BRVM, a stock exchange headquartered in Abidjan, Ivory Coast, is a member of the World Federation of Exchanges (WFE), apart from being a participant in the African Exchanges Linkage Project (AELP). It is also the world’s first fully integrated regional stock exchange, serving the eight member states of the West African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

According to BRVM, “As global capital looks beyond traditional markets, the West African Economic and Monetary Union (WAEMU) is fast emerging as a credible destination for diversified, growth-oriented investment. BRVM Investment Days brings together policymakers, issuers and investors, offering a clear view of capital markets and portfolio opportunities across the region. The BRVM enters 2026 on the back of sustained momentum. Over the past five years, the BRVM Composite Index has nearly doubled, rising by 99.15%, with a further 25.26% gain in 2025 despite global uncertainty. Market capitalisation has reached CFA 24,781 billion (approximately $40 billion), representing 18.37% of WAEMU GDP. Returns remain above 8% on equities and around 6% on bonds. WAEMU’s economic growth, estimated at 6.7% in 2025, combined with a reduction in budget deficits, creates a favourable macroeconomic environment. This stability, coupled with a dynamic and well-regulated financial market, offers US investors a unique opportunity to gain exposure to one of Africa’s most promising regions.”

“The BRVM is no longer a frontier story — it is a market delivering consistent performance with expanding access. For investors looking beyond traditional markets, WAEMU offers a rare combination of growth, returns and increasing liquidity,” said Dr. Edoh Kossi Amenounve, Chief Executive Officer (CEO) of the BRVM.

He listed out recent developments around BRVM, including new listings like the Banque Internationale pour l’Industrie et le Commerce du Benin (BIIC), enhanced disclosure standards and the rollout of new instruments such as derivatives, ETFs and ESG-linked indices, that have consolidated the stock exchange’s already dominated position further. Sustainable finance is also gaining traction, with five green bond issuances raising close to CFA 170 billion.

Dr. Amenounve continued, “At the same time, the BRVM is expanding access through its participation in the African Exchanges Linkage Project (AELP), improving cross-border market access and broadening investor reach across African markets. BRVM Investment Days offers investors direct access to the institutions and issuers shaping the region’s markets. It is an opportunity to gain a deeper understanding of the fundamentals and see where capital can be best deployed with confidence.”

BRVM Investment Days 2026 will bring together institutional investors, investment advisors, corporate advisors, bankers, policymakers and market participants from across WAEMU and the diaspora. The previous successful editions in London, Paris, New York, Dubai and Johannesburg attracted over 100 investors and financiers (in each city).

The New York chapter will host prominent events such as a panel discussion on ’WAEMU Economic Outlook — Integration, Industrialisation & Investment Opportunities,’ which will cover the West African region’s macroeconomic outlook, fiscal and monetary frameworks, and investment priorities.

Also, banking executives will discuss their approach to sourcing capital for regional issuers, apart from outlining the sectors and types of securities presenting investment opportunities, and sharing their perspectives on how local capital markets are developing and becoming increasingly attractive to international investors.

Another panel discussion, titled ’Capital Markets & Financial Innovation — Green Finance & Infrastructure Instruments’, will explore emerging asset classes and financial instruments supporting infrastructure and sustainable investment across WAEMU. Speakers will discuss opportunities for international investors, including infrastructure financing vehicles, green finance instruments, and cross-border investment structures.

The post BRVM Investment Days 2026 comes to New York: All you need to know appeared first on International Finance.

For example, one former gas “peaker” plant in North Tonawanda (just north of Buffalo) runs almost continuously to power a crypto mine. In the first quarter of 2025, this plant operated 84 out of 90 days, in contrast to just eight days in all of 2021, and it emitted as much CO2 in three months as it had in the previous two years combined.

In effect, mining operations have transformed low-use industrial sites into constant polluters. US officials estimate that nationwide commercial crypto mining already consumes roughly between 0.6% and 2.3% of the country’s electricity, which is a share that could rise rapidly as more facilities begin operation.

Supporters in upstate areas argue that repurposing abandoned plants and tapping into cheap power can help stimulate the struggling upstate New York economy through jobs and increased tax revenue.

However, local regulators and environmental analysts caution that the climate and local impacts may outweigh those benefits. The Energy Information Administration (EIA) has ranked US Bitcoin’s electricity consumption as being comparable to that of an entire medium-sized state. The associated carbon footprint is substantial unless the power comes entirely from zero-carbon sources.

Impact on energy use

Bitcoin mining’s enormous power demands make it a highly energy-intensive industry. Many US operations are powered by fossil fuel plants, which are often ageing coal or natural-gas generators that have been refurbished for crypto use. In New York, miners have acquired decommissioned “peaker” plants and run them at full capacity, resulting in sharply increased greenhouse-gas emissions. At North Tonawanda’s Fortistar plant, which was previously idle, carbon output surged after it was converted into a crypto mining site.

Climate watchdogs warn that adding gigawatts of mining demand typically revives polluting power plants that would otherwise be closed. For example, Texas grid operators have reported that planned large-scale crypto facilities could create up to 43,600 megawatts of new demand by 2027, much of which is expected to be met by newly built gas-fired plants. Indeed, Texas has recently authorised $10 billion in public loans to build or expand plants to satisfy crypto-driven electricity needs.

Across the country, utilities and independent agencies have begun tracking these effects. The EIA and Department of Energy have conducted surveys to measure energy use by mining operations. In 2024, Senator Elizabeth Warren’s office urged the DOE and EPA to mandate energy consumption and emissions reporting for Bitcoin mining, noting that the United States’ share of global Bitcoin mining rose from 4% to 38% between 2019 and 2022.

Environmental groups estimate that even moderate levels of mining usage currently account for about 2% of national electricity consumption. This implies that the carbon and water impacts are equivalent to those of a mid-sized nation.

A United Nations study found that globally, Bitcoin mining consumed 173.4 terawatt-hours in 2020 and 2021, which exceeded Pakistan’s total electrical output. It also required enough water to fill 660,000 Olympic-sized swimming pools. In areas like upstate New York, where climate laws require net-zero emissions by 2040, the use of fossil fuel-based power for mining is viewed as fundamentally incompatible with state goals.

Researchers from Harvard University concluded that Bitcoin mining added more demand to the US electrical grid than the entire city of Los Angeles. The researchers identified corresponding air pollution and environmental concerns in their findings, which were published in March in Nature Communications.

To quantify the energy use of Bitcoin mining, the Harvard researchers analysed data from the 34 largest mining operations in the US, which together account for 80% of the country’s Bitcoin mining capacity. Their database included both the locations of the mines and their energy consumption levels.

Between August 2022 and July 2023, these 34 facilities consumed 32.3 terawatt-hours of electricity. This is 33% more electricity than the city of Los Angeles uses in the same time frame. Approximately 84% of that energy came from fossil fuel sources. In effect, Bitcoin mining has added a city’s worth of electricity consumption to the grid, together with all the associated pollution.

Noise, water, and local livability

Beyond energy use, crypto mines also create significant local environmental burdens. The thousands of high-powered servers and generators in these facilities produce a vast amount of heat, requiring massive industrial fans that operate constantly.

Farmers and rural residents living near crypto mining sites consistently describe a relentless mechanical noise. In Granbury, Texas, a resident compared the sound to having a jet engine permanently stationed nearby. A farmer in Pennsylvania made the same comparison and said her hens were visibly disturbed by the constant hum.

Journalists have documented numerous complaints about piercing noise from Bitcoin farms. One resident compared the experience to standing at the edge of Niagara Falls when the fans are running.

This nuisance is not minor. Medical experts note that prolonged exposure to noise above 80 decibels can increase the risk of cardiovascular issues and other health problems. In both Texas and Arkansas, local officials have recorded reports of headaches, hearing loss, vertigo, and chronic stress attributed to the incessant hum from crypto fans.

