Finance

In this articleBTC.CM=Anne Boden, CEO of Starling Bank, speaking at Web Summit 2019 in Lisbon, Portugal.Harry Murphy | Sportsfile for Web Summit via Getty ImagesLONDON — Anne Boden, the CEO of British fintech start-up Starling, is worried about cryptocurrencies.Some digital currency exchanges are “quite dangerous,” Boden said, adding the finance industry should remain vigilant about fraud in the unregulated crypto market.It comes after Binance, the world’s largest crypto exchange, was banned from carrying out regulated activity in the U.K. by the country’s financial services watchdog.”The industry as a whole must really be alert to the dangers of people using bitcoin and cryptocurrencies to process fraudulent payments,” Boden told reporters on a call Thursday.Founded in 2014, Starling is one of Britain’s best-known challenger banks, a new breed of lenders aiming to shake up the market with online-only checking accounts. Rivals include Monzo, Revolut and Monese.On Thursday, Starling reported a 600% jump in revenue in the 16 months ending 2021, helping the bank more than halve its losses.Starling is now on track to record its first annual profit in 2022, Boden said, adding the company may go public by late next year or early 2023.Britcoin?Despite her cautious stance on crypto, Boden said she believed there was a future for digital currencies.”Certain digital currencies are interesting (but) our customers are not asking for that service,” Boden said.”In 2-3 years’ time, things will have changed and most banks, including Starling, will be gearing up to do very interesting things in these areas,” she added.Starling is closely following the Bank of England’s research exploring whether to issue a digital version of the British pound, Boden said.The BOE is one of several global central banks exploring their own digital currencies. China is leading the way, trialing its digital yuan with millions of people. More

Budrul Chukrut | LightRocket | Getty ImagesChinese ride-hailing giant Didi came under pressure again on Thursday after a report that Beijing is considering harsh penalties from a massive fine to even a forced delisting after its IPO last month.Shares of Didi fell more than 4% in premarket trading Thursday after shedding 18% this month. Bloomberg News reported Chinese regulators are planning a slew of punishments against Didi, including a fine likely bigger than the record $2.8 billion that Alibaba paid earlier this year.The penalties could also include suspension of certain operations, delisting or withdrawal of Didi’s U.S. shares, the report said, citing people familiar with the matter.Didi shares have lost about 18% to $11.50 a share since its market debut on June 30 when it started trading at $14 a share.Zoom In IconArrows pointing outwardsLast week, officials from seven Chinese government departments visited the ride-hailing giant’s offices to conduct a cybersecurity review. The ride-hailing giant was forced to stop signing up new users and its app was also removed from Chinese app stores.The Cyberspace Administration of China alleged that Didi had illegally collected users’ data.Beijing is stepping up its oversight on the flood of Chinese listings in the U.S., which are overwhelmingly tech companies. The State Council said in a recent statement that the rules of “the overseas listing system for domestic enterprises” will be updated, while it will also tighten restrictions on cross-border data flows and security.— Click here to read the original Bloomberg News story.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

In this articleNTGRCROXLUVWHRULVR-GBA customer selects bar of Dove soap, a Unilever product, at a Sainsbury’s supermarket in London, U.K.Bloomberg | Getty ImagesCheck out the companies making headlines before the bell Thursday:Netgear – Netgear shares plummeted 14.2% after the computer equipment maker reported lower-than-expected sales and revenue for its latest quarter. The company also gave guidance that fell short of analyst forecasts. Netgear said supply chain constraints and factory closures due to Covid-19 held back its performance.Unilever – Unilever reported better-than-expected sales and earnings for the second quarter, but the consumer products giant also said that a significant increase in commodity costs would hurt its full-year profit margins. Its shares dropped 4.6%.Whirlpool – Whirlpool reported adjusted quarterly earnings of $6.64 per share, beating the consensus estimate of $5.90, with the appliance maker’s revenue also topping Wall Street forecasts. Whirlpool also raised its full-year guidance, as consumer demand remains strong even in the face of higher prices.Dow Inc. – The materials science company’s shares rose 1.7% in the premarket, after Dow Inc beat earnings estimates by 27 cents with quarterly a profit of $2.72 per share.  