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Climate and the Financial Sector Newsletter
This newsletter highlights climate-related regulatory, litigation and enforcement developments relevant to the financial sector.
30 April 2024 [EU] – Revised Environmental Crime Directive (ECD) to enter into force on 20 May 2024
Directive (EU) 2024/1203 of 11 April 2024 on the protection of the environment through criminal law and replacing Directives 2008/99/EC and 2009/123/EC (the Revised ECD) was published in the Official Journal on 30 April 2024, and entered into force on 20 May 2024. It replaces the former 2008 ECD by providing a complemented and up-to-date list of environmental offences, which Member States will have to incorporate as criminal offenses in their national framework. Amongst new categories of offense are unlawful ship recycling or water abstraction and serious breaches of EU chemicals and mercury legislation. The Revised ECD also sets maximum and minimum fines, i.e., at least 3 or 5% of the worldwide turnover or more than 24 or 40 million euros, depending on the type of offence, with enhanced mitigating and aggravating circumstances to be taken into account. Member States are expected to establish qualified offences, subject to more severe penalties in the event of serious widespread and substantial damage or destruction of the environment. Member States will have to transpose the new offences by 21 May 2026 and publish national strategies on combatting environmental criminal offences by 21 May 2027. [link – link]
8 May 2024 [EU] – Directive on the postponement of European sustainability reporting standards published in Official Journal
Directive 2024/1306 amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and third countries was published in the Official Journal on 8 May 2024. It will enter into force on 28 May 2024. [link]
This Directive will postpone the deadline for the Commission to adopt specific standards (sector-specific and relating to certain third-country undertakings) until 30 June 2026. For more information, please refer to our latest newsletter available here.
10 May 2024 [EU] – IOSCO comments on IESBA consultation on Proposed International Ethics Standards for Sustainability
IOSCO has responded to the International Ethics Standards Board for Accountants (IESBA)’s consultation on its “Proposed International Ethics Standards for Sustainability Assurance (IESSA) and Other Revisions to the Code Relating to Sustainability Assurance and Reporting” with key areas and priority topics for the IESBA’s consideration. IOSCO recommends better coordination amongst IESBA and IAASB as concerns mutually used definitions, such as that of “sustainability information”, to promote interoperability. Other recommendations concern the scope of the International Independence Standards as applied to sustainability assurance engagements and applicable criteria, and a better definition of the requirements for the communication of actual or suspected non-compliance with laws and regulations between the auditor and the sustainability assurance practitioner. [link – link]
13 May 2024 [EU] – Commission registers European Citizens’ Initiative on the taxation of greenhouse gas emissions
The European Citizens’ Initiative ‘Save the Planet by Shifting Taxation from Labour to Greenhouse Gas Emissions’ has been registered by the European Commission. The initiative calls for the strengthening of the ‘Fit for 55’ package and the EU carbon pricing system, through a faster phase-out of free allowances, and an uncapped carbon price, along with a better redistribution of carbon pricing revenues to low-income households. This registration merely means that the formal conditions were met, but bears no meaning on the Commission’s appreciation of its substance, which will be considered if the initiative receives one million statements of support within one year of the signature collection’s launch, in at least seven Member States. [link – link]
14 May 2024 [UK] – UK Finance publishes report ‘Unlocking the SME Net Zero Transition’
UK Finance, an industry group for UK financial services firms, has published a report (here) highlighting the role of small and medium-sized enterprises (SMEs) in the UK’s transition to a net-zero economy. According to the report, SMEs account for between 43% – 53% of the UK’s greenhouse gas emissions, yet their appetite to implement carbon-reducing policies is waning, with (as of 2023) only 19% of SMEs planning to take steps to significantly reduce their carbon footprint.
Drawing on interviews with SME owners and staff, UK Finance identified three main barriers to the introduction of sustainability initiatives, namely (i) resourcing (time, information and capacity); (ii) finance; and (iii) policy clarity.
