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The FCA alleges the pair used confidential information from the Wall Street bank to boost returns

A former Goldman Sachs analyst and his brother, an ex-Clifford Chance lawyer, committed insider dealing using confidential information obtained from the elite Wall Street bank, according to the prosecution at a London trial.

Mohammed Zina, 35, and his brother Suhail Zina, 36, appeared in the dock before a jury at Southwark Crown Court on Thursday for the opening of their trial.

The men are accused of six counts of insider dealing between July 2016 and December 2017, as well as three counts of fraud related to loans they obtained from Tesco Bank to fund their trading. They deny the charges.

The case is the most high profile criminal trial of insider trading brought by the UK’s Financial Conduct Authority in over four years.

The brothers made profits in the region of £140,000 from their dealing, according to prosecutor Peter Carter KC, acting for the FCA.

The brothers used the price-sensitive information “to give, not a guarantee, but to increase the chances really significantly that when they sold the shares they wouldn’t simply get their money back, they would get more than they invested,” Carter told the jury.

The FCA alleges that the offences took place when Mohammed Zina was working in Goldman’s London conflict resolution group, which is privy to inside information. The jury was taken through Goldman’s policies on confidentiality and rules against trading on non-public information.

Their first trade, in semiconductor designer Arm, was the only trade out of the six that resulted in a loss, according to the FCA.

The jury heard that Mohammed Zina used three bank accounts for the trading, one of which was opened in his brother Suhail’s name, and the other two in the name of their sister, Shenaz Chunara.

Carter told the jury that Mohammed Zina oversaw his sister’s accounts, and that messages will show Mohammed sometimes got “impatient” with her “because he got some inside information and he had to trade while the information was still inside before there was a risk of it becoming public.”

The accounts were funded using the Tesco Bank loans, which the lender was told were obtained for ‘home improvements’. The brothers paid back the first two loans quickly but were arrested before the third one could be repaid.

The alleged insider dealing in question carries a maximum penalty of seven years in prison, while fraud carries a maximum sentence of 10 years.

The trial is due to run until the end of February 2024.

Event details and information

Future of Asset

D’après les indicateurs avancés des notaires, le prix des appartements dans la capitale devrait s’établir en janvier 2024 à 9 760 euros le mètre carré, en recul de 6,3 % sur un an.

Le prix du mètre carré va bel et bien passer sous la barre des 10 000 euros à Paris. Pressenti à maintes reprises depuis que le marché immobilier s’est grippé, et déjà annoncé par plusieurs réseaux d’agences immobilières, le franchissement de ce seuil symbolique apparaît désormais dans les chiffres des notaires. Il s’agit là d’un retour « au niveau de prix constaté au printemps 2019, il y a quatre ans et demi », constatent les Notaires du Grand Paris, à l’occasion de la publication, jeudi 30 novembre, des statistiques trimestrielles du marché immobilier ancien en Ile-de-France.

Nous n’y sommes pas encore tout à fait puisque, au troisième trimestre, les prix au mètre carré s’établissent à 10 090 euros dans la capitale. Le mouvement de baisse enclenché devrait toutefois se prolonger, « et l’on attend un prix de 9 760 euros en janvier 2024 (– 6,3 % en un an) d’après nos indicateurs avancés sur les avant-contrats, affirment les notaires. Par rapport au point haut enregistré en novembre 2020 (10 860 euros), le prix a reculé de 1 100 euros et de 10 % ». Plus qu’un ajustement, il s’agit là d’une baisse forte.

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Désormais, tous les arrondissements de la capitale enregistrent une diminution de leurs prix, comprise entre 2 % et 7 % en un an. Les plus forts reculs sont recensés dans le 16e (– 6,4 %), le 13e (– 6,6 %), le 11e (– 6,7 %) et les 19e et 20e arrondissements (– 6,5 %). A La Chapelle (18e), le quartier le plus abordable de Paris, les prix atteignent 7 540 euros le mètre carré.

