Luckily, Matthew Adams has at least two decades worth of expertise guiding him with each new policy shift and market shakeup. His resume includes various senior roles at major firms like State Street, HSBC, Northern Trust and BNP Paribas.

By 2022, Adams arrived at First Abu Dhabi Bank (FAB) where he oversees the bank’s international client base of global custodians, broker dealers and private banks.

Adams provided Global Finance with some insight on sub-custody services, his approach to client management, and the complicated nature of modern securities services. The interview has been edited for length and clarity.

Global Finance: What are the latest trends in sub-custodianship?

Matthew Adams: Sub-custodians are experiencing different trends based on regional factors, local economies and regulatory environments. There is often a disparity in how individual markets can keep pace with infrastructure developments. In the GCCE [Gulf Cooperation Council and Egypt] markets where FAB provides sub-custody services, we see a range of models. Some operate on a broker clearing model, while others have transitioned to true delivery versus payment and central counterparty [CCP] clearing models. This diversity presents a significant challenge as global investors seek uniformity in trading venues. Intermediaries and global institutions are looking for regional consistency in partnerships which can drive substantial commercial opportunities. One notable development is the emergence of the General Clearing Member [GCM] initiative. This allows international broker dealers to become remote trading members of the local exchanges. 

GF: How does that help?

Adams: There are multiple benefits to this. It eliminates the need for a local presence and the requirement to transact via a locally licensed broker. Direct connectivity with the exchanges is established to enable trading on both proprietary and client accounts using a licensed custodian clearing member. However, for the global broker community to move away from using established local broker relationships in multiple markets, we will likely need to see a standardized GCM concept across markets, with CCPs in place. The Abu Dhabi Securities Exchange and Dubai Financial Market are expected to go live in 2024, with the Securities Depository Centre Company [EDAA] in Saudi Arabia [owned by Tadawul] following in the future, promising wider adoption thereafter. To achieve post-trade efficiencies and foster commonality in post-trade processes, regional custodians can harness developments in infrastructure to reduce costs and improve overall market efficiency.

GF: Any advice for investment managers when selecting a global custodian?

Adams: The ultimate benefits of appointing a global custodian are efficiency, risk mitigation and cost savings—all captured under one contract. When selecting a global custodian, it is essential to review their due diligence policies with respect to the appointment and maintenance of sub-custodians, as well as their contingent and dual-network operations. Corporates, pension fund trustees and boards of directors should consider these aspects.

GF: Do corporates ever have a say in selecting sub-custodians?

Adams: It’s ultimately up to the global custodian to select and manage sub-custodians. What we do see is that many global custodians, in addition to running dual and/or contingent networks, may appoint an additional sub-custodian at their clients’ request. This typically occurs if the client is of a size and relationship that warrants such a request and has due cause for concerns regarding a particular sub-custodian, whether those concerns are related to risk or competition.

GF: Why are more companies seeking opportunities in emerging markets?

Adams: Many companies are looking to expand into these markets and rightfully so, when you consider the number of untapped opportunities. Many of the more successful markets in the region have a few things in common, such as having a relatively wealthy population—both domestic and foreign—large reserves of capital and most importantly, strong leadership.

To provide some context on why there is more demand in emerging-market expansion, all GCCE markets are currently classified by various metrics as emerging markets. However, each is in a different stage of development. Some, such as the UAE and Saudi Arabia, achieved significant economic progress in recent years. For example, Saudi Arabia’s stock exchange, Tadawul, has risen to take its place among the top exchanges globally since its founding 17 years ago. The market continues to expand and diversify, with around 40 IPOs in the last 12 months alone. However, it remains heavily concentrated in traditional oil stocks, with Saudi Aramco being the only Fortune 500 company in the region.

GF: What are some of the growth drivers?

Adams: Some of the factors driving growth in emerging markets include engagement with the market, pension fund reforms and a growing domestic investment fund industry. 

Strong local or regional financial institutions and service providers can engage with the markets and push for solutions in line with international investor requirements. Many GCC markets have seen a surge in IPOs — the majority of which have been vastly oversubscribed.

