Weekly News Roundup 22-26/04/24

Explore the latest Finance happenings this week via our concise and easy-to-read Weekly News Round-up.

It is designed to be your most organised way to stay up-to-date on the major industry stories every week. We cram one week’s worth of news into a 5-minute read. You’re welcome!

China and Bahrain’s Investcorp Launch $1bn Fund to Foster Economic Ties

China's partnership with Bahrain's Investcorp to establish the $1 billion Investcorp Golden Horizon fund signals a deepening of economic cooperation between China and the Gulf Cooperation Council (GCC) region. Backed by both GCC and Chinese investors, the fund aims to bolster high-growth sectors such as consumer, healthcare, logistics, and business services across Saudi Arabia, the GCC, and China. The collaboration is poised to strengthen trade and economic relationships, building upon the historically robust economic connections between China and the Middle East, including significant trade volumes and recent central bank agreements aimed at enhancing financial cooperation.

JPMorgan Appoints New Chair and GM for Its China Securities Arm

JPMorganChase has appointed Lu Fang as the new chair of its China securities division, succeeding former chair Park Pu. This internal restructuring also sees Greg Yu, previously the deputy general manager, stepping into the role of general manager. With these changes, JPMorgan aims to reinforce its commitment to China and enhance its strategic operations in the region. Lu Fang will oversee overall management and strategic initiatives, while Greg Yu will manage daily operations and regulatory relationships, in addition to his role as head of Equities. 

Meta Stock Plummets Despite Robust Q1 Earnings

Meta's shares took a nosedive, dropping over 15% in after-hours trading, following a second-quarter forecast that fell short of expectations despite the company's strong first-quarter performance. While revenue increased 27% to $36.64 billion and net income doubled to $12.37 billion, the projected revenue for Q2, estimated at $36.5 billion to $39 billion, fell below analysts' forecasts, triggering investor concerns. CEO Mark Zuckerberg's discussion of investments in non-profitable ventures during the earnings call added to the uncertainty, overshadowing Meta's pivot to efficiency in 2023.

ANZ Explores Infrastructure Investment Opportunities in India

ANZ Group Holdings Ltd. is actively engaging with Australian pension funds to explore potential investments in India's infrastructure assets and debt market, according to Mark Whelan, the group executive of institutional at ANZ. With India prioritising infrastructure development and a significant funding gap in the sector, opportunities for investment are expanding. Australia's pensions industry, seeking global investment avenues due to limited domestic options, stands to benefit from India's burgeoning infrastructure sector.

Lloyds Sees Profits Fall Amid Increased Mortgage Competition

Lloyds Banking Group faced a notable decline in profits during the first quarter of 2024, reporting pre-tax profits of £1.6 billion, a 28% decrease from the previous year. The drop was attributed to intensified competition in the UK mortgage market, leading to squeezed margins. Heightened competition for mortgages and deposits resulted in a 10% decline in net interest income, exacerbated by customers moving funds to higher-interest savings accounts. While Lloyds' strategic direction remains confident, additional expenses, including a new Bank of England levy and charges for employee severance, have impacted earnings. Despite predictions of stable house prices, ongoing competition and cost pressures pose challenges to the bank's profitability in the foreseeable future.

Microsoft and Alphabet Post Strong Revenue Growth

Tech giants Microsoft and Alphabet showcased robust revenue growth driven by investments in artificial intelligence (AI), contrasting with Meta's cautionary outlook on AI investment returns. Shares of Google-parent Alphabet surged over 11% in Frankfurt, while Microsoft shares rose nearly 5%, in response to their strong earnings reports. Microsoft exceeded Wall Street's revenue and profit expectations, attributing its success to increased AI adoption in cloud services. Similarly, Alphabet announced its first-ever dividend and a $70 billion stock buyback following a quarter that surpassed sales, profit, and advertising revenue expectations. 

NatWest Group Reports 28% Drop in Q1 Profit

Prominent UK banking institution, NatWest Group disclosed a notable 28% decline in its pre-tax profits for the first quarter of 2024, totaling £1.3 billion. Despite surpassing analysts' forecasts, the decline is attributed to heightened competition in the banking sector, impacting profit margins amid increased competition for savings, lending, and mortgage products. While the bank's income dipped due to lower deposit balances and customer shifts to higher-interest accounts, impairments for loan losses performed better than expected. 

Amazon Web Services Plans $11 Billion Investment for Major Expansion in Indiana

Amazon Web Services (AWS) has announced its intention to invest approximately $11 billion in Indiana, marking the largest capital infusion in the state's history. The initiative, backed by Governor Eric Holcomb and the Indiana Economic Development Corporation, aims to establish new data centres in St. Joseph County, generating at least 1,000 job opportunities while also contributing funds for local road infrastructure improvements.