The discussion comes at a pivotal moment for the market. Total surplus lines premium reached approximately USD 100.9 billion in 2025, with activity concentrated across key jurisdictions including California, Florida and Texas. That growth is bringing increased pressure, from evolving regulatory requirements, litigation trends and the use of artificial intelligence in underwriting models, claims decision-making and core insurance operations.

Attendees included executives from the Surplus Line Association of California, Florida Surplus Lines Service Office, Excess Line Association of New York and Surplus Lines Stamping Office of Texas, alongside national policy and industry voices from organisations including the American Property Casualty Insurance Association and the Wholesale & Specialty Insurance Association, as well as representatives from leading carriers, wholesale brokerages and regulatory and legal experts across the surplus lines market.

Andrew Gulcher, chief of the Investigation Division at the California Department of Insurance, spoke on enforcement priorities and the growing importance of compliance in a high-volume market. Additional discussions featured updates tied to the National Association of Insurance Commissioners, coordination across state regulatory frameworks, including potential updates related to the Nonadmitted and Reinsurance Reform Act, as well as broader policy developments affecting areas such as tort reform and parametric insurance.

Throughout the meeting, participants examined how coordination across states can support consistency in oversight while preserving the flexibility and freedom of rate and form that define the surplus lines market. Discussions also addressed enforcement trends and evolving exposures, including the use of artificial intelligence in underwriting and governance, the continued impact of litigation and catastrophe risk on sectors such as utilities and the growing role of the surplus lines market in addressing coverage gaps related to AI as admitted carriers reassess their risk appetite.

“The surplus lines market exists to absorb complexity, but that only works when there is discipline behind it,” said Benjamin McKay, CEO and executive director of the Surplus Line Association of California. “As the market scales, that discipline must be reinforced through coordination and accountability across jurisdictions. That’s where the market is headed—more complex and increasingly interconnected, with risks that don’t stop at state lines.”

Participants emphasised that as the USD 100 billion surplus lines market continues to globalise, the role of stamping offices and surplus line associations remains foundational. Without coordinated oversight, access to coverage for complex risks would be significantly constrained across the US economy.

The post Surplus lines market faces rising regulatory pressure appeared first on International Finance.

Walmart has become a dominant force in the global retail industry thanks to this strategy. Walmart has continuously reduced costs and passed savings on to customers, maintaining its competitive edge thanks to its vast supply chain and economies of scale. The business operates under several names, such as Asda in the United Kingdom and Walmart in the United States. Walmart has considerably increased its online presence in addition to its physical locations by making large investments in e-commerce platforms to fulfil the changing demands of customers in the digital era. The company aims to improve customer loyalty and engagement by implementing programmes such as Walmart+, a subscription-based service that provides benefits like unlimited free delivery.

A wide range of product categories, including groceries, clothing, electronics, home goods, and more, are included in Walmart’s business model. The company’s initiatives to cut waste, support renewable energy, and assist local communities through various philanthropic endeavours demonstrate its commitment to sustainability and corporate responsibility. Walmart is still a powerful player in the retail industry despite backlash over its labour policies and effects on small businesses. It keeps coming up with new ideas and innovations to stay ahead of the competition.

Walmart has looked into strategic alliances and acquisitions in recent years to bolster its position in important markets and diversify its sources of income. In an ever-evolving retail landscape, the company shows a proactive approach to staying relevant by investing in technology start-ups and forming alliances with other industry leaders. While navigating the opportunities and challenges of the digital era, Walmart continues to shape the future of retail with its vast resources, global reach, and dedication to delivering value to customers.

Today, Walmart has achieved new heights all because of Carl Douglas McMillon, an American businessman, and the president and chief executive officer (CEO) of the company.

Who is Carl Douglas McMillon?
• Doug McMillon was born in Memphis, Tennessee, and grew up in Jonesboro, Arkansas, USA
• He studied for a Master of Business Administration (MBA) from University of Tulsa, USA
• Doug McMillon joined Walmart as a summer associate in high school in 1984, and since then he worked for the company throughout his career
• At the start of his career, he became a buyer, and later worked as a general merchandise manager for Walmart’s wholesale store division Sam’s Club before taking an executive role, overseeing toys, electronics, and sporting goods, among other areas
• Doug McMillon became the company’s fifth CEO in 2014
• He raised wages for hourly workers in the United States, boosted the company’s commitment to e-commerce and revamped Walmart’s executive team, within his first two years as chief executive
• Doug McMillon announced Walmart would invest an additional USD 2.7 billion in higher associate wages, benefits and training, including raising its lowest wage to USS 9 an hour in 2015 and USD 10 an hour for 2016
• Forbes named him to its World’s Most Powerful People list in 2014, 2015 and 2016
• As of 2024, according to Forbes, Doug McMillon’s net worth is around 2,770 crores USD

Walmart Continues Its Growth Journey Despite Challenges

In February 2024, Walmart said that its quarterly revenue rose 6%, as shoppers turned to the retail giant’s outlets throughout the holiday season. The revenue growth also got backed by the company’s global e-commerce sales growth, which touched the double digit mark.

The retail giant is all set to acquire smart TV maker Vizio to accelerate the growth of its advertising business. Walmart’s Chief Financial Officer John David Rainey told CNBC that while customers were putting expensive items like electronics, TVs and computers in the backburner (in terms of their buying preferences), they were shopping more frequently. Even after the change in consumer behaviour, Walmart has been witnessing continued sales strength.

In the three months that ended January 31, Walmart’s net income fell to USD 5.49 billion or USD 2.03 per share, compared with USD 6.28 billion, or USD 2.32 per share, in the year-ago period. Also, revenue increased from USD 164.05 billion in the year-ago period. The venture now expects its consolidated net sales to rise 4% to 5% in its fiscal first quarter. It also anticipates adjusted earnings of USD 1.48 to USD 1.56 per share on a pre-stock split basis.

For its fiscal 2025, the retailer expects consolidated net sales will climb 3% to 4%, while anticipating adjusted earnings of USD 6.70 to USD 7.12 per share on a pre-stock split basis.

