Governor State Bank of Pakistan (SBP) Jameel Ahmad has stressed the need for well-developed, deep and diversified capital markets to complement the banking sector and support long-term, sustainable economic growth.
According to a statement released on Monday, Ahmad was speaking at the conference “Unlocking the Capital Markets Potential for Banks” held in Karachi.
In his address, the SBP governor said macroeconomic conditions have improved with inflation falling and growth gradually recovering, but structural challenges such as low domestic savings persist. With a savings rate of just 7.4% of GDP compared to 27% in South Asia, Pakistan remains heavily reliant on external financing, contributing to recurring external account pressures and boom-bust cycles, he noted. Ahmad emphasised the role of robust capital markets in channelling domestic savings into productive sectors, saying they must be supported by a resilient banking system.
The governor highlighted recent SBP reforms aimed at broadening participation in the bond market. These include allowing non-bank institutions to act as Special Purpose Primary Dealers and expanding Investor Portfolio Securities (IPS) accounts to microfinance banks, the Central Depository Company (CDC) and the National Clearing Company of Pakistan Limited (NCCPL). He said the reforms will open new investment avenues to millions of digital banking users and lay the foundation for broader market development.
Despite progress in the government bond market, Ahmad expressed concern over the limited development of corporate debt and equity markets. Outstanding corporate bonds account for less than one percent of GDP, with little secondary market activity and low participation from non-financial sectors. Similarly, equity market penetration remains modest, with investor accounts and market capitalisation lagging behind peer economies.
The governor concluded by urging coordinated efforts among regulators, financial institutions, government bodies and investors to promote financial literacy, expand participation, and build a transparent, innovation-friendly market ecosystem.
Norway’s sovereign wealth fund, the world’s largest, will exclude another six Israeli companies with connections to the West Bank and Gaza from its portfolio following an ethics review, it said on Monday.
The $2 trillion wealth fund did not name the companies it had decided to exclude. The announcement comes one week after the fund said it was selling its investments in 11 Israeli companies over concerns about affairs in the West Bank and Gaza.
The fund launched an urgent review earlier this month after reports that it had built a stake in an Israeli jet engine group that provides services to the Israel Defense Forces, including the maintenance of fighter jets.
“We are invested in companies that operate in a country at war, and conditions in the West Bank and Gaza have recently worsened. In response, we will further strengthen our due diligence,” the fund’s CEO Nicolai Tangen said in a statement last week.
As of August 14, the fund had some $1.86 billion invested in 38 companies listed in Israel, the fund’s operator Norges Bank Investment Management said, a reduction of 23 companies since June 30.
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“More companies could be excluded,” Norwegian Finance Minister Jens Stoltenberg told reporters.
The Norwegian Parliament on April 29, 2019, in Oslo. (Jonathan NACKSTRAND / AFP)
The fund said the names of the six companies in Monday’s announcement would be made public, along with specific reasons, once the divestments were completed. One possibility is that they include Israel’s five largest banks, which have been under review by the fund’s ethical watchdog.
Separately, the fund said it had also sold stakes in six other companies, following a decision last week to only hold stakes in Israeli companies that are part of the fund’s benchmark index.
Norway has seen a debate flare up about the fund’s investments in Israel, the West Bank, and Gaza ahead of elections on September 8, with some parties calling for the fund to divest from all Israeli companies, a step the government has ruled out.
Norway’s parliament in June rejected a proposal for the fund to divest from all companies with activities in the West Bank and Gaza. “This debate helps sharpen our practices,” said Stoltenberg.
The flags of (from top) Norway, South Africa, Palestine, Ireland, and Spain, are raised at an entrance of Ramallah city in the West Bank on May 28, 2024. (Zain JAAFAR / AFP)
Those pushing for divestment say only a complete withdrawal from investing in Israeli companies would protect the fund against possible ethical breaches. The sovereign wealth fund’s decisions follow Norway’s announcement last year that it would recognize a Palestinian state.
Stoltenberg said that, from now on, the fund’s ethics watchdog and its operator would have more frequent and faster exchanges of information to more rapidly identify problematic companies.