Revenue beat forecasts as well, as sales benefited from higher prices and tight supplies. Dow also sees an upbeat second half as global economies improve.AT&T – AT&T reported adjusted quarterly earnings of 89 cents per share, 10 cents above estimates, with revenue also above Wall Street projections. AT&T added a greater number of wireless subscribers than expected and also saw a jump in signups for its various HBO services, and its shares climbed 1.2% in premarket trading.DR Horton – The homebuilder’s shares fell 4.4% in premarket action despite the company reporting stronger-than-expected earnings. DR Horton earned $3.06 per share for the second quarter, compared with a $2.81 consensus estimate. The company also raised its fiscal 2021 revenue guidance. Southwest Airlines – Southwest shares fell 2.4% in the premarket, as its 35 cents per-share loss for the second quarter was wider than the 23 cent loss analysts were expecting. Southwest’s revenue beat estimates, however, and the airline said it expected to remain profitable for the remainder of the year. Blackstone Group – The private equity firm reported earnings per share of 82 cents for the second quarter, 4 cents above estimates. Blackstone benefited from a record surge in the value of its investments compared to a year ago. Shares of Blackstone climbed 1.6%.Crocs – The footwear maker’s shares rallied 8% after the company posted adjusted quarterly earnings of $2.23 per share, compared to a consensus estimate of $1.60. Revenue also beat forecasts with Crocs saying it was seeing strong demand for the brand around the globe.Biogen – The drug maker earned an adjusted $5.68 per share for the second quarter, compared to a consensus estimate of $4.54, with revenue above estimates as well. Biogen also raised its 2021 revenue forecast, and its shares added 1.3% in the premarket.Texas Instruments – Texas Instruments beat earnings estimates by 22 cents with a quarterly profit of $2.05 per share. Revenue also beat analyst forecasts. However, the chipmaker issued weaker-than-expected revenue guidance for the current quarter, raising concerns about low inventories and manufacturing capacity. The stock shed 4.6%.Las Vegas Sands – Las Vegas Sands lost 26 cents per share, 10 cents more than Wall Street was anticipating for the casino operator, and revenue also fell short of estimates. However, the company said it remained confident about a rebound in travel and tourism. Las Vegas Sands fell 2.2%. More

In this articleVA Visa debit card.Simon Dawson | Bloomberg | Getty ImagesLONDON — Visa said Thursday it has agreed to buy British payments start-up Currencycloud, in its second major fintech acquisition of 2021.The deal values Currencycloud at £700 million ($962 million), Visa said. The payments giant led an $80 million investment in Currencycloud at the beginning of 2020. As a result, Visa said the sum it’s paying for Currencycloud would be reduced by the outstanding equity it already owns.Founded in 2007, London-headquartered Currencycloud sells software for banks and fintech firms to process cross-border payments. It’s one of many business-focused fintechs that operate behind the scenes powering popular banking and payment apps like Monzo, Starling and Revolut.”Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments,” said Colleen Ostrowski, Visa’s global treasurer.”With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers,” she added.Shares of Visa barely moved in pre-market trading. The stock has risen over 22% in the past year, however, thanks to a boom in digital payments during the coronavirus pandemic.The acquisition of Currencycloud marks Visa’s second fintech deal this year, according to Crunchbase. The card network company last month agreed to buy Swedish firm Tink for $2.1 billion, after its attempt to acquire Plaid, a U.S. rival, was thwarted by U.S. regulators.Currencycloud has raised more than $160 million in total from investors including Google parent company Alphabet’s venture capital arm GV, French bank BNP Paribas and Japanese financial services firm SBI Holdings.”Re-imagining how money flows around the global economy just got more exciting as we join Visa,” said Mike Laven, Currencycloud’s CEO.”The combination of Currencycloud’s fintech expertise and Visa’s network will enable us to deliver greater customer value to the businesses moving money across borders.”Currencycloud, which has 500 banking and technology clients in more than 180 countries, will continue to operate from its headquarters in London and keep its currency management team. The deal is subject to regulatory approvals and other customary closing conditions, Visa said. More

