Financial Services Talking Points | 15/08/2017

In today’s talking points: Silicon-Valley startup establishes hub in Sydney; China’s fiscal revenue experiences increase; China’s foreign exchange reserves rise to USD 3.08 trillion; 126% increase in M&A investment: Australia remains a hot destination for Chinese investors.

Silicon-Valley startup establishes hub in Sydney

Optimizely, a digital experimentation company originating out of Silicon Valley, has recently announced plans to establish its Asia-Pacific hub in Sydney after raising $185 million from American investors. The company specialises in providing businesses with software to edit websites without the need for coding or advanced website skills. Analytics are also improved to track the effectiveness of changes, allowing business to further optimise their online presence.

The company has expanded into Australia to better cater to its Australian client base, further develop its operations in the country and to act as a base for expansion into the broader Asia-Pacific region.

Optimizely joins a growing list of tech companies moving into Australia in recent years, including OVH, Qualtrics, Stripe and Slack. The majority of these companies are choosing to base themselves out of Sydney, leading some to dub Sydney as Asia-Pacific’s up-and-coming tech hub.

Read more at: The Australian Financial Review


China’s fiscal revenue experiences increase

Chinese fiscal revenue experienced higher growth rates in July compared to previous months, while fiscal expenditure saw a slower increase. Looking at year-on-year statistics, fiscal revenue is up 11.1 percent on July 2016, whereas fiscal expenditure only grew by 5.4 percent. These figures attest to the resilience of China’s economy and the government’s ability to successfully meet economy targets.

China has adopted a more proactive approach to its fiscal policy in 2017 as part of efforts to support economic growth. The government has set its fiscal deficit at 3 percent of GDP for the year, which is equivalent to 2.38 trillion yuan.

Read more at: Xinhua


China’s foreign exchange reserves rise to USD 3.08 trillion

The value of China’s foreign exchange reserves rose to a 9-month high of USD 3.08 trillion, after increasing for 6 consecutive months. This was attributed to a combination of multiple factors, including an increase in value of non-US dollar assets within the foreign exchange reserve portfolio, a weaker US dollar, and a reduction of capital outflow as a result of more effective regulations. The growth of the Chinese economy of 6.9% in the first half of 2017 and the surrounding optimism was also key, with Bloomberg chief Asia economist tom Orlik stating “a stronger yuan, resilient growth and buoyant markets all helped keep the brakes on outflows”.

Read more at: China Daily


126% increase in M&A investment: Australia remains a hot destination for Chinese investors

China has continued to heavily invest in Australia, with USD 16.2 billion worth of merger and acquisitions in the past financial year. This was led by CKI’s purchase of Duet Group for USD 9.8 billion and Chow Tai Fook’s purchase of Alinta for USD 3.07 billion. Despite the impressive activity in investment, dealmakers have said that the activity has been somewhat dampened due to domestic shifts, with China’s 19th National Congress being held in October, as well as Chinese regulators’ continued restrictions on foreign investment of deals worth more than USD 1 billion.

Read more at: The Australian