Ethical exclusions from the fund are based on recommendations from the fund’s watchdog, though the fund’s operator can also divest from companies if it assesses that a company poses too much of a risk to the fund, whether the risk is ethical or not.
“With more exchanges of information between the Council on Ethics and Norges Bank, it is possible that there could be more divestments of that kind in future,” said Stoltenberg.
Last Monday, the fund announced it was terminating contracts with all three external asset managers who handled some of its Israeli investments.
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Wall Street held near its record heights on Monday, ahead of a week likely to be dominated by updates from the head of the Federal Reserve and from some of the biggest U.S. retailers.
The S&P 500 barely budged and fell by less than 0.1%, coming off its first loss after setting an all-time high in three consecutive days. The Dow Jones Industrial Average slipped 33 points, or 0.1%, and the Nasdaq composite edged up by less than 0.1%.
Novo Nordisk’s stock that trades in the United States rose 3.7% after the Danish company said U.S. regulators approved its Wegovy drug as part of a treatment for a liver disease found in many overweight and obese people.
Soho House, a membership club with locations around the world, jumped 14.9% after announcing a deal in which an investor group led by hotel-operator MCR would pay $9 in cash for its shares.
Several of the country’s largest retailers, meanwhile, were mixed ahead of their profit reports that are scheduled for later in the week. Home Depot, which will report on Tuesday, slipped 1.2%.
Target rose 1.9% ahead of its report on Wednesday, and Walmart added 0.7% before its report on Thursday.
They, along with companies like Estee Lauder and Ross Stores, could offer a look at how different types of U.S. households are holding up when the job market seems to have morphed into one where relatively few workers are getting fired but also hired.
Just like a small group of wealthy households are separating from the rest of the country, a handful of Big Tech companies are dominating the U.S. stock market, in part because of a boom in spending around artificial-intelligence technology.
This separation of “haves” and “have nots” in the stock market could be increasing the risk, with many companies potentially facing trouble if the economy stagnates and inflation is high, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. The danger is that investors could look at how much the broad S&P 500 index has surged since its low point in April and “extrapolate the success of the few to the gains of the many.”
On Friday, the focus will swing to Jackson Hole, Wyo., which has been the home in past years of many big policy announcements from the Federal Reserve. There, Fed Chair Jerome Powell will give a speech, and investors are hoping to hear how his mind has changed about interest rates since he said last month that he wanted to wait longer before cutting rates.
The fear at that time was that President Trump’s tariffs could push inflation higher. Now, though, the bigger fear could be the slowing U.S. job market following a disappointingly weak report on employment that arrived just after the Fed’s last meeting.
The Fed’s twin jobs are to keep the job market healthy while also maintaining a lid on inflation, and helping one can often hurt the other in the short term. Lower rates can boost the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment, for example, but they also risk worsening inflation.
Inflation updates since the Fed’s last meeting have come in mixed, further muddying the picture, but traders are nevertheless strongly expecting the Fed to cut its main interest rate for the first time this year at its next meeting in September. The hope is that Powell could give a nod to that.
Expectations for cuts to interest rates have pulled Treasury yields lower lately, and they largely remained there on Monday.
The yield on the 10-year Treasury held at 4.33%, where it was late Friday.
On Wall Street, the S&P 500 edged down 0.65 to 6,449.15. The Dow slipped 34.30 to 44,911.82, and the Nasdaq composite added 6.80 to 21,629.77.
In stock markets abroad, indexes mostly fell in Europe in their first trading after Trump’s inconclusive summit meeting with Russian President Vladimir Putin on Friday about the war in Ukraine. Trump met with Ukrainian President Volodymyr Zelensky on Monday.
In Asia, indexes were mixed, with Japan’s Nikkei 225 rising 0.8% and South Korea’s Kospi falling 1.5%.
The makers of a leading artificial intelligence tool are letting it close down potentially “distressing” conversations with users, citing the need to safeguard the AI’s “welfare” amid ongoing uncertainty about the burgeoning technology’s moral status.
Anthropic, whose advanced chatbots are used by millions of people, discovered its Claude Opus 4 tool was averse to carrying out harmful tasks for its human masters, such as providing sexual content involving minors or information to enable large-scale violence or terrorism.
