|Bid||195.63 x 800|
|Ask||196.19 x 900|
|Day's Range||195.19 - 201.88|
|52 Week Range||151.70 - 245.08|
|Beta (3Y Monthly)||1.31|
|PE Ratio (TTM)||8.22|
|Earnings Date||Oct 15, 2019|
|Forward Dividend & Yield||5.00 (2.47%)|
|1y Target Est||237.82|
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Currency havens reigned as traders returned to their desks early Monday after an action-packed weekend that saw no let-up in the escalating tensions between the U.S. and China.Soon after the foreign exchange market opened in New Zealand, the Japanese yen, the top-performing major currency of the year, climbed to a new 2019 high against the dollar, and the offshore yuan was quoted at an all-time low, as investors ramped up their bid for safety amid concerns that a bruising trade war will hamper global growth. The Australian and New Zealand dollars fell.President Donald Trump’s hammerlock on battling China any way he can as the two super powers struggle to make a deal was already evident after he announced additional tariffs on Chinese products just as the markets closed on Friday.With the trade rift growing, traders have lifted chances of three more rate cuts in 2019 by the Federal Reserve. Chairman Jerome Powell’s warning at Jackson Hole Friday that the U.S. economy faces “significant risks” was quickly met with new threats from Trump of further action on China. While his decision to impose additional tariffs fell short of speculation for a stronger U.S. response, such as currency intervention, odds remain dim for a trade agreement anytime soon. All this makes the trading week set to start on febrile footing.“The market now expects the trade tensions to unleash an even bigger deflationary force and growth hit than it did before last week,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “We should expect a weaker fix for the yuan versus the dollar. Haven currencies, like the yen and Swiss franc, will be in demand and those tied to growth - including the Australian, New Zealand and Canadian dollar - will be under pressure.”In the wake of a 2.6% drop in the S&P 500 Index Friday, some stocks in the Middle East on Sunday gave global investors a taste of what’s to come, with indexes in Israel and Saudi Arabia falling at least 2%. Early Monday, the greenback was briefly quoted below the year’s low versus the yen - which was reached in January at 104.87 - before slightly bouncing at just above 105. More flight-to-safety demand could push the 10-year Treasury yield down this week after it finished Friday at about 1.5%.The Kiwi and the Aussie dollar were about 0.3% lower as the Asian trading day began Monday.Two top White House officials said President Trump has the authority to force American companies to leave China, as he claims -- but whether he invokes the power is a another question.Treasury Secretary Steven Mnuchin, speaking on “Fox News Sunday” from the Group of Seven meeting in Biarritz, France, said Trump would have the ability under the International Emergency Economic Powers Act, if he declared an emergency. White House economic director Larry Kudlow agreed, in an interview on CNN’s “State of the Union,” but said “there’s nothing right now in the cards” to do so.“The latest round of tariff announcements” that came out on Friday “ imply moderate further escalation and raise some risks of more escalation to come, which make us cautious in the very short-term,” Ebrahim Rahbari, Citigroup’s global head of currency analysis, said in a note. The yuan “is likely to weaken further” with the offshore yuan to reach 7.5 in coming months.Trump’s piling on more criticism of Powell on Friday, coupled with his call to U.S. companies operating in China to consider leaving, pummeled markets going into the weekend. This backdrop also sent a key slice of the yield curve, which is closely watched as a gauge of an impending recession, further into inversion as traders’ viewed the growth outlook as more dire and ramp up bets the Fed cuts.The gap between three-month rates and yields on 10-year Treasury notes fell to Friday to as little as -45.9 basis points - its least since March 2007.