UK Accounting Watchdog to Investigate PwC's Audit of WH Smith
The UK’s accounting regulator has initiated an investigation into PricewaterhouseCoopers (PwC) concerning its audit of travel retailer WH Smith.
The inquiry will focus on PwC’s auditing of WH Smith’s financial statements for the fiscal year ending 31 August 2024.
The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.
WH Smith is also under investigation by the City watchdog.
Surprise Interest Rate Hike in Indonesia
Indonesia’s central bank has unexpectedly raised interest rates by 25 basis points to 5.5% in response to the Iran war, aiming to support the Indonesian rupiah.
This off-cycle decision follows the bank’s first borrowing cost increase in two years just weeks prior.
“This increase is a follow-up measure to strengthen the stabilization of the rupiah exchange rate against the impact of heightened global volatility caused by the war in the Middle East.”
Oil Prices Decline as Trump Announces Iran Peace Deal Near Completion
Oil prices fell this morning after former US President Donald Trump stated that negotiations for an Iran peace deal are in their "final throes."
Trump made these remarks to reporters at JFK airport following his attendance at the NBA Finals at Madison Square Garden.
He asserted that Iran and Israel had agreed through his mediation to cease hostilities and that the deal would be finalized within "two or three days." He added that the Strait of Hormuz would reopen immediately after the agreement.
Brent crude dropped by 1% to $93 per barrel, remaining approximately $20 above pre-conflict levels from late February.
Meanwhile, the AI sector continues to recover, according to Deutsche Bank’s Jim Reid:
“The KOSPI (+7.35%) is sharply higher after its 9th worst day in 45 plus years of history yesterday (-8.29%). The Nikkei (+2.19%) is also benefiting from a recovery in technology stocks after a decline of over -3.5% yesterday.
Chinese stocks are up just over half a percent and other markets are broadly flat. S&P 500 (+0.26%) and NASDAQ 100 (+0.54%) futures are also continuing to recover after a decent session yesterday.”
Full Story: OpenAI Confidentially Files for Initial Public Offering
OpenAI has confidentially filed to go public on the US stock market, according to a company statement published on Monday. The company’s debut on Wall Street is anticipated to be among the most highly valued listings in market history, with a valuation exceeding $850 billion.
The company stated:
“We recently submitted a confidential S-1. We expect it to leak so we’re just announcing it. We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”
An S-1 is an investor prospectus submitted to the US Securities and Exchange Commission (SEC) prior to an initial public offering (IPO). The confidential filing allows regulators to review and discuss the company’s financial disclosures before they become public.
Introduction: Chip Stocks Bounce Back Ahead of ‘Brat Summer’ for AI Firms
Good morning and welcome to our ongoing coverage of business, financial markets, and the global economy.
For the second consecutive day, circuit breakers were triggered on the Seoul stock exchange; however, this time due to a rapid market rise rather than a decline as on Monday.
Shares of South Korea’s chip giants surged today as investors returned following yesterday’s sell-off, boosting optimism that the recent tech share decline is temporary rather than indicative of a prolonged AI market crash.
Samsung Electronics shares rose over 9%, while memory chipmaker SK Hynix surged by 15%.
These two major stocks propelled South Korea’s KOSPI index up by 8.4% during Tuesday’s session, rebounding from an 8% drop the previous day. The rally triggered successive temporary suspensions of program buy orders, known locally as “sidecars.”
SK Hynix’s gains were supported by a new multiyear partnership with Nvidia to develop next-generation memory for AI systems. Nvidia’s CEO Jensen Huang toured Seoul, meeting with tech firms and sharing fried chicken with journalists:
Ipek Ozkardeskaya, senior analyst at Swissquote, noted the unusual volatility in the KOSPI:
“A day with a rise or fall of less than 5% in the Kospi has become rare – a sign of just how volatile this market has become and, therefore, how much of the move is driven by speculation. Indeed, the Kospi’s volatility index keeps rising to unbelievable levels, suggesting that when the music stops, there will be carnage.”
Today, the ongoing narrative of technology stocks attracting investment flows while non-tech sectors lag continues to unfold.
This narrative will face tests in the coming weeks as several major tech companies prepare to go public.
Last night, OpenAI filed for its initial public offering, potentially valuing the company behind the ChatGPT chatbot at over $1 trillion. This places OpenAI in competition with fellow AI pioneer Anthropic and Elon Musk’s SpaceX, which is scheduled to go public on Friday.
Kathleen Brooks, research director at XTB, commented:
“The OpenAI news means that we will hear more about how much revenue it is generating and how much cash it is burning through in the coming weeks.
2026 is set to be the ‘brat summer’* for these AI names, with their soaring valuations and big promises for how AI will change the world and send their revenues soaring.”
[* For the benefit of any reading, brat summer is a term used to describe a period of intense hype and volatility in AI stocks.]
The Agenda
- 9:45am BST: Treasury Committee hearing on Financial Inclusion Strategy
- 11am BST: NFIB’s US Business Optimism Index
- 1:30pm BST: US trade data for April
