Page 7 – The Business Pinnacle

HSBC Turned to Asia, Middle East to Meet Growing IPO Demand

by The Business Pinnacle June 10, 2025

written by The Business Pinnacle

HSBC observed a growing interest from Southeast Asian and Chinese companies who wanted to invest in Hong Kong.

The Hong Kong and Shanghai Banking Corporation (HSBC) will expand its investment banking division to meet the increasing demand for initial public offerings (IPOs) from Asian and Middle Eastern companies.

The bank planned to shift its focus to high-return areas, such as Hong Kong and India, and exit low-profit markets, including Europe and the US.

London Stock Exchange Group reports that 27 companies have raised $9.96 billion as of last week, placing Hong Kong at the top of the global IPO table. Similarly, 113 Indian firms have raised $7.71 billion, which puts the National Stock Exchange and the Bombay Stock Exchange in fourth and fifth place, respectively.

David Liao, co-CEO of HSBC for Asia and the Middle East, stated that the company has removed mergers and acquisitions from US and UK markets and wants to redirect its growth to Asian markets.

He added that Hong Kong was a listing market for foreign investors, so the bank decided to increase its capacity to serve the growing population of wealth management clients beyond the 7.5 million residents.

Surendra Rosha, the other co-CEO for Asia and the Middle East, stated that the bank wanted to attract international investors to Indian companies. The bank observed a growing interest from Southeast Asian and Chinese companies who wanted to invest in Hong Kong.

The two co-CEOs are known as “the twins” among their coworkers. They manage the biggest profit center in one of the world’s major banks, with US$6.41 billion in pre-tax earnings in the first three months of 2025, or 68% of the company’s total income. They hold two of the twelve seats on the Group Operating Committee.

HSBC’s expansion of its investment banking division in Asia and the Middle East represents a return to its historical roots.

The bank was founded in Hong Kong in 1865. Its current strategy reconnects with its geographic origins while addressing market realities.

Investment banks like HSBC are finding a niche outside the conventional oil and gas industry due to the changing economic relationship between Asia and the Middle East.

The trade relationships between the Gulf and China will help to surpass Western countries by 2027, with cumulative foreign direct investment (FDI) flows predicted to reach $270 billion over the next decade.

Hang Seng Investment Management, a division of HSBC’s Hang Seng Bank subsidiary, listed the $500 million SAB Invest Hang Seng Hong Kong exchange-traded fund (ETF) on the Saudi exchange in October.

HSBC was also the custodian bank for the Saudi government’s sukuk ETF. It went public in Hong Kong on May 29. A custodian bank is a financial institution that holds and safeguards client assets, like stocks and bonds.

As Saudi is trying to diversify its economy, banks are modifying their service offerings to serve its IT and renewable energy industries, which are crucial for increasing capital in the region.

The largest trade finance bank sees opportunities in Hong Kong and Asia after the US-China trade tensions. The 10 economies of the Association of Southeast Asian Nations (ASEAN) are a potential growth market for them.

With over 600 million people in ASEAN, the tariffs are forcing some economies to rethink how they can cooperate to help businesses and entrepreneurs use this enormous market.

In the first quarter, the bank added 300,000 new customers to its 6 million Hong Kong clients since mainland tourists rushed to Hong Kong to purchase wealth products, insurance, and other assets.

HSBC had big ambitions. It wanted to withdraw from investment banking in the West in the hopes that Asia would source its funds, especially after its diminishing market share in its Western unit.

It was no surprise that HSBC wanted to re-shift its focus. Some people were surprised by its decision to close its mergers and acquisitions advisory and equity capital markets divisions in the UK, Europe, and the US. However, those markets comprised only 0.3% of the bank’s global revenues.

June 10, 2025 0 comments

Eng & Tech Industry

Meta Explores Over $10 Billion Investment on a Startup that Dominates Data Market

by The Business Pinnacle June 9, 2025

written by The Business Pinnacle

Mark Zuckerberg, the CEO of Meta, declared in January that he would invest up to $65 billion in AI-related projects this year, making it the company’s top priority.

Facebook parent company Meta Platforms is negotiating with artificial intelligence startup Scale AI to invest several billion dollars in them. According to sources related to the matter, the cash might be worth over $10 billion, making it one of the biggest private company funding of all time.

The sources added that the terms of the deal have not been finalized yet and could still change.

Meta representatives and Scale AI did not respond to requests for comment.