Regarding pension fund and saving reforms: The UAE is changing the existing end-of-service benefit, which will divert capital investment into domestic mutual funds. This move will shift multiple billions of dollars from what is effectively an accounting liability into the capital markets in the first year.

A growing domestic Investment Fund industry supports further capital investment, employment, and greater efficiency in relation to capital markets. In the UAE, there is a move to mandate for onshore licensed funds to act as feeders to what is currently and largely a distribution market for offshore funds. 

Progressive regulatory reforms are also driving growth. We expect that Saudi Arabia, the largest domestic fund industry in the GCC, to require independent fund administrators to calculate NAVs—a market standard in the larger global fund markets. This will bring further comfort to investors and lead to additional investment in listed securities.

The ability for sub-custodians to keep up with and manage these regional changes to facilitate clients’ entry into these markets is paramount. This is where institutions like FAB can play a pivotal role in assisting across the spectrum of the regional markets which are our “home” markets, promoting interoperability and consistency to increase accessibility and ultimately boost investor confidence. 

GF: How do you see the status of the US economy in the next 12 months?

Bullard: I think the US economy is in good shape for a soft landing. To me, soft landing means that output grows at the potential growth rate, that the job market is in pretty good balance, and that inflation is moving back toward target and isn’t too far from target. All those things are happening. And you know, GDP growth looks to me like the run rate is maybe between 2 and 2.5 percent for 2024, that’s pretty close to the potential growth rate, or a little above the potential growth rate. Inflation has been coming down toward target, and that’s going to enable the Federal Reserve to get going on the interest rate cuts.

GF: Do you then expect a rate cut in September?

Bullard: The committee was pretty clear at the last meeting and in the chairman’s press conference, that they are ready to go at the September meeting, unless something really dramatic happens. I think, you know, they’re about as clear as you can be for a central bank. I do think they’ll start in September with 25 basis points, and then the question is how fast do they want to move to get back toward a more-or-less restrictive stance of monetary policy, and so even when they lower the policy rate a little bit, the policy rate will still be restrictive. They have to continue to lower from that point. And I think it’s probably 25 basis points per meeting for several meetings in a row, until you can get down to a lower level of the policy rate, and then at that point, you could decide whether inflation is continuing to go to 2% or not, and whether you want to continue to normalize the policy rate.

GF:  You see a cut of 75 basis points between now and December, right?

Bullard: Right.

GF: Do you expect big policy differences depending on who will win the US presidential elections in November?

Bullard: One thing I’ve said about this, is that this election does have a lot of uncertainty around it, because not just the White House is up for grabs in a close election, but also the House of Representatives and the Senate are very close. It’s not clear to me that either party will be able to win all three of those. I think divided government is a distinct possibility for the ultimate outcome. And in the US when there’s divided government, that usually means not too much gets done. And usually financial markets like that outcome. And so, I think that that’s been a factor that’s been driving financial markets during the summer here, but the election could change direction very quickly and either party, I would say, could still sweep. If one party sweeps, it will be able to do more, and probably wants to do more. And so that would be a little bit different.

GF: How do you explain the market crisis we had on August 5^th?

Bullard: I would say that the dramatic sell off in US equities and global equities was partly due to the jobs report in the US. But if you look at that report, it was weak, but it was not that weak. I think what really exacerbated the downturn was events in Japan over the weekend and into Monday morning.

I think the [Bank of Japan] is trying to pull back some on its policy. It’s a very dovish policy that’s been in place for many years and, you know, attitudes have changed in Japan some, where they now think that a too weak yen is maybe counterproductive.

And I think that upset some of the carry trade that has been based on the idea that Japan will never do this.  I think that’s what caused the big sell off, especially in Japan. I think the US jobs report was over interpreted, and then that was all exacerbated by the Bank of Japan.

GF: Why are financial markets so stressed?

Bullard: The geopolitical risk is very serious, and I do think we’re living with the [Gaza and Ukraine] wars going on, but they could easily metastasize into larger conflicts, either one of them, and markets do worry about that and that could be a big risk.

