Sun. Sep 27th, 2020

European Central Bank warns of growing risks to global financial stability – business live

Rolling coverage of markets, economics and business news amid warning of increased risks posed by non-bank lenders

11.54am GMT

The Chinese e-commerce company Alibaba has raised about $11bn in a share offering in Hong Kong, the city’s biggest offering since 2010 despite ongoing protests against the Chinese-controlled regime.

Alibaba said Wednesday that it has set the price for the offering at 176 Hong Kong dollars per share, raising 88bn Hong Kong dollars (£8.7bn) – the largest fundraising of 2019. That amount could rise to £10bn if bankers exercise options to sell an additional lump of shares over the next 30 days.

The company plans to use the proceeds from the global offering for the implementation of its strategies to drive user growth and engagement, empower businesses to facilitate digital transformation, and continue to innovate and invest for the long term.

11.32am GMT

Back on the ECB, here’s a bit more detail on those building financial stability risks.

Low interest rates – designed by central bankers to stimulate spending – have had the knock-on effect of making it more difficult for investors to make returns on their money. That has pushed investors outside the heavily regulated banking sector to look for returns, or yield, elsewhere.

The ongoing search for yield across non-banks may exacerbate the build-up of vulnerabilities, not least by lowering financing costs for riskier borrowers.

Funds invested in illiquid assets can face severe difficulties in dealing with large-scale outflows. Higher leverage, for example in hedge funds, can add to procyclical investor behaviour and accelerate outflows.

Continue reading…Rolling coverage of markets, economics and business news amid warning of increased risks posed by non-bank lendersECB: Risks to global financial stability have increasedStock markets: Trump threatens tariff rise in China trade dispute Prosus hits back after Takeaway.com and Just Eat try to go forward with mergerAlibaba raises up to £10bn in Hong Kong share offering 11.54am GMT The Chinese e-commerce company Alibaba has raised about $11bn in a share offering in Hong Kong, the city’s biggest offering since 2010 despite ongoing protests against the Chinese-controlled regime.Alibaba said Wednesday that it has set the price for the offering at 176 Hong Kong dollars per share, raising 88bn Hong Kong dollars (£8.7bn) – the largest fundraising of 2019. That amount could rise to £10bn if bankers exercise options to sell an additional lump of shares over the next 30 days.The company plans to use the proceeds from the global offering for the implementation of its strategies to drive user growth and engagement, empower businesses to facilitate digital transformation, and continue to innovate and invest for the long term. 11.32am GMTBack on the ECB, here’s a bit more detail on those building financial stability risks.Low interest rates – designed by central bankers to stimulate spending – have had the knock-on effect of making it more difficult for investors to make returns on their money. That has pushed investors outside the heavily regulated banking sector to look for returns, or yield, elsewhere.The ongoing search for yield across non-banks may exacerbate the build-up of vulnerabilities, not least by lowering financing costs for riskier borrowers.Funds invested in illiquid assets can face severe difficulties in dealing with large-scale outflows. Higher leverage, for example in hedge funds, can add to procyclical investor behaviour and accelerate outflows. Continue reading…