The post Business Leader of the Week: Meet Doug McMillon, CEO of Walmart appeared first on International Finance.

The repayments include Ksh2.37 billion (USD 15.5 million) for principal repayments and Ksh351.29 million (USD 2.3 million) for interest payments.

“The fresh instalment brings cumulative exchequer payments on the KQ guaranteed debt to Ksh13.35 billion (USD 87.1 million) with the first payment having been done in the quarter ending in December 2022,” Zawya reported.

“The total amount paid on guaranteed loans during the first three months of FY 2023/24 amounted to Ksh2.72 billion, which was payment for Kenya Airways loan comprising of Ksh2.37 billion for principal repayment and Ksh351.29 million for interest payments,” the Kenya Controller of Budget (COB) noted.

In 2022, the Kenya Treasury informed the IMF (International Monetary Fund) about taking over the debt contracted by Kenya Airways in 2017 from the USA Export-Import Bank (Exim). The African country took the step to facilitate the better management of risk for its national carrier including the potential call-up of the guarantee.

In February 2023, Treasury Principal Secretary Chris Kiptoo told MPs that Exim Bank USA had handed in a default notice after the KQ made a delayed payment of the guaranteed loan.

Despite paying down more than Ksh13 billion (USD 84.83 million), KQ’s guaranteed debt has soared by 13.4% since September 2022 to Ksh87.36 billion (USD 570 million) from Ksh76.97 billion (USD 502.3 million), due to the sharp depreciation of the Kenyan Shilling.

KQ’s debt takeover by the exchequer, known as debt novation, is dubbed as a part of the airlines’ wider restructuring, seeking to support the carrier cost-effectively.

The plan will incorporate additional capital injection by the state, along with cost cuts and network optimisation. Key Performance Indicators (KPIs) will also be set up for the KQ senior executives.

Meanwhile, the airline has warned of impending flight disruptions, due to the problems it is facing in the aircraft spare parts global supply chain. Kenya Airways Group Managing Director and CEO Allan Kilavuka said that the capacity shortage might persist for “approximately two weeks”.

Kenya Airways has now been hit with flight disruptions due to the crew shortage. The phenomenon, which started in December 2023, has now created a situation for the venture where it will have to forego any chances of making profits, as it faces the pressure of compensating the passengers being affected by the flight disruptions.

As per the media reports, on December 13 and 14, some 17 flights got delayed. For flight cancellations, especially on the European routes, KQ will have to refund per passenger some Sh92000.

Kenya Airways’ fleet has two B737-300s, eight B737-800s, nine B787-8 Dreamliners, and thirteen E190ARs. Of the overall lot, E190 5Y-KYS (msn 19000478) has been out of service in Nairobi since late October.

The venture has already taken the delivery of its first B737-800 freighter and plans to add a second unit of the type by February 2024.

Kenya Airways will utilise the aircraft on routes to destinations like Sharjah, Dubai World Central, Jeddah, Riyadh, Dakar Blaise Diagne International, Lagos, N’Djamena, Mogadishu, Mumbai International, Freetown, and Monrovia Roberts.

The airline is seeking a strategic investor as it battles foreign exchange volatility negatively impacting its turnaround strategy despite its recent KES998 million shilling (USD 6.6 million) operating profit.

Kilavuka, while briefing the Parliamentary Transport and Infrastructure Committee on October 24, said that with limited government support and growing foreign currency-denominated debts, the carrier had no alternative but to seek a strategic investor.

Kilavuka said that the venture was aiming to achieve a capacity growth of 23% in 2025 and 16% in 2026.

The post Despite settlement of USD 17 million debt, Kenya Airways faces headwinds appeared first on International Finance.

“Creating better, more expansive and global-oriented offerings and experiences for its residents has always been the impetus behind the company’s continued success. This evolution has become the antecedent for its newest program, Vista Estates––cities built within cities that offer what an urban sprawl purveys, but in microcosm. These miniature metropolises come infused with themes and offerings inspired by the best-loved places in the world and are designed to recreate global living and lifestyle,” Vista Land told International Finance.

The strength of Vista Estates lies in its ability to forecast housing trends and gauge consumer sentiment in its master-planned communities. It has earned recognition for offering entertainment, work opportunities, services, open spaces, transportation, and residential options in an ‘all-in-one’ solution, right in the confines of the residential communities.

“The experience is elevated and world-class––taking the best the world has to offer home to roost. Roost it does as there are 60 Vista Estates pipelined across the country, finding the places across our islands where Filipinos prefer to live, choose to raise their families, and aspire for the tomorrows they work so hard for,” the company stated further.

Decoding Vista Estates’ Master-Planned Communities

Vista Estates operates its residential and commercial property businesses through six distinct housing brands, namely Camella, awarded as Best Developer in Luzon, Visayas, and Mindanao in the recently concluded Lamudi The Outlook 2023 Philippine Real Estate Awards, Communities Philippines, Crown Asia, Brittany, Vista Residences, focusing on high-rise residential properties, and VistaMalls, which is involved in commercial property developments.

Talking about Vista Estates’ master-planned developments, in bloom up north is Rosevale Towers in Tuguegarao City, a development of Vista Estates that blends tropical charm with tinsel-town allure.

“Verida, Balanga City’s first eco-estate modeled after Singapore, is rising in the Land of Valor. Provence in Malolos is the premier enterprise megacity in the north inspired by the joie de vivre of France. Provence won the coveted Best Township Development in Luzon in the recently concluded DOT Property Awards 2023. Paving the way for a new metro north lifestyle is North Commons in Caloocan City. Mimicking the character of its namesake mountain town in Colorado, USA, is Aspen, located in San Jose del Monte, Bulacan,” Vista Estates told International Finance.

Apart from the other projects, Vista Land has stretched its presence in other flourishing urban centres in the country, such as The Crescent, a 38-hectare New Orleans-in-miniature in Santa Maria, Bulacan. Another project, named Castellana, is a 60-hectare recreation of the Spanish region of Castilla y León on Baliwag soil. Montessa in Subic, Zambales, encapsulates a community inspired by Spain’s Pueblos Blancos.

