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Brief: Bank of England Chief Economist Huw Pill said new variants of the coronavirus and the risk of another lockdown are some of the risks that could blow off track the view of policy makers that the U.K. economic recovery is maturing. Speaking Friday as the emergence of the Nu variant of Covid-19 roiled global markets, Pill said the arrival of any new strain could disrupt the BOE’s guidance that rates have to rise in coming months. “If there’s a financial disruption, or if there’s the onset again of a pandemic and a lockdown, those are the type of events which clearly would change our view of the world. We hope those things don’t happen, Pill told business leaders in northern England. “We hope those things don’t happen. We don’t really know what the future holds. It’s those unknown unknowns that the most difficult to manage.”
Brief: Money markets are offloading bets on central bank interest-rate hikes in a hurry, as inflation fears give way to concerns that a new coronavirus strain may spread globally and slow economic growth. Traders have pushed back the timing of a 25-basis-point rate increase by the Federal Reserve to September from June, with only one further hike expected for the remainder of 2022. It’s a similar story in the U.K. where the Bank of England is now expected to tighten policy in February instead of next month. Wagers that the European Central Bank will raise its deposit rate by the end of next year have also been slashed, with only a seven basis-point increase priced in, around half of that seen earlier this week.
Brief: UK entrepreneurs are leading the way out of the Covid-19 crisis with the number of new businesses created up 15 per cent in the last year, according to ECI Partners, a growth-focused mid-market private equity firm. According to figures from the ONS, a total number of 405,555 new businesses were created in the UK in 2020/21, compared to 352,575 in 2019/20. Despite the economic challenges of the pandemic, UK entrepreneurs have shown their resilience and the rise in business creation provides an optimistic outlook for new businesses in the UK. Mark Keeley, Partner at ECI Partners, says: “These figures really demonstrate the UK’s strong entrepreneurial spirit, with business leaders focussing on how to thrive rather than simply survive.”
Brief: Bitcoin fell sharply alongside other assets on Friday, hitting a seven-week low and officially entering bear market territory. The world’s biggest cryptocurrency sank nearly 8% in the last 24 hours to $54,315, according to Coin Metrics data. Bitcoin at one point traded as low as $53,549, its lowest level since early October. Bitcoin is down more than 20% from an all-time high of nearly $69,000 which it hit earlier this month. Bear markets are typically defined by a decline of 20% or more from recent highs. Other cryptocurrencies also plunged Friday. Ether, the second-biggest crypto, fell 10% to $4,062, while XRP slumped 10% to around 95 cents. Digital currencies are falling in tandem with other risk assets amid panic over a new, heavily-mutated variant of the coronavirus first detected in South Africa.
Brief: Airline shares tumbled on Friday after the U.K. instituted a temporary ban on flights from South Africa and Germany prepared to restrict entry along with other European Union members. Israel and Singapore have also curbed access from South Africa and neighboring nations to fight an emerging strain of coronavirus that has alarmed health officials across the world. European Commission President Ursula von der Leyen proposed an “emergency brake” on air travel from South Africa, which allows EU member countries to act quickly to limit the risks from emerging virus variants. British Airways parent IAG SA sank 21%, while Deutsche Lufthansa AG fell 14%. Ryanair Holdings Plc, Air France-KLM and other European airlines registered drops of similar magnitude.
Brief: Nearly 40 per cent of Canadian businesses say they do not expect a return to pre-pandemic profitability levels by the end of next year, as concerns about rising inflation and new waves of COVID-19 weigh on business prospects. That's according to HSBC's most recent Voice of Business survey of more than 7,300 business leaders in 14 countries, including 536 Canadian companies. The survey found that 25 per cent of businesses will reach pre-pandemic levels of profitability by the end of the year, and another 36 per cent expect to hit those levels by the end of 2022. But other companies expect a more prolonged recovery period, with 39 per cent reporting that they will return to pre-pandemic levels of profitability after 2022. The survey also found that Canadian businesses are feeling more pessimistic about their future growth prospects than entrepreneurs in other countries. In Canada, 56 per cent of businesses say they feel more optimistic than they did a year ago – a time that was marked by COVID-19 uncertainty – compared to 72 per cent in the U.S. and 64 per cent globally.
