With apprehensive investors awaiting three crucial central bank meetings that might set the tone for risk appetite moving into next year, Asian stocks witnessed a mix on Tuesday with currencies remaining in tight ranges. The meeting of the Reserve Bank of Australia (RBA) on Tuesday was the immediate focus, with the Bank of England and the Federal Reserve making policy decisions later in the week.

Adam Dawes, an Investment advisor at Shaw and Partners Ltd, said that they are keen to know the results of the RBA. He anticipates that wording will begin to shift in favor of the hikes in interest rates, or at the very least, the withdrawal of quantitative easing. A reduction in the RBA’s primary policy measure aimed at short-term rates which are ultra-low would signify a shift in the bank’s approach and might serve as a prelude to the Fed’s meeting. The markets believe this meeting would herald the start of the Fed’s bond-buying process.

Before the RBA’s post-meeting statement, the government bonds of Australia declined, with the 10-year benchmark yield rising five basis points to 1.973 percent. Although the Hong Kong benchmark was up by 1.8 percent, Chinese shares began marginally lower. Local blue chips (.CSI300) were down 0.09 percent. The KOSPI index (.KS11) in South Korea started at 1.50 percent higher. After exceeding 36,000 points for the first time during intraday trade, the Dow Jones Industrial Average (.DJI) climbed 0.26 percent. 

In early trade, currency movements were minor, with the dollar lingering near recent highs after posting its largest daily gain in more than four months last Friday. The yen was a smidgeon lower at 114.11 per dollar, with the dollar losing ground against the euro overnight.

The Australian dollar stayed firm at $0.7521 after a week of frantic selling in the local bond market. However, volatility gauges indicate a turbulent week ahead.

On Wednesday, the Federal Reserve plans to approve reducing its $120 billion monthly bond-purchasing programs, which was put in place to help the economy. On the other hand, investors will be looking for comments on interest rates and how long the current spike in inflation would last. Expectations of robust demand and the conviction that producer groups will not be turning into spigots too quickly helped oil prices recover on Monday, reversing earlier losses triggered by China’s release of fuel stockpiles.

On Tuesday, Cathie Wood-led Ark Invest reduced its holdings in Coinbase Global Inc, marking the Cryptocurrency exchange company’s stock’s second straight day of selling.

The prominent money management business sold 5,855 shares in Coinbase via the Ark Innovation ETF, valued at $1.46 million. On Tuesday, shares of the Cryptocurrency exchange finished 2.80%, down at $249.33 a share. Since its spectacular NASDAQ debut in mid-April, Coinbase shares have dropped approximately 24%.

Bitcoin is up by 10.31% this week and is trading at $56,382. While Dogecoin is down by 7.99%, it has experienced increased trading activity, contributing to Coinbase’s income. Shiba Inu, a meme coin, is up 52 percent this week and is attracting a lot of attention.

The Ark Next Generation Internet ETF and the Ark Next Generation Internet ETF are two additional Ark exchange-traded funds that own Coinbase stock.

Before Tuesday’s transactions, the three ETFs had 6.27 million shares in Coinbase, valued at roughly $1.60 billion.

Some more key trading happened for Ark

PayPal Holdings Inc. was sold for 26,901 shares, valued at $6.88 million. The payments company’s stock ended the day 0.31 percent down at $255.85 per share.

Wood’s primary investment technique is to buy on the low end of the market. Her funds were purchased in the short-term losses in Bitcoin, Zoo, Ginkgo Bioworks, and Peloton after it was hammered by a short-seller at various points this year. She believes Bitcoin will reach $500,000 in the next five years.

Coinbase stock is also held by two additional funds, the Ark Next Generation Internet ETF and the Ark FinTech Innovation ETF. All three companies own 6.3 million shares worth around $1.6 billion. In April, the crypto exchange began trading on the NASDAQ.

On Monday, the Ark Innovation ETF added Teledoc, Intellia, and Crispr Therapeutics to its holdings. The company sold around 16,000 shares in BYD, a Chinese electric car firm backed by Warren Buffett.

On Thursday, the financial problem at China Evergrande Group and Beijing’s latest effort to push private businesses weighed down upon Asian markets. The price of crude oil was at a six-week high.

In Japan, China, and Hong Kong, equities fell again, with technology firms leading the way. As regulators tighten their control on the gaming sector, casino stocks have continued to fall in Macau. Futures in the United States fell slightly as European contracts were mixed. Overnight, the S&P 500 had its largest gain since August.