“Escalation of the trade war could extend the bond rally further, with increased probability that U.S. 10s revisit all-time yield lows set in 2016,” - at 1.318%, wrote a team of strategists at Goldman Sachs Group Inc. including Praveen Korapaty, on Sunday. “Cross-border flows into U.S. dollar fixed income, driven by a surge in negative yielding debt, may not moderate without broad improvement in data.”There is roughly $16 trillion pool of global debt with sub-zero rates. Treasuries have gained 8.4%, leaving them on track for their best annual performance since 2011, according to the Bloomberg Barclays U.S. Treasury Index.A dive in the greenback Friday also sparked renewed speculation the U.S. may intervene to weaken the currency.The Bloomberg Dollar Spot index sank 0.35% on Friday.“Friday’s financial market blows signal the yuan will keep weakening, safe haven assets will stay in demand and the dollar will remain supported for now by limited Fed easing despite fears of FX intervention,” said Mansoor Mohi-uddin, senior macro strategist at NatWest Markets in Singapore in a note.Adding to the nervousness was a Group of Seven gathering in Biarritz, France, at which French President Emmanuel Macron appeared to anger the U.S. by seeking to put climate change at the top of the agenda. The meeting may end without a final communique.“The trade war between the U.S. and China is now escalating at a bewildering pace, which is likely to trigger further market volatility and expectations of ever more aggressive monetary easing from the Federal Reserve,” said Patrick Wacker, a fund manager for emerging-market fixed income at UOB Asset Management Ltd. in Singapore. “The yuan will keep falling towards the bottom of its new near-term range of 7.05-7.25 against the dollar.”On Sunday, possible signs that Trump may be regretting being aggressive on China at the G-7 gathering soon abated when the White House said media misinterpreted his initial remarks. That confusion will only add more uncertainty to the outlook, some analysts predicted.White House Press Secretary Stephanie Grisham said that Trump doesn’t regret starting a trade war but he does have second thoughts on whether he should have hit the Chinese even harder.Trump’s comment followed by the reversal only “adds more uncertainty to markets, which increases the odds of a U.S. recession,” said Andrew Brenner, the head of international fixed-income at Natalliance Securities in New York.(Updates with Australian and New Zealand dollar quotes.)To contact the reporters on this story: Netty Ismail in Dubai at email@example.com;Liz Capo McCormick in New York at firstname.lastname@example.org;Filipe Pacheco in Dubai at email@example.comTo contact the editors responsible for this story: Jenny Paris at firstname.lastname@example.org;Justin Carrigan at email@example.com;Dana El Baltaji at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Business Roundtable says companies must serve all stakeholders; value investors should be skeptical Continue reading...
“Everybody laughs about the glowing orb,” says HR McMaster, recalling a memorable image of Donald Trump’s trip to Riyadh in 2017. The photo in question shows the president, the First Lady, King Salman of Saudi Arabia, and President Abdel Fattah al-Sisi of Egypt, hands close together touching a frosted glass globe, lit eerily from within.
High-frequency trading and ETFs have exploded in popularity since 2008, but they have yet to be tested in a bear market Continue reading...
Goldman (GS) might acquire a majority stake of 51% holding in its Chinese investment banking joint venture, Goldman Sachs Gao Hua Securities Co.
