The week in IR: Trade deals, $1 tn valuations and AI
- The US has signed an initial trade deal with China following two years of economic tussling that saw tariffs placed on goods worth hundreds of billions of dollars, reported the New York Times. The deal aims to open up China to more US companies and provide greater intellectual property protection. China has also said it will spend an addition $200 bn on US goods and services by 2021.
- Alphabet, the parent company of Google, has become the fourth US public company to reach a $1 tn valuation, according to the Guardian. The search giant follows in the footsteps of Microsoft, Apple and Amazon to reach the milestone. Alphabet’s shares closed at a record high on Thursday of $1,450.16. It originally listed in 2004 for $85.
- Investment management firms will not survive unless they truly embrace AI, wrote Angelo Calvello of Rosetta Analytics in an opinion piece for the Financial Times. He said many asset managers are talking up their use of AI while broadly sticking with the status quo. ‘Choosing the status quo over disruption will certainly prove fatal for managers; the question is, how long can they live on their current life support systems?’ he wrote.
- Passive investment strategies are continuing to gain market share, reported The Trade. The amount of assets held by global passive funds hit $11.4 tn at the end of November last year, according to the website, citing figures from the Investment Company Institute. Of that figure, over $6 tn is held in ETFs.
- Rob Jackson, the SEC commissioner, says he backs direct listings as a way that companies can go public more cheaply, reported Reuters. The commissioner was weighing in on the debate over the charges for going public levied by investment banks. He did not comment on a NYSE proposal, currently being considered by the SEC, that would help companies list without underwriting support from banks.