Finance

“Chinese companies are becoming increasingly interested in getting listed in Hong Kong or New York, due to difficulty in getting listed in Mainland China and pressure from shareholders to quickly achieve an exit,” said Marcia Ellis, Hong Kong-based global co-chair of private equity practice, Morrison Foerster.
Few large China-based companies have listed in New York since the Didi IPO in the summer of 2021 increased scrutiny by U.S. and Chinese regulators on such listings.
Many Chinese companies that list in Hong Kong see it as a way to test investors’ appetite for an IPO in another country, said Reuben Lai, vice president, private capital, Greater China at Preqin.

Chinese autonomous driving company WeRide listed on the Nasdaq on Friday, Oct. 25, 2024.
China News Service | China News Service | Getty Images

BEIJING — Chinese IPOs in the U.S. and Hong Kong are set to increase next year, analysts said, as some high-profile listings outside the mainland this year raise investor optimism over profitable exits.
Chinese autonomous driving company WeRide listed on the Nasdaq Friday with shares rising nearly 6.8%. Earlier this month, Chinese robotaxi operator Pony.ai also filed paperwork to list on the Nasdaq. Both companies have long aimed to go public.

Few large China-based companies have listed in New York since the Didi IPO in the summer of 2021 increased scrutiny by U.S. and Chinese regulators on such listings. The Chinese ride-hailing company was forced to temporarily suspend new user registrations, and got delisted in less than a year.
U.S. and Chinese authorities have since clarified the process for a China-based company to go public in New York. But geopolitics and market changes have substantially reduced U.S. IPOs of Chinese businesses.
“After a couple of slow years, we generally expect the IPO market to revive in 2025, bolstered by interest rate decreases and (to some extent) the conclusion of the U.S. presidential election,” Marcia Ellis, Hong Kong-based global co-chair of private equity practice, Morrison Foerster, said in an email.

“While there is a market perception of regulatory issues between the U.S. and China as being problematic, many of the issues driving this perception have been solved,” she said.
“Chinese companies are becoming increasingly interested in getting listed in Hong Kong or New York, due to difficulty in getting listed in Mainland China and pressure from shareholders to quickly achieve an exit.” 

This year, as many as 42 companies have gone public on the Hong Kong Stock Exchange, and there were 96 IPO applications pending listing or under processing as of Sept. 30, according to the exchange’s website.
Last week, Horizon Robotics — a Chinese artificial intelligence and auto chip developer — and state-owned bottled water company CR Beverage went public in Hong Kong.
The two were the exchange’s largest IPOs of the year, excluding listings of companies that also trade in the mainland, according to Renaissance Capital, which tracks global IPOs. The firm noted that Chinese delivery giant SF Express is planning for a Hong Kong IPO next month, while Chinese automaker Chery aims for one next year.
Still, the overall pace of Hong Kong IPOs this year is slightly slower than expected, George Chan, global IPO leader at EY, told CNBC in an interview earlier this month.
He said the fourth quarter is generally not a good period for listings and expects most companies to wait until at least February. In his conversations with early stage investors, “they are very optimistic about next year” and are preparing companies for IPOs, Chan said.
The planned listings are generally life sciences, tech or consumer companies, he said.

Hong Kong, then New York

Investor sentiment on Chinese stocks has improved over the last few weeks thanks to high-level stimulus announcements. Lower interest rates also make stocks more attractive than bonds. The Hang Seng Index has surged over 20% so far this year after four straight years of declines.
Many Chinese companies that list in Hong Kong also see it as a way to test investors’ appetite for an IPO in another country, said Reuben Lai, vice president, private capital, Greater China at Preqin.
“Geopolitical tensions make Hong Kong a preferred market,” Ellis said, “but the depth and breadth of US capital markets still make many companies seriously consider New York, especially for those that focus on advanced technology and are not yet profitable, who sometimes believe that their equity stories will be better received by U.S. investors.”  
Just over half of IPOs on U.S. exchanges since 2023 have come from foreign-based companies, a 20-year high, according to EY.
Geely-backed Chinese electric car company Zeekr and Chinese-owned Amer Sports both listed in the U.S. earlier this year, according to EY’s list of major cross-border IPOs.
Chinese electric truck manufacturer Windrose said it intends to list in the U.S. in the first half of 2025, with a dual listing in Europe later that year. The company, which aims to deliver 10,000 trucks by 2027, on Sunday announced it moved its global headquarters to Belgium.
A recovery in Chinese IPOs in the U.S. and Hong Kong can help funds cash out on their early stage investments in startups. The lack of IPOs had reduced the incentive for funds to back startups.
Now, investors are looking at China again, after recently deploying capital to India and the Middle East, Preqin’s Lai said. “I’m definitely seeing a greater potential from now in China whether it’s money coming back, valuation of the companies, exit environment [or] performance of the funds.”
While the pickup in investor activity is far from levels seen in the last two years, the nascent recovery includes some investments in consumer products such as milk tea and supermarkets, Lai said. More

