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Mar 15, 2019

The week in IR: Big tech stocks are driving markets to new 2019 highs

This week’s investor relations-related stories from around the web

CNBC explained in a video that big tech stocks are driving markets to new 2019 highs. It stated that Facebook, Amazon, Netflix, Alphabet and Apple all closed higher on Wednesday, pushing the S&P 500 up.

According to the Wall Street Journal, a Nasdaq executive and one other key employee have left for the Members Exchange, or MEMX, a startup with prominent Wall Street backers that plans to launch a low-cost stock exchange.

The surprise departure of Facebook’s chief product officer Chris Cox caused shares to fall five percent to their lowest in nearly three months, reported Reuters. The company is once aging being
scrutinized over its handling of privacy, extremism and political content. Cox was apparently a Wall Street favorite and worked with Facebook founder Mark Zuckerberg for 13 years.

The Guardian reported that British citizens who own shares in Ryanair will be barred from buying more stock, voting on company resolutions or attending annual shareholder meetings if a no-deal Brexit goes ahead. This is because EU regulations require that airlines flying under a European license must be majority-owned and controlled by shareholders from the trading bloc. 

According to Business Korea, shareholder activism is changing the corporate landscape in Korea. Many experts say that 2019 will be the first year of shareholders exercising their expanded rights, with the general shareholders meeting season in March becoming a watershed.

Hong Kong’s securities regulator has imposed its largest ever fine on a number of international investment banks for failing in their roles as sponsors for Chinese initial public offerings, reported The Financial Times. According to the publication, the Securities and Futures Commission penalized UBS, Morgan Stanley, Bank of America Merrill Lynch and Standard Chartered a total of about HK$786.7 mn ($100 mn).

According to The Telegraph, outsourcer Interserve will collapse into administration after investors rejected a rescue plan that would have handed control of the company to lenders. It said almost 60 percent of its shareholders revolted against a debt-for-equity swap deal that would have written off its debt but watered down the stakes of investors. Interserve shares have been suspended with immediate effect and the company will go into a pre-pack administration that will wipe out shareholders.

US stocks were mixed after a three-day rally, while the dollar surged amid concern a trade deal with China remains elusive, according to Bloomberg. It added that the pound fell as the Brexit saga rumbled on. The S&P 500 fluctuated between small gains and small losses after a report that a meeting between President Donald Trump and President Xi Jinping to sign an agreement ending the trade war is now likely to happen in April at the earliest.

Citing research from Moody’s Investor Services, The Financial Times reported that assets in US passive investment funds are on course to overtake those in active funds by 2021. It stated that the boom in cheap investment products has upended the fund management industry, draining assets from more expensive active strategies overseen by humans in favor of basic tools that buy stocks in popular indices — such as the S&P 500.