Reuters (November 29)
“European investors managing assets worth more than 1 trillion pounds ($1.28 trillion) are pressing top auditors to take urgent action on climate-related risks, warning that failure to do so could do more damage than the financial crisis.” The investors assert that the Big Four audit firms “are not giving enough weight to a potentially rapid transition towards a low-carbon future as governments implement the 2015 Paris Agreement to curb climate change.”
Tags: Assets, Auditors, Big Four, Climate change, Damage, Europe, Financial Crisis, Investors, Low-carbon future, Paris Agreement, Risks
The Economist (October 19)
“Constitutionally, the emperor is ‘the symbol of the state and of the unity of the people’. But the imperial cocoon in which he is kept risks making him more of a relic. Much like his father, Emperor Naruhito is relatively informal when touring the country, petting dogs and chatting with schoolchildren.” However, “the royal family has scant leeway to make itself more relevant” as it remains bound by “stifling bureaucracy and ritual.”
Tags: Bureaucracy, Constitution, Emperor, Imperial cocoon, Informal, Naruhito, Relic, Risks, Royal family, Stifling, Symbol, Unity
INC. (July/August Issue)
IPOs are forecast to top 200 in 2019, raising approximately $70 billion. “If companies now seem to be rushing to the IPO market, it may be they sense that the risks of waiting are rising fast. VCs are taking advantage of the best opportunity to transfer that risk—and burn rate—to public stockholders.”
Tags: $70 billion, 2019, Burn rate, IPOs, Opportunity, Risks, Rush, Stockholders, VCs
Wall Street Journal (October 26)
The European Central Bank is now faced with “a dilemma as it edges toward higher interest rates just as the region’s economy slows and faces escalating risks, from international trade tensions to a European dispute over Italy’s budget.” For now, President Mario Draghi has no plans to change course as the ECB seeks to “phase out easy-money policies.”
Tags: Budget, Dilemma, Draghi, ECB, Economy, Interest rates, Italy, QE, Risks, Trade tensions
Investment Week (April 27)
The European Union’s Packaged Retail and Insurance-based Investment Products (PRIIPS) regulation “is aimed at helping retail investors better understand and compare the key features, risks, rewards and costs of different products through a short Key Information Document (KID).” However, Andrew Bailey, the chief executive of the Financial Conduct Authority (FCA) “has expressed he is ‘concerned’ about the new PRIIPS legislation, highlighting literature requirements ‘are not providing useful context’ while there is evidence it is causing US funds to withdraw from Europe.”
Tags: Bailey, Context, Costs, EU, FCA, KID, PRIIPS, Regulation, Retail investors, Rewards, Risks, US funds, Useful
Reuters (April 23)
“For investors, the key question is whether the ECB’s carefully calibrated exit plan from its ultra easy policy could be scuppered by trade tensions, especially if the dispute between the United States and China sucks in the euro zone. The ECB would have to alter its march towards a more normal policy stance if growing risks from protectionism, exchange rates or market swings end up depressing inflation.”
Tags: China, ECB, Euro zone, Exchange rates, Exit plan, Inflation, Investors, Market swings, Protectionism, Risks, Trade tensions, U.S.
The Economist (September 17)
“Investors outside China have about $1trn invested in firms that use” variable interest entities (VIEs). These include Alibaba and Tencent. Yet, it remains “unclear if VIEs are even legal in China,” exposing investors to two risks. “First, the VIEs could be ruled illegal, potentially forcing the firms to wind up or sell vital licences and intellectual property in China. The second danger is that VIE owners seek to grab the profits or assets held within. If they refuse to co-operate, die, or fall out of political favour, it is far from clear that firms can enforce VIE contracts in Chinese courts.”
Tags: Alibaba, Assets, China, Contracts, Courts, Illegal, Investors, IP, Profits, Risks, Tencent, VIEs
Bloomberg (July 18)
“The growing focus on the risks associated with the BOJ’s monetary stimulus program—which includes enormous asset purchases, particularly of Japanese government bonds, as well as negative interest rates and yield curve control—comes as its inflation target remains elusive. With no end to its program in sight, the BOJ is under increasing pressure to mitigate risks and explain its thinking about an eventual exit.” Bloomberg calculated that the BOJ already owns over 70 percent of all shares in Japan-listed ETFs and could soon own most of the free float in companies like Fast Retailing.0000000000000
Tags: Asset purchases, BOJ, ETFs, Fast Retailing, Free float, Inflation, Japan, JGBs, Monetary stimulus, Negative interest rates, Risks, Yield curve control
Bloomberg (June 22)
“In the culmination of a long-running saga, MSCI Inc. yesterday announced that it would include some Chinese stocks in its widely used benchmark indexes, starting next year.” The decision beggars belief. “China is undeniably an increasingly important market…. But lowering the standards of what constitutes a market and obfuscating real problems just exposes unknowing foreign investors to elevated risks. If Chinese investors and even regulators are so wary of Chinese stocks, why encourage foreigners to enter the fray?”
Tags: Benchmark, China, Foreign investors, Index, MSCI, Problems, Regulators, Risks, Saga, Standards, Stocks
Boston Globe (May 8)
Trump is making a tense situation on the Korean Peninsula perilous. His “sole success is adding himself to the things South Koreans most fear. Indeed, his erratic behavior has affected South Korea’s presidential election Tuesday, helping elevate the candidate least favorable to the United States. As Trump oscillates, risks burgeon.”
Tags: Election, Erratic, North Korea, Risks, South Korea, Success, Trump, U.S.
