The Monday Roundup: what we are watching this week | January 2nd

By Puja Sharma

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

Game of ‘Soonicorn’

📉Futu Holdings Ltd., a Chinese online broker backed by Tencent Holdings Ltd. abruptly postponed its Hong Kong listing, according to a Bloomberg report.

During mid-morning trading on Friday, Up FinTech and Futu were both down about 25%. There are allegations that both online brokerage firms have broken the law in ways that could be problematic for their business models and caught the attention of Chinese securities regulators.

The Hong Kong Stock Exchange said Futu, which operates like Robinhood Markets Inc. in the US for mainly Hong Kong-based clients, was “clarifying certain matters.”

Futu and Up FinTech have allowed investors within mainland China to invest in stocks and other investments outside the country, according to a statement released on Friday by the China Securities Regulatory Commission (CSRC). According to the CSRC, Futu and Up Fintech are operating illegally in violation of China’s capital outflow controls.

Up FinTech and Futu should stop accepting mainland Chinese customers, according to the CSRC. Those who are already customers will be allowed to keep trading securities with Futu and Up Fintech, but they won’t be able to make further deposits since they would potentially violate the capital-movement restrictions.

Although they acknowledged the CSRC’s comments, the two companies attempted to assure investors that their businesses are safe. In mainland China, Futu expects to work with regulators to ensure compliance with all laws and regulations.

💸Founded in Bengaluru in 2011, Money View raised $75 million in Series E funding led by Apis Partners, a UK asset manager that supports financial services and financial infrastructure companies. Evolvence and Tiger Global Ventures are among the venture capital firms that participated in the round.

In its latest funding round, the company was valued at $900 million, joining the club of soonicorn start-ups expected to reach $1 billion in value soon.

The fresh funding will be used as growth capital to scale the core credit business, grow the team, and expand its product portfolio with services such as digital bank accounts, insurance, and wealth management solutions, the company said in a statement.

According to Udayan Goyal, Co-founder and Managing Partner at Apis Partners, “Money View is one of the most innovative and successful digital credit businesses across our markets and the company has attained market leadership in India while delivering high profitability and a strong focus on ESGI principles. Money View’s strong track record speaks for itself, and we are confident that we will be able to celebrate more successes with the company in the coming months and years.”

Support System

🏦The Bank of Russia announced the extension of a package supporting National Payment System (NPS) entities, stating that “destabilizing factors still affect the payment market” and might cause difficulties in their operations.

In 2022, the Bank of Russia implemented measures to support NPS entities due to changes in the conditions of money transfers amid the restrictions imposed by foreign states. The package aimed to help reduce the burden on such entities expired on 1 January 2023.

In a recent press release, the bank said it has analysed NPS entities’ performance as regards money transfers over the period and found out that destabilising factors still affect the payment market.

This measure is extended as the transformation of the correspondent relationship continues, which causes fluctuations in the number of money transfers on correspondent accounts.

🪙Trovata, one of the leading bank-connected platforms that makes it easier for finance and treasury professionals to manage cash, and J.P. Morgan Asset Management, a global leader in investment management with $2.3 trillion of assets under management, announced they are partnering to help joint customers tap into Morgan Money’s services to access higher yields on corporate investing amidst rising interest rates.

Trovata will host the Morgan Money corporate investing and trading solution as the first third-party app on its platform. Joint customers can determine their liquidity needs using Trovata, then take action to invest seamlessly using the services offered by Morgan Money. Users can transact across their global portfolio in real time and compare funds across multiple managers, currencies, durations, or settlement options.

In addition, investment balances and transactions from Morgan Money will flow into Trovata in real-time so that operating and investing activities can be monitored and managed in one place, delivering a unified experience for managing operating cash flows and investments.

“Now more than ever, corporate treasury investors need a fully integrated trading solution for their liquidity needs,” said Paul Przybylski, Head of Product Strategy and Morgan Money at J.P. Morgan Asset Management. “Bringing two of the newest and fastest growing experiences in corporate finance and treasury together makes for a powerful combination for our customers.”

What is the buzz

👛Cathie Wood’s Ark Invest purchased $5.5 million worth of additional Coinbase shares, continuing the investment firm’s dip-buying spree as turmoil weighs on the cryptocurrency platform, according to a Market Insider report.

The famed money manager now holds $47 million worth of the company’s stock in its Ark Fintech Innovation ETF (ARKF). Coinbase makes up 7.14% of its holdings, with a total of 1.35 million shares.

Ark Invest is also one of Coinbase’s largest shareholders, holding a 4.3% stake as of September 30, according to Bloomberg data. It’s been a tough year for Coinbase. The company’s stock is down 86.29% year-to-date, currently trading near records lows at $34.13. The company continues to take hits from a prolonged crypto bear market, along with a harsh macro environment that’s left investors wary of tech equities across the board.

CEO Brian Armstrong has warned the company’s revenue this year will plunge more than 50%. The collapse of Sam Bankman-Fried’s FTX last month dragged down the industry even further. The credibility of the nascent space is in question after the bankrupt exchange’s meltdown, causing shareholders to turn away from their crypto-related bets.