(Bloomberg) -- Gold’s faring extremely well as a haven asset, with inflows into exchange-traded funds hitting 1,000 tons since holdings bottomed in early 2016 after a prolonged unwind in the wake of the global financial crisis.Total known ETF holdings expanded to 2,424.9 tons on Wednesday, the highest since 2013, following inflows over the past three years and a continued build-up in 2019, according to data compiled by Bloomberg. Current assets are about 1,000 tons higher than the post financial crisis nadir of 1,425.1 tons.Gold has surged this year as investors seek protection from slowing global growth, the incessant trade war, and turmoil in the bond market that suggests the U.S. may be headed for another recession. The rise has been aided by a rate cut from the Federal Reserve and expectations more will soon follow. This week, veteran investor Mark Mobius gave a blanket endorsement to buying bullion, saying accumulating the precious metal will reap long-term rewards.Others are also bullish. Goldman Sachs Group Inc. has said prices will climb to $1,600 an ounce over the next six months. The bank’s global head of commodities research, Jeffrey Currie, said that gains are likely be fueled by demand for ETFs as well as increased central-bank purchases. Spot gold traded at about $1,500 on Thursday, up 17% this year.(Updates with price in final paragraph.)To contact the reporter on this story: Ranjeetha Pakiam in Singapore at email@example.comTo contact the editors responsible for this story: Phoebe Sedgman at firstname.lastname@example.org, Jake Lloyd-Smith, James PooleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Several factors are roiling world markets right now, from fears of a possible U.S. recession to erratic policymaking, trade tensions and general uncertainty. But the unusual size of the moves -- regularly on the order of 1% to 3% -- is being heightened by something else: the struggle to find someone with whom to trade. The decline in trading liquidity is evident in several metrics. Volumes have declined. Since 2007, average daily trading in U.S. Treasury bonds (measured as a percentage of market size) has fallen by over 60%. Trading in traditionally less liquid corporate and high-yield bonds has shrunk by similar amounts. The number of small trades (under $1 million) has grown, suggesting a lack of partners for larger deals.Over the same period, U.S. equity market turnover has also shrunk. The Goldman Sachs Group Inc. estimates that in 2018, by some measures, single-stock liquidity fell 30% to 40%. Other telling indications include significant intra-day moves, frequent price spikes, higher volatility of bid-offer spreads and the proliferation of flash crashes such as the sharp increase in the Cboe Volatility Index or VIX at the end of 2018 and the Japanese yen flash in January 2019.Structural changes are driving this trend. For a variety of reasons, traditional market-makers such as banks and dealers have become less active; bank trading assets have fallen from 40% of total assets in 2008 to half that figure. Regulatory changes have made trading more capital-intensive. Meanwhile, industry consolidation has reduced the number of participants. The trading inventory of government and especially corporate debt has fallen.Trading liquidity has instead become dependent on different kinds of investors. Algorithmic traders now make up around 50% of U.S. equity trading. Other providers range from pension fund and insurance companies to mutual funds, exchange-traded funds or ETFs, hedge funds and private investors. This increased role for investors may be problematic. Investment funds and algorithmic traders are not natural providers of liquidity. They channel investor money. Unlike banks, they do not have permanent capital to risk in providing liquidity or warehousing positions. Traditional market makers, such as banks, can buy or sell based on assessed true value, building inventory and waiting for market fluctuations to subside. In part, this is made possible by the greater stability of their funding and capital base.By contrast, funds are limited in their ability to make markets by adjusting prices. Their ability to buy and sell is dependent on the flows of investible funds. Large inflows necessitate buying, as most fund have limits on how much money they can keep in cash. At the same time, since most funds offer investors the chance to withdraw their money on short notice, redemptions obligate funds to sell. Where investors are leveraged, the need to meet margin calls restricts liquidity and trading activity. This further limits the ability of investors to provide market liquidity just when it’s most needed.Other investors are constrained by mandates and investment rules. ETFs, which are now a major influence, must adjust holdings to reflect the underlying benchmark, irrespective of value or price considerations. Algorithmic traders compete with central and commercial banks in chasing safe and highly liquid assets. Perversely, this diminishes liquidity for those assets. Diminished trading liquidity has several implications for