JPMorgan Chase has begun suing customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical glitch that allowed them to withdraw funds before a check bounced.
The bank on Monday filed lawsuits in at least three federal courts, taking aim at some of the people who drew down the highest amounts in the so-called infinite money glitch that went viral on TikTok.
A Houston case involves a man who owes JPMorgan $290,939.47 after an unidentified accomplice deposited a counterfeit $335,000 check at an ATM, according to the bank.

JPMorgan Chase has begun suing customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical glitch that allowed them to withdraw funds before a check bounced.
The bank on Monday filed lawsuits in at least three federal courts, taking aim at some of the people who withdrew the highest amounts in the so-called infinite money glitch that went viral on TikTok and other social media platforms in late August.

A Houston case involves a man who owes JPMorgan $290,939.47 after an unidentified accomplice deposited a counterfeit $335,000 check at an ATM, according to the bank.
“On August 29, 2024, a masked man deposited a check in Defendant’s Chase bank account in the amount of $335,000,” the bank said in the Texas filing. “After the check was deposited, Defendant began withdrawing the vast majority of the ill-gotten funds.”
JPMorgan, the biggest U.S. bank by assets, is investigating thousands of possible cases related to the “infinite money glitch,” though it hasn’t disclosed the scope of associated losses. Despite the waning use of paper checks as digital forms of payment gain popularity, they’re still a major avenue for fraud, resulting in $26.6 billion in losses globally last year, according to Nasdaq’s Global Financial Crime Report.
The infinite money glitch episode highlights the risk that social media can amplify vulnerabilities discovered at a financial institution. Videos began circulating in late August showing people celebrating the withdrawal of wads of cash from Chase ATMs shortly after bad checks were deposited.
Normally, banks only make available a fraction of the value of a check until it clears, which takes several days. JPMorgan says it closed the loophole a few days after it was discovered.

Miami and California

The other lawsuits filed Monday are in courts including Miami and the Central District of California, and involve cases where JPMorgan says customers owe the bank sums ranging from about $80,000 to $141,000.
Most cases being examined by the bank are for far smaller amounts, according to people with knowledge of the situation who declined to be identified speaking about the internal investigation.
In each case, JPMorgan says its security team reached out to the alleged fraudster, but it hasn’t been repaid for the phony checks, in violation of the deposit agreement that customers sign when creating an account with the bank.
JPMorgan is seeking the return of the stolen funds with interest and overdraft fees, as well as lawyers’ fees and, in some cases, punitive damages, according to the complaints.

Criminal cases?

The lawsuits are likely to be just the start of a wave of litigation meant to force customers to repay their debts and signal broadly that the bank won’t tolerate fraud, according to the people familiar. JPMorgan prioritized cases with large dollar amounts and indications of possible ties to criminal groups, they said.
The civil cases are separate from potential criminal investigations; JPMorgan says it has also referred cases to law enforcement officials across the country.
“Fraud is a crime that impacts everyone and undermines trust in the banking system,” JPMorgan spokesman Drew Pusateri said in a statement to CNBC. “We’re pursuing these cases and actively cooperating with law enforcement to make sure if someone is committing fraud against Chase and its customers, they’re held accountable.”

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AI Age
AI Insights

Sierra, the startup founded by ex-Salesforce co-CEO Bret Taylor and former Google executive Clay Bavor, has raised a funding round that values the company at $4.5 billion. 
The $175 million round was led by Greenoaks Capital, with participation from ICONIQ and Josh Kushner’s Thrive Capital. 
One in every three venture dollars this year has gone to an artificial intelligence startup, according to CB Insights.

Artificial intelligence startup Sierra, co-founded by ex-Salesforce co-CEO Bret Taylor, is more than quadrupling its valuation to $4.5 billion in a fresh funding round.
The San Francisco-based company, which was valued at $1 billion in January, raised $175 million in a funding round led by Greenoaks Capital. The Information reported earlier this month that Sierra was in the midst of raising capital.

