Hedge fund stampede into cocoa futures fuels record price spike

Feb 16, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Euronext yesterday announced strong Q4 and full year 2023 results, showcasing the advantages of its diversified business model. Costs for 2023 were better than anticipated, with 74 million euros in synergies achieved, surpassing interim guidance. Full year 2023 revenue and income increased by 3.9% to 1,474.7 million euros, with non-volume related revenue constituting 60% of total income, up from 57% in 2022. Key highlights include growth in Technology Solutions, Advanced Data Services, Custody and Settlement, and Listing revenue. Clearing revenue remained stable, while trading revenue decreased due to softer cash and derivatives trading, offset by record results in fixed income and power trading.

Many people politically aligned on the right believe George Soros has a lot of audacity. And they would be almost right. Soros is positioned to become the biggest stockholder in the U.S. radio company Audacy Inc. when it emerges from bankruptcy. Soros’ investment firm bought up $400 million of Audacy’s highest-ranking debt, Bloomberg reported, making it the largest member of a group of lenders planning to exchange their loans for stock in the broadcaster.

Do you remember the other day when I mentioned how the term “washing” was the new “gate” in terms of being added to the end of trends like green and AI? Well, after JP Morgan and State Street Global Advisors’ withdrawal from Climate Action 100+, the term that is being applied is “Greenhushing.” So add “hushing” to your slang for when support of debate is being stifled. Bloomberg has a story titled JPMorgan’s Exit From Climate Group Sparks ‘Greenhushing’ Debate.”

LSEG’s Alex Wilson announced on LinkedIn that he has been “awarded the prestigious Freedom of the City of London as part of being invited to join The Worshipful Company of Plumbers.”

Do you know who William Post is? He just died at the age of 96, The New York Times reported. There is a good chance you may have at one time consumed his invention: Pop-Tarts.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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A survey from KPMG, “Addressing the Strategy Execution Gap in Sustainability Reporting,” found that businesses are increasingly committed to investing in environmental, social, and governance (ESG) capabilities over the next three years. While 90% of business leaders plan to increase ESG investment, challenges persist, such as measuring ROI and understanding value drivers. A discrepancy between perception and preparedness exists, with many organizations banking on future technologies like artificial intelligence (AI) and machine learning (ML) to improve sustainability reporting and integration. View the press release and download the report here. ~SAED

Our most read stories from our previous edition of JLN Options were:
Opportunities in local and global volatility markets from Eurex.
Move over Tesla, there’s a new options monster in town from the Financial Times.
As investors flee China, options traders pile into longshot bets pegged to rebound hopes from Markets Insider. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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From Humble Beginnings to Trading Success: The Journey of Leonard Kok
JohnLothianNews.com

Leonard Kok came from a humble background, with working parents, and thought he might be a policeman when he grew up. However, when he went into the Army for his national service, he read that the highest paid people were not doctors or lawyers, but traders.

Kok decided he wanted to become a trader. He was captivated by the idea and after 2 ½ years of national service, where he was a lieutenant, he began looking for a job as a trader. However, he discovered he lacked a key requirement: experience.

Watch the video »

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The security risks that haunt the world; American power remains crucial for international stability
The Editorial Board – Financial Times
Next week will mark the second anniversary of Russia’s full-scale invasion of Ukraine on February 24 2022. Although Russia has signally failed to achieve its war aims in Ukraine, the international security situation looks increasingly dangerous. With American support for Ukraine faltering – due to the intransigence of Republicans in Congress – there are legitimate fears that the tide of the war may soon turn in the direction of Russia. Alongside the largest land war in Europe since 1945, attendees at the Munich Security Conference over the coming days will have plenty to ponder.
/jlne.ws/3wt0aZx

***** Make markets, not war!~JJL

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Why Nato members are sounding the alarm on Russia’s aggressive posture; Western defence figures warn of Moscow’s capabilities and heightened threat beyond Ukraine
Henry Foy, Guy Chazan, John Paul Rathbone and Richard Milne – Financial Times
New assessments of Russia’s military capabilities and its threats to Nato’s security have led to a rising drumbeat of warnings from western governments and pressure to invest more heavily in defence. “We are living in truly dangerous times [and] at a point when large-scale conflict is more likely than it has been in recent history,” said a British military intelligence official. Russia’s bellicose “intent is still there”, said a second UK defence official. “Its land forces have been degraded in Ukraine, but its air force and navy are largely intact, and Russia is still a major nuclear power.”
/jlne.ws/3SzHn6o

****** We need to listen to our allies.~JJL

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Lutnick on FMX vs CME: “Put us toe-to-toe in the ring and we’re on.”
Dan Barnes – FI-Desk.com
Interdealer brokers and market operator BGC Group intends to launch its futures exchange for US Treasury and SOFR contracts this summer to compete with CME Group’s US interest rate complex. Chair and CEO of BGC Group, Howard Lutnick, outlined the challenges and opportunities that the firm saw in the upcoming launch of FMX after CME Group reported a good year in 2023, with average daily volume (ADV) of 24.4 million contracts.
/jlne.ws/4bzt7mV

****** Put me in coach, put me in.~JJL

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Thursday’s Top Three
Our top story Thursday was Chicago Magazine’s La Salle Street Blues, subtitled “As businesses desert the once-vibrant corridor, boosters worry the mayor won’t get behind a mixed-use revitalization plan.” Second was John Lothian’s commentary The FIA sure knows a Hall of Fame Way to say ‘I love you’ on Valentine’s Day, about the 2024 FIA Hall of Fame honorees. Third was the CME Group’s page about its Micro Gold Futures and Options, which John mentioned in Hits & Takes.

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Lead Stories

Hedge fund stampede into cocoa futures fuels record price spike; Speculative traders have amassed a $8.7bn bet on further gains, the largest ever
Susannah Savage – Financial Times
Hedge funds have piled into the cocoa market since the end of last year, exacerbating a record-breaking surge in prices sparked by poor harvests in West Africa. Speculative traders have amassed an $8.7bn bet across London and New York cocoa futures contracts that prices will continue to rise, the largest ever in dollar terms, according to positioning data from the Commodity Futures Trading Commission.
/jlne.ws/3uALSpg

EU clearing rules are a quiet win for London; Also in this week’s newsletter, revisiting the financial regulation inherited from the EU
Laura Noonan – Financial Times
Peter is taking a well deserved break this week – along with half the rest of the UK it seems – so you’ve got me, and this week I’m going to be digging into the EU’s new clearing rules. While Brexit continues to take up a disproportionate amount of time for UK financial regulators, it has long since faded from the international scene. Major meetings of global financial policymakers can go by with just a passing reference to the topic.
/jlne.ws/48eMVsF

CFTC Names Brian Young as Director of Whistleblower Office
CFTC
Commodity Futures Trading Commission Chairman Rostin Behnam today announced that Brian Young has been named the director of the CFTC’s Whistleblower Office. “Whistleblowers play a critical role assisting the CFTC be a strong cop on the beat. Much of our Division of Enforcement’s success is tied to the strength of our Whistleblower Office,” said Chairman Behnam. “Brian’s extensive experience covering the issues directly impacting our markets will ensure the continued success of the CFTC’s Whistleblower program, and the urgent need to provide individuals who have information the assurances needed to come forward.”
/jlne.ws/42Fqtb4