Scale AI provides data labeling services to assist companies in training their machine-learning models. It is one of the significant beneficiaries of the generative AI boom. Microsoft and OpenAI are its clients. The IT giants Nvidia, Amazon, and Meta have sponsored Scale AI, a data labeling company founded in 2016 by Alexandr Wang. At 24 in 2021, he became the youngest self-made billionaire in the world at that time.

When Microsoft and Meta funded a fundraising round in 2024, the startup’s value was around $14 billion. According to reports, the startup generated $870 million last year and anticipates that sales will more than double to US$2 billion by 2025. The report indicates that Scale AI is negotiating a bidding offer of $25 billion.

Many tech giants are investing heavily in artificial intelligence, claiming it is the future of technology, from Google and Amazon’s efforts to support competitor firm Anthropic to Microsoft’s $ 13 billion+ investments in OpenAI.

Sources claim that Mark Zuckerberg, the CEO of Meta, declared in January that he would invest up to $65 billion in AI-related projects this year, making it the company’s top priority. Meta also aims to establish its Llama AI model (an open-source large language model ) as the industry standard, as its chatbot, which is available on Facebook, Instagram, and WhatsApp, is used by 1 billion people every month.

It is a unique move and the biggest external AI investment to data for Meta. The social media giant has primarily relied on internal research and a more open development approach to advance its AI technology.

Scale AI plays a significant role in making artificial intelligence data accessible to companies. Since the success of AI training depends on the quality of the data, the company uses many contract workers to clean and tag text, photographs, and other data.

Scale AI and Meta both have interests in defense technology. Meta announced a new collaboration with defense contractor Anduril Industries last week. The two companies will collaborate to create goods for the US military, including an AI-powered helmet with augmented and virtual reality.

The company announced this after it restructured its generative AI team to speed up the development of its product and feature rollouts. Meta stated that the move, which involves splitting the team into two groups, is intended to enhance the company’s competitive edge in the quickly evolving AI business by streamlining processes and defining roles.

Meta has approved US government organizations and defense contractors to use its AI models.

The company is already working together with Scale AI on a project called Defence Llama, a military-use version of Meta’s Llama large language model (LLM).

In other AI news, PYMNTS published an article discussing how small and medium-sized businesses (SMBs) are using artificial intelligence to compete with larger companies.

According to the survey, artificial intelligence helps smaller businesses to quickly adopt an AI-first business model and let go of their old systems by automating procedures, enhancing skills, and speeding up decision-making.

June 9, 2025 0 comments

Money Market Capital Market Financial Market

Stablecoin Issuer Circle Lists IPO In NYSE With Shares Doubling

by The Business Pinnacle June 6, 2025

written by The Business Pinnacle

Circle’s stock surged as high as $103.75 and had to be halted multiple times to contain volatility, owing to uncontrolled trading.

Circle Internet, one of the biggest Stablecoin issuers, debuted on the New York Stock Exchange (NYSE) on Thursday. Circle shares more than doubled, providing a much-needed boost to the initial public offering (IPO) market, which has been struggling to regain investor confidence.

The Stablecoin issuer’s stocks opened for trading at $69 per share, catapulting the company’s value to nearly $18 billion on a fully diluted basis. The New York-based company’s stock surged as high as $103.75 and had to be halted multiple times to contain volatility, owing to uncontrolled trading.  The shares finally closed at $83.23, a 168% increase from their initial IPO price.

Stablecoins are cryptocurrencies which hold stable value as they are linked to traditional currencies like the US dollar. Circle was founded in 2013 and issues the USDC stablecoin with a market capitalisation of over $61 billion, making it the second-largest stablecoin after Tether. Circle will trade on the NYSE under the symbol ‘CRCL’ with JP Morgan, Citigroup and Goldman Sachs as its lead underwriters.

With the IPO market struggling to gain momentum, this successful flotation will encourage other crypto companies to go public. Digital assets are piquing the interest of investors as token prices rise and more favourable regulations are likely to be introduced, which could prompt more companies to debut their listings.

Financial analysts believe that crypto companies going public will make the future of the cryptocurrency industry more stable and secure. Having publicly traded companies will make it easier for the crypto ecosystem. Yesterday, Circle priced its upsized US IPO offering at $31 apiece, raising $1.05 billion. Circle and its shareholders managed to sell 34 million shares for $31 each, raising the company’s valuation to $8 billion on a fully diluted basis. 