To address these hurdles, the report recommends that government, financial services firms and larger companies take action to help SMEs. The specific proposals include a recommendation that the UK Government relaunch its UK Business Climate hub, that it issue £5,000 “Help to Green” vouchers, that banks provide guidance and financial products to support green initiatives and that larger companies support their SME suppliers with training and resources to improve their environmental practices.
16 May 2024 [UK] – UK government publishes implementation update and framework for UK sustainability reporting standards
The UK Government has published (i) the framework (here) that will govern the endorsement and implementation of the International Sustainability Standard Board’s (ISSB) IFRS Sustainability Disclosure Standards in the UK, creating the UK Sustainability Reporting Standards (SRSs), as well as (ii) an update (here) on the implementation timeline of the UK Sustainability Disclosure Requirements (SDRs) of which the SRSs form a part (together with the work of the Transition Plan Taskforce, sustainability disclosures and investment labels for funds, the UK Green Taxonomy, and nature-related disclosures).
The framework document provides for (i) the establishment of a new UK Sustainability Disclosure Technical Advisory Committee to support and advise the Department for Business and Trade (DBT) on the endorsement and creation of the SRSs, and (ii) a UK Sustainability Disclosure Policy and Implementation Committee to co-ordinate the implementation of the SRSs between the Financial Conduct Authority (FCA) and DBT.
According to the implementation update, the UK government aims to endorse the SRSs by Q1 2025, which will then allow the FCA to create new requirements for listed companies on sustainability reporting based on the endorsed SRSs. In Q2 2025, the UK government will consider implementing the SRSs for companies outside the FCA’s regulatory perimeter, though no legislation on this topic is expected to be effective prior to 1 January 2026.
16 May 2024 [International] – NGFS publishes technical documents on sustainable and responsible investment for central banks
The Network for Greening the Financial System (NGFS) published a cover report and two technical documents on ‘Sustainable and Responsible Investment (SRI) in central banks’ portfolio management’. These documents put forward 10 recommendations for central banks to better understand SRI policies and to improve their SRI practices, notably based on earlier NGFS publications, case studies and internal surveys. They also provide deep dives into different ways central banks may account for climate change within their non-monetary investments in corporates or in sovereign debt, presenting both decarbonization strategies and common challenges faced by central banks when implementing the latter.
Paolo Angelini, Co-chair of the NGFS Workstream on Net Zero for Central Banks, Member of the Governing Board and Deputy Governor of the Bank of Italy, said of the report: “Leveraging on the progress and experiences of central banks in SRI practices, these documents provide insightful analyses on climate-related risks for investment. They delve into implementation issues with a practical, hands-on type orientation, but they also give investors (not only central banks) food for thought on several challenges and unanswered conceptual issues that are still present in this field.” [link – link]
Asset Management
14 May 2024 [EU] – ESMA publishes final report containing Guidelines on funds’ name using ESG or sustainability-related terms
ESMA published Guidelines aimed at establishing harmonised criteria for use of ESG and sustainability terms in fund names, following its related public statement of 14 December 2023 (for more information on this statement, please refer to our newsletter available here).
The Guidelines aim to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names. For this purpose, and to provide asset managers with clear quantitative criteria, the Guidelines establish that where a fund has any ESG-related words in its name, a minimum proportion of at least 80% of its investments should be used to meet the environmental or social characteristics or sustainable investment objectives in accordance with the binding elements of the investment strategy. The Guidelines also apply exclusion criteria for different terms used in fund names, based on the Paris-aligned benchmarks for terms such as “environmental”, “impact” and “sustainability”, and based on the Climate Transition Benchmarks for terms such as “transition”, “social” and “governance”. Where those terms are combined, further criteria are specified.