ABN Amro Expects State to Keep Divesting Under Wilders Cabinet
Sarah Jacob and Cagan Koc – Bloomberg
ABN Amro Bank NV expects the Dutch government to continue reducing its stake in the lender under a new government led by Geert Wilders. Wilders is currently trying to cobble together a coalition government after the Nov. 22 election led to an unexpected win for his far-right Freedom Party, which secured more seats than polls had forecast.
/jlne.ws/3T0Lxpa

FCA warns advice firms over high charges; 20 of the biggest groups asked for details of fees on ongoing services
Sally Hickey – Financial Times
The City regulator has warned advice firms it may crack down on customer charges, following concerns that some clients are overpaying. In a statement on Thursday, the Financial Conduct Authority said it had written to about 20 of the largest advice firms, asking for details of their delivery of ongoing services which clients are charged for once advice has been given.
/jlne.ws/3UGc8ZW

How Gen AI will change asset management; The industry serves as a natural experiment for a technology that will change practices, organisations and regulations
Mohamed El-Erian – Financial Times
There is little doubt that generative AI is a massively disruptive innovation that will bring both job destruction and enhancement. The balance between the two is now a hot topic where asset management increasingly finds itself, albeit unwittingly, serving as a “natural experiment”.
/jlne.ws/4bGyOzy

Passive Resistance, Round II – Where Price Discovery Survives; The debate goes on over whether passive investing is killing capitalism. So how much active management is truly needed for public markets?
John Authers – Bloomberg
Passive Aggression. Passive investment sounds harmless. Its name implies that funds managed passively don’t really do anything. But it’s increasingly cast as an agent of destruction, breaking markets and fighting capitalism. As passive has moved to a much more dominant position in equity markets, such arguments become more plausible. At the turn of the year, Morningstar, the most widely cited group tracking the fund management sector, reported that for the first time that a majority of US investment funds were managed passively.
/jlne.ws/3SKy9nM

The ESG Backlash on Wall Street Spurs a Jump in ETF Closures; ETF shutdowns spread as fund launches slowed in 2023: BI data; Active funds are rising but costs are tough to justify: Sohn
Isabelle Lee – Bloomberg
Interest in sustainable investing has taken a back seat in the past year after the environmental, social and governance strategy found itself enmeshed in a viscous political storm. The dwindling demand is evident in the Americas from the slowdown in sales of new exchange-traded funds and the pickup in fund closures and outflows, according to Shaheen Contractor, senior ESG strategist at Bloomberg Intelligence. In 2023, the region saw just 48 new ETFs introduced, down from 104 in 2022 and 125 in 2021, data compiled by Bloomberg Intelligence show.
/jlne.ws/3HXTntA

Former Wall Street Executive Liz Hocker Launches National IPO and Business Consulting Firm 10:10 Strategy LLC
Yahoo!Finance
Liz Hocker, a veteran in the consulting and capital markets industry with more than 25 years of experience, has announced the launch of a national IPO and business consulting firm, 10:10 Strategy. Leveraging her extensive expertise and insights gained from her tenure at Nasdaq, Hocker aims to streamline the way companies navigate the complexities of initial public offerings (IPOs) and strategic business planning.
/jlne.ws/42DVyfn

After Larry Fink and Jamie Dimon’s firms bail on climate group, NYC Comptroller lets rip: ‘they are caving to climate deniers’
Amanda Gerut – Fortune
The chief financial officer who oversees New York City’s five public pension funds, with $242 billion in assets, has something to say to BlackRock CEO Larry Fink’s asset management firm and Jamie Dimon’s J.P. Morgan Asset Management: You guys are failing. “By caving into the demands of right-wing politicians funded by the fossil fuel industry and backing out of their commitment to Climate Action 100+, these enormous financial institutions are failing in their fiduciary duty and putting trillions of dollars of their clients’ assets at risk,” said New York City Comptroller Brad Lander in a statement. “Climate risk is financial risk. Today BlackRock, JPMorgan, and State Street are choosing to ignore both.”
/jlne.ws/3I2RuvK

An ESG Asset Manager Exodus; Three big firms-JPMorgan Asset Management, BlackRock and State Street Global Advisors-exit the Climate Action pressure group.
The Editorial Board – The Wall Street Journal (opinion)
Has the tide turned on environmental, social and governance (ESG) investing? It appears so. JPMorgan Asset Management, BlackRock and State Street Global Advisors on Thursday retreated from the Climate Action 100+ investor compact because they don’t want the political and legal liability. Climate Action 100+ describes itself as the “largest ever global investor engagement initiative on climate change.” Its 700 or so institutional investor members manage more than $68 trillion in assets (before Thursday’s exits). Their goal is to force companies to zero out CO2 emissions by 2050.
/bit.ly/3wsZraL

The next round of the ESG fight should start in Congress, not in court
Sarah E. Hunt – The Hill (opinion)
In 2023, during state legislative sessions, approximately 165 bills were framed around using environmental, social and governance (ESG) investment criteria. Such bills will likely continue to be presented in state legislative sessions this year, but the new trend is to take this issue to the courtroom. Before the holidays, Tennessee Attorney General Jonathan Skrmetti (R) announced a “first-of-its-kind” consumer lawsuit against BlackRock. While the allegations in this lawsuit ostensibly aim to make the company more accountable to the public, it may unintentionally hurt consumers instead.
/bit.ly/3uDz5lX

U.S. Treasury Debunks Narrative That Hamas Relied on Crypto to Fund Terrorism
Jesse Hamilton – CoinDesk
Just after Hamas’ terrorist attacks in Israel last year, crypto took blame for helping fund such brutal killing. While the prominent media reports were later bashed by cryptocurrency experts, the U.S. Department of the Treasury’s top official on terrorism financing confirmed to lawmakers on Wednesday the situation was blown out of proportion. While the Wall Street Journal in October had tied tens of millions of dollars in crypto payments to Hamas, Palestinian Islamic Jihad and others, citing a blog post by analytics firm Elliptic that was later edited, the account represented a misunderstanding of what assets actually fell into the hands of terrorists.
/jlne.ws/49jn3NE

The Antitrust Enforcers Aimed at Big Tech. Then Came the Backlash; South Korea pledged to protect its online platforms from marketplace giants, but lobbyists are crying foul play.
Jin Yu Young and Daisuke Wakabayashi – The New York Times
The South Korean government unleashed a wave of panic across the internet industry: The country’s antitrust regulator said it would enact the toughest competition law outside Europe, curbing the influence of major technology companies.
/jlne.ws/3SGwD6m

NDFs trading: If you build platforms, the algos will follow; Following a string of new NDFs platforms launched into the market – particularly in Asia – and volumes continuing to grow, Annabel Smith explores demand for NDF algorithmic trading capabilities on the buy-side, unpacking the need for greater liquidity and transparency to take automation mainstream.
Annabel Smith – The Trade
Non-deliverable forwards (NDFs) have not always gone hand in hand with algorithmic trading, but in light of recent market developments, this could be about to change. The instruments have been pegged by the buy-side as the next frontier when it comes to algorithmic trading efforts in the foreign exchange (FX) markets.
/jlne.ws/3UG0Sgc