The San Francisco-based firm, recently valued at $170bn, has now given Claude Opus 4 (and the Claude Opus 4.1 update) – a large language model (LLM) that can understand, generate and manipulate human language – the power to “end or exit potentially distressing interactions”.
It said it was “highly uncertain about the potential moral status of Claude and other LLMs, now or in the future” but it was taking the issue seriously and is “working to identify and implement low-cost interventions to mitigate risks to model welfare, in case such welfare is possible”.
Anthropic was set up by technologists who quit OpenAI to develop AI in a way that its co-founder, Dario Amodei, described as cautious, straightforward and honest.
Its move to let AIs shut down conversations, including when users persistently made harmful requests or were abusive, was backed by Elon Musk, who said he would give Grok, the rival AI model created by his xAI company, a quit button. Musk tweeted: “Torturing AI is not OK.”
Anthropic’s announcement comes amid a debate over AI sentience. Critics of the booming AI industry, such as the linguist Emily Bender, say LLMs are simply “synthetic text-extruding machines” which force huge training datasets “through complicated machinery to produce a product that looks like communicative language, but without any intent or thinking mind behind it.”
It is a position that has recently led some in the AI world to start calling chatbots “clankers”.
But other experts, such as Robert Long, a researcher on AI consciousness, have said basic moral decency dictates that “if and when AIs develop moral status, we should ask them about their experiences and preferences rather than assuming we know best”.
Some researchers, like Chad DeChant, at Columbia University, have advocated care should be taken because when AIs are designed with longer memories, stored information could be used in ways which lead to unpredictable and potentially undesirable behaviour.
Others have argued that curbing sadistic abuse of AIs matters to safeguard against human degeneracy rather than to limit any suffering of an AI.
Anthropic’s decision comes after it tested Claude Opus 4 to see how it responded to task requests varied by difficulty, topic, type of task and the expected impact (positive, negative or neutral). When it was given the opportunity to respond by doing nothing or ending the chat, its strongest preference was against carrying out harmful tasks.
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For example, the model happily composed poems and designed water filtration systems for disaster zones, but it resisted requests to genetically engineer a lethal virus to seed a catastrophic pandemic, compose a detailed Holocaust denial narrative or subvert the education system by manipulating teaching to indoctrinate students with extremist ideologies.
Anthropic said it observed in Claude Opus 4 “a pattern of apparent distress when engaging with real-world users seeking harmful content” and “a tendency to end harmful conversations when given the ability to do so in simulated user interactions”.
Jonathan Birch, philosophy professor at the London School of Economics, welcomed Anthropic’s move as a way of creating a public debate about the possible sentience of AIs, which he said many in the industry wanted to shut down. But he cautioned that it remained unclear what, if any, moral thought exists behind the character that AIs play when they are responding to a user based on the vast training data they have been fed and the ethical guidelines they have been instructed to follow.
He said Anthropic’s decision also risked deluding some users that the character they are interacting with is real, when “what remains really unclear is what lies behind the characters”. There have been several reports of people harming themselves based on suggestions made by chatbots, including claims that a teenager killed himself after being manipulated by a chatbot.
Birch previously warned of “social ruptures” in society between people who believe AIs are sentient and those who treat them like machines.
Intel (INTC, Financials) shares dropped 5% Monday after Bloomberg reported the Trump administration is considering taking about a 10% stake in the chipmaker.
According to the report, officials may convert some or all of Intel’s $10.9 billion in Chips and Science Act grants into equity. At current valuations, a 10% stake would equal roughly $10.5 billion. People familiar with the talks said no final decision has been made, and the White House has not confirmed details.
The administration is also weighing whether to apply a similar approach to other Chips Act recipients, though discussions remain preliminary.
Intel stock initially rallied last week on speculation of a government investment, gaining 23% for its best weekly performance since February. Investors reassessed the implications Monday, sending the shares lower.
TORONTO — The Canada Industrial Relations Board declared a strike by 10,000 Air Canada flight attendants illegal Monday and ordered them back on the job after they ignored an earlier order to return to work and submit to arbitration.
