One of cryptos longest-running exchanges has been sold

One of the longest-standing crypto exchanges has new owners after Europe-based Bitstamp was sold to South Korea’s Nexon, marking the gaming firm’s second such acquisition.

The acquirer is NXMH, a Belgium-based PE and investment firm owned by NXC — the parent of Nexon — and it will take a majority 80 percent stake in the business for an unknown fee. The New York Times’ Nathaniel Popper suggested earlier this year that Bitstamp was in the process of being sold “to South Korean investors” for $400 million, but NXC declined to comment on the price when asked by TechCrunch.

NXC acquired 65 percent of Korea-based exchange Korbit one year ago for 91.3 billion KRW, or approximately $79.5 million at the time.

Bitstamp was founded in 2011 by Slovenian entrepreneur Nejc Kodrič with an initial €1,000 and it survived the heady early days of crypto, unlike a certain peer named Mt. Gox. Today, Bitstamp is ranked inside the world’s top 30 exchanges based on trading volume with more than 100 staff. Bitcoin and XRP are among its most traded tokens, according to data from Coinmarketcap.com.

The company has a license to do business across the EU but it also works with customers worldwide.

Bitstamp has been profitable since its early life, but Kodrič revealed the sale is down to the potential to work with NXC, which he sees as a like-minded partner.

Bitstamp has been regularly approached by suitors for quite some time. The reason why we finally decided to sell the company is a combination of the quality of the buyer, the quality of the offer and the fact that the industry is at a point where consolidation makes sense. A major factor in agreeing to the sale is that the mission, leadership and vision of the company remains the same.

We believe this acquisition is the logical next step in Bitstamp’s growth as a company and I look forward to the future with this team.

The Bitstamp CEO said business will continue as normal — he’ll retain his position as CEO and keep 10 percent of the company.

Interestingly, he told Fortune that regulatory compliance meant the deal took some ten months to close after first being agreed in December 2017 when crypto market valuations hit a peak — with Bitcoin, in particular, getting close to a record $20,000 valuation.

Bitstamp raised around $14 million in capital from investors along its journey, with U.S-based Pantera capital one of its major backers.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Norway’s $1tn wealth fund urged to keep oil and gas investments

Government advisers reject central banks proposal to sell billions held in oil stocks

Government advisers have urged Norway not to ditch oil and gas investments from its $1tn sovereign wealth fund, in a setback for those backing the worlds biggest fossil fuel divestment.

Norways central bank last year recommended the fund sell the billions it holds in oil stocks to avoid the risk of a permanent drop in crude prices.

However, a government-appointed commission has rejected the proposal, warning that a less diverse investment strategy would have major consequences for the funds returns.

A sale of energy stocks would challenge the current investment strategy of the fund, with broad diversification of the investments and a high threshold for exclusion, the commission said on Friday.

The Government Pension Fund Global was built off the oil and gas revenues that have made Norway rich.

It also has major holdings in international oil firms, including $6.14bn in Shell, followed by billions of dollars invested in other oil majors such as BP, Chevron, ExxonMobil and Total.

It has smaller stakes in the Italian oil firm Eni, the US oil firm ConocoPhillips and the US oil services group Schlumberger. Most oil company share prices have climbed in the past year along with crude prices.

Divesting those stocks was not an effective insurance against the substantial hit Norway faced to its tax take if its oil and gas sector was hurt by an oil price crash, the commission argued.

The commission, headed by the economist ystein Thgersen, said the funds existing investment strategy was simple, well founded and has served the fund well.

Nicol Wojewoda, the Europe team leader at the climate campaign group 350.org, said: This summer Nordic heatwaves, wildfires in the Arctic Circle and alarming news of the thickest Arctic sea ice starting to break up, have brought climate change so close to home for Norway. It seems unthinkable to continue to invest in companies that have caused this chaos.

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The government said a final decision would be made this autumn.

Siv Jensen, the minister of finance, said: Together with the advice from Norges Bank [the central bank] and the public consultation of the banks advice, this report will constitute a solid foundation for decision-making.

Norways state-owned oil company Statoil earlier this year rebranded itself as Equinor, to reflect what it said was its new role as a broad energy company.