Fireside Friday with… BidFX’s Scott Gold; The TRADE catches up with Scott Gold, head of sales, Americas at BidFX at the TradeTech FX US conference in Miami, to unpack the challenges facing asset managers when it comes to pre-funding accounts, the untapped potential of technological innovation to ease trader workloads, and how the buy-side can best leverage data capabilities.
Claudia Preece – The Trade
What strategies are asset managers employing to pre-fund accounts and what are the associated challenges and costs? It differs. I would say there’s three levels of worriedness so to speak – firstly Asia, Asia-Pacific and Australia who as a region are the most worried because it typically has never had a presence in the US time zone. Following that is Europe and the Middle East where some of have US offices and some don’t, which equates to a middle-tier worry. Finally, there’s the US asset managers, who are probably the most equipped to handle it, but still need to put processes in place and probably take a review of their tech stack to see how to make it most efficient.
/jlne.ws/48kseeQ

TradeTech FX US: ‘The trust factor’ makes for liquidity winners in the emerging markets FX space; Head of trading, Kaustuv Dasgupta, EDGE at Two Sigma Investments, values trust across the workflow, taking a quantitative approach to dealer selection.
Claudia Preece – The Trade
Kaustuv Dasgupta delved into his opinions on sourcing better liquidity in foreign exchange emerging markets with ‘trust’ and a recognition of the importance of human-to-human interaction as key parts of the process from his perspective. He explained that while data is of course essential there is no substitute for these interactions between counterparties and is something that goes both ways and ultimately leads to more fruitful interactions.
/jlne.ws/3UPJgym

Ukraine Invasion

Ukraine Wins German Security Deal as Weapon Stocks Run Short
Michael Nienaber, Alberto Nardelli and Alex Wickham – Bloomberg
German Chancellor Olaf Scholz and Ukrainian President Volodymyr Zelenskiy signed a bilateral security cooperation deal as Ukraine’s artillery shortage threatens to force a further rationing of shells. The agreement sealed Friday at the chancellery in Berlin is designed to deter Russia from future aggression against its western neighbor after the current war ends. Zelenskiy agreed a similar accord with the UK last month and will sign another with French President Emmanuel Macron later in Paris.
/jlne.ws/3ONRd3n

Alexey Navalny, Jailed Activist Who Defied Putin, Dies at 47; Jailed since 2021, he was recently moved to Arctic prison; Navalny survived 2020 nerve-agent attack he blamed on Kremlin
Bloomberg News
Alexey Navalny, the Russian lawyer and anti-corruption activist who became the most potent voice in opposition to President Vladimir Putin, a calling that landed him in a maximum-security prison camp, has died, according to the prison service. He was 47. Navalny fell sick during a walk and medical staff were unable to revive him, the prison authorities said Friday. An investigation is under way, according to the statement. No cause of death was given.
/jlne.ws/3T0LbyQ

Europe May Now Be Ukraine’s Only Hope. That’s Scary; The bloc will have to consolidate and act strategically as never before.
Marc Champion – Bloomberg (opinion)
The US could soon go from pledging to support Ukraine’s defense against Russia for “as long as it takes” to for as long as it was good for Donald Trump’s presidential election campaign. It’s hard to fathom the unseriousness of this act, which would cost lives, corrode faith in American reliability from Taiwan to the Middle East, and guarantee future instability for a European market that accounts for 2.6 million US jobs. Yet it may well happen.
/jlne.ws/3I3EkPa

Ukraine’s Military Reset Is Doomed Without More US Aid; Zelenskiy is making necessary changes in combat leadership and getting money from Europe, but if America abandons him his nation is doomed.
James Stavridis – Bloomberg (opinion)
It’s been a tough week for Ukraine. President Volodymyr Zelenskiy replaced the popular leader of his military, General Valeriy Zaluzhnyi, with the current army commander, General Oleksandr Syrskyi. He has watched the flailing in the US Congress over a new tranche of funding for Ukraine. And Donald Trump, leading in most US presidential polls, is on the campaign trail firing shots at both Ukraine and the North Atlantic Treaty Organization.
/jlne.ws/49fhNKV

How Russia Recruits Soldiers From Cuba to Fight in Ukraine; Eager to escape Communist island’s poverty, Cubans are joining Russian army
Jose de Cordoba – The Wall Street Journal
On a blazing hot day in November, Raibel Palacio and three neighborhood friends boarded a flight at Cuba’s Varadero beach resort, taking selfies and chattering in excitement. They had a job offer that promised a way out of the island’s misery. A few weeks later, Palacio was killed by a drone as he tried to tie a tourniquet to staunch the bleeding from a leg wound on the freezing front lines of Ukraine, said Danelia Herrera, his mother.
/jlne.ws/3wmT3lx

Israel/Palestine Conflict

Egypt Builds Walled Enclosure on Border as Israeli Offensive Looms; Authorities are surrounding an area in the desert with concrete walls as a contingency for possible influx of Palestinian refugees
Summer Said and Jared Malsin – The Wall Street Journal
Egyptian authorities, fearful that an Israeli military push further into southern Gaza will set off a flood of refugees, are building an 8-square-mile walled enclosure in the Sinai Desert near the border, according to Egyptian officials and security analysts. For weeks, Egypt has sought to bolster security along the frontier to keep Palestinians out, deploying soldiers and armored vehicles and reinforcing fences. The massive new compound is part of contingency plans if large numbers of Gazans do manage to get in.
/jlne.ws/4bH0TXq

Netanyahu Pushes Back Against Pressure to End War After Call With Biden; The Israeli leader opposes proposals discussed in world capitals to recognize a Palestinian state
Dion Nissenbaum – The Wall Street Journal
Israeli Prime Minister Benjamin Netanyahu pushed back against growing international pressure to bring the four-month-old war in the Gaza Strip to an end as Palestinian doctors in the embattled enclave struggled to save patients in a major hospital that was raided by the Israeli military. After speaking by phone with President Biden, Netanyahu said Friday that he is opposed to proposals being discussed in world capitals to officially recognize a Palestinian state as part of a coordinated diplomatic effort to end the war-a move that would give Palestinian leaders a long-sought symbolic victory.
/jlne.ws/3whIQqu

Exchanges, OTC and Clearing

Cboe Now Lists iShares By Blackrock ETFs Across Its Entire Global Exchange Network
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today announced that Cboe Australia has listed for trading new Exchange Traded Funds (ETFs) from iShares by BlackRock. With these new iShares ETF listings, BlackRock becomes the first global asset manager to list its iShares ETFs on each of Cboe’s listings exchanges in the U.S., Canada, Australia, the UK and the European Union. Three of the funds commence trading on Cboe Australia on February 16, 2024, while two Australian hedged versions of the funds are planned to launch February 23, 2024.
/jlne.ws/3UHKPi4

HKEX Welcomes Hong Kong Government Appointments To Its Board
Hong Kong Exchanges and Clearing Limited
Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) welcomes the Hong Kong Government’s appointment of Chan Kin-por and Peter Yan, and its re-appointment of Susan Chow, to its Board of Directors. The terms of the three directors will begin at the conclusion of HKEX’s 2024 Annual General Meeting (AGM) and will end at the conclusion of the AGM in 2026.Laura M Cha and Benjamin Hung will retire from the Board after the conclusion of the 2024 AGM.
/bit.ly/48kJEIx