I think also maybe more pedestrian is just that the market is up a lot. The equity market is highly valued in the US and … I think that makes people nervous. They think that, you know, maybe those are overvalued, and the air will come out of that level. So, in that sense, they’re right to worry about that, and right to worry about these great companies, but do we really want to value them as how these were valued?

GF: Are you talking about a company like Nvidia?

Bullard: Nvidia, would be a classic, you know, classic one that went way, way up this year. You know, it’s a great company, and they’ve got a great product, and they’re selling a lot of it, but what’s the right valuation, I think, is the question.

GF: How do you see the global economic landscape beside the US?

Bullard: I would say the global landscape is less rosy than the US, because you’ve got China, which I think is struggling, at least by Chinese standards. China is struggling, not growing as fast as they used to. They’ve got clear fundamental problems in their real estate market, maybe elsewhere, and then Europe, which has not had as much growth as us, and has the war going on in Ukraine and has been more tied to, at least the leading economies have been, more tied directly to China. So China slowing down, it’s very clear more than the US. I would say that for global growth, it’s not as clear that we can get the kind of numbers that we’ve had in recent years. It’s a little bit slower there, and there’s more recession risk there than in the US economy.

GF: Do you expect trade tensions, and the decoupling between China and the US continuing?

Bullard: I think both parties in the US have decided that a more protectionist stance on global trade is something that they want to pursue. One of the hallmarks of the Biden administration was that it didn’t really reverse any of the policies of the Trump administration with respect to trade, and I would expect that to continue going forward.

[The attitude toward global trade] fundamentally, it’s more protectionist. It’s less globalist than it would have been even a few years ago, or certainly during the Reagan-Bush years. And I don’t see that turning around. I think we’re going to have more volatility from that dimension going forward, and I’m a little concerned that you could have markets anticipating a trade war even before one actually occurs because both parties, both political parties are talking about getting tougher on tariffs, maybe not only China, but everyone in the world. That would invite retaliation or threats of retaliation that could lead to a lot of volatility.

Century-old global mining-and-metals conglomerate Anglo American plc has been on a roller coaster since the end of May, when it dramatically cut off merger talks with rival BHP and instead announced a sweeping restructure of its portfolio.

Many analysts greeted the plan with skepticism. UBS downgraded London-based Anglo American from Buy to Neutral, citing the restructuring scenario and the hurdles to getting it done by the end of 2025, as management has pledged to do, and the German private bank Berenberg affirmed a Sell rating. In the two months following the announcements, Anglo’s stock price fell 18%.

The auguries worsened at the end of June, when a fire caused the shutdown of Anglo’s Grosvenor coal mine in Australia. New York-based investment bank Jefferies attributed 30% of the value of Anglo’s steelmaking coal business to the Grosvenor mine; its coal operations are one of the assets the company plans to sell as part of the restructuring. Production is not expected to resume until next year.

“Anglo’s main problem this reporting period will be with the coal operations and how it will sell a burning coal mine,” quipped Ian Woodley, portfolio manager at Old Mutual.

Three weeks later, Anglo released its latest results, and the bad news seemed to pile up further. The company took a $1.6 billion impairment based on its decision to slow the development of Woodsmith, its promising venture into organic fertilizer production in the UK. The decision, which was intended to help Anglo focus on its restructuring, swung the company from a net profit of $1.26 billion in the first half of 2023 to a $672 million loss in the first half of this year. 

“Anglo’s valuation upside no longer looks compelling on a standalone basis,” JP Morgan’s equity research team concluded, suggesting it may still be a takeover target.

The restructuring itself is a complicated affair. Aside from selling off its coal operations and executing various cost-control measures, Anglo aims to demerge Anglo American Platinum (Amplats), put its nickel mining operations on mothballs for possible divestment, and divest or demerge its fabled DeBeers diamond unit, which will move Anglo out of the diamond business for the first time in almost 100 years. The end-product, chair Duncan Wandblad forecasts, will be a leaner, more linear company, laser-focused on copper and iron ore production, which are expected to benefit from the shift to green energy, and last year accounted for 70%-plus of Anglo’s EBIDTA. 