investors. Their ability to trade is increasing fragile. Volumes can evaporate quickly when volatility rises, as investors turn from buyers to sellers and algorithmic traders withdraw. In effect, providers of liquidity then become users, destabilizing markets. Price discovery, which underlies all trading and valuations, becomes unreliable. The different focus of investors in the current cycle complicates matters. Investors searching for return have invested in riskier, less liquid assets. As investors in Argentina have discovered, a quick exit is sometimes impossible in emerging markets.There’s also heightened risk of investors being unable to exit “gated” funds where redemptions are suspended. The three largest U.K. property funds froze over $12 billion in assets in the aftermath of the Brexit vote. More recently, the Swiss fund manager GAM Holding AG and iconic U.K. investor Neil Woodford have blocked redemptions. Bank of England Governor Mark Carney has warned that investment funds that promise to allow customers to withdraw their money on a daily basis are "built on a lie."There are broader implications. Illiquidity may precipitate fire sales and large asset price moves, resulting in sudden and sharp tightening in financial conditions.In 2007, then-Citigroup Inc. head Chuck Prince made an ill-fated comparison to investing as a game of musical chairs: You kept dancing while the music played. The problem, as traders are rediscovering, is finding a chair when the music stops. Investors are underestimating and under-pricing the risks diminished market liquidity could pose in the next downturn. (Corrects to delete reference to H2O Asset Management LLP as a “gated” fund in thirteenth paragraph. )To contact the author of this story: Satyajit Das at email@example.comTo contact the editor responsible for this story: Nisid Hajari at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Satyajit Das is a former banker and the author, most recently, of "A Banquet of Consequences."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Tokyo is about to get another mound of capitalism.Mori Building Co. is spending 580 billion yen ($5.4 billion) on a new, 20-acre hub of commerce in the city’s core. Similar in size to New York’s Rockefeller Center, the complex will have shops, restaurants, 213,900 square meters of office space, 1,400 residences, a world-class hotel, an international school and the city’s biggest food court.If this capital of 14 million has a king of the hills, it’s the Mori real-estate empire. The new project will eclipse the builder’s signature development, Roppongi Hills — home to Google and Goldman Sachs Group Inc. offices, and a magnet for shoppers and international visitors. The closely held company, whose late founder was once the country’s richest man, is betting that more people — especially foreigners — will flock to live and work in Tokyo over the coming years.“Japan’s office market is behind in relative size and depth,” Mari Kumagai, head of research at Colliers International Group Inc. “If you’re serious about making money from buildings, you have to do this.”Set to open in 2023, the new endeavor doesn’t yet have a name. For now, it’s called the Toranomon-Azabudai project, from the neighborhoods Mori will gobble up in Minato-ku, one of Tokyo’s toniest enclaves. Starting with the 1986 debut of nearby Ark Hills, the real-estate developer has been relentless in its push to transform Tokyo’s skyline with hefty buildings clad in steel and glass.Mori’s properties often cater to foreign businesses and visitors, offering sanctuaries for them to stay, work and shop in a megalopolis that can be difficult to navigate. Signage and restaurant menus in the city still often lack English or other languages. Green spaces are still few and far between, and the view from the 52nd floor of Roppongi Hills betrays a sea of drab, gray low-rise homes and buildings that stretch to the horizon.“This is going to become Tokyo’s newest landmark,” said Shingo Tsuji, Mori’s chief executive officer. “We’ve spent 30 years thinking about this project, and how cities should be created.”Mori’s goal is to create a city within a city that people can “escape to, rather than flee from.” Ground broke this month on the big new project, which will connect two subway stations and create a new arterial road to relieve the development’s impact on vehicle traffic. Although the total footprint will be smaller than its predecessor, the new complex will have more floor space, with a 64-story main tower and two residential towers.When Mori embarked on its Roppongi project almost two decades ago, developers were jumping over each other to put up new buildings in Tokyo. Land prices were down 75% after Japan’s economic bubble burst in the early 1990s, interest rates were on their way to zero and new zoning laws made it easier to combine lots for big projects.That bet may have paid off. But now, Mori’s new project is being built under a different scenario, coming after a long run-up in office space demand. Tokyo’s real-estate market is thriving, with vacancy rates near record lows below 3%, according to Colliers, the real-estate investment and services firm.The big question is whether that trend will continue, as well as Mori’s ability to keep riding the wave of mega projects. Although rental growth has been robust, Colliers predicts it will peak at around the current 5% before easing to an average of 0.8% over the next few years. All told, central Tokyo will have 70 major real-estate projects breaking ground from 2018 through 2023, according to the firm.