Tuesday 1st September 2015
NEWS: Friday, August 28TH: The Hong Kong Monetary Authority says it has granted a restricted banking licence to Goldman Sachs Asia Pacific Company Limited (GSAPCL) under the Banking Ordinance. GSAPCL, incorporated in Hong Kong, is a wholly-owned banking subsidiary of the Goldman Sachs Group, Inc. The number of restricted licence banks in Hong Kong is now 24 - Apple launched its first Australian dollar corporate bond issue, raising $1.2bn within two hours this morning. Strong demand for the US tech giant’s fixed and floating, four and seven year Kangaroo bonds saw the firm outstrip predictions it would raise between $500m and $1bn. Apple bonds are popular because the AA+ rated company is considered an ultra-safe investment, although yields are correspondingly low — about 3% on four-year bonds and about 3.8% on seven-year bonds - The European Securities and Markets Authority (ESMA) has published the responses received to the Joint Committee Discussion Paper on Key Information Document for PRIIPS. The responses can be downloaded from the regulator's website - Romania’s MV Petrom reportedly is planning a secondary listing on the London Stock Exchange. According to Romanian press reports, the local investment fund Fondul Proprietatea may sell a significant stake in the company via public offering on the Bucharest Stock Exchange and London Stock Exchange. OMV Petrom, with a current market capitalisation of €4.85bn has announced that it will ask its shareholders’ approval for a secondary listing in London. The general shareholders meeting is scheduled for September 22nd. Austrian group OMV, holds 51% of the company’s shares; other shareholders include the Romanian state, via the Energy Ministry, with a 20.6% stake, and investment fund Fondul Proprietatea, which holds 19%. The remaining 9.4% is free-float - Morgan Stanley (NYSE/MS) today announced the launch of a new fund, the IPM Systematic Macro UCITS Fund, under its FundLogic Alternatives plc umbrella. The fund provides exposure to IPM’s Systematic Macro strategy, which is based on IPM’s proprietary investment models that provide unique insights into how fundamental drivers interact with the dynamics of asset price returns. The FundLogic Alternatives Platform currently has more than $2.6bn in assets under management (as of 31 July 2015) and this latest addition expands Morgan Stanley’s offering of global macro strategies - Equities sold off hard this morning as continued pressure on Chinese stocks rippled throughout world markets. Chinese government intervention brought the Shanghai Composite back a positive close; but the question is now, has confidence eroded so much that the market will continue to depend on the government to prop it up? The other key element to consider today is the outcome of the debate in the German parliament on the Greek bailout. Last month, a record 65 lawmakers from the conservative camp broke ranks and refused to back negotiations on the bailout. The daily Bild estimated that up to 120 CDU and CSU members out of 311 might refuse to back the now-agreed deal. However, Chancellor Merkel is looking to secure support from the Social Democrats (SPD), Merkel's junior coalition partner, and the opposition Greens which will likely swing the final decision Greece’s way. However, a rebellion by a large number of her allies would be a blow to the highly popular Chancellor.

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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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