Starting with early rule-based programmatic trading in the 1970s and 1980s, finance firms have long applied statistics and computing to markets. In the 1990s and 2000s, machine learning and neural networks added sophistication.

For example, hedge funds like Renaissance Technologies hired PhDs to use AI for pattern recognition. Today, we stand at a new inflexion point with generative AI and large language models that can process massive streams of text and data and even suggest novel trading ideas. As one Wharton finance expert notes, AI’s evolution “from algorithmic trading to personalised advice” has made finance “fertile ground for AI innovation.”

Applications of AI in finance

AI is now embedded in many financial processes. Broadly, AI serves in trading, analysis, and operations. In trading, automated systems place orders faster than any human can. High-frequency trading algorithms, often powered by machine learning (ML), make thousands of small trades every second to exploit tiny price discrepancies. Many of the largest trading venues are dominated by such “automated trading” in highly liquid assets. In other domains, AI systems read and summarise information.

For example, NLP tools scan newsfeeds and social media to gauge market sentiment, a process known as sentiment analysis. A sudden burst of negative tweets about a company might trigger selling by algorithms. In risk modelling and compliance, AI churns through vast data to calculate creditworthiness or portfolio risk in real time.

Advisors and insurers use AI to predict defaults or claims, while banks deploy chatbots to handle customer queries. In short, AI touches everything from trade execution to loan approvals and is effectively “democratising” access to analytics that only big institutions once had.

The influence of AI and algorithms is clearest in a few headline-grabbing episodes. In January 2021, the GameStop saga showed the power of social sentiment and automated strategies. A surge of retail traders on Reddit’s WallStreetBets sent the share price of the video-game retailer GME skyrocketing over several days.

Hedge funds that had short positions in the stock rushed to close them. Eventually, trading apps temporarily halted trading, igniting a political firestorm. Researchers note that “retail investors using the Robinhood platform” collectively drove the sharp price swing. Although that episode was driven by human coordination online, it attracted algorithmic responses, with some trading bots detecting the rapid price trend and either piling in or pulling out, amplifying volatility.

AI-driven trading has also featured in the activity of quantitative hedge funds. Firms like Renaissance Technologies, Two Sigma, DE Shaw, and others have long used machine learning to devise strategies. A 2019 survey identified those four as pioneers in AI-driven investing. These firms process vast alternative datasets, from satellite imagery of retail parking lots to aggregated price patterns, looking for subtle predictive signals.

For example, AI can spot that a retail chain’s lawns are greener or read thousands of local news sites to update earnings estimates. In late 2022, Reuters reported Renaissance’s quant funds using models to target returns. Although strategies are secretive, experts agree that AI “provides a competitive advantage” in systematic trading.

AI and social media can also combine in troubling ways. Studies and news accounts warn of sentiment manipulation using bots. In a recent report, experts imagined hundreds of AI-generated social media profiles pushing a narrative about a stock. Real people reacting to the buzz drive the price up or down, while those who detect the narrative profit.

The danger is that neither the promoter nor some of the manipulators even realise they’re part of a larger AI-driven scheme, making enforcement hard. In practice, regulators have seen smaller-scale attempts in crypto and DeFi, where “malicious actors…deploy AI bots” on platforms like Telegram to hype assets.
These examples highlight how automated sentiment analysis and engagement can influence markets, sometimes legitimately, with bots surfacing true trends and at other times through coordinated pumping.

Speed, scale and smarter markets

The attraction of AI in finance is clear, as it does things humans cannot. Speed and automation are paramount. Machines can execute orders in microseconds and monitor markets around the clock, far faster than any trading floor. This rapid processing tightens bid-ask spreads and improves liquidity in normal times.

As the IMF notes, technology has “improved price discovery, deepened markets, and often dampened volatility” in normal periods. AI also excels at scalability and data processing. Financial markets generate enormous volumes of data on prices, news, social posts, filings, and satellite images, and AI can sift through it all.

Advanced neural networks and LLMs (Large Language Models) can turn unstructured text into structured signals. For instance, a generative model can instantly read a regulatory filing or earnings call transcript, flagging risks or opportunities. The IMF notes that generative AI lets investors “process very large amounts of unstructured, often text-based, data,” which can improve forecasts and price accuracy.

Another benefit is pattern recognition and precision. AI algorithms can spot complex statistical patterns that humans cannot see, such as nonlinear relationships or high-dimensional correlations.

In portfolio management, for example, deep-learning models and reinforcement learning (RL) can adapt trading rules over time. Quantitative analysts now use RL to optimise asset allocation dynamically, a method well-suited for constantly shifting markets.

These models “identify complex patterns in large datasets” by using millions of parameterised rules, going far beyond traditional formulae. In effect, AI can tailor strategies to ever-changing conditions, learning minute details of market microstructure.

This leads to efficiency and consistency, and routine tasks like compliance checks or customer service get automated via RegTech tools and chatbots, freeing humans for higher-level thinking. In trading, even a tiny improvement can be valuable. A recent AI pilot by HSBC reportedly found a quantum-enhanced model that improved trade-fill predictions by 34% over classical methods.

Finally, AI can open new markets and lower costs. According to the IMF, AI tools are reducing barriers to entry and making it feasible for smaller firms or even individuals to analyse less-liquid markets like emerging debt or certain commodities. By automating research, coding, and data gathering, generative AI might lower the expertise needed to trade exotic assets.

In retail finance, AI-powered robo-advisors have democratised wealth management. One report notes that about half of retail investors say they would use ChatGPT or similar AI to choose or rebalance investments.

This suggests AI is making advanced analysis available to “anyone,” not just Wall Street. Overall, proponents argue these gains, faster reactions to news, more thorough analysis, and automation, should make markets more efficient and investors more informed.

Herding, black boxes and volatility

AI in finance may sound like an interesting and exciting concept, but it is not risk-free. A key concern is model correlation or “monoculture.” When many firms use similar data and algorithms, their trades tend to move together. Regulators and economists warn that this can amplify swings.

For example, if numerous deep-learning models all see a similar signal, they might simultaneously sell stocks, creating a cascade. The Bank of England and the SEC have warned that advanced AI’s “hyper-dimensionality” and shared data sources could lead to just a few dominant models or data providers. In practical terms, a “monoculture” of strategies can increase market correlations and herding. In stressed markets, this may cause liquidity to evaporate suddenly.

