The Poon Report - Daily News Summary
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Citigroup CEO Jane Fraser Is Shaking Up Executive Ranks
Taken from WSJ Thursday, 14 September 2023
Bank declines to say how many jobs would be cut in the changes, which are meant to shrink the top of the sprawling company
Citigroup Chief Executive Jane Fraser is shaking up the bank’s upper management levels, shedding layers and overlapping roles in her latest bid to simplify the sprawling organization.
The bank said Wednesday it will get rid of its longstanding split into two divisions and eliminate the international layer overseeing global regions.
In its place: The heads of the five businesses Fraser has made the bank’s focus will all report directly to her.
Simplifying Citigroup has been a top goal for Fraser since she took over the bank in early 2021. Citigroup is the most global of the big U.S. banks and in many ways remained a jumble of overlapping fiefs from deals struck decades ago.
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“We need the leaders of our five businesses at my table, fully engaged in how we operate the firm and in the critical decisions we make every day,” Fraser wrote in a memo to employees Wednesday. “We need a structure with fewer layers and clearer, more direct lines of decision making.”
The five businesses for Citigroup are: services (treasury and custody work for big clients); markets; banking (investment banking, corporate and commercial banking); consumer banking; and wealth management.
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Aviva banks ￡800m from Singapore exit
Taken from The Times Thursday, 14 September 2023
Aviva has struck an ￡800 million deal to exit its joint venture in Singapore, the latest in a series of overseas disposals aimed at streamlining the insurer.
The sale of the British group’s debt and equity investments in Singapore Life Holdings to Japan’s Sumitomo Life Insurance Company takes the total raised from international disposals in the last three years by Amanda Blanc, the Aviva boss, to more than ￡8 billion.
It also completes Aviva’s exit from Singapore, which Blanc, 56, started in September 2020 when she agreed to sell a majority stake in the insurer’s operations in the island nation.
Under Blanc, Aviva has pulled out of Italy, Vietnam, France, Poland, Turkey and now Singapore by selling a string of non-core businesses, which has refocused what was a sprawling company onto its main markets of the UK, the Republic of Ireland and Canada.
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She said yesterday that the Singapore sale was “a good outcome for Aviva”. Blanc added: “The transaction further simplifies the business and we are in a very strong position to build on our trading momentum in the UK, Ireland and Canada.
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Apple’s New Lineup Fails to Create a Stir in China
Taken from WSJ Thursday, 14 September 2023
After the iPhone maker was upstaged by rival Huawei, muted reaction to the latest models adds to warning signs
Apple’s annual release of its new iPhone lineup has failed to create the usual buzz among China’s consumers, the latest sign of the mounting challenges the company faces in one of its biggest markets.
True, many die-hard enthusiasts stayed up late to watch the iPhone 15 models being unveiled from Apple’s headquarters in Cupertino, Calif. And by Wednesday afternoon, the topic “Apple’s latest product release” had received more than 500 million views on Weibo, one of China’s biggest social-media platforms.
But unlike in previous years, Apple’s new smartphones—with options for titanium cases, more-powerful chips and camera upgrades, along with an unexpected price freeze on most models—didn’t feature in the top trending topics for discussion among Weibo’s half-billion users on the day it was released.
Apple’s difficulties are increasingly visible in China, where Covid-related factory disruptions last year underscored the need to make its manufacturing and supply chain less reliant on the country. The company has been turning to India, the other country whose population exceeds one billion, where it is making more iPhones, opening stores and gaining market share.
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Estimates of the impact vary, with few public details. Analysts said the ban highlights the risks Apple faces in managing its relationship with Beijing when U.S.-China tensions are simmering. Each side has targeted the others’ tech companies as part of their strategic rivalry, with China’s Huawei Technologies facing bans in the U.S. and other Western countries.
On Wednesday, Chinese Foreign Ministry spokeswoman Mao Ning said that no laws, regulations or policy documents have been introduced to ban the purchase and use of foreign-brand smartphones, including Apple’s. She also said they had noticed “numerous media reports on security incidents involving Apple smartphones,” without elaborating.
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Chevron Australia LNG workers set to begin two-week total strikes
Taken from Yahoo Finance (Reuters) Thursday, 14 September 2023
Workers at Chevron's two major liquefied natural gas (LNG) projects in Australia are set to begin total strikes for two weeks from Thursday, potentially disrupting output that accounts for more than 5% of global supply.
Australia is the world's biggest LNG exporter and its main buyers are in Asia. Traders anticipate any cuts to supplies would intensify competition, with Asian buyers competing with Europe for cargo, spurring spot price volatility in the European gas market.