Regular Constituents Change in KRX Post IPO Index
KRX
There will be regular consituents change in KRX Post IPO Index. Effective date : February 23rd, 2024. Please refer to the index website menu or index data product file for details and target weight.
/bit.ly/49gjBmR

Interest rate derivative trading will cease at 1:30 p.m. today, February 16, 2024. Furthermore, the Exchange’s markets will be closed on February 19, 2024.
The Montreal Exchange
/bit.ly/36dLiSh

NSE supports IIM Kozhikode’s Inaugural Annual Conference on Macroeconomics, Banking & Finance
National Stock Exchange of India
National Stock Exchange of India (NSE) is proud to announce its support and participation in IIM Kozhikode’s Inaugural Annual Conference on Macroeconomics, Banking & Finance. The conference title is “Securing Financial Stability Amid Global Spillovers”. The conference started with lighting of the lamp ceremony in the presence of Shri V. Anantha Nageswaran, Chief Economic Advisor to Government of India, Shri Dinesh Khara, Chairman, SBI, Shri Ashishkumar Chauhan, MD & CEO, NSE and Prof. Mridul Saggar, Head, URUPPIKA, IIM Kozhikode.
/bit.ly/3T0hEW1

Performance Bond Requirements: Interest Rate Margins – Effective February 16, 2024
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/jlne.ws/49FNME9

SPAN 2 Framework Energy Model Parameter Changes – Effective February 16, 2024
CME Group
CME Clearing has undertaken a review of the parameters used in the SPAN 2 framework’s crude pod. In particular, the parameters within the SPAN 2 framework’s stress value-at-risk (“SVaR”) sub-component of the market risk component, liquidity risk component, and concentration risk component were reviewed. Following this review, CME Clearing has determined it will introduce:
/jlne.ws/3HXxYkh

NT Progress LLC, a subsidiary of the Moscow Exchange, has raised a new round of funding for the development of the NTPro platform
MOEX
A subsidiary of the Moscow Exchange, NT Progress LLC, has reached agreements in principle to attract a new round of financing from an external investor to accelerate the development of services of the NTPro over-the-counter trading platform. The investor was a private equity fund managed by the TRINFICO Investment Group, whose share in the capital of NT Progress LLC after the transaction will be 56%.The terms of the deal are not disclosed. The transaction is at the final stage and will be closed in the near future.
/bit.ly/3OMtnVA

Fintech

Release of Data Distribution Service J-Quants Pro (Paid Version) for Corporate Users
JPXI
Since October 2023, JPXI has made a free trial version of J-Quants Pro available to corporate users, aiming to deliver financial data related to the Japanese market in an easy-to-use manner through APIs and SFTP. Based on the positive feedback and evaluations received from many users during this trial period, JPXI has officially released the paid version of J-Quants Pro today, February 15, 2024.
/jlne.ws/3UCSyxO

Hindenburg Report Throws Swiss Fintech Temenos Into Turmoil; Temenos denies the report, calling it “false and misleading”; Shares plummet after short seller alleges major irregularities
Allegra Catelli and Tara Patel – Bloomberg
Temenos AG was a target of activist investors even before a report by Hindenburg Research led to the biggest drop in 15 years in the Swiss banking software company’s shares. But unlike in the past when investors pointed more broadly to governance issues in its corporate suite, Hindenburg alleges serious flaws in the company’s books, suggesting “major accounting irregularities.” Temenos also “manipulated earnings,” the short seller said in its report, adding that the practices were an “open secret” at the company. Hindenburg said it conducted a four-month investigation during which it interviewed 25 former employees, “including senior leaders.”
/jlne.ws/3UDC6NO

OpenAI’s Sam Altman Seeks US Blessing to Raise Billions for AI Chips
Mackenzie Hawkins, Ed Ludlow, Gillian Tan and Dina Bass – Bloomberg
OpenAI Chief Executive Officer Sam Altman is working to secure US government approval for a massive venture to boost global manufacturing of artificial intelligence chips, an effort that risks raising national security and antitrust concerns in Washington, according to people familiar with the matter. Altman has been meeting with potential investors and partners in the US, Middle East and Asia over the past few weeks, but he has told some of them that he can’t move forward without a green light from Washington, said the people, who asked not to be named discussing confidential conversations.
/jlne.ws/3uB4PYU

Apple Readies AI Tool to Rival Microsoft’s GitHub Copilot
Mark Gurman – Bloomberg
Apple Inc., racing to add more artificial intelligence capabilities, is nearing the completion of a critical new software tool for app developers that would step up competition with Microsoft Corp. The company has been working on the tool for the last year as part of the next major version of Xcode, Apple’s flagship programming software. It has now expanded testing of the features internally and has ramped up development ahead of a plan to release it to third-party software makers as early as this year, according to people with knowledge of the matter.
/jlne.ws/42LlZQq

The real quandary of AI isn’t what people think; Our reliance on smartphones is a clue to the way we’ll eventually use generative technology
Tim Harford – Financial Times
Do you think the leading large language model, GPT-4, could suggest a solution to Wordle after having four previous guesses described to it? Could it compose a biography-in-verse of Alan Turing, while also replacing “Turing” with “Church”? (Turing’s PhD supervisor was Alonzo Church, and the Church-Turing thesis is well known. That might befuddle the computer, no?) Shown a partially complete game of tic-tac-toe, could GPT-4 find the obvious best move? All these questions, and more, are presented as an addictive quiz on the website of Nicholas Carlini, a researcher at Google Deepmind. It’s worth a few minutes of your time as an illustration of the astonishing capabilities and equally surprising incapabilities of GPT-4. For example, despite the fact that GPT-4 cannot count and often stumbles over basic maths, it can integrate the function x sin(x) – something I long ago forgot how to do. It is famously clever at wordplay yet flubs the Wordle challenge.
/jlne.ws/3weugjo

Paytm and India Are Dealing With the Fallout of Opaque Dealings
Sankalp Phartiyal – Bloomberg
/jlne.ws/3ONX8Wd

Cybersecurity

Google Announces Free AI Cyber Tools to Bolster Online Security; Firm will offer free open-source tool to identify malware; AI is increasingly used by hackers and cybersecurity firms
Aggi Cantrill – Bloomberg
Alphabet Inc.’s Google announced an initiative to provide artificial intelligence tools and investments to bolster online security, as the emerging technology is increasingly used to both protect against and perpetrate cybercrime. Google will introduce a new open-source resource powered by AI that utilizes file type identification to help detect malware, the company said in a statement Friday. The tool, which is already being used to protect products including Gmail and Google Drive, will be made available for free.
/jlne.ws/3wjLsnK

Why We Must Democratize Cybersecurity
The Hacker News
With breaches making the headlines on an almost weekly basis, the cybersecurity challenges we face are becoming visible not only to large enterprises, who have built security capabilities over the years, but also to small to medium businesses and the broader public. While this is creating greater awareness among smaller businesses of the need to improve their security posture, SMBs are often left facing a gap in the market, unable to find security tooling that is both easy for them to use and which they can afford.
/jlne.ws/42JaFUP