A recent IMF analysis noted that many algorithmic funds include safety mechanisms that can all activate at once, causing feedback loops. The 2010 “Flash Crash” is a cautionary example of an automated sell order in one market leading to a chain reaction, briefly knocking 1,000 points off the Dow within minutes.

Though that crash predated today’s AI, it illustrates the danger of automated systems acting in unison. Experts now worry AI-driven trading could produce even faster and larger moves.

Closely related is model opacity and explainability. Modern AI models are often “black boxes” that even their designers cannot fully explain how a specific trading decision was reached. This poses problems for oversight. If an AI fund suddenly accumulates a large position in an obscure asset, regulators might not understand why.

The IMF notes that market participants insist on human oversight and explainable strategies, avoiding purely “black box” approaches. Likewise, a recent Sidley (law firm) report warns that deep-learning and reinforcement-learning systems can have “emergent behaviour” that current market rules aren’t built to catch.

For example, if an AI learnt to detect fraud or manipulate prices in some non-obvious way, standard surveillance systems might miss it. The opacity also raises ethical concerns. How do we verify that AI decisions are fair and unbiased? Finance is littered with historical biases, so an AI trained on past records might perpetuate discrimination. Wharton researchers point out that “bias in AI models is particularly pertinent” in finance, especially lending and insurance.

There are also privacy and manipulation issues. Bad actors can use AI to tailor scams or spread disinformation. SEC Chair Gary Gensler warns that AI-driven narrowcasting can facilitate fraud by zeroing in on individuals’ vulnerabilities. Indeed, regulators have already flagged concerns about AI-generated “deep fakes” of company announcements or rumours that could jolt markets.

Finally, there is the risk of systemic volatility. Many worry that AI might make crises worse by speeding up decision-making. In turbulence, when computers pile into or out of trades in milliseconds, prices can swing violently.

The Sidley report cites the IMF in noting that many AI strategies include circuit-breaker logic that all trigger together under unprecedented moves, risking a sudden freeze of liquidity. In other words, while AI may “damp down” routine volatility by making markets more efficient, it might also set the stage for faster, sharper shocks. Small errors or adversarial attacks on widely used models could propagate quickly across markets. There’s also a concentration risk, and just a few tech firms provide the most advanced AI services and cloud infrastructure, so outages or cyberattacks could disrupt financial systems more broadly.

Governance meets technology

Awareness of these issues is growing. Governments and regulators worldwide are moving to govern AI in finance. In the EU, for example, the new AI Act will classify many financial AI systems as “high-risk” and impose strict obligations.

Practices like AI-based credit scoring or risk pricing will have to meet transparency, data quality, and audit requirements. The stated goal is “consistency and equal treatment in the financial sector.”

Financial institutions are also starting to set their own AI governance. Many banks now require human sign-off on automated strategies. Investment funds maintain “model risk management” teams to test how strategies behave under stress. After the GameStop episode, social platforms began cracking down on stock-promo groups. And financial regulators update rules in light of faster trading speeds.

Still, experts say more will be needed. For example, regulators worry about a lack of transparency when nonbanks use cutting-edge AI outside full supervision. There are calls for international coordination, like the Financial Stability Board surveying AI preparedness in different countries.

Another trend on the horizon is quantum computing. While today’s AI uses classical computers, quantum machines promise even more power. If scalable quantum computers arrive, they could revolutionise optimisation and simulation problems in finance.

Banks are already experimenting. In 2025, HSBC announced a pilot with IBM showing that a quantum algorithm could predict bond trade outcomes 34% better than classical methods.

UBS, Citigroup, and others are researching quantum for portfolio optimisation and risk analysis, and analysts estimate the “quantum technology” market could reach $100 billion by 2030.

In plain terms, quantum computing could solve certain portfolio or pricing problems much faster than today’s fastest supercomputers. However, practical quantum advantage remains in early stages, and much of that promise is years away. Even so, finance leaders like HSBC’s quantum head call this a “new frontier” in computing for markets.

Tale of two traders

The AI wave affects big institutions and small investors differently. Large financial firms such as banks, hedge funds, and trading firms have the resources to develop sophisticated AI. They run vast data centres, hire machine-learning experts, and deploy cutting-edge models.

These institutional players have led the AI adoption for over a decade as they’ve used automated algorithms in HFT and complex derivatives trading. They also invest in AI for risk management and compliance. Because of their scale, they have an edge in computing speed and data access.

Retail investors have lagged but are catching up. The same chatbots and analysis tools that institutions use are now available to individuals in a lighter form. As one industry report noted, about half of retail investors say they would use AI tools to pick or adjust investments, and around 13% already do. User-friendly platforms now offer AI-driven advice and portfolio screening.

For example, retail-friendly robo-advisors automate investing for individuals with modest accounts. Even individual day traders are experimenting with off-the-shelf AI bots or sentiment-tracker apps. Indeed, the widespread curiosity about ChatGPT and AI has “democratised” access to analysis once reserved for big banks. One former UBS analyst remarked that using ChatGPT for stock research was akin to “replicating many workflows” of an expensive Bloomberg terminal.

Balancing innovation and stability

AI’s role in finance is growing fast. As the IMF puts it, generative AI is the “latest stop on a journey” where technology incrementally improves markets. Its benefits in faster processing, new insights from data, and lower costs have already transformed many aspects of trading and investment.

But the journey is not without bumps. Our analysis shows that there are real risks that correlate with AI models, as they could unintentionally synchronise market behaviour, create opaque algorithms, trigger flash crashes, and mislead investors.

Addressing these issues will require vigilance and innovation on their own part. Regulators are awakening to the challenge, calling for AI governance frameworks and updating rules for our faster, more complex markets.

Financial firms are instituting controls on things like explainability requirements and kill switches for trading bots. Meanwhile, new technologies on the horizon, like quantum computing, promise even more powerful tools.

In the end, the AI transformation in finance mirrors other revolutions by creating opportunities and pitfalls. The central question will be how these systems are deployed. Used wisely, they can make markets more efficient and accessible to more people. Used recklessly, they could amplify our worst crashes or widen inequalities.

For investors and policymakers alike, the task is to harness AI’s ingenuity while keeping our collective financial system resilient. Industry leaders must ensure AI markets remain “transparent, fair, and inclusive,” even as the algorithms get ever smarter.

The post AI drives change in global markets appeared first on International Finance.