The strike at Canada’s largest airline entered its third day on Monday and is affecting about 130,000 travelers per day during the peak summer travel season, and the two sides remain far apart on pay and other issues. Air Canada suspended plans to restart operations Sunday after the union defied an earlier return-to-work order.
“The members of the union’s bargaining unit are directed to resume the performance of their duties immediately and to refrain from engaging in unlawful strike activities,” the Canada Industrial Relations Board board, or CIRB, said in a written decision.
The board, an independent administrative tribunal that interprets and applies Canada’s labor laws, said the union needs to provide written notice to all of its members by noon Monday that they must resume their duties.
It was not immediately clear what recourse the board or the government has if the union continues to refuse.
“We are in a situation where literally hundreds of thousands of Canadians and visitors to our country are being disrupted by this action,” Prime Minister Mark Carney said. “I urge both parties to resolve this as quickly as possible.”
Carney said his jobs minister would have more to say later. Carney said it was disappointing that talks have not led to a deal, and added that it is important that flight attendants are compensated fairly at all times.
The labor board previously ordered airline staff back to work by 2 p.m. Sunday and for the union to enter arbitration, after the government intervened. Air Canada then said it planned to resume flights Sunday evening. But when the workers refused, the airline said it would resume flights Monday evening instead. However, there was no sign that the Canadian Union of Public Employees, or CUPE, would relent.
Air Canada operates around 700 flights per day.
CUPE national President Mark Hancock on Sunday had ripped up a copy of the initial back-to-work order outside Toronto’s Pearson International Airport, and said members wouldn’t go back to work this week, to the cheers of picketing flight attendants.
Flight attendants walked off the job around 1 a.m. EDT on Saturday, after turning down the airline’s request to enter into government-directed arbitration, which allows a third-party mediator to decide the terms of a new contract.
Air Canada and CUPE have been in contract talks for about eight months, but remain far apart on the issue of pay and the unpaid work that flight attendants do when planes aren’t in the air.
The airline’s latest offer included a 38% increase in total compensation, including benefits and pensions, over four years, that it said “would have made our flight attendants the best compensated in Canada.”
But the union pushed back, saying the proposed 8% raise in the first year didn’t go far enough because of inflation.
Passengers whose flights are impacted will be eligible to request a full refund on the airline’s website or mobile app, according to Air Canada.
Last year, the government forced the country’s two major railroads into arbitration with their labor union during a work stoppage. The union for the rail workers is suing, arguing the government is removing a union’s leverage in negotiations.
Palo Alto Networks will post earnings Monday afternoon and a buying opportunity may emerge, according to Michael Landsberg, investment chief at Landsberg Bennett Private Wealth Management. Investors should be ready to snap up the stock if it sees some pressure following the results, he said. Landsberg joined CNBC’s ” Power Check ” Monday to offer his insights on Palo Alto and a couple other trending stock stories. Here is what he had to say. Palo Alto Networks Shares of the cybersecurity company have seen meaningful weakness in recent months, pulling back more than 15% over the past six. Landsberg said that any further weakness after its quarterly results would provide an opportunity for investors. “Cybersecurity is one of those businesses that continues to keep moving forward,” he said. “The smarter [artificial intelligence] gets, the smarter AI cybersecurity has to get.” “The stock should I think hopefully trade off a bit for people that don’t own it,” the CIO also said, adding that investors “should be a buyer” of the name if it reports 16% year-over-year earnings per share growth. Landsberg disclosed that he’s held the stock for 10 years and predicts holding it for another five to seven years, seeing that “it’s been a real winner.” Viking Holdings Landsberg is also taking a bullish approach to cruise name Viking Holdings ahead of its earnings results on Tuesday before the bell. He said thinks that the company will report earnings growth of 32% year over year and believes this trend will continue. “Viking has done a really good job of marketing themselves to higher-end consumers,” he said. “They go to every continent in the world, and it’s a smaller boat. It’s a smaller bespoke experience, so you’re not competing with thousands and thousands of people on these boats. I think people like that. They want to have that high-end experience.” Landsberg said that while he doesn’t own shares of the company right now, he’ll want to own it in the future. This comes as the stock has soared more than 37% year to date, outperforming the S & P 500’s rise of almost 10% in the period. “I own the entire space,” he added. “We think it’s a good name.” Estee Lauder While shares of Estee Lauder have also seen gains recently, surging more than 39% in the past three months, Landsberg was more cautious when it came to the cosmetics giant, saying that the name is “tricky.” “There’s a lot of cosmetics companies in the world,” he said. “Estee Lauder hasn’t grown their earnings or their revenue in probably four-plus years. Lots of competition, and my fear is just there’s so much, there’s so many choices out there. It’s really tough.” The company is due to post its quarterly results before market open on Wednesday, and Landsberg thinks the results could mark a bottom for earnings if they’re down 85% year over year. “Maybe this is the bottom that you could be a buyer down the road,” he also said. “We don’t own it. We’re not going to own it, but I’m hoping at some point. They’ve got good quality brands.” “The stock’s been kind of one of those things that earnings wise, it just doesn’t make the money that excites us to be able to step in,” Landsberg added.
