Finance

The EU is no stranger to overcapacity. Its economic landscape once featured butter mountains, milk lakes and other landmarks of excess production—the surreal results of its common agricultural policy, which guaranteed high prices to dairy farmers. Thus the president of the European Commission, Ursula von der Leyen, knew what she was talking about when she warned Xi Jinping, China’s ruler, about his country’s “structural overcapacities” at a recent meeting in Paris.Her concern was not farming but manufacturing. Europe is worried about a flood of electric vehicles and steel from China, which could displace cherished industries and jobs in the union. China’s steel exports, measured in tonnes, increased by more than 28% in the first three months of this year, compared with a year earlier. Its exports of new-energy vehicles increased by almost 24%. In response, the EU is considering “countervailing” tariffs to offset the subsidies that have assisted the growth of China’s industry. More

On a regular Tuesday morning, a large crowd has gathered outside a grocery store in Xuchang, a city of 4m people. Visit Pangdonglai at the weekend and things are even busier. Thousands, some having travelled hundreds of kilometres, arrive before dawn to take their place in a queue that snakes back and forth in front of the store’s entrance. At a time when China’s ritziest shopping centres are often desolate, and the country’s economy is struggling, the success of Pangdonglai’s 13 outlets is captivating executives who want to understand consumer sentiment.The latest economic data make the queues still more intriguing. Retail spending grew by just 3.1% in March year on year—well below expectations. In the same month, listed retail firms revised down their expected earnings by an average of 7%. In Shanghai, where per-person consumer spending is three times higher than in Pangdonglai’s home province, high-end grocers are closing down. One such chain, CityShop, announced in April that it would shut its doors for good after 29 years. Pangdonglai’s success contains lessons about both what may be needed to revive China’s economy and the shape that such a revival might take. More

A key is seen in front of a computer screen displaying the Airbnb logo in Ankara, Turkey, on Nov. 22, 2023.
Dilara Irem Sancar | Anadolu | Getty Images

Check out the companies making headlines in extended trading:
Airbnb — The hoteling company issued disappointing forward guidance, dragging shares down 8%. Airbnb said second-quarter revenue would range between $2.68 billion and $2.74 billion, but analysts were calling for $2.74 billion, per LSEG. The company beat on the top and bottom lines for the first quarter.

Robinhood — The retail investing company jumped about 6% after the company’s first-quarter report surpassed Wall Street estimates. Robinhood reported earnings of 18 cents per share on revenue of $618 million, while analysts polled by LSEG expected 6 cents in earnings per share and $549 million in revenue.
Klaviyo — Shares climbed 7% after the marketing automation company issued promising revenue guidance for the second quarter. Klaviyo expects revenue in the current quarter of $211 million to $213 million, while analysts polled by LSEG expected $210 million.
Arm Holdings — Shares pulled back 6%. The chip company posted full-year revenue guidance of $3.8 billion to $4.1 billion, while Wall Street called for $3.99 billion in revenue, per LSEG.
Equinix — The data center real estate investment trust climbed more than 11%. Equinix posted adjusted earnings before interest, taxes, depreciation and amortization of $992 million for the first quarter. Analysts polled by FactSet called for $981.3 million.
AppLovin — The mobile tech company surged 10%. First-quarter earnings for AppLovin came in at 67 cents per share, while revenue was $1.06 billion. Analysts called for earnings of 57 cents a share and revenue of $974 million.
SolarEdge — The solar energy company slid nearly 7%. SolarEdge posted a wider-than-expected loss for the first quarter, coming in at $1.90 a share, while analysts polled by LSEG anticipated a loss of $1.57 per share. Second-quarter revenue guidance was also weak, ranging between $250 million and $280 million, versus analysts’ estimates for $306 million. More

Robinhood shares rose after the retail brokerage announced stronger-than-expected first-quarter results.
Net income rose to $157 million, or 18 cents per share, on record revenue of $618 million.
Cryptocurrency transactions accounted for $126 million in revenue in the quarter, the company said.