Taylor is chairman of OpenAI’s board and previously ran Salesforce, alongside Marc Benioff. He was also chairman of Twitter when Elon Musk was negotiating to buy the social media company. Taylor is a longtime entrepreneur, widely credited with helping to create Google Maps. At Google, he met his Sierra co-founder Clay Bavor, who spent nearly two decades at the tech giant, leading virtual reality efforts and Google Labs.
Sierra is focused on helping enterprises like home security company ADT, Sonos, Weight Watchers and Casper personalize and implement AI agents for customer service. Taylor and Bavor unveiled the startup earlier this year.
“We think every company in the world, whether it’s a technology company or a 150-year-old company like ADT, can benefit from AI, and the technology is ready right now,” Taylor told CNBC in an interview. “We want to enable Sierra to address that market, and that means expanding internationally and to other industries.” 
ICONIQ and Josh Kushner’s Thrive Capital contributed to the new funding round.
Taylor describes Sierra as “conversational AI,” and bristles at the word “chatbot,” even banning the phrase in the company’s downtown San Francisco office. Sierra is looking to create a more conversational style of interaction, Taylor said. He pointed to the ease of OpenAI’s ChatGPT and compared it with the frustrating experience of talking on the phone with an airline bot.

“When you think of chatbots, you think of those annoying, robotic things — you can feel the difference,” Taylor said, adding that Sierra is making its agents more “empathetic and conversational.”

Bret Taylor, co-CEO of Salesforce, speaks at the Viva Technology Conference in Paris on June 15, 2022.
Nathan Laine | Bloomberg | Getty Images

Sierra’s team lets each client customize the agent’s personality to its corporate brand. Clothing company Chubbies, for example, took a more sarcastic route with a younger sounding agent named Duncan Smothers. Taylor said some luxury brands are opting for a British accent with a more serious tone. 
“We really think that your conversational AI agent should be not only transactional, but a brand ambassador,” Taylor said. “It’s actually something that is a statement of your values. So do you want to be sarcastic? Do you want to use emoji? Do you want it to sound like text messaging, or do you want it to sound like a lawyer?”
Sierra uses what Bavor and Taylor describe as a “constellation” of models, with a “supervisor.” The technology uses one model to do the heavy lifting, with the expectation that it won’t be 100% reliable, but use a second model as a backup, to “check” the others and help with accuracy. The company currently relies on large language models from OpenAI, Anthropic and Meta, among others. 
There’s competition in the space. Taylor’s former company, Salesforce, as well as Microsoft, in partnership with OpenAI, are exploring the AI agent space. Taylor compared Sierra with the companies that built cloud software on top of Amazon Web Services and other cloud infrastructure.
“In the cloud era, you had Shopify, Salesforce, ServiceNow and Adobe — I think the same thing will play out in AI with Sierra,” Taylor said. “We’re helping their branded customer facing agent.”
He mentioned startups like Cursor, which makes coding agents, and Harvey, which makes legal agents.
Sierra’s funding follows a flurry of major AI announcements in Silicon Valley. OpenAI raised billions of dollars at a $157 billion valuation. Perplexity is in the midst of raising a round that values the company at $9 billion, a source confirmed to CNBC. One in three venture dollars this year has gone to an AI startup, according to CB Insights. 
“When a technology wave like this happens, I think a lot of people are trying to place their bets,” Taylor said. “I don’t know which company will win, but it’s a smart investment, categorically. Clearly customer experience and customer service is a huge opportunity, and I think we are the leader in this space, and seeing a lot of demands because of that.” 

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Kristo Käärmann, who co-founded Wise in 2011, was on Monday ordered by the Financial Conduct Authority to pay a £350,000 fine.
The FCA said that Käärmann failed to notify the regulator about him not paying a capital gains tax liability when he cashed in on shares worth £10 million in 2017.
The watchdog found him in breach of its Senior Management Conduct Rule 4, which states: “You must disclose appropriately any information of which the FCA would reasonably expect notice.”

Kristo Kaarmann, CEO and co-founder of Wise.
Eoin Noonan | Sportsfile | Getty Images

LONDON — Kristo Käärmann, the billionaire CEO of money transfer firm Wise, was slapped with a £350,000 ($454 million) fine by financial regulators in the U.K for failing to report an issue with his tax filings.
Käärmann, who co-founded Wise in 2011 with fellow entrepreneur Taavet Hinrikus, was on Monday ordered by the Financial Conduct Authority (FCA) to pay the sizable penalty due to a breach of the watchdog’s senior manager conduct rule.