Disparités selon les arrondissements

Le coup de frein reste moins marqué à Paris Centre (– 2 %), dans les 5e et 6e (respectivement – 2,3 % et – 2,5 %) ou dans le 8e (– 2 %), secteur qui abrite le quartier le plus cher de la ville, celui des Champs-Elysées, où les prix s’affichent à 19 150 euros le mètre carré. Charles Flobert, l’un des porte-parole de la Chambre des notaires du Grand Paris, l’explique par « des produits très haut de gamme et une nombreuse clientèle étrangère. Les Français non résidents et les étrangers représentent désormais 15 % de la clientèle qui achète à Paris, c’est le taux le plus élevé depuis que nous réalisons des statistiques ».

Sur l’ensemble de la capitale, neuf arrondissements ont vu les prix passer sous les 10 000 euros le mètre carré au troisième trimestre, auxquels il faudra ajouter « probablement bientôt le 17e arrondissement », note M. Flobert.

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A l’origine de cette baisse des prix, une chute brutale de 29 % du nombre d’appartements anciens vendus au troisième trimestre par rapport au troisième trimestre 2022. Certes, le marché immobilier fonctionnait alors à plein régime, à la sortie de la crise sanitaire. Mais la baisse du nombre de transactions est également forte (– 14 %) par rapport à la moyenne d’activité des dix dernières années. Et encore ce recul est-il moindre à Paris qu’en petite et en grande couronne.

En Ile-de-France, au troisième trimestre, la chute du nombre de ventes de logements anciens s’accélère en effet, et atteint 34 % en un an. Le niveau d’activité y est désormais inférieur d’un quart par rapport à la moyenne de ces dix dernières années. « Au point que, faute de volumes, certaines données chiffrées sur les prix vont devenir difficilement exploitables », reconnaît Elodie Frémont, également porte-parole de la Chambre des notaires du Grand Paris. Ce décrochage aboutit à retrouver les volumes de 2015.

« Parcours du combattant »

Alors que les années de taux d’intérêt historiquement bas ont porté au plus haut le marché immobilier en solvabilisant massivement la clientèle, la fin du cycle de l’argent « gratuit », qui correspond au relèvement des taux par la Banque centrale européenne et par les banques, a figé les échanges. En octobre, le taux moyen des crédits immobiliers (hors assurance) s’élevait à 4,12 %, contre à peine plus de 1 % en décembre 2021.

De quoi réduire drastiquement le pouvoir d’achat des ménages, qui ont massivement renoncé à se lancer dans un projet immobilier. Les propriétaires, de leur côté, ont davantage hésité avant de vendre pour acheter un nouveau logement : la durée de détention moyenne des biens vendus s’est ainsi allongée, passant pour un appartement de 10,4 ans en 2003 à 12,6 ans en 2023 (et de 13,2 à 15,3 ans pour les maisons).

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Les notaires observent que la retombée de la fièvre immobilière a désormais un impact « sensible » sur les prix, qui reculent de 5,3 % en un an, au troisième trimestre, sur l’ensemble de l’Ile-de-France. « Dans le logement ancien, tout ne se vend plus à n’importe quel prix. Le zéro défaut va dorénavant primer, tandis qu’un rez-de-chaussée ou un premier étage posent des difficultés, tout comme une mauvaise orientation, un quartier en vogue devenu moins attractif ou un diagnostic de performance énergétique dégradé », explique Mme Frémont. Les indicateurs avancés sur les avant-contrats en petite et grande couronne laissent ainsi entrevoir des baisses annuelles de prix des appartements, respectivement de 8 % et 6 % en janvier 2024.