“The office market is doing really well, vacancies are coming down,” said Patrick Wong, a Bloomberg Intelligence analyst. “The issue is whether rents can keep going up further.”Tokyo isn’t the only frothy real-estate market in the region. Singapore and Sydney are also seeing low office-leasing vacancies as companies hire more people. Last month, the government of Singapore clamped down on speculative buying and selling, with the central bank citing “euphoria” in the property market.At the same time, protests in Hong Kong have put the brakes on demand for central office space in China’s special administrative region. Spooked investors are turning elsewhere to places such as Singapore, which saw private home sales surge a sequential 43.5% in July. Although no multinational corporations have said they’re leaving Hong Kong, it’s probably on their mind, according to Wong. “This could be an opportunity for Tokyo,” he said.That’s music to the ears of Japanese Prime Minister Shinzo Abe, who in 2014 pushed to establish new strategic special zones in Tokyo and other cities as part of his Abenomics revitalization plan. The areas of Tokyo that fall under those zones, which offer deregulation and other incentives, are right where Mori has been developing properties for decades.No surprise, then, that the Toranomon-Azabudai mega project has been 30 years in the making. Work on it started even before Roppongi Hills. For its major projects, Mori’s employees spend years going door to door, persuading local residents and property owners to hand over their land in exchange for prime residential space in the new buildings.It’s hardly a coincidence that Mori’s suffix for its biggest developments — there’s also Toranomon Hills and Atago Green Hills — harks back to that other chichi neighborhood, Beverly Hills. It’s also a nod to the Japanese word, Yamanote. Transliterated as “the hill’s hand,” the term refers to the more desirable, hilly land west of the Imperial Palace in feudal Tokyo that now include Mori’s properties.“We’ve poured everything we’ve learned from our Hills projects into this new development,” Tsuji said.Mori’s ultimate vision is to link up all of its properties into an uber-complex of offices, homes and retail space. Although the developer is going to unveil the project’s name just before it opens for business, odds favor it will end with “Hills.”(Updates with analyst’s comment in fourth paragraph. A previous version of this story corrected the timeframe of projects.)\--With assistance from Hiromi Horie.To contact the reporter on this story: Reed Stevenson in Tokyo at email@example.comTo contact the editors responsible for this story: Emma O'Brien at firstname.lastname@example.org, Reed Stevenson, Jeff SutherlandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FT premium subscribers can click here to receive Due Diligence every day by email. Japan, according to received wisdom, doesn’t do hostile takeovers. There was a brief spate of attempts about a decade ...
(Bloomberg) -- Equity hedge funds are enjoying their strongest performance since 2009 -- with the S&P 500 index up 16% this year -- but Goldman Sachs Group Inc. warns that crowding is a risk.Funds have benefited from both a rising stock market and successful stock selection, strategists including Ben Snider and David Kostin wrote in a note Aug. 20. They’ve also concentrated their holdings into a reduced number of industries, such as health care, and into single names, particularly Amazon.com. Inc. When rallies peak, too much professional money can try to get out of the same stocks simultaneously and exaggerate declines.“Funds continue to lift portfolio weights in their top positions, which are increasingly also the top positions of other funds,” the strategists wrote. “These dynamics, along with higher leverage, lower portfolio turnover, and declining market liquidity, have boosted the performance of momentum stocks while also increasing the risk funds face from crowding.”They added that this will “make funds particularly vulnerable to a potential market unwind, particularly if accompanied by the decline in liquidity that typically coincides with falling risk appetite.”Investment banks from Goldman to Morgan Stanley increasingly study the relative positioning of funds that compete with each other to beat benchmarks. The crowding issue is in focus this month, as August has seen a spike in stock and bond markets volatility. Hedge funds rushed for safety last quarter as Treasuries rallied and concerns about economic slowdown flared, regulatory filings compiled as of last week showed.Goldman found the most popular long positions had lagged the S&P 500. The favorite short positions trailed by even more. Overall, the average equity fund return in 2019 has been 9%.Alongside the success comes some concern as well, after examining the holdings of 835 hedge funds with $2.1 trillion of gross equity positions at the start of the third quarter.Goldman found a rotation continued from technology into health care, which is now the sector with the largest overweight versus the Russell 3000 Index, which like the S&P 500, is also up 16% this year. Overweights in health care and industrials are at a 10-year high, the report said. Funds trimmed positions in semiconductors and “other stocks exposed to U.S.