This late-stage cryptocurrency firm’s entry into the market is one of the biggest flotations of the year, after US President Donald Trump’s protectionist policies caused much uncertainty in the market, resulting in several companies delaying their IPO listings. Circle’s debut is also one of the biggest crypto listings since Coinbase Global went public in 2021.

Despite these economic upheavals and stock market volatility, the cryptocurrency industry does look at the next few years with optimism, as Trump has been hailed as the ‘crypto President’, having promised friendlier regulations. The Trump administration aims to impose fewer restrictions on the crypto industry in an attempt to bring these digital assets into the mainstream, making the market a more pro-crypto environment.

This optimism has translated into companies adding cryptocurrencies to their balance sheets to capitalise on rising token prices. However, there remains some scepticism dividing the market, as demand for stablecoins and less-volatile crypto assets remains higher, as opposed to more speculative single-cryptocurrency investments, which are not backed by the US dollar.

This is Circle’s second attempt to go public after it ended its $9 billion deal with blank-check firm Concord Acquisition Corp in 2022. This was a result of a lack of enthusiasm from both companies, as the crypto industry was exhibiting a bearish sentiment for risky bets.

However, the company has debuted in the IPO market at the right time, as the potential stablecoin bill in the US could further boost the adoption of these digital tokens, bringing them into the mainstream. Reuters reported that CEO Jeremy Allaire said that Circle is on an innovation spree, working to bring stablecoins into the mainstream financial market, and also exploring ways to facilitate the interaction of financial institutions with the USDC.

Circle’s inaugural run in the NYSE is an indicator that the IPO market will soon pick up and also that crypto companies will make haste to go public with their listings, elevating the value of digital assets and possibly normalising their interaction in the financial sector.

June 6, 2025 0 comments

Money Market Capital Market Financial Market

Brazil Sells $2 Billion Bond As CDS Declines

by The Business Pinnacle June 5, 2025

written by The Business Pinnacle

This deal was announced around the same time as Brazil’s five-year credit default swap (CDS) declined, which is an important determinant of sovereign risk used by investors to hedge against default.

Latin America’s largest economy has resorted to drastic measures in light of an impending global recession. For the second time this year, Brazil sold $2.75 billion in dollar-denominated sovereign bonds as international issuance, as it capitalises on declining default risk.

Reuters reported that the Brazilian government sold $1.5 billion through a new five-year bond, at a 5.68% yield, set to mature in 2030. Additionally, it also sold $1.25 billion with its 10-year benchmark Global 2035 bond at a 6.73% yield.

This deal was announced around the same time as Rio de Janeiro’s five-year credit default swap (CDS) declined, which is an important determinant of sovereign risk used by investors to hedge against default. Although it rose earlier this year, Brazil’s CDS fell to its lowest in 2025, marking a 27.6% year-to-date decline on Tuesday. The treasury stated that the demand for the new issuance overtook the issued volume by fourfold.

This dollar bond sale follows the Global 2035 bond, which was reopened on Wednesday, wherein the country’s treasury raised $2.5 billion in a 10-year dollar-denominated sovereign bond. This deal was finalised in February and was aimed at augmenting the treasury’s blueprint of enhancing liquidity in Brazil’s external yield curve.

This transaction was led by some of the biggest names in banking, like Bradesco, JP Morgan and Morgan Stanley. The issuance is key to external debt in extending maturities, diversifying benchmarks and broadening the investor base, according to the Treasury. It is interesting to note that at the time of the February deal, Brazil’s CDS had improved considerably, dropping more than 20% year-to-date.

The market climate in Brazil, like all other countries, has been quite uncertain, especially after US President Donald Trump took over the White House. Fiscal concerns and global market uncertainty following Trump’s win resulted in a manic sell-off in Brazilian assets.

Despite escalating economic tensions, financial analysts have pointed out that drastic shifts in trade policies, including Trump tariffs, have prompted capital to be diverted elsewhere, thereby significantly benefiting emerging markets. This has resulted in the US dollar weakening against other global currencies.

In Brazil, investors are awaiting the promised structural fiscal reforms, which are currently being discussed in Congress. The government is set to announce the new measures next week, which can help balance public accounts after the proposal to increase the tax on financial transactions, known as the IOF tax, was met with much controversy.

President Luiz Inacio Lula da Silva’s leftist government has been trying to introduce gradual tax increases to meet fiscal demands, but they have had little success. Last year, da Silva’s administration proposed to increase the social contribution tax, which was never voted on in Congress. The government ultimately lost hope that this increase could generate $2.63 billion in extra revenue.