Spencer Platt | Getty Images

Shares of Robinhood rose in extended trading Wednesday afternoon after the retail brokerage announced stronger-than-expected first-quarter results.
Robinhood reported net income of $157 million, or 18 cents per share, for the first quarter. That is a positive swing from the same period last year, when the company had a net loss of $511 million, or 57 cents per share.

Here is how Robinhood’s results compared to Wall Street estimates, according to analysts surveyed by LSEG:

Earnings per share: 18 cents vs. 6 cents expected
Revenue: $618 million vs. $549 million expected

The company said the earnings per share and revenue numbers were both records for the firm. The stock jumped more than 5% in after-hours trading.
Robinhood surged in popularity during the Covid-19 pandemic in 2020 and 2021, but has since seen user activity and revenue that mirrors action in the broader market. Stocks and cryptocurrencies rose during the first quarter, which likely helped the company’s results.
Cryptocurrency transactions accounted for $126 million in revenue in the quarter, the company said. Regulatory uncertainty has clouded the future of that business. Robinhood disclosed on Monday that the U.S. Securities and Exchange Commission had issued a Wells Notice to the company, signaling potential legal enforcement action over the company’s cryptocurrency business.
Dan Gallagher, Robinhood’s chief legal, compliance and corporate affairs officer, said in a blog post that the company was “disappointed” in the SEC’s decision and still believes that the crypto assets on its platform are not legally securities.

Robinhood said its number of funded customers rose by 810,000 year over year to 23.9 million. Assets under custody rose 65% year over year to $129.6 billion, according to the press release.
Shares of Robinhood were up nearly 40% year to date before Wednesday’s earnings announcement.
Read the full earnings release here.
Correction: A previous version of the story misstated the date of Robinhood’s quarterly report. More

British neobank Monzo told CNBC it raised another $190 million from investors including Hedosophia and CapitalG, Alphabet’s independent growth fund.
The latest funding boost Monzo’s total funding this year to $610 million and values the business at $5.2 billion post-money.
TS Anil, CEO of Monzo, told CNBC his firm plans to use the cash to build new products and accelerate its international expansion plans.

Monzo CEO TS Anil.

British neobank Monzo said Wednesday that it’s raised another $190 million, lifting the total it’s raised so far this year to $610 million.
The company told CNBC it raised the cash from new investors including Hedosophia, a backer of top European fintechs including N26 and Qonto. CapitalG, Alphabet’s independent growth fund, also participated in the round.

Singaporean sovereign wealth fund GIC also participated in Monzo’s latest fundraise, a source familiar with the matter told CNBC. The source spoke on the condition of anonymity as details of GIC’s involvement aren’t yet public.
GIC declined to comment.
The latest funding values Monzo at roughly $5.2 billion, an increase on the $5 billion valuation it attained in March when it raised $430 million. The total $610 million round marks the single-biggest funding round for a European fintech in the past year, according to Dealroom data.
TS Anil, CEO of Monzo, told CNBC his firm plans to use the cash to build new products and accelerate its international expansion plans.
“At the heart of it we are a mission-oriented company that’s looking to build the single place where people can meet all of their financial needs,” Anil told CNBC in an exclusive interview.

“What’s exciting to me is that, as we pursue that mission of changing people’s relationship with money, we’ve built a business model that is congruent with that as well, with this model that is built entirely around the customer.”

Monzo entered the black for the first time last year, hitting profitability following the end of its 2023 fiscal year. Anil said Monzo’s looking to ramp up profits with diversification into other income generators, like lending and savings.
Notably, Anil said that Monzo’s planning to launch its first pensions product in the next six to nine months.
That would put it in competition with traditional lenders including Barclays and NatWest. Last year, NatWest acquired 85% of U.K. workplace pension services provider Cushon for £144 million ($180 million).