« Les premières baisses de prix ne suffisent toutefois pas à compenser la hausse du taux de crédit et l’augmentation de l’apport demandé : le projet immobilier devient le vrai parcours du combattant », constate Mme Frémont, entre refus de crédit, refus d’instruire et délai d’instruction rallongé. Une acquisition doit « de plus en plus souvent être garantie par une hypothèque et non plus par un simple cautionnement, et elle est souvent cumulée avec d’autres demandes de garanties, allant jusqu’au cautionnement des parents, témoigne-t-elle. Phase pour le moins humiliante quand l’emprunteur est âgé de 50 ans ou plus ».

Une éclaircie s’annonce en revanche de ce côté-là. Le tassement de l’inflation constitue « une perspective encourageante pour les taux qui s’est accompagnée de messages d’ouverture de lignes de crédit par certaines grandes banques », affirment les Notaires du Grand Paris. Un retournement pour des établissements de crédit qui avaient fait preuve ces derniers mois d’une frilosité rare.

The Sandro, Maje and Claudie Pierlot parent company will enter the market in partnership with retail giant Reliance Brands.

PARIS — French accessible luxury player SMCP is set to enter India through a partnership with Reliance Brands Ltd.

SMCP is parent company to women’s labels Sandro, Maje and Claudie Pierlot and men’s label Fursac. The partnership will see the first Sandro and Maje stores open in India in 2024, the French group said Thursday.

The stores are slated to open in the second half of the year at the Jio World Plaza shopping mall in Mumbai.

The group plans to open an average of three additional stores a year over the next two years, with the goal to open up to 10 units in the country by 2027. Key target markets after Mumbai will be Delhi, Bangalore and Kolkata.

“Those are the cities where you find the proper retail environment and the commercial level of retail,” SMCP chief executive officer Isabelle Guichot told WWD. “The commercial level of retail is now really developing in India and that allows for the proper brand portfolio and environment.”

SMCP had explored expansion into the country before COVID-19 and felt now was the right time to move as the country’s retail landscape has evolved and several luxury players have entered the market. India also has a potent mix of new money and demographics, Guichet said, noting the growing segment of high net worth individuals in the country, alongside upwards of 116 million eager Gen Z shoppers.

Feedback from young Indian consumers that shop in the Middle East and the U.K. helped the company “see that appetite, which really confirmed our willingness to enter the country.”

The company hopes to make inroads with that young shopper who is interested in exploring the story of French style. “It’s quite relevant for us to be a pioneering element in that segment in India,” she said. “It’s an obvious untapped opportunity for us.”

Sandro and Maje will be the first two brands making strides as the company finds its footing in the market. “Then let’s see with Claudie Pierlot and Fursac how we can maneuver once we get a little more experience in the market with Reliance,” she said.

The partnership with Reliance and their experience with luxury brands was also a key deciding factor.

RBL is the country’s largest retailer in the luxury to premium sector and has been riding the wave of expansions into the subcontinent through partnerships with high-end houses including Giorgio Armani, Balenciaga, Bottega Veneta, Valentino, Versace and more.

The Reliance conglomerate is an industrial giant that ranges from oil and gas to telecoms, media, textiles and retail. It operates more than 900 brand stores and retail concessions throughout India.

The expansion into India is continuing SMCP’s growth strategy after 46 net openings in the third quarter. The group operates more than 1,600 stores worldwide across its four labels.

SCMP is entering India at a time when it is remixing its strategy elsewhere in Asia. In China, where the company faced a slower-than-expected recovery, it is looking at opening stores on the Hainan peninsula in the south of the country as domestic tourism heats up.

“It’s a constant moving environment we will absolutely maintain and make the best of our network in China to make sure that we have the best presentation and retail execution in that country,” the CEO said.

The company will continue its strategy by enlarging or optimizing stores throughout its existing network in first- and second-tier cities, “rather than enlarging the number of cities,” she said, however noting there “may be one or two openings” in the near future.

Guichet said the dynamic in China has changed as those shoppers are moving around more within the region and heading less to far-flung locales abroad, such as Europe.

