What to Watch in Asia Today
By William Langley in Hong Kong
UK-China Relations
The British government is expected to formally respond to a damning report from parliament’s intelligence and security committee in July. The report found the UK’s approach to China’s “increasingly sophisticated” espionage to be “completely inadequate”.
Hong Kong
The second day of the eighth Belt and Road Summit, which marks the 10th anniversary of Chinese leader Xi Jinping’s global infrastructure project, includes a special session on Hong Kong as a hub for raising investment in the Middle East.
Markets
Futures point higher in Tokyo and are flat in Hong Kong. US stocks rose and Treasury yields fell on Wednesday as investors shrugged off a higher-than-expected inflation report. The S&P 500 equity index inched up 0.1 per cent and the Nasdaq Composite added 0.3 per cent.
Argentina’s Monthly Inflation Rate
By Ciara Nugent in Buenos Aires
Argentina’s monthly inflation rate hit a 32-year high of 12.4 per cent in August, according to the country’s statistics agency. This exceeds analysts’ expectations and brings the annual price rise to 124.4 per cent. The figures highlight the deteriorating state of Argentina’s fragile economy, which has been aggravated by uncertainty surrounding the upcoming election and economist Javier Milei’s untested plan to dollarise the economy.
Arm Shares
By Tabby Kinder and Richard Waters in San Francisco, Arash Massoudi and Ivan Levingston in London, and Leo Lewis in Tokyo
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 the range due to high demand, with the stock being more than five times oversubscribed. The Arm listing has been closely watched as an indicator for new tech IPOs. It is the largest listing since electric-truck maker Rivian debuted in 2021 and technology valuations have seen a decline in recent months.
Goldman Fires Transaction Banking Chief
By Joshua Franklin in New York
Goldman Sachs has terminated four employees in its corporate cash management business for “serious violations” of its communications policies. This move reflects the Wall Street bank’s crackdown on the use of unapproved messaging apps for conducting company business. Hari Moorthy, a partner at Goldman and global head of transaction banking, was among those fired. In a memo to employees, the bank stated that it had lost confidence in the leaders of the transaction banking business, leading to their termination.
Meloni Sticks by Italian Bank Windfall Tax
By Amy Kazmin in Rome
Italian Prime Minister Giorgia Meloni has rejected calls to eliminate a controversial windfall tax on banks, despite criticism from the European Central Bank. Meloni stated that while the details of the tax could be amended, the revenues generated should remain the same, amounting to just under €3bn. The proposed tax has raised concerns that banks with weaker capital levels or smaller institutions relying on traditional lending may struggle to absorb potential economic downturn risks.
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