– HSBC will stop funding new oil and gas fields in a renewed campaign against fossil fuels after the bank was accused of greenwashing, said The Telegraph in a report. The decision follows the company’s vow to achieve net-zero emissions in its projects by 2050 or sooner. It comes after the London-headquartered bank was accused of misleading consumers and greenwashing its reputation in a landmark ruling by the advertising watchdog. But the bank said it will continue funding natural gas projects, as Europe faces its biggest energy supply crunch in a generation after Russia’s invasion of Ukraine.

– Germany’s top regulator called for global regulation of the cryptocurrency industry to protect consumers, prevent money laundering and preserve financial stability, Reuters reported. Mark Branson, president of the Federal Financial Supervisory Authority (BaFin), said a hands-off approach that would ‘just let the industry grow as a playground for grown-ups’ was the wrong tactic. Branson was speaking hours after US prosecutors accused Sam Bankman-Fried, founder of cryptocurrency exchange FTX, of misappropriating billions of dollars and violating campaign laws in what has been described as potentially one of America’s biggest financial frauds.

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