The FCA said that Käärmann failed to notify the regulator about him not paying a capital gains tax liability when he cashed in on shares worth £10 million in 2017.
The watchdog found him in breach of its Senior Management Conduct Rule 4, which states: “You must disclose appropriately any information of which the FCA would reasonably expect notice.”
It comes after the Wise boss was hit with a separate £365,651 fine by U.K. tax collection agency Her Majesty’s Revenue and Customs (HMRC) in 2021 for being late to submitting his tax returns during the 2017/18 tax year.
Käärmann’s name was added to HMRC’s public tax defaulters list. His tax liability for that year was £720,495, according to HMRC. He has a net worth of $1.8 billion, according to Forbes.

‘High standards’ expected

The FCA said Monday that, between February 2021 and September 2021, the tax issues were relevant to its assessment of Käärmann’s fitness and propriety as a senior director of a financial services firm.

Käärmann failed to consider the significance of the issues and notify the FCA despite being aware of them for over seven months, the regulator added.
“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” Therese Chambers, joint executive director of enforcement and oversight, said in a statement Monday.

“It should have been obvious to Mr Käärmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety.” 
Käärmann said in a statement Monday that he remains “focused on delivering the mission for Wise and achieving our long-term vision.” “After several years and full cooperation with the FCA, we have brought this process to a close,” he said.
“We continue to build a product and a company that will serve our customers and owners for the decades to come,” Käärmann added.
The chair of Wise, David Wells, said that the company’s board of directors “continues to take Wise’s regulatory obligations very seriously.”
Wise’s board found that Käärmann was “fit and proper” to continue in his role at the firm after an internal investigation in 2021.
As a result of that review, Käärmann was required by the board to take “remedial actions” to ensure his personal tax affairs were appropriately managed.

Less severe than feared

The value of the FCA’s fine is substantially lower than the potential maximum fine he could have faced.
Käärmann could have been fined as much as £500,000 for his tax failings, but qualified for a 30% discount because he agreed to resolve the issues.

News of the fine comes after Wise earlier this month reported a 17% increase in “underlying income,” which consists of cross-border revenue, card and other revenue, and interest income.
Wise reiterated its target of achieving an underlying profit before tax margin of 13% to 16% over the medium term thanks to investments in pricing, and added that meant it wouldn’t have to make “further material investments in reduced pricing” in the second half of the year.
In a note Monday, analysts at British investment bank Peel Hunt boosted their expectations for Wise’s full-year profit before tax by 15%. They have a £1,000 price target and a “buy” rating on the stock.
“While Wise made no changes to the guidance set in June 2024, we expect a significant near-term beat,” Peel Hunt analysts Gautam Pillai and Barun Singh wrote in the note. 
Käärmann and Hinrikus, both Estonian tech entrepreneurs who immigrated to the U.K., took Wise from a scrappy startup to a payments disruptor now worth £7.4 billion.
They created Wise to offer a low-cost alternative to banks charging hidden fees for moving money across borders. More

America was supposed to be in recession. When the Federal Reserve began to raise interest rates at the fastest pace since the early 1980s, few economists expected the economy to be heading into a presidential election in this state. Indeed, even a few months ago few thought things would be this good. Inflation-adjusted quarterly growth in annualised terms has averaged 2.9% since the start of 2023, above its long-term trend. On October 30th America will publish its GDP figure for this year’s third quarter. According to a usually reliable model from the Atlanta Fed, the economy probably expanded at an annualised pace of 3.3%, nearly twice as high as the median forecast in July, at the start of the quarter. More

There are many technical indicators for traders to choose from. For Carter Worth, there’s one that stands out above all others: volume.
“A lot of charters don’t look at volume. They say it’s all in the price action. … but volume is the essential criteria,” Worth, the founder of Worth Charting with more than three decades on the Street, told CNBC’s Dominic Chu in this special Pro Talks discussion available to all readers. “The study of volume and price volume correlation is the single most important thing one can do if one wants to engage in pattern recognition and studying price action trying to profit in the market.”

“[Philosophers] Camus and Sartre would argue that existence precedes essence, and in markets, volume precedes price,” he added.
(Pro subscribers can watch the full interview here.)
In this interview, Worth talks about:

How his career in finance began
His approach to chart analysis
The importance of a defined time horizon for investors

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In the race to find the next artificial intelligence application, Chinese smartphone company Oppo said it is talking to Google and Microsoft senior management every week about the tech.
“Google will also come to China to ask us, what needs and pain points do you have with your products? Let’s solve them together,” Billy Zhang, president of Oppo’s overseas market, sales and services, said, according to a CNBC translation of his Mandarin-language remarks.
The smartphone company also plans to integrate AI into its factories, which are increasingly automated, Zhang said.