Research group EnergyQuest estimated revenue at risk for Chevron and partners from the strikes at about A$76 million ($49 million) per day, though it said not all of the revenue would be lost as some cargoes may be deferred to a later date.
The union alliance, which had previously said the strike would begin at 6 a.m. Perth time (2200 GMT on Wednesday), did not immediately respond to a request for comment. Chevron has said its focus will be on maintaining reliable operations if disruptions occur.
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In a bid to stop industrial action, Chevron is pursuing an untested legal strategy and has applied to the Fair Work Commission, Australia's industrial arbitrator, for an "intractable bargaining" declaration. If granted, it would end the strikes and allow the umpire to dictate an agreement.
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UAW, Automakers Remain ‘Far Apart’ in Contract Talks, Union President Says
Taken from WSJ Thursday, 14 September 2023
Union plans to target limited number of factories for initial round of strikes if deal isn’t reached Thursday night
The United Auto Workers union remains far apart in negotiations with Detroit automakers for a new labor agreement and is preparing walkouts at select factories when contracts expire late Thursday, its president said.
UAW President Shawn Fain told members during a livestream Wednesday evening that General Motors, Ford Motor and Stellantis have come closer to the union’s wage-increase demands and other priorities, but he expressed doubt that a deal would be reached before the 11:59 p.m. ET Thursday deadline.
Fain said the union’s goal is to reach an agreement. But he told workers to be prepared to strike, and confirmed plans to target a limited number of factories initially if a walkout is called. That tactic would involve fewer workers than a traditional action that involves all workers walking off the job at once.
“We’re preparing to strike these companies in a way they’ve never seen before,” Fain said. He scheduled another video address to members Thursday night to identify which factories would go down.
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Senator Mitt Romney urges Biden and Trump to 'stand aside' for 2024
Taken from BBC News Thursday, 14 September 2023
US Senator and former presidential hopeful Mitt Romney has called for Donald Trump and Joe Biden to "stand aside" and make room for a new generations of politicians.
He made the remarks while speaking to media about his own plans to retire.
He said he was choosing not run again because it was time "for a new generation of leaders".
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In response to a question from the BBC, Mr Romney also said that it would be a "great thing" for both President Biden and Mr Trump to step aside so both parties can pick "someone in the next generation".
Mr Biden, 80, and Mr Trump, 77, are the frontrunners for the 2024 presidential race for the Democrats and Republicans, respectively.
Mr Romney also contrasted himself with some fellow Republicans, arguing that he represents a "small" and "wise" part of the party focused on policy goals.
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BBC Video: 'Overwhelming consensus' to regulate AI, says Elon Musk
Taken from BBC News Thursday, 14 September 2023
Top tech leaders, including Elon Musk, Mark Zuckerberg, Sundar Pichai and Bill Gates, met with US lawmakers on Wednesday to discuss AI governance.
'This meeting may go down in history as being very important for the future of civilisation,' Musk said.
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Meloni sticks by Italian bank windfall tax despite ECB criticism
Taken from FT Thursday, 14 September 2023
Levy poses risk to eurozone financial stability by reducing Italian lenders’ retained earnings, says central bank
The European Central Bank has taken aim at Italy’s windfall tax on banks, warning that it risked making the sector more vulnerable to an economic downturn and urging Rome to carefully assess the impact of the levy.
The ECB’s non-binding legal opinion, published as its governing council met in Frankfurt on Wednesday, is set to intensify tensions with Rome, already elevated after rate-setters’ sharp increases in borrowing costs.
But in a Wednesday night interview, Italian prime minister Giorgia Meloni ruled out scrapping the tax, though she said the details could be amended provided the revenues remained “unchanged” and the tax still yielded the “just under” €3bn in revenues Rome was now expecting.
“If there are corrections to be made, it can be done, but I do not want to backtrack,” she said on state television.
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SoftBank-backed Arm prices shares at $51 apiece ahead of IPO
Taken from FT Thursday, 14 September 2023
Move values UK chip designer at more than $52bn as it prepares to begin trading on Thursday
Shares in UK chip designer Arm have been priced at $51 per share before trading begins on Thursday, giving the company a market valuation of $52.3bn.
The price is at the top end of a range of $47-$51 per share due to high demand that resulted in its stock being more than five times oversubscribed.
The listing has been watched closely as a barometer for new tech IPOs. It is the largest listing in two years, since electric-truck maker Rivian debuted in 2021, raising about $12bn. Tech valuations have slumped from their coronavirus pandemic-era highs in the past 18 months amid economic uncertainty and rising interest rates.
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Earlier on Wednesday, several bankers involved in the IPO said they expected the price to reach as high as $52 a share.
High demand has helped to crack open a window for tech listings in the US after a dearth of deals this year.