Evergrande’s onshore real estate unit is the leading developer, and one of China’s largest financial concerns. It halted the trading of bonds on Thursday. Authorities have started the process of setting the basis for a future Evergrande debt restructure.

Oil continued its strong advance, which was accompanied by increases in other energy commodities. The dollar rose slightly, while Treasuries remained unchanged. The New Zealand currency and bond rates rose as the country’s economic growth outperformed expectations, despite the outbreak of the Delta variant and increased expenses caused by higher commodity prices and low supply due to the pandemic. Investors continue to analyze the prognosis for economic recovery. The United Nations predicted that the global economy would rebound at its quickest rate in nearly five decades this year but warned of growing disparities between developed and poor countries.

According to T. Rowe Price’s global asset allocation study, while global economic growth is above trend, it has passed peak levels, and the market cycle has entered a phase of “deceleration,” marked in part, by lower profit growth.

President Joe Biden’s economic program is under scrutiny. The House Ways and Means Committee approved $2.1 trillion in new taxes on Wednesday, the largest package of tax hikes in a generation. The additional taxes are primarily targeted at companies and the rich.

The financial industry on the east is flourishing, while the west continues its struggle. Wednesday, Mar 12, witnessed stocks on Wall Street dropping for the third consecutive day. News regarding consumer prices raised every investor’s concern about impending inflation.

If the data checks out, every effort by the Federal Reserve to minimize interest rates will go to waste. The S&P experienced a fall of 2.1%, bringing its weekly loss to 4%. The benchmark was S&P’s worst one-day performance since February and also its worst three-day performance since last October.

The reason behind the drop is the Labor Department’s report regarding the CPI (Consumer Price Index). As per the reports, the CPI surged 4.2% this month alone and continues to rise exponentially since 2008. The period between March and April witnessed an increase of 0.8% too.

While the price pressure rises in the standard financial market, the Federal Reserve believes that the trend will fade in 2022. However, investors are still on their toes against inflation more than ever. Thus, it falls on the Federal Reserve’s shoulders to convince the market that the shift is temporary and everything would settle down in a short period.

Bitcoin Plummets after Tesla Refuses to Accept it for Car Payments

While the traditional financial domain stumbles, the crypto industry witnessed a shocker too. Tesla is globally known for its Bitcoin support, but Elon recently announced that consumers cannot pay for vehicles in BTC. The reason is cited to be the crypto’s high energy usage.

Bitcoin recently failed to break the 60k dollar mark again and fell to 55k dollars. But the crypto was quick to recover and managed to reach the 57k market price. However, the abrupt news by Elon has ruined numerous investors’ portfolios since Bitcoin has now tumbled to the 50k dollar mark.

As of Mar 13, 2021, Bitcoin is trading at 50,961 USD. The 24-hour gap for the crypto is 46k dollars to 57k dollars; however, it constantly fluctuates within the 50.5k to 51k dollar mark. Starting this year, Elon helped Bitcoin reach new heights by proving its market liquidity. However, the latest advancements have hurt the crypto market as a whole.

Wall Street is having a difficult time as the stock value fell for three straight days. Although the Fed believes the inflation indications are merely temporary, investors are still relatively worked up. The news from the crypto side is not desirable either, as, after a viable struggle, Bitcoin again plummeted. The decline happened after Elon announced Tesla not accepting BTC for vehicle payments. The news affected the entire crypto circle as the COIN stock closed at -6.4%.

To launch chess on E-Sports platforms, World Chess has joined hands with Securitize, and Algorand will launch a hybrid IPO, which is a Security Token Offering (STO) followed by an IPO. In the STO, World Chess will sell a 5% stake as security tokens; investors can convert these tokens to equivalent shares once an IPO takes place.

As all transactions of security tokens will be embedded on a blockchain, they cannot be altered or erased. STO will follow KYC and AML norms; thus, full transparency will be maintained about the users purchasing the tokens. The STO will be vetted by financial regulatory agencies and even the exchange facilitating the sale of tokens. It will ensure that World Chess meets all the requirements for launching the STO.

World Chess’s CEO, Iyla Merenzon, has said that the funds from the STO would be used for the IPO and for promoting chess in the E-Sports arena. World Chess will also raise money from traditional financial institutions.

E-Sports and cryptocurrency both appeal to younger users in large numbers. An increasing number of E-Sports platforms are allowing cryptocurrency transactions. Thus, appealing to such users and letting them know that it shares their enthusiasm for cryptocurrency and blockchain technologies is a good move by World Chess. Selling security tokens is a way of connecting users with online Chess, thus, making them a partner in its success as an E-sport.