Rich Asians Give Deutsche Bank Crazy Growth Potential

In Deutsche Bank AG Chief Executive Officer Christian Sewing’s push to get back into growth mode, there’s one specific business in which there are pretty much no hiring limits.

The private bank in Asia is still recruiting, even after bringing on board about 100 relationship managers and support staff in the first half, Lok Yim, who runs the Asia-Pacific wealth business, said in an interview. “I don’t think there’s a limit apart from what we can digest,” he said.

Few businesses offers such eye-watering opportunities for global banks right now as catering to Asia’s swelling millionaire class. While Sewing has cut thousands of jobs elsewhere, in Asia he’s locked in a battle with banks from Credit Suisse Group AG to Morgan Stanley for the bankers who can bring in wealthy clients — and generate revenue from them.

“We’ve been having strategy papers with Christian Sewing,” Yim said. “The discussion is about ‘how much more would you like to grow?’" he added.

Read about how not even fruit bowls are safe in Deutsche Bank’s cost clampdown

Since taking over in April, Sewing has announced plans to cut at least 7,000 jobs and retrench in investment-banking areas such as prime finance and U.S. rates. More recently, however, the CEO has talked about the need to expand some operations. Wealth management in Asia, the Americas and Europe has been identified as among the bank’s most important areas for growth, according to its second-quarter earnings statement.

Asian Assets

The size of wealth assets under management in Asia is second only to Deutsche Bank’s home market in Germany, though overall growth has been subdued in recent years. Total AUM was 216 billion euros ($251 billion) at the end of June, little changed from a year earlier.

Yim said the bank had a strong first half in Asia with “a lot of client activity in the first quarter that carried momentum into the second quarter." AUM in the region edged up to 51 billion euros at the end of June, from 47 billion euros a year earlier, which Yim said was due to both new money inflows and movement in the value of financial assets.

Wealth Business

Deutsche Bank's Asia AUM is the largest after Germany (in billion euros)

Source: Deutsche Bank's second-quarter earnings presentation

Yim expressed optimism that the recent hiring of relationship managers will bring more rich clients to the bank. “With new colleagues coming on board we are hopeful that we will, over a reasonable period of time, bring new clients onto the Deutsche platform," Yim said.

Despite recent market volatility, Deutsche Bank is advising its wealthy clients in the region to maintain their investments rather than move into safe havens like cash, Yim said. “We do not feel that this is a time to stay in cash. If anything, we remain fully invested but in a hedged environment."

Yim said he is looking to technology and a focus on certain countries and markets in order to contain costs and “sustain profitability" at a time when he is adding new bankers. For example, the bank has exited the wealth business in Australia and Japan in recent years, and no longer serves European clients from Asia, Yim said.

“We want to grow, but sustainably and safely," Yim said. “But we are not going to hire people for the sake of hiring."

    Spotify Analysts Are Falling for a Stock That Hasn’t Traded Yet

    Spotify Analysts Are Falling for a Stock That Hasn’t Traded Yet

    • Analysts recommend buying music-streaming stock ahead of debut
    • Share price a mystery until trading starts on April 3

    It’s anyone’s guess what price Spotify Technology SA’s shares will trade at when they debut next week, but that hasn’t stopped analysts from jumping in with buy recommendations.

    Four analysts have released bullish research on the music-streaming company this week ahead of an unusual direct listing on April 3.

    Atlantic Equities LLP analyst James Cordwell and RBC Capital Markets analyst Mark Mahaney both suggested buying Spotify for its leading role in a global market. But the bulls still disagreed on a price – their targets are 38 percent apart from each other.

    Without a traditional initial public offering, Spotify shares have no indicative price range. Instead, the trading price will remain a mystery until existing holders sell shares on the New York Stock Exchange. “With no shares being offered, supply seems to be the greater unknown,” MKM Partners LLC’s Rob Sanderson said in his buy-rated initiation note. “We are anticipating unusual trading dynamics in the days and weeks following the April 3 listing and are unsure how long before adequate liquidity will be established.”

