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Briefs: Bitcoin surpasses US$60,000; large private companies must report annual climate-related disclosures

The Edge Singapore
The Edge Singapore • 9 min read
Briefs: Bitcoin surpasses US$60,000; large private companies must report annual climate-related disclosures
At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand. Photo: Bloomberg
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Quoteworthy: "He continues to be fit for duty and fully executes all of his responsibilities without any exemptions or accommodations." –— Kevin O’Connor, physician for 81-year-old US president Joe Biden, who is facing questions about his ability to serve a second term as president if re-elected in November given his age.

Bitcoin surpasses US$60,000 as demand from ETFs triggers bull run

At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand.

The surge in demand for the cryptocurrency resulting from new exchange-traded funds is vastly outstripping the amount of Bitcoin that long-time holders are willing to sell. That was what lit the match that has set the crypto market on fire, with fuel being added from traders chasing the upward momentum, covering short positions and loading up on leveraged bets that the bull run will continue.

It all culminated in a wild session for the cryptocurrency market on Feb 28, with Bitcoin jumping as much as 13% to US$63,968 ($86,007) — its first trip above US$60,000 since November 2021 — before it pared gains as a surge in traffic triggered trading outages and displays of US$0 balances for users of Coinbase, the largest US digital-asset exchange.

Bitcoin has jumped about 40% already this year, triggered mostly by the successful launch of US exchange-traded funds holding the coins which have attracted more than US$6 billion since they began trading Jan 11. Bitcoin last traded at US$60,000 in November 2021, after reaching an all-time high of almost US$69,000 earlier that same month. “It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

See also: A new trade war offers no easy way back for old global order

An upcoming reduction in Bitcoin’s supply growth, known as the halving, is adding to the optimistic sentiment. Halvings used to have a more significant impact on Bitcoin prices since miners earning rewards for their work validating blocks of transactions were in control of large portions of the new tokens issued by the blockchain. But the process alone now likely has much less influence on Bitcoin since the vast majority of the token is already mined. Still, with the next halving in April set to reduce supply amid a surge in demand from ETFs, speculative appetite is raging for Bitcoin as well as smaller tokens ranging from Ether to Dogecoin.  

“We are starting to see a pretty clear Fomo [fear of missing out] kind of rally,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “More and more people are just convinced to buy.”

Bitcoin’s trading volume surged to more than US$79 billion, or by almost 60% in the past 24 hours, according to data from CoinMarketCap.com.

See also: Should we fear a trade war?

The speed of the rally has some observers warning that it leaves investors susceptible to the boom and bust cycles that have become emblematic of crypto.

“This move has been very sharp, leverage is very high at the moment, as implied by derivatives basis and funding rates, so I would not be surprised by a sharp correction” or 20% or more, said Jaime Baeza, founder at crypto hedge fund AnB Investments. “Nonetheless I would not be shorting into this rally while it continues to move at this pace.”— Bloomberg

Large private companies must report annual climate-related disclosures from FY2027: Acra, SGX RegCo

Large private companies in Singapore will be required to report and file annual climate-related disclosures starting FY2027. These companies are defined as those with annual revenue of at least $1 billion and with total assets of at least $500 million.

The move is part of the government’s efforts to help companies strengthen capabilities in sustainability, says Second Minister for Finance Chee Hong Tat at the Ministry of Finance Committee of Supply on Feb 28.

These large private companies will follow Singapore’s listed issuers, which will be required to do the same by FY2025, using the International Sustainability Standards Board’s (ISSB) standards, issued in June 2023.

These annual climate-related disclosures will first have to include Scope 1 and 2 greenhouse gas (GHG) emissions. Listed issuers will have to disclose their Scope 3 GHG emissions from FY2026 and conduct external limited assurance on Scope 1 and 2 GHG emissions from FY2027, while large private companies have until FY2029 to meet both requirements.

To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section

Mandatory climate reporting for listed issuers and large private companies was first mooted by the Sustainability Reporting Advisory Committee (SRAC) in July 2023.

The SRAC is an industry-led committee set up by the Accounting and Corporate Regulatory Authority (Acra) and Singapore Exchange S68 -

Regulation (SGX RegCo) to advise on the roadmap for advancing sustainability reporting by companies in Singapore.

Since FY2023, listed issuers in the financial, energy and agriculture, food and forestry products industries have been required to provide climate-related disclosures aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations.

All other listed issuers are required to apply TCFD to their climate-related disclosures on a “comply or explain” basis.