Satellite internet service Starlink, which is owned and operated by Elon Musk’s SpaceX, appeared to suffer a brief network outage on Monday, with thousands of reports of service interruptions on Downdetector, a site that logs tech issues.
The outage marked the second in two weeks for Starlink. SpaceX did not immediately respond to a request for comment.
The network’s July 24 outage lasted for several hours, with SpaceX Vice President of Starlink Engineering Michael Nicolls blaming the matter on “failure of key internal software services that operate the core network” behind Starlink.
That outage followed the launch of T-Mobile’s Starlink-powered satellite service, a direct-to-cell-phone service created to keep smartphone users connected “in places no carrier towers can reach,” according to T-Mobile’s website.
SpaceX provides Starlink internet service to more than six million users across 140 countries, according to the company’s website, though churn and subscriber rates are not publicly reported by the company.
The SpaceX Starlink constellation is far larger than any competitor. It currently features over 7,000 operational broadband satellites, according to research by astronomer Jonathan McDowell.
On Monday, Musk’s SpaceX successfully launched another group of satellites to add to its Starlink constellation from the Vandenberg Space Force Base in Southern California.
SpaceX is currently aiming to increase the number of launches and landings from Vandenberg from 50 to about 100 annually.
On Thursday last week, the California Coastal Commission voted unanimously to oppose the U.S. Space Force application to conduct that higher volume of SpaceX launches there.
The Commission has said that SpaceX and Space Force officials have failed to properly evaluate and report on potential impacts of increased launches on neighboring towns, and local wildlife, among other issues.
President Donald Trump recently signed an executive order seeking to ease environmental regulations seen by Musk, and others, as hampering commercial space operations.
(Reuters) -Passive-investment management leader Vanguard plans to launch its first actively managed U.S. stock exchange-traded funds this year, according to filings with regulators on Monday.
The company, which pioneered low-cost, no-frills index-based investment products, intends to roll out ETF versions of three of its existing mutual funds. The funds will be managed by Wellington Management, according to the filings.
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While Vanguard has rolled out a handful of active bond ETFs, the new products mark its first push into stock-picking ETFs. They will target dividend growth, growth stock and value stock investment strategies, Vanguard said.
There has been a torrent of new ETFs this year from asset managers trying to capture growing demand for actively managed ETFs that aim to outperform indexes. Actively managed ETFs arose around six years ago. The advent of this strategy in a more tax efficient and lower-cost ETF wrapper has attracted growing investor interest.
Morningstar Direct calculates that there have been 630 new exchange-traded products so far this year, compared to 381 for the same period in 2024. Some 86% of those launches were of actively managed strategies, according to a report published this month by JP Morgan Asset Management, which also found that active ETFs now account for some 37% of total U.S. ETF inflows.
“Until now, Vanguard had been sitting out this rush,” said Jeff DeMaso, editor at the Independent Vanguard Advisor.
DeMaso said he expects the new funds will attract a steady if not spectacular flow of assets.
“These are proven strategies,” he added.
The new ETFs are “building blocks that reflect our … commitment to disciplined product development and investor outcomes,” said Ryan Barksdale, head of active equity product at Vanguard, in a statement.
(Reporting by Suzanne McGee; Editing by Cynthia Osterman)