The majestic Ilocos Region plays host to two Vista Estates: Bramasole casts endless rays of possibilities in Laoag City by crafting a Tuscan countryside for those who ‘yearn for the sun,’ and Querencia in Metro Vigan will be composed of charming hamlets and tower clusters of white stucco topped with clay-tile roofs so loved in the California landscape.

Another project titled ‘Vidarte’ has emerged as the art district in Antipolo, Allegria, touted as the ‘District of Fun’. Stanza is located in Tanza, Cavite, a community where business and leisure sync in harmony. Praverde, which is the green sanctuary in the bustling city of Dasmariñas, Cavite, is highly commended as the ‘Boutique Developer of the Year’ by Lamudi The Outlook 2023 Philippine Real Estate Awards.

The Italian’s love for life finds expression in Milano, located in Bacoor City. Further south is Santerra, Naga City’s nature and lifestyle district. On the island of Panay, one will find Georgia, which bested other finalists in becoming the Best Mixed-Use Development in Visayas and Mindanao. Rising in Zamboanga is Andaluz, a 32-hectare mixed-use development blueprinted after Andalusia in Spain.

Similarly, themed projects like ‘The Midtown’, ‘The Montage’ and ‘Altafina’ have brought a paradigm shift in the Philippine housing landscape.

Vista Land is also planning to create similar well-thought-out neighbourhoods in Pangasinan, Isabela, Nueva Ecija, Tarlac, Cavite, Bohol, two in Davao, Bukidnon, Agusan del Norte, and South Cotabato.

The post Vista Estates: Call an entire city your new ‘home’ appeared first on International Finance.

Europe is short of natural gas because of falling supplies from Russia. Chinese growth has slowed sharply as a result of the lockdowns that stem from its zero-COVID policy, and also concerns over its unstable real estate market are growing.

The atmosphere is so gloomy that many investors are wondering if a recession has actually begun. Answering the question is challenging. With regard to economic metrics, the epidemic has caused chaos. Consumer confidence has declined due to inflation, but when questioned about their own financial situation as opposed to the overall economy, consumers are significantly more upbeat. The poor US GDP estimates do not match up with other output measurements or employers’ expanding payrolls.

Manufacturing surveys show their lowest performance since the pandemic’s early days, although this could be because consumers are still readjusting their purchasing patterns following the pandemic’s worst period (there is less buying of home-gym equipment, but more queuing in airports). Even China’s slowdown could help Europe narrowly, by reducing global demand for liquefied natural gas.

Regardless of whether economies are already shrinking, it is hard to see how they can avoid recession in 2023 as monetary tightening bites and Europe heads into a bleak winter. The silver lining is that both higher interest rates and the energy shock will bring gains that should strengthen the world economy in the long run.

Some recessions feed on themselves as indebted households cut their spending or default cascade through a fragile financial system. With a few exceptions, such as Canada’s frothy housing market, today’s big economies suffer from few such vulnerabilities. In fact, households and companies look strong.

The bank balances of the poorest American households are around 70% fatter than they were in 2019. Even the threat of an emerging-market financial crisis—the usual worry when the Fed raises rates—is not what it once was. That is in part because of a switch towards debts denominated in local currencies rather than dollars.

The main global economic fault line is inflation. Thankfully, it is still short in the tooth. The last time the Fed tightened monetary policy so dramatically, in the early 1980s, prices had more than doubled over the previous decade. Today the figure is moderate, because inflation only took off last year.

Though America’s economy has badly overheated, long-term inflation expectations remain modest. The best historical analogy is probably not the prolonged battle with stagflation of the 1970s but the burst in consumer prices that followed the mass disruption of the Second World War.

The downturn that brought that inflation to an end was shallow and left a few scars. A mild recession should squeeze price rises out of the economy this time, too. Already, markets are betting that American prices will rise by about 3.8% over the next year, less than half the current inflation rate.

Elsewhere the main impetus for inflation is soaring global food and energy prices and disrupted supply chains, which are raising the price of imported goods. Some shortages are already easing. Wheat prices are down by nearly 40% from their recent peak in May. Oil prices have also been falling lately. Supply chains are recovering.

Unfortunately, Europe’s gas shortage is getting worse. Though governments are doing their best to shield consumers from the consequences, if rationing becomes necessary, industrial production and hence GDP will fall, perhaps steeply in exposed economies like Germany. Even as output shrinks, inflation will rise further.

Yet in the same way that a downturn should purge the American economy of its inflation problem, Europe could emerge from recession having overcome its complacency about the supply of energy. Policymakers have belatedly realized that a carefully managed shift to clean energy also eases their dependence on autocratic regimes.

Around the world, investment in renewable energy is surging and governments that were previously skeptical about nuclear power—an essential part of a low-carbon energy grid—are reconsidering their opposition to it. Even Japan, which suffered the Fukushima disaster in 2011, is hoping to restart more nuclear reactors. If the world emerges from the coming downturn with inflation under control and on the path to greener, more secure energy supplies, the pain will not have been for anything.

Recession consequences

According to Cliff Hodge, chief investment officer for Cornerstone Wealth, recession happening from time to time doesn’t make them desirable, nor does it discredit policies aimed at reducing the length and severity of the downturns. The US Central Bank, the Federal Reserve, conducts monetary policy under a congressional mandate to promote stable prices and maximum employment.

Just as the Fed is likely to raise interest rates when high inflation threatens stable prices, it’s likely to cut them (if there’s room to cut) when a recession causes employment to plummet. Other developed countries also use counter-cyclical monetary and fiscal policy.

“A shallow recession cooling off an overheated economy is unlikely to do lasting damage, and policymakers have learned the hard way they can do little to prevent one. Nor can they end one: that depends on the decisions of every business and individual. Policymakers do use monetary and fiscal policy to support the economy as needed and promote favorable long-term outcomes. They are unlikely to remain idle while a deep downturn throws millions out of work and homes because the economic and personal damage caused can slow growth long after the NBER has deemed the recession over, ” Hodge said.