A national study observed that noise issues caused by miners are now so common that they have become a persistent source of frustration in rural, mostly Republican communities. Even if the noise complies with local sound ordinances, the constant low-frequency vibrations can make homes unlivable. In North Tonawanda, New York, residents living more than half a mile away from the plant have reported being able to hear its fans from their porches.

Water use and water pollution are additional concerns. Crypto mines often require fresh water for cooling purposes or for maintaining on-site generators. Experts caution that the water demand of Bitcoin mining is insufficiently studied but potentially significant.

According to the same UN study, a large-scale crypto mining site could use as much water as a small city each year, straining already limited water resources in drought-prone regions. Furthermore, diesel or natural gas generators used at some mining locations can emit local air pollutants. For instance, Pennsylvania mining sites that burn waste coal have released sulphur dioxide and fine particulate matter.

The local costs, including impacts on air quality, water resources, wildlife, and human well-being, are considerable.

Opponents in rural communities have voiced concerns about disappearing wildlife, livestock disturbed by noise, and family members tormented by nonstop humming, even behind closed windows. These consequences have led to public meetings, citizen noise-monitoring campaigns, and legal challenges in multiple states.

Economic trade-offs

Proponents of crypto mining often claim that it brings jobs and economic revitalisation to struggling rural towns. A 2022 Politico report highlighted that advocates promote these facilities as a way to stimulate economic growth in upstate New York by repurposing inactive power plants.

Sometimes, local governments offer tax breaks or discounted electricity rates to attract crypto companies. Yet the actual number of jobs created tends to be small, possibly only a few dozen per large facility, while public costs can be substantial.

In Texas, analysts argue that increased electricity demand from crypto mining ultimately drives up prices for everyone. As one report noted, “ordinary Texans may end up footing the bill on their monthly utility statements” as the grid adjusts to crypto-related demand.

In Arkansas, utility providers have stated that industrial crypto operations often pay reduced electricity rates, effectively passing infrastructure costs onto other customers.

Communities have begun reevaluating the costs and benefits. In some rural counties, initial enthusiasm for economic investment has turned into frustration over higher bills and noise disturbances. Activists have highlighted that utilities and state governments have offered generous incentives to crypto firms. For example, the Texas-based company Riot Platforms received about 136 million dollars in power-related credits between 2022 and 2024, which at times exceeded its own mining revenue.

In response, community organising has intensified. In Georgia, residents living near proposed mining sites successfully lobbied their county government to reject rezoning requests, and neighbouring jurisdictions went further by enacting complete bans. In Wisconsin and Pennsylvania, neighbours have launched coalitions to oppose crypto mining, arguing that a small number of jobs are not worth the disruption to local life and the environment.

Even in relatively affluent areas, local governments have imposed moratoria. In 2024, the city council of North Tonawanda voted unanimously to prohibit new crypto mining projects for two years, although existing operations were allowed to continue.

These battles often defy conventional political divisions. Residents who strongly supported pro-crypto politicians have sometimes led opposition efforts. Hood County, Texas, which gave Donald Trump more than 80% of the vote in 2024, witnessed lawsuits and protests by conservatives against a Marathon Digital mine in Granbury.

In local online groups, residents expressed simultaneous support for Trump and deep frustration with the Bitcoin mine that they felt had “destroyed their peace.” In North Tonawanda, activist Deborah Goldeck argued at a public meeting that had the city acted sooner, “we could have avoided the misery of constant high noise levels” that now affect her neighbourhood.

In rural Arkansas, Gladys Anderson’s description of constant “shrieking and humming” from a nearby mine drew media attention and spurred legislative reforms. These grassroots efforts share a common thread. People feel that an industry backed by powerful crypto interests has altered their quality of life without consent.

Political dynamics

Cryptocurrency mining has become a contentious political issue at the state and national levels. The Republican Party has officially taken a supportive stance toward the industry. In its 2024 platform, the GOP pledged to defend the right of individuals to mine Bitcoin and to ensure that Americans can maintain self-custody of their digital assets.

President Trump has repeatedly endorsed crypto mining as a strategy for achieving US energy leadership. He even claimed that producing all Bitcoin domestically would help make the country “energy dominant.”

Crypto companies have poured funding into political campaigns. One watchdog group estimated that the industry spent more than 119 million dollars on federal races during the 2023–2024 election cycle, accounting for nearly half of all corporate spending in some contests.

Several Republican legislators at the state level have introduced “right-to-mine” bills aimed at limiting the authority of local governments to regulate the industry. Politicians from both parties have tried to win over the industry by promising deregulation.

For instance, in New Hampshire in 2025, Republican lawmakers advanced a proposal to prohibit towns and regulatory agencies from imposing restrictions on crypto mining, with the explicit goal of signalling support to the industry. In Texas, political leaders have introduced incentives such as tax breaks and discounted electricity for mining companies, while some municipalities have approved subsidised power deals.

However, this top-down enthusiasm increasingly conflicts with the sentiments of Republican voters in rural communities. Commentators have described a growing national backlash, with many traditionally conservative voters expressing opposition to crypto mining when it affects their neighbourhoods.

The Week summed up the situation by noting that in some areas, Trump’s crypto-friendly policies have met resistance from the very voters who helped return him to the White House. This tension between party loyalty and local quality-of-life concerns is now playing out across the country.

Conservative state and local leaders have come under pressure from constituents demanding tighter controls. In red states such as Georgia and Pennsylvania, citizen protests have led to legislative debates and political gridlock.

In Virginia and Kansas, lawmakers only took up crypto mining regulations after strong grassroots organising prompted public hearings. In Arkansas in 2024, the state’s new Republican governor signed legislation imposing stricter permitting requirements in response to growing public concern.

Even industry insiders have acknowledged the backlash. Marathon Digital CEO Fred Thiel noted that one of the company’s Texas mining sites had been approved by voters in a pro-Trump region, yet it still faced demands for tighter noise regulations from local residents.

As a result, partisan messaging on cryptocurrency is increasingly split between national and local levels. Republican candidates on the national stage often appeal to crypto investors and tech donors. In contrast, local Republican officials, including mayors, county supervisors, and state lawmakers, in some cases have aligned with environmental activists or citizen groups calling for stronger oversight or moratoriums.

For example, a previous Republican governor of New York (before Kathy Hochul) had questioned the wisdom of expanding crypto mining in the face of community pushback. In Congress, Democrats have sometimes used this internal GOP divide to their advantage. Some House Democrats have proposed new taxes on crypto mining and regulations requiring pollution controls. At the same time, crypto-friendly bills like the proposed federal “Strategic Bitcoin Reserve Act” have met resistance from suburban and rural voters alike.

The net result is a complicated political landscape for the crypto mining industry. On one hand, it enjoys vocal support from high-ranking officials. On the other hand, it increasingly encounters organised local resistance, often within the same communities that elected those officials.

Regulatory experiments

This clash between local resistance and national support has triggered a wave of policy experiments at the state and federal levels. Some jurisdictions have moved to rein in crypto mining in order to protect residents’ health and meet environmental targets.

In November 2022, New York became the first state to impose a temporary ban on new proof-of-work cryptocurrency mining at fossil-fuel power plants. This law prohibited all new permits and the renewal of existing permits, unless the projects could demonstrate that they operated entirely on renewable energy. Governor Hochul’s administration described the law as a limited but necessary pause aimed at balancing economic development with the objectives of the state’s Climate Leadership and Community Protection Act.

New York’s Department of Environmental Conservation has also taken enforcement actions against noncompliant facilities. In some cases, the agency has denied permits or sued companies for violating clean air or climate mandates. One example is Greenidge Generation’s use of waste coal at a plant in Dresden, which came under legal scrutiny due to its environmental impact.

Other states have followed New York’s lead. In Georgia, conservative local governments have passed restrictions or outright bans after public hearings. State legislators have considered measures to regulate noise and limit grid strain from mining operations. In Pennsylvania and Montana, environmental organisations have taken legal action against facilities that keep old coal plants running for mining purposes.