Brief: A new wave of junk downgrades looms over Europe as the region shudders under one of the worst outbreaks of the pandemic. Some 84 bonds worth 46 billion euros ($52 billion) are on the cusp of losing their investment-grade ratings -- marking a reappearance for fallen angels that had all but vanished this year, according to Bloomberg Intelligence analysts. “With European lockdowns back on, fallen angels are a worry,” Mahesh Bhimalingam and Bhumika Gupta wrote in research published Thursday. There was just one fallen-angel downgrade in Europe in the past six months, they wrote. The downgrades are another sign of cracks emerging in the European credit market that’s been buttressed by central bank bond buying for years and even more so during the pandemic. But now that support is set to diminish as soon as March -- and the prospect is pushing up borrowing costs and volatility. The risk premium in euro-denominated corporate bonds, as measured by Bloomberg indexes, just rose above 1% for the first time in more than a year. This comes as spread volatility is rising to multi-month highs from depressed levels.
Brief: Euro-area business activity unexpectedly quickened, though the region’s recovery faces headwinds from a fresh wave of Covid-19 infections and “record inflationary pressures.” IHS Markit’s composite Purchasing Managers’ Index rose to 55.8 in November from 54.2 in October, according to a survey of purchasing managers by IHS Markit published Tuesday. While that defies the median estimate in a survey of analysts that forecast the measure would retreat, it still points to weaker economic growth in the closing quarter of 2021, the report said. That’s partly down to the pandemic’s latest surge across Europe, which looks set to cause renewed disruptions to the economy in December. Any new lockdowns are likely to hit the currently thriving services sector, while manufacturing is already suffering from a global supply squeeze.
Brief: European stocks eked out small gains on Wednesday as traders digested a fresh batch of economic data and monitored the region’s latest Covid surge. The pan-European Stoxx 600 closed up 0.1% after choppy trading earlier in the session. Telecoms shares rose 1.2% to lead the gains while autos stocks sank 1.5%. European investors continue to monitor the acute Covid crisis in the region this week, with more countries considering stricter restrictions and partial lockdowns to curb rising infections. Germany is expected to make a decision on stricter measures on Wednesday amid a surge in cases there, and France recorded more than 30,000 new daily infections on Tuesday for the first time since August. In political news, German parties agreed to form a three-way coalition after almost two months of talks. The deal will see Olaf Scholz, the center-left Social Democratic Party’s candidate, become Germany’s next chancellor, replacing Angela Merkel who has led Germany for 16 years.
Brief: The head of Hong Kong’s securities watchdog categorically defended the government’s restrictive quarantine policy, saying that it will not affect the city’s status as a global finance hub. “There will be no long-term impact on Hong Kong as an international financial centre,” said Ashley Alder, chief executive of Securities and Futures Commission. Alder, who is currently undergoing a 21-day quarantine after returning from the COP26 climate summit in Glasgow, answered media queries from his hotel room as he remotely took part in the SFC Regulatory Forum. Other financial centres like Singapore, London and New York have eased travel restrictions and opted for “living with Covid”. Hong Kong, on the other hand, has adopted a zero-Covid-19 policy and requires travelers to undergo up to 21 days of compulsory quarantine. “The other cities cannot replicate what we are doing,” he said. “Hong Kong has a range of successful cross-border trading schemes with the mainland, including the two Stock Connect schemes, Bond Connect and Wealth Management Connect schemes.”
Brief: The European Central Bank may decide to only put its 1.85 trillion-euro ($2.1 trillion) pandemic bond-buying program on hold rather than abolish it after net purchases are set to end in March, according to Governing Council member Robert Holzmann. The program, which was launched in 2020 to address the pandemic shock and fragmentation on euro-area bond markets, could enter a “waiting room” rather than be terminated as the ECB’s crisis response moves into a new phase, Holzmann said at a news briefing in Vienna. This will be in order to “save the advantages of flexibility in case they become necessary in the event of economic shocks, which are definitely possible, but we do not expect,” he said.At issue is the question whether the ECB should hold on to the versatility of its crisis tools even after it shifts its focus on more conventional instruments.
Brief: German business confidence took another hit in November, with a new wave of Covid-19 infections looming over the economy and rising inflationary pressures threatening to weigh on manufacturing. A gauge compiled by the Munich-based Ifo Institute dropped for a fifth straight month to its lowest since April. Economists had predicted a decline to 96.7. Expectations for the next half year also worsened. The report underscores mounting challenges facing German businesses, which are now facing a resurgent pandemic -- having already struggled with supply disruptions for most of 2021 as demand across the globe rebounds following lockdowns. A separate purchasing managers’ index Tuesday showed “unprecedented inflationary pressures” are threatening to restrain output in the coming months. The Bundesbank warned this week that inflation may approach 6% in November, and could stay elevated for a longer period than originally thought.