Google launches a slew of AI initiatives to enhance cybersecurity
Gagandeep Kaur – CSO
The company also announced $2 million in research grants and strategic partnerships to support research at several institutes, including The University of Chicago, Carnegie Mellon, and Stanford. Tech giant Google launched the AI Cyber Defense Initiative to leverage Artificial Intelligence (AI) to boost cybersecurity and to reverse the “Defender’s Dilemma,” the company said in a blog post.
/jlne.ws/3SYHhqn

Ransomware Payments Hit $1 Billion: What Tech Pros Need to Know
Dice Staff
Ransomware made a comeback in 2023… and not in a good way. A study released by blockchain analysis firm Chainalysis calculated that ransomware extortion payments topped $1 billion for the first time in 2023. This increase follows a relatively low period for cybercriminal gangs carrying out these malicious attacks, with payments falling from $983 million in 2021 to $567 million in 2022 before this recent increase.
/jlne.ws/4bC0G7H

Cryptocurrencies

Crypto for Advisors: Impact of the Spot Bitcoin ETFs for Portfolios
Sarah Morton, Gregory Mall – CoinDesk
We’ve passed the one-month mark since the spot bitcoin ETF approvals in the US, and now we have real-world data to review. In less than a month, the spot ETFs are boasting $10 billion of AUM, with inflows reaching one billion in one day alone. For context, the spot ETFs must acquire and hold the underlying asset, bitcoin, of which there will only be 21 million. As the market watches the interest in these ETFs, the conversation naturally includes portfolio construction – how much bitcoin should I have in my portfolio? Gregory Mall from AMINA Bank looks at different methodologies for including crypto in a portfolio.
/jlne.ws/3T1FUqQ

Coinbase posts first profitable quarter in 2 years as CEO keeps pushing for regulations: ‘We remain confident that the U.S. will get this right’
Mari­a Soledad Davila Calero – Fortune
After eluding profitability for two years, Coinbase executives celebrated posting $273 million in net income for the fourth quarter of 2023, putting the net profitability for all of 2023 at $95 million. Even before the earnings call, markets were reacting positively to Coinbase, with shares on Thursday closing up 3.3%-and rising about 13% after hours. Although there were mixed predictions among analysts on whether Coinbase would achieve quarterly profitability, JPMorgan raised its recommendation from underweight to neutral, which also helped in giving the stock price a bump, according to Bloomberg.
/jlne.ws/3uq5vR2

Jupiter’s compliance team blocked crypto ETP investment; Intervention highlights uneven EU playing field, with some Ucits funds holding crypto assets
Ed Moisson – Financial Times
Jupiter’s compliance department blocked its investment team from holding a cryptocurrency exchange traded product in one of its Irish Ucits funds, highlighting divergent regulatory approaches in the EU. The disclosure of the incident comes as fund managers increasingly look to hold crypto assets in funds, but are unable to do so uniformly across the EU.
/jlne.ws/3T4S7va

Bitcoin Is Back, Back, Back, Baby
Ben Schiller – Bloomberg
Take a look at the frontpage of CoinDesk today and you could be forgiven for thinking our site is all about Bitcoin. Just look at the headlines: BTC is above $50k. Options traders are betting on $75,000. Bitcoin’s market cap is back above $1 trillion. Bitcoin ETFs have accumulated $11 billion since being approved in the U.S. in January. The Fear and Greed Index, a measure of market sentiment, is in “extreme greed” territory, its frothiest moment since BTC’s all-time high in September 2021. Bitcoin is even a campaign meme.
/jlne.ws/42EXy76

Stupid Things Craig Wright Said in His Latest Stupid Trial; During his cross-examination, lawyers for the Crypto Open Patent Alliance (COPA) tried to ensnare the Satoshi Nakamoto pretender in a web of lies.
Daniel KuhnAccess – CoinDesk
Over the course of nearly 30 hours of cross-examination, Craig Steven Wright, the Australian man who claims to be Bitcoin’s pseudonymous creator, Satoshi Nakamoto, has been raked through the coals. The self-described computer scientist, economist, cryptographer, patent writer, author, lawyer, pastor, master of martial arts and mathematician (in other words: fabulist) has been accused of misrepresenting facts, told by the judge to stay on topic and silenced by his own lawyers.
/jlne.ws/49xojgx

Politics

Billionaire Soros to Become Biggest Stockholder in US Radio Company
Ashley Carman and Amelia Pollard – Bloomberg
Soros Fund Management is positioned to become the biggest shareholder of Audacy Inc. when the radio and podcast company emerges from bankruptcy. The investment firm founded by billionaire George Soros has scooped up more than $400 million of Audacy’s highest-ranking debt, bankruptcy court filings show. That makes it by far the biggest member of a group of lenders planning to swap their loans for stock in the broadcaster.
/jlne.ws/3OKliRj

Anthropic’s AI Chatbot Will Avoid Answering Voting Questions
Rachel Metz – Bloomberg
Artificial intelligence startup Anthropic said it’s working on safeguards around its chatbot Claude ahead of global elections slated for this year – including redirecting voting-related prompts away from the service. “We proactively guide users away from our systems when they ask questions on topics where hallucinations would be unacceptable, such as election-related queries,” the company wrote in a blog post Friday. Hallucination is shorthand for false information generated by AI.
/jlne.ws/42J8mB9

The US Will Face Blowback in the Middle East, No Matter What; History shows its relationship with Israel and the region’s contentious politics will spark criticism from all sides, even if the US avoids a wider war.
Sylvia Westall and Ziad Daoud – Bloomberg
It’s been four months since Joe Biden embraced Benjamin Netanyahu in Tel Aviv and urged a nation in mourning to avoid being consumed by rage after the attack by Hamas that killed about 1,200 Israelis on Oct. 7. Now, with Israel’s war with Hamas advancing through the devastated Gaza Strip and tens of thousands reported dead, the US finds itself in the last place it wanted to be in the Middle East.
/jlne.ws/3T2yMuy

Trump-Tied SPAC Jumps on Gaining Long-Awaited SEC Approval
Carmen Reinicke and Subrat Patnaik – Bloomberg
The blank-check firm that’s been looking to take Donald Trump’s media company public soars after receiving a long-awaited nod from the US Securities and Exchange Commission. Shares of Digital World Acquisition rose 16% Thursday to close at $50.56 a share after the SEC declared the registration statement for its proposed business combination with Trump Media & Technology Group effective.
/jlne.ws/49gW3hW

House Votes to Overturn Biden’s Natural Gas Export Approval Freeze
Ari Natter – Bloomberg
The House voted Thursday to pass legislation that would effectively undo the Biden administration’s freeze on new liquefied natural gas export approvals. While the bill isn’t likely to be taken up in the Democratically-controlled Senate, its passage on a 224-200 vote, including nine Democrats, could embolden House Republicans to include language easing the pause in future government funding legislation.
/jlne.ws/3uA3C46

Exclusive-Rubio urges SEC to block Shein IPO unless China operating risk disclosed
Katherine Masters – Reuters
/jlne.ws/3I1Hoet

House Won’t Pass Stopgap to Avoid Shutdown, Key Republican Says
Erik Wasson, Joe Mathieu and Kailey Leinz – Bloomberg
/jlne.ws/42EWIHu

Elizabeth Warren hasn’t lost a Senate race. Is a pro-crypto Republican lawyer about to change that?
Niamh Rowe – Fortune
/jlne.ws/48jWjvj