The US economy grew at rates well below its potential for years following the 2007-2009 recession, slowed by a lower labor force participation rate as some laid-off workers never returned. Here’s why recessions can be so costly.

Increasing unemployment

Rising unemployment is a recession staple. As demand declines and orders drop, companies respond by cutting costs, and labor is by far the biggest expense for many. Those layoffs, in turn, further sap demand, extending a downward spiral in economic sentiment and output. This dynamic ensures that employment declines rapidly in a recession, then gradually recovers during the subsequent expansion.

People who lose jobs during recessions, especially deep ones, are more likely to become long-term unemployed and find it more difficult to re-enter the labor market later. Among workers displaced during the Great Recession, only 35% to 40% were employed full-time by January 2010. Re-employment rates remained unusually low for workers who lost their jobs as late as 2013.

Another study found men lose an average of 1.4 years of earnings if laid off with the unemployment rate below 6% but twice as much if the unemployment rate is above 8%.

Financial losses

Recessions are bad for capital as well as labor. Corporate profits drop as sagging demand and severance drive up unit costs. Overly indebted companies may default on their debt, driving up borrowing costs or causing credit to evaporate entirely for others in similar straits.

Publicly listed companies are not immune, and stock market prices tend to decline well in advance of the recession as investors price in the increased risk. The decline in financial asset prices can, in turn, reverse the wealth effect, further undermining consumer spending and balance sheets.

Recession silver linings

A recession resulting from an economic imbalance may rectify it, clearing the way for a return to growth. For example, the 1981-1982 recession, which was triggered by Federal Reserve interest rate increases in response to high inflation, helped to lower the inflation rate from 11% in June 1979 to 5% by October 1982, and the US economy grew for the next eight years.

Similarly, a recession can end the misallocation of investment capital, whether fueled by a housing bubble or a dot-com one. By driving down asset prices, recessions can also provide opportunities for attractive returns for investors willing to take the long view.

The bottom line

Recessions are a natural, unavoidable stage of the economic cycle that invariably brings hardship to individuals who lose their jobs or businesses. Even if they do pop bubbles and offer some investors’ attractive buying opportunities, their silver linings aren’t so nice that you would want to stand under that storm cloud and get soaked for any longer than is absolutely necessary.

The post Do recessions have a silver lining? appeared first on International Finance.

In his current role, he has the mandate to build and grow the International business across Capital markets and security services under Edelweiss Wealth Management. Prior to his current assignment, Vivek was the Head of Asia for the asset management business at Edelweiss. Vivek is a passionate business leader and enjoys working with diverse stakeholders to achieve collective business growth. He is a regular speaker at capital market forums and is associated with Market Advocacy initiatives for the group. Vivek is an Economics Graduate and holds a Master’s degree in Business Administration from Symbiosis.

As a young veteran of 18 years, Vivek commenced his career graph with the consumer banking business at Citibank, followed by a product investment role at ING Investment Management which led to varied roles at Edelweiss. He is among the few Indian financial services business leaders to traverse roles across the value chain from wealth management, asset management and institutional securities in India and abroad.

Vivek has spent the last few years propagating the India growth story to global investors, a natural people’s person and compelling storyteller. Not one to let cynicism cloud his judgment, Vivek believes in looking at objectives with a realistic lens. He believes that the pandemic has been a blessing in disguise for India in a lot of ways. “Our ability to fight the pandemic and emerge with a new wave of businesses and ideas, has made India look more attractive than at any time in the past. As the country approaches the $5 trillion mark in terms of GDP, the international community would only welcome the opportunity with open arms,” he avers.

According to Vivek, qualities such as collaboration, accountability, transparency, and clear communication are the key mantras to successfully grow and build business’s in the long term. In his interview with the International Finance Magazine, Vivek Sharma shared insights on topics like Digital Banking, Fin-tech, Asset-Management, Crypto, and much more. An excerpt from the interview:

Q) Tell us about the products/services/solutions your company provides and how they get value out of it?

A) Edelweiss Asset Services, which was established in 2013 (a custodial arm of Edelweiss Wealth Management), is a SEBI (Securities and Exchange Board of India) registered DDP (Designated Depository Participant) and offers the regulated business of custody and clearing services to global investors that invest in India’s capital markets. The firm has global offices in Singapore, Hong Kong, London, Dubai, and New York. We offer a plug-and-play model and fully integrated services across Securities Custody & Safe Keeping, Derivatives Clearing, Setup Advisory, Research & Execution Services, and Compliance Support that meets every business requirement of Foreign Investors to invest in Indian markets.

Our clientele includes Foreign Portfolio Investors (FPIs), Mutual funds, Alternate Investment Funds, Portfolio Management Services, Domestic Brokers, Corporate Treasuries, and High Net-worth Individuals (HNIs). Our focus within the FPI segment is across institutional formats such as Hedge Funds, HFT’s Quant Funds, Proprietary Trading Firms, Long only & Family offices.

Edelweiss has been present in the Indian Financial Services space for about 25 years and has emerged as a choice of India Partner for global institutional clients, primarily because of the specialist role we play and for the support we provide throughout the investment life cycle right from set-up to advisory to transactions to closures. Today, Edelweiss Asset Services has grown exponentially to become the dominant clearing member of the country and commands a significant market share in the NSE (National Stock Exchange of India) F&O segment.

Q) Banking has become digital in most countries, what is the biggest challenge that you see with digitization?

A)  The compatibility between different systems is one of the biggest challenges. As a custody and clearing services provider to global clients, different clients will have different back-office systems depending on their legacy systems, choice of other service providers, degree of outsourcing etc. One of our biggest USPs is the ability to adapt our service to be compatible with the systems that our clients are using. Unlike many similar players in this space, we are able to do this because we have developed our digital systems in-house and thus, able to customize it to suit our client’s digital requirements.