According to a joint statement by Acra and SGX RegCo, some companies have given feedback that they are already reporting using other international standards and frameworks, in order to meet requirements in other jurisdictions or to keep their investors informed.

Hence, Acra will exempt some large private companies with parent companies that are already reporting climate-related disclosures.

To qualify for this exemption, the parent company’s climate-related disclosures must use ISSB-aligned local reporting standards or equivalent, such as the European Sustainability Reporting Standards.

Should the parent company’s climate-related disclosures use other international standards and frameworks, such as the Global Reporting Initiative (GRI) Standards or the TCFD recommendations, the large private company will be exempt from reporting and filing climate-related disclosures with Acra until FY2029.

Acra says it will review whether to extend the transitional period, “depending on global developments relating to the adoption and recognition of other standards and frameworks”.

Mandatory climate reporting could be on the horizon for smaller private companies as well. The SRAC’s recommendations from July 2023 included a review, scheduled for 2027, to mandate climate reporting by private companies with annual revenue of at least $100 million by around FY2030.

In a Feb 28 announcement, Acra says it will review the experience of listed issuers and large private companies before introducing reporting requirements for other companies.

The Ministry of Trade and Industry (MTI) will extend support to help companies kickstart their climate reporting journey and build climate reporting capabilities. More details will be shared by MTI during its Committee of Supply.

Acra CEO Ong Khiaw Hong says: “Acra is committed to sustainability and environmental responsibility, and to making Singapore the best place for business. That is why we are working actively with SGX RegCo and the business community to advance climate reporting in Singapore — a crucial step in addressing the pressing challenges of climate change.”

Tan Boon Gin, CEO of SGX RegCo, says SGX-listed issuers have had a headstart in climate reporting and many have seen its benefits. “Companies are better-equipped to meet demand from their lenders, customers and investors for sustainability-related information. They can also more readily access the growing pool of sustainable capital. These position Singapore well as a green economy.”

SGX RegCo will separately conduct a public consultation on the detailed rule amendments to implement the recommendation relating to listed issuers, including requiring climate-related disclosures based on the ISSB Standards from FY2025. SGX RegCo is expected to finalise its recommendations on the ISSB Standards this year. — Jovi Ho

Hong Kong scraps property curbs

Hong Kong’s government is removing cooling measures on housing to boost the lacklustre market and will provide additional funds to support tourism as part of a sweeping plan to revive growth in the financial hub.

Measures to curb housing demand will be cancelled with immediate effect, Financial Secretary Paul Chan said in his budget speech on Feb 28. The policies are no longer necessary in the current economic and market conditions, he said during an address that also detailed some HK$1 billion ($171 million) spending on tourism measures including fireworks displays and efforts to host more mega events.

In addition, the Hong Kong Monetary Authority eased mortgage rules, pausing stress tests and allowing some home buyers to purchase properties with smaller down payments.

Confidence in Hong Kong has waned as home prices tumbled to a seven-year low, national security measures eroded freedoms of expression and the stock market sank at one of the fastest rates worldwide. High interest rates and China’s growth slowdown have also weighed on the city’s recovery from the pandemic slump.

The Hang Seng Properties Index reversed losses on news of the property cooling measures, climbing 2.6%. New World Development Co jumped more than 8%, headed for its best day in more than two months and the biggest gainer on the Hang Seng Index. Henderson Land Development Co advanced 7.7%.

The HKMA said it will suspend a stress test for residential mortgages that required borrowers to attain a certain level of income to cover a potential rise in interest rates.

In addition, it allowed buyers to borrow more to purchase more expensive homes. For example, the maximum loan-to-value (LTV) ratio for properties worth as much as HK$30 million was changed to 70%. Previously, only homes valued up to HK$15 million were eligible for a 70% LTV ratio.

Until now, non-residents had to pay a combined 15% tax when purchasing properties, while Hong Kong resident buyers who already own a home were subject to a 7.5% levy. Owners who sold their properties within two years of purchase had to pay extra duties. In comparison, the rate for regular home purchases is capped at 4.25%.

Still, the impact of the tax cuts is likely to be muted if previous easing measures are any guide. After the government lowered the additional stamp duty on non-local buyers and investors last October, there was only a moderate rise in sales. There was just an increase of 16 home sales tied to such tax between November and January, according to Jones Lang LaSalle Inc.

Any pickup in the housing market would improve Hong Kong’s prospects to generate revenue from land sales, easing pressure on the city’s strained finances. The government decided not to sell any residential or commercial land plots in the first quarter due to weak demand from developers. — Bloomberg 

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