What to watch in Asia today
UK-China relations: The British government is expected to formally respond to a damning report from parliament’s intelligence and security committee in July, which found the UK’s approach to China’s “increasingly sophisticated” espionage was “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 pointer higher in Tokyo and were 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 hits 32-year high in August
Argentina’s monthly inflation rate hit a 32-year high of 12.4 per cent in August, the country’s statistics agency said Wednesday, following the shock victory of radical libertarian economist Javier Milei in a crucial primary election last month.
The rate is now at its highest since 1991 and came in above analysts expectations, bringing annual price rises to 124.4 per cent.
The figures suggest the deterioration of Argentina’s fragile economy has accelerated as uncertainty about October’s election and Milei’s untested plan to dollarise the economy roiled markets.
Government efforts to fix prices through agreements with major retailers have largely failed to blunt pressures.
Arm shares expected to price above initial IPO range ahead of debut
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 since electric-truck maker Rivian debuted in 2021, raising about $12bn.
Technology valuations have slumped from their coronavirus pandemic-era highs in the past 18 months amid economic uncertainty and rising interest rates.
Read more on Arm here.
Goldman fires transaction banking chief over policy violations
Goldman Sachs has fired four employees in its corporate cash management business over what the Wall Street bank characterised as “serious violations” of its communications policies.
The terminations are another example of the clampdown on Wall Street over employees using unapproved messaging apps to conduct company business.
Hari Moorthy, a partner at Goldman and global head of transaction banking, was one of the employees fired, according to a person familiar with the matter.
In a memo to Goldman employees on Wednesday, 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”.
Meloni sticks by Italian bank windfall tax despite ECB criticism
Italy’s prime minister Giorgia Meloni has ruled out scrapping a controversial windfall tax on banks, which was criticised by the European Central Bank on Wednesday.
Meloni said she would not eliminate the tax, but said the details could be amended provided that the revenues remain “unchanged” and the tax still yielded the “just under” €3bn in revenues that Rome is expecting.
The ECB has warned that banks with weaker capital levels or smaller institutions more reliant on traditional lending “could become less able to absorb the potential downside risks of an economic downturn” as a result of the proposed tax.
Read more about the windfall tax here.