This comes less than three months after the stock soared on a meme stock rally that began with an argument that the company could be the next Carvana, an online used car retailer based in Tempe, Arizona. The company, which buys and sells residential real estate online, has overhauled its leadership team about a month after CEO Carrie Wheeler stepped down. It has also decided that co-founders Keith Rabois and Eric Wu will serve on the board of directors.

Opendoor will provide Nejatian with a compensation package worth USD 2.78 billion, apart from letting the new CEO own nearly 12% of the company. Nejatian will also have the guidance of Eric Wu and Keith Rabois from the company’s board. Wu served as Opendoor’s CEO from 2013 to 2022 and chaired the board from 2020 to 2022.

Rabois, who served on the boards of Reddit and Yelp and currently serves on the board of Ramp, was appointed chairman. Both are returning to Opendoor to bring back “founder DNA and energy,” the company announced. The duo will also inject capital. It is worth mentioning that Khosla Ventures and Wu invested USD 40 million of equity capital into Opendoor through a private purchase.

Kaz Nejatian’s pay package will see Opendoor turn away from its traditional CEO compensation plans in favour of a return to massive equity awards associated entirely with stock price performance. Nejatian left his role as chief operating officer at Shopify to join Opendoor, and as per the reports, he will receive two “make-whole” awards from his new bosses. The first will be a USD 15 million cash award, followed by the second, a USD 15 million restricted-stock unit award.

Nejatian will also receive two performance-based awards. The first, consisting of 40.9 million shares, has been designed to ensure that shareholder value isn’t eroded, according to Farient Advisors vice president Eric Hoffmann.

“The shares vest in installments over five years with a stock price gate of USD 6.24, which means the stock must maintain an average closing price of USD 6.24 or higher over a 60-day period for vesting to occur. Opendoor’s stock surged more than 78% on Thursday following Nejatian’s appointment to $10.49, but in June, the stock hovered around 56 cents a share. The second performance award is designed like a moonshot with seven stock price hurdles ranging from USD 9 to USD 33. The tranches only vest when the stock hits price milestones of USD 9, USD 13, USD 17, USD 21, USD 25, and USD 33,” reported Fortune.com.

Upon hitting the above-mentioned price targets, Nejatian will receive compensation valued at USD 2.78 billion, apart from owning 11.6% of the company, double the stake Wu held when Opendoor went public through a SPAC in 2020.

“What I find interesting is that they clearly believe this guy, who was the COO at Shopify, is going to make or break this company. They are willing to make a very large bet and put a lot of power and money into his pocket to get him on board and motivated to grow and drive the company forward,” Hoffmann told Fortune.com.

Meet Kaz Nejatian

Before entering the tech world, Kaz Nejatian began his career as an associate at Ropes & Gray LLP, where he focused on compliance, privacy, and data security for banking and payments clients, an important skill set for the real estate market. He also served as the Director of Strategic Planning for Citizenship and Immigration Canada, where he developed and executed the “Startup Visa” programme, a policy designed to bring global entrepreneurs into the country, which CNN called “the most successful set of immigration policies in the world.”

In the beginning, Nejatian founded the payment technology company Kash in his basement with a vision for a new, safer payment system and grew the company before it was acquired by a publicly traded financial services firm. Nejatian also held leadership responsibilities like product lead for payment platforms at Meta, where he oversaw payment products for WhatsApp and Instagram. He has extensive experience in building systems that operate at a global scale.

In three years, Kaz Nejatian became COO of Shopify and spearheaded the development of its financial products, such as payments, capital, and banking products. His goal was clear: “Our job is to take the things that suck for entrepreneurs and make those things not suck.”

Keith Rabois, Opendoor’s new chairman, said Nejatian is the right leader to make Opendoor an “AI-first company,” and he is an “AI-native executive” who led Shopify’s recent push into generative AI tools. Nejatian said he wants to use AI to make buying and selling a home “radically simpler, faster, and more certain.”

On X (formerly Twitter), Kaz Nejatian described the need to make homeownership easier. He wants to do for homebuyers and sellers what Shopify did for entrepreneurs: create a platform that fits their needs and then scale it up.

He said, “This is a once-in-a-lifetime chance to redefine the possibilities in real estate.”

The post Business Leader of the Week: Opendoor CEO Kaz Nejatian plans AI-first future for real estate appeared first on International Finance.

International Finance recently spoke with Shahnawaz Rashid, Chairman of the CBFS Board, Executive General Manager, and Head of Retail Banking at Commercial Bank.

In the conversation, Shahnawaz Rashid highlighted CBFS’s top priority: advancing Qatar’s financial landscape and shared how the institution is actively working toward that goal. He also offered insights into CB Waseet, one of Qatar’s leading trading apps.

CBFS operates across several key functions. How would you describe your core mission?

Advancing Qatar’s financial landscape is a top priority at CBFS. We have geared all our efforts to drive the sector forward by empowering investors and supporting their growth. In light of our mission, we have introduced world-class solutions that range from stock execution and asset management to market intelligence. We strive to remain at the forefront of the financial services industry, and we have the scalability, resources, and foresight to introduce state-of-the-art solutions in the market.

Market making is not a widely understood concept in the region. Can you explain your role in that space?

Market making involves continuously providing buy-and-sell prices for selected listed stocks to enhance liquidity and price efficiency. CBFS is among the licensed market makers, and we work closely with the Qatar Stock Exchange. Our role is to instil investor confidence and ensure tighter spreads, as they are essential in a healthy, active market.

How do you support retail and institutional investors in their investment journey?

We offer a suite of tailored financial solutions to retail and institutional investors. For retail clients, our mobile trading platform, CB Waseet, offers user-friendly access to live market data, fast order execution, and real-time portfolio tracking. As for our institutional clients, we provide a high-touch service, research-driven insights, and block trading capabilities. Our solutions have been designed to facilitate everyday life while enabling our customers to achieve their goals.

Speaking of CB Waseet, what makes it one of Qatar’s top trading apps?

When designing CB Waseet, our top priority was to create a user-friendly and reliable experience, and that’s exactly what we delivered. The app successfully bridges convenience with functionality while offering advanced features like technical analysis tools, multilingual support, and instant notifications. This creates a secure and responsive space for modern investors. CB Waseet is a gateway for seamless trading experiences.

How will your recently introduced research division add value for investors?

