Friday 27th February 2015
NEWS TICKER, FEBRUARY 26TH 2015: The CME Group says that the volume in the Mexican peso interest rate clearing in the opening weeks of 2015 has outstripped the volume recorded in the whole of 2014. January was a particularly good month, with record volume m with $50bn cleared (MXN760bn), and $163bn cleared since launch. Meanwhile open Interest has grown to over $139.5bn (MXN2trn) – doubling since the start of the year - Italy’s payment systems specialist SIA reports operating margin up 22.5% at €81.9m and revenues up 7% at €336.9m over the 2014 financial year. The firm says it has proposed an ordinary dividend of €0.21 per share, with a total value of €35.68m. The firm reports a substantive 146% growth in the number of payment transactions processed through 2014 (touching 12bn over the year, with 9.2bn of those related to credit transfers (up 316%) and 3bn via cards (up 9%). The firm also reports a 5% increase in trading and post-trading operations, with service levels of 100%. The firm notes the success of its “Jiffy” service launch in the year, the new “Person to Person” (P2P) payments service, an App permitting money transfer in real time by Smartphone to a user’s contacts, associating the IBAN code of the account with the phone number included - The Straits Times Index (STI) ended -14.65 points lower or -0.43% to 3426.18, taking the year-to-date performance to +1.81%. The FTSE ST Mid Cap Index declined -0.31% while the FTSE ST Small Cap Index declined -0.29%. The top active stocks were SingTel (-0.47%), DBS (-0.66%), Global Logistic (+1.17%), UOB (-0.26%) and OCBC Bank (-0.38%). The outperforming sectors today were represented by the FTSE ST Consumer Goods Index (+0.77%). The two biggest stocks of the FTSE ST Consumer Goods Index are Wilmar International (+1.85%) and Thai Beverage (+0.71%). The underperforming sector was the FTSE ST Basic Materials Index, which declined -1.28% with Midas Holdings’s share price declining 3.08% and Geo Energy Resources’s share price unchanged. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (-0.12%), STI ETF (-0.87%), SPDR Gold Shares (+0.50%). The three most active Real Estate Investment Trusts (REITs) by value were CapitaMall Trust (unchanged), Ascendas REIT (-1.59%), Suntec REIT (-0.51%). The most active index warrants by value today were HSI25000MBeCW150330 (+5.50%), HSI25000MBeCW150429 (+7.38%), HSI24400MBePW150330 (-10.11%). The most active stock warrants by value today were OCBC Bk MBeCW150803 (-5.74%), SGX MB eCW150803 (-1.16%), DBS MB eCW150915 (-5.33%) -World Bank today called for more transparency in India's power subsidy regime and suggested re-identification of the target population to improve the balance-sheets of losses-stricken distribution companies. The global development finance body says the sector should be allowed to operate in a commercially viable manner by ensuring that those firms that are not eligible for subsidy pay for what they consume - The country witnessed a decline of 12 per cent in solar power generation at a total 883 MW last year, according to energy consulting firm Mercom Capital Group. Total solar energy installations in 2013 stood at 1,004 MW, it said. However, its 2015 forecast remained unchanged at an approximately 1,800 MW with some upside - BNP Paribas Securities Services has appointed Andrea Cattaneo as head of Brazil. "We have expanded our custody offering in Brazil and across Latin America in recent years with great success," says Alvaro Camuñas, head of Spain and Latin America at BNP Paribas SS - A new draft text on an EU system for the use of Passenger Name Record (PNR) data, tabled by lead MEP Timothy Kirkhope (ECR, UK), was discussed in the civil liberties committee on Thursday morning. An evaluation of the necessity and proportionality of the proposal in the face of current security threats, its scope (list of offences covered), retention periods, the inclusion or exclusion of intra-EU flights, the connection with the on-going data protection reform, as well as the consequences of the EU Court of Justice judgement annulling the 2006 data retention directive, were among the issues discussed by MEPs. The 2011 Commission proposal would require more systematic collection, use and retention of PNR data on passengers taking “international” flights (those entering the EU from, or leaving it for, a third country), and would therefore have an impact on the rights to privacy and data protection.

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The European Review

By Patrick Artus, chief economist at Natixis

Countries’ attractiveness measured by business investment

Friday, 08 June 2012 Written by 
Countries’ attractiveness measured by business investment Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan. The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France. http://www.ftseglobalmarkets.com/

Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan.

The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France.

Countries’ attractiveness for setting up business

Attractiveness depends on cost-competitiveness, the tax system, the skill level of the labour force, corporate profitability, public infrastructure, etc. So it is a multi-faceted and complex variable.



It can be measured indirectly, by:

  • cost-competitiveness, in light of the trend in exchange rates measured by the real trade-weighted exchange rate. Currently the currencies of the United Kingdom, Italy and Spain are overvalued in real terms;
  • export market shares, in which losses have been very marked in Japan, the United Kingdom, France and Italy;
  • the trend in potential GDP and in production capacity in industry. Potential GDP has grown significantly in the United States, while production capacity has stagnated in the United Kingdom, Japan, Spain and Italy;
  • growth in employment excluding the civil service, which has been the most vigorous in Spain and the weakest in Japan.

If we use these criteria, the most attractive countries for companies are the United States, Sweden, Germany, Spain and France, while the least attractive are the United Kingdom, Italy and Japan.

Attractiveness measured by investment

However, for each country we also look at two direct measures of attractiveness for companies:

  • the proportion of the country’s business investment that is carried out in that country and not abroad. This proportion is low in Sweden, France, Spain and the United Kingdom;
  • the share of investment by foreign companies in GDP. This proportion is high in Sweden, the United Kingdom and Spain.

According to this investment criterion of attractiveness, the most attractive countries are the United States, the United Kingdom, Spain; the least attractive are France and Italy.

Which are the most attractive countries among the large OECD countries?

When you summarise both the indirect and the direct approaches, you realize that the United States tops the ranking, while France and Italy are found at the bottom.

Patrick Artus

A graduate of Ecole Polytechnique, of Ecole Nationale de la Statistique et de l'Adminstration Economique and of Institut d'Etudes Politiques de Paris, Patrick Artus is today the Chief Economist at Natixis. He began his career in 1975 where his work included economic forecasting and modelisation. He then worked at the Economics Department of the OECD (1980), before becoming Head of Research at the ENSAE. Thereafter, Patrick taught seminars on research at Paris Dauphine (1982) and was Professor at a number of Universities (including Dauphine, ENSAE, Centre des Hautes Etudes de l'Armement, Ecole Nationale des Ponts et Chaussées and HEC Lausanne).

Patrick is now Professor of Economics at University Paris I Panthéon-Sorbonne. He combines these responsibilities with his research work at Natixis. Patrick was awarded "Best Economist of the year 1996" by the "Nouvel Economiste", and today is a member of the council of economic advisors to the French Prime Minister. He is also a board member at Total and Ipsos.

Website: cib.natixis.com/research/economic.aspx

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