In the news this week

Author: John Crabb, Karry Lai, Olly Jackson | Published: 13 Jul 2018
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Americas: more of the same

It was back to business as usual in the US, as the country’s divisions seemed to widen yet further. Following the retirement of Justice Kennedy last month, President Trump announced his pick for the vacant Supreme Court position; Judge Brett Kavanaugh of the DC Court of Appeals. Far from a unanimously popular choice, Kavanaugh has been instantly lambasted by many on both sides of the ideological divide.

In what is becoming a daily occurrence, the US trade war with China continued hastily, first with the announcement of $35 billion more in tariffs against the country, and then with the threat of $200 billion more later in the week. The news has caused a bond rally as uncertainty between the two behemoth nations continues to fester.

The US Government Accountability Office issued a report this week suggesting that the US Treasury and the Department of Defense should increase certain aspects of the Committee on Foreign Investment in the United States, including assessing staffing issues to ensure the agency can operate at full capacity and adequately mitigate national risk.

Other news saw the Commodity Futures Trading Commission issue its largest ever whistleblower award, at $30 million, as JPMorgan was reprimanded for conflict of interests. The saga of the AT&T acquisition of Time Warner continued as the Department of Justice appealed the previous decision in what is the biggest antitrust case of all time.

Asia: strength to strength

The Competition and Consumer Commission of Singapore has provisionally found that the Grab and Uber merger has reduced competition. It has proposed penalties and potential remedies: if the companies fail to address competition concerns, the merger may have to be unwound. Uber took a 27.5% stake in Grab in exchange for the company’s operations in eight Asian countries. Both companies have less than two weeks to respond to the decision.

Hong Kong’s Securities and Futures Commission (SFC) has launched a consultation on proposals to amend the Guidelines on Anti-Money Laundering and Counter-Terrorist Financing. It aims to streamline the identification and verification processes for on-boarding customers to allow for more flexibility, including the use of technology for non-face-to-face account opening with adequate safeguards. The consultation ends on August 9.

Xiaomi shares officially began trading on the Hong Kong stock exchange on Monday. It is the first company to list with a weighted voting rights structure after changes to Hong Kong’s listing regime came into effect. The company priced its shares at the lower end of the HK$17 ($2.17 approximately) to HK$22 range. Net initial public offering proceeds were HK$23.98 billion.

EMEA: boom and bust

The number of M&A mega deals for the first half of this year has more than trebled compared to the same period last year and there is little sign of this growth slowing down. "Our pipeline is bulging with work and I don’t see signs of it slowing up," said Richard Browne, global co-head of corporate at Allen & Overy.

Figures show the number of deals exceeding $10 billion rose by 301% in H1 2018 from the same period last year, and deals exceeding $5 billion rose by 226% within the same period. Overall deal value also increased by 64%, despite deal volumes falling by 11%.

The Department of Justice has launched an investigation into price manipulation of cryptocurrencies or 'spoofing’. Concern has been raised that some investors are filing orders to deliberately encourage other traders to buy or sell, and this could be influencing the highly volatile pricing. Regulators have been rooting out 'spoofing’ or 'wash trading’ out of futures markets, but given that the cryptocurrency market remains unregulated, it can be easy for investors with malicious intent to get involved.

It is nearly two months after the General Data Protection Regime (GDPR) came into force, yet many companies are not effectively communicating their retention policies and data is still being held longer than necessary. According to Neil Aremband, GDPR consultant, organisations need to continuously update a corporate list register to mitigate risks and someone within the company needs to take lead of this, but many SMEs don’t tend to have one currently.

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