Staying relevant nowadays takes a village. Staying on track with the evolving landscape and growing needs of investors is necessary if you want to be at the forefront. At CBFS, we continuously ask ourselves: What kind of support do investors need? How can we integrate advanced tools to elevate their trading experiences? How can we empower them to achieve their goals? We conduct research around these questions, and through the insights we get, we deliver exceptional services that enable clients to make well-informed and confident decisions. Our added value for investors is transparency, financial knowledge, and round-the-clock support.

What’s ahead for CBFS in the coming years?

Our plans include expanding our digital services, introducing more innovative investment products, and further positioning CBFS as a key player in market development. As Qatar’s capital markets mature, we will continue to drive growth and innovation. For investors navigating the evolving landscape, CBFS is more than just a brokerage – it’s a long-term financial partner with a relentless commitment to market integrity and innovative solutions. With a solid reputation and trusted expertise, CBFS remains fundamental in Qatar’s financial ecosystem.

The post CBFS powers Qatar’s capital market growth: Shahnawaz Rashid appeared first on International Finance.

According to a recent SEC filing, he sold 166,664 shares of Zoom’s Class A common stock over the course of two days, on March 4 and 5, 2025. The prices at which the shares were sold ranged from USD 73.5587 to USD 75.3747 each.

InvestingPro metrics noted that the company has strong financial health and maintains impressive gross profit margins of about 76%. The transactions were carried out under a predetermined trading plan, and the total sale value came to about USD 12.05 million. As a result of these transactions, Eric Yuan no longer directly owns any shares of Zoom’s Class A common stock. Zoom currently looks undervalued, according to InvestingPro’s Fair Value analysis, since its balance sheet shows more cash than debt.

Meanwhile, Zoom is also actively interacting with analysts and strategic partners to improve its financial outlook and market presence. To satisfy the rising demand for unified communications, Zoom and Mitel have introduced a new hybrid cloud communications solution that combines enterprise-grade telephony with AI-driven tools. Financial services venture Stifel has modified its outlook for Zoom, indicating steady performance despite macroeconomic trends and reducing the price target to USD 85 while keeping a Hold rating.

The analysts anticipated that Workvivo and the Contact Centre, two possible growth drivers, would boost Zoom’s earnings. Considering Zoom’s narrowest quarterly beat and a cautious growth outlook for fiscal year 2026, Bernstein kept its Market Perform rating with a target of USD 89 in place.

In addition, Cantor Fitzgerald reaffirmed its Neutral rating with a target of USD 87, noting a modest rise in enterprise sales in spite of a decline in online revenue. Investors closely monitor Zoom’s strategic initiatives, with analysts highlighting the significance of revenue acceleration and product innovation, particularly in AI and enterprise solutions.

With planned AI developments and new product offerings anticipated to be crucial to its future trajectory, the company’s efforts to maintain growth in the face of shifting market conditions continue to be a focal point.

Let’s Meet Eric Yuan

Eric S. Yuan is a Chinese-American billionaire businessman, engineer, and the CEO and founder of Zoom Communications, of which he owns 22%. He graduated from China University of Mining and Technology in Beijing with a master’s degree in geology engineering after earning a bachelor’s degree in applied mathematics from Shandong University of Science and Technology. Motivated by a 1995 speech by Bill Gates, Eric Yuan relocated to Silicon Valley in 1997 to work in the tech sector, despite early visa issues.

Eric Yuan was one of the first 20 employees of WebEx, a web conferencing startup. He was appointed Vice President of Engineering following Cisco’s 2007 acquisition of WebEx. Yuan established Zoom Video Communications in 2011 after Cisco rejected his proposal for a smartphone-friendly video conferencing system. As remote communication became crucial during the COVID-19 pandemic, Zoom’s user base and Yuan’s wealth increased.

Eric Yuan was named Time’s Businessperson of the Year in 2020 and was listed among Time’s 100 Most Influential People. Additionally, he received recognition from the Carnegie Corporation of New York’s Great Immigrants Awards.

Eric Yuan’s journey from China to the top of a multinational technology company is a prime example of creativity, tenacity, and the influence of visionary leadership in the tech sector.

Zoom: The New AI-First Company

Zoom Communications, whose current market cap stands at USD 22.65 billion with impressive gross profit margins of 75.79%, in March 2025 announced a significant expansion of its AI features by introducing new “AI Companion” capabilities and enhancements across its suite of services. The updates will reportedly bolster productivity and collaboration within the Zoom platform. According to InvestingPro data, Zoom maintains a strong financial health score of “GREAT,” positioning it well for continued innovation and growth.

Zoom’s AI Companion is transitioning to an agentic role, meaning it will actively perform tasks and manage multi-step actions using reasoning and memory. This upgrade is designed to streamline operations by executing tasks on behalf of users and managing complex problem-solving processes. “With annual revenue of USD 4.67 billion and strong cash management practices, Zoom has demonstrated its ability to invest in cutting-edge technology while maintaining financial discipline,” stated a report from Investing.com.

The new agent skills include features like calendar management, clip generation, and writing assistance. Additionally, Zoom will introduce specialised agents for business services like “Zoom Virtual Agent,” which will provide empathetic and contextual customer self-service conversations. Users can also look forward to the “AI Studio” feature, which will allow for the creation and deployment of customisable virtual agents.

Zoom also has plans to integrate third-party agents, such as ServiceNow AI Agents and enable users to develop custom agents tailored to their specific needs. The Custom AI Companion add-on, expected to be available for purchase in April 2025 at USD 12 per user per month, will further enable organisations to customise AI capabilities as per their operational requirements.

“Zoom’s AI enhancements extend to Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom Docs, and Zoom Contact Centre. For instance, Zoom Meetings will soon include live notes and agenda timers, while Zoom Phone will offer voicemail summaries and support for the Zoom for Microsoft Teams app. AI Companion for Workspace Reservation will assist in-office workers with scheduling and desk booking based on teammate availability and meeting schedules. Zoom Docs will gain advanced reference and query capabilities, and a new voice recorder on the Zoom Workplace mobile app will transcribe and summarise in-person conversations,” Investing.com noted further.

Zoom Drive, all set for a May 2025 launch, will simplify asset management across Zoom Workplace. The venture is also enhancing its Contact Centre with AI-intent routing and Advanced Quality Management, which will use AI for scoring customer interactions and providing a conversational interface for supervisors.

