Global ETF News Older than One Year
IMF Working Paper-Finding the Bad Apples in the Barrel: Using the Market Value of Equity to Signal Banking Sector Vulnerabilities
August 16, 2019--Summary:
This paper measures the performance of different metrics in assessing banking system vulnerabilities. It finds that metrics based on equity market valuations of bank capital are better than regulatory capital ratios, and other metrics, in spotting banks that failed (bad apples). This paper proposes that these market-based ratios could be used as a surveillance tool to assess vulnerabilities in the banking sector.
While the measures may provide a somewhat fuzzy signal, it is better to have a strategy for identifying bad apples, even if sometimes the apples turn out to be fine, than not being able to spot any bad apples before the barrel has been spoiled.
Source: IMF
Beyond Big Pharma | Investing in the Future of Healthcare | WELL Trends in Healthcare and Life Sciences
August 15, 2019--Health and wellness are key components to the success of any society. Demographic and economic changes, coupled with increased patient expectations, have led to an exponential increase in the pace and scale with which health care innovations are emerging and disrupting the healthcare sector worldwide.
New entrants from outside the traditional business of healthcare are redefining the $9.59 trillion global healthcare market for consumers, providers, payers, and investors in both developed and developing nations [1].
In addition, major global trends are increasing the need for healthcare services globally. These include:
1.1 Aging Populations
People worldwide are living longer. Between 2015 and 2050, the proportion of the world's population over 60 years of age will nearly double from 12% to 22%.
Source: hanetf
Global uncertainty places bond investors in a binary bind
August 14, 2019--August 14, 2019--With more than $15-trillion of bonds now offering negative yields and US Treasuries now well below 2% and possibly heading for zero, bond market investors are facing tricky times.
Their future investment experience hinges on whether governments lead the global economy into a worst-case or best-case scenario-something over which they have no control.
Source: dailymaverick.co.za
IMF-Fuel for Thought: Ditch the Subsidies
August 14, 2019--Pensions, education, healthcare, better infrastructure, technology, and climate change: fiscal policymakers have their work cut out for them on many fronts. Whether you live in a rapidly aging advanced economy, or a low-income or emerging market economy with a young, booming population, all these issues matter for you.
As the Fiscal Monitor in April 2019 shows, government policies on taxes and spending have to adapt and should shift to growth-enhancing investment. This means, for example, more money to build classrooms, hospitals and roads, while cutting wasteful spending, such as inefficient energy subsidies.
Our chart of the week shows that removing fossil fuel subsidies, which typically benefit the rich more than the poor, could gain up to 4 percent of global GDP in additional resources over the medium term to invest in people,, growth, and help protect the most vulnerable.
Source: IMF
World bond market sets quarterly record after boom in first-half activity
August 8, 2019--The world's green bond market hit a record quarterly high in the last three months, as investor appetite in environmental assets picked up pace.
Issuers brought $66.6bn (£54.8bn) of green bonds to market globally in the second quarter of 2019, propelling issuance in the first half of the year and shattering records.
Source: cityam.com
Markets dip after renminbi hits weakest level in 11 years
August 5, 2019--Global markets dip after renminbi hits weakest level in 11 years.
The renminbi lingered at its weakest level since the 2008 global financial crisis on Monday, triggering an angry response from US president Donald Trump and causing a wave of jitters across global markets.
Source: FT.com
All-out trade war could cost global economy $1.2trn-chart
August 5, 2019--The recent escalation in the trade war could cost the already fragile world economy dearly. Modelling by Bloomberg Economics shows that global GDP would be 0.6% lower in 2021 if the market slumps during an all-out trade war, compared to a no trade war scenario.
That's the equivalent of a $1.2trn hit to the global economy.
Source: FIN24.com
Bassanese Bites: Trade tantrum
August 4, 2019-Global Markets
Global equities slumped last week reflecting two negative events: disappointment with regard to Fed guidance and Trump's new tariffs. A flight to safety saw long-term bond yields plumb new lows, the $A weaken, and $US and gold prices firm. The $A has now hit my target level of US 68c, somewhat earlier than expected, while local 10-year bond yields are close to breaking below 1%!
Although the Fed cut rates by 0.25% as widely expected, Fed chair Powell's declaration that this "was not the beginning of a long series of rate cuts" disappointed the market, although he did add "I didn’t say it's just one or anything like that". That's consistent with my view that the Fed would likely cut rates twice this year but, barring a US recession, the four rates cuts seemingly expected over the next year always seemed unlikely.
Source: BetaShares
IEEFA report: BlackRock's fossil fuel investments wipe US$90 billion in massive investor value destruction
Investors need to ask why
August 1, 2019--BlackRock, the world's largest fund manager with US$6.5 trillion of assets under management-bigger in value than the third largest economy in the world-continues to ignore the serious financial risks of putting money into fossil fuel-dependent companies, a new report has found.
Produced by the Institute for Energy Economics and Financial Analysis (IEEFA), the report places a price tag on BlackRock's fossil fuel-heavy strategy-saying the firm's failure to effectively address risk has lost investors over US$90 billion in value destruction and opportunity cost from just a select few holdings over the past decade.
Source: Institute for Energy Economics and Financial Analysis (IEEFA)
IOSCO issues Statement on Benchmarks Transition
July 31, 2019--The Board of the International Organization of Securities Commissions (IOSCO) today published the Statement on Communication and Outreach to Inform Relevant Stakeholders Regarding Benchmarks Transition.
The Statement seeks to inform relevant market participants of how an early transition to Risk Free Rates (RFRs) can mitigate potential risks arising from the expected cessation of LIBOR.
IOSCO wishes to raise awareness of the impact of LIBOR's likely cessation and the need for relevant stakeholders to transition from the widely used USD LIBOR to RFRs -particularly to the new US preferred Secured Overnight Financing Rate (SOFR). Raising awareness is important to facilitate prudent risk management across corporate and financial institutions and mitigate potential financial stability and conduct risks.
Source: IOSCO