Global expansion plans

Monzo’s funding expansion caps off a busy year for the nine-year-old firm, which now counts more than 9 million retail customers in the U.K. — 2 million of whom joined Monzo last year alone — and over 400,000 business customers.
Last year saw Monzo make its first foray into investments with a feature allowing customers to invest in funds managed by BlackRock.
Anil said Monzo identified that about a third of people using the service had never invested previously — and, more notably, 45% of the women investing via the Monzo app are first-time investors.
Another big priority for Monzo in the coming months is international expansion.

The company recently restarted its U.S. expansion efforts, hiring a long-time executive from Block’s Cash App as its new U.S. CEO after earlier abandoning a bid to acquire a banking license from U.S. regulators.
For now, Anil says, Monzo’s team in the U.S. is primarily focusing on product to ensure that the service it has there is of high enough quality that it can compete with major incumbents like JPMorgan and Citibank.
The U.S. has proven notoriously difficult for European neobanks to crack.
Berlin-based digital bank N26 notably withdrew from the U.S. in 2021.
Revolut, meanwhile, has failed to formally file an application for a U.S. bank charter yet despite having earlier said it intends to file a draft application for a U.S. bank license.
“What I like about how we’re approaching this is, at the heart of it, it’s not just words,” Anil told CNBC in an exclusive interview Tuesday.
“The necessary conditions for the U.S. for us is getting the product right. That’s what we’re spending our time and effort on there.”
European expansion is also on the cards, Anil said, although he didn’t commit to a date for when this will happen.

Mortgages are coming

Longer term, Monzo is also planning to launch a mortgages product, which would see it compete much more aggressively with U.K. retail banks in the world of lending.

Monzo currently offers monthly installment plans and consumer loans via its app.
It also has a “Mortgage Tracker” feature which lets users track how much they’ve paid toward their mortgage and how much equity they’ve built.
But it’s yet to officially roll out a service that would let people apply for mortgages directly within its app.
Anil said Monzo is in the early stages of exploring partnerships with lenders to offer this.
He declined to name any prospective partners.
One thing Monzo hasn’t got any immediate plans for is an initial public offering.
Although he thinks Monzo will make a “great public company one day,” Anil said it’s still too early to talk of an IPO. He says he’s focused on growing Monzo at scale before reaching that milestone. More

HD Hyundai Marine Solution’s IPO is South Korea’s largest since January 2022, when LG Energy Solution went public.
The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering.
The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.

Employees of HD Hyundai Marine Solution Co., during the company’s listing ceremony at the Korea Exchange in Seoul, South Korea, on Wednesday, May 8, 2024. HD Hyundai Marine, a ship repair company, jumped as much as 45% in its South Korea trading debut after a 742.3 billion won ($547 million) initial public offering that was priced at the top of a range and met strong demand.
Bloomberg | Bloomberg | Getty Images

Shares of maintenance and repair firm HD Hyundai Marine Solution nearly doubled in their trading debut Wednesday, marking a strong start to South Korea’s largest IPO since January 2022.
Shares traded as high as 166,100 South Korean won ($121.59) apiece, representing a 99.1% surge from the IPO price of 83,400 won. The stock closed at 163,900 won, representing a gain of 96.52%.

The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering. The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.
Half — or 4.45 million—of the IPO shares are newly issued.
The company’s IPO showed strong investor interest, with both the institutional and retail offering oversubscribed by over 200 times combined.
The Wall Street Journal, citing HD Hyundai officials, reported that the parent conglomerate, which held a 62% stake in its unit ahead of the IPO, will continue to be in control.
Meanwhile, KKR, the second-largest shareholder since 2021, plans to gradually reduce its stake, which currently stands at 38%. More

Since Russia began its invasion in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have escaped the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. “If you can drive a tractor, you can drive a tank,” notes Mr Kachka. Farmers therefore not only have new opportunities to evade taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More

Since Russia invaded in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have left the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. Farmers therefore not only have new opportunities to dodge taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More