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  • Writer's pictureYug Serai and Dominic Wilton

Market Roundup

Stock Spotlights:

Manchester United (MANU)

The recent increase in Manchester United's (MANU) stock price was sparked by rumours of a potential sale of the legendary soccer club. The stock price increased by 13% on Friday, taking it to a new 52-week high.

Recent increases coincided with discussions of possible purchasers for the company. The Daily Star said that Apple may be considering making an offer for MANU, which would reportedly cost roughly $7 billion.

The price of MANU rose $2.41 during Friday's trading session, closing at $21.21. An intraday 52-week high price of $22.95 was reached for the stock. Amid the acquisition rumours, shares have soared recently, increasing by around 66% over the past week.

Credit Suisse

Investors evaluated the impact of enormous outflows the bank announced this week against reports that competitors in the crucial growth market of Asia are profiting from the Swiss firm's woes, and Credit Suisse Group AG plummeted to a fresh record low as a result.

On Wednesday, Credit Suisse said that clients had withdrawn roughly 84 billion francs ($89 billion) in the first six weeks of the fourth quarter, with no sign of reversal in sight. The wealth management division saw the largest outflow, amounting to 10% of assets under management.

On Friday, shares of the lender dropped as much as 5% in Zurich after Vontobel, an asset management firm, lowered its price target and said the company "urgently" needs to prevent outflows in its main wealth management division. Since 2014, this is the longest losing streak for the stock.

OECD’s updated forecast

Global economic growth is forecast to be sluggish this year and next, hampered by high-interest rates, punishing inflation, and Russia's war in Ukraine.

That is the gloomy prognosis from the Paris-based OECD, which was released on Tuesday. The OECD predicts that global economic growth will slow to 3.1% this year from a booming 5.9% in 2021. The OECD forecasts that next year will be even worse, with global economic growth of only 2.2%.

At a press conference, OECD Secretary-General Mathias Cormann stated, "It is true we are not anticipating a worldwide recession." But this is a really difficult forecast, and I don't think anyone will find much solace in the predicted 2.2% world growth.

Crude Oil Caps

As tighter lockdowns were enacted in China due to mounting Covid cases, and news surfaced that Saudi Arabia supports OPEC+ raising supplies, Brent prices fell more than 5% on Monday, causing widespread losses on Wall Street. After Saudi Arabia's energy minister refuted a Wall Street Journal story that the OPEC+ group was considering a production increase, the price of crude oil and the stock price of energy companies rebounded. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all rose by about 0.4% as a result.

The Wall Street Journal reported on Tuesday that the United States and its allies are trying to settle on a price cap for Russian oil as soon as Wednesday, with officials debating setting it at $60 per barrel in an effort to implement the plan by December 5.

On Wednesday, ambassadors from the 27 EU member states will gather to try to negotiate a price accord; the group must obtain a unanimous agreement on the price cap, which may prove tough. The plan's goal is to keep oil prices from skyrocketing while decreasing Russia's income from energy exports.

First weekly loss in November for US-listed Chinese stocks.

Chinese stocks fell as investors fretted over how new COVID regulations would affect the world's most populous country. This week, the government issued further limitations in response to an increase in reported instances, and the pressure has been building ever since. Foxconn, an Apple supplier, has seen a rise in worker protests over the zero-COVID policy as of late. U.S.-listed Chinese stocks, including market heavyweight Alibaba (BABA), fell about 4% on Friday as investors remained wary of the long-term effects of the COVID outbreak. In the meantime, Bilibili (BILI) fell by over 7%. Tencent Holdings (OTCPK: TCEHY) and Weibo (WB) also experienced declines of around 5%. NetEase (NTES) and Pinduoduboth fell by more than 1%.

FTX Scandal – Section Authored by Dominic Wilton

FTX, meaning ‘futures exchange,’ was the third largest crypto exchange behind Binance and Coinbase, but recently lost that title due to their own misconduct. FTX have recently begun their bankruptcy proceedings following one of the largest scandals by an exchange ever, which could be a precursor to cryptocurrency regulation in the United States.

The reason for their bankruptcy is that FTX lacked sufficient assets to meet the surge in customer funding withdrawal requests after the scandal broke. FTX had used a substantial amount of these missing customer funds to invest in their own cryptocurrency ‘hedge fund’, Alameda Research, to inflate its price. Amongst the customer funds transferred from FTX to Alameda up to $2 billion ‘vanished’ and remains unaccounted for.

Whether this money was hidden by founder Sam Bankman-Fried in one of FTX’s 130 affiliated companies is yet to be answered, however, some of these companies do seem to raisefinancial red flags. One such company is Farmington State Bank, acquired by FTX for $11.5 million, which prior to the acquisition had only one branch, three employees, and a net book value of $5.7 million. The deposits in this bank were consistently around $10 million for ten years, and in Q3 2022 they jumped to $84 million after FTX stepped in. This acquisition of a US financial firm for double its net book value suggests that FTX has ties to the US financial system despite being headquartered in The Bahamas and denying such ties which is one reason US Financial regulators are having a tough time pressing criminal charges on any FTX executives.

This scandal is still unravelling, and US regulators still have some digging to do in FTX’s books, which could show embezzlement and having misled customers - but only time will tell.


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