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Reuters

Global shares hit three-month highs on economic recovery hopes

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LONDON (Reuters) – World shares hit three-month highs on Wednesday and the dollar fell for the sixth day running as easing lockdowns and hopes for more monetary stimulus gave investors confidence, despite civil unrest in the United States and rising COVID-19 tolls.

FILE PHOTO – A general view shows the German share prize index DAX board during afternoon trading as markets react on the coronavirus disease (COVID-19) at the stock exchange in Frankfurt, Germany, March 16, 2020. REUTERS/Kai Pfaffenbach

The MSCI world equity index, which tracks shares in 49 countries, rose to its highest since March 6, having gained throughout the Asian session.

The index is down more than 8% year-to-date, amid pandemic lockdowns that have pushed many economies into contraction.

MSCI’s main European Index also held near three-month highs and European bourses opened higher, with the STOXX 600 up around 1.2% and back to levels not seen since March 6.

In China, Japan and South Korea, where COVID-19 is relatively contained, stock indexes have recovered substantially to be only about 5-6% below this year’s peaks.

There are some signs of recovery in business activity as governments restart their economies, albeit in the knowledge that easing lockdowns too early could trigger a second wave of infections.

A closely-watched survey of service sector activity in China recovered to pre-epidemic levels in May.

“If we look at what’s going on in China, for sure, we have more data now and the improvement of the activity is for real. It’s quite easy to extrapolate this Chinese trend to other countries,” said Benjamin Melman, global CIO at Edmond de Rothschild Asset Management.

Euro zone businesses suffered another devastating contraction in activity in May. While there are signs the worst is over, it could be months before there is a return to growth, a survey showed on Wednesday.

But broader economic optimism supported risk-sensitive currencies and pushed down the dollar, which hit a three-month low against a basket of comparable currencies at around 0730 GMT. It then recovered around 0.2% during the morning, reaching 97.52 at 1100 GMT.

Oil rose on Wednesday, with Brent above $40 for the first time since March, as optimism mounted that major producers will extend output cuts and a recovery from the pandemic will spur demand for fuel.

Brent crude futures for August were up around 1.2% at $39.11 a barrel, having hit as high as $40.53 earlier in the session. U.S. West Texas Intermediate (WTI) crude futures rose to the highest since March 6 before erasing gains, down 1% on the day at $36.45.

Spot gold fell 0.6% to around $1,717 per ounce.

STEEPENING U.S. YIELD CURVE

Germany’s ten-year government bond yield rose to its highest since mid-April as the global risk-on mood saw demand for safer debt decline, but then slipped back slightly to -0.399 by 1100 GMT.

The European Central Bank is expected to ramp up stimulative bond purchases when it meets on Thursday.

The euro, which rose above $1.12 for the first time in 11 weeks in early London trading, is on track for a seven-day winning streak against the dollar – its longest streak since December 2013.

The safe-haven Japanese yen hit a two-month low of 108.85 to the dollar before bouncing back to around 108.70 per dollar.

The U.S. Treasury yield curve steepened, partly reflecting the sale of more government debt to finance massive stimulus efforts.

The 30-year U.S. Treasuries yield rose to as high as 1.532%, its highest since mid-March, as expectations of central bank policy support kept shorter yields in check.

FILE PHOTO: Investors look at screens showing stock information at a brokerage house in Shanghai, China January 16, 2020. REUTERS/Aly Song

The yield gap between five- and 30-year Treasuries rose to 118 basis points, the highest since early 2017.

Tens of thousands of people defied U.S. curfews to take to the streets on Tuesday for an eighth night of protests over the death of a black man in police custody.

“The disconnect between what the average person sees happening in the world and what they see happening in the financial markets is getting wider and wider,” Marshall Gittler, head of investment research at BDSwiss, wrote in a note to clients.

Reporting by Elizabeth Howcroft; Editing by John Stonestreet and Andrew Cawthorne

Source: http://feeds.reuters.com/~r/reuters/topNews/~3/XC5NnpyIC-s/global-shares-hit-three-month-highs-on-economic-recovery-hopes-idUSKBN23A002

Blockchain

India to have a ‘window’ for Bitcoin, says minister amid crypto ban FUD

The Ministry of Finance of India continues to form a careful position on private cryptocurrencies.

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The minister of finance of India, Nirmala Sitharaman, has given a ray of hope for the Indian cryptocurrency community as more fear, uncertainty and doubt circulate regarding a supposedly impending ban on digital assets. 

In a Saturday interview with India Today, Sitharaman emphasized that the ministry does not plan to shut off Indian innovations associated with Bitcoin (BTC) and its underlying blockchain technology.

“From our side, we are very clear that we are not shutting all options off. We will allow certain windows for people use, so that experiments on the blockchain, Bitcoins or cryptocurrency […] and fintech, which depend on such experiments, will have that window available for them. We are not going to shut it off,” she said.

Sitharaman said that the ministry is finalizing a cabinet note on crypto as India continues formulating its official stance on the asset class. “It is nearing completion, and then it will be taken to the cabinet. The Supreme Court had commented on cryptocurrency. We are very clear that the Reserve Bank of India will take a call on an official cryptocurrency,” she said.

After India’s supreme court lifted a crypto banking ban one year ago, reports of a new ban started circulating in early 2021. In February, another anonymous Indian official claimed that the government was about to introduce a complete ban on crypto, giving investors up to six months to liquidate their holdings.

On Sunday, Reuters published a report citing an anonymous senior government official who claimed that India is preparing to enforce a blanket ban on crypto and impose major penalties on rule-breakers. As part of an alleged bill, India is planning to criminalize “possession, issuance, mining, trading and transferring crypto-assets,” the source claimed.