Another challenge with increasing digitalization is data privacy and security. Clients are concerned with ensuring the data that they provide to us, which can include some very sensitive personal information of their directors, and UBOs for KYC purposes, are well safeguarded. This is a big concern with rising cases of hacking, scams, and data leaks.

Q) Is the global economic downturn threatening Fintech growth?

A) The structural factors behind the growth of the fintech industry remain intact despite volatility in the economic and business cycles. In many countries, there is a substantial portion of the population that is unbanked or underserved when it comes to basic financial services, with the incumbent banking players remaining unable or unwilling to fill the gap due to a variety of reasons – legacy systems, capital constraints, regulations, industry structure, etc. This is dovetailed with the fact that the younger generation in these countries is digital natives and thus comfortable with fintech services delivered through technological platforms that circumvent traditional routes of delivery.

Q) As recession looms, how do you see the future ahead?

A) There will be short-term volatility and downside risks in the short term, especially with a tighter monetary policy regime globally, a stronger US dollar, high inflationary pressures from supply chain disruptions, geopolitical tensions, and robust post-pandemic demand.

Beyond short-term market gyrations, the long-term demand for investment services and investors choosing to stay invested remain robust. We have seen a strong activity from our client base in terms of new FPI account openings, and continue to have a strong pipeline of global clients looking to set up their FPIs this year.

Q) Crypto is not legally accepted in many countries, what’s your take on it?

A) The technology underlying bitcoin and many other cryptocurrencies – blockchain, decentralized finance, distributed ledger technology – will have long-term adoption and use-cases. We are seeing new fin-tech players utilizing these technologies and pioneering new forms of financial services or new modes of delivering existing financial services from these technologies.

The highly speculative elements of cryptocurrencies make them hard to value and subject to extreme volatility. This means they are not a useful asset class from a portfolio management perspective, besides their function as a speculative investment.

Q) How will an unstable economy impact the banking sector?

A)  Areas of banking that depend on economic activity may suffer – consumer banking, consumer/business loan growth, credit card usage, mortgage business etc. Banks with robust asset and wealth management arms that can generate stable fee incomes, independent of margins and loan growth, would benefit as investors position their portfolios defensively to weather the uncertainty.

Capital market activity will tend to slow down as deal-making becomes tactical and opportunistic as companies adopt a wait-and-see approach before doing acquisitions. Trading activity will also tend to slow as financial market participants become defensive in the face of uncertainty.

Q) What would be your advice to asset-management firms?

A) Have a clear strategy for establishing a strong competitive advantage, given that the asset management industry is becoming increasingly crowded. This can be in the form of scale or niche expertise in a particular asset class or geography. Improve processes and productivity through technological solutions or service providers who can offer superior technological offerings.

Q) Since the economy is passing through bouts of instability, what kind of investment advice will you like to give to our readers?

A) Remain invested in the market through a well-diversified portfolio as time in the market is better than timing the market. EM countries like India offer good long-term growth prospects and should definitely be in a well-diversified portfolio.

The post Time in the market is better than timing the market: Vivek Sharma appeared first on International Finance.

Russia failed to pay $100 million of coupons on bonds due last month, for which a 30-day grace period ended on June 26. Since beginning an invasion of Ukraine in late February, Russia had already come close to going into default multiple times.

Russia has the ability and inclination to pay its obligations but was unable to do so because the White House’s decision to restrict avenues to creditors in the West effectively prevented payment. A previous domestic debt default occurred in 1998 when the country faced a post-Soviet economic transformation.

According to Russia, the US allegedly staged the default as a ruse. Last week, it announced that it would pay off its debt with roubles, a plan that creditors have already rejected. The scenario has been referred to as a “farce” by finance minister Anton Siluanov.

Siluanov said anyone can declare whatever they like. But anyone who understands what’s going on knows that this is in no way a default.

A default would be declared by one of Wall Street’s ratings companies, likely S&P, Fitch or Moody’s. But European Union sanctions have forced the firms to withdraw their coverage of Russia.

However, the bonds on which the payment was missed allow their holders to declare a default if 25% agree non-payment has occurred. Documents attached to the debt instruments give three years for a claim to occur – meaning some investors may wait to see whether Russia is rehabilitated into the global financial system during that time.

If they do take action, doing so through the legal system could prove difficult because Russia has said it will reject the jurisdiction of any foreign court.

Foreigners held about $20 billion of Russian eurobonds at the start of April. Several payment deadlines have now passed, so it is possible Russia will soon be deemed to have defaulted on multiple debts.

Why did Russia not make the payment?
The default was not for lack or willingness or means on Russia’s part. The country runs a huge trade surplus predominantly because of lucrative oil exports. it exported goods and services worth $58.2bn more than the value of its imports in the first quarter of 2022, according to the Central Bank of Russia. It also has relatively low debt levels.

However, Russia’s coupon payments were rendered impossible by the United States. The Office for Foreign Asset Control – the branch of the US Treasury Department that deals with financial sanctions – had allowed Western investors to continue to receive debt payments as part of the initial volley of sanctions at the start of the war in Ukraine. That exemption was allowed to lapse last month, meaning payment became effectively impossible.

What would it mean for Russia?
Recovering from a default can be a slow and arduous process and may be even more complicated for Russia given it is being squeezed out of the global financial system.

The reputational damage can also be heavy. Many investors are bound by covenants preventing them from investing in countries deemed to be in default. If it cannot rebuild its reputation as a borrower, Russia may find there is limited interest next time it tries to tap international markets, although it isn’t expected to do so for some time.

The process will be unusual in this case. Countries usually default because they are destitute. That isn’t the case for Russia. Its fiscal strength means investors may be very willing to rehabilitate Moscow when, or if, it returns to Western markets.

The bigger impact may prove to be on Russia companies, which are more reliant on international funding. Some investors may rule out lending money to such companies as a result of the state-level default.

Who else will be affected?
At the time of the invasion of Ukraine, Russia had $39.7bn of outstanding external debt – comparatively small compared to the US which paid out almost $140bn on sovereign debt in 2020 alone. About half is held by foreigners. Another 3 trillion roubles of domestic debt is held by foreigners, according to pre-war data.

