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From the Fed to the Middle East: ESG investors set sights on fixing inequality
August 7, 2020-A new social justice mandate for the Fed?
ESG investors focus on Middle East
British supermodel Lily Cole on climate and sustainable fashion
A largely unnoticed EU plastic tax could create big headaches for member states
Fintech and the Fed: keys to fixing racial inequality?
Fintech has been a hot topic for impact investors in the last year, particularly in Silicon Valley. No wonder: the beauty of fintech is that it can offer financial services to underserved or excluded parts of the population-such as women in emerging markets-while also promoting innovation. Another potential opportunity for fintech: helping American black-owned businesses. Especially given that the attrition rate among black-owned businesses during the pandemic has been twice as high as that among white-owned ones, according to a fascinating paper that the New York Federal Reserve published this week.
ETF joins world's biggest gold owners as investors flock in
August 5, 2020--An exchange traded fund has become one of the world's biggest owners of gold, surpassing even the central banks of Japan and India, as investors have scrambled to buy the precious metal and pushed it to record highs.
SPDR Gold Shares, an ETF that owns physical bullion rather than just financial derivatives, has hoovered up gold this year as investors seeking price gains or a haven asset channel more money into the fund.
The size of the fund's holdings-which are held in HSBC's London vaults- has climbed to 1,258 tonnes
Global Imbalances and the COVID-19 Crisis
July 5, 2020--The world entered the COVID-19 pandemic with persistent, pre-existing external imbalances. The crisis has caused a sharp reduction in trade and significant movements in exchange rates but limited reduction in global current account deficits and surpluses. The outlook remains highly uncertain as the risks of new waves of contagion, capital flow reversals, and a further decline in global trade still loom large on the horizon.
Our new External Sector Report shows that overall current account deficits and surpluses in 2019 were just below 3 percent of world GDP, slightly less than a year earlier. Our latest forecasts for 2020 imply only a further narrowing by some 0.3 percent of world GDP, a more modest decline than after the global financial crisis 10 years ago.
view the IMF-2020 External Sector Report: Global Imbalances and the COVID-19 Crisis
BNP Halts New Commodity Trade Finance Deals as It Reviews Unit
August 5, 2020--Bank is reviewing its involvement in the business in EMEA
Options include closing unit that specializes in such deals
BNP Paribas SA has suspended new commodity trade finance deals while it reviews its involvement in the business in Europe, Middle East and Africa, according to people familiar with the matter.
The French bank, one of the largest lenders to global commodity traders, has recently told clients that no new deals will be concluded unless there's a contractual obligation, said the people, who asked not to be identified because the information isn't public. BNP is currently reviewing options for the future of its EMEA commodity trade finance business, the people said.
Can active fund managers deliver higher returns than ETFs
August 4, 2020-- Active fund managers choose their investments in an attempt to beat the index they are benchmarked against, such as the FTSE 100 or S&P 500.
Despite the lure of beating the index, for every winner there is a loser and higher costs can erode gains.
ETF backers declare victory after 'largest ever stress test'
August 4, 2020--While some oil-focused funds suffered in the Covid sell-off, most came through in one piece
When Michael Burry, the doctor-turned-hedge fund manager immortalised in The Big Short for predicting the subprime crisis of 2008, started warning last year about a new financial bubble, people naturally took note.
His target this time was the fast-expanding industry of exchange traded funds, investment vehicles that can be traded like a stock but passively track a range of underlying assets. The ETF sector vaulted over the $6tn-in-assets mark last year, up more than sevenfold since 2007.
Financial Market Data Spending Expected To Decline In 2021; Industry Undecided On Impact Of COVID-19
August 4, 2020---New Burton-Taylor Survey Results
Global spending on financial market data is expected to decline marginally in 2021, with 33.7% of respondents in Burton-Taylor's Financial Market Data/Analysis 2020 Global Demand Survey expecting spending to decline by more than 2%, with 8.5% of respondents expecting total spending to decline by 6% or more according to a new study published today by Burton-Taylor International Consulting, part of TP ICAP's Data & Analytics division.
User segments expected to see the largest declines included salespeople and corporate C-Suite users, with 15% and 13% in each category expecting spending declines in excess of 6%, respectively.
Emerging-market rebound hangs in balance as economies struggle
August 3, 2020-- The coronavirus shows no signs of subsiding, which will have economic impacts in August, says an economist.
Efforts by central banks to boost economies in developing nations, may even be reaching their limits.
Economic data due this week will help investors know what is happening in emerging markets next.
Pathways to Net Zero: Scenario Architecture for strategic resilience testing and planning
August 3, 2020--Climate change poses a systemic risk to institutional investors. All portfolios are exposed to it, yet the impacts will be uneven across asset classes, sectors and geographies. Understanding how this could play out is of central importance to investors' response to the climate challenge. A key approach is the use of scenario analysis to test the resilience of the portfolio to a number of future states. This can further be developed for financial analysis.
Asset Owners and Asset Managers and their service providers to:
understand an end point ambition requires a scenario pathway to be of use in financial analysis;
understand the scenario pathway architecture (defined in this paper as key variables, metrics, attributes and drivers) determine the financial impact of any scenario. This can be used to compare and contrast scenarios;
understand how climate scenarios can then be used in risk analysis of their own portfolios and engagement with companies following the Paris Agreement and the IPCC SR1.5℃ study;
understand how scenarios can then become base case forecasts to begin to inform actual business and portfolio planning and decisions using business level metrics such as production, capex and emissions, which leads to action.
Investors can use scenarios to inform engagement with companies and/or directly to inform their portfolio construction.
From climate scenarios to forecasts: asset owners fall into one of five groups
August 3, 2020--What do asset owners actually believe will happen, asks Julian Poulter
It's a scary world for asset owners right now. Historically low interest rates are helping drive down returns with unmatched liabilities, against potentially the greatest recession ever, with politics reducing the productivity of globalisation and the looming climate transition waiting to stunt any recovery.
Governments must now decide if their stimulus dollars will promote a green transition in both the energy and land systems or add to the problem. And asset owners must second guess the impact of their decisions and anticipate further disruptive intervention.
