Wednesday 25th May 2016
NEWS TICKER, WEDNESDAY, MAY 25TH: Invesco Perpetual today announced that Thomas Moore has been appointed to join the Henley Fixed Interest investment team* in June. Moore has over 17 years’ experience in fixed interest markets, and joins from Morgan Stanley & Co. where he held the role of managing director and head