Most of that is held by financial institutions: banks, pension funds, asset managers and hedge funds.

Data from the Bank for International Settlements shows French banks held about $4.5bn of Russian government bonds as of last year, while US lenders held $3.8bn, Austria’s had $3.2bn and Italians $2.6bn. UK banks had just $520m of exposure.

A debt default is typically followed by a period of restructuring, when investors usually lose money. Moody’s estimates investors can expect to receive up to just two-thirds of the bond’s value. Some could respond with legal challenges, although these would face difficulties because Russia will not recognise the jurisdiction of foreign courts.

The documents for the bonds Russia has defaulted on say holders have three years to make a claim following non-payment. Some investors may be tempted to wait it out and see what happens.

Russia’s economy to shrink by 15%
A global banking lobby group said that Russia’s economy will shrink 15% this year and 3% in 2023. The downfall will be because of western sanctions, an exodus of companies, a Russian brain-drain and due to collapse in exports wipe out 15 years of economic gains.

In its report on the Russian economy following its invasion in Ukraine on February 24, the Institute of International Finance (IIF) said it did not expect a ceasefire in the war and that it was likely sanctions would be expanded and tightened in the coming months.

Western sanctions following the invasion had triggered the full disintegration of 30 years of investment, Elina Ribakova, the Institute of International Finance’s (IIF) deputy chief economist, told reporters during a media briefing.

“What is the number you are going to put on ripping apart 15 years of value chains, adding that should Europe wean itself off Russian energy exports, the economy would be hit even harder in the medium-term, she said.

The United States, European countries and other allies have imposed sweeping sanctions aimed at punishing Russia and at impeding Moscow’s ability to fund its war machine.

While Russia’s economy is slowing sharply and its people’s spending power is shrinking, a surge in oil and gas prices — major Russian exports — have lifted the country’s current account surplus to record levels in recent months.

Ribakova said that the surplus, as well as a rebound in the rouble after an initial crash, should not be mistaken for thinking Russia’s economy was holding up better than expected.

Russian banks were flush with foreign exchange reserves as imports collapsed, she said, but Russian businesses and consumers had nothing to spend it on.

Instead, the impact of sanctions would hit harder with time, especially if Europe cut oil and gas imports significantly, although she noted this would take months if not years.

The IIF forecasts that Russian gross fixed capital formation will contract 25% in 2022, imports 28% and exports 25%.

“Despite the meaningful steps taken since late February, we are far from the top of the escalation ladder,” the IIF authors said in their report.

“Additional measures, such as those related to the financial system and/or key Russian exports (and imports), would be possible and could lead to dramatic consequences for the Russian economy, as well as the government’s ability to continue its war effort in Ukraine. However, the costs of such actions could be significant for the sanctions-imposing countries as well”, the IIF authors added.

Ribakova, just back from a trip to Kyiv, also said that while much attention was being paid to reconstruction costs, Ukraine was on the verge of a balance of payments crisis as the war hammered its economy.

Russian stock market experiencing fifth worst crash in history
According to Bloomberg analysis the benchmark MOEX Russia Index closed 33% lower in Moscow, erasing $189 billion in shareholder wealth. That’s the fifth most brutal one-day selloff among 90 global equity indexes.

This is the first time since 1987 that a selloff of this magnitude has hit a market worth more than $50 billion. In the aftermath of the Black Monday crash that year, Hong Kong’s Hang Seng Index tumbled 33%. The worst single-day drop over the past century in any market of any size was Argentina’s 53% slump in January 1990, when the country was battling hyperinflation and a mounting economic crisis.

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More expensive mortgages and other loans
The immediate impact will be felt in the United States, where people will have to pay more for mortgages, credit cards, school loans, and other debt. The 30-year fixed-rate mortgage’s average rate has already risen to about 6%, the highest level since 2008. Monthly payments for someone buying a median-priced home in the United States have increased by around $600 since the beginning of the year.

Delores Robinson, a retired educator from Ohio who recently purchased a new apartment, says, “I wish I had started looking earlier.”

Ms Robinson says she was relieved to lock in a cheap rate, despite the fact that it was more than when she began her search. However, rising rates will put purchases out of reach for some buyers.

According to the National Association of Realtors, home sales in the United States are expected to drop 9% in 2022. This decrease may be distressing for those who have been unable to purchase, but it is also predicted to slow price growth to 5% in 2022, after double-digit increases in recent years. If this occurs, it will aid in the reduction of inflation, indicating that the Fed’s actions are having an effect.

Smaller pensions & more expensive Uber rides
When interest rates rise, investors tend to reshuffle their portfolios dramatically. Those movements have been increasingly prominent as general economic concerns have grown. Those with money invested in the stock market, such as those with 401k retirement plans (a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts), have seen their investments plummet in value. The S&P 500 has lost more than 20% of its value since January 1, signalling a bear market, while the Nasdaq has lost over a third of its value.

Risky assets, like cryptocurrencies, have seen their prices fall, as the stock exchanges outside of the United States have also been hit. Investment firms are increasingly backing away from more risky enterprises, seeking profitability from companies like Uber, which has been losing money for years. That implies individuals will have to pay more for things like cab trips and delivery, or such businesses would close down, as happened with a number of start-ups in New York that promised 15-minute groceries.

“In times of uncertainty, investors look for safety,” Uber boss Dara Khosrowshahi wrote in a letter to staff last month about the steps the firm would take to try to boost its bottom line, including slowing hiring. “It’s clear that the market is experiencing a seismic shift and we need to react accordingly”, he said.

Job market slowdown and recession risk
As demand declines, the robust post-pandemic labour market, which saw employers compete aggressively for workers, allowing new recruits to demand higher pay and other perks and encouraging many to move professions for better, is coming to an end.

Property giants Redfin and Compass announced plans to lay off hundreds of employees, citing the downturn and rising rates as reasons. A spate of major corporations, including Amazon, Walmart, Tesla, and Spotify, has announced plans to reduce or eliminate employment.