Even in states that are generally favourable toward cryptocurrency, lawmakers have introduced new regulations. In Texas, in 2023, legislators proposed several bills (some of which passed) to require large mining operations to register with grid authorities and to place limits on their use of “demand-response” programmes.

The Electric Reliability Council of Texas (ERCOT) has since implemented rules requiring any mining operation drawing more than 75 megawatts to sign flexible load agreements. These agreements give the grid operator greater control to shut off power during times of high demand, to help stabilise the system.

At the federal level, regulation is still in early stages. In 2024, a bipartisan group of US senators led by Elizabeth Warren called on the Department of Energy and the Environmental Protection Agency to require mandatory reporting of crypto mining’s energy use. They characterised the industry’s rapid growth without oversight as “alarming.”

So far, neither the Biden administration nor the EPA has issued dedicated rules for crypto mining. However, federal agencies have begun monitoring the sector more closely. Mining now appears in national energy and climate assessments, and the Energy Information Administration is considering including it in future data collection surveys.

Meanwhile, other jurisdictions have moved in the opposite direction. Industry lobbyists have drafted and promoted “right-to-mine” bills in several states that aim to preempt local zoning laws and noise ordinances. According to Earthjustice, some of these proposals would block towns from regulating crypto operations altogether.

In 2025, New Hampshire legislators debated a bill that would have made it illegal for any local agency to restrict crypto mining. Libertarian groups and blockchain advocacy organisations praised the proposal, viewing it as a victory for deregulation.

In Missouri, lawmakers introduced bills to classify Bitcoin mining as critical infrastructure. Other proposals aimed to exempt mining facilities from environmental permits, treating them as if they were simply data centres rather than power-consuming industrial sites.

These deregulatory efforts have met strong resistance from environmental advocates and local governments that support home-rule rights. The debate illustrates a growing confrontation between the cryptocurrency industry’s desire for minimal regulation and the communities most affected by its operations.

In practice, the most effective policy responses have come from state and local governments. Measures such as temporary bans, conditional permits, or tailored noise regulations have given municipalities some control over how and where mining occurs. For example, North Tonawanda’s decision to ban new mining projects and conduct noise studies reflects one way that communities can act within their legal authority.

Other examples include the actions of rural counties in Georgia and new state laws in Arkansas, which were enacted after constituents like Gladys Anderson publicly described how crypto noise had affected their lives. These efforts demonstrate how traditional zoning and environmental rules can be applied to this emerging industry.

At the national level, more ambitious proposals are under discussion. One idea is to impose a substantial tax on electricity used for crypto mining. For instance, President Biden had proposed a 30% tax, although it was ultimately dropped. Another option would be to require carbon offsets for mining operations powered by fossil fuels.

Academic researchers and policy analysts have proposed more balanced solutions. These might include requiring crypto companies to pause operations during power emergencies or mandating that they operate only from designated clean energy sources. The broader policy debate is ongoing and has become a staple topic in energy and climate forums.

The post Rural America fights back against crypto appeared first on International Finance.

Despite delays and cost overruns, the project was deemed a game-changer for civil aviation, as since its maiden service flight on 21 January 1976 with Air France from Paris-Roissy and British Airways from London Heathrow, Concorde quickly captured flyers’ attention. Transatlantic flights became the main market, with Washington Dulles and New York JFK becoming the operational hubs for these jets. While Air France and British Airways operated 20 such airframes together, they could only operate them for transoceanic flights, as going supersonic, despite more than halving travel times, brought another menace: sonic booms over the ground.

However, the story met a horrible ending on 25 July 2000, when Air France Flight 4590 crashed shortly after takeoff, killing all 109 occupants and four on the ground. Although the remainder of the fleet came back to service eventually, they were retired in 2003, 27 years after beginning their commercial operations.

Since then, aviation geeks have been wondering: Will there be another supersonic passenger jet, or will concerns like deafening sonic booms and exorbitant costs push things back again? However, companies like Boom Supersonic, Spike Aerospace, Exosonic, and Hermeus are bringing the concept back to life.

Promising days ahead?

In August 2022, American Airlines pre-ordered 20 Overture aircraft from Boom, with the option to purchase an additional 40. With a $10 million initial investment, Japan Airlines too followed suit with a pre-order for an additional 20, and United Airlines promised to purchase 15 from the venture.

Boom claims that the jets, which are anticipated to be built in 2025 and make their flight by 2029, will carry 80 passengers on over 600 routes and reduce travel times by up to 50% compared to their subsonic counterparts.

Private companies are not the only ones participating; NASA is developing the X-59, a supersonic aircraft, through its “Quesst” programme. Its purpose is to reduce the noise of the infamous “boom” in order to avoid the problems of the Concorde, which was only permitted to reach supersonic speeds over the ocean.

In order to measure the ground response to the sound, the jet is scheduled to fly over a few residential communities in the United States in 2025. The data will then be submitted to the International Civil Aviation Organisation in an attempt to change noise regulations. Opening hundreds of new airline routes to supersonic travel could result from its success.

According to Boom, passengers could travel from Miami to London in less than five hours, Tokyo to Seattle in four and a half hours, and New York to London in three and a half hours.

According to reports, Spike, which is creating an 18-passenger business jet that might be completed by 2028, is trying to increase speed even more in order to transport passengers from London to New York in as little as 90 minutes.

While Boom is aiming for net zero by 2025 and says Overture will “run on 100% sustainable aviation fuel, making it the first new commercial aeroplane to have such capability,” Spike is aiming for net zero carbon by 2040.

As per Boom, its jets will have “engine updates, without afterburners, and an automated noise reduction system” to ensure takeoff is no louder than subsonic planes. Exosonic, which is developing a 70-passenger aircraft with VIP suites, says its sound will be quieter than that of regular traffic. Both companies are also working on lowering the boom through various technologies.

Battling headwinds

However, not everyone is assured about the prospects of supersonic flights being an instant hit in the coming days. Teal Group Senior Consulting Analyst Bruce McClelland is one of these sceptics.

“The problems are both economic and political. The faster an aeroplane flies, especially supersonically, the more it encounters an exponential increase in drag. That requires a lot more engine thrust, which requires a lot more fuel. Concorde needed as much as eight times more fuel to move one passenger from New York to London compared to a Boeing 747, so that’s expensive,” he said.

“There’s also the cost of developing, building and testing a plane. The development of modern jetliners runs into the multiple billions of dollars. I don’t see there being sufficient demand for a large production run, so it’s going to have to be priced pretty high. Given the physical limits, I don’t see a way to overcome this,” he added.

The United States and the Soviet Union developed but later gave up on supersonic flight due to prohibitively high costs. Concorde was the only successful endeavour, and the French and British governments provided funding for it.

Kevin Michaels, Managing Director of AeroDynamic Advisory, said, “Boeing was developing its own supersonic aircraft back in the 1960s, and it dropped out when it saw that the US government wasn’t going to support it. There are only two airlines that used Concorde, BA and Air France, and it never made money for the manufacturers that produced it. If the manufacturer can’t make money producing it, then it’s not going to be a viable market in the long run. The economics of being part of an airline are what ends up killing you, and that was one of the biggest lessons from Concorde.”

Additionally, there is a great deal of uncertainty regarding the engine’s manufacturer. With a statement stating that the commercial aviation supersonic market was “not currently a priority,” Rolls-Royce recently ended its collaboration with Boom. Since then, Honeywell Aerospace, Safran, and General Electric have all declared that they will not be manufacturing the engine.

“That left only Pratt & Whitney, and they said it’s not core to them and their brand, and they’re focusing on other projects. Engines take years and years and years of development, and a brand new one costs billions of dollars. These five companies are the only companies that have a remote chance of pulling this off technologically, so as it stands, Boom doesn’t have an engine,” Michaels added.

Boom is currently developing a purpose-built turbofan engine called “Symphony” for its Overture supersonic airliner.

