With the pulling of ANTs IPO last month there has been a significant increase in competing fintech companies’ user bases, presenting higher levels of risk for the overall Chinese economy on multiple fronts. With some of the most powerful players in asset management, such as BlackRock and Silver Lake being left to hold billions in assets they have no control over, and already tight limits on IPO pricing, investors are being scared off. Then domestically as the competing fintechs lack the economies of scales available to ANT, higher interest rates are being forced on consumers, the Financial Times calculated these to be in the region of 25-35%.
A recent study by ISEAS Yusof-Ishak Institute found 62% of respondents in Southeast Asia favoured aligning with the USA over China, up nearly 10 percentage points from last year. As Southeast Asia is home to some of the world’s fastest growing economies this growing support may encourage further investment from western companies and investors alike.
In a massive upheaval to the gig economy, the Supreme Court has ruled that Uber drivers are employees with a right to minimum wage, sick and holiday pay, and a pension. This ruling has come as no surprise following similar rulings in the EU on Deliveroo and in the USA on Uber as well. Despite this, Uber’s share price has seen no real change and there is potential for Uber to repeat the actions it took in California to redefine the status of ‘workers’ and their rights.
The EU and UK have come to a draft agreement on the flow of information between the two states, although Brussels has ensured the right to periodically review and annul this if they believe the UK to have diverged from EU privacy laws. It is worth noting that whilst the EU was withholding the right of data to flow between the two parties the UK had stronger data protection than was required by EU law, therefore with an included 4-year periodic review of UK data laws this by no means provides long run security.
The Biden administration have announced plans for delayed introduction of their tax increase plan for gradual implementation in the latter half of 2021, through the next 4 years. This tax plan involved an increase in corporate tax from 21% to 28%, still below the 35% level seen pre-2017, so whilst this may slow investment and growth in the equities market, most listed companies have experience operating under much higher taxes.
As usual, here is the weekly S&p500 heat map.