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Blackstone-backed auto lender going public; Citi plans majority-owned Chinese JV


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Blackstone-backed auto lender going public; Citi plans majority-owned Chinese JV

Exeter Finance Corp., a specialty auto finance company backed by Blackstone Group LP, filed for an initial public offering of its class A common stock. The maximum aggregate offering price is $100 million, estimated solely to calculate the registration fee. The subprime auto lender, acquired by Blackstone in 2011, had a $4.0 billion managed portfolio of retail installment contracts with an average FICO score at origination of 567.

In China, Citigroup Inc. plans to set up a majority-owned securities joint venture in the East Asian nation after exiting its joint venture with Orient Securities Co. Ltd., sources for Reuters say. The U.S. bank wants to own a domestic joint venture to expand its business scope in China and could reportedly finalize a new partner for its securities unit before the end of 2019.

Virtu Financial Inc. expects to report net income of $100 million to $129 million for the fourth quarter of 2018, which would be 199% to 286% higher than the $33.4 million posted in the prior-year period. In addition, the market making firm projects fourth-quarter 2018 net trading income to rise year over year to between $350 million and $364 million from $286.4 million. Virtu is expected to report its actual fourth-quarter 2018 results in early February.

Economists from all 11 primary dealers of Canadian government securities expect Bank of Canada to hold its benchmark overnight interest rate steady at 1.75%, The Wall Street Journal reports. A majority of them expect the bank to wait until at least the second quarter to further raise rates to give officials adequate time to analyze the impact of the slump in oil prices and financial market turmoil on the Canadian economy.

The minutes of the Federal Open Market Committee's December 2018 meeting are due out today at 2 p.m. ET. They may provide important insights on the policymakers' decision to hike interest rates and project "some further gradual increases," Fed watchers told Bloomberg News.

Goldman Sachs Group Inc.'s general counsel, Greg Palm, is expected to leave the investment bank in the coming weeks, sources for Bloomberg News say. Palm's departure, which was earlier set for 2018, comes at a time when the company is facing several ongoing investigations into its dealings with Malaysian investment fund 1Malaysia Development Bhd.

Elisabeth Bourqui has resigned as the chief operating investment officer of California Public Employees' Retirement System, also known as CalPERS, Pensions & Investments reported. Dan Bienvenue, the pension fund's managing investment director, global equity, has been appointed acting chief operating investment officer, according to the report.

In fintech news, the Office of the Comptroller the Currency filed a motion to dismiss a lawsuit filed by state banking regulators challenging its plan to grant banking charters for fintech companies, American Banker reports.

Cross River Bank has partnered with Stripe Inc. to provide customers in the gig economy with real-time access to their earnings through push-to-card payments.

In other parts of the world

Asia-Pacific: Citigroup to exit China securities JV; Australia proposes superannuation reforms

Europe: UK faces new hard Brexit hurdle; Deutsche eyes bonus cut; Carige taps state aid

Middle East & Africa: UAE lender to swap Abraaj debt for fund stakes; PE firms invest in Prime Bank

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Largest financial ETF saw massive outflows in December 2018: Investors stampeded out of the largest U.S. financial exchange-traded fund in December 2018. SSgA Funds Management Inc.'s Financial Select Sector SPDR Fund (XLF) had $3.23 billion in net client outflows last month, $1.19 billion more than any other U.S. ETF.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, Hang Seng increased 2.27% to 26,462.32, while the Nikkei 225 increased 1.10% to 20,427.06.
In Europe, around midday, the FTSE 100 increased 1.02% to 6,931.58 and the Euronext 100 was up 1.05% to 939.02.

On the macro front
The MBA mortgage applications, EIA petroleum status report and Federal Open Market Committee minutes is due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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