Zoom is also developing industry-specific solutions, such as Zoom Workplace for Frontline, Zoom Workplace for Clinicians, and Zoom Workplace for Education, each designed and customised to address the unique needs of different professional environments. The goal is pretty clear here: to provide an AI-first work platform for enhancing human connection and team collaboration in 21st-century business establishments.

The post Business Leader of the Week: Under Eric Yuan, Zoom is transforming itself into an ‘AI First’ company appeared first on International Finance.

According to Chris Burt, Director of the Risk Coalition Research Company, “where the market suspects the organisation is taking more risk than might be appropriate,” shares may be lower than expected due to financial results and company performance.

“Imagine the Titanic moving at full speed across the Atlantic, making fantastic progress,” he continues.

While European banking shares increased by 20% between January and July 2024, hitting nearly nine-year highs, “the STOXX Europe 600 Banks index was down 0.5% after a raft of bank earnings fed into analyst and investor concerns about the sustainability of the sector’s profit growth. Eurozone banks see investment banking boost but outlook stalls shares,” according to Mathieu Rosemain, Tom Sims, and Valentina Za’s article.

A legal provision related to Deutsche Bank’s failing Postbank unit contributed to the company’s quarterly loss and 7% stock decline. The company also scrapped plans for a repurchase and increased bad loan loss charges. Although BNP Paribas anticipates exceeding its €11.2 billion net profit goal, an 11% decline in net interest income (NII) has raised worries in its retail division.

Additionally, Moody’s Ratings thinks that UniCredit and Santander’s NII have essentially peaked. As a result, risk charges will go up, even though growing profits have improved investor mood. Despite this, lenders have traded below their tangible book value, which raises questions about whether their profitability can last.

Despite this, the investment banking businesses of BNPP and Deutsche helped to diversify revenue streams in recent quarters by offsetting any shortfalls.

“At BNPP, revenue from equities trading and prime brokerage services jumped 58%,” added Rosemain, Sims, and Za.

Ambivalent attitude

According to Olivier Panis, Associate Managing Director of Financial Institutions Group at Moody’s Ratings, the outlook for Eurozone bank earnings remained rather stable. In 2023, the banks in the zone increased their net interest margins (NIMs).

“We expected profitability to stabilise in countries where variable-rate lending predominates,” he said.

In the first half of 2024, HSBC and other Italian and Nordic banks did better than their counterparts. In 2025, Moody’s Ratings predicts that bank profitability in the Eurozone will “remain strong” notwithstanding a drop.

As per Panis, Moody’s Ratings believes most profit margins have peaked as policy rates began to decline this year. However, the move from current accounts to more costly term accounts will slow down.

After two years of low lending activity, Panis continues, “Stable economic growth and inflation near central bank targets will offer the opportunity for stronger lending volumes while also supporting asset quality and risk charges.”

However, he believes that operating costs will continue to rise. Higher compensation costs and technology are to blame for this. As a result of higher interest rates in nations like Spain, Portugal, and Italy, Moody’s Ratings believes that there may be some divergent profitability trends among banking systems with a larger percentage of assets at variable rates.

According to Fitch Ratings, the biggest banks in Europe are expected to be profitable in 2024, matching the high levels of 2023. Fitch’s September 2024 “Large European Banks Quarterly Credit Tracker” indicates that most of the 20 major banks experienced strong results in the first half of the year.

Due to their “better than expected earnings,” it raised its full-year projections for a few banks. For instance, according to a press release, HSBC and other Italian and Nordic banks did better than their counterparts in the first half of 2024.

They were expected to continue performing at a high level from July to December. French banks, on the other hand, are falling behind their counterparts and are only predicted to see modest increases in profitability.

According to Z/Yen Senior Research Partner Hugh Morris, the outlook is generally favourable. He claimed that the Eurozone’s growth rate is likely between 3-4%, which should boost bank profits throughout the banking industry because mortgages account for half of bank lending in the Eurozone, and demand for them has been generally weak over the past few years.

He clarifies that the European Central Bank (ECB) “believes the banks will be able to improve with a forecast of global GDP growth of 3.4% for the next two years.”

ECB believes that the Eurozone is expected to closely align with this forecast. One of the driving factors behind this is the anticipated long-term increase in mortgages, in contrast to their previous period of stagnant growth in the region.

Income from net interest

Morris finds the banks’ net interest incomes (NIIs) among the most intriguing aspects. They are crucial to the medium-term financial gains of banks. He claims that cost management has been a major driver of BNP Paribas and that it is one of the factors that drive short-term development.

He underscores that while other criteria may fluctuate, NII remains the benchmark. For instance, cost control helped BNP achieve record profits, Morris continues. During a 40–50-year cycle, banks manage costs when they have to and don’t when they don’t.

The market examines NII because it has doubts about BNP’s ability to maintain rigorous cost control. That is the crux of the problem. For what reason does the market have doubts about BNP? A significant portion of the solution is NII.

“A full-scale conflict in the Middle East is another possibility. The entire world will get sick if someone sneezes in that region. More than Ukraine is to blame for the rise in the price of Brent crude oil. These kinds of price shocks will impact bank lending and investment decisions. Although no one can predict what will occur, these are the main contributing elements. Morris also believes that the Eurozone is growing slowly and that banks’ expansion would be constrained by the West’s latent productivity,” Morris added.

The banks resist

It is possible that certain banks were undervalued and are not receiving the full reflection of profitability, which is why they have been held back. Morris thinks that worries about NII and the long-term viability of headline profits may be to blame.

He said, “A lot depends on how each bank is made up, and there is cyclical falling in love and out of love with investment banking as a way to kick start growth.”

Deutsche Bank incurred significant losses as a result of this mistake. Twenty years ago, Deutsche Bank aimed to establish itself as a global investment bank to rival the American market, but within five to ten years, everything crumbled. Despite having fewer assets than Santander, it is the 22nd largest bank globally. In terms of assets, it is only somewhat larger than the Toronto Dominion Bank.

The NII is a significant measure of medium-term performance, and stock markets are attempting to price in the value of future performance. If they observe that the NII’s performance deviates from short-term gains, they will pay closer attention to that.

Interest rate issues have hindered certain banks, according to Panis. The sustainability of banks’ profit growth may be affected, he believes, as the advantages of higher rates to their net interest margins have begun to wane.

Despite rate reduction by central banks, he predicts that borrowing costs will continue to be higher than they were before 2022. This will have an impact on borrowers’ capacity to refinance and repay debts.