The Starling Bank banking app on a smartphone.Adrian Dennis | AFP via Getty ImagesLONDON — British digital bank Starling reported a sevenfold increase in revenue in the 16 months ending March 2021 as its lending soared, helping to cut losses in half.Losses after tax totaled £23.3 million ($32 million) in the period, down from the £52.1 million Starling lost in its last annual accounts, which covered the 12 months up to Nov. 30.Revenues, meanwhile, shot up 600% to £97.6 million from £14 million in its 2019 fiscal results.Starling said it changed its financial year-end from Nov. 30 to March 31 to make it easier for shareholders to compare results on a quarterly basis.The London-based firm has been significantly growing its balance sheet amid a surge in lending thanks to government-backed financing schemes aimed at helping businesses through the coronavirus pandemic.Starling said the amount of lending on its books spiked to £2.2 billion “from a very low base.” This helped the bank break even for the first time in Oct. 2020, Starling said, adding that it has made a profit each month since then.In a trading update Thursday, Starling said sales reached £42.8 million in three months to the end of June 2021, giving it an annual run rate of £170 million.Starling is now “very much on track to post our first full year of profitability” in its 2022 fiscal results, CEO and founder Anne Boden told reporters on a call Thursday.Diverging from rivalsThe bank’s shift toward profitability marks a divergence from fellow fintechs Monzo and Revolut, which saw their losses mount in 2020.Monzo racked up a post-tax loss of £113.8 million in the 12 months to February 2020, up from £47.1 million a year earlier. The London fintech, which saw its market value slashed by 40% to £1.25 billion last year, warned disruption from Covid-19 had led to “significant doubt” about its ability to continue “as a going concern.”Revolut reported annual losses of £167.8 million in 2020, higher than the £106.7 million it lost in 2019. However, Revolut said it was “strongly profitable” in the first quarter of 2021. The company recently raised funds at a $33 billion valuation, putting its market value ahead of British banking giant NatWest’s.Boden said that, though Starling’s rivals have millions more customers than it does, Starling users typically hold much more money. Starling has over 2 million users, while Revolut and Monzo have 16 million and 4 million, respectively.”They have seven times the customer numbers we have and only 60% of the deposits,” Boden said. According to Starling, personal banking customers hold an average balance of £2,000 with the lender.Starling is pushing heavily into the small business banking market, now commanding a 6.3% share of the sector in the U.K. and planning to reach double-digit market share in the next 18 months. As of June 30, £3.9 billion of Starling’s deposits were from businesses while £2.8 billion were from retail users.IPO plansThe company, which was last privately valued at $1.5 billion, recently launched mortgages and plans to acquire a lender to further bolster its balance sheet. As for an initial public offering, Boden said she may float the business by late 2022 or early 2023.”We’re going to do it in our time,” she said. “We’re not going to be forced to do it because it’s fashionable at the moment.”Earlier this month, money transfer firm Wise went public in a blockbuster direct listing in London, valuing the business at $11 billion. The company’s shares have steadily increased since, and it’s now worth $18.2 billion. More

Chinese authorities have promoted the use of the yuan worldwide, while the U.S. dollar dominates global transactions.Getty ImagesBEIJING — When it comes to the investment outlook, one Chinese economist predicts once-a-century opportunities will emerge from a “struggle for supremacy” between the U.S. and China.This game-changing window comes from upheaval on both sides, said Liu Yuhui, director of a finance research department at a government think tank, the Chinese Academy of Social Sciences.China is set on becoming a great nation, he said, while the U.S. has embarked on a dollar-printing policy since the coronavirus pandemic that has changed the financial balance. To Liu, this U.S. policy reflects an irreversible, significant change that has direct consequences for China’s macroeconomic policy goal of controlling inflation domestically.That’s according to a CNBC translation of his Mandarin-language speech, titled “The bipolar world under the U.S.