The popularity of E-Sports is growing in the US, and E-Sports platforms are working to integrate cryptocurrency with their games to allow micro-transactions within the game where users can both earn cryptocurrency and spend it within the game to buy skins, machines, guns, etc. As all the transactions within the game are recorded on a blockchain, they are immutable and cannot be erased. Thus, the user can access them each time he wants to play a game. Cryptocurrency is also being used to develop E-Sports on the line of pay-as-play, which means users will not have to pay for a fixed time to play a game but will pay only for the number of times they play a particular game.

It remains to be seen whether Chess will appeal to E-Sports users in its traditional form or will some changes be made in its rules to attract the E-Sports crowd.

Gold loan provider Muthoot Finance has agreed to buy 100% equity in IDBI Asset Management (AMC) and IDBI Mutual Fund (MF) Trustee Company for Rs 215 crore.

The company revealed this information in a filing to the Bombay Stock Exchange. It further clarified that it planned to complete the transaction by February 2020, provided there were no regulatory issues.

On completion of the transaction, both IDBI Asset Management Ltd and IDBI Mutual Fund (MF) Trustee Company will become wholly-owned subsidiaries of Muthoot Finance.

The mutual fund space has 44 companies who between them have AUM over Rs 26 lakh crore.

With this deal, Muthoot Finance will mark its entry in the mutual fund’s space. Beginning with gold coins, Muthoot has steadily entered other financial services areas like insurance, money transfer, foreign exchange, etc. Thus, customers can find a range of financial products with Muthoot Finance.

Started in 2010, IDBI MF offers 22 schemes across the country covering all levels of investors, with Assets Under Maintenance (AUM) of approximately Rs 5,300 crore.

George Alexander Muthoot, Director of Muthoot Finance, said that IDBI MF was a trusted brand in the mutual fund space with a loyal customer base. He further said,

At Muthoot, we pride ourselves in venturing into mutual fund space through such an established player. The business objectives and customer-centric approach that we follow within Muthoot Group is well aligned with the business objectives of the mutual fund industry.

ICICI Securities were advisors on the deal for IDBI MF, and IDBI Asset Management and J Sagar Associates were their legal advisors. AZB and Partners were legal advisors for Muthoot Finance.

This has been the year of initial public offerings, and the one by Latitude Financial has been one of the most anticipated ones of the year so far. However, as everyone knows, the ultimate price of the share depends on the sort of interest that has been shown by investors during the roadshow. Latitude has now revealed that it is going to offer its share for $2 each at its IPO, and that is the lower range of the price band that it had specified in its prospectus. On Friday, the company informed fund managers about its decision.

The company’s brokers stated in its book message, “Based on investor feedback to date, the price for the Latitude Financial Group IPO has been fixed at $2.00 per share / 12.4x PE / 5.2% dividend yield.” It went on to add, “As previously advised, the bookbuild closes on Wednesday 16 October, however the issuer reserves the right to close the book early.” That being said, it is still on course to be the biggest listing in Australia in 2019, and at the stated share price, Latitude is going to raise as much as $1.24 billion. The sum reflects 12.4 times multiple of its future profits.

The IPO is going to give the financial firm a valuation of $3.54 billion and will make it one of the most valuable financial services company in Australia. Australia is on its way to become one of the most important markets for Fintech and overall financial innovation, which is why it is not a surprise to see such a big-ticket IPO being floated by a financial services company. Some of the biggest shareholders in Latitude Financial include Deutsche Bank and KKR, and it has grown at an impressive pace over the past few years.

Uber which changed the way urban transportation was done is troubled by Wall Street. The first day of the Uber IPO trading on the NYSE began with a fall of 7.6% from its Initial Public Offering price of $45. By the end of the day on Friday, the market capitalization of the company was a shade above its $76 billion that private investors put it at and was at $76.5 billion. The ride-hailing company started at $42 for a share down by its $45 IPO. Later it further slid down to $41.06 quashing all the hopes of a successful IPO for its CEO Dara Khosrowshahi who was appointed specifically to work on making the IPO a success.