The increased cost of living and the fact that asset values in Europe have not changed significantly since 2022 only make the situation worse.

“As a result of the monetary tightening, the cost of funding has materially increased, with the end of targeted longer-term refinance operations (TLTROs) and a material shift in the deposit mix toward more expensive term deposits,” he continues, adding that he believes this could affect asset quality and moderate lending volumes.

Even while this change may have stabilised, the deposit mix hasn’t changed since 2022, and central banks have started lowering interest rates once more.

The revenue and expenses from the stock market compound these difficulties.

According to him, capital markets income helps sustain revenue, but inflation in salaries and one-time expenses are driving up costs, which may hurt the long-term viability of profit growth.

He agrees with Morris that “geoeconomic fragmentation, which could increase volatility, impact banks’ operating environments, their asset risk, and profitability,” has several sources of uncertainty. The turmoil in the Middle East and the war in Ukraine are two prime examples of this.

The effect of NII

However, Morris believes that NII is primarily responsible for the worries regarding the durability of profit increases.

Before adding that the market has witnessed the emphasis on cost management and the interest in erratic industries, like investment banking, come and go, he states, “It is the bread-and-butter business, and it is not looking so rosy.”

The biggest banks in Europe are probably going to be profitable in 2024, matching the high 2023 levels.

Despite the market’s attempt to incorporate its likely performance into the current stock price, NII remains a persistent presence. Since the share price ought to reflect the present value of anticipated medium-term profit streams, Morris views it as Economics 101.

He believes that this indicates that “the markets’ perception of forward value will outweigh one set of half-year results.”

He doesn’t know Unicredit well, but he thinks it’s an unusual strategy that the CEO, Andrea Orcel, decided to give back almost all of the company’s profits to shareholders in the form of dividends and buybacks.

Morris further says it is unclear whether the choice to purchase a digital bank in Belgium resulted in a decline in quarterly revenues, especially with regard to the latter, and whether it caused a 3% decline in shares.

Even if purchasing a digital bank costs money up front, Unicredit may benefit in the long run. At the same time, it will not become distinctly apparent for a considerable amount of time.

“This uncertainty would cause its shares to decline, and although the markets appreciate innovation, they are leery of money pits and white elephants,” Morris noted.

According to Panis, increased market volatility is driving activity for investment banking, and client transactions are increasing capital markets revenue. He claims that this will help revenue growth in 2024. This is especially true for banks that “may suffer from low lending activity in commercial banking, as is the case for French banks, for example.”

Nevertheless, he notes that the growth of the capital markets division “drove a 6% rise in adjusted revenue to $65 billion for European global investment banks in Q2 2024, with a significant boost from equity and investment banking income.”

Then there are the fees associated with underwriting and advising on debt issuances, equity, and M&A transactions. According to him, each of them adds to the total earnings.

“When a deal is there to be done, the fees and margins are probably better than they have been,” Morris adds, even though there are fewer opportunities available.

Leverage against the cost base is necessary, and he discovers that if three individuals are needed to complete a $50 million deal, it might take all of them to complete a $500 million contract. He asserts that while this approach is advantageous for finding deals, it may leave you with an uncovered cost base when market conditions change. This indicates that the cost base stays essentially fixed. Growing economies of scale tend to make profitability highly volume-dependent.

Capital market diversification

However, diversification of capital markets activities in Europe has benefited investment banking, in part because of the COVID-19 pandemic, which caused several banks to suffer considerable losses. Panis pointed out that certain banks also decided to lower their risk appetite restrictions for specific equity derivatives with exotic structures.

Banks have also developed more balanced worldwide market divisions with a more diverse product mix as a result of geopolitical crises, such as the Russia-Ukraine war, which generated price instability.

“This diversification is rather credit-positive when implemented successfully because it exposes less of the overall business model of those banks to market turbulence and makes capital market revenues relatively less volatile,” he says, adding that not all European banks have equal access to the depth of the US capital market.

Nonetheless, Morris holds the belief that certain banks are concealing issues and should return to their fundamental role as a value store. He believes that banking should be a boring, medium-margin industry.

However, he believes that balance sheets are very challenging to correctly understand since “human ingenuity has added multiple layers of risk and complexity to that, to the point that banks’ report and account. This leads to a wobble and a misconception of share value.”

According to author and banking futurist Brett King, a conceptual shift is necessary to align investments with broader social initiatives and evolving value creation. This requires a re-evaluation of how performance is assessed.

He argues that, despite the profitability of investment banking, it is not appropriate for the modern world. He believes that investment banks, along with banks in general, must adopt a fundamentally new way of thinking to continue thriving. To achieve this, they need to develop more diverse revenue sources that align with contemporary value systems.

High interest rates and strong investment banking revenues have driven banks’ profitability, but market scepticism persists, reflected in restrained stock performances. Analysts attribute this hesitation to factors such as declining net interest income (NII), rising operational costs, and geopolitical uncertainties.

Geopolitical tensions, inflation, and fluctuating deposit mixes further complicate the outlook. While stable economic growth and improved lending volumes offer hope, rising operating costs and risk charges may offset these gains. The banking sector’s ability to navigate these challenges will depend on strategic cost management and adaptability to evolving financial conditions.

Ultimately, while Eurozone banks have demonstrated resilience, doubts over their long-term profitability persist. The market remains cautious, weighing short-term earnings against the broader economic landscape. As interest rates shift and global uncertainties loom, the banking sector must strike a balance between growth and risk management to sustain investor confidence and maintain profitability in an increasingly complex financial environment.

The post Eurozone banks struggle despite strong earnings appeared first on International Finance.

Following a comparison of the development of the stock markets in South Africa, Russia, and Qatar during their respective hosting of the mega football event in 2010, 2018, and 2022, the firm came to this conclusion.

The analysis projects that Saudi Arabia’s hosting of the FIFA World Cup in 2034 will have a major economic impact and accelerate the growth spurred by “Vision 2030,” a national initiative to diversify the Kingdom’s economy away from its reliance on oil.

“The decision for the host is usually made roughly seven to 12 years in advance. Post announcement, equity markets generally performed well with South Africa showing the strongest return, followed by Qatar and Russia. Therefore, we expect the Saudi market to outperform emerging markets in the coming period,” SNB Capital said, as reported by the Arab News.

“FIFA 2034 also reflects positively on the equity market, leading to positive market return, valuation expansion as well as resilience and quick recovery from any potential global market headwinds,” it added.

