Institutional Investor (October 29)
“Just as information from barometers and thermometers can help us prepare for tomorrow’s weather, so corporate information on environmental, social and governance (ESG) issues can help investors make better decisions and prepare for the future” by providing such information “as whether supply chain management takes account of climate risk, whether fixed assets are based in areas prone to flooding and cyclones and whether the scale of a company’s greenhouse gas (GHG) emissions is contributing to more extreme weather events over the long term.” But the problem is “too few companies report on such ESG factors. And when they do, it is often voluntarily reported, which tends to mean different methodologies and measures too inconsistent for investors to compare efficiently.” There is an obvious solution. Global stock exchanges should “coordinate the reporting of sustainability metrics just as they do with financial metrics.”
Tags: Climate risk, ESG, Extreme weather, Fixed assets, GHG emissions, Investors, Methodologies, Stock exchanges, Supply chain management
Euromoney (October Issue)
Warning some stock exchanges could face downgrades, ratings agency S&P cautioned that they “have become more prone to operational risk.” Fragmentation is one key challenge. “There are now 16 SEC-registered securities exchanges in the US and more than 50 alternative trading systems, whereas before 2005 the equities market was dominated by NYSE and Nasdaq. It is this interconnectivity that is fueling operational risk. When Nasdaq halted trading in August, for example, other stock exchanges, including NYSE, Bats and Direct Edge, were also forced to stop trading in Nasdaq-listed securities.”
Tags: BATS, Challenge, Direct Edge, Downgrades, Fragmentation, Interconnectivity, Nasdaq, NYSE, Operational risk, S&P, SEC, Securities, Stock exchanges, Trading, U.S.
Institutional Investor (August Issue)
“Facing an image problem,” many Chinese companies are retreating from U.S. exchanges. “Frustrated by low valuations and investor skepticism, Chinese companies are increasingly considering delisting from U.S. stock exchanges.” Since 2009, 24 Chinese companies have delisted, often going private, from the NYSE and Nasdaq. Much investor skepticism is directed at companies that utilized reverse mergers to attain their listing, thereby avoiding the scrutiny that would accompany a normal IPO, but the skepticism has tainted even Chinese companies with solid financials.
Tags: China, Companies, Delisting, Image, Investors, IPO, Listing, Nasdaq, NYSE, Private, Reverse mergers, Scrutiny, Skepticism, Stock exchanges, U.S., Valuations