-dollar super-expansion cycle — The Chinese capital market’s ‘cognitive revolution.'”Liu, also chief economist at Tianfeng Securities, was speaking Friday at asset manager ChinaAMC’s investment strategy conference. Founded in 1998, ChinaAMC is one of the country’s largest mutual fund managers and has 1.54 trillion yuan ($240.63 billion) in assets under management.In Liu’s view, the U.S. is implementing the concept of “modern monetary theory“ (MMT), which holds governments with their own strong currency can print money to support the domestic economy without worrying too much about budget deficits.One of the most well-known proponents of modern monetary theory is Stephanie Kelton, formerly chief economist for Democrats on the U.S. Senate Budget Committee and a senior economic advisor to Bernie Sanders′ 2016 presidential campaign.The U.S., under the Trump administration and subsequently the Biden administration, has kept interest rates low and released trillions of dollars into the economy to support growth in the wake of the pandemic.The stimulus program has drawn criticism for its scale. At conglomerate Berkshire Hathaway’s annual meeting in May, U.S. billionaire Warren Buffett’s longtime business partner Charlie Munger said modern monetary theory might be “more feasible than everybody thought. But I do know that if you just keep doing it without any limit it will end in disaster.”Read more about China from CNBC ProBernstein picks 5 high-yielding China stocks to buy while the regulatory crackdown hits techMorgan Stanley downgrades Tencent Music, warns of hit from new Chinese regulationsChinese tech stocks face other risks on top of tighter regulation, says portfolio managerMeanwhile in China, the ruling Chinese Communist Party just celebrated its 100th anniversary on July 1, when President Xi Jinping called again for the “great rejuvenation” of China.To Liu, the government’s stance means policy will focus on ensuring national security and cutting carbon emissions. He emphasized political correctness will be even more critical for investment in light of developments like Alibaba founder Jack Ma’s controversial speech last fall and the subsequent suspension of Ant Group’s IPO.Mainland Chinese stocks with the highest probability of large gains will be those in the new energy, seed, optics and semiconductor industries, among others, Liu said.As for digital currencies, on which Chinese authorities have intensified their crackdown this year, Liu cast them in geopolitical terms as well.”In my view,” he said, “it’s just the U.S.’ way to tempt Chinese capital.” More

SILENCE FILLS the official merchandise shop in Tokyo’s Aqua City mall, just steps from the Olympic village. It had hoped to do brisk business selling everything from T-shirts to traditional daruma dolls to hordes of fans. But the pandemic means that the games, which are due to open on July 23rd, will proceed with little fanfare. Sales are just 10% of what was projected, the shop’s manager laments. The outlook for the wider gains from the Olympics is similarly gloomy—but covid-19 is only partly to blame.Economists have long argued that, rather than consumption, tourism and prestige, the games leave high debt, wasteful infrastructure and onerous maintenance obligations. In a 2016 paper Victor Matheson and Robert Baade, two American academics, concluded that “in most cases the Olympics are a money-losing proposition for host cities.” The games this year offer plenty more grist for the sceptics’ mill. “It would have been better not to have them,” says Suehiro Toru of Daiwa Securities, an investment bank, expressing a sentiment common in Japan among economists and non-economists alike.Calculating the economic impact of mega-events like the Olympics can be tricky. Organisers and critics argue over which costs are actually incurred by the games, and which are investments cities would have undertaken anyway. But one near-certainty is that the games blow the budget. Alexander Budzier, Bent Flyvbjerg and Daniel Lunn of Oxford University find that every Olympics since 1960 has overspent, by an average of 172% in real terms. (The International Olympic Committee disputes their findings.) Tokyo fits the pattern. In 2013 the price-tag for the games was $7.5bn. By late 2019 the official budget had risen to $12.6bn, and Japan’s audit board reckoned that the true cost was twice that. Covid-19 countermeasures, including the cost of testing and