Next steps include publication on the ESMA’s website, two months after which the national competent authorities shall notify whether they intend to comply, and three months after which the Guidelines will become applicable. Existing funds will benefit from a six-month transitional period from this date. [link – link]
Insurance
25 April 2024 [Italy] – The Italian Insurance Supervisory Authority joins the Forum for Insurance Transition to Net Zero set up by the UN Environment Programme
IVASS is among the new members of the Consultative Group of Insurance Regulators & Supervisors (CGIRS) of the Forum for Insurance Transition to Net Zero (FIT), along with 16 other international insurance regulators and supervisors, including the Bank of England’s Prudential Regulation Authority, European Insurance & Occupational Pensions Authority, Central Bank of the Netherlands, German Federal Financial Supervisory Authority (BaFin) and French Prudential Supervision & Resolution Authority (ACPR). [link]
The FIT, chaired by UNEP, is a multi-stakeholder forum set up by the United Nations Environment Programme (UNEP) with the aim to promote climate action by the insurance industry and accelerate transition to a net-zero economy, by allowing dialogue with insurance market participants and insurance regulators and supervisors, the concerned institutions and the scientific community. FIT intends to move forward from the current practice of self-regulation implemented by insurance market participants to create its own net-zero framework, working towards soft regulation and ultimately hard regulation.
The FIT will work closely with the Consultative Group of Insurance Regulators & Supervisors (CGIRS), as well as a second group made up of academic, research and civil society organizations.
The mission of the FIT consists in:
- Advancing frameworks for net-zero insurance metrics and developing new net-zero insurance concepts;
- Developing a net-zero transition plan framework for insurance market participants;
- Engaging with the real economy on the development of net-zero transition plans by corporates across different sectors;
Tackling challenges and opportunities to develop insurance products that would support the net-zero transition.
Litigation
16 May 2024 [GER] – German federal government ordered to stricter climate protection measures
The Higher Administrative Court in Berlin has ordered the German federal government to step up its climate protection program. Current measures are not sufficient to achieve the climate targets (i.e. a 65% reduction in emissions by 2030 compared to 1990 levels). With the exception of agriculture, all sectors are expected to miss the targets of the Climate Protection Law. The specific measures to be taken are at the discretion of the federal government.
If the ruling withstands an expected appeal to the Federal Administrative Court, it is likely to have far-reaching consequences for the current government’s policies in all departments. [link, only German]
21 May 2024 [France] – Criminal suit filed against TotalEnergies and its shareholders
A criminal suit was filed against TotalEnergies by eight individual claimants and three NGOs, alleging “manslaughter,” “endangering others,” “failing to combat a disaster,” and “harming biodiversity.” The complaint also targets TotalEnergies’ CEO, Board of Directors, as well as ten of its largest shareholders, who are alleged to have systematically voted in favour of the proposed climate strategy and always opposed resolutions calling for more ambitious strategies for combating climate change.
Previous editions of the newsletter can be found below:
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News
Breakfast on Wall Street: The Week Ahead
The spotlight next week will shift somewhat to the Federal Reserve’s second-quarter earnings season and monetary policy. Market watchers will be treated to results from several major names, including Dow 30 components Goldman Sachs (GS), UnitedHealth (UNH), Johnson & Johnson (JNJ) and American Express (AXP), along with streaming giant Netflix (NFLX).
The Fed will still attract some attention as investors will be eager to hear from a packed lineup of central bank speakers just before the policy meeting lockout period.
In terms of the economic calendar, after fifteen days of labor market and inflation indicators, activity data will gain momentum in the form of the latest retail sales and industrial production reports.
Earnings Highlight: Monday, July 15 – Goldman Sachs (GS) and BlackRock (Black). See the full earnings calendar.
Earnings Highlight: Tuesday, July 16 – UnitedHealth (UNH), Bank of America (BAC), Progressive (PGR), Morgan Stanley (IN), PNC Financial (PNC) and JB Hunt Transport (JBHT). See the full earnings calendar.
Earnings Highlight: Wednesday, July 17 – Johnson & Johnson (JNJ), US Bancorp (USB), Morgan Children (KMI), United Airlines (UAL) and Ally Financial (ALLY). See the full earnings calendar.