The government has been struggling fiscally, and when Finance Minister Fernando Haddad was asked whether there would be another attempt to implement tax changes, he said that since a 90-day waiting period is required before tax hikes can come into effect, it was unlikely that the government would introduce any changes this year.

However, to make up for these fiscal vacuums, Brazil has had to turn to the international market for bond issuances. In June 2024, the government raised $2 billion in its second sustainable bond issuance. The Treasury had also announced in its 2025 financing plan that it would continue issuing conventional and sustainable sovereign bonds. With this new external issuance, Rio’s Treasury expects to further liquidate the sovereign dollar yield curve, provide pricing references for corporate issuers and raise funds for external debt maturities in advance. Given the demand for these bonds, it is likely that more such issuances will be announced by the end of the financial year.

June 5, 2025 0 comments

Capital Market Money Market Transportation

Virgin Australia Staged to Raise $442.8 Million in IPO, Report Says

by The Business Pinnacle June 4, 2025

written by The Business Pinnacle

Virgin Australia will have an enterprise value of A$3.6 billion with a net value of A$3.6 billion.

Virgin Australia has staged a zero-to-hero moment, giving a financial comeback in recent years, going from a collapse during the pandemic to one of the most closely watched initial public offerings (IPOs) of 2025. Bain Capital-owned Virgin Australia planned to go public with an IPO of A$685 million ($442.78 million).

According to it, Bain will sell around 30% of the airline for a fixed price of A$2.90 per share.

Bain refused to discuss the plan.

The private equity company would offer 236.2 million shares in the IPO to value the company at A$2.32 billion on a fully diluted basis.

After entering voluntary administration in April 2020 with debts of around $7 billion, the airline company was bought by Bain Capital for A$700 million and reorganized under then-CEO Jayne Hrdlicka. The strategy that helped turn the company upside-down centered around cost reduction, operational efficiency, and repositioning in the mid-market segment. The efforts helped them deliver their first profit in over 10 years, with $129 million in net earnings in FY2023.

The positive momentum continued into the financial year 2024 (FY2024) when the company reported an income of $5.4 billion.

According to the term sheet, Bain will lose a portion of its ownership from around 70% to 39.4% after the sale, while Qatar Airways will retain a 23% stake.

According to a bookrunner’s letter received on Wednesday, investors had submitted indicative bids that would cover the deal’s size before book building started.

Virgin will have an enterprise value (a company’s total value, considering equity and debt obligations) of A$3.6 billion with a net value of A$3.6 billion.

This initial public offering was one of the most watched deals in Australia in recent years as it is heavily reliant on Australia’s consumer market.

Virgin has temporarily stopped flying internationally as it wants to put its full attention on domestic travel, but it has scheduled to start flying long-haul flights again through its Qatar partnership.

A report published by the Australian Competition and Consumer Commission (ACCC) states that Virgin has a domestic market share of 34.4%, which is less than its main rival, Qantas (which has a share of 37.7% as of March).

The deal will take the first place of “the largest IPO in Australia” this year after DigiCo Infrastructure REIT secured A$2 billion in December.

Since its launch, DigiCo’s shares have been losing their strength and reduced by almost 30%.

The term sheet stated that Virgin’s shares would begin trading on the Australian Securities Exchange (ASX) on June 24 and that institutional book-building would close on Thursday.

The front-end book-building procedure is used to conduct this IPO, where investor place their bids before Australian regulators examine and approve the prospectus.

Virgin hired investment banks after its IPO, which was on the cards for more than two years, kept getting delayed due to the erratic global financial markets in 2023.

Virgin fell to the ground in 2020 due to the severe COVID-19 restrictions that damaged the global airline industry, where flights got halted and people stayed at home.

There is no set date for the initial public offering (IPO), but sources claim that Bain Capital has cleared the listing one month before its June 30 balance date. Additionally, it has promised not to sell any shares until after the results of December.

The benchmark S&P/ASX200 index for Australia has increased by 3.77% so far in 2025.

Virgin Australia came in sixth place, Qantas came in second, and Air New Zealand finished first on the list of the World’s Safest Airlines for 2025 with a record of no incidents or crashes.

June 4, 2025 0 comments

Retail Industry Trade

Shein and Temu Explores European Markets After Tariffs But Fear Losing American Consumers

by The Business Pinnacle June 3, 2025

written by The Business Pinnacle

Shein’s representative stated that to ensure safety and quality standards, the company spent $15 million on product and safety checks and conducted 2.5 million product tests.