Over the next one to four years, Saudi Arabia will reportedly invest heavily in infrastructure, such as stadiums, transit systems, and urban growth. The Kingdom’s steel, cable, and cement companies will be among the main beneficiaries of this time in the infrastructure and construction sectors.

“Construction firms will profit from these projects as they approach completion in the medium term, which is four to eight years. Over the next eight to twelve years, the tourism and hospitality industries will benefit, and the retail sector—which includes luxury stores and vehicle rental agencies—will also be in a strong position to gain,” SNB Capital noted.

The post FIFA World Cup 2034 to bring positive momentum to Saudi stock market: Report appeared first on International Finance.

However, what impact is lower oil likely on GCC stock markets?

Although analysis following last month’s global market selloff that followed the unwinding of the yen carry trade suggested that a GCC stock market meltdown could happen if oil prices dropped below USD 70 per barrel, another perspective holds that markets, especially those in the UAE and Saudi Arabia, do not now correlate as closely to the price of oil as they once did.

Because oil is a significant export, there is still some correlation between oil prices and stock markets in the Gulf region, according to chief market analyst Arun Leslie John of Century Financial.

However, it is not as strong as it is sometimes depicted to be or as strong as it was five to six years ago.

Brent crude trended lower from its July 2024 peak above USD 84 per barrel, according to LSEG data. However, the Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX), and Saudi Arabian Stock Market Tadawul indexes all trade above levels.

By the end of 2023, the non-oil sector in the UAE is expected to contribute 74.3% of the country’s GDP, according to government data; in Saudi Arabia, the non-oil sector is expected to contribute 50% of GDP.

“The UAE has an especially strong non-oil sector, and it is growing at a rapid pace,” John said, adding that diversification means that regional markets may not feel that much of an impact from a falling oil price.

Hurricane Francine has raised oil prices after hitting a three-year low, according to Mohamed Hashad, Chief Market Strategist at Noor Capital.

Positive news about the United States’ demand also played a role in the rally. Following Hurricane Francine’s forced platform evacuations, which caused output disruptions in the Gulf of Mexico, oil prices increased.

The post If oil stabilises below USD 70, what will it mean for Gulf markets? appeared first on International Finance.

“Enterprise value calculates the potential cost to acquire a business based on the company’s capital structure. To calculate enterprise value, take current shareholder price, for a public company, that’s market capitalisation. Add outstanding debt and then subtract available cash. Enterprise value is often used to determine acquisition prices. It’s also used in many metrics that compare the relative performance of different companies, such as valuation multiples,” Oracle NetSuit explained.

Enterprise value is a financing calculation, the amount a business leader needs to pay to those having a financial interest in his/her venture. That includes everyone owning equity (shareholders), as well as the lenders. If someone buys a company with debts, he/she needs to pay up for the stock and then pay off the debt, but the person gets the company’s cash reserves upon acquisition. Because you receive that cash, it means you paid that much less to buy the company. That’s why you add the debt but subtract the cash when calculating an acquisition target’s enterprise value.

Knowing The Concept In Detail

Conceptually, enterprise value gives an entrepreneur a realistic starting point for what he/she would need to spend to acquire a public company outright. In reality, as per Oracle NetSuit, it typically takes a premium to EV for an acquisition offer to be accepted. This happens due to reasons like the company’s board demanding a premium to its current share price, before the venture goes for the sale. Also, when an acquirer starts buying stock, the economic principles of supply and demand typically kick in, driving up the share price. During the bidding stage, multiple bidders emerge, leading to a significant premium.

“A company’s enterprise value is not reflected solely in its shareholder contribution, the amount of money contributed to a business by shareholders; it also takes into account company debt, both short- and long-term, and cash reserves. While debt and cash are clear and simple terms, market cap deserves a bit of explanation,” Oracle NetSuit added.

People often discuss a company’s stock price and whether it has gone up or down. However, the actual price of a share of a stock is meaningless in terms of understanding a company’s value without additional data, particularly how many shares are outstanding. Multiplying the share price by the number of outstanding shares gives the exact information about the company’s market capitalisation, and the total dollar value of the company’s outstanding shares.

“As a simple example, Company A’s stock may trade at USD 100 per share while Company B’s stock trades at USD 20. But if Co. A has 100 million shares outstanding and Co. B has 500 million shares outstanding, then their market caps are precisely the same: USD 10 billion,” Oracle NetSuit continued.

However, the idea of enterprise value suffers from a limitation, especially when it comes to comparing dissimilar companies. Enterprise value holistically quantifies how much a company would cost to take over, rather than simply its value in terms of market capitalisation. If two companies have the same market cap but one has significant debt while the other has significant cash reserves, the company without the debt would cost less to acquire.

“However, EV doesn’t consider how companies make use of the debt they carry. A software company with significant debt and few cash reserves may be a less attractive investment than a company with similar market cap and no debt, but the investment decision wouldn’t be as clear-cut when deciding between different industries. A utilities company or auto manufacturer, or any other capital-intensive industry, would likely need to incur a significant amount of debt to finance the capital needed to generate revenue,” Oracle NetSuit stated.

EV becomes more useful in the case of comparing companies at similar stages of growth. Companies in a phase of high growth are less likely to have as much debt as a more mature company.

Increasing EV For Small Businesses: Here Are The Tips

Does EV matter for small businesses? Yes, in the opinion of Michael Evans, Managing Director and Chief Financial Officer for Newport, LLC, a partnership of board directors and senior executive leaders with deep knowledge of business strategy, operations, and capital markets.

“Small business owners often have their heart and soul tied up in their business, not to mention most of their cash! Typically, your company will be your largest investment and just as you may have a wealth manager for your other personal investments; you also need to wealth manage your business. The day may come when you will be looking at an exit strategy, and clean and lean companies bring the highest price,” Evans wrote in his article titled “How to Increase Your Enterprise Value,” published in AllBusiness.

When it comes to pulling off exit strategies, private business owners (including small business owners) can better prepare their company for an exit strategy or simply increase the value of their business for their family by focusing on the three legs of the value stool: strategic, financial and operational improvement. Together, these legs, if coordinated and approached methodically, can significantly result in a more valuable company. The concept is called building enterprise value.