-China trade conflict,” according to the strategists.Also, late June and July saw a sharp rise in exposures as the Federal Reserve began to cut rates and U.S.-China trade relations appeared to thaw, the strategists said. But leverage has been trimmed again in August. While the S&P 500 rose in June and July, it’s down 1.8% so far this month. Amazon.com appeared most frequently among the 10 largest holdings of funds, followed by Facebook Inc. New names on the list of the top 50 such stocks include Allergan Plc and Micron Technology Inc.(Adds S&P 500 performance in recent months in penultimate paragraph.)To contact the reporter on this story: Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, ;Samuel Potter at email@example.com, Todd White, John ViljoenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Goldman Sachs Group Inc's buyout arm is exploring the sale of Safe-Guard Products International LLC, which could value the auto warranty company at more than $1 billion, including debt, people familiar with the matter said on Wednesday. Goldman Sachs is working with advisers on an auction for Safe-Guard, though there is no certainty a deal will be reached, said the sources, who asked not to be identified because the matter is confidential. Goldman Sachs declined to comment.
(Bloomberg) -- Goldman Sachs Group Inc.’s trading division is planning its biggest hiring spree in years. The catch? The entire effort is focused on coders, a sign of where Wall Street is headed.The firm is looking to add more than 100 engineers for tech-related roles on the trading floor in the coming months, according to Adam Korn, co-head of engineering in the trading division. Goldman plans to raid its rivals in the tech and finance industries, with most of the new positions to be based in New York and London.“You are going to see us very actively in the marketplace going after this kind of talent,” Korn said. “Historically, engineers were not seen as a part of the business. That’s obviously changed.”The firm is focused on adding people who can respond to the demands of trading partners seeking to automate, Korn said.Wall Street has been in a state of upheaval for the past decade, especially involving traders who sit in between buyers and sellers of stocks and bonds. Rapid advancements in technology have fundamentally altered the way that business gets done, enabling firms to cut staff as automation takes over. Banks are responding by allocating more resources to technology.The firm’s new management under Chief Executive Officer David Solomon approved the plan earlier this year.“We walked in there with our ‘Shark Tank’-esque plan,” Korn said. “The leadership group was excited and interested and the firm is putting money where its mouth is.”Marquee HiresThe hires at Goldman will help continue the build-out of Marquee, a trading and risk-management platform that the firm hopes will translate into a meaningful business line in its trading division.Goldman has also been overhauling its electronic-trading platform to serve large quant hedge funds, with an eye toward using advancements in trading tools that could then be deployed across a larger set of business partners. Reducing trading time, processing more requests and spitting out faster responses to queries would help generate more trades and more business.Raj Mahajan, a partner at the firm, has been a key part of the initiative, helping build out the technology backing the equity-trading operations. He was recently elevated to a new role that will make him responsible for all quant client needs.The effort has been making some inroads, with the firm last quarter scooping up more than $2 billion in quarterly revenue from equities trading and narrowing the gap with Morgan Stanley, which has held the mantle of Wall Street’s top equities-trading shop in recent years.That didn’t go unnoticed.“We’ve done over $2 billion a quarter, the first and second quarters, for a while now,” Morgan Stanley Chief Financial Officer Jonathan Pruzan said after the firm released second-quarter results. “A competitor did this for the first time in a long time.”To contact the reporter on this story: Sridhar Natarajan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Despite a challenging backdrop, Warren Buffett is adding bank stocks to his investment portfolio. Thus, investing in banks with strong fundamentals and prospects seem to be a wise decision.