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Goldman fires transaction banking chief over communication policy breaches
Taken from FT Thursday, 14 September 2023
Dismissal of several leaders in the unit comes as Wall Street faces increased scrutiny over communications
Goldman Sachs has fired several employees at its nascent corporate cash management business over what the Wall Street bank characterised as “serious violations” of its communications policies.
The firings are another example of a clampdown on Wall Street over employees’ communications. Banks including Goldman have paid hundreds of millions of dollars in fines over past breaches, including using unapproved messaging apps such as WhatsApp to conduct company business, risking a violation of government-mandated record-keeping practices.
In a memo to Goldman employees on Wednesday that was seen by the Financial Times, the bank told staff that “the firm terminated the employment of several leaders in the transaction banking (TxB) business after losing confidence in them following serious violations of firm policies”.
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Under Goldman’s communications policy, employees are required to communicate about firm-related business on communications channels that have been approved by the bank.
Transaction banking is one of Goldman’s new businesses, launched in 2020. It principally provides cash management services to corporate clients. It also provides banking infrastructure to fintech companies that do not have a US banking licence, but that side of the business has faced scrutiny from regulators, the FT reported last month.
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UK estate agents gloomiest in 14 years as house prices and sales fall
Taken from FT Thursday, 14 September 2023
Rics survey points to ‘sluggish housing market’ as high mortgage rates hit demand
House sales and prices fell across the UK in August as high mortgage rates hit property demand, leaving estate agents at their most gloomy about the market in 14 years, according to a leading survey published on Thursday.
The Royal Institution of Chartered Surveyors said its house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in home prices, fell to minus 68 last month from minus 55 in July.
The reading is the lowest since 2009, and well below the minus 56 forecast in a Reuters poll of economists.
The professional body’s report found that new buyer inquiries, a measure of housing demand, declined by two points from July to minus 47 in August, while new sale instructions slid nine points to minus 26.
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Keir Starmer would seek EU deal on migrants to thwart smugglers
Taken from FT Thursday, 14 September 2023
Labour leader’s push to sharpen foreign policy profile to include meeting with Macron in Paris
Labour would seek an EU-wide agreement with Brussels on the return of migrants to try to tackle cross-Channel clandestine migration, party leader Sir Keir Starmer said on Wednesday.
Starmer, who is seeking to build his international profile, said he would also treat people smugglers like terrorists if he won power in a general election, freezing their assets and restricting their movement.
In an interview with The Times, Starmer confirmed that Labour would overturn the new law that stops cross-Channel migrants claiming asylum in Britain. He said Conservative plans to deport people to Rwanda were inhumane.
In the long run, Starmer said Labour would try to strike a returns agreement with the EU for asylum seekers adding that a “quid pro quo” of any deal, such as accepting quotas of migrants from the EU, would be the subject of negotiation.
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Senate subpoenas Saudi’s $700bn sovereign wealth fund over US dealings
Taken from The Guardian Thursday, 14 September 2023
Chamber’s investigations committee is targeting the PIF after refusing to voluntarily comply with requests for disclosure
Saudi Arabia’s $700bn sovereign wealth fund – which has been used as a lever of global influence by Crown Prince Mohammed bin Salman – has been subpoenaed by a powerful Senate committee after it refused to voluntarily comply with information requests about its US dealings.
The subpoena, which was issued by the Senate’s permanent subcommittee on investigations, is targeting the Public Investment Fund’s wholly-owned US subsidiaries in connection to the group’s proposed golf deal and “related investments throughout the United States”.
The PIF is also the majority owner of the Newcastle United football club.
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Senators were visibly agitated by the PIF’s lack of compliance with voluntary requests for disclosure, which is seen by the lawmakers as part of a troubling posture by Saudi officials to put themselves out of reach of US law.
“The Saudi Public Investment Fund cannot have it both ways: if it wants to engage with the United States commercially, it must be subject to United States law and oversight,” Blumenthal said.
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China is ‘headhunting Britons in sensitive positions’
Taken from The Times Thursday, 14 September 2023
Government expected to acknowledge Beijing’s attempts to penetrate Whitehall
China is attempting to “headhunt” Britons in sensitive positions to advance its own interests, the government is expected to say on Thursday as it recognises that more measures are necessary to protect British interests.
Beijing has encouraged individuals of Chinese heritage to pursue political office in the UK and hired former MPs and officials to work for Chinese companies as part of an attempt to strengthen its influence, a landmark report by MPs found this year.
The report on the threat posed by China was the result of a four-year inquiry by the Intelligence and Security Committee of Parliament (ISC), the only group of MPs allowed to examine the work of MI5, MI6 and GCHQ.
