The Three Big Transitions Reshaping Finance
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,627,086 (-0.52%)       Melbourne $991,016 (+0.02%)       Brisbane $1,008,247 (+0.57%)       Adelaide $881,757 (-1.94%)       Perth $857,431 (+0.47%)       Hobart $728,683 (+0.15%)       Darwin $650,080 (-2.29%)       Canberra $1,042,488 (+1.17%)       National $1,052,954 (-0.17%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $754,033 (-0.54%)       Melbourne $493,897 (-0.18%)       Brisbane $575,927 (+2.34%)       Adelaide $460,725 (+2.82%)       Perth $451,917 (+0.14%)       Hobart $507,207 (+0.52%)       Darwin $359,807 (+0.61%)       Canberra $486,447 (-2.01%)       National $534,000 (+0.26%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,472 (+43)       Melbourne 14,783 (-132)       Brisbane 7,948 (+15)       Adelaide 2,170 (+81)       Perth 5,836 (+49)       Hobart 1,243 (+2)       Darwin 251 (+7)       Canberra 967 (-21)       National 43,670 (+44)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,699 (+113)       Melbourne 8,259 (+38)       Brisbane 1,637 (+2)       Adelaide 386 (+14)       Perth 1,480 (-37)       Hobart 204 (+6)       Darwin 409 (+5)       Canberra 1,034 (+6)       National 22,108 (+147)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $820 ($0)       Melbourne $600 ($0)       Brisbane $640 (-$10)       Adelaide $610 (+$10)       Perth $680 ($0)       Hobart $550 ($0)       Darwin $740 (-$10)       Canberra $680 ($0)       National $675 (-$2)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $760 ($0)       Melbourne $595 ($0)       Brisbane $630 (-$10)       Adelaide $500 ($0)       Perth $625 (+$5)       Hobart $460 (+$10)       Darwin $535 (-$5)       Canberra $550 ($0)       National $595 (-$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 6,053 (+221)       Melbourne 6,376 (+263)       Brisbane 4,431 (+5)       Adelaide 1,566 (+60)       Perth 2,666 (-61)       Hobart 431 (0)       Darwin 102 (+7)       Canberra 621 (+19)       National 22,246 (+514)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,306 (+260)       Melbourne 6,173 (+102)       Brisbane 2,248 (-24)       Adelaide 399 (+26)       Perth 754 (+14)       Hobart 148 (+5)       Darwin 145 (+9)       Canberra 785 (+39)       National 20,958 (+431)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.62% (↑)        Melbourne 3.15% (↓)       Brisbane 3.30% (↓)     Adelaide 3.60% (↑)        Perth 4.12% (↓)       Hobart 3.92% (↓)     Darwin 5.92% (↑)        Canberra 3.39% (↓)       National 3.33% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.24% (↑)      Melbourne 6.26% (↑)        Brisbane 5.69% (↓)       Adelaide 5.64% (↓)     Perth 7.19% (↑)      Hobart 4.72% (↑)        Darwin 7.73% (↓)     Canberra 5.88% (↑)        National 5.79% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 28.7 (↓)       Melbourne 30.2 (↓)       Brisbane 30.7 (↓)     Adelaide 25.9 (↑)        Perth 35.8 (↓)       Hobart 37.6 (↓)     Darwin 37.0 (↑)      Canberra 28.5 (↑)      National 31.8 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 29.2 (↓)     Melbourne 30.4 (↑)        Brisbane 29.5 (↓)     Adelaide 26.3 (↑)        Perth 36.6 (↓)       Hobart 29.7 (↓)       Darwin 45.0 (↓)     Canberra 39.6 (↑)        National 33.3 (↓)           
Share Button

The Three Big Transitions Reshaping Finance

Three phenomena have exploded since COVID: digital assets, Robinhood, and SPACs.

By Stephen Deane
Wed, Sep 8, 2021 11:14amGrey Clock 4 min

Ever since Covid disrupted our lives, two themes have emerged. First, a feeling that we are living in an antechamber to a new and still-undefined era. And second, a pattern of hybrids, from homes converted into hybrid spaces of living/working/schooling, to expectations of a new office hybrid that will mix virtual and in-person meetings.

But what about the world of finance and securities markets? There, too, we can find patterns of transition and hybrids. Consider three phenomena that began before Covid but have exploded in growth since then: digital assets, Robinhood, and SPACs.

Start with the rise of cryptocurrencies, digital tokens and other such assets, which remain very much in a transitory stage (like the “Wild West,” SEC Chairman Gary Gensler recently observed). Even as the crypto asset class has grown to an estimated $1.6 trillion, basic questions remain unanswered. Are digital tokens securities or commodities? Are decentralized finance platforms really securities exchanges? Are data miners and other digital service providers really broker-dealers? Should the SEC permit Bitcoin ETFs? And who should regulate these products, services and entities—the SEC, the CFTC, or banking regulators?

Gensler has called on Congress to give the SEC “additional authorities to prevent transactions, products, and platforms from falling between regulatory cracks.” Specifically, he wants “additional plenary authority to write rules for and attach guardrails to crypto trading and lending.” And the U.S. House has passed a bill (H.R. 1602, the Eliminate Barriers to Innovation Act of 2021), which would require the SEC and CFTC to establish a working group on digital assets.