Jerome Powell, the chairman of the US central bank, expressed optimism that the economy will escape widespread job losses, despite the fact that the US labour market remains tight, with nearly double the number of openings for job seekers. However, the economy was already suffering difficulties, as inflation raises business costs and reduces people’s purchasing power.

In the first three months of the year, growth had already slowed. While this was initially attributed to a data anomaly in foreign trade, other indicators, such as retail sales, have begun to deteriorate. Analysts warn the bank risks causing a persistent downturn, as rising rates clash with a weaker economy, also known as a recession.

Stronger dollar
The US dollar has gained 10% this year as a result of the Fed’s actions, which have prompted investors to migrate money to America in search of higher yields, boosting demand for the currency. It’s a silver lining for Americans considering holidays to destinations like the United Kingdom, where the pound fell below $1.20, its lowest level since the pandemic.

However, the rising value of the US dollar means that imports of goods such as energy and food, which are frequently traded in dollars, will be more expensive. This adds to economic difficulties, particularly if a government has a large dollar-denominated debt.

Fiona Cincotta, a market analyst at City Index says, “Emerging markets tend to be the markets that really do stand to suffer the most.”

Higher rates abroad
The US is not alone hiking in a vacuum. Dozens of other countries have also announced rate rises in recent months, including the Bank of England, and Switzerland. Australia and Canada.

Inflation is a war that many people are battling. They are, nonetheless, influenced by events in the world’s greatest economy. In nations where currencies are pegged to the dollar, such as Kuwait and Saudi Arabia, the impact of US rate hikes is nearly immediate, with banks increasing in lockstep to stem a money drain to the US. The economic story in the United States will continue to be keenly monitored as those changes take effect.

US economy can deal with inflation
Meanwhile, President Joe Biden says he’s confident a US recession isn’t inevitable, but inflation is soaring. Speaking to the Associated Press, Biden said the US economy wouldn’t necessarily fall into recession, even as growth slows and inflation stays strong.

“First of all, it’s not inevitable. Secondly, we’re in a stronger position than any nation in the world to overcome this inflation”, he said.

Inflation has been rampant in the United States, with an annual rate of 8.6% in May, the highest in 41 years. As Western sanctions on Russian energy exacerbate the general gap between global demand and supply, fuel costs are at the heart of the surge in consumer prices. However, the cost of basic commodities and shelter is also rising rapidly.

The Federal Reserve took a bold step, boosting the benchmark interest rate by 75 basis points to combat inflation. This was the greatest rate hike since 1994, and more is on the way, with Fed policymakers predicting that rates will need to rise to around 4% in 2023, the highest level since early 2008.

Despite the Fed’s efforts and Biden’s optimism, a number of prominent economists and investors have warned of an imminent recession in the United States. Economists at Wells Fargo said the steep rate hikes will raise borrowing costs across the economy and are likely to tip the US into a “mild-recession,” in mid-2023.

Morgan Stanley’s chief strategist Mike Wilson, who correctly anticipated the last three stock market crashes, stated that the likelihood of a recession has increased as a result of the introduction of higher rates.

Wilson, though, believes that even if the Fed achieves a soft landing, the stock market will remain chaotic. He expects the S&P 500 to drop another 10% from its current level to as low as 3,400 points, with the Nasdaq 100 following suit.

The stock market where millions of ordinary people invest is on track for its worst week of losses since March 2020 as inflation and recession fears mount. Earlier this week, it officially tipped into a bear market, having lost more than 20% in value from a record high in January.

Richard Hunter, head of markets at trading platform Interactive Investor said for the moment, the mood is clear. Investors globally are questioning whether any global growth is possible amid the current monetary shackles and are giving risk assets a wide berth at the slightest excuse.

According to the American Automobile Association, consumer opinion toward the US economy is gloomy, as high petrol, food, and home prices affect Americans’ wallets. As a result of Russia’s sanctions, gas prices have surged to new highs, with the average national gas price now above $5 per gallon.

Consumer confidence has plummeted to new lows. In June, the University of Michigan consumer confidence index fell to a new low of 50.2, as a failing economy, rising costs, and personal financial concerns hit home. For millions of Americans, the economic slowdown is a major concern. According to Google Trends, more people in the United States have searched for the term “recession” this year than at any point before 2004.

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Although data programming and digit calculation may not seem like it would make for the flashiest clips, Excel TikTok tutorials and comedy sketches have amassed millions of views and morphed into an entire genre of content, with an array of influencers that spans languages and continents.

The TikTok hashtag “excel” has over 1.8 billion views in total, and some of the biggest TikTokers in the space have hundreds of thousands of followers, thanks to their videos featuring jokes about Excel and how-to guides.

How has TikTok become a medium of putting information? According to the Nobel economics laureate Herbert Simon, in the world where information and entertainment is abundant, the critical scarce resource becomes attention and that is what makes the Chinese app so popular. Since attention is a finite resource competition, for companies like Facebook it becomes a zero-sum game. The more attention one attracts, the less there is for the others. And this is the area where TikTok appears to be easily winning.

Around 90% of its users visit the app more than once a day, and they spend an average of 52 minutes per day on it. According to Scott Galloway, the average session lasts 11 minutes, an average watcher can easily watch 26 videos, each lasting 25 seconds.

As TikTok receives millions of video rush daily, the threat of data mining is also increasing. There are various reports about TikTok privacy concerns, which has become a talk-point among various experts, questioning its security.

What is data mining?
Data mining means sorting information to gather facts about an entity or someone. Companies and individuals collect information on the internet for many reasons. One of them is to analyze customers’ behavioral patterns to tailor content and ads more accurately.

As the name implies, you can think of data mining as an excavation or gold exploration process that seeks to find fossil deposit patterns. Data miners can extract data points on a subject from right about anywhere.

For instance, an app developer might decide to gather more information about you from other services on your devices. Consequently, they might use this to analyze your content-consuming behavior.

Here’s the concept: data mining allows someone or an organization to place data points on you. Invariably, they know more about you and your pattern of living than you think in the long run. They can even predict how you might behave in the future.