Consumers often buy products through online shops on platforms like Amazon, Shein, and Temu. The primary source of customers for them used to be Americans, but ever since US President Donald Trump scrapped the duty-free imports, it has demolished the company’s business model of exporting cheap goods into the US. They are exploring new markets in Australia and Europe to soften the blow.

The companies used to import cheap clothing, electronics, toys, and homeware by taking advantage of low-cost, high-volume manufacturing operations in China. However, Trump’s administration’s on-again-off-again trade war with China increases the pricing of goods, which puts pressure on either retailers or consumers to pay.

Last year, under the de-minimis rule, 1.36 billion goods were transported to the US, which exempts goods under $800 from import tax. Goods purchased from Temu and Shein now have a 30% tax on goods up to $50 apart from the 145% tariffs imposed by Trump on China.

So naturally, Chinese companies shifted their focus to European markets, spending millions of dollars on advertisements to attract European consumers. But that has slowly slowed down. They are not willing to give up their core markets in the US, so they are willing to take high risks and lower margins than handle the challenges in the European market.

The reason Chinese companies would rather sacrifice their profits than enter the European market is that the EU and UK markets have far more product standards and safety protection than the US. The American market has non-tariff barriers (NTBs), which are restrictions on international trade that are not from tariffs or taxes.

The European Commission was investigating Temu products for potential violations related to the sale of illegal goods and misleading user interface designs. Similarly, Shein got a different lawsuit alleging false discounts and sustainability claims. The company has one month to respond or pay the fine based on its EU turnover.

Bernhard Kluttig, a deputy German economy minister, claims their intention is not to block affordable products or intelligent business models but rather to protect consumers from unsafe goods.

The European Commission has launched an initiative called Priority Control Areas to conduct surprise border checks to find products that do not meet EU standards.

It was after Darmstadt Regional Council, a regional authority in Germany, tested around 800 products of Asian e-commerce and found that 95% of the consumer products did not meet the standards.

The EU is in the process of enforcing stricter rules and ruling out the de-minimis customs duty exemption. But the US was faster and removed its equivalent in May, which is quite risky since the retailers might find a way to dump the goods in Europe.

A Temu representative claimed to take product safety checks very seriously through robust onboarding checks and regular monitoring to ensure compliance and work with certification agencies.

Similarly, Shein’s representative stated that to ensure safety and quality standards, the company spent $15 million on product and safety checks and conducted 2.5 million product tests.

According to Mark Greeven, dean of Asia at IMD Business School, online retailers did not view the increasing regulatory complexity as an insurmountable barrier. The companies are ready to expand their warehouses in European markets, with companies like Temu exploring different business models and working with small businesses in Europe.

He added that it would be challenging to build a market of ultra-low-cost models with an algorithmically marketed model that worked in the US. It could take some time to understand how to navigate the tariffs and tailor their products to the European market.

However, Chinese retailers have crossed many storms in their existence, making them highly efficient and adaptable.

Wang from the Shenzhen Cross-border E-commerce Association stated that the future of tariffs is chaotic, but their shift to other markets would depend on the tariff number.

When the tariffs were at 54%, retailers continued to stay in US markets for cash flow even though they made thinner profits.

He added that when the tariff number becomes even higher than before, the companies will have to exit the market and look for new homes since staying here would mean dying faster.

June 3, 2025 0 comments

Trade Lifestyle

South Korea Tries to Offset 50% US Steel Tariffs to Protect Exporters

by The Business Pinnacle June 2, 2025

written by The Business Pinnacle

Shares of South Korean steel companies fell, with SeAH Steel Corp. down 6.3% in morning trading and POSCO and Hyundai Steel down 3%.

South Korea’s Industry Ministry announced that it will respond to the looming 50% US tax on steel products as part of its trade talks with Washington to minimize the impact of tariffs on its industry.

The country decided to make this move when US President Donald Trump announced on Friday that he would raise tariffs on imported steel and aluminum from 25% to 50% starting on Wednesday to increase pressure on global steel producers and intensify his trade battle just hours later when Trump accused China of violating the agreement they had with the US about mutually taking back the tariffs and trade restriction for crucial minerals.

The steel industry is the country’s most crucial industry, having a high impact on other sectors. It has contributed significantly to Korea’s economic development by steadily providing materials to industries including construction, shipbuilding, and automobile.

The gross domestic product (GDP) of the steel industry accounts for 1.5% of the entire industry and 4.9% of the manufacturing sector.