Should the plan succeed, Anglo will be “a higher quality company,” says Morningstar equity analyst Jon Mills, “as it will be less leveraged to changes in commodity prices, led by its high-quality, low-cost, long-life copper mines, including 60%-owned Quellaveco in Peru and 44%-owned Collahausi in Chile.”

Despite the difficulties, such as regulatory approvals needed in South Africa and Botswana, Amplats having to renegotiate supplier contracts and funding lines, and De Beers struggling with a downturn in the diamond market, some analysts think Anglo can pull it off.

“The plan is viable,” says Dawid Heyl, portfolio manager at Ninety-One, a large Anglo shareholder, “and while the execution risk is real, they’ve given themselves a good amount of time to get it done.” Anglo’s stock price is still trading well above the levels it reached before BHP’s bid emerged in April, he notes, “so the market is giving them the benefit of the doubt.”

Anglo reported a modest first step in its restructuring in late July, when it finalized an agreement to sell two royalties to Taurus Funds Management for $195 million: an iron ore royalty owned by De Beers related to an Australian iron project, and a gold and copper royalty related to a project in northern Chile.

“The main risks,” says Mills, “are that it takes longer than intended, and that Anglo accepts bids for its assets that are lower than they should be as it tries to meet its target completion date while minimizing the risk of BHP returning or other suitors emerging.”

But Radoslaw Beker, director at Fitch Ratings, argues that the prices Anglo expects to reap from the assorted divestments and demergers are not overly optimistic: “If the market environment remains stable through the next year, we don’t see problems in getting their numbers. Based on the company’s announcement, and the justification for it, we think it’s achievable.”

Should it succeed, Anglo’s huge restructuring will cap a long-term trend in the mining-and-metals industry away from the diversified model that has been the company’s hallmark for more than a century.

“A diversified model was an advantage at one point,” Heyl notes, “but today, you don’t get rewarded for that, which is why Anglo has been trading at a deeper discount than other miners.”

Wanblad’s vision for the company “shows a real focus on metals, longer term,” says Beker, “and this is the trend that miners want to go in.”

If GIX gets the green light from the US Securities and Exchange Commission, it plans to kick off trading in 2025. And it’s a global initiative, too. Labovitz tells Global Finance that while a security must be listed on another US exchange to list with GIX, he’s already chatting up counterparts abroad.

“Conversations with exchanges and broker-dealers in Europe and Africa” about potentially bringing equity-linked products, i.e., American Depositary Receipts and exchange-traded funds, from those regions to the US markets via GIX are taking place, he explained. “We’re still in the early stages of those discussions.”

As GIX waits for regulatory approval, Labovitz is mapping out a future where saving the planet is thought of as a savvy corporate finance strategy. The following interview is edited for length and clarity:

Global Finance: Who’s expressing interest in GIX and why?

Daniel Labovitz: We have spoken with hundreds of public companies. From our conversations, it’s clear that they understand the logic and importance of sustainability to their business and their shareholders. Company leaders know that significant portions of their investor base, employees, and customers care deeply about it and are looking for evidence that companies are not just greenwashing. If a company is perceived to be greenwashing, it puts them at a disadvantage when competing for the best talent and consumers—especially younger cohorts, who, more and more, are considering a company’s values as part of their employment and purchasing decisions. Ultimately, company leaders know they will lose access to sustainability-minded investors willing to trade short-term gains for long-term sustainable value growth.

GF: What were some of the questions that get brought up?

GF: Is there data to support that?

Labovitz: There is growing evidence that focusing on sustainability leads to the company’s stock outperforming the broader market. For example, a 2022 McKinsey study found that “green leaders” in the chemicals market doubled their total shareholder return compared to “green laggards.” A 2023 study in Britain found that a board sustainability committee positively impacted market value, while a separate study found that corporate environmental commitments can play a buffering role during disruptive market events. In other words, markets agree that sustainability investments and sustainability-focused corporate governance can improve returns and lower volatility. You’d be hard-pressed to find a CFO or CEO who said “no, thank you” to either.