Brief: Nordea Bank Abp is urging its employees in Denmark to bring a Covid certificate when working at the office. The biggest Nordic bank isn’t currently checking whether employees have a Covid passport, but said staff are “expected to act responsibly” and follow hygiene protocols. The purpose is to limit the spread of the virus, a Nordea spokesman said in an emailed response to questions. The lender also provides Covid testing at its largest locations in Denmark. Nordea’s move comes at a time when Denmark is working on rushing through legislation that will allow employers to demand workers have a valid Covid passport. And even though those proposals are not yet in place, they do have the backing of a major labor organization.
Brief: As coronavirus ripped through Britain and businesses faced a potentially fatal cash squeeze, a company controlled by one of the U.K.’s richest financiers, John Beckwith, received a taxpayer-backed relief loan for about 3.7 million pounds ($5 million) — even though the firm hasn’t been trading for years. A Bloomberg News review of almost half of the loans granted under the U.K. government’s 26.4 billion-pound Coronavirus Business Interruption Loan Scheme (CBILS) shows that lenders handed out more than 130 million pounds to companies with similarly questionable claims, despite a requirement that borrowers had to be negatively affected by the pandemic. One emergency loan, for 4.7 million pounds, went to a firm founded just two days before it received the funds, corporate records show.
Brief: Zoom Video Communications Inc., the poster child of the so-called “pandemic winners” basket, is losing more of its luster. The video conferencing company slumped 15% to close at the lowest since June 2020. Its latest quarter showed slowing growth as people started socializing in-person -- also a trend that roiled the shares of other lockdown winners Peloton Interactive Inc. and Teladoc Health Inc. Including Tuesday’s losses, Zoom saw about $100 billion wiped out from its market value since its October 2020 peak, which is a decline of 64% for the stock. Despite the pullback, the stock is still up nearly 500% since its 2019 debut. Both Zoom and Peloton have given back the bulk of their gains since the pandemic’s onset, suffering lockdown withdrawal symptoms.
Brief: EY has published the 2021 EY Global Alternative Fund Survey, which offers a comprehensive overview of the perspectives from alternative fund managers and the institutional investors who allocate to these asset classes. The 15th annual survey sheds light on the topics that will be transforming the industry for years to come, including investors' improved perception of alternative funds; the growing importance of ESG and diversity, equity and inclusion (DEI) considerations; and the industry's view on product and strategy expansion into areas such as digital assets and an increased desire for exposure to private markets. "Beyond reflecting on how alternative fund managers and their investors addressed the ongoing challenges posed by COVID-19, this research highlights the resilience of our industry and the key transformations that managers and investors are partnering to affect," saisaysd Natalie Deak Jaros, EY Global Hedge Fund Co-leader and Americas Wealth & Asset Management Co-leader. "2021 was a year in which the industry invested to build significant momentum around various initiatives that will pay dividends for years to come."
Brief: Investment managers expect companies to restrict executive bonuses if government support has not been paid back during the year under review, according to the Investment Association (IA) latest annual pay guidelines. The majority of companies have been sensitive to the experiences of their stakeholders, employees and customers throughout the Covid-19 pandemic when deciding on pay and bonuses. According to the trade body, 13% of the 83 FTSE companies analysed were "colour topped" by the Institutional Voting Information Service (INVIS) for their Covid response during the 2021, AGM season. The colour code, or ‘Top’, helps highlight the severity of issues to be considered. The IA also wrote to the chairs of FTSE 350 Remuneration Committees, which told companies that ESG metrics should also determine executive pay and bonuses. Fund managers want to see that ESG metrics are clearly linked to company strategy. “The rationale and robustness of ESG performance-related targets should also be made clear to investors,” the IA wrote. “Companies with ESG risks and opportunities incorporated into their long-term strategies should have these similarly incorporated into their remuneration structures, and where they haven’t, should explain to investors how they will do this in future years.”
Brief: Euro-area business activity unexpectedly quickened, though the region’s recovery faces headwinds from a fresh wave of Covid-19 infections and “record inflationary pressures.” IHS Markit’s composite Purchasing Managers’ Index rose to 55.8 in November from 54.2 in October, according to a survey of purchasing managers by IHS Markit published Tuesday. While that defies the median estimate in a survey of analysts that forecast the measure would retreat, it still points to weaker economic growth in the closing quarter of 2021, the report said. That’s partly down to the pandemic’s latest surge across Europe, which looks set to cause renewed disruptions to the economy in December. Any new lockdowns are likely to hit the currently thriving services sector, while manufacturing is already suffering from a global supply squeeze.
