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Citigroup may post record revenues in Hong Kong; blank check deals on the rise

Despite the extended U.S.-China trade war and political protests in Hong Kong, Citigroup Inc. is likely to post record annual revenues in the city, Financial Times reported, citing a person familiar with the matter. In an interview with the news outlet, Citigroup’s Hong Kong and Macau CEO Angel Ng said clients "are very focused on the business strategy, rather than the macro environment."

Private companies are increasingly choosing to go public through the reverse-merger route of selling themselves to special purpose acquisition companies rather than running an IPO, Bloomberg News reported. Given the recent swings in the IPO market, blank check deals are gaining traction, and TPG Capital and Apollo Global Management Inc. are getting into the space, the report added.

Jamie Dinan-led York Capital Management is shutting down its main Credit Opportunities Fund, which oversees almost $2 billion, due to the hedge fund's poor performance, The Wall Street Journal reported. Up to 30% of investors' money could be returned by March 2020, the firm told clients in a letter.

After having commissioned its first aircraft carrier, China now aims to build "aircraft carrier-sized" investment banks that could compete with the likes of Goldman Sachs Group Inc., Bloomberg News reported. The ambition may require mergers among the country's roughly 130 securities firms, led by CITIC Securities Company Ltd., which declined to comment on any potential acquisition plan.

Analysts expect technology companies to step up collaborations with banks in 2020, Bloomberg News reported. Analysts also expect more M&A and government scrutiny in the fintech sector in the new year, according to the report.

Cowen analyst Jaret Seiberg predicts political trouble for Wells Fargo & Co. in 2020, especially due to the rising scrutiny from Democrats, Bloomberg Quint reported. House Financial Services Chairman Maxine Waters has reportedly indicated that she will subject Wells Fargo to extra attention. Moreover, Seiberg expects a "worse outcome" for Wells Fargo if it becomes a talking point for Democratic presidential candidates.

In other parts of the world

Asia-Pacific: India sets P2P lending cap; China mulls reserve requirement ratio cuts

Now featured on S&P Global Market Intelligence

10% of Kentucky banks, thrifts become M&A targets in 2019: Following a record year of credit unions acquiring banks, industry experts are split on whether the trend will continue into 2020. While some expect the volume of these deals to stay high as more credit unions reconsider the idea of acquiring banks after seeing so many deals announced in 2019, other others think the trend could slow down if regulators become more skeptical of the deals.

Wave of credit union-bank deals could continue into 2020: Fifteen deals have been announced in Kentucky this year, including 12 just in the second half of 2019. By comparison, 15 deals were announced in the state in all of 2016 through 2018.

Wall Street eyes final act of stock market reforms in 2020: Wall Street and Washington appear to be on the verge of at least partially resolving some of the longstanding spats in the trading world, from market data to the launch of new exchanges.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng decreased 0.15% to 27,864.21, and the Nikkei 225 was up 0.04% to 23,830.58.

In Europe, around midday, the FTSE 100 was up 0.09% to 7,630.15, and the Euronext 100 climbed 0.13% to 1,154.45.

On the macro front

The Redbook and Richmond Fed Manufacturing Index reports are 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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