CEOs and CFOs also like our trading model. It will help companies generally by incentivizing market makers to post liquidity on the exchange. Once the exchange is approved for trading, we plan to seek SEC approval for a market maker support program specifically for GIX-listed companies. That program would reward companies for making up-front investments in green transition by incentivizing market makers to add liquidity in listed stocks.

GF: How does GIX hold companies accountable?

Labovitz: Investors develop skepticism toward company promises, particularly in sustainability, due to the frequent abandonment of ambitious environmental commitments. This lack of accountability often occurs once the public attention wanes. GIX, however, is uniquely positioned to bridge this “trust gap.” We mandate our listed companies to establish a robust governance infrastructure, ensuring that their promises are not just words but deeply embedded in the company’s DNA.

GF: Has something similar been done before?

Labovitz: Incentivizing good corporate governance has been a core function of stock exchanges in the US for more than 100 years. In the early 20th century, there were little standardized accounting or financial controls inside companies, and investors were not entitled to the right to receive disclosures from the company. This allowed a lot of fraud to thrive. To combat this, the NYSE told companies that if they wanted their stock to be traded on the exchange, the company would have to abide by specific corporate governance standards, implement standardized accounting, and commit to regular disclosures to investors. As a result, an NYSE listing became the gold standard for public companies, so much so that when the SEC was formed, it incorporated many of the NYSE’s governance standards into the federal securities laws and rules that we still live with 90 years later.

Sustainability reporting is in a place where financial reporting was in the early 20th century. There is a lack of standardization, insufficient mandatory disclosures to investors, and a lot of greenwashing, whether unintentional or otherwise. To date, the NYSE and Nasdaq have not adopted corporate governance standards for sustainability, so GIX is stepping up to address that gap.

GF: How do investors benefit from GIX?

Labovitz: Regarding value for investors, it’s important to note that even when it was the gold standard for listings, the NYSE never guaranteed that a company would be profitable and did not anoint winners and losers. To the extent it guaranteed anything, it was that investors would get quality, timely, reliable information from which they, the investors, could make informed investment decisions. The same applies to GIX and sustainability: our role is not to anoint companies as “green” or “not green.” GIX’s listing standards ensure companies give investors quality, timely, and reliable information about sustainability initiatives and performance so they can make informed investment decisions. Efficient markets need transparent information; GIX ensures investors get it. After that, it’s up to the market—not the exchange—to allocate capital where it will be most productively used.

GF: What are your next steps?

Labovitz: Our first goal is to launch the exchange and build experience and credibility running a dual listing market. It’s not a small task—several exchanges have tried to launch a primary listing business right out of the gate and not succeeded, so we wanted to learn from those examples.

The timeline for our launch depends on securing SEC approval of GIX’s Form 1 application for registration as a national securities exchange. After approval, we will need approximately five to six months to complete all the pre-launch work that can’t be done until then. That puts us on track to launch trading in the first half 2025.

Once we launch, we’ll be better positioned to evaluate what’s next, including listing green derivative products: ETFs, ETNs, index products, and ADRs, and creating markets for innovative green equity products. Whichever way we go, we promise to keep you posted.

Toward the end of July, several companies looking to go public told vastly different stories than the one billionaire Bill Ackman weaved on social media.

The hedge fund manager grabbed headlines on Wednesday, July 31, when he decided to no longer plan an initial public offering (IPO) for his firm, Pershing Square USA.

In a prepared statement on X.com, Ackman posted: “While we have received enormous investor interest in PSUS, one principal question has remained: Would investors be better served waiting to invest in the aftermarket than in the IPO? This question has inspired us to reevaluate PSUS’s structure to make the IPO investment decision a straightforward one. We will report back once we are ready to launch a revised transaction.”

The withdrawal comes shortly after the fund announced plans to raise $2 billion—significantly lower than the previously touted $25 billion.

When valuations shift so drastically, it’s usually due to “a major event” or “a failed deal, or even a market correction,” Carl Niedbala, co-founder of risk management firm Founder Shield, said.

“It’s tough to pinpoint the perfect valuation,” he added, skeptical that it was indicative of a trend. 

Indeed, Ackman’s decision to scale back IPO plans seemed evident when reports suggested that Seth Klarman, a fellow billionaire investor, appeared to be committed to investing in Pershing Square USA but ultimately rescinded.