The crypto lobby’s newest target; Plus, updates on Coinbase and crypto’s venture capitalists
Scott Chipolina – Financial Times
/jlne.ws/3uDnTpw

Ursula von der Leyen calls on EU to subsidise defence production; Brussels must fortify sector for a ‘rougher world’, commission president warns in interview with FT
Roula Khalaf, Ben Hall and Henry Foy – Financial Times
/jlne.ws/49g91MZ

Regulation

Former Goldman analyst found guilty of insider trading and fraud; Mohammed Zina convicted in case brought by Financial Conduct Authority
Suzi Ring and Alistair Gray – Financial Times
A former Goldman Sachs analyst has been found guilty of insider trading and fraud by a London jury in a high-profile case brought by the UK’s Financial Conduct Authority. Mohammed Zina was convicted at Southwark Crown Court on Thursday after he used information obtained at the investment bank to trade in stocks including semiconductor designer Arm and pub company Punch Taverns.
/jlne.ws/3T1TMSa

Wells Fargo Consent Order for Fake Accounts Ended by US Regulator
Hannah Levitt – Bloomberg
Wells Fargo & Co. said the Office of the Comptroller of the Currency terminated a 2016 consent order tied to a fake-accounts scandal that plunged the bank into years of regulatory and management turmoil. The order required Wells Fargo to revamp how it offers and sells products and services to consumers and take other steps to protect its customers and employees. The OCC said in its termination that the bank’s compliance with laws and regulations means the order no longer needs to be in place.
/jlne.ws/42FmdrY

China seeks revision of anti-money-laundering law to address risks related to cryptocurrencies and other virtual assets
South China Morning Post
China will soon implement revisions to its outdated Anti-Money-Laundering (AML) Law, in a move that legal experts see as a way to address the growing risks associated with virtual assets. A draft amendment to the existing AML law, which was enacted in 2006 and took effect in 2007, was discussed at a State Council meeting chaired by Chinese Premier Li Qiang, and will be submitted for review by the national legislature, according to a recent report by state-run news agency Xinhua.
/jlne.ws/49niMck

Hong Kong customs arrests 7 in a $1.8 billion money laundering case linked to transnational crime
Kanis Leung – Associated Press
Hong Kong customs officials have arrested seven people linked to the territory’s largest ever money laundering case, involving about 14 billion Hong Kong dollars ($1.8 billion) some of it linked to a scam case in India. The seven local residents, aged between 23 and 74, were part of a large-scale transnational syndicate that used various shell companies and bank accounts to transfer large sums from overseas to the city under the guise of running international trading businesses, customs officials said Friday.
/jlne.ws/3UDk3Hz

Federal Court Orders Oregon Resident and His Forex Trading Firm to Pay $830,000 in Civil Penalties for Commodity Fraud and Registration Violations
CFTC
The Commodity Futures Trading Commission today announced that the U.S. District Court for the District of Oregon entered a consent order for permanent injunction, monetary sanctions, and equitable relief against defendants Erik J. Hass and his company Simply Gains, Inc. The order resolves a CFTC action filed against the defendants on June 9, 2020, alleging they fraudulently solicited millions of dollars from unsuspecting customers for trading retail leveraged, margined, or financed foreign currency (forex) and failed to register as required under the Commodity Exchange Act (CEA). [See CFTC Press Release No. 8178-20]
/jlne.ws/49Cixtn

SEC Charges Van Eck Associates for Failing to Disclose Influencer’s Role in Connection with ETF Launch
SEC
The Securities and Exchange Commission today announced that registered investment adviser Van Eck Associates Corporation has agreed to pay a $1.75 million civil penalty to settle charges that it failed to disclose a social media influencer’s role in the launch of its new exchange-traded fund (ETF).
/jlne.ws/3V0URer

SEC Obtains Judgments Against She Beverage, Inc. and Its Principals Lupe L. Rose, Sonja F. Shelby, and Katherine E. Dirden
SEC
The Securities and Exchange Commission today announced that it obtained final judgments against SHE Beverage Company, Inc. and its principals, Lupe L. Rose, Sonja F. Shelby, and Katherine E. Dirden, who were previously charged with defrauding investors between 2017 and 2019.
/jlne.ws/3T2EXyo

Investing and Trading

In Battered China Stocks, ‘Lottery Ticket’ Trades Gain Favor
Carolina Wilson and Yiqin Shen – Bloomberg
In the wreckage of China’s stock-market meltdown, some traders are making long-shot bets that officials in Beijing can stoke a recovery. They’re finding moments to snap up options tied to US-listed exchange-traded funds that track Chinese equities, which have been whipsawed by Covid lockdowns, regulatory pressure and a property crisis. It’s evidence that market participants – who’ve seen shares from Beijing to Hong Kong slump 60% from a 2021 peak – want to be able to capture the upside for the stocks, just in case the government eventually succeeds in stoking a rebound.
/jlne.ws/42LsCC3

As earnings loom, Nvidia options traders brace for monster share move
Saqib Iqbal Ahmed – Reuters
Traders in the U.S. equity options market are betting Nvidia’s upcoming earnings report could spur a massive move in the shares of the world’s most dominant artificial intelligence chipmaker. Nvidia, up about 50% this year, could see its shares swing by about 11% in either direction following its quarterly results on Feb. 21, according to data from options analytics service ORATS. That’s the largest expected move options traders have priced in ahead of Nvidia’s earnings over the last three years and well above the stock’s actual average earnings move of 6.7% over that period, ORATS founder Matt Amberson said.
/jlne.ws/3T1RNgG

Nvidia earnings will put an entire stock market meme to the test. Again.
Myles Udland – Yahoo Finance
Wedbush analyst Dan Ives, the most creative voice on Wall Street today, marrying a dramatic flair with a prescient, unabashed bullishness on AI’s investment case, called Nvidia’s quarterly results from last May a “jaw dropping” event. “The Street was all awaiting last night’s Nvidia quarter and guidance to gauge the magnitude of this AI demand story with many skeptics saying an AI bubble was forming and instead Jensen & Co. delivered guidance for the ages,” Ives wrote at the time.
/jlne.ws/3wkrwkE

MicroStrategy’s Unconventional Bitcoin Bet Is Now Worth $10 Billion
David Pan – Bloomberg
In the midst of the Covid-19 crisis, MicroStrategy Inc.’s Michael Saylor made the then little-noticed decision to invest the enterprise-software maker’s cash into Bitcoin. Before the shift in the middle of 2020, the Tysons Corner, Virginia-based company Saylor co-founded had about $500 million mostly invested in short-term U.S. government securities. At the time, Saylor said he began to question that conventional strategy when yields tumbled in the wake of the pandemic. He called his cash hoard a “melting ice cube,” predicting accurately that inflation would surge after the Federal Reserve relaxed policy.
/jlne.ws/3SKKFDQ

Two Years on Europe’s Stock Market Is a Lifetime; As big companies get bigger, the small become sitting ducks for buyout firms.
Lionel Laurent – Bloomberg
Back when Spotify Technology SA was only a few years old, I visited the cramped offices of French music startup Believe SA, which had the promising pitch of one day becoming a digital record label for the streaming era. The bet paid off: The company listed on the Paris stock market a decade later in 2021 at a EUR1.9 billion ($2 billion) valuation, and was hailed by the French government as an example of how its tech scene could hold its own against the likes of the US.
/jlne.ws/49g81bH