for a role in Saudi Aramco’s planned stock market listing after a charm offensive by top executives, including former Trump administration official Dina Powell. The Wall Street bank had failed to secure a top advisory role in 2017 when Saudi Aramco nominated banks including JPMorgan Chase, Morgan Stanley, Moelis, Evercore and HSBC for what could be the world’s largest listing. The successful launch of a $12bn international bond by Saudi Aramco this year renewed momentum for the IPO and revived optimism about the Saudi economy after the international condemnation that followed the killing of journalist Jamal Khashoggi.
Banks likely to get some respite soon, with the U.S. regulators showing the green light for easing of the Volcker Rule under the Trump administration.
Goldman Sachs has applied to take majority control of a securities joint venture in China in a move that will bring the US investment bank closer to its goal of sole ownership of the company. China has in the past year expedited the opening of its financial sector to foreign companies, following criticism that the process has dragged on for far too long without allowing true market access. In December UBS became the first to receive the green light, with the China Securities Regulatory Commission approving its request to raise its stake in Beijing-based UBS Securities from 24.99 per cent to 51 per cent.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Berlin’s vibrant startup scene is creating a new generation of wealthy entrepreneurs who are increasingly looking for advice on how to manage their money.One bank that’s trying to capitalize on that demand is locally based Weberbank. While some of Germany’s biggest private banks are forgoing the capital, the 70-year-old company aims to grow its asset under management by 10% a year by tapping into this relatively new source of business.“The number of wealthy people is rising here. We see plenty of potential,” Chief Executive Officer Klaus Siegers said in an interview. The company has no need to look beyond the city for private-banking clients, he said.Siegers acknowledged that Berlin has a relatively small number of the kind of small and mid-sized companies that have thrived in other parts of the country, enriching their owners. “However, this gap is increasingly being filled by the startup scene in the city,” Siegers said.Berlin’s fintech boom has in recent months attracted big-name investors including Goldman Sachs Group Inc. According to a study by EY, startups based in the city received a total of 2.1 billion euros ($2.3 billion) in financing in the first six months of this year alone. Salaries in the fintech industry are rising sharply, the head of Berlin-based investor Finleap said earlier this month.Old MoneyThe city’s newly rich aren’t the only reason why Siegers sees his potential customer base growing. “There are also established wealthy people who are attracted to Berlin’s art and culture and who want to relocate here. And of course, they also need a private bank in Berlin,” he said.The heads of Frankfurter Bankgesellschaft and Bankhaus Metzler recently declared Berlin unfit to house private banking locations, citing a lack of potential clients. Other companies in the industry, such as Fosun International Ltd.’s Hauck & Aufhaeuser, don’t have a presence in the city either.Since 2009, Weberbank has been owned by Mittelbrandenburgische Sparkasse. The public-sector lender bought the business from failing WestLB. Weberbank’s private-banking customers have, on average, around 2 million euros of assets, Siegers said, even though there is no set minimum to become a client. The company, which also caters to some institutional investors, has assets under management of about 6.2 billion euros and is profitable.(Quote on clients added in last paragraph)To contact the reporter on this story: Stephan Kahl in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Erhard Krasny at email@example.com, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Goldman Sachs has applied for majority control of its Chinese joint venture, the bank confirmed on Wednesday, the latest international bank to do so ahead of Chinese plans to eventually allow foreigners full control. The bank submitted an application with the China Securities Regulatory Commission (CSRC) on Monday to take its stake in Goldman Sachs Gao Hua Securities to 51% - the maximum permitted - from its current 33% holding. Western banks' lack of control over the JVs, along with their limited contribution to revenues, have long been a source of frustration for foreign banks in China.