Calls to Pershing Square were not returned.

Meanwhile, other companies enjoyed better luck.

Lineage Inc., for example, raised over $5 billion and began trading 12% above its offer price as of July 30, making it the largest IPO of 2024.

In an email to Global Finance, EY’s Global IPO Leader George Chan noted that Lineage’s success underscored a “particularly active” July.

Chan also singles out the $564 million listing of KKR-backed OneStream Inc., which priced above its initial filing range and is currently trading 40% above its offer price.

Then there’s health services provider Concentra Group Holdings, which raised about $529 million.

“Valuations are more tempered compared to the highs of 2020 and 2021,” Chan says. “This indicates a balanced approach with sustainable pricing levels.”

Thus far, he adds, it’s been a good year for IPOs, even if activity didn’t surpass 2023.

According to EY, global IPO volume fell 12% for the first six months compared to last year. IPO proceeds were also down—by 16%—year over year.

The data appears to be far from the comeback dealmakers expected when they spoke to Global Finance late last year.

“The global IPO market experienced a mild downturn due to weak IPO activity in the Asia-Pacific (APAC) region, particularly in Greater China,” he says.

“Historically, APAC has significantly contributed to global IPO activity. Therefore, the decline in IPO numbers is more indicative of APAC’s underperformance rather than the below-average performance of other regions,” Chan adds.

However, he points to two other regions that witnessed a significant increase in IPO activity during the first half of 2024: the Americas and Europe, the Middle East, India and Africa (EMEIA).

EMEIA saw a 45% increase in IPOs and an 84% rise in proceeds, while the Americas experienced a 14% increase in IPOs and a 75% increase in proceeds.

“In stark contrast, APAC witnessed a 42% decline in the number of IPOs and a 73% drop in proceeds,” Chan says.  

Ryan Coombs, a partner in O’Melveny’s Capital Markets Practice, agreed that July was “a positive start to the second half of the year.”

“I don’t think the global IPO statistics reflect the health of the US IPO market,” he adds. “Year-over-year, the trends suggest there will be more US IPOs in 2024 than in 2023.”

Coombs says the US election and interest rate changes may impact the second half of the year. But he expects the same energy in the US IPO market in the first half of 2024 to carry through to the second half of 2024.

“I think the US IPO pipeline will continue to reflect the market’s preference for businesses with quality financials and demonstrated growth opportunities,” he said.

Numerous Indian companies and multinational subsidiaries in India are heading for IPOs in the next few months, as funding capital projects amid India’s infrastructure boom takes precedence over other corporate finance activities.

Vodafone Idea (Vi), India’s third-largest telecom services operator (213 million subscribers), has just completed mega rounds of capital raises so far in 2024, with the final piece, equipment-vendor financing, concluding on July 18. The company has major obligations on capex, debt service, 5G spectrum purchases, dues to equipment vendors, among others, and has designed a capital-raising plan using multiple corporate finance levers in 2024, including asset sales, follow-on public offers, preferential equity sales to a company promoter, and equity allotment to equipment vendors, all of which have been completed for now.

No company’s struggles epitomize the impact of cutthroat competition in the Indian telecom market more than Vi’s. As its larger Indian rivals, Reliance Jio (484 million subscribers) and Bharti Airtel (382 million subscribers), have already completed 5G rollouts across the country, Vi is not even out of the gate yet. Vi will commence its 5G rollout in the next few months, expecting to spend $3 billion to $4 billion. While Hyundai India’s IPO later this year is on track to set a record, it is Vodafone Idea (Vi) that will have ended up raising the largest amount of money, INR 360 billion ($4.3 billion), in corporate India in 2024.

Unlike its larger and well-capitalized rivals, Vi has never turned a profit, largely due to hyper-competitive pricing of telecom services, making its recently demonstrated capital-raising prowess remarkable. According to a June 2024 presentation by Vodafone, Indians consume 20 gigabytes of data per month, which is the highest in the world but pay the lowest data costs in the world, at an average of $2.10 per user per month. This price per gigabyte is certainly cheap compared to Brazil at $5.70 and China at $6.60 per user, but astonishingly low when compared to the US consumer’s monthly cost of $45.60 per user.