“The Chinese consumer is a very important target for us, but we have to deal with it differently — more locally, both in brick-and-mortar and digital. We have a bit of a different conversation with the Chinese client now but still very important,” Guichet said.

In Europe, a new mix of local tourism has also increased. SCMP is looking to its home country of France, which will host the Olympics next year, for another new injection in Paris, as well as cities like Lille and Marseille where some events will be held. The company is mapping that strategy out. “We are really scrutinizing very closely the program and what will be the flow,” she said.

Elsewhere, the Americas are “normalizing” after a pointed drop in Chinese tourists heading to Canada. The company is continuing its expansion in the U.S. with two openings in New York City’s Meatpacking District slated for mid-December, and an opening in Scottsdale, Ariz., in the first quarter of next year.

SMCP’s continuing concentration on developing its omnichannel strategy is being adapted to the different markets, with a focus on integration and streamlining logistics. “The technology and infrastructure behind it are really for us a key to our retail development,” she said. “Globally, we are making sure our omnichannel capacity and capabilities from reservations, ship from the store, [and] to resale, circular economy are developing.”

That development brings in a bit of a different client mix, as the company concentrates on its post-pandemic full-price strategy. Digital channels “sometimes attract people more eager to look for nice prices,” but that is shifting. For example, the Maje “Miss M” bag launched in September sold out quickly, Guichet said, and customers were able to use the digital services to reserve and place a deposit for the next drop.

November “was a big month in digital,” Guichet said, adding that China’s Singles’ Day was strong, as well as Black Friday kicking off the holiday season elsewhere in the world.

The company continues to be “watching very carefully what happens” with macroeconomic and political conditions shifting quickly worldwide. “It’s something that has an impact on consumer behavior, but we’re looking at what’s going on and we’re preparing [for] the last month of the year with the utmost care and attention.”

Guichet said the company’s corporate social responsibility is a main pillar and “key to each and every move that we do…there will be no U-turn,” she said. One move is that the company is shifting away from using oil-based virgin polyester to recycled materials, as well as using more natural fibers. “It’s very important that we keep in mind that it’s no longer an option, it’s something that is part of our business model and that is to be conveyed properly to the client,” she said.

The Gen Z shoppers are particularly keen on this information before making purchasing decisions, she said, and are aided by the inclusion of QR codes that have traceability information available. Guichet said about 70 percent of the company’s stock keeping units now carry the QR codes on hangtags.

The French company has seen a slowdown in consumer spending in key markets in Europe and the Americas, as well as a slower-than-expected recovery in China, dampening its growth in the third quarter.

In the most recent financial results released in October, the company reported sales fell 1 percent at constant exchange to 295 million euros during the three-month period, while it seeks to implement a cost-cutting and full-price sales strategy to boost its numbers.

India’s apparel sector is set to grow about 3.6 percent per year through 2027. The market reached $101 billion in 2023, with the market value of women’s apparel estimated at $49 billion.

The market is exuberant about AI, and rightly so, but that exuberance has caused many VCs to lose their minds, chasing any deal with a dot-ai domain name.

Some of the investment rationales are based on conventional wisdom that’s just wrong — I call these the “myths” of AI investing.

Here are three of the most common:

So many VCs have been quoted breathlessly saying: “We have to be first and fast to catch the AI wave.”

That’s sloppy thinking — or, more likely, the absence of thinking. Think about Pets.com vs. Chewy. Webvan vs. Instacart. AltaVista vs Google. Myspace vs. Facebook. Being first isn’t necessarily a disadvantage, but it’s not necessarily an advantage either.

Spencer Greene

There are specific, narrow situations where being first is important. In a “land-grab” market, for example, the first company that spends enough to acquire a majority of customers can establish long-term hegemony.

That was the strategy behind a16z’s overcapitalization of Clubhouse. It didn’t work that time, but sometimes it does.

In other industry structures, though, being well-capitalized and first means you are educating customers on a new behavior and making it easy for later entrants to acquire them on the back of your investment.