Brief: For the first time in history, private equity is on track to invest more than USD1 trillion in American businesses over the course of a single calendar year, according to the American Investment Council’s (AIC) 2021 Q3 Investment Trends Report. Through the end of the third quarter, private equity has invested USD788 billion in 4,806 businesses across the United States. The amount invested represents an 86 percent increase from the same period in 2020. “Today’s report confirms that private equity has been a critical partner to help businesses of all shapes and sizes as the American economy recovers from the COVID-19 pandemic,” says AIC President and CEO Drew Maloney. “Private equity is a particularly critical partner for small businesses that need the capital and expertise to survive and grow. The industry’s continued growth is a testament to the strength of these partnerships and private equity’s critical role in powering the American economy.”
Brief: As COVID-19 cases stabilize and Cambodia enters a post pandemic recovery phase, schools have been reopening under the “back to school” campaign. Prudential Cambodia has committed $100,000 in 2021 to support the Ministry of Education, Youth and Sports and other NGO partners in their efforts to provide quality education as well as ensure public safety. The funds will be used to donate high quality thermometers and masks, and other necessary items to encourage students especially those in middle or higher education to return to school. His Excellency Dr. Hang Chuon Naron, Minister of Education, Youth and Sports said, “I would like to thank Prudential Cambodia for their support on our back to school campaign which will enable children to continue their education during this challenging time”. “Prudential is committed to supporting our communities as they recover from the pandemic. Education is critical to an individual’s success in the future and we are happy that we are able to help parents and students in Cambodia continue to access quality education in a safe manner,” said Mr. Sanjay Chakrabarty, Chief Executive Officer, Prudential Cambodia.
Brief: JPMorgan Chase & Co. is offering to reimburse Hong Kong employees up to $5,000 to compensate for their quarantine stay as the financial hub sticks to its zero-Covid policy. All Hong Kong-based employees who are executive directors and below may claim the amount for a single quarantine stay for personal trips undertaken by employees visiting immediate family members, which includes spouses, domestic partners, children, parents and grandparents, according to an internal memo. A Hong Kong-based spokeswoman confirmed the content.“We recognize that the costly quarantine measures in place in Hong Kong associated with COVID-19 have impacted many of you with respect to visiting family and loved ones overseas,” JPMorgan’s Hong Kong chief Harshika Patel said in the memo. The program applies to employees under quarantine between Dec. 1, 2021 and Nov. 30, 2022, the memo said.
Brief: The pan-European Stoxx 600 slipped 0.2% by mid-afternoon, with telecoms climbing 1.3% while travel and leisure stocks fell 1.3%. U.S. stock futures pared earlier gains but were still up marginally in premarket trading on Monday ahead of the holiday-shortened week stateside. U.S. markets will be closed on Thursday on Thanksgiving Day and the stock market closes early at 1 p.m. ET on Friday. Stocks have a track record of posting gains in Thanksgiving week, which will potentially set the stage for a year-end Santa rally. European investors will be keeping an eye on the spread of Covid-19 across the continent after Germany and Austria re-imposed strict containment measures last week. Another big market-moving event this week will be President Joe Biden’s nomination for the next Federal Reserve chief.
Brief: The world economy is approaching the northern hemisphere winter in disarray, unable to shake off the coronavirus crisis amid persisting supply disruptions, soaring prices and resurgent outbreaks. Global surveys of purchasing managers this week are likely to point that way. Among the outcomes anticipated by economists are slowing manufacturing and services activity throughout the euro zone and the U.K., and only modest improvement in the U.S. With parts of Europe confronting renewed restrictions to contain another wave of the virus, China’s rebound fading and rising infections taking hold in America too, much of the global economy is now staring at the threat of a second northern winter of woe, compounded by a cost-of-living squeeze amid surging gas prices and supply bottlenecks.
Brief: Manulife Financial Corp. plans to reopen its Canadian and U.S. offices on Jan. 24, with some employees on hybrid models that will bring them into the workplace three days a week. Many workers will visit the office on Mondays, Wednesdays and one additional flex day per week, Chief Executive Officer Roy Gori and the firm’s executive leadership team said in a memo to staff on Friday. “We have listened to your feedback, heard from medical experts and government officials, and talked with our peers across the market,” the executives said in the memo. “Our goal is to balance the flexibility many of us have enjoyed as a silver lining to the pandemic with our amazing on-campus culture where we can get it done together.” Manulife’s announcement comes two days after Bank of Nova Scotia, Canada’s third-largest lender by assets, set Jan. 17 as the date it would start a phased return to office.