The government is expected to acknowledge Beijing’s growing attempts to penetrate Whitehall in its response to the report and insist that it is “not complacent” about the threat. It is understood that ministers will explicitly warn about Chinese attempts to recruit individuals in “key positions”.
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Von der Leyen calls for EU expansion in state of union speech
Taken from The Times Thursday, 14 September 2023
The president of the European Commission leaves everyone guessing about whether she will seek a second term
Europe must answer the “call of history” with “complete union” and further enlargement, Ursula von der Leyen has said.
In her annual “state of the union” speech, von der Leyen set out a radical programme for EU integration but declined to say if she wanted a second term as president of the European Commission.
Von der Leyen, 64, must decide in the coming months whether to stay on for another five years or seek another big role, such as secretary-general of Nato.
She backed expanding the EU to include Ukraine and the western Balkans, giving the union new “geopolitical weight” by increasing its membership from its post-Brexit 27 to a “Team Europe of 30-plus”.
“In a world where size and weight matters, it is clearly in Europe’s strategic and security interests to complete our union,” she told MEPs at the European parliament in Strasbourg. “I believe that the next enlargement must also be a catalyst for progress. That means answering practical questions about how a union of over 30 countries will work in practice.”
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European leaders begin talks in Spain next month on how to manage expansion to include countries such as Ukraine by the end of the decade.
There are fears that some member states could reject a new EU treaty, such as in 2005 when French and Dutch voters rejected the EU constitutional treaty.
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'Seeing is believing': Country Garden's Malaysia project in spotlight
Taken from Yahoo Finance (Reuters) Thursday, 14 September 2023
As cash-strapped developer Country Garden battles to stave off default, its sprawling $100 billion development in Malaysia has come under scrutiny from creditors even as the Southeast Asian nation dangles financial incentives to lure investments.
Billed as a paradise with turtles and white-sand beaches, Country Garden's Forest City development in the state of Johor next to Singapore aims to house 700,000 people across 7,000 acres on four reclaimed islands upon completion in 2035.
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Seven years in, Country Garden has invested 20 billion ringgit ($4.3 billion) in the project, Forest City said, a far cry from the initial $100 billion plan. Today, with development still in progress, it houses fewer than 10,000 people - about 1% of its target.
Forest City has become emblematic of the risks Country Garden and some of its Chinese peers took on with their debt-fuelled building boom not just at home but also in offshore markets.
As it struggles with weak cash flow and a wall of repayment obligations, Country Garden's prospects of deploying additional capital to the project now look increasingly challenging, analysts say. The Chinese developer is also unlikely to see any revenue boost from the project any time soon.
Late last month, Forest City said the project is proceeding as planned despite issues tied to the "political landscape and interference, economic stability, government policy".
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Invest Saudi may open a Greater Bay Area office to attract capital, technology and talent to support kingdom’s Saudi Vision 2030
Taken from SCMP Thursday, 14 September 2023
Saudi Arabia’s investment promotion agency may open an office in the Greater Bay Area (GBA), expanding its presence in southern China to attract capital, technology and talent to support the kingdom’s Saudi Vision 2030, a key official said.
Invest Saudi, a brand overseen by the Saudi Ministry of Investment (MISA), may open an office somewhere in the bay area – the region made up of Hong Kong, Macau and nine Guangdong provincial cities – to augment the promotional mission currently undertaken by its Beijing office, said Saleh Al-Khabti, MISA’s deputy minister for investment transactions.
“To reach our aspirations … we have to be in all major cities in China,” Saleh said after a closed-door round table forum at the Asia Society, concurrent with the Belt and Road Summit in Hong Kong. “We have to be very careful in establishing our presence to make sure we remain connected to all of mainland China.”
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Thai Chinese visa waiver scrutinised
Taken from Bangkok Post Thursday, 14 September 2023
Policy likely to have muted impact
A visa-free scheme for Chinese travellers would not immediately increase the market to 700,000 arrivals from the mainland per month because of concerns about safety and a slow resumption of flights, which are only half of the pre- pandemic levels of 2019.
Tourism operators in Phuket instead have high hopes for Kazakhstan, which is set to be granted visa-free arrivals from Sept 25, 2023 until Feb 29, 2024, as this market has high potential, according to travel agents.
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With Prime Minister Srettha Thavisin set to visit China next month, Mr Sisdivachr said the government should use this opportunity to convince its Chinese counterpart about tourism cooperation, asking Beijing to help regulate fake news about Thailand that is rampant on Chinese social media.
He said the visa-free policy will more likely benefit individual travellers in the early weeks, while those travelling with tour groups have to wait for 1-2 months because tourism operators will not fully resume their package sales if they are uncertain about sufficient demand.