Environmental, Social and Corporate Governance

A Battery Company CEO on the ‘Massive’ Effect of the Inflation Reduction Act; Freyr Battery plans to invest billions in a factory near Atlanta.
Dan Gearino – Inside Climate News
A Norwegian battery company has been working since 2022 to open a supersize factory outside of Atlanta that will bring more than 700 jobs to the region. Freyr Battery is developing a manufacturing process for lithium-ion batteries that it says will be less expensive and have less waste than the processes many competitors use. The batteries would be available for stationary energy storage and for use in large electric vehicles such as buses. The Georgia plant is one of the many projects whose existence is at least in part due to the Inflation Reduction Act, President Joe Biden’s 2022 climate law.
/bit.ly/3OI5pLp

World leaders slammed for prioritising ‘vested interests’ over long-term sustainability
Sarah George – edie
The influential figures have signed an open letter from The Elders and The Future of Life Institute this week, stressing the importance of a mindset shift among leaders to tackle the many escalating, global risks to humanity. This letter emphasises how risks including the climate and nature crises, pandemics, conflict and disinformation are all interconnected. By failing to recognise this and respond with both urgency and long-term thinking, the letter argues, world leaders are exposing millions of people to existential risks – now and in the future.
/bit.ly/3uDTE1O

Tipping points for the planet
David Gelles and Manuela Andreoni – The New York Times
A drumbeat of recent reports has driven home the fact that our planet’s complex environmental systems are undergoing profound upheavals as a result of human activity. Glaciers around the world, from Greenland to Switzerland to Antarctica, are melting faster than expected as atmospheric and ocean heat hit new highs. New research suggests that up to half of the Amazon rainforest could rapidly transform into grasslands or weakened ecosystems in the coming decades as a result of deforestation, climate change and drought.
/jlne.ws/48kq92A

JPMorgan’s Exit From Climate Group Sparks ‘Greenhushing’ Debate
Alastair Marsh – Bloomberg
Was it greenhushing or greenwashing? That’s the question the ESG world is asking after JPMorgan Asset Management and State Street Global Advisors quit the world’s largest investor group formed to fight climate change. One interpretation of their withdrawal from Climate Action 100+ on Thursday, the investor coalition that pressures major polluters such as Exxon Mobil Corp. and Shell Plc to decarbonize, is that ferocious Republican attacks on environmental, social and governance investing strategies in the US are prompting high-profile firms to try and downplay or disguise their sustainability efforts.
/jlne.ws/4bQUNDY

ESG investing: Funds focused on responsible practices outperform in the long haul, says index compiler
Eric Ng – South China Morning Post
Investment products with strategies zeroing in on companies’ environment, social and governance (ESG) performance should outperform in the long term, overshadowing the outflows in the near term triggered by high interest rates, renewables energy sector challenges and greenwashing scandals, according to a stock index compiler.
Data collated by Hang Seng Indexes Company has shown that its ESG indices have outperformed benchmark indices by a comfortable margin over the years.
/bit.ly/48juFyo

Tesla and Elon Musk Show Why Governance Doesn’t Matter-Until It Does; Companies with dominant shareholders have a record of outperformance, but the wheels can come off quickly in a crisis
Stephen Wilmot – The Wall Street Journal
Elon Musk’s Tesla is an extreme example of an uncomfortable truth for investors: Companies run by big shareholders often give smaller shareholders good returns-while also flouting rules and norms designed to protect them.
/jlne.ws/4bCTuZ7

Explainer: Why China’s provinces are so important for action on climate change
Carbon Brief
/bit.ly/3T2nEhh

KPMG Study Reveals Surprising Plan for ESG Spending by Companies; Roughly 90% of companies surveyed plan to increase investment; KPMG asked board members and executives at biggest companies
Lily Meier – Bloomberg
/bit.ly/3I4epXi

New York pension fund to divest some Exxon holdings
Seher Dareen and Ross Kerber – Reuters
/jlne.ws/4bHn4ge

Carbon problem for damaged peatlands
Richard Topping and Kenza Bryan – FT Climate Capital (video)
/bit.ly/3SGbvNw

The East Coast Is Sinking; New satellite-based research reveals how land along the coast is slumping into the ocean, compounding the danger from global sea level rise. A major culprit: overpumping of groundwater.
Mira Rojanasakul and Marco Hernandez – New York Times
/bit.ly/4bD0yVz

They’re Supposed to Be Ethical Investors. Why Are They Funding the War on Gaza? A range of so-called ESG (environmental, social, and corporate governance) funds have major investments in some of the weapons manufacturers making arms for Israel.
Sarah Sax – The Nation
/bit.ly/3uHSWAo

UN chief calls on tech firms to stop profiting from ‘toxic content’
Reuters
/bit.ly/3SYFSjB

Institutions

Banks Are Piling Back Into Everything From Mortgage Debt to CLOs; Deposits are ticking up, giving them more money to put to work; Return of bank buyers helps propel broad rally in credit
Scott Carpenter – Bloomberg
US banks are starting to ramp up purchases of everything from mortgage-backed securities to collateralized loan obligations after nearly two years of cutting back, adding fuel to a multi-month rally across credit markets. Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. have been boosting purchases of top-rated CLOs. Commercial bank holdings of mortgage bonds are also on the upswing, climbing 12 of the last 15 weeks, according to Federal Reserve data. It comes as Wall Street buyers added $41 billion of securities to their portfolios in the three months through December, according to data compiled by Citigroup, ending a streak that saw them shed more than $800 billion since March 2022, separate Fed data show.
/jlne.ws/3OI4BGn

Nick O’Kane: Macquarie’s best-paid manager bows out of ‘millionaires factory’; Australian bank’s commodities chief earned A$58mn last year as the energy trading business he built flourished
Nic Fildes – Financial Times
Macquarie has long been dubbed the “millionaires factory” in Australia for the bank and investment group’s ability to transform the fortunes of its best performers. Nick O’Kane, Macquarie’s departing head of commodities, proved to be a prime example of that reputation last year as his pay surpassed A$1mn a week.
/jlne.ws/3ut4O9B

NatWest Group Names Paul Thwaite as Permanent CEO
Ian Walker – The Wall Street Journal
NatWest appointed interim Chief Executive Officer Paul Thwaite to the role on a permanent basis, formally replacing Alison Rose who resigned in July after discussing the closure of Brexit campaigner Nigel Farage’s account with a journalist. The London-listed bank-which is 34.96% owned by the U.K. Government-said Friday that Thwaite’s appointment is with immediate effect. He will receive a base salary of 1.156 million pounds ($1.5 million) a year and an annual performance-related bonus of up to 100% of salary in cash and shares, as well as other benefits.
/jlne.ws/42KENPO

Hedge Fund Investors Are Getting More Demanding About Charges
Liza Tetley and Nishant Kumar – Bloomberg
More hedge funds are agreeing to conditions on their performance fees, reflecting a tougher environment for attracting investors to riskier strategies. A survey by Barclays Plc found 67% of investors now prefer a hurdle rate, meaning the fund must perform a certain amount above a threshold before they can charge incentive fees.
/jlne.ws/3wis4Yr