Ecological issues

Boom will probably encounter more obstacles even if it sorts out the engine hurdle. NASA’s project probably wouldn’t be ready in time for Boom’s anticipated 2029 takeoff, and it’s unclear if the sonic noise problem can be resolved.

Additionally, there is the matter of customer demand. Flights across the Pacific that could have attracted customers are not feasible due to the current supersonic jets’ limited range before requiring refuelling.

Most importantly, a lot of people have questioned the sustainability claims at the moment, as the supplies of sustainable aviation fuel are still scarce.

“The claim that Boom’s flights will be offset by using only sustainable aviation fuel strikes me as stretching credibility. The only way that works is if the producer of a supersonic aircraft has its own source for SAF. Otherwise, operators will be forced to queue up with everyone else and take whatever they can get their hands on, most of which will probably be plain jet fuel. SAF right now is more expensive than regular jet fuel, so it just adds to the operating costs. Right now, known SAF production represents only a small fraction of a per cent of the total worldwide demand for jet fuel, and the most optimistic scenario I’ve seen is that this might ramp up to 30% by 2050,” McClelland said.

There are chances of airlines ending up facing criticism if they use their limited supply of SAF for supersonic travel (pumping multiple times as much fuel per passenger as a regular aircraft). Aerion Supersonic, the massive business jet company that went out of business, is all too familiar with these challenges. A group of industry experts founded the company in 2004, determined to create a $120 million supersonic aircraft that would first take to the skies in 2029. At the time, this project was regarded as the most promising option in the supersonic world.

However, it never built an aircraft and, after 17 years of trying, declared bankruptcy, stating that it was having difficulties in raising capital to achieve the next steps in the manufacture and regulatory approval of the company’s supersonic aircraft.

“Aerion was very highly thought of in the industry. It was aimed at business aviation and charter companies rather than commercial flight, so there was a much smaller capacity. It had a really interesting design, they were extremely well-funded, and they had some of the big OEM manufacturers on board. Then one day, they announced chapter 11 bankruptcy, and it was over. There’s only been one successful entrant into the jetliner business globally, and that’s Embraer in Brazil,” Michaels noted.

Future possibilities

None of this means that supersonic travel will never again be possible. However, the challenges indicate that, should it ever regain traction, the business aviation sector is more likely to see success than large-scale commercial aircraft. That’s at least the opinion of Michaels.

“Demand for supersonic travel is there, but it’s very niche. It doesn’t lend itself to commercial airlines. It lends itself to lower capacities, and ultra-high-net-worth individuals. So, is it something that’s going to revolutionise the airline industry as we know it? I don’t think so,” he said.

There is still hope that we could one day be flying around the world in a few hours and in a semi-sustainable manner if NASA’s project is successful. This is because sustainable aviation fuel will become more widely available, operating costs can be reduced, and supersonic jets can travel farther.

We may have to wait a bit longer before we can hop over to Australia in half a day, though, as reaching that destination by 2029 appears to be more of a marketing gimmick for airlines like United and American.

Supersonic travel remains a captivating vision for aviation’s future. While technical, financial, and ecological challenges persist, ongoing innovations and renewed interest suggest the dream of faster-than-sound passenger flight may yet become reality again.

The post Supersonic jets set for takeoff again? appeared first on International Finance.

Employees were reportedly informed that they would need to move closer to the company’s offices in North Carolina or New York to meet the new office-working requirement. Depending on their length of service with IBM, employees who choose not to relocate will be offered a severance package worth up to six months.

“Managers are being instructed to reach out to their direct reports and ask that they relocate to Raleigh, North Carolina, or Poughkeepsie, New York. They must be within 50 miles of one of these sites. If not, they will be offered severance,” a spokesperson told The Register.

The Finance & Operations division is believed to be a costly unit for the company, but by employing artificial intelligence (AI), hiring fresh graduates, and outsourcing, IBM hopes to cut costs. A source confirmed to The Register: “AI will be implemented to replace people.”

The term “soft layoff” refers to the fact that IBM’s RTO requirement has encouraged voluntary resignations from staff members, thereby avoiding official layoffs. The company has previously been accused of discrimination when implementing layoffs.

IBM CEO Arvind Krishna said, “Three years ago, we laid out a vision for a faster-growing, more profitable IBM. Two weeks ago, in the company’s annual report, I was pleased with the efforts made by the IBM team to fulfil or surpass our promises. Revenue increased by just 1% year-over-year for both the quarter and the entire year. By 2025, IBM aims to increase its revenue by 5%.”

“The CEO has stated that thousands will be replaced by AI, and management is currently heavily focused on cuts and slowing hiring,” the source said.

The post IBM under fire as return-to-office order suspected of replacing human staff with AI appeared first on International Finance.

Blackstone offers its clients a diverse range of investment strategies, while operating through multiple segments, including credit, real estate, hedge fund solutions, and private equity.

Blackstone has made a name for itself in the private equity space by managing and acquiring businesses in a range of sectors. The ability of the company to drive value creation within its portfolio companies by utilising its operational expertise and strategic insights is what makes it an expert in this field.

In the real estate sector, Blackstone has accumulated a sizable portfolio of properties across the globe, consisting of residential complexes, office buildings, hotels, and industrial spaces. Capitalising on opportunities in both established and emerging markets, the firm handles asset management, development projects, and property acquisitions through its real estate arm.

Institutional investors seeking diversified exposure to alternative investments are served by Blackstone’s hedge fund solutions segment, which includes fund-of-funds, customised portfolios, and advisory services. With the use of sophisticated investment strategies, the company’s hedge fund offerings are intended to reduce downside risk and provide investors with attractive risk-adjusted returns.

Furthermore, Blackstone’s credit division is concentrated on making investments in a range of credit-related instruments, such as direct lending, mezzanine financing, and distressed debt. This segment pursues opportunistic investments in global credit markets while offering flexible capital solutions to businesses looking for financing options.

The ability of Blackstone to recognise and seize investment opportunities in a variety of asset classes and market conditions is ultimately what drives the company’s success. Blackstone is still a major player in influencing the global alternative investment market because of its proven track record of providing investors with substantial returns and its dedication to excellence in investment management.

The brain behind this successful venture is 76-year-old Stephen A. Schwarzman, chairman and CEO of the Blackstone Group.

Who Is Stephen Schwarzman?
• Stephen Schwarzman was raised in a Jewish family in Huntingdon Valley, Pennsylvania
• He attended the Abington School District in suburban Philadelphia and graduated from Abington Senior High School in 1965
• Stephen Schwarzman briefly served in the US Army Reserve before attending Harvard Business School, where he graduated in 1972
• His first business was a lawn-mowing operation when he was 14 years old, employing his younger twin brothers, Mark and Warren
• Stephen Schwarzman’s first job in financial services was with Donaldson, Lufkin & Jenrette, an investment bank that merged with now-defunct Credit Suisse in 2000
• He worked at the investment bank Lehman Brothers, became a managing director at age 31, and then head of global mergers and acquisitions
• Stephen Schwarzman was listed as a member of the international advisory board of the Russian Direct Investment Fund in September 2011
• According to the Bloomberg Billionaires Index, he had a net worth of $32 billion as of October 2022
• Stephen Schwarzman was named one of Bloomberg’s 50 Most Influential People of the Year in 2014 and 2016
• He and his wife Christine gave USD 25 million to the Animal Medical Centre of New York in New York City in 2021

Blackstone to bid for L’Occitane

According to Bloomberg News, the private equity firm has been investigating possible acquisition offers for L’Occitane and has completed preliminary due diligence. Blackstone is thinking about collaborating on a buyout with Reinold Geiger, the billionaire chairman of L’Occitane.

In Hong Kong trading, L’Occitane’s shares increased by 0.8%, valuing the company at approximately HK$38.4 billion (USD 42.9 billion). Geiger thought about going private with the company in 2023, hoping to relist it in Europe at a higher price. Ultimately, he gave up on the concept, which caused L’Occitane stock to plummet.