adapting venues, have since added another $2.8bn.A Tokyo government study in 2017 projected that the returns would more than make up for the costs. It estimated that the games would generate ¥14trn ($127bn) of additional demand. Part of the boost comes from the construction of new infrastructure, though such projects can often crowd out investments in other, more useful areas. Another benefit usually comes from consumption around the games, on everything from tickets to food and drink. But as the competition will unfold without spectators, Tokyo stands to reap little of that.Much of the gain is expected to come from the woollier category of “legacy effects”, such as increases in tourism and also the use of transport and other infrastructure after the tournament ends. But those projections are probably overstated to begin with, and the pandemic will erode much of them, argues Miyamoto Katsuhiro of Kansai University. Japan may still benefit from the extra hotels that it built, reckons Kiuchi Takahide of the Nomura Research Institute; the supply of rooms was becoming a constraint on Japan’s growing tourism industry before the pandemic. But others worry that the controversy around holding the games during a pandemic will create a negative legacy effect, denting Japan’s international standing and making travellers less likely to visit. Such concerns might explain why big sponsors such as Toyota say they will shun the opening ceremony.The number of cities bidding for the games has dwindled in recent years. Tokyo’s experience seems set only to put more of them off, especially rich places with less need for infrastructure binges. The Olympics may become a race no city wants to run. More

In this articleUNPAALU.S. stock index futures were flat in overnight trading on Wednesday, after the major averages advanced during regular trading to turn positive for the week.Futures contracts tied to the Dow Jones Industrial Average gained 27 points. S&P 500 futures and Nasdaq 100 futures were marginally higher.During the session the Dow gained 286 points, or 0.83%, while the S&P climbed 0.82%. The Nasdaq Composite was the relative outperformer, rising 0.92%. Energy was the top-performing S&P group, advancing 3.5% as oil prices rebounded.Wednesday’s gains built on Tuesday’s strong session, and the major averages have now erased the losses from Monday’s sell-off. The Dow dropped more than 700 points to start the week as rising Covid cases worldwide hit sentiment. The yield on the 10-year Treasury dipped to a five month low of 1.17% at the beginning of the week, which also caused investors to offload equities. On Wednesday the yield on the 10-year rose 8 basis points to 1.29%.”The truth is investors have been very spoiled by the recent stock market performance,” noted LPL Financial chief market strategist Ryan Detrick. “Incredibly, we haven’t seen as much as a 5% pullback since October. Although we firmly think this bull market is alive and well, let’s not fool ourselves into thinking trees grow forever. Risk is no doubt increasing as we head into the troublesome August and September months.”Stock picks and investing trends from CNBC Pro:Fund manager names some ‘hugely undervalued’ global stocks that are a ‘screamingly obvious’ buyUBS says space tourism could be a $4 billion market by 2030. Here’s how to play itJPMorgan is ‘bullish again’ and picks a new list of its top global stocksA busy week of earnings will continue on Thursday. AT&T, D.R. Horton, Southwest Air, American Airlines, Abbott Labs and Union Pacific are among the names on deck before the opening bell. Intel, Twitter, Snap and Capital One will post quarterly updates after the market closes.So far 15% of the S&P 500 has reported earnings, with 88% beating earnings estimates, according to Refinitiv. Of the companies that have reported 84% have topped revenue expectations.Investors will also be watching the weekly jobless claims number from the Department of Labor on Thursday. Economists polled by Dow Jones are expecting the number of first-time filings to be 350,000, down from the prior reading of 360,000. Existing home sales figures will also be released.”We expect a continuation of sloppy trading through the seasonally-weak summer months; however, our base case remains that the primary trend over the next 12 months remains higher,” Keith Lerner, chief market strategist at Truist wrote in a note to clients. “The S&P 500, which just made a new record high last week, has gone one of the longest periods of the past decade without so much as a 5% pullback,” he added.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More