Active managers’ attacks on sustainable passives miss their mark; Funds become cheaper, but questions remain about green credentials
Alice Ross – Financial Times
Search the internet for “passive sustainable funds” and you get a whole string of warnings. These funds don’t engage with companies, they rely on third-party rating agencies’ opinions, and can’t divest if they’re not happy. Further investigation reveals that most of these warnings come from active fund managers.
/jlne.ws/3SJyBCH

Work & Management

Deutsche Bank Orders Managers to Office Four Days a Week; Other staff required to spend more time working in person; Changes come into effect from June, tightening Covid era rules
Steven Arons – Bloomberg
Deutsche Bank AG is tightening the expansive work-from-home rules it introduced in the wake of the Covid pandemic, joining a growing number of investment banks that require staff to be in the office more frequently. Managing directors will have to be in the office four days a week while all other staff are required to come in at least three days, according to a memo on Thursday seen by Bloomberg. The changes are effective as of June.
/jlne.ws/49CEp8c

Why we still can’t agree on how to work from home; Four years on from the onset of COVID-19, companies and individuals are as far apart on a consensus on this issue as ever. But this year could bring change.
Patrick Durkin – AFR
Hands up who thinks hybrid work is here to stay? OK, keep your hand up if you think that your company has nailed its approach to hybrid working, we asked at The Australian Financial Review Workforce Summit this week. While most hands went up for the first question, just a handful remained raised for the second, among the several hundred attendees inside Hilton Hotel’s Grand Ballroom in Sydney.
/jlne.ws/48kNSja

How to Keep People From Dozing Off During Online Meetings; Research shows that participants are much less engaged in virtual meetings than when gathering in person. There are ways around that.
Niina Nurmi – The Wall Street Journal
If you have ever fought off yawns during a video call, don’t be too hard on yourself. Most virtual meetings aren’t stimulating enough to keep people alert. This isn’t just anecdotal, or something that we intuitively feel. In a study of hundreds of virtual and in-person meetings at two global corporations, we found that lots of people doze off-or find their minds wandering-in online meetings, because the meetings don’t do enough to keep them involved. They are too crowded. They are too long. There is too much lecturing and not enough interaction. So, people sink into drowsiness before long and get much less productive.
/jlne.ws/42MdRyT

Wellness Exchange

Climate Change Is Fueling a New Type of Anxiety, Therapists Say; Mental health experts are reporting a rising number of patients experiencing high levels of stress over global warming and its impacts. How are they treating it?
Olivia Rudgard and Jack Wittels – Bloomberg
When psychotherapist Caroline Hickman was asked to help a child overcome a fear of dogs, she introduced them to her Labradoodle, Murphy. “You get the child to feel confident in relation to the dog and teach the child skills to manage a dog,” she says. “You build the skills, build the competence, build the confidence, and then they’re less scared of dogs generally.” Climate anxiety is a different beast, Hickman says. “We don’t 100% know how to deal with it. And it would be a huge mistake to try and treat it like other anxieties that we are very familiar with that have been around for decades. This one is much, much worse.”
/bit.ly/4bzmPDP

Climate Anxiety Can Feel Like ‘There’s No Safe Harbor’; Bloomberg Green asked readers and other members of the public how global warming is impacting their mental health. Their answers covered a range of emotions – and solutions.
Olivia Rudgard – Bloomberg
For Tom Spencer, there was a moment where his feelings about climate change tipped over from something remote and abstract into real anxiety. The 35-year-old Brit had spent years working in PR in the electric motorsport sector. When he moved to Ireland in 2018, he found himself confronting a flood of misinformation about electric vehicles. “Like most people, I had known there was this underlying big problem, but it hadn’t been my problem. It wasn’t really affecting my daily life,” he says. But the more greenwashing he encountered, the closer to home it became. A mixture of adapting to a new culture, the added anxiety of the pandemic and a sense of responsibility toward others meant everything came to a head in early 2020. “It’s this feeling where it suddenly clicks. I completely understand the scale of this issue. God, we’ve wasted a lot of time,” he says.
/jlne.ws/42Paoj9

Regions

Australians Opt for Chicken Over Pricey Steak as Inflation Bites; Consumers are switching to cheaper food and eating out less; On per capita basis, chicken is most-consumed meat in country
Keira Wright and Swati Pandey – Bloomberg
Australians are turning to chicken over pricey steaks as surging living costs squeeze household budgets. Poultry producer Inghams Group Ltd reported a 268.6% spike in net income from 12 months earlier, half-year results showed Friday. Earnings before interest, taxes, depreciation and amortization climbed 28.8%. The result was driven in-part by consumers switching to relatively cheaper chicken and choosing to eat at home in response to soaring costs for everything from mortgage repayments to rents and gasoline.
/jlne.ws/3I6ODBG

Global Banks Boost India Bond Marketing as Index Day Nears
Saikat Das – Bloomberg
Wall Street banks are ramping up efforts to attract new business in India, as billions are set to flow into the country’s trillion-dollar sovereign debt market following the inclusion of nation’s bonds in global debt indexes. Morgan Stanley, Barclays Plc., Citigroup Inc. and Deutsche Bank AG are among institutions that have, or are in the process of engaging with global investors who could potentially invest large amounts of money in India, according to people familiar with the matter.
/jlne.ws/49dxana

Australia classifies nickel as a ‘critical’ mineral to protect ailing industry; Producers of EV battery material fear collapse as supply glut from Indonesia knocks prices
Nic Fildes – Financial Times
The Australian government has added nickel to a list of commodities eligible for support from a A$6bn (US$3.9bn) stimulus fund, extending a lifeline to the ailing industry as falling prices hit producers of the mineral critical to electric vehicle batteries. Canberra’s intervention on Friday underlines mounting concern from global governments that a glut of low-cost nickel from Indonesia, where the industry is dominated by Chinese producers, is forcing mines to close and reducing self-sufficiency in supply chains for growing low-carbon industries.
/jlne.ws/3OKehA9

Cocoa Shortages Force Shutdowns at Ghana’s Top Processors
Ekow Dontoh, Baudelaire Mieu and Mumbi Gitau – Bloomberg
Ghana’s cocoa processing units have been falling silent as a shortage of beans deepens in the world’s second-largest grower. Cargill Inc., along with local firms Cocoa Processing Co. Ltd. and Niche Cocoa Ghana Ltd have all had to shut down their units intermittently over the last few months, according to people familiar with the matter. The companies declined to comment.
/jlne.ws/49zsQhL

South Africa Seeks Private Money for Climate Response Fund; Country has been hit by devastating floods in recent years; Fund should seek to pre-empt weather events, Creecy says
Antony Sguazzin – Bloomberg
South Africa will seek private-sector participation in a planned climate-change response fund announced by President Cyril Ramaphosa last week. The fund will be used to pay for the strengthening of infrastructure against extreme weather as well as to restore bridges and roads damaged by those events, Environment Minister Barbara Creecy told a meeting of the Presidential Climate Commission on Friday.
/bit.ly/42EGG0h

Global tree-planting push threatens African grasslands, warns report; Research highlights risks posed by pan-continental reforestation project
Michael Peel and Kenza Bryan – Financial Times
/bit.ly/48ltzlG

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