Dynamism Needed in Financial Markets; Ant Group FaltersBy Peter Appleby | Thu, 11/05/2020 - 17:31
Mexico’s financial sector has been awaiting the results of the US election. Bitcoin, the world’s oldest digital currency, has enjoyed the uncertainty of the election period while Ant Group, headed by Alibaba’s Jack Ma, saw its IPO delayed. Arturo Herrera, meanwhile, has said the recent pandemic and changes in financial behavior have pressed the need for Mexico’s financial markets to be more dynamic.
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Minister of Finance Bemoans Lack of Savings, Investment Options in Mexico
Minister of Finance Arturo Herrera said Mexico’s financial sector must become more dynamic to offer a greater array of savings and investment opportunities to consumers, El Economista reported this week.
At the National Financial Education Week 2020, the minister pointed out that only 37 percent of Mexicans have a bank account and just 5 percent of bank account holders make voluntary pension contributions to pension funds, known as Afores.
He also noted that the 20 percent increase in digital transactions seen between April and June caused by the pandemic requires a more robust system as digital fraud is also likely to rise.
He said that the increase in remittances seen this year was welcome but that financial education needs to improve.
The world’s highest-valued fintech company had a hiccup this week. Ant Group’s IPO on the Shanghai Stock Exchange was suspended a day after regulators said it may not have been compliant with new listing requirements.
The fintech unicorn raised US$34 billion ahead of its stock market debut, marking the biggest share sale in history, and has previously criticized Chinese financial regulation for being old-fashioned.
Zhang Yi, Chief Executive of consultancy iiMedia suggested that the company’s best bet to get to market could be to split the business into several IPOs.
The world’s best-known cryptocurrency, Bitcoin, has seen its value increase by over 10 percent since the US’ election day as uncertainty on the outcome and the potential for the election’s final count to be drawn-out could weaken the dollar.
Bitcoin has hit prices not seen since 2018 amid the confusion around the vote. According to experts, a Biden victory – which now seems likely – may lead to large-scale spending on social and environmental issues which would, due to federal budget deficits, likely be financed by the printing of money.