Why should one be concerned?
It is no crime to gather facts about publicly available data. But when data mining occurs on deeper webs like TikTok, it might raise privacy concerns since users’ details are typically exposed and monitored. And no one is sure how they use such information.

TikTok isn’t the only privacy intruder. For instance, Facebook also has several privacy issues that you can avoid. And its activity has leaked users’ data in many ways.

But TikTok’s data mining saga isn’t all about users’ privacy leaks, it appears more twisted than that. Reports have flown around in the past about how the app’s algorithm efficiently suppresses visibility for content containing specific keywords. Part of this is a fact contained in a 2019 report by The Washington Post detailing how TikTok’s algorithm repressed keywords featuring the unrest in Hong Kong at the time.

Many users also complain about how TikTok prevents their content from reaching a larger audience despite having many followers. All these make it look like TikTok uses the mined data to somewhat recognize and distinguish between users based on their races, colors, disparities, and abilities to determine what they can post. The company seems desperate about how it collects and uses information.

What is more outrageous? A part of TikTok’s privacy policy points out that although users can choose to share specific third-party data with them, they might collect this from those third-party apps automatically. Unfortunately, every user has to agree to this policy while registering on the app.

How and why does TikTok mine users’ data?
There are two categories of users on TikTok; unregistered content consumers and registered content creators or watchers. TikTok mines data from you if one is under the second category. These include information from your TikTok profile and the content you post on the app. But as mentioned, it digs further into third-party apps on your device to grab further information. This is even imminent if you register your TikTok account via third-party apps.

Companies that mine data might sell them, and this isn’t anything beyond what TikTok can do. Worse, it’s even without users’ consent. Experts also believe that TikTok might be spying on its teeming users. Though there’s still no evidence to back this claim.

Is TikTok secure after all?
Whether or not TikTok is safe depends on how you view its data mining processes. While data mining isn’t a security issue itself, it can lead to data misuse. As you have seen, TikTok primarily uses the mined data to censor content and probably pick trails on its users.

Nonetheless, many third-party TikTok data harvesters take advantage of this intruding attribute of TikTok. It is unclear whether it partners with these third-party scrapers to sell users’ data. But there are web apps like Apify, 4K Tokkit, Bright Data, and more that offer automated TikTok scraping services, including profile data collection. To say this is disturbing isn’t an overstatement.

Moreover, you can’t say for sure what people might do with your data once they collect it from these scraping services. However, we can predict this might provide hints about you to threat actors.

And while TikTok mines the data to analyze patterns about you, there have been concerns that it sells the output information to the government so they can spy heavily on users. Pertinent to this is a 2019 lawsuit reported on BBC News which claims that TikTok sends US users’ data to the Chinese government.

Can one prevent TikTok from mining your data from third-party apps?
Preventing TikTok from tracking your details on third-party apps can be difficult since the app sometimes collects users’ data without their consent. It means even if you set your device to prevent app tracking, TikTok might not respect your choice.

But there are a couple of ways to limit the data TikTok collects and shares about you. One way is to avoid registering or logging into your TikTok account with third-party social authentications like Facebook, Google, or Twitter login. However, if you are an iPhone user, you can use your Apple ID to register on the app. But you might want to use Apple’s Hide My Email feature while using this feature.

While Android might not provide Apple’s type of anonymity, you can use third-party blockers if you are an Android user. Specifically, you might want to try DuckDuckGo’s new privacy feature to block TikTok’s app tracking. And if you are accessing TikTok via the browser, you might want to use privacy plugins.

Is it time to ditch TikTok?
Although TikTok’s data mining is shady, some people are indifferent. Dumping the app is still a personal decision. So, it depends on your conviction. Nonetheless, it is needful to say you can delete your account from TikTok and dump it for other alternatives if you feel threatened or unsafe.

TikTok revenue worldwide
Launched in September 2016, TikTok has garnered a huge audience globally in mere six years. The app has ruled out its dominance among billions of TikTok users count worldwide. As per the latest TikTok statistics, almost every other video goes viral beyond the app, racking up billions of views on Twitter and Instagram. It is safe to say that TikTok’s popularity has skyrocketed and reached heights.

As per the reports of Statista’s TikTok user stats, the app had over 1 billion active users worldwide at the end of 2021, representing a 45% growth compared to the year 2020. TikTok has been welcomed enthusiastically, especially by Asian countries such as Cambodia, Japan, Indonesia, Malaysia, Thailand, and Vietnam. Currently, Ireland is one of the top countries with the fastest-growing Tik-Tok market.

Today, TikTok is the seventh most used social media platform in the world sitting above its rivals Snapchat, however, trailing behind Instagram, Whatsapp, YouTube, and Facebook. When you compare the journeys, it took Instagram almost six years to gain the same amount of monthly active users that TikTok garnered in its first three years. Whereas, for Facebook to gain the same amount of monthly active users, it took over four years.

The post TikTok turning a generation of video addicts into data goldmine appeared first on International Finance.

The owner of the company, Bilal Muhammad, said that the company’s ticket situation ‘got out of hand’ after contractors didn’t pay, leaving Weed World to deal with it. He said they ‘took for granted tickets were just being taken care of,’ and that going forward, tickets will be paid on time.

Muhammad called tickets a ‘natural byproduct’ of having a fleet of trucks operating in a congested city like NYC, but said he does take issue with accusations the company selling cannabis products without a license, which are still not available in New York.

“We’re being grouped with these up and newcomers that are actually selling real weed and we don’t sell real weed. We never have,” the owner said in a statement.

According to its website, Weed World Candies launched in 1999 with the goal to get marijuana and hemp legalized and industrialized. “We tour the country in a fleet of ‘loud’ vehicles promoting the legalization and decriminalization of the cannabis plant and all its components,” it says.

“It’s not clear what the so-called weed trucks were selling in Weed World’s name. The website lists only Cannabidiol (CBD) products, which lack Tetrahydrocannabinol (THC), the active ingredient in marijuana, and says its campers sell lollipops”, the NYC department of finance in a statement.

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