Over 70% of L’Occitane is owned by an investment vehicle that Geiger ultimately controls, according to exchange filings. There is no guarantee that the current discussions will result in a proposal. L’Occitane might draw interest from other suitors, Bloomberg stated further.

The year 2010 saw the Luxembourg-based company going public on the Hong Kong stock exchange. The stock has since declined, reaching a peak in 2022 at a price more than double that of its IPO.

L’Occitane’s enterprise value was approximately 10 times its estimated earnings before interest, tax, depreciation, and amortisation, compared to peers that trade at an average of more than 13 times.

The post Business Leader of the Week: Meet Stephen Schwarzman, founder of Blackstone Group appeared first on International Finance.

SIG began as a Philadelphia Stock Exchange options trading company and has since grown to include trading in equities, fixed income, futures, commodities, and derivatives, among other financial services.

The business stands out for its quantitative trading tactics, which use cutting-edge technology and in-house developed algorithms to execute trades across a variety of asset classes.

SIG’s unique approach to trading, which combines exacting quantitative analysis with state-of-the-art technological infrastructure, is credited with its success. Because of this, SIG has been able to successfully negotiate intricate market dynamics and hold a competitive advantage in the quickly changing financial landscape.

SIG has expanded its range of business endeavours beyond trading, encompassing market-making, proprietary trading, investment management, and venture capital investments. The company has made a name for itself as a leader in market-making, supplying liquidity to international exchanges and enhancing market efficiency. SIG also oversees many hedge funds and investment vehicles for high-net-worth individuals and institutional investors.

SIG prioritises research and development, making significant investments in human capital and technology to spur innovation in quantitative models and trading strategies. The company’s culture encourages intellectual curiosity, teamwork, and creativity, which draws top talent from a variety of fields, including finance, engineering, computer science, and mathematics.

SIG is steadfast in its adherence to its fundamental principles of honesty, quality, and ongoing development despite its growth and international presence. The company follows strict risk management procedures to protect capital and preserve stability in erratic market circumstances. Furthermore, SIG actively participates in charitable endeavours, funding projects related to community development, healthcare, and education.

Susquehanna International Group is a leader in quantitative trading, utilising knowledge and technology to prosper in the fast-paced financial industry. Rich in innovation, dedicated to quality, and possessing a wide range of skills, SIG is still influencing the direction of the world’s financial markets.

The brain behind this successful venture is 67-year-old Jeff Yass, who is the Co-founder and MD of the company.

Who Is Jeff Yass?
• Jeff Yass grew up in a middle-class Jewish family in Queens, New York, United States
• In 1951, he graduated with a BS from LIU Brooklyn, and worked as an accountant, rising to chairman of Datatab Inc
• Jeff Yass and five fellow students became friends and later co-founded Susquehanna International Group in 1989
• In 2002, he became a member of the board of directors of the libertarian Cato Institute
• In 2015, Jeff Yass donated $2.3 million to a Super PAC supporting Rand Paul’s presidential candidacy
• He has contributed to education reform, including the Yass Prize for Sustainable, Transformational, Outstanding, and Permissionless (STOP) education, launched during the COVID-19 pandemic
• Jeff Yass has supported Save the Children, “Spirit of Golf Foundation”, People’s Emergency Centre Families First building, and the Franklin Institute’s Franklin Family Funfest Committee
• He appeared as one of 76 Revolutionary Minds in Philadelphia magazine in 2001
• Jeff Yass is the richest man in Pennsylvania and is one of the ten largest political donors in the United States
• According to the Israeli newspaper Haaretz, Jeff Yass is a major supporter of Israeli right-wing think tanks

SIG To Help Clients Buy & Sell Cryptocurrencies

In 2023, SIG announced that it would begin offering cryptocurrency trading to its clients.

Susquehanna’s Bitcoin trading desk currently employs about a dozen people, but it has also been covertly facilitating over-the-counter (OTC) cryptocurrency trades for more than two years. With the intention of eventually growing this service, the company will now start providing cryptocurrency to a select 500 of its clients.

“We believe that this technology and this asset class are going to change some facet of financial services, and we think it is going to exist forever,” Bart Smith, head of Susquehanna’s digital asset group said, the New York Times reported.

According to Smith, Susquehanna sees Bitcoin mainly as a store of value for the time being, but it thinks it or another cryptocurrency could eventually become the “native currency” of the internet.

Susquehanna will assist its customers in purchasing and selling real cryptocurrencies, such as bitcoin, ether, and bitcoin cash, in addition to bitcoin futures.

The company will be permitted to assist its clients in trading cryptocurrencies that the Securities and Exchange Commission (SEC) has classified as securities because it is registered with the SEC as a broker-dealer.

The post Business Leader of the Week: Meet Jeff Yass, co-founder and MD of Susquehanna Group appeared first on International Finance.

According to a trading statement for the three months ending on September 30, 2021, annual subscription value (ASV) growth, a metric of recurring revenue that analysts have been closely watching since LSEG’s USD 27 billion acquisition of data and analytics company Refinitiv in 2021, was 7.1%.

This follows investors being alarmed by a decline in the previous quarter.

The Tories and the LSEG board believe that the exchange could outperform rivals, with LSEG CEO David Schwimmer claiming that he was optimistic about the year’s total income growth, estimating it to be between 6% and 8% higher than the projection range.

The majority of LSEG’s revenue currently comes from data and analytics, which increased 7.2% annually to 1.29 billion pounds due to increased sales, more client retention, and a larger yearly price increase, according to LSEG.

With recoveries excluded, the group’s total revenue increased by 8% to 1.96 billion pounds, and its gross profit was 1.77 billion pounds.

Investors, however, are still worried that the Sunak government is not doing enough to ensure that the Londen stock markets remain somewhere near being competitive.

Brexit & The LSEG’s Fall

The London stock market was the most prestigious and prosperous in Europe. After Brexit, approximately 6 billion pounds (USD 7 billion) of daily trade in European Union stocks departed London for exchanges across the Channel.

The Brexit agreement between London and Brussels primarily excluded financial services, thus UK exchange operators are no longer able to offer European customers trading in Britain’s EU-listed equities. Nearly all trading in EU stocks currently occurs on the Continent, where companies in the UK capital like the London Stock Exchange Group, Cboe, and Aquis Exchange activated their venues for EU shares.

In November 2022, France took over the top spot as the most valued stock market in Europe. The incident is believed to be caused by a weak pound, worries about a recession in the UK, and rising sales at French luxury goods manufacturers, according to Bloomberg statistics.

For the first time since records began in 2003, Paris had surpassed London.

Because of the global scope of the listed companies on the London Stock Exchange, the exchange has long drawn an excessive amount of capital from investors compared to the size of the UK economy.

According to Citigroup, 11% of the MSCI World Index in 2000 consisted of UK-listed stocks. The MSCI World Index covers over 1,500 businesses that collectively represent most of the global stock market by value. Some 23 years later, the UK market accounts for barely 4% of the total, according to a Financial Times article.

Large IT IPOs on Wall Street and faster-growing international markets like China and India were attracting investors. In the meantime, UK pension funds have reduced their exposure to domestic stocks to find government bonds with more predictable returns.

Then came Brexit and years of political unrest that damaged Britain’s reputation among investors and damaged London’s position as the capital of European finance.

The combined effect has been detrimental to the FTSE 100, which has lagged behind the gains of benchmark exchanges in the US and the EU since the global financial crisis, even with a recent uptrend.

Concerns about London’s future returned as the world’s largest supplier of building materials, CRH, announced that it would be shifting its principal listing to the United States and chipmaker ARM, the jewel in the UK tech sector, indicated it would stage its initial public offering (IPO) on Wall Street. The biggest listed corporation in London, Shell, also thought about moving. There is a growing concern because the UK economy depends heavily on London’s markets.

When combined, the corporate actions appeared to be “a vote of no confidence in the investment environment here in the UK,” according to stockbroker CMC Markets UK’s chief market analyst Michael Hewson.