With AI moving so fast, the benefits of being first are arguably even weaker than in slower-moving markets.

Google and OpenAI have spent billions of dollars on technology that Facebook is now giving away for free. This is not to say that Google or OpenAI won’t be successful — they’ll do fine.

But if you hear a startup or an investor citing first-mover as their primary source of competitive advantage, you need to be very skeptical indeed, as it means they haven’t thought through the hard question of how to sustain advantage over time.

This is a common logical fallacy, confusing necessary with sufficient. It’s generally true that you need to have a good product to have a good business, but being a good product isn’t nearly enough.

Netscape literally invented the World Wide Web; its Navigator browser may have been the single most impactful product of the last 50 years. Still, it turned out to be a terrible business.

In AI we are seeing new gee-whiz demos every day. There’s truly amazing, science-fiction-y stuff coming out regularly now. But here’s the thing: A lot of it is not going to make money.

How cool something is often doesn’t correlate to its business potential. Often the real money is in the less sexy markets. Think about Netscape, the inventor of the web browser, vs. F5 Networks, a leader in — wait for it — HTTP load balancers. One generates $500 million of free cash flow; the other is an exhibit at the Computer History Museum.

It’s accepted wisdom that large companies can’t innovate, and that when the world changes startups always win.

Think about Netflix vs. Blockbuster, Airbnb vs. Hilton, PayPal vs. banks, Amazon vs. Barnes & Noble/Tower Records/Walmart.

Tech companies currently occupy all five of the top spots in the S&P 500; in 2010, there were none even in the top 10. Obviously, then, new “AI-native” startups will knock off today’s incumbents and achieve similar dominance, right?

Actually, no. AI companies seeking to disrupt Big Tech incumbents mostly won’t succeed, because Big Tech is hyper-aware of AI, has plenty of talent, controls most of the world’s data, and is spending freely.

When you hear “software is eating the world,” the “world” that is being eaten is the world of traditional, nontech businesses, like Barnes & Noble. Those were businesses that treasured profits over investment (didn’t spend freely), were not cool or lucrative places for innovators to work (didn’t have the talent), and that misunderestimated how the world was changing (not hyperaware).

Of course, there will be successful outliers who will beat Big Tech here and there, but broadly speaking Big Tech is much less vulnerable to disruption than pre-internet companies were.

Where AI startups will succeed is in battles against nontech incumbents. The 80% of the S&P 500 that is not tech is the most vulnerable to AI disruption from startups. Industries that were too difficult to automate in the pre-AI era, and that can be automated now for the first time, are the best opportunities.

So, don’t expect that AI will eat software, at least not in the sense of new AI-native companies displacing Microsoft or Apple. Instead, we can say: Software ate some of the world, and now AI has come along to eat what software could not digest.

Policymakers are wary of calling time on tightening campaign prematurely even as data suggests work may be nearly done

Federal Reserve officials are preparing to leave their historic interest-rate raising campaign on hold next month for the third meeting in a row — but that does not mean they are ready to discuss cuts yet.

Since July the federal funds rate has held steady at a 22-year high of 5.25 per cent to 5.5 per cent, a level that policymakers have described as “restrictive” for households and businesses as the central bank seeks to curb demand across the world’s largest economy.

But officials have danced around two crucial questions: whether rates are now high enough to bring inflation down to the Fed’s 2 per cent target, and how long they must stay at a “sufficiently restrictive” level.

Those questions will remain unanswered when the Federal Open Market Committee convenes in mid-December for the final gathering of 2023. Fed officials are poised to leave open the possibility of more tightening while keeping prospective cuts at bay, even as the economic signals increasingly suggest the debate within the central bank will begin to creep in that direction.

The hesitation to officially declare the rate-rising phase of the inflation fight over, and address more directly the parameters for rate cuts, stems in part from concerns that doing so could unleash a wave of looser financial conditions that undermine the Fed’s efforts to rein in price pressures.