Brief: The outlook is still good for investors, says Luca Paolini, chief strategist at Pictet Asset Management. “Equity prices have reached a record high, up nearly 100 per cent from the pandemic low, much faster than anticipated. Whilst the outlook should seem good for investors, some factors will cap the expected returns for both equity and bonds in 2022. “Record valuation, tighter monetary/fiscal policy and the surge in inflation will keep the pressure on, resulting in single digit return for equities. Bonds, we think have entered a secular bear market, although a significant breakout in yields looks unlikely.” “Next year will be ‘less of the same’, rather than a turning point. We are in the last third of the expansion in what has been the most accelerated market and business cycle in history.”
Brief: The UK and US are driving forward the rapid growth of the global healthtech sector, with latest data from London & Partners and Dealroom.co showing a record USD51.3 billion has been pumped into startups already this year, up 280 per cent on 2016 levels. The findings have been released to coincide with this week’s Silicon Valley Comes to the UK event series, bringing together investors, entrepreneurs and CEOs from the UK and the Bay Area both physically and virtually to discuss the role of technology in building a better future and solving the great challenges of our time. As the world continues to tackle the impacts of coronavirus, the pandemic has acted as a catalyst to an already growing healthtech sector and investment has reached record highs in 2021. The US leads globally with USD31.9 billion in VC investment so far this year, while the UK comes in third with USD3.8bn, close behind China’s USD4.1 billion.
Brief: Resurgent concerns about COVID-19 in the face of looming European lockdowns weighed on a range of sectors Friday, pushing stocks and oil down and boosting the dollar. Wall Street opened the day mixed, with the tech-heavy Nasdaq posting a record open but the blue-chip Dow dipping on fears the economic recovery could stall. The Dow Jones Industrial Average fell 0.7%, the S&P 500 lost 0.08% and the Nasdaq Composite added 0.42%. The MSCI world equity index, which tracks shares in 45 nations, fell 0.16%. European stocks also retreated from record highs as the specter of a fresh COVID-linked lockdown in Germany and other parts of Europe cast a shadow over the global economy. Markets went into a tailspin after news that Austria will become the first Western European state to reimpose a full lockdown to tackle a new wave of coronavirus infections and signs that Germany might do the same.
Brief: The selection of service providers – be they prime brokers, administrators or software systems – is more important than ever before following the seismic upheaval faced by hedge fund firms over the past 18 months. 2020 and 2021 proved to be “a different world” for hedge funds and the financial services industry more broadly, with firms being forced to evolve through working and trading remotely amid the Covid-19 pandemic, said Billy Murray, head of prime at InterTrader, during the service provider-focused panel at this year’s hedgeweekLIVE European Emerging Manager Summit. That, in turn, has thrown the whole business of selecting and managing service provider relationships into ever-sharper focus for start-up hedge funds, which Murray said is “more important than ever before”.
Brief: This year’s hedgeweekLIVE European Emerging Managers Summit examined how start-up funds can best organise their approach to operational due diligence, with attendees hearing how cybersecurity and succession planning have emerged as key considerations as a result of the coronavirus pandemic. Sarah-Jane O’Sullivan, director at Willis Towers Watson, set out a range of corporate governance and front-, middle-, and back-office functions which remain central to the ODD process. Along with IT and HR, there has also been an increased emphasis on controls around cybersecurity as a result of Covid-19 and homeworking, according to O’Sullivan and panel moderator Thomas Deinet, executive director at SBAI. The session heard how the wholesale moves towards cloud-based tech have heralded sweeping changes to the operational due diligence process over the past decade, which had been further accelerated by Covid, in turn bringing added cybersecurity challenges.
Brief: Since buying the Tampa Bay Lightning in 2010, Jeff Vinik has looked to transform downtown Tampa. The NHL team has improved on the ice, winning the 2020 and 2021 Stanley Cups, and he has spearheaded a more than $3.5 billion real estate development. While Vinik told CNBC’s Diani Olick that he is “no commercial real estate expert” during a CNBC Evolve Livestream on Wednesday, the 56-acre development is putting a big bet on office space with more than 1-million-square-feet of new space and the first office tower to be built in Tampa in over 25 years. That comes as the commercial real estate market is still trying to find its footing amid the pandemic as employers and workers embraced hybrid and virtual work arrangements. For example, a recent survey found that only 28% of Manhattan office workers are back at their desks and fewer than half will return by January.