The Tory Solution

The Tories almost unanimously have a single ideological solution to the economic crisis in the United Kingdom. The frequently contentious leadership of Margaret Thatcher came to an end 33 years ago in 1990, and April 2023 marked the tenth anniversary of her passing.

However, her legacy lives on, with most of the fundamental ideas and ideology still being highly regarded by most Conservative MPs, members of the grassroots, and voters, as well as conservative media.

The BBC explains, “At its most crude, Thatcherism represents a belief in free markets and a small state. Rather than planning and regulating business and people’s lives, the government’s job is to get out of the way.”

It should be restricted to the essentials: defence of the realm and the currency. Everything else should be left to individuals, to exercise their own choices and take responsibility for their own lives.

The Tories are looking at fewer regulations and encouraging risks in corporations and shareholders as per Thatcheristic policies.

The City of London is up against fierce competition from financial hubs in the European Union and New York for initial public offerings following Brexit.

After being appointed minister of financial services earlier in November 2023, Bim Afolami stated on Tuesday that he would prioritise carrying out the government’s already announced changes, making sure regulators reach their goals for competitiveness, and encouraging “ownership.”

Britain recently announced that it might consider selling shares to the public in an effort to sell its 39% ownership in NatWest Bank.

Afolami stated at a Financial Times banking conference, “We are going to do more in the budget in the spring, to focus on promoting ownership. I am very passionate about this, particularly for younger people.”

Opinion surveys predict that the opposition Labour Party will win the general election in Britain in 2024. It supports promoting more private investment to boost the economy, but it has not yet outlined its proposals should it win the election.

Afolami admitted that the measures to promote ownership and convince pensions to participate in enterprises were long-term, but he did not provide a timeline for any modifications.

Having a greater appetite for risk, under supervision to prevent “bringing the house down” when things go wrong, is part of the solution, he said.

The Final Verdict

According to Afolami, the experience of businesses that choose to list in New York as opposed to London has not been “uniformly positive.”

The British government attempted to convince Arm, a British chip designer, to list in London rather than New York, as the latter’s shares have been trading below the offer price.

The reality is that LSEG has been in a difficult position since Brexit. However, hope remains as many companies are doing poorly at NASDAQ and are looking for alternatives.

The Tory leadership’s response has been chaotic so far. It is to be seen whether a change in policy would attract corporations and if the London Exchange will return to its glory days.

The post IF Insights: Will the London Stock Exchange be ever competitive? appeared first on International Finance.

The US Attorney’s Office for the Southern District of New York claimed in its lawsuit that the automakers were negligent in failing to include anti-theft devices in their vehicles, which would have made them much more difficult to steal, reports The Verge.

Hyundai and Kia have now agreed to a USD 200 million settlement on the matter.

According to the US National Highway Traffic Safety Administration (NHTSA), the “Kia Challenge” has led to hundreds of car thefts nationwide, including at least 14 reported crashes and eight fatalities.

A group of thieves known as the “Kia Boys” were reportedly posting instructional videos on YouTube and TikTok about how to steal Kia vehicles. The videos gave a tutorial on how to bypass the vehicles’ security systems using tools as simple as a USB cable.

As per reports, the thefts were easy to pull off due to a manufacturing flaw in the Hyundai and Kia vehicles produced between 2015-2019. These vehicles lacked electronic immobilizers, a device which prevents thieves from breaking in and bypassing the vehicle’s ignition. The feature is standard equipment in the United States on nearly all vehicles from the same period made by other manufacturers. The flaw came to notice in September 2022.

A class-action lawsuit was filed in a federal court in Orange County, California, alleging that Kias built between 2011 and 2021 and Hyundai cars built from 2015 to 2021 were “deliberately” built without “engine immobilisers”.

As the challenge got viral on social media, police in several American cities reported a serious rise in car thefts.

Coming back to the USD 200 million settlement, it will only apply to around 9 million vehicles that lack push-button ignitions and anti-theft immobilizers. In February 2023, the companies also offered free software updates to extend the length of the alarm sound from 30 seconds to one minute and to require a key in the ignition switch to turn the vehicle on. The settlement also includes up to USD 145 million for out-of-pocket losses for consumers who had cars stolen, as per a Reuters report.

Talking about the ‘Kia Challenge’ on TikTok, The US state of Milwaukee has seen reported thefts of 469 Kia and 426 Hyundai vehicles in 2020 alone. The same numbers spiked in 2021 to 3,557 and 3,406 respectively.

The post Viral TikTok trend lands Hyundai, Kia in legal soup in the United States appeared first on International Finance.

The recent financial crisis, sparked by the failure of three prominent American regional banks, has resulted in a slowdown in commercial real estate as borrowers worry that these lenders will reduce their capital supplies. Analysts and real estate professionals warned this could slow the sector’s further growth.

In the same week, both Silicon Valley Bank and Signature Bank failed. First Republic Bank followed the same direction soon. Large lenders to developers and owners of office buildings, rental apartments, shopping centres, and other commercial properties had accounts at Signature and First Republic.

Small banks own 4.4 times more exposure to US CRE loans than their larger counterparts as compared to big banks. CRE loans account for 28.7% of assets at those small banks, compared to only 6.5% at big banks. A sizable portion of those loans will need to be refinanced, further compounding problems for borrowers in the context of rising interest rates.

The office sector has a unique set of difficulties. Stronger fundamentals exist in several other CRE industries. Additionally, we don’t think prospective losses in the office sector will jeopardize the stability of nearby banks. The office sector is a minor portion of the economy in terms of GDP and wealth.

Nevertheless, the small bank lending channel more broadly does provide a macro risk, as tighter lending requirements and issues with profitability in the banking industry might limit the amount of financing available and drive up the cost for small and medium-sized firms. However, it is challenging to estimate this risk properly and there is a lot of uncertainty regarding potential offsets.

The struggling office sector is under increasing strain due to rising rates. Early on in the COVID phase, vacancies surged, and they have continued to rise ever since. The office vacancy rate, 12.5% as of 2023, is comparable to 2010, one year after the global financial crisis. The volume of office sales is currently getting close to its post-GFC lows.

The increase in remote work is the main cause of these difficulties. Even though more workers started returning to their workplaces in 2022, the overall amount of remote work is still seven times more than before the COVID period. Moreover, it’s not difficult to imagine the pain in the office sector getting worse given the Federal Reserve’s historically quick pace of interest rate increases over the past year, as well as the acceleration of layoffs in professional and business services and the obsolescence of older office buildings.

However, investors must keep in mind that there are two parts to the office market. Geographically specific challenges are arising and differently affecting property vintages, with Chicago and San Francisco facing far greater challenges than Miami, Raleigh, and Columbus. Newer office construction especially that completed after 2010 is experiencing significantly higher net absorption rates than earlier construction.

Increasing rates and limiting credit availability will inevitably cause problems for some borrowers. Although the sector’s current liquidation rate is low, we anticipate that over the next ten years, the total number of commercial mortgage-backed securities (CMBS) liquidations for the office sector will climb to about 20% (with total losses anticipated to be about 8.5%).

The figure below shows that this level of hardship is comparable to the sector’s levels in the years following the GFC, but, more importantly, it will likely take many years to manifest. Borrowers will probably make use of loan extension options shortly. Looking further out, it is anticipated that in 2025–2027, CMBS loan maturities will become increasingly difficult.

According to Trepp, a commercial real estate data company, First Republic had the ninth-largest loan portfolio in that market in the United States. Similarly, Signature had the tenth-largest loan portfolio before it failed.

In addition to offering most commercial real estate loans to businesses, midsize and regional banks are also part of a much larger market. Typically, banks package their loans into intricate financial products and sell them to investors to acquire additional funds to make new loans.

This implies that a reduction in lending may change how investors behave. An industry body estimates that commercial real estate made $2.3 trillion in economic contributions to the United States in 2022. However, analysts worry about a new recession because the industry hasn’t fully recovered from the pandemic’s damage.