Earnings Highlight: Thursday, July 18 – Netflix (NFLX), Abbott Laboratories (ABT), Black stone (BX), Domino’s pizza (ZDP) and Taiwan Semiconductor Manufacturing (TSM). See the full earnings calendar.
Earnings Highlight: Friday, July 19 – American Express (AXP), Halliburton (THANKS) and Travelers (VRT (return to recoverable value)) See the full earnings calendar.
IPO Observation: Hospital and healthcare clinic operator Ardent Health Partners (TARDT), insurance service provider Twfg (TWFG) and the biotechnology company Lirum Therapeutics (LRTX) are expected to price their IPOs and begin trading next week. The analyst quiet period ends at Rectitude (RECT) to free up analysts to publish ratings.
News
Trump shooting: Gold could hit record high, dollar and cryptocurrencies set to jump
Police cars outside the residence of Thomas Matthew Crooks, the suspected shooter at a Trump rally on Saturday, investigate the area in Pennsylvania. Following the incident, one rally attendee was killed, two rally attendees are in critical condition and Donald Trump suffered a non-fatal gunshot wound. The shooter is dead after being shot dead by the United States Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Investors will initially favor traditional safe-haven assets and may lean toward trades more closely tied to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
“There will undoubtedly be some protectionist or safe-haven flows into Asia early this morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I suspect gold could test all-time highs, we’ll see the yen being bought and the dollar, and flows into Treasuries as well.”
Early market commentary suggested Trump’s shooting at a rally in Pennsylvania on Saturday could also prompt traders to increase his likelihood of success in the November election. His support for looser fiscal policy and higher tariffs is generally seen as likely to benefit the dollar and weaken Treasuries.
An indicator of market sentiment heading into the weekend: Bitcoin surged above $60,000, likely reflecting Trump’s pro-crypto stance.
Other assets positively linked to the so-called Trump trade include stocks of energy companies, private prisons, credit card companies and health insurers.
Traders will also be closely watching market measures of expected volatility on Monday, such as those in the tariff-sensitive Chinese yuan and Mexican peso, which have begun to price in the U.S. vote.
Trump said he was shot in the right ear after a shooting at his rally. His campaign said in a statement that he was “fine” after the incident, which prompted him to rush off the stage.
“Currencies will be the first major market on Monday in Asia to react to the weekend’s shots. There’s potential for extra volatility, and getting a clear reading could be especially difficult because liquidity will be hurt by Japan’s national holiday,” said Garfield Reynolds, Asia team leader for Bloomberg Markets Live.
Strategists had already expected a volatile run-up to the election, particularly as Democrats are still agonizing over President Joe Biden’s candidacy after his poor performance in last month’s debate raised questions about his age. Investors were also grappling with the possibility that the election could end in a drawn-out dispute or political violence.
But there is little precedent for events like those in Pennsylvania. When President Ronald Reagan was shot four decades ago, the stock market plunged before closing early. The next day, March 31, 1981, the S&P 500 rose more than 1% and benchmark 10-year Treasury yields fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay particular attention as the attack is likely to boost Trump’s election chances and ultimately lead to concerns about the fiscal outlook, according to Marko Papic, chief strategist at California-based BCA Research Inc.
“The bond market must at some point become aware of President Trump’s greater chances of winning the White House than any of his rivals,” Papic wrote. “And I continue to believe that as his chances increase, so too must the likelihood of a bond market revolt.”
Kyle Rodda, senior financial markets analyst at Capital.com, said he was seeing client flows into Bitcoin and gold following the shooting.
“This news marks a turning point in American policy norms,” he said. “For markets, it means safe-haven trades, but more tilted toward non-traditional safe-havens.”
News
Latest Business News Live Updates Today, July 11, 2024
Follow us for stories on Bill Gates, Elon Musk, Mukesh Ambani, Gautam Adani as we bring you everything that’s happening in the business world. Follow the latest gold and silver prices here too. Stay in the know on all things business with us.