The steel industry has been attempting to improve its trade balance by increasing exports and becoming self-sufficient in steel production. As a result, exports increased from USD 7.6 billion in 2000 to USD 27.7 billion in 2016, representing a 5.8% increase in the country’s industry exports. In a similar vein, imports tripled from USD 6.8 billion in 2000 to USD 19.4 billion in 2016. Infrastructure investment has also grown from 1.7 trillion won in 2000 to 3 trillion in 2016.

Data from the American Iron and Steel Institute shows that last year, South Korea was the fourth-largest supplier of steel to the United States, after Canada, Mexico, and Brazil.

The Industry Ministry of South Korea stated that they had arranged an urgent meeting with the representatives from Pohang Iron and Steel Company (POSCO) and Hyundai Steel, two of the country’s largest steel producers.

Shares of South Korean steel companies fell, with SeAH Steel Corp. down 6.3% in morning trading and POSCO and Hyundai Steel down 3%.

The 50% tariffs will make it more difficult for Korean steel exporters, who have significantly avoided increasing their exports to the United States, to avoid its scrutiny, despite growing US steel prices and if there are any more increases in US steel prices, it will be a burden on the shoulders of exporting companies.

According to trade data, despite tariffs, South Korea’s steel exports to the US increased by 12% in April compared to the year before.

When Trump became president for the second time in January, he implemented some of the first tariffs, including those on steel and aluminum. On March 12, he imposed 25% tariffs on most steel and aluminum imports entering the United States.

Industry officials stated that the tariffs backfired the original motive by raising the prices of US steel, which influenced many industries including construction, automobiles, and home appliances.

South Korea, a significant US ally, has demanded that the US waive the tariffs on steel, automobiles, and other goods during discussions with the United States.

Seoul agreed to draft a trade package by the end of the 90-day suspension on Trump’s reciprocal tariffs in July. The lack of political leadership has made it challenging for negotiators to make crucial choices.

Hyundai Steel has announced the construction of a $5.8 billion mill in Louisiana in response to the US tariffs, but the facility is not operational until 2029.

POSCO, a larger competitor of Hyundai Steel, signed a preliminary agreement in April to invest stock in the manufacturing project.

June 2, 2025 0 comments

Capital Market Financial Market Money Market

Hong Kong- Saudi Arabia Launch Asia’s First Sharia-Complaint ETF

by The Business Pinnacle May 30, 2025

written by The Business Pinnacle

The Premia BOCHK Saudi Arabia Government Sukuk ETF began trading on the Hong Kong Stock Exchange on Thursday.

Hong Kong has yet again proved its prowess in the financial world with its newly launched exchange-traded fund (ETF), which tracks Saudi Arabia’s Islamic government bonds, also known as ‘sukuks.’ This is a major step taken by Hong Kong to strengthen its financial ties in the Middle East.

The Premia BOCHK Saudi Arabia Government Sukuk ETF began trading on the Hong Kong Stock Exchange on Thursday. This sukuk allowed local investors to access the world’s second-largest market for Sharia-compliant debt securities. The Premia BOCHK ETF follows the iBoxx Tadawul Government & Agencies Sukuk Index and includes sukuk denominated in riyal and US dollar, by the Saudi government and related agencies.

The ETF trades under stock codes 3478 for Hong Kong dollars and 9478 for US dollars. Approved by the Securities and Futures Commission of Hong Kong, it offers quarterly US dollar distributions, with a fee not upward of 0.35%, along with an expected annual tracking difference of around -2.

It was launched at the Capital Market Forum, which was a two-day event hosted by Saudi Tadawul Group and Hong Kong Exchanges and Clearing Ltd., to facilitate more cross-border investments. This year’s theme was ‘Powering Connections’ and aimed at strengthening economic and capital market ties between the Middle East and East Asia.

The fund was launched by Premia Partners, a home-grown ETF provider, and BOCHK Asset Management, a unit of the Bank of China, which is the third-largest lender in the country. HSBC has offered to provide cross-border fund services in both financial markets. Trading closed on day one with the fund jumping to 1.8% to HK$82.48 and 1.7% to $10.52. The iBoxx index, however, fell to 4.2% in local currency despite gaining 0.4% last year.