According to Vi, tariffs in India have risen by just 4% in 11 years and suggest that a hike is long overdue. This combination of expected revenue increase from higher tariffs, the launching of 5G services, and supportive government policies (reduced spectrum costs, longer amortization of dues, and conversion of debt owed to the government to equity) have likely buoyed the confidence of investors and led to several successful issuances of new equity.

On July 18, Vi confirmed that it issued the first tranche of common stock to its equipment suppliers, Nokia Solutions and Networks India (NSNI) and Ericsson India, as part of its equipment-vendor financing plan. NSNI was issued 256.7 million shares and 158.4 million shares to Ericsson, raising a combined $80 million. This tranche is part of a larger issue of 1.03 billion shares to NSNI and 633 million shares to Ericsson; the combined value of this complete issue is $300 million. Following the completion of the full allotment over time, NSNI will hold a 1.5% stake and Ericsson will hold a 0.9% stake in Vi. This allotment of shares follows the $250 million worth of equity sold to the Aditya Birla Group, one of the promoters of the company; Vodafone Plc is the other promoter; both holding a combined 37.3% stake. The largest shareholder is the government of India, holding a 23% equity stake. The Indian government became a majority shareholder after Vodafone Idea opted to accept a government plan to convert the interest it owed on its debt to the government into equity instead of paying the interest in cash. Vi has a total of $26 billion in outstanding debt, almost all of it owed to the Indian government for spectrum purchases.

Vi’s initial issue of common stock to NSNI and Ericsson India and earlier to one of its two promoter groups, Aditya Birla and Vodafone Plc, while dramatic, has come after two still larger capital raises this year. In April, Vi first raised $2.2 billion in a follow-on public offer (FPO), which is a subsequent offer of shares to the investing public by a listed company, and then in mid-June sold 487 million shares representing an 18% stake in Indus Towers, one of the world’s largest telecom tower operators also listed in India, raising $1.8 billion. The block sale of Indus Towers stock will be used to reduce its outstanding debt by that amount. Following this equity sale, Vi now holds just a 3.1% stake in a company that it once held a 21.5% stake in, along with Bharti Airtel, India’s dominant telecom provider, which now owns 49% of Indus Towers.

Though RBI has collaborated with seven countries to link the Unified Payments Interface (UPI) for bilateral payments, this is the first time it has joined a multilateral project, and will connect a potentially large user base
to UPI.

Project Nexus is designed to connect the Faster Payment Systems of four Association of Southeast Asian Nations (ASEAN) countries—Malaysia, the Philippines, Singapore, Thailand—and India and has the potential to add more countries. The five participating countries will be the founding members and first movers of this platform, and have signed an agreement with BIS to this effect in Basel, Switzerland.

The recently completed third phase of Project Nexus involved the participation of the central banks of the four ASEAN nations, domestic IPS operators, and Bank Indonesia, which has special observer status. As part of its fourth phase, RBI will also join the project.

The platform creates an affordable instant payment system, serving as an alternative to global instant payment players that have high transaction costs. It aims to lower costs and expedite international remittances between countries, promoting financial inclusion, economic integration, and scalability, thereby contributing to the G20 Roadmap for Enhancing Cross-border Payments.

Project Nexus standardizes domestic IPS connections, allowing operators to make one connection to Nexus instead of custom connections to each country. Thus, the IPS is connected to all the countries in the network.

To manage the live implementation, the participating central banks and IPS operators will work toward establishing a new entity called the Nexus Scheme Organization, owned by central banks, the IPS operators or both. Finally, BIS will move toward a technical advisory role to enhance cooperation among its members and participants.

The list of such exchanges is growing, and the trend is global. For example, the Eastern Caribbean Securities Exchange (ECSE) is the Caribbean’s major regional stock exchange, designed to attract companies with regional interconnectivity and regional investors. Companies such as Grenada Electricity Services from Grenada and the Bank of Nevis from St. Kitts and Nevis found their listing home there.