Brief: CEO turnover spiked in the first half of 2021, as companies tapped new talent to navigate the aftermath of the COVID-19 pandemic and stressed-out chief executives sought a career change, a study from recruiting firm Heidrick & Struggles found. The findings illustrate how CEOs are not immune to the exhaustion that has swept hundreds of millions of workers worldwide since the onset of the pandemic and has pushed many to consider a new job or lifestyle in a wave dubbed "The Great Resignation." "Our belief is that it will only accelerate going into next year as people have delayed their retirements," said Jeff Sanders, co-managing partner of Heidrick's global CEO and board practice. There were 103 CEO appointments in the first half of 2021 out of 1,095 companies in 24 regions that Heidrick studied, including the United States, China and some European countries.
Brief: The boss of HSBC Holdings Plc, the biggest bank in Hong Kong, said he won’t do anything that would put the city’s efforts to open up travel to mainland China at risk, even as criticism of the financial hub’s zero-Covid policy grows. In an interview at the Bloomberg New Economy Forum in Singapore, Chief Executive Officer Noel Quinn said he currently has no plans to visit the city, the lender’s biggest market. “It’s important for Hong Kong to establish what they need to establish with China on reopening,” he said in an interview with Francine Lacqua. “I don’t want to do anything that may jeopardize that. I would love to get back to Hong Kong as soon as I can and when the authorities feel it’s right for me to go back, I will.” The finance industry has been ratcheting up pressure on Hong Kong to ease its quarantine rules and abandon its zero-Covid policy amid concern it is becoming increasingly difficult to recruit and retain talent.
Brief: Asset managers need to rethink the way they hire, manage, and keep the best people — and fast. Industry executives agree that the pandemic has fundamentally changed the way people want to work and managers need to take those changes seriously and invest in training and support services to make it all function. On Thursday, Deloitte provided some evidence for the big post-pandemic shift. The so-called workplace talent model will continue to change next year, according to Deloitte’s 2022 investment management outlook report released Thursday. Based on a survey of 400 senior investment management executives from July to August of this year, the consulting firm expects that asset managers will invest what’s needed and strengthen their talent organizations. That includes everything from work-from-home policies, comprehensive training, and infrastructure; diversity equity and inclusion; and strategies to communicate a sense of purpose to employees, among other things.
Brief: The increased use of automated trading is turning asset managers into liquidity makers rather than liquidity takers and has prompted sell-side market makers to call for an overhaul of market rules.This is the finding of a new report into equity and fixed income markets commissioned by the FIA EPTA, the trade association for market-making firms.The report, Turning the Tables on Liquidity Provision, written by Redlap Consulting, found that the greater use of automated trading, driven by the pandemic, has given buy-side firms greater access to a wider range of trading partners and reduced their reliance on traditional sell-side market makers.More than two-thirds (67%) of asset managers now see transparency as a key factor in their selection of liquidity partners while a similar number (70%) said that data and technology play a greater role in deciding where they trade.
Brief: Bank of Nova Scotia plans to start a phased return-to-office plan for headquarters employees who are still working remotely on Jan. 17, marking a major commitment for a broad return from one of Canada’s largest banks. The return will be staggered for different groups, and the majority of head-office employees will be working in a hybrid model, spokesman Clancy Zeifman said in an e-mailed statement Wednesday. All employees at Toronto-based Scotiabank will be required to follow the bank’s mandatory vaccination policy. Canada’s banks have kept the majority of their headquarters employees working remotely as the country has maintained many of its pandemic safety measures into the fall. Scotiabank’s target date for a broad return was selected based on guidance from medical advisers and in consultation with the government, Zeifman said.
Brief: Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned. While the economic recovery from the coronavirus crisis means near-term risks have dissipated, vulnerabilities are accumulating with potentially grave consequences down the line, according to the Frankfurt-based bank. “Concerns particularly relate to pockets of exuberance in credit, asset and housing markets, as well as higher debt levels in the corporate and public sectors as a legacy of the pandemic,” it said Wednesday in its Financial Stability Review, echoing former Federal Reserve Chairman Alan Greenspan’s description of the dot-com bubble in the 1990s.
Brief: Over two-thirds, or 67%, of private equity firms have cited market conditions over the last year as a key barrier to deploying capital, according to a new market report from Gallagher, although 57% said the out-turn over the period was either better than expected or exactly as expected. The report, which surveyed 150 private equity firms across the US, UK and Asia, also revealed this was significantly down compared to findings in last year's survey, in which 88% of firms said the out-turn was in line with their expectations. Limited capital capability was felt most acutely in the UK, with 72% of firms revealing conditions prevented capital deployment, compared to 62% of firms in Singapore, where it was least acute, possibly reflecting the harsher effects of the pandemic across Europe.