Latest news on July 11, 2024: Airtel says its new Xstream Fiber plans bundle over 350 live TV channels (Official Photo) (Reuters) Disclaimer: This is an AI-generated live blog and has not been edited by Hindustan Times staff.
Follow all the updates here:
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Thu, 11 Jul 2024 08:44 PM
Business News LIVE Updates: Decoding Airtel’s new Xstream Fiber packages, finding value with Live TV and OTT
- Airtel confirms to HT that the live TV proposition is being delivered using its DTH network, while the bundled streaming subscriptions are an extension of its Xstream Play platform.
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Thu, 11 Jul 2024 03:58 PM
Business News LIVE Updates: TCS Q1 results meet estimates: Net profit up 9%, ₹10 dividend declared
- TCS’s consolidated revenue rose 5.4% to Rs 626.13 billion in the June quarter. Analysts had expected revenue of Rs 622.07 billion, as per LSEG data.
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Thu, 11 Jul 2024 03:51 PM
Business News LIVE Updates: Indian companies falsified generic Viagra data to get approval, says US FDA: Report
- Synapse Labs Pvt. Ltd may have been used in hundreds of drugs that are still available for sale, the report said.
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Thu, 11 Jul 2024 03:09 PM
LIVE Business News Updates: Namita Thapar’s emotional post on Emcure IPO listing: ‘Mirza Ghalib sums up my feelings’
- Emcure Pharmaceuticals was listed at ₹1,325.05, up 31.45% on the BSE and NSE on July 10.
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Thu, 11 Jul 2024 02:39 PM
LIVE business news updates: Amazon could face investigation over treatment of UK food suppliers, watchdog says
- An Amazon spokesperson said the company has made several improvements for food suppliers since last year’s results.
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Thu, 11 Jul 2024 01:39 PM
LIVE Business News Updates: This Bengaluru company aims to launch a ‘space habitat’ by 2027, in talks with SpaceX
- AkashaLabdhi calls itself a “home among the stars” as it says the company’s area of expertise is signal processing and continuous automation.
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Thu, 11 Jul 2024 01:10 PM
Business News LIVE Updates: Amazon India employees on working conditions: Made to stand for hours, bathroom breaks not allowed
- A survey conducted by UNI Global Union with the Amazon India Workers Association had 1,838 participants who alleged appalling working conditions at Amazon facilities in India.
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Thu, 11 Jul 2024 12:44 PM
LIVE Business News Updates: UK overhauls listing rules in bid to attract IPOs to London: What has changed?
- The new rules allow companies to carry out more activities without putting them to a shareholder vote, the UK’s Financial Conduct Authority said.
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Thu, 11 Jul 2024 12:18 PM
Business News LIVE Updates: Want to send money abroad? Open foreign currency accounts at GIFT City
- Foreign currency accounts will be like a bank account in India, but instead of rupees, you hold foreign currency like US dollars.
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Thu, 11 Jul 2024 11:30 AM
Business News LIVE Updates: First Abu Dhabi Bank denies interest in acquiring stake in Yes Bank: Report
- The report said the Yes Bank stake sale has attracted interest from Japan, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc.
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Thu, 11 Jul 2024 11:04 AM
LIVE Business News Updates: TCS Share Price Surges Ahead of Q1 Results: What Brokers Say About the Stock
- TCS Share Price: The stock opened at ₹3,944.65 against its previous close of ₹3,909.90. It then rose 1.8 percent to ₹3,979.90 level.
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Thu, 11 Jul 2024 10:22 AM
LIVE Business News Updates: Reliance Jio IPO listing likely in 2025 at $112 billion valuation: Jefferies
- Jio “could list at a valuation of $112 billion” and add “7-15 percent upside” to Reliance Industries’ share price, Jefferies said.
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Thu, 11 Jul 2024 09:42 AM
LIVE Business News Updates: Yes Bank shares rise after Moody’s revises outlook to ‘positive’ from ‘stable’
- Global rating agency Moody’s has raised its outlook on Yes Bank to positive from “stable” despite expectations of a gradual improvement in its depositor base.