The reduction in stock prices was a shocker and raised many questions on the fate of other tech start-ups that are about to list their shares shortly. Many Wall Street banks were hired its underwriting, and there is a concern that some of them have miscalculated the actual value and also the risk appetite of investors. Traditionally, tech companies have seen a jump in share prices on the first day of their IPOs. Some big companies like Facebook, Snap, Alibaba, etc. rose in the initial offering. Adding to the woes of Uber was the volatile stock market on Friday with the S&P 500 index on a decline for the fifth day due to ongoing trade tensions between the US and China.

Softbank value slides down
After the Uber IPO failed to take off as predicted the Softbank shares saw a fall of 5.4%. They reported a loss of $9 billion in the market despite a valuation gain that they got from having a stake in Uber. Softbank founder Masayoshi Son who is transforming the company from a telecom operator to an investment firm for tech start-ups has invested $100 billion in Vision Fund, and its stocks have risen by more than 60% in the past year, but the recent slide in its value will not augur well for Son’s portfolio.

Though there is a slide in Softbank’s value due to Uber’s IPO making a fall on the first day of its IPO, market analysts like Tomoaki Kawasaki say “It’s too early to tell how sensitive SoftBank will be to Uber’s price moves going forward. But even if they fall, that doesn’t have a direct impact on Vision Fund profits.”. But some investors are already selling as the debut was not as they had expected.

Last month ride-hailing company Lyft had its initial public offering (IPO) amid much fanfare, but within two days the company’s shares crashed after the listing day positivity, and since then the stock has been in a cycle of negativity. In a new development, the company has released some alarming projections that are going to put off potential investors further and perhaps make the current investors think twice about continuing with their existing holding. On Tuesday, Lyft recorded another humungous loss as the quarterly losses stood at a staggering $1.1 billion, but in a more alarming development, the company has also stated that its losses are going to be at its peak in 2019. At the same time, the company went on to state that it is going to cut costs significantly and ensure that revenues per customer are raised.

That being said, the company sounded bullish about its future and Brian Roberts, the Chief Financial Officer of Lyft went on to state that a path to profitability exists. He said, “We are encouraged by the strength of our core business and see a clear path to profitability in ride sharing.” Despite these announcements from the company, it needs to keep in mind that at the time of its IPO, Lyft had stated that it might never actually make a profit and that must weigh on the minds of most investors. The stock never really recovered since its fall on the day after listing and is down 29% from its listing price so far.

However, Lyft’s announcements could also affect its much larger rival Uber, which is all set to have its mega IPO this week. It is going to be the biggest IPO in the history of Wall Street, with the company seeking a valuation of around $90 billion and it remains to be seen whether Lyft’s troubles affect Uber’s listing day performance or not. At the end of the day, they are competitors in the same line of business, and this is only going to be the second IPO for a ride-hailing company. That being said, the interest in Uber from large institutions is genuine, and although the company has stated that it might ever be able to turn a profit, investors could still bet on what it promises.

Over the last two decades, many Chinese companies have become major players in industries that have traditionally been dominated by household global names, and in a new development, Chinese coffee house chain Luckin Coffee Inc and Starbucks’ rival is gearing up for a mega Initial Public Offering (IPO). However, what is even more interesting is the fact that the company is going to have its IPO at the stomping ground of its much bigger rival, the United States. According to sources which are close to the developments, the company is looking to raise as much as $800 million in its IPO in the US and have already set $100 million as the place holding the amount in its filings with the Securities and Exchange Commission. However, sources have revealed that the actual IPO is going to be a much larger one.

The sources who are aware of the developments have stated that the company is looking to raise a minimum of $500 million from the IPO, with the maximum target remains $800 million. That being said, the company has not yet revealed the number of shares which are going to be put on sale on the day of the IPO. It is a very exciting time for the company as it raised a staggering $150 million in its latest round of funding and is now valued at $2.9. However, with the IPO, they are targeting of valuation to the tune of around $5 billion and needless to say, it is all set to be one of the biggest listings in the US this year once trading goes live on the stock.

The reason behind listing in the US instead of places like Hong Kong is perhaps the fact that it has not yet turned a profit ever since it first opened for business in 2017. It is a well-known fact that most bourses outside of the US are far more conservative in nature and investors are reluctant to bet big on companies that can’t show profits, irrespective of the prospect of the business. However, when it comes to the US, that is not often the sole focus, and the potential investors try to work out whether the company in question can grow or not. In that regard, Luckin is in a good position since the company has grown at a tearing pace over the past few years and the number of cups of coffee that is being sold each day has grown exponentially. Last year, the company sold 8.7 billion cups, and they expect that figure to balloon to 15.5 billion cups in the next four years.