Chinese smartphone company Oppo ranks second in mainland China, and fourth worldwide, according to Canalys.
Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese smartphone company Oppo is doubling down on artificial intelligence as it holds weekly talks about AI with senior management at Google and Microsoft in the run-up to the launch of its flagship phone overseas.
The collaborations are part of the race to find the next artificial intelligence application. The rise of generative AI — tech that can produce human-like responses when prompted — has companies from Apple to Honeywell rushing to tap its capabilities.

“Google will also come to China to ask us, what needs and pain points do you have with your products? Let’s solve them together,” Billy Zhang, president of Oppo’s overseas market, sales and services, told reporters last week at the company’s office in the southern Chinese city of Shenzhen. That’s according to a CNBC translation of his Mandarin-language remarks.
“We know consumers’ needs, and we will use AI to satisfy [them],” Zhang said. The company is expanding further in Europe, but does not have immediate plans for the U.S., he said.
Oppo, which owns the OnePlus brand too, said it derives around 60% of its revenue from Southeast Asia, Europe and other overseas markets. The company ranked fourth globally in terms of smartphone shipments in the third quarter, making up 9% of all units shipped, according to Canalys. Samsung and Apple were tied for the first spot, followed by Xiaomi.

While the U.S. leads in terms of AI capabilities, experts suggest Chinese companies will have an edge when it comes to consumer applications of the tech. That’s despite U.S. restrictions on exports of high-end chips to China.
Oppo has said its forthcoming flagship smartphone will be equipped with AI writing and recording summary tools from Google’s Gemini, and content generation features from Microsoft. Microsoft employs OpenAI products such as ChatGPT.

It was not immediately clear to what extent existing Oppo models use AI tools from the two tech companies. Oppo has yet to announce when its flagship phone will be available globally.

AI smartphones set for growth

Oppo in June announced it plans to integrate generative AI in 50 million of its devices this year. Its existing AI tools allow touching up photos — such as removing window reflections. Oppo also has a ChatGPT-like bot.
In addition to partnerships, Oppo said it has developed its own AI models since 2020 and opened an AI center in February.
“We are very optimistic about AI and have invested with great determination,” Zhang said. “AI is the most important area for tech in the future. All industries can be transformed by AI.”
Counterpoint Research predicts shipments of generative AI smartphones will skyrocket to 732 million in 2028 from 46 million last year, according to a whitepaper published Wednesday. The report did not specify how complex those generative AI features would be.
Apple next week is due to publicly release its first software update with AI tools. A subsequent update will allow removing unwanted elements in photos, and integration with ChatGPT, the iPhone maker said Wednesday.
Chinese smartphone company Honor on Wednesday revealed the next version of its operating system that can use AI to mimic actions on a touchscreen, such as opening an app to order coffee delivery.

Tech for production efficiency

Oppo plans to integrate AI into its factories, which are increasingly automated, Zhang said. “Today, automation improves quality and stability, lowers production costs and increases unit yield.”
At a production line for an entry-level smartphone in Dongguan, near Shenzhen, Oppo has this year replaced about 8% of the workers with machines, and moved those employees to work on more complex, higher-end phones.
Other companies have announced plans to integrate generative AI with the industrial sector. Honeywell this week announced a deal with Google’s Gemini to create AI assistants for factory workers and systems.
Oppo is rolling out its digital management system to its factories in seven other countries, starting with India and Indonesia. The company also produces phones in Turkey, Pakistan, Bangladesh, Brazil and Egypt.
“Since our manufacturing process is largely digitalized and standardized, growing and expanding to global markets is much easier,” Danny Du, director of manufacturing management at Oppo told CNBC.
Oppo has cut its manufacturing costs by nearly 40% over three years, Du said, adding that technological integration with factory machines and systems has cut production time to six days, from 16. He said that allows Oppo to respond more quickly to market orders, instead of relying on longer-term forecasts that come with the risk of unsold inventory.
— CNBC’s Kif Leswing and Eric Rosenbaum contributed to this report. More

Arriving in Stepford, Connecticut, Joanna—protagonist of “The Stepford Wives”, a horror novel—is dragged to a “workout class” at the Simply Stepford Day Spa by a neighbour. The duo are met by 15 identikit women. Their hair, heights and skin colours differ a little. Their waist sizes do not. Each can be no bigger than a British size 8, their waists nipped in by belts and accentuated by 1950s skirts. More