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Thu, 11 Jul 2024 09:16 AM
Business News LIVE Updates: Sahaj Solar IPO opens today: All you need to know before subscribing to the issue
- Sahaj Solar IPO: The block issue aims to raise ₹52.56 crore through issuance of 2.92 million new shares and will close on July 15.
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Thu, 11 Jul 2024 08:40 AM
LIVE Business News Updates: Why Analysts Believe India’s Earnings Season May Disappoint Stock Market Investors
- Investors in Indian stocks hoping for a robust earnings season to justify expensive valuations are likely to be disappointed.
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Thu, 11 Jul 2024 08:35 AM
LIVE Business News Updates: Elon Musk Says Second Neuralink Brain Implant Will ‘Give People Superpowers’ Within a Week
- Elon Musk said Neuralink will make some changes to try to alleviate the problem of its electrode wires retracting from brain tissue.
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Thu, 11 Jul 2024 07:59 AM
LIVE Business News Updates: Apple warns Indian iPhone users of possible Pegasus-like ‘spyware attack’
- In April this year, the Indian Computer Emergency Response Team (Cert-In) flagged several vulnerabilities in Apple’s operating system for iPhone and iPad.
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Thu, 11 Jul 2024 07:45 AM
Business News LIVE Updates: US stock markets at record highs led by world’s biggest tech companies
- The Philadelphia Semiconductor Index rose 2.4% to a record high after Taiwan Semiconductor Manufacturing Co. reported strong quarterly revenue.
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News / Business / Latest Business News Live Updates Today, July 11, 2024
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News
Jio Financial share price: Should you buy this Reliance group stock on Monday ahead of Q1 FY2024 results?
Q1 2024 Results: Jio Financial Share Price will be in focus on Monday as the Reliance Group company has a fixed board meeting on July 15, 2024 to consider and approve the company’s unaudited standalone and consolidated financial results. Trust Group company informed about the Q1 2024 Results date on Wednesday last week via an exchange filing. According to stock market experts, Jio Financial Services Limited is poised to deliver impressive Q1 results for FY25 on solid operating income. They have forecast a healthy QoQ PAT for the company in Q1 FY25.
Jio Financial Services News
Speaking on the Jio Financial Services Q1 2024 results, Manish Chowdhury, Head of Research, StoxBox, said, “We believe Jio Financial Services is poised to deliver impressive results in Q1FY25 aided by its operating income, which is likely to show robust growth driven by strong investment income, which in turn should lead to healthy PAT growth on a sequential basis. Jio Financial Services continues to make strategic moves such as launching digital products and expanding its ecosystem, with a clear focus on future growth. The company has announced plans to introduce products for lending against stocks and mutual funds, leveraging Jio’s large user base, which could be a significant growth driver in the coming quarters.”
“Furthermore, with the NBFC receiving RBI approval to become a primary investment company, Jio Financial Services is well-positioned to unlock value from its investments. Overall, we expect the company to report robust numbers in the upcoming quarter,” the StoxBox expert added.
Jio Financial Stock Target Price
Speaking about the technical outlook of Jio Financial share price, Ganesh Dongre, Senior Manager, Technical Research at Anand Rathi, said, “Jio Financial Services share price is poised to make a fresh high at the ₹260 apiece level. If the stock breaks above this mark, the Reliance Group stock could make a fresh high by touching the ₹290-₹295 zone. Hence, those with Jio Finance stock in their portfolio are advised to stick to the script by keeping a stop loss at ₹205. If the stock breaks above ₹260 decisively, then one can upgrade the stop loss at ₹240 for the near-term target of ₹295.”
On the advice to new buyers regarding Jio Financial stock, Ganesh Dongre said, “New buyers are advised to wait for the breakout. Once the stock breaks above ₹260, one can buy this Reliance Group stock at the short term target of ₹295, keeping a stop loss of ₹240 apiece.”
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
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