Competition between NASDAQ and NYSE for new listings, hedge funds' bets against the US Treasury market, concerns over market stability, influx of wealthy Chinese business people in Singapore, impact on Singapore's neutrality, big companies like Alibaba and Tencent opening in Singapore, and upcoming student loan payments in the US.
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Quick takeaways
The competition between NASDAQ and the New York Stock Exchange for new listings is heating up with Instacart's expected IPO, highlighting factors like services, reputation, and fees as crucial considerations for companies.
The basis trade engaged by hedge funds, involving short positions in futures contracts for US Treasuries, has caused market upheavals in the past, leading central banks to worry about potential instability during times of market stress.
Deep dives
Battle Between NASDAQ and New York Stock Exchange for Listings
Instacart, the US online grocery delivery company, is expected to launch its IPO on NASDAQ, raising about $660 million. This will further intensify the competition between NASDAQ and the New York Stock Exchange for new listings. Companies choose between the two based on factors like services, reputation, and fees. While these listings are a source of prestige for the exchanges, they also bring in substantial revenue through listing fees and annual charges.
Hedge Funds Shorting US Treasuries Concern Central Banks
Hedge funds are engaged in a basis trade where they hold short positions in futures contracts for US Treasuries while being long in the cash market. This trade exploits small discrepancies in prices between the two markets. Central banks are alarmed as this trade has caused upheavals in the past, like the repo market crisis in 2019 and the market turbulence during the COVID-19 pandemic in 2020. Central banks worry that in times of market stress, these highly leveraged hedge funds may need to unwind their positions, causing instability in the Treasury market.
Instacart’s public listing this week is set to inch Nasdaq further ahead of the New York Stock Exchange in their closest fight for new listings in five years, and a build-up of leveraged bets has the potential to dislocate trading in the $25tn US Treasuries market. Plus, the FT’s Mercedes Ruehl explores whether an influx of Chinese migration and money to Singapore could threaten its status as a neutral safe haven.
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The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Monique Mulima, Monica Lopez, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.