    Utilities Plot a Digital FutureAnd Look Like Tech Stocks

    In December, 20 months into the top job at Germany’s Innogy AG, Peter Terium unveiled a 3 billion-euro plan to transform the utility into a provider of electric car technology, digital networks, and offshore wind farms. His goal, he said, was to become “a trailblazer of change. We do not wait to see what happens. We set trends.” Terium didn’t need to wait long to see what happened. A week later, he was out of a job. 

    Terium’s fate highlights the dilemma faced by European utilities. The likes of the U.K.’s Centrica Plc, Eon SE of Germany, and Italy’s Enel SpA are shifting away from their traditional business of simply selling electricity and starting to offer higher-tech—and potentially more profitable, but also riskier—services such as smart meters, rooftop solar panels, and installing batteries in customers’ garages.

    Utilities, grid operators and other companies in the sector will plow $590 billion into digital initiatives from 2017 to 2025, or about a fifth what they’ll spend on of their total capital spending, according to Bloomberg New Energy Finance. The industry must make such investments if it’s going to survive, but “you need to credibly show that you can deliver,” said Leonard Birnbaum, an executive board member at Eon. “You can’t say, ‘Hey there’s the growth out there, let’s go spend money. Trust me and lets see what happens.”

    Futureproofing Utilities

    Spending by the energy sector on digitalization projects is set to soar

    Source: Bloomberg New Energy Finance

    The shift is changing the market’s view of what was long deemed a safe, stable sector that delivered consistent, if uninspiring, revenue growth. With the perceived risk of the industry on the rise, dividend yields of utility stocks have jumped. And the shares have been more volatile than the wider market since 2014 as prices for electricity, and the gas and coal needed to produce it, have whipsawed.

    Smart Meters

    “Energy prices are going up and down much more than they used to,” said Elchin Mammadov, an analyst at Bloomberg Intelligence. Rising competition has squeezed margins, and as companies move away from carbon-based fuels, “they need to invest more even as their earnings are not growing as fast.”

    Innogy, Fortum Oyj of Finland, and Sweden’s Vattenfall AB have installed thousands of electric vehicle charging stations across the Continent. Iberdrola SA in Spain and France’s Engie SA are developing software to let them better manage power lines and networks. And almost all of Europe’s largest utilities now connect thermostats and appliances to smartphones. Though such programs are pricey—the companies must buy and install millions of smart meters—they see it as a necessary expenditure to help customers more efficiently use electricity.

    Vattenfall E-car charging station in Berlin. 
    Photographer: Krisztian Bocsi/Bloomberg

    While the utilities feel they must adapt to the changing market with the shift, it’s difficult to predict the long-term payoff of initiatives such as e-car charging points given that there are few battery powered vehicles on the road, said Andreas Regnell, head of strategic development at Vattenfall. “We don’t know when it will be profitable,” Regnell said. “So we are spending money a bit on a leap of faith.”

    “Google of Energy”

    Enel is seeking to beef up its digital offerings via a unit dubbed Enel X. The division, which its chief hyperbolically calls “the Google of energy,” has some 1,000 employees working on projects ranging from Enel-branded credit cards to systems that let electric vehicle owners to sell power stored in their batteries back to the grid when demand peaks.

    Francesco Venturini
    Photographer: Aaron M. Sprecher/Bloomberg

    “Technology has meant disruption for the energy industry,” says Enel X boss Francesco Venturini. “We’re trying to turn that technology into an opportunity.”

    In January, hedge fund Marshall Wace said in a letter to investors that it had sold short shares of German power producer Uniper. The letter said the fund expects coal prices to fall, which would cut the price of power. Marshall Wace also predicts that some of the utility’s generating plants will be taken out of service and others will be displaced by renewables. Both those factors would shrink Uniper’s earnings as its electricity revenue declines, the fund said.

    Companies have seen their stock prices drop as “a lot of market share has been lost to renewables,” said Ahmed Farman, an analyst at Jefferies International Ltd. in London.

    Longer-term investors are also taking note. Ronald Wuijster, chief investment officer at Dutch pension fund APG Asset Management, says many utilities must change their strategies to survive. While there’s no one-size-fits-all solution, he suggests companies pay greater attention to the potential effects of climate change as they plan their investments.

    “For so many utilities, if you look at the long term horizon you will see clear risks,” Wuijster said. “That could mean you’re gradually going to need to change your strategy.”