Stocks advance ahead of Fed policy meet

By Jenniffer B. Austria

LOCAL stocks rose Tuesday on positive investors’ sentiments following President Ferdinand Marcos Jr.’s second State of the Nation Address Monday and ahead of the US Federal Reserve’s policy meeting.

The PSE index, the 30-company barometer of the Philippine Stock Exchange, climbed 29.86 points, or 0.45 percent, to close at 6,661.11, while the broader all-shares index rose 13.67 points to 3,540.38.

Analysts said investor sentiments turned positive after the Marcos administration promised to sustain the growth of the domestic economy and on expec-

PSEi July 25, 2023

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tations the US Federal Reserve would continue its policy tightening.

“The market widely expects the Fed to raise rates by 25 basis points,” Regina Capital Development Corp. head of sales Luis Limlingan said.

Value turnover remained thin at P3.86 billion.

Meanwhile, Hong Kong led a surge across Asian markets Tuesday after

China’s leaders pledged fresh measures to boost the nation’s stuttering economy, building on optimism that central banks were nearing the end of their ratehiking cycle.

With data in recent months showing growth stuttering and business activity slowing, Beijing has come under pressure to provide much-needed support, particularly for the vast property sector. Despite a series of announcements and minor interest rate cuts, investors have been largely disappointed by the policy response from authorities, with very few concrete measures being unveiled. However, top leaders on Monday signaled a fresh push to get the post-Covid recovery back on track, particularly the troubled property sector, which accounts for a major part of the world’s number-two economy.

After a meeting, the 24-person Politburo recognized “the current economic operation is facing new difficulties and challenges” and agreed they must “implement precise and effective macroeconomic regulation, strengthen countercyclical regulation and policy reserves.”

The meeting, headed by President Xi Jinping, also called for efforts to expand domestic consumption and “adjust and optimize real estate policies in a timely manner”, according to state broadcaster CCTV.

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SAN FRANCISCO, United States—

TikTok, the social platform known for its addictive video content, announced Monday that it will offer text-only posts, becoming the latest tech giant to offer an alternative to embattled Twitter.

The text posts on TikTok will most closely resemble similar offerings on Instagram, which earlier this month also launched a challenge to Twitter —which owner Elon Musk renamed X—called Threads.

Like Meta-owned Threads, TikTok benefits from its size, with around 1.4 billion monthly active users, according to specialist site Business of Apps. But unlike Facebook’s parent company, it has chosen to integrate its new text-only feature into its app rather than launch a separate product, as Meta did with Threads.

TikTok’s version will remain more visual than a Twitter or Threads post, with users able to add a color background, music and stickers to the post.

The Chinese-owned company said the new format will expand “boundaries of content creation for everyone on TikTok” and tap into the “creativity” seen in comments and captions, the company said.

In addition to Threads, smaller platforms such as Mastodon, Bluesky and Substack Notes have emerged as potential rivals to Twitter, but none have so far dethroned it despite its troubles. AFP

PACKING FACILITY. Workers sort peaches at the packing house after they were harvested from the trees at Pearson Farm on July 24, 2023 in Fort Valley, Georgia. Due to weather extremes earlier in the year, their peach season, which usually ends in August, concluded Tuesday. Pearson Farm said they typically ship peaches to their customers for a 10-week period, but because of the lack of peaches, they only did four weeks. Peach farmers in Georgia say that a heat wave that hit the state in February and two cold fronts that passed through later in the season caused them to lose more than 90 percent of their crops this year. AFP

Swedish retailer H&M sues Chinese rival Shein in court

HONG KONG, China—Retail giant

Hennes & Mauritz has sued its fastgrowing rival Shein in a Hong Kong court for copyright infringement, the Swedish fashion juggernaut said Tuesday.

Shein, founded in China in 2008, has swiftly claimed a top place in the global fast-fashion marketplace, offering lowpriced collections attractive to young social media-savvy customers.

H&M confirmed on Tuesday it had opened a lawsuit against Shein and Zoetop Business, a Hong Kong-based company affiliated with the online retailer.

“We have an ongoing copyright infringement lawsuit towards Shein filed in Hong Kong,” a H&M spokesperson said.

“We believe that Shein in multiple cases has infringed on our designs.”

According to a Hong Kong court document, H&M had pointed to “the striking resemblance between the products showing they must have been copied” and the “sheer scale of (Shein’s) unauthorized substantial reproduction of the copyright works.”

A representative for Shein, which is now based in Singapore, said by email the company does not comment on pending litigation.

Copyright infringement lawsuits are common in the fast-fashion world but it is often smaller, independent designers lodging complaints against giant retailers, making H&M’s suit against Shein unusual.

The Swedish high-street brand is among the world’s most recognizable and has for years jousted with Spain’s Inditex—Zara’s owner—for the top spot.

But Shein’s rapid rise from a brand favoured by TikTok influencers to a global household name for Gen-Z— with a reported growth of $16 billion in 2021—has tipped the scales, placing it on H&M’s heels. Its cut-price merchandise and relentless expansion have also brought allegations from critics of forced labour and human rights abuses.

Three independent designers in the United States filed lawsuits against Shein this month, alleging that it has “grown rich by committing individual infringements... as part of a long and continuous pattern of racketeering.” AFP

“The overall stance remains in a progrowth mindset, but the focus is more forward-looking with an increased emphasis on addressing structural challenges (i.e. local government debt) to facilitate longer-term sustainable growth,” said Erin Xin at HSBC.

The announcement “keeps a supportive tone, which can help provide some support for the recovery and it may provide some boost to market sentiment”, she added.

While it was nowhere near the blockbuster spending plans seen in the past, the news gave investors a boost, with Hong Kong jumping nearly four percent thanks to a rally in real estate companies and tech giants. With AFP

UBS fined $387m over Credit Suisse misconduct—Fed

WASHINGTON, United States—

The Swiss banking giant UBS has been fined close to $400 million for misconduct by its recentlyacquired subsidiary, Credit Suisse, the US Federal Reserve announced on Monday.

Swiss regulators pushed UBS to take over its former rival Credit Suisse earlier this year amid a banking crisis spurred by the collapse of US regional lender Silicon Valley Bank.

On Monday, UBS was fined a total of $387 million by the Fed and the Bank of England over Credit Suisse’s failure “to adequately manage” the risk posed by the US family investment fund Archegos, despite repeated warnings, the Fed announced in a statement.

The dramatic implosion of the family hedge fund run by Bill Hwang cost Credit Suisse around $5.5 billion in losses.

The Fed said “the misconduct involved Credit Suisse’s unsafe and unsound counterparty credit risk management practices” with Archegos, and announced a consent order and a fine for UBS worth $268.5 million.

The Bank of England’s Prudential Regulation Authority would also be fining Credit Suisse’s new owner, the Fed announced, adding that the sum total of fines levied by the two regulators would be approximately $387 million.

The action against UBS is being taken in conjunction with the Swiss Financial Market Supervisory Authority, the Fed said. AFP