This sukuk is the first of its kind in Asia and gives Hong Kong a much-needed push in the financial market, as it sets out to strengthen its ties with the Middle East, particularly as relations with the US are strained due to the ongoing tariff crisis and trade war escalation. Both Hong Kong and Saudi Arabia stand to emerge as important global financial hubs with such initiatives. Arab News reported that the Saudi Exchange CEO, Mohammed Al-Rumaih, said that such a partnership will bridge the gap between Eastern and Western Asia, and also strengthen ties with local and international investors.

In his address at the Capital Market Forum, Financial Secretary Paul Chan Mo-po said that there is a large market for Islamic financing and that there is much room for discussions and deliberation between the market participants and the Islamic community. Mo-po emphasised the need to have an array of choices which comply with one’s beliefs and regulations befitting of these requirements.

Financial ratings company Fitch Ratings revealed that the global sukuk market surged 11% to $961 billion last quarter, compared to the same period last year, and it estimates that it could cross the $1 trillion mark this year. Fitch Ratings also revealed that Malaysia, which has a 40% share, Saudi Arabia with 28%, and Indonesia with 11% make up the three biggest sukuk markets. This new fund shows the increasing global demand for sukuks as it offers regular income without offending the dictates of Islam.

The securities included in the iBoxx index carry an A credit rating backed by Saudi Arabia’s large oil reserves. The launching of this fund at the Capital Market Forum indicates the Kingdom’s commitment to strengthening its financial markets, as part of its economic diversification plan, in line with Saudi Vision 2030.

Before the ETF was launched, two ETFs worth $1.8 billion were listed in Riyadh last year, which offered Middle Eastern investors a chance to own top Hong Kong stocks. Julia Leung Fung-yee, CEO of Hong Kong’s Securities and Futures Commission that such sukuk ETFs could be launched in other Gulf countries as well. This indicates willingness from both, Hong Kong and Saudi Arabia to strengthen their financial and capital markets.

May 30, 2025 0 comments

Financial Market Capital Market

Netskope Approaches Morgan Stanley To Secure US IPO

by The Business Pinnacle May 29, 2025

written by The Business Pinnacle

Netskope had been waiting for the markets to stabilise but given the escalating geopolitical tensions, the expectations that the US IPO would receive strong activity have dropped.

In a bid to secure a US initial public offering (IPO), cybersecurity firm Netskope has hired financial services company Morgan Stanley. Reuters reported that sources have confirmed that this listing could raise more than $500 million.

Netskope plans to go public in the third quarter of this year, which could potentially increase the company’s valuation to over $5 billion. These figures, however, are not set in stone, as factors like timing, valuation, and the total amount the offering would raise could change according to market conditions.

Founded in 2012, Netskope is a cloud-based security software provider that helps its client companies protect their apps, websites, and data from cyber threats. The California-based company rivals fellow cybersecurity firms like Rubrik Inc. and Zscaler Inc. The company also boasts an illustrious client base, like Yamaha and Ross Stores Inc.

Multinational firms like Morgan Stanley Tactical Value and Goldman Sachs Asset Management, among others, are investors in Netskope. The company was valued at $7.5 billion in 2021, but tech startups have faced significant drops in valuations in the years that followed.

The company has been laying the foundation for the IPO since last year, as Chief Executive Sanjay Beri had confirmed with Reuters in an interview last June. Beri had revealed that while Netskope had no immediate plan to go public, preparations were underway, particularly since the firm amassed over $500 million in annual recurring revenue in 2024.

With the Presidential elections due last November, Beri had said that Netskope was in no hurry to go public and that the company would consider it once the elections were over and the markets were more stable. For this highest-valued cybersecurity startup, an IPO would help raise awareness of its brand, and for the past year, Netskope has focused on investing in security products, expanding the platform and becoming more cash flow positive.

Now, with firm is finally ready to go public and attain a US listing. The company had been waiting for the markets to stabilise but given the escalating geopolitical tensions and the threats surrounding an impending trade war, the expectations that the US IPO would receive strong activity have dropped.

However, all is not lost, as companies are seeing some hope, as the present pause on tariffs by the US and other countries, particularly China, has come as a reprieve. Markets have been recovering and slowly picking up pace in recent weeks, and companies are optimistic that increased IPO activity is in the pipeline for this year.

It was reported earlier this month that companies which had previously postponed their IPOs, citing market volatility, have since moved up their dates to go public. In April, Swedish fintech firm Klarna and San Francisco fintech Chime, along with US-based StubHub, delayed their initial offering after President Trump’s Liberation Day tariffs caused global markets to tumble. Companies sparked a global equity sell-off race and hurriedly backed out of acquisitions and IPO listings.