Some of what passes as crypto innovations pretty clearly seems to be old-fashioned investment products dressed up in digital garb. That would include any stablecoins that function like money market funds and those tokens that fall within the definition of a security. Nonetheless, there is no denying that crypto mixes digital technology with traditional forms of finance in a hybrid of innovation.

Second, consider Robinhood, which has exploded into view along with Redditor-fueled moonshot trades in meme stocks. Its proclaimed mission “to democratise finance for all” may invite skepticism, but the company can make a strong claim to having attracted a surge of first-time retail investors, representing a younger and more ethnically diverse customer base. Powering that success is Robinhood’s sleek mobile app—and its arsenal of gamification tools to entice and engage customers. But do the nudges and gamification tools cross the line into the realm of investment advice?

“Once individuals become customers, Robinhood relentlessly bombards them with a number of strategies designed to encourage and incentivize continuous and repeated engagement with this application,” the Massachusetts state securities regulator alleges in a lawsuit against Robinhood. The complaint points to several such techniques, from celebrating customer trades with confetti (a practice Robinhood has since abandoned) to plying customers with lists of most-traded and most-popular securities on its platform.

Should practices like these be subject to the fiduciary standard of an investment adviser? Or to the new Best Interest standard for broker-dealers? Robinhood has called the regulator elitist and says it isn’t making recommendations. Whatever the outcome of the lawsuit, these gamification techniques make Robinhood appear different in kind from the (boring?) practices of traditional broker-dealers that merely execute customers’ trades. The gamification of mobile trading apps may represent a hybrid between standard broker-dealer practices and full-fledged investment advice.

Third, consider SPACs, which have been around since 2003 but have exploded in popularity in the Covid era. In a hugely successful marketing campaign, SPACs have presented themselves as a kind of poor man’s private equity. If true, that would make SPACs a hybrid between private investment opportunities and public markets.

The deSPAC merger—the key event in the life of a SPAC—is also a hybrid. This is when the SPAC merges with a private operating company, allowing the target to become a public company without going through an IPO. Or is the merger itself really an IPO?

That’s precisely the question raised by John Coates, a Harvard Law professor who has become a top SEC official. In a provocative speech on April 8, Coates argued that the deSPAC merger is an initial public offering, because it is the first time the private operating company is introduced to the public. One speech, however, does not make SEC policy. And Coates’ theory remains untested in court. Nonetheless, it suggests how the deSPAC merger can be considered a hybrid between traditional forms of IPO and merger transactions.

At a House Financial Services subcommittee hearing on May 24, Michael San Nicolas, Guam’s delegate, asked how a SPAC differed from a closed-end equity (mutual) fund. The question may have seemed arcane at the time, but in retrospect it appears to have foreshadowed a series of blockbuster lawsuits against SPACs. Former SEC Commissioner Robert J. Jackson, Jr. and Yale Law Professor John Morley have joined in a lawsuit against Bill Ackman’s SPAC, Pershing Square Tontine Holdings Ltd. (ticker: PSTH), which raised $4 billion to become the single largest SPAC, and followed up with suits against two other SPACs, GO Acquisition Corp. and E.Merge Technology. The suits allege that the SPACs are really investment companies, like mutual funds and ETFs, because they invest in securities while searching for a merger partner.

“Under the [Investment Company Act of 1940], an Investment Company is an entity whose primary business is investing in securities,” the lawsuit against PSTH argues. “And investing in securities is basically the only thing that PSTH has ever done.”

Ackman says the suit against his SPAC is meritless, but warns, “Because the basic issues raised here apply to every SPAC, a successful claim would imply that every SPAC may also be an illegal investment company.” The suit suggests one more way that SPACs could be considered a hybrid—a cross between an investment company (like a mutual fund) and a publicly traded company.

One wonders how we will look back on these market developments a decade from now. Will SPACs, cryptoassets, and mobile trading apps be seen as hybrids that emerged in the antechamber we are living in now?

Reprinted by permission of Barron’s. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: September 2, 2021.



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Money
New York Watch Auctions Record Uptick in Sales in the Face of Market Slowdown
By LAURIE KAHLE 24/06/2024
Money
The Crazy Economics of the World’s Most Coveted Handbag
By CAROL RYAN 24/06/2024
Money
Do You Have What It Takes to Be a ‘Personality Hire’?
By CALLUM BORCHERS 22/06/2024
New York Watch Auctions Record Uptick in Sales in the Face of Market Slowdown
By LAURIE KAHLE
Mon, Jun 24, 2024 4 min

Luxury watch collectors showed ongoing strong demand for Patek Philippe, growing interest in modern watches and a preference for larger case sizes and leather straps at the June watch sales in New York, according to an analysis of the major auctions.

Independent and neo-vintage categories, meanwhile, experienced declines in total sales and average prices, said the report from  EveryWatch, a global online platform for watch information. Overall, the New York auctions achieved total sales of US$52.27 million, a 9.87% increase from the previous year, on the sale of 470 lots, reflecting a 37% increase in volume. Unsold rates ticked down a few points to 5.31%, according to the platform’s analysis.

EveryWatch gathered data from official auction results for sales held in New York from June 5 to 10 at Christie’s, Phillips, and Sotheby’s. Limited to watch sales exclusively, each auction’s data was reviewed and compiled for several categories, including total lots, sales and sold rates, highest prices achieved, performance against estimates, sales trends in case materials and sizes as well as dial colors, and more. The resulting analysis provides a detailed overview of market trends and performance.

The Charles Frodsham Pocket watch sold at Phillips for $433,400.

“We still see a strong thirst for rare, interesting, and exceptional watches, modern and vintage alike, despite a little slow down in the market overall,” says Paul Altieri, founder and CEO of the California-based pre-owned online watch dealer BobsWatches.com, in an email. “The results show that there is still a lot of money floating around out there in the economy looking for quality assets.”

Patek Philippe came out on top with more than US$17.68 million on the sale of 122 lots. It also claimed the top lot: Sylvester Stallone’s Patek Philippe GrandMaster Chime 6300G-010, still in the sealed factory packaging, which sold at Sotheby’s for US$5.4 million, much to the dismay of the brand’s president, Thierry Stern . The London-based industry news website WatchPro estimates the flip made the actor as much as US$2 million in just a few years.

At Christie’s, the top lot was a Richard Mille Limited Edition RM56-02 AO Tourbillon Sapphire
Richard Mille

“As we have seen before and again in the recent Sotheby’s sale, provenance can really drive prices higher than market value with regards to the Sylvester Stallone Panerai watches and his standard Patek Philippe Nautilus 5711/1a offered,” Altieri says.

Patek Philippe claimed half of the top 10 lots, while Rolex and Richard Mille claimed two each, and Philippe Dufour claimed the No. 3 slot with a 1999 Duality, which sold at Phillips for about US$2.1 million.

“In-line with EveryWatch’s observation of the market’s strong preference for strap watches, the top lot of our auction was a Philippe Dufour Duality,” says Paul Boutros, Phillips’ deputy chairman and head of watches, Americas, in an email. “The only known example with two dials and hand sets, and presented on a leather strap, it achieved a result of over US$2 million—well above its high estimate of US$1.6 million.”

In all, four watches surpassed the US$1 million mark, down from seven in 2023. At Christie’s, the top lot was a Richard Mille Limited Edition RM56-02 AO Tourbillon Sapphire, the most expensive watch sold at Christie’s in New York. That sale also saw a Richard Mille Limited Edition RM52-01 CA-FQ Tourbillon Skull Model go for US$1.26 million to an online buyer.

Rolex expert Altieri was surprised one of the brand’s timepieces did not crack the US$1 million threshold but notes that a rare Rolex Daytona 6239 in yellow gold with a “Paul Newman John Player Special” dial came close at US$952,500 in the Phillips sale.

The Crown did rank second in terms of brand clout, achieving sales of US$8.95 million with 110 lots. However, both Patek Philippe and Rolex experienced a sales decline by 8.55% and 2.46%, respectively. The independent brand Richard Mille, with US$6.71 million in sales, marked a 912% increase from the previous year with 15 lots, up from 5 lots in 2023.

The results underscored recent reports of prices falling on the secondary market for specific coveted models from Rolex, Patek Philippe, and Audemars Piguet. The summary points out that five top models produced high sales but with a fall in average prices.

The Rolex Daytona topped the list with 42 appearances, averaging US$132,053, a 41% average price decrease. Patek Philippe’s Nautilus, with two of the top five watches, made 26 appearances with an average price of US$111,198, a 26% average price decrease. Patek Philippe’s Perpetual Calendar followed with 23 appearances and a US$231,877 average price, signifying a fall of 43%, and Audemars Piguet’s Royal Oak had 22 appearances and an average price of US$105,673, a 10% decrease. The Rolex Day Date is the only watch in the top five that tracks an increase in average price, which at US$72,459 clocked a 92% increase over last year.

In terms of categories, modern watches (2005 and newer) led the market with US$30 million in total sales from 226 lots, representing a 53.54% increase in sales and a 3.78% increase in average sales price over 2023. Vintage watches (pre-1985) logged a modest 6.22% increase in total sales and an 89.89% increase in total lots to 169.

However, the average price was down across vintage, independent, and neo-vintage (1990-2005) watches. Independent brands saw sales fall 24.10% to US$8.47 million and average prices falling 42.17%, while neo-vintage watches experienced the largest decline in sales and lots, with total sales falling 44.7% to US$8.25 million, and average sales price falling 35.73% to US$111,000.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
The significant retirement cost awaiting more Australian homeowners
By Bronwyn Allen 20/06/2024
Property
Bats, Asbestos, a Leaky Roof: This English Estate Proved to be the Ultimate Fixer-Upper
By RUTH BLOOMFIELD 20/06/2024
Lifestyle
A ‘cheeky’ seat takes out the top prize at Australia’s Next Top Designers Awards
By KANEBRIDGE NEWS 17/06/2024
0
    Your Cart
    Your cart is emptyReturn to Shop