Recent discussions about a new stock exchange in the US state of Texas, which would compete against the triumvirate of US exchange operators—the New York Stock Exchange, Nasdaq and CBOE—have amplified the trend.

The Texas Stock Exchange (TXSE), to be based in Dallas, will be initially funded with a $120 million investment. In recent years, anti–New York sentiment around issues such as compliance requirements and environmental, social and governance rules has triggered a backlash among many businesses. This, among other factors, has led to the current Texan proposal.

Major liquidity providers, such as BlackRock and Citadel Securities and many Texas-based Fortune 500 companies, are backing the proposed all-electronic bourse.

The TXSE founders applied for US Securities and Exchange’s approval, which is currently pending. The new exchange would give companies a reduction in the high listing requirements often associated with the established exchange operators. Texas is perceived as a business-friendly, low-tax state with limited regulatory requirements, and the entrepreneurs behind this venture hope to bring this type of thinking to the stock exchange space while reducing red tape. Texas’ specialization in the energy sector, meanwhile, would provide energy companies with another avenue for corporate finance solutions.

The traditional partnership structure has reached its limits: It is capital-constrained. Much of the profits go back to partners each year, and the company has retirement obligations for former partners. At the same time, accounting firms must heavily invest in artificial intelligence tools to deepen their consulting business and grow profits.

Sensing opportunities for consolidation, private equity (PE) firms have purchased shares in five of the top 26 US accounting firms in recent years. Tower Brook Capital invested in advisory and accounting expert EisnerAmper. New Mountain Capital took an interest in Citrin Cooperman, and Parthenon Capital got involved with Cherry Bekaert.

In February 2024, Baker Tilly US signed a $1 billion deal with Hellman & Friedman and Valeas Capital Partners. Shortly thereafter, the American branch of Grant Thornton, the world’s seventh-largest accounting firm, announced an investment by New Mountain Capital. These financial alliances have proven beneficial, as seen in the case of Citrin Cooperman, which has completed 17 acquisitions since New Mountain Capital’s capital injection, to become a $600 million powerhouse.   PE firms’ appetite for accounting firms is not limited to the US. It has a global reach, as seen in the UK, where Hg and PAI Partners are now shareholders in Azets, one of the top 10 UK accounting firms. Azets, in turn, has acquired 90 local providers. Waterland Private Equity took stakes in two other UK accounting firms, Moore Kingston Smith and Cooper Parry

The heightened level of regional consolidation, especially among Danish and Norwegian savings banks, has produced more than 50 mergers and acquisitions (M&As) in the first half of 2024. This trend is expected to accelerate in the second half of the year. Moreover, digital banks’ growing presence and competitive impact forcing high-street banks to overhaul their business models and practices to create partner groups to drive domestic and Nordic growth.   

Insurance group Sampo’s $4.73 billion takeover offer for the Copenhagen-headquartered Topdanmark reflects heightened interest by banks in growing through M&A deals that have a regional focus. The offer obtained foreign direct investment regulatory clearance in July. Sampo is on track to complete the transaction in September.

“Topdanmark is a perfect fit for Sampo. Our strategies have further aligned as pure property and casualty insurers in recent years,” said Sampo Group CEO Torbjörn Magnusson at the time of the announcement.

Meanwhile, Danske Bank is exploring ways to recalibrate its business model to create mortgage loan product partnerships with rival Danish banks. Carsten Egeriis, Danske Bank’s CEO, says the bank needs to change how it does business to retain private and corporate customers in the face of “disrupters expanding their range of offerings” in the Nordic retail lending space. 

Swedbank formed a strategic product-distribution partnership with the Helsinki-based asset manager and life insurance provider Aktia Bank in another significant Nordic cross-border collaboration. The deal expands the Swedish bank’s corporate offerings in Finland while enabling Aktia to ally with Swedbank to provide compatible customer-tailored finance offerings.

In other noteworthy Nordic cross-border events, the Norwegian marine insurer Gard Forsikring expanded its market reach by acquiring the global Marine and Energy unit of Denmark-based Codan (part of Alm. Brand Group) in a deal worth $234 million.