However, a mere month later, when stock markets gained and trade tensions eased, financial research analysts pointed out that the IPO cycle was entering a period of revival and that investors would be looking for large discounts. The Israeli retail trading platform was one of the first to greenlight its highly anticipated New York flotation. Similarly, Chime also announced its plans to go ahead with its IPO listing.

Therefore, it comes as no surprise that a company like Netskope, which had been working to go public for a year now, would announce its intentions just as the markets are showing signs of recovery. Global markets are subject to unexpected changes, particularly with US protectionist policies triggering a trade war across continents. However, companies are making the most of this short period of peace to move ahead with their financial ambitions.

May 29, 2025 0 comments

Industry Eng & Tech

Salesforce To Acquire Informatica For $8 Billion To Boost Its AI-Products

by The Business Pinnacle May 28, 2025

written by The Business Pinnacle

Similarly, this new deal with Informatica also highlights Salesforce’s foresight in understanding the potential in the AI market and its eagerness to cash in on this bandwagon.

Cloud software company Salesforce announced on Tuesday that it would buy Informatica, a data management platform, for $8 billion to increase its competitiveness in the artificial intelligence (AI) market. After a break of several years, Salesforce, which had been on the receiving end of repeated scrutiny by activist investors pushing for better profitability, has re-entered the mergers and acquisitions (M&A) market with this new venture.

The Wall Street Journal had reported earlier this week that after Salesforce walked away from a bid to acquire Informatica last year, negotiations were renewed in April of this year. It was around the same time that a number of interested buyers, like private equity firms and other companies, had also approached the data company.

Informatica was founded in 1993 and provides subscription-based data management services over a cloud network and also automates tasks for over 5,000 active customers. This data management firm boasts a rich clientele, including mega-brands like Deloitte and Unilever.

While Salesforce has a reputation for acquiring its smaller rivals, it came under fire around 2023, when activist investors like ValueAct Capital and Elliott Management criticised the company’s strategies and urged management reform. Salesforce duly implemented cost-cutting, increased share buybacks and disbanded the M&A board committee.

Reuters reported that Thoma Bravo and Cloud Software Group were part of the five interested buyers of the asset. For Salesforce, the acquisition of Informatica is its biggest deal since it bought workplace messaging app Slack Technologies Inc. in a $27.7 billion deal in 2021. With the timely purchase of Slack, Salesforce showed great business acumen, having predicted a growing preference for remote work, particularly at the height of the pandemic.

Similarly, this new deal with Informatica also highlights the company’s foresight in understanding the potential in the AI market and its eagerness to cash in on this bandwagon. For Salesforce, this venture will augment its data management tools as it explores more AI-powered products. The software maker can also exercise more control over how business data is used and managed, which is important for it now as it seeks to further embed generative AI into its products.

According to Salesforce CEO Marc Benioff, this partnership has the potential to create the most complete, agent-ready data platform in the industry, and such a deal will strengthen the company’s position in the $150 billion-plus data enterprise market.

The software company has been offering AI agents, programs that can handle routine work without the need for human supervision, and it has also been offered to businesses for recruitment and customer services. In December 2024, it was reported that Salesforce’s AI-generated platform for creating virtual representatives, known as ‘Agentforce’ has closed more than 1,000 paid deals.

Benioff had previously expressed his belief that ‘digital labour’ is set to augment humans and add to growth in the economy. He also revealed that Salesforce would soon introduce a ‘robot force partner program’ which could connect real-world and virtual machines.

On Tuesday, Informatica shares surged 5.8% in afternoon trading at $23.86, and Salesforce was up 1.78%. Salesforce is reportedly paying Informatica $25 per share, a premium of about 30% to Informatica’s closing price on May 22, the day before news of the acquisition broke.

The business software giant hopes to finalise the deal early on in the next fiscal year, starting February, with both cash and new debt, and it will have to give the deal two years after closing to boost its operating margin. Market analysts believe that this acquisition could help Salesforce catch up with its fellow software rivals, as data management software is usually sold as part of a toolkit.

Salesforce is known for being a calculated dealmaker, having bought data analytics firm Tableau Software in 2019 for $15.7 billion in stock and Slack in 2021. This new deal with Informatica is also one that the software company knows it needs to expand its range of operations. This new acquisition also raises questions of whether Salesforce is finally out of its slump and will soon announce an array of partnerships and acquisitions, as it did before it drew the ire of activist investors.

May 28, 2025 0 comments

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