Despite reports of a ban from anonymous sources continuing to surface, Sitharaman said in early March that the ministry wants to form a “calibrated” stance on digital assets. 

Nischal Shetty, founder of local crypto exchange WazirX, seemed optimistic about Sitharaman’s comments in a tweet, stating that it is time for the Indian crypto community to build. 

The RBI and the Ministry of Finance did not immediately respond to Cointelegraph’s request for comment.

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Source: https://cointelegraph.com/news/india-to-have-a-window-for-bitcoin-says-minister-amid-crypto-ban-fud

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Reuters

Fintech banker McLaughlin hunts bigger deal after upsized SPAC IPO

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NEW YORK (Reuters) – The blank check firm co-founded by one of the most prominent U.S. financial technology investment bankers will broaden its search for merger partners to companies worth up to $10 billion after pricing a larger initial public offering (IPO).

Steve McLaughlin started FT Partners in 2001 and since then, the fintech-focused investment bank has worked on mergers and acquisitions and public and private fundraising for the likes of BlackRock Inc, StoneCo Ltd and GreenSky Inc.

An alumnus of Goldman Sachs, McLaughlin and FT Partners have also been involved in advising a half-dozen firms in mergers with so-called special purpose acquisition companies (SPACs), most recently mobile bank MoneyLion’s $2.9 billion combination with Fusion Acquisition Corp.

Alongside Gene Yoon, founder of technology-focused investment firm Bregal Sagemount, McLaughlin is now sponsoring his own SPAC. Independence Holdings Corp. priced a $435 million IPO on Monday, having increased the number of units sold due to investor demand.

SPACs are shell companies that raise funds from investors to take a private company public.

Pulling in extra cash and fully exercising the greenshoe, a share allotment potentially sold in the days after an IPO prices, McLaughlin told Reuters on Tuesday, will allow Independence to target larger fintech companies, beyond the $5 billion maximum size previously considered.

He added a deal involving a company that processes payments between businesses, or one providing financial management services, would be likely for Independence.

“We provide an incredibly attractive option for a company as we’ve successfully taken many companies through this complex process, so we can give comfort to founders and investors along the way,” McLaughlin said.

Despite heightened investor interest in cryptocurrencies, McLaughlin said Independence wouldn’t be investing in a firm in that industry because most businesses are still too early in their development.

He added it was highly unlikely that Independence would end up merging with a client of his investment bank.

Source: Reuters – Fintech banker McLaughlin hunts bigger deal after upsized SPAC IPO

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Reuters

Former Disney executives Mayer and Staggs plan new SPAC – source

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(Reuters) – Former Walt Disney Co executives Kevin Mayer and Thomas Staggs plan to raise $300 million in an initial public offering for a new special purpose acquisition company (SPAC), a person familiar with the matter said on Thursday.

The duo’s first SPAC, Forest Road Acquisition Corp, agreed a three-way merger last week with fitness companies Beachbody LLC and Myx Fitness LLC that was valued at around $2.9 billion.

Former basketball star Shaquille O’Neal, who is also on the board of directors at pizza chain Papa John’s International Inc, and Martin Luther King III, the oldest son of civil rights leader Martin Luther King Jr, are working for Forest Road II as a strategic advisor and a director, respectively, the source said.

Mayer and Staggs will serve as co-chief executives and co-chairmen of the new SPAC, the source said. They had worked with the first Forest Road SPAC as a strategic advisor and director, respectively.

The source requested anonymity ahead of a regulatory disclosure on the SPAC IPO.

Mayer was Disney’s top streaming executive before he left the media giant last year to become the chief executive of popular video app TikTok. He departed the company three months after joining. Staggs worked at Disney for 26 years and held various roles including chief operating officer.

SPACs are shell companies that raise funds to take a private company public. They have gained immense popularity since last year, as they allow companies to go public by eschewing traditional IPOs.

A string of high-profile SPACs have been raised in the last 12 months, including by financial investors William Ackman and Barry Sternlicht, former U.S. House Speaker Paul Ryan and ex-NFL quarterback Colin Kaepernick.

Source: Reuters – Former Disney executives Mayer and Staggs plan new SPAC-source

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Reuters

Global firms raise $546 billion in January as SPAC frenzy continues

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(Reuters) – Companies raised $546 billion from new bond and share issues in January, as a flood of central bank money-printing and recovering stock markets brought record numbers of new listings, SPAC deals and share sales, Refinitiv data showed on Wednesday.

The numbers included $106.15 billion in initial public offerings (IPOs), SPACs and secondary offerings, with the amount of money raised by SPACs alone soaring 20 times to $24.26 billion from a year earlier, the data showed.

Companies also raised nearly $439.9 billion in corporate debt in January, a 5% fall since the same period last year, but still the second largest January in 25 years.

A SPAC, a shell company that raises money in an IPO before later merging with a privately held company to take the latter public, has become many investors structure of choice over the past year.

January’s haul was already 30% of a total $79 billion raised by SPACs in the whole of 2020.

Traditional IPO volumes in the United States, however, remained higher than SPACs in January, hitting a 25-year high of $33.9 billion.

Some 47% new bond and share issues were U.S. offerings in January this year, with China second with $23.96 billion.

Nasdaq was the clear winner among exchanges, with 167 issues raising $41.12 billion, followed by the New York Stock Exchange and the Hong Kong Exchange a close third, with both raking in a little more than $18 billion respectively.

That was in stark contrast to European financial hubs London and Frankfurt, which raised $4.29 billion and $1.72 billion respectively.

Chinese online video company Kuaishou Technology is the biggest IPO globally so far this year, raising $5.42 billion in Hong Kong, followed by Polish parcel locker business InPost SA which raised $3.40 billion in Amsterdam.

Source: Reuters – Global firms raise $546 billion in January as SPAC frenzy continues

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