“It’s a perfect storm right now,” declared Varuna Bhattacharyya, a real estate attorney with Bryan Cave Leighton Paisner in New York who primarily represents banks.

“We were already in a place with a much lower rate of originations,” Varuna Bhattacharyya said about the new loan applications that banks handle. So it’s challenging to avoid experiencing some worry and panic.

According to Varuna Bhattacharyya, lenders will be even more careful when approving loans for brand-new building projects other than the most high-profile “trophy deals.”

Borrowers now worry that banks will become more cautious about making loans. Even though the panic has generally subsided for now, regional banks may still be plagued for months by the possibility of another operational failure.

When new loan applications nearly reached a standstill in the fourth quarter of 2020, commercial real estate lending had started to recover from the depths of the COVID lockdowns for much of the previous year. In contrast, according to Trepp, the annual rate of commercial real estate loan origination by dollar volume increased by 18% in the fourth quarter of 2022.

Lending to the commercial real estate sector started to slow in January 2023, even before the Federal Deposit Insurance Corporation intervened to take over Silicon Valley and Signature.

According to Matthew Anderson, a managing director at Trepp, the commercial real estate loan growth rate in 2023 has already decreased by 50% compared to 2022 on an annual basis. He claimed that the Federal Reserve’s interest rate increases, which were beginning to impact the commercial real estate market, were partially to blame for the downturn. Moreover, since Silicon Valley and Signature’s failures, lending has likely decreased even further, according to Matthew Anderson. However, he added that the impact’s duration and depth are still uncertain.

Commercial real estate encompasses mortgages, building loans, and loans designed expressly for operating apartment complexes with multiple dwelling units. Commercial mortgage-backed securities, a market worth over $72 billion in 2022, are the so-called securitized products that include bank loans. It’s a different situation in 2023, though, as issuance of such bonds has decreased by 78% from 2022.

Daniel Klein, the president of Klein Enterprises, a Maryland-based company that manages commercial real estate, had recently discussed a construction loan for a new project with several banks. He claimed that one of the banks abruptly withdrew a term sheet for a loan after the banks failed.

Daniel Klein, whose family-owned company oversees around 60 office, retail, and apartment buildings, claimed that the bank had yet to justify its choice and was unsure whether the recent troubles in the banking industry had played a role. In the coming months, he predicted, as midsize banks become wary following the failures of Silicon Valley Bank and the Signature, loan terms from lenders will become more onerous.

“Banks are generally being more conservative than they were six or nine months ago. However, we’ve had good fortune. We have a lot of established local banking links.” he said.

According to Michael E. Lefkowitz, a real estate attorney with Rosenberg & Estis in New York, regional banks are an essential component of the commercial real estate ecosystem because their bankers spend a lot of time building connections with real estate developers and managers. However, large banks typically do not offer such “high-level service” to middle-market real estate companies.

When the FDIC revealed that it had sold virtually all of the remaining deposits at Signature Bank to a subsidiary of a peer, New York Community Bancorp, which is also a significant commercial real estate lender, some of the worries of real estate lenders eased a little bit. Following money withdrawals from the bank by corporate clients, including real estate companies and cryptocurrency investors, the banking authority took control of Signature on March 12, 2023.

One of the largest commercial real estate lenders in the New York metropolitan area before its bankruptcy was Signature.

A sign of precisely how many customers fled the bank before authorities intervened on March 12 to stop the flow was the $34 billion in client deposits that New York Community Bancorp acquired upon purchasing some of Signature’s assets, down from the $88 billion that Signature held before the bank ran.

There are concerns about whether other banks will step forward to fill the hole created by the demise of Signature, even with the selling of banking deposits to New York Community Bancorp.

According to the FDIC, New York Community Bancorp purchased loans totalling around $12.9 billion from Signature, most of which were business loans to healthcare organizations and wasn’t a part of Signature’s sizable commercial real estate portfolio. Therefore, the FDIC must still find a buyer for Signature’s primary portfolio of commercial real estate loans.

The FDIC official stated that the company “has not characterised the types of loans left behind” and that they will be “disposed of at a later date.”

Matthew Anderson of Trepp said, “I believe this indicates that Signature’s commercial real estate portfolio is still in limbo.”

First Republic’s home base in San Francisco, where Trepp utilizes an indicator to gauge the likelihood of default on bank-owned office complex loans, had the most trouble.

In anticipation of more Federal Reserve interest rate hikes and renewed calls for regulators to become more rigorous in monitoring bank risk-taking, banks are likely to reduce lending to retain capital and improve their balance sheets. Any reduction in new credit could delay the beginning of commercial construction and bring the economy closer to a recession.

Bank regulators will need to monitor banks keeping too many commercial real estate loans in their portfolios as they attempt to stabilize the financial system. This can lead to its own set of issues in a slowing economy.

The credit rating firm Moody’s Investors Service reported in 2022 that 27 regional banks already have significant concentrations of these loans on their balance sheets. According to the paper, the problem might become severe for banks if the economy enters a recession.

The post Banking concerns for US property market appeared first on International Finance.

Real estate in the future

New technology and an influx of finances are causing significant changes in the real estate sector. This surge in the capital should be taken as a hint that the real estate sector is getting ready for rapid transformations due to the emergence of new digital resources. Most importantly, investors must be prepared for blockchain technology, virtual reality, smartphone apps, and online property listing platforms’ influence on all facets of real estate transactions.

Investors will soon notice increased competition among websites that advertise properties, many designed to make it easier for prospective/current owners to acquire/sell their properties. Although websites like Zillow and Trulia have dominated the market for some time, other websites of a similar nature will still be developed.

Buyers and renters will have clear notions of what they are looking for when shopping for houses, thanks to the popularity of internet listing systems. Investors who want to stay ahead of the curve must adjust to buyers (and sellers) who have instant access to hundreds of real estate listings. Joining the bright home trend and including appliances and other elements compatible with new apps is one approach to stand out. These elements’ greater security and energy efficiency appeal to the tech-savvy demographics.

Many facets of the real estate transaction process will continue to alter as more smartphone apps get developed. Real estate agents can already sign and share contracts and other papers on their phones thanks to programmes like Docusign and Dotloop. Tenants can pay rent or contact landlords online using other apps like Buildium and RentTrack. As investors look for ways to automate the deal acquisition, property administration, and communications, these apps are anticipated to gain popularity.

Apps that use blockchain technology to support the legal aspects of a transaction are also likely to be released, which will be of interest to investors. They will concentrate on several topics, including exchanging crucial papers and transferring deeds or titles. Blockchain networks boost trust and eliminate intermediaries when purchasing and selling real estate.

Online real estate

Another emerging technology that will have an impact on the real estate industry is virtual reality. Even though 3-D walkthroughs and 360-degree images may be familiar to investors, their use is anticipated to grow. Investors may boost the number of property viewings without adding extra time or effort by offering prospective buyers a new method to experience properties. Buyers will be able to tour homes without ever going, thanks to recorded 3-D property tours.

Investors will be thrilled to learn that virtual reality software will be used for property viewings and may assist renovators in planning their projects. For instance, several apps may enable investors to observe staged rooms and renovations from their mobile phones. In addition, property developers and investors interested in raw land investments may benefit from virtual reality in real estate. According to Forbes, property developers should prepare for virtual reality applications that let users experience finished properties before construction even begins.

According to investors, introducing new technology will generally benefit all parties involved in real estate deals. Investors should consider these impending changes as methods to make business more dependable and efficient rather than worrying about new resources.

India-based proptech firm Square Yards launched its 3D Metaverse platform in August 2022 to showcase the future of real estate search and discovery through a high-end 3D digital twin of the city of Dubai, the next property investment destination. The platform brings cutting-edge technologies such as 3D, AI, VR, AR, and interactive real estate visualisation into play through its Metaverse app.

“With this solution, users can search from over 2000+ potential real estate projects across Dubai through its interactive 3D interface, get complete details of the project, and enter into the project metaverse as an Avatar,” the company said.