Brief: Greed is outpacing fear in world financial markets as investors respond to the pandemic recovery, Goldman Sachs Chief Executive David Solomon says, adding that such periods of exuberance are usually not long-lived. Solomon told Bloomberg's New Economy Forum in Singapore on Wednesday the global economy was facing a 'complicated time' as activity began to strengthen after the sudden shutdown in many parts of the world in 2020 because of coronavirus. The unprecedented levels of stimulus ordered by governments and central banks, he said, had led to exuberance in certain markets. "I think markets generally when I step back and I think about my 40 year career, there's been periods of time when greed has far outpaced fear. We were in one of those periods of time," Solomon told the Singapore event.
Brief: Corporate executives are signing up for acres of new office space in London as they attempt to lure workers back to their desks. Demand for offices in the U.K. capital has rebounded sharply with businesses committing to 819,000 square feet of new space in the six months through September, British Land Co. said in a statement Wednesday. That’s the equivalent of more than 10 soccer fields and includes a new headquarters for law firm Allen & Overy at the developer’s 1 Broadgate development, which is fully pre-leased ahead of completion, and space to Facebook-owner Meta Platforms Inc. There is a “renewed optimism in London offices with occupiers more confident of committing to space as their employees return to the office,” the landlord said in a statement. “Demand is firmly focused on the very best space, with an emphasis on sustainability, wellness, shared and flexible space and excellent transport connections.”
Brief: Global dividends are expected to hit pre-pandemic levels by the end of the year, according to Janus Henderson, as third quarter figures surge.This is particularly the case for companies in Europe, parts of Asia and emerging markets, the asset management firm said.Dividends jumped 22% year-on-year reaching $403.5 billion, an all-time high for third quarter figures.The majority of companies globally either raised their dividends or held them, while mining dividends were found to drive two thirds of the increase. Recently restored banking dividends also made a significant contribution. Janus Henderson said dividends are now expected to surpass the pre-pandemic peak by the end of December 2021.
Brief: Banks are poised to hand investment bankers and traders their biggest bonuses since the financial crisis, with hopes the cash will stem the high levels of turnover sweeping across Wall Street. Equity and debt underwriters will be the biggest winners, with a jump of as much as 35% from a year earlier, according to a report Tuesday by compensation consultant Johnson Associates Inc. Equity traders and M&A bankers may see a 25% increase. Fixed-income traders could be the lone losers, with their bonuses potentially sinking as much as 5%. “Our clients are going to pay people well” amid concern about employee turnover, Alan Johnson, managing director of Johnson Associates, said in an interview. “The business results are terrific so there’s no holding back.” The Covid-19 pandemic was a boon for Wall Street, first with a trading surge on wild market swings and then a dealmaking boom.
Brief: As economies reopen following months of disruption, economic uncertainty remains. Interest rate rises loom, China's economy slows, and concerns grow about mounting inflation. Headlines also warn of perfect storms, black swans, and bottlenecks. While disruption to global supply-chains is serious, the news stories bely the recovery of sectors worst affected by Covid-19: sports, hospitality, and entertainment. Hotspots within these sectors present attractive opportunities for investors to start positions in solid structural winners during a moment of short-term weakness. The 'empowered consumer' investment theme offers a way to identify these opportunities, as it recognises the influence consumers have on the companies they buy from, the use of data and technology by these companies, and the vertical business models that provide a substantial barrier to entry for competitors.
Brief: JP Morgan’s billionaire leader govt Jamie Dimon used to be allowed to skip Hong Kong’s strict 21-day resort quarantine laws as a result of he runs “an overly large financial institution” with “key industry in Hong Kong”, the territory’s leader govt, Carrie Lam, stated on Tuesday. Dimon flew into Hong Kong on Monday on JP Morgan’s non-public jet, turning into the primary Wall Side road financial institution boss to seek advice from the territory or mainland China for the reason that pandemic started. Wondered about why Dimon used to be allowed to go into the territory with out complying with coronavirus laws, Lam stated: “The justification is said to financial system, as it is a very large financial institution with key industry in Hong Kong. He had to come and paintings for roughly an afternoon in Hong Kong. However there are restrictions, together with restrictions over his itinerary, so the chance is totally manageable.”