In one cautionary sign, US stock markets have rallied sharply in recent weeks as long-term interest rates have fallen — something Christopher Waller, a Fed governor, on Tuesday said serves as a reminder that “policymakers must be careful about relying on such tightening to do our job”. 

That rally accelerated this week after Waller said he was “increasingly confident” that monetary policy was in the right place to achieve the Fed’s goals, and suggested rates could come down if inflation moderates “for several more months”.

Now, traders in futures markets wager the first cut will come in May, and that the policy rate will hover around 4 per cent by the end of next year, about a full percentage point lower than its current level.

Policymakers are also genuinely uncertain about how quickly inflation will cool and whether the recent string of better than expected data will prove fleeting — as was the case in 2021 — or if consumer price growth will plateau at an unacceptably high level.

Thomas Barkin, president of the Richmond Fed, on Wednesday warned that if inflation looks set to “flare back up, I think you want to have the option of doing more on rates”.

Jay Powell, Fed chair, also seemed wary earlier this month of again being “misled” by positive news on the inflation front as he kept the door open to more tightening.

“I would be very surprised if anytime soon you heard commentary from somebody like the chair or others that ‘we’re done’,” Charles Evans, who retired from the Fed in January after serving 15 years as president of its Chicago bank.

John Roberts, who worked for 35 years at the Fed until his departure in 2021, added: “It’s definitely not time for a victory lap.”

Still, officials have been unable to deny that the data is starting to suggest they may have done enough to squeeze the economy. Consumer spending has begun to cool alongside business activity across both the manufacturing and services sectors. Demand for workers has ebbed, too, without causing serious cracks in the labour market.

Perhaps the most encouraging signal came from the October consumer price index report, which showed annual inflation had moderated to 3.2 per cent — more than analysts had expected — as cost increases slowed.

For rate cuts to be considered, officials need to be confident inflation is trending back to 2 per cent in a sustainable way. Powell said earlier this month that officials are not thinking about such policy action “right now at all”.

But Powell has previously offered up clues about the Fed’s thinking. He hinted in September that rate cuts could be warranted as inflation moderates, so the central bank’s policy settings do not become more prohibitive. Such an adjustment could resemble the series of cuts the Fed implemented over three meetings in 2019 — which it dubbed a “mid-cycle adjustment” — aimed at mitigating risks to the economy.

At minimum, the Fed likely needs to see several inflation reports that reflect a downward trend, as October’s CPI report indicated.

For Roberts, now a senior adviser at Evercore ISI, a “headfake-proof” threshold would be core inflation as measured by the personal consumption expenditures price index hitting a six-month pace of 2.5 per cent with wage growth also moving down.

As of October, core PCE was running at an annual pace of 3.5 per cent following a 0.2 per cent monthly increase in prices, data released on Thursday showed.

“It’s not implausible that by mid-year inflation could be down to where the Fed would be wanting to cut,” Roberts said.

A sudden, sharp downturn in activity could also influence the Fed’s approach, although staffers and officials are not expecting that.

According to individual forecasts published in September, policymakers predict just 0.5 percentage points’ worth of cuts next year with core inflation cooling to 2.6 per cent, slower growth of 1.5 per cent and a slightly higher unemployment rate of 4.1 per cent. Those estimates will be updated next month.

Economists at Deutsche Bank currently forecast the Fed will begin lowering its policy rate in June, bringing it down by a total of 1.75 percentage points by year-end, as the economy tips into a “mild” recession in the first half of 2024. UBS also anticipates the US economy to flatline around 0.3 per cent next year and expects cuts beginning in March.

Evans said: “They do have the ability now that inflation has come down that if the economy weakens, they can reposition the funds rate lower but still be restrictive in that environment.

“I think they have more policy options if they get into that situation [compared to] if inflation was closer to 4 per cent and they weren’t sure it was coming down.”