Evans explains these legs as “Strategic Improvement,” “Financial Improvement,” and “Operational Improvement.” Under the strategic part, the private business owners need to focus on the venture’s roadmap in order to build its enterprise value. This means positioning the direction of the company in the marketplace via four key strategic considerations. The management team needs to figure out which customers the company should serve, apart from developing new capabilities to power innovation, generate sales, and operate more efficiently than the competitors and be focussed.

The management team also needs to build a profitable economic model at a higher scale while increasing the leverage that makes the company profitable. Also, infrastructure should be created to support operational growth, apart from having access to capital to fund the predicted level of growth. The company also needs to be open to the idea of raising capital to fund growth, consistent with its vision and risk appetite. And while raising the capital; be aware of the operating changes a new capital structure will entail.

When it comes to “Financial Improvement,” it involves maximising cash flow, balancing fixed and non-fixed assets, maintaining a current ratio sufficient to cover unforeseen costs and balancing short-and long-term financing needs. This includes optimising the company’s balance sheet, cash flow and income statement. Key initiatives include restructuring capital structure to take advantage of lower market interest rates, renegotiating supplier terms (for example to shift inventory storage and maintenance costs), reviewing the venture’s payment practices, especially payment terms with suppliers and sales terms with customers and figuring out whether these conditions are more generous than the venture’s competitors.

Also, the venture needs to ask itself whether it has a large enough cash cushion to sustain the business in the event of a downturn. Is it taking full advantage of tax strategies (including tax-saving opportunities)?

The last leg, known as “Operational Improvement,” helps build enterprise value involving fine-tuning a business’ internal operations. One very good application area is the supply chain; where the company’s management team puts the “Operational Improvement” into practice by sourcing and aggregating more efficiently the inputs that the company makes into products/services. The company also needs to be open to re-configuring its activities, for example, replacing part of its sales force with contract resources that specialise in tasks like direct marketing and prospecting leads, apart from exploring “virtual models” including using social and business networks.

The company can also consider contract services (for example, call centre, order fulfilment), whether onshore or offshore, to do activities that are not core to adding value. The management team can further reduce the production cost by sourcing from new suppliers, thereby avoiding dependency on too few.

The post Thinking of increasing your enterprise value? Here are the tips appeared first on International Finance.

The strongest rainfall in 75 years on April 16th created the floods, which have resulted in a decline in the stock prices of most insurers, according to Century Financial.

According to Century, while insurers with weaker capital positions can experience stress and endure delays in processing claims, a build-up of claims from the same incident might result in reinsurance plans that limit insurers’ liability.

To address the increased frequency and severity of weather occurrences in the area, insurers may raise rates in reaction to these issues, especially for comprehensive vehicle coverage.

In addition, it is projected that post-flood infrastructure improvements will stimulate demand for insurance, hence promoting higher insurance penetration in the United Arab Emirates.

According to Vijay Valecha, chief investment officer of Century, two of the biggest insurance companies have experienced notable stock price declines: Dubai National Insurance, listed on the Dubai Financial Market (DFM), and Abu Dhabi National Takaful, listed on the Abu Dhabi Securities Exchange (ADX), with declines of 27% and 20%, respectively.

The two businesses primarily deal in underwriting, or reinsuring, against reinsurers.

Nevertheless, Union Insurance, an Abu Dhabi-listed firm, saw a 32% increase in share price during that time. Century attributed this to the fact that the company makes 55% of its revenue from non-life insurance products and the remaining 32% from life insurance.

According to Valecha, the flooding will put reinsurance plans and solvency capital buffers to the test.

The majority of insurers in the United Arab Emirates possess strong capital and liquidity reserves; nevertheless, approximately 20% of listed insurers have solvency levels that are either marginally over or below the legally mandated minimum.

According to Valecha, this might put pressure on the capital and liquidity buffers of certain insurers with weak capital positions, which could postpone the payment of claims. To strengthen their resilience, insurers with weaker capital positions might look to merge.

According to Century, local insurers handle the majority of automotive claims, while commercial risks are usually reinsured globally. As a result, local insurers’ income is expected to suffer this quarter.

The insurance market can manage the insured losses even with the expected increase in automotive claims since they are spread across multiple insurers, third-party insurance is common for damaged cars, and reinsurance policies are likely to absorb accumulated claims, according to Valecha.

The post Emirates floods to impact insurance companies in UAE appeared first on International Finance.

This is a setback for the fund’s management, as Norway’s central bank had recommended investing up to 5% of the fund’s assets, which corresponds to around $80 billion, in private equity.

However, Finance Minister Trygve Slagsvold Vedum has said that the government has concluded that investing in unlisted stocks is not a good idea at this time.

He cited higher fees, lower transparency of information, and the need for a broad political consensus as the reasons for this decision.

“We will continue to consider it,” he added.

According to State Secretary Ellen Reitan, the need for stability at home during a time of political instability abroad played a role in the decision.

During an interaction with Reuters, Ellen Reitan said, “In unstable times, it is important to have calm around important institutions, and the oil fund is definitely one of them. It has been a success story, with a key factor being the calm surrounding its administration.”

The finance ministry intends to create an independent expert council for the fund, which will provide input for future decision-making on topics such as investment in unlisted equities.

The fund expressed positivity towards the ministry’s desire to further assess the possibility of including unlisted shares in its mandate.

“We look forward to meeting the Finance Committee in parliament later this month to answer questions on the topic,” it said in an email statement.

In the past, Parliament has disapproved of proposals to move the assets into private equity, citing the potential high costs and potential hindrance in evaluating ongoing performances.

The adoption of private equity could have offered the opportunity for the fund to invest in companies that are yet to be listed, including the rapidly growing technology sectors, such as artificial intelligence.

Critics have argued that the fund should stick to its decades-long successful investment strategy of tracking global stock market indexes. However, supporters of private equity argue that unlisted companies have become a rapidly growing and larger part of the economy.

The CEO of the fund, Nicolai Tangen has shared that the current combination of high interest rates and a relatively low number of new stock market listings globally makes it an opportune time for the fund to deploy capital via private equity investments.

The fund, which invests Norway’s surplus oil and gas revenue abroad, is the world’s largest single stock market investor, owning approximately 1.5% of all globally listed shares, and has stakes in over 8,800 companies.

Apart from foreign government and corporate bonds and unlisted real estate in major cities, it also possesses a small but growing portfolio of infrastructure projects such as wind farms.

The post Norway sovereign wealth fund: No private equity dive despite central bank’s push appeared first on International Finance.