Brief: Bugcrowd, the world's first crowdsourced cybersecurity platform for multiple solutions, today released its annual Inside the Mind of a Hacker '21 report, which provides CIOs and CISOs valuable insight on ethical hackers and the economics of security research. New findings indicate a startling shift in the threat landscape with 8 out of 10 ethical hackers recently having identified a vulnerability they had never seen before. This comprehensive annual study offers an in-depth look at ethical hackers to reveal how they reduce risk, which industries leverage their expertise most, and what organizations are doing to attract high-performing security researchers to their programs. It also indicates the growing geographic disparity in crowdsourced cybersecurity investment, with continental Europe allocating 79% less budget to ethical hacking than North America.
Brief: The sweeping changes and far-reaching trade upheaval brought about by Brexit and Covid-19 heralds sizable investment opportunities for hedge fund managers, according to a new study by IG Prime. The report – ‘An Analysis of Post-Brexit Economies’ – examines the impact of Brexit on international trade, gauging potential growth areas in specific sectors, and considers the broader trends unfolding from evolving international trade patterns as a result of the UK’s decision to leave the European Union. Specifically, the report probes the UK’s main exports prior to Brexit – such as precious metals, vehicles, and pharmaceutical products – as well as the main exporters of those same products in the EU and Singapore, in order to determine which countries may be set to increase exports. It also looks at the impact of the Covid-19 impact on trade over the course of 2020.
Brief: OneStream Software, a leader in corporate performance management (CPM) solutions for the world’s leading enterprises, has announced the results of its "Enterprise Financial Decision Makers Outlook - October 2021" survey. The study, conducted by Hanover Research, targeted finance leaders across North America and identified the factors driving their budgets and technology adoption plans for 2022. The COVID-19 pandemic had a long-lasting impact on many companies, but 2021 led to some positive business resurgence. Of the organizations surveyed, four out of ten indicate they have grown since the start of the pandemic. Of those growing, 70 percent are experiencing growth equivalent to pre-pandemic business results.However, 31 percent are still stagnated and another 30 percent have shrunk since March/April 2020. Many financial executives have a renewed focus on the future, exploring people-focused initiatives, technology adoption and new reporting measures for next year.
Brief: US Treasury secretary Janet Yellen has said that the only way to bring inflation back down is to continue to “make progress against the pandemic”, according to the FT. "The pandemic has been calling the shots for the economy and for inflation," Yellen told CBS's ‘Face the Nation' programme. "And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do." US inflation reached its highest level since 1990, as October's consumer price index soared 6.2% year-on-year, and recorded a month-on-month increase of 0.9%, exceeding consensus expectations. The FT reported that Yellen expects the recent rise in prices of certain goods, such as fuel, to come down in the second half of next year as long as the economy recovers from Covid-19.
Brief: Firms such as State Street Corp. and CF Global that offer outsourced trading services are seeing more inquiries in Asia as fund managers and family offices look to cut costs and set up contingency plans. Asia, and China in particular, has lagged behind other regions on the outsourcing front because of a reluctance by particularly family offices to go outside for help, according to executives in the industry. That is now slowly changing in part as the pandemic revealed the need to have backups. “Asia is catching up,” said James Woodward, APAC head of portfolio solutions who runs the outsourced trading desk at State Street, which has been offering the service in Asia since 2010. “There’s obviously an education phase, but as we move forward, some of those Asian funds embrace the benefits that can be garnered from some of these firms’ investments in all the technology and infrastructure and capability sets.”
Brief: It's a new world for European asset managers. In the wake of the pandemic, a growing number of their clients have begun to opt for online communication tools rather than in-person conversations, and these businesses have been forced to rapidly rethink their sales and marketing strategies to meet the demand. According to a Cerulli report, managers in major European economies such as the U.K., Spain, and France are planning to increase their sales headcount and adjust their marketing strategies to catch the latest communication trends. More resources will be deployed to video production, social media, and brand development, a trend that will likely continue as managers compete for digital attention.During the early stages of the pandemic, European asset managers rushed to develop virtual communication tools to show their clients that “they were there if needed,” according to Fabrizio Zumbo, associate director of European retail and wholesale research at Cerulli.
Brief: AstraZeneca Plc is moving to profit from the COVID-19 vaccine it developed with the University of Oxford after watching Pfizer Inc. and Moderna Inc. reap huge returns over the past year of the pandemic. The U.K. drugmaker will start generating modest profits from the shot as new orders are received, AstraZeneca said in a statement Friday. The vaccine will continue to be sold at cost for developing nations. The company is shifting to a for-profit model even as many countries grapple with rising COVID cases. AstraZeneca Chief Executive Officer Pascal Soriot said COVID is moving into an endemic phase, and the move is in line with the company’s plan early in the crisis, when it pledged not to profit from the vaccine as long as the disease remained a pandemic.
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