“Imagine searching for properties to buy, sell and rent across Dubai in high-quality 3D at true scale, visit the project building in VR, walk around the amenities and interiors, and interact with residents and salespeople virtually,” said Tanuj Shori, the company’s Co-founder and CEO, while interacting with the ET.

Rentd, a UK-based company is all set to launch an online property platform for Dubai, which will enable renters and landlords to conclude the entire rental journey online. Features on the platform include 3D virtual tours of villas and apartments to signing contracts digitally.

Real estate agents’ future

One of the significant developments in real estate investing is the growing gap between homeowners and real estate agents. As a result, many wonders if listing a home on their own or working with a professional agent are preferable.

Real estate brokers are still in need in the 21st century, and it isn’t easy to see a time when they won’t be required. Unfortunately, they provide the typical homeowner with far too much value.

To begin with, their bargaining abilities and knowledge of the local real estate market will always help sellers get the best price for their homes, homeowners who attempt to sell a home risk losing money with only one hiccup. The buyer’s representative might negotiate a lower price. Everything may go right with a qualified agent to represent the concerned parties’ interests in a transaction.

Agents have the potential to sell a home more quickly in addition to getting the most money for it. They already have a qualified buyers list in addition to marketing initiatives. Before the house is formally listed for sale, the proper agent can already have a buyer in mind.

There is no denying that a competent real estate agent is priceless, particularly for those in the investing sector, but a few trends need your attention. For Sale by Owner (FSBO) platforms, in particular, are starting to carve out a niche among a small group of sellers.

Selling without an agent

In the last two years, almost 17% of homebuyers felt they didn’t need to use a real estate agent, according to a poll done for Redfin. The survey, made possible by SurveyMonkey Audience, found that discounted commissions are becoming increasingly common. One-third of the homeowners who did utilise an agent to buy a house claimed that their representative provided incentives in the form of a refund or savings of more than $500.

Realtors frequently charge 6% of the sales price in exchange for their services. As a result, commissions can exceed $14,000 on a single-family home with a median value of $230,000. At that point, the idea of doing without a Realtor becomes alluring.

Over half of all homeowners in America would consider selling their property without a Realtor’s assistance, according to research from ForSaleByOwner. At the same time, 55% of Millennials admitted they planned to offer their house using the “for sale by owner” sales strategy.

With today’s consumers, particularly millennials, exerting more control over the purchasing and selling process than ever, the real estate market is undergoing a “dramatic transformation,” according to Lisa Edwards, director of the business strategy at ForSaleByOwner.

The peak of the 2015 selling season saw an astonishing 57% growth in listings on ForSaleByOwner, and nothing indicates that the trend won’t continue. Yet it’s vital to remember that most sellers are from the Northeast. Large cities with large populations, like New York, Boston, and Philadelphia, seem more interested in skipping the agency process. Even the National Association of Realtors (NAR) agreed that FSBO transactions are more likely to occur in major urban regions.

Today, without the assistance of an agent, [sellers] may quickly comprehend market conditions by using free internet pricing tools, evaluating recently sold homes, and looking at homes currently for sale online, according to Edwards.

Sites like Redfin have proven to be very beneficial for sellers. While typical agents can get away with charging twice as much, Redfin only charges sellers 1.5% of the transaction price. The difference may result in a $3,750 savings for sellers of a $250,000 home.

There is no denying that the way individuals view selling has altered due to internet listing services. Particularly agents have been forced to respond to the development of technology.

A Redfin representative stated that “real estate agents are reacting to increasing competition in the market,” adding that traditional brokers had to adapt their business practices to remain competitive.

Of course, there is no reason to think trends will force real estate agents out of business. FSBO and other websites have made it simpler for the typical seller to advertise a home, but real estate brokers still have a position in the industry.

The housing market in the future

Real estate property markets are anticipated to change when millennials, a new wave of homebuyers, enter the market. The Urban Land Institute report indicates that millennials are beginning to enter the real estate market with an emphasis on suburban locations.

Although suburban house developments are nothing new, the real estate market may see fascinating changes in these locations. It has been discovered that millennial homebuyers are more interested in walkable neighbourhoods and close to community resources.

While suburban areas can represent fresh markets for mixed-use and retail spaces, this should be good news for investors looking to enter the commercial sector.

Real estate investors may run into renters of all ages looking for more facilities in metropolitan regions. Parking and trash collection may be regarded as conveniences in the current market, but more is needed in the future. In the end, new amenities like roof access, communal spaces, and even specific offices will receive more attention in real estate.

Although they will only develop further, investors who own multifamily buildings may see these changes as early as 2023. Those that want to stay in the lead should monitor similar properties and alternative neighbourhood options.

Luxury properties will become more prevalent in real estate in the future. This is because inventory (especially luxury houses) will grow as housing demand rises to accommodate homebuyers.

Investors will see the highest rises, per Realtor.com, in locations like San Jose, CA; Seattle, WA; Boston, MA; and Nashville, TN. Yet, these developments should still be anticipated by investors nationwide.

Finally, green building techniques and eco-friendly housing amenities will likely become more prevalent, which is good news for all real estate agents.

Investors should only partially discard the real estate industry’s eco-friendly segment, even though tax policies may have reduced some motivation for eco-friendly home upgrades.

According to the National Association of House Builders, 80% of homebuyers would be favourably influenced by energy efficiency. The survey covered Energy Star appliances, above-code insulation, and adequately insulated windows.

These qualities should be kept in mind by real estate investors who specialise in new construction and house flipping and should be incorporated as necessary.

The real estate housing market’s future holds some intriguing adjustments overall. Accordingly, investors should monitor their individual needs to determine whether to capitalise on developing trends.

Experts’ prediction on the sector’s future

Finding information about the future of real estate from more seasoned investors is one of the finest methods to do it. Individuals who have been investing for ten or more years have witnessed (and adjusted to) significant changes in how the real estate market operates. In many situations, these investors have improved their ability to predict where real estate may be headed.

Than Merrill, CEO of FortuneBuilders and a real estate investor, has invested for over 15 years. So when asked where he saw the real estate industry going, his primary responsibility was technology.

In an interview with Disruptor Daily, Merrill stated that the advent and rising popularity of cryptocurrencies and blockchain would significantly impact transaction times. With greater access to these networks, he continued, buyers and sellers will operate more quickly.

On a related point, some investors have made assumptions about how technology will affect relationship dynamics and transaction timelines in the real estate sector. Buyers and sellers, landlords and tenants, and even investors and contractors are included.

For instance, Dominique Burgauer, CEO of Archilogic, stated that cutting-edge businesses are currently driving the adoption of new technology. For example, almost all phases of a building’s existence will soon be managed online, according to Burgauer. Likewise, the real estate sector will be online, from development and furnishing through sales and upkeep.

According to this perspective, many investors might wait for rival companies to lead the way with innovative technologies. Investors should instead concentrate on finding the best ways to adopt these new technologies before their rivals can.

Furthermore, according to Property Radar, “local investors need to concentrate more on off-market real estate purchases and value development. In general, Wall Street doesn’t want any issues with either people or property. Deals that don’t scale include heavy fixers, probate, liens, unclear titles, and hoarder homes. Also, they need to aggressively investigate upzoning, accessory housing units, or innovative financing options. To compete, our sector needs to keep becoming more professional.”

Investors should concentrate on research, education, and mentoring to adapt and evolve with industry titans. Although there is still much to learn about the real estate market’s future, investors can develop their professional judgement and take action when necessary by continually experimenting with new ideas.

Emerging technologies, interactions between buyers and agents, and shifting homeowner demographics will influence future trends in real estate. To succeed, real estate investors must develop the ability to flourish in this environment.

The real estate market is changing significantly due to new technologies that will shorten closing times, online listing sites that will make purchasers more knowledgeable, and the entry of new age groups. Even professional forecasts point to future market shifts. As a result, investors have a lot to look forward to regarding the future of real estate.

The post Technology & the future of real estate appeared first on International Finance.