Goldman Sachs expects US and Japanese stocks to rally in 2024

US stocks are forecast by Goldman Sachs Research (GSR) to have a modest return next year, as high valuations partly offset above-consensus economic growth. The S&P 500 index is expected to rise to 4,700 by the end of 2024, representing a price gain of about 5% and a total return of around 6%, including dividends. GSR economists’ forecast for US GDP growth in 2024 is already reflected in stock prices. 

With a 5% risk-free return, cash remains a competitive alternative to stocks. Three-month treasury bills yield around 5.5%, similar to the earnings yield of the S&P 500 index. 

GSR analysts think there may be investment opportunities beneath the surface. “Quality” stocks — with higher profitability, stronger balance sheets, and stable sales and earnings growth — could outperform in an environment of persistent investor concern about an impending recession. Growth stocks, with a higher expected growth rate than the rest of the market, may be attractive given stable economic growth and interest rates. Lagging cyclical stocks that are sensitive to a downturn may rally, given our economists' prediction that recession risk is lower than feared.

While US stocks may struggle to beat cash, GSR forecasts that the Japanese equity market will have a transformational year in 2024, boosted by solid global economic growth and stock market reforms. 

The Tokyo Stock Price Index (TOPIX) is projected to rise about 13% to 2,650 by the end of 2024. Japanese companies’ earnings momentum also remains strong, GSR strategists Bruce Kirk and Kazunori Tatebe write in the team's report. They forecast 12% growth in TOPIX earnings per share in 2023, 8% in fiscal year 2024, and 7% in fiscal year 2025. 

The Tokyo Stock Exchange's corporate governance reforms are a crucial part of the forecast, which Kirk and Tatebe say “have been a game changer for the Japanese equities market."

Garanti BBVA expands remote corporate banking in digitisation drive

BBVA’s Turkish franchise is strategically reinforcing its commitment to enhancing customer accessibility by extending remote banking services to corporate clients.

Using a suite of digital offerings initially designed for retail customers, this expansion should help corporates by offering reliable access to Garanti BBVA’s remote banking services. The streamlined onboarding process lets businesses open bank accounts via the mobile app, eliminating the need for physical branch visits.

With the convenience of remote customer service, originally tailored for retail customers, now also covers corporate clients, the bank’s digital channel allows for smart interactions with users at every point of their experience, and responds to their needs instantly.

 

EPC publishes SEPA Payment Account Access (SPAA) scheme’s default remuneration model

The European Payments Council (EPC) has published the business conditions for the SEPA Payment Account Access (SPAA) scheme, which it says marks a significant step forward in developing open banking in Europe.

The SPAA scheme builds on the investments done in the revised Payment Services Directive (PSD2) context. It covers the set of rules, practices and standards that allow the exchange of payment account-related data and facilitate the initiation of payment transactions in the context of ‘value-added’ (premium) services provided by asset holders (i.e. account-servicing payment service providers (ASPSPs)) to asset brokers (e.g. third-party providers (TPPs)).

The SPAA scheme rulebook, in line with the Euro Retail Payments Board (ERPB) mandate of June 2021, foresees the publication of an objective and transparent set of business conditions inclusive of a default remuneration model, which have been developed within a multi-stakeholder approach by an independent economic consultant, appointed following a public RFP, and under the strategic guidance of the retail payment industry (supply and demand) as represented in the SPAA Multi-Stakeholder Group (MSG).

The default remuneration model, based on a sound cost-calculation methodology and an anonymised and aggregated data collection exercise, consists of two sets of default fees, namely default asset fees related to the SPAA premium assets and features that a scheme participant asset holder exposes to a scheme participant asset broker, and a default API access fee for the use of the premium SPAA API. The availability of the premium SPAA API does not in any way exclude nor prevent an asset holder and/or asset broker to use APIs already developed under PSD2 for basic services.

The business conditions are expected to be revised early next year and periodically to remain fully aligned with market and regulatory developments. 

 

Vault to automate accounts payable for Canadian businesses

Digital financial platform Vault has released a transfer approval feature designed to help Canadian business owners flexibly manage their accounts payables (AP) process, with enhanced control and visibility into payments.

Vault’s Transfer Approval feature addresses the challenge of managing bank transfers within a growing, multi-user organisation by allowing owners to set explicit limits on the funds their employees are authorised to transfer. Using the feature, admins can review and approve or reject transfers before they are processed, effectively aligning spend to company policies.

Vault aims to facilitate better business banking by enabling expense policy compliance and strategic business planning. Rules from the new feature aim to allow a culture of trust and empowerment by granting employees autonomy within predetermined limits. Every transfer above the threshold is reviewed, preventing unauthorised transactions violating company spend policies. 

Owners can also proactively manage expenses by aligning transfer limits to department or project budgets, ensuring accurate business planning and resource allocation. Customised multi-level approvals offer flexibility to create workflows that accommodate unique business processes.

 

EBA consults on new crypto AML/CFT guidelines 

The European Banking Authority (EBA) has launched a public consultation on new guidelines on preventing the abuse of funds and certain crypto-assets transfers for money laundering and terrorist financing purposes. These ‘travel rule’ guidelines specify the steps that payment service providers (PSPs), intermediary PSPs (IPSPs), crypto-asset service providers (CASPs) and intermediary CASPs (ICASPs) should take to detect missing or incomplete information that accompanies a transfer of funds or crypto-assets. 

They also detail the procedures all these providers should implement to manage a transfer of funds or a transfer of crypto-assets that lacks the required information. These guidelines aim to forge a common understanding to ensure the consistent application of EU law and a stronger anti-money laundering and countering the financing of terrorism (AML/CFT) regime. The consultation runs until 26 February 2024.

The main objective of the guidelines is to prevent the abuse of funds and crypto-assets transfers for terrorist financing and other financial crime purposes. The guidelines also ensure that relevant authorities can fully trace such transfers where this is necessary to prevent, detect or investigate money laundering and terrorist financing. To achieve this, the EBA promotes the development of a common understanding by PSPs, IPSPs, CASPs and ICASPs and competent authorities across the EU, of what the effective procedures are to detect and manage the transfer of funds and crypto-assets lacking the required information on the payer/originator and the payee/beneficiary, and how they should be applied.

The EBA will hold a virtual public hearing on the consultation paper on 17 January 2024. All contributions received will be published following the end of the consultation, unless requested otherwise.

 

South Korea CDBC pilot set for 2024

South Korea plans to pilot a central bank digital currency (CBDC) prototype involving 100,000 citizens in the fourth quarter of next year. 

The Bank of Korea (BoK), Financial Services Commission and Financial Supervisory Services will jointly operate the pilot, Korea Times reported on 23 November. 

Under the pilot project, the 100,000 selected individuals can buy goods at stores with tokenised deposits issued by commercial banks in the form of a CBDC.

 

Back of the net! PSV Eindhoven welcomes Ebury as official fintech partner

PSV Eindhoven has partnered with Ebury as their official fintech partner. A multi-year contract will allow Ebury to support the club in international payments and cash management, thus helping the club streamline its global cash flows. 

This collaboration aims to expand Ebury’s network within the Brainport region of Eindhoven. The business community in the southern part of the Netherlands has gathered at PSV Business for years, making it an ideal place for Ebury to network and establish connections. As a sponsor, Ebury is now part of the growing community at PSV, and the organisation says it is thrilled to have them on board.

“As a club, we conduct many international payments,” said Frans Janssen, Commercial Director at PSV. “We are convinced that Ebury’s services will add value to both PSV and the other companies within our business network. And when combined with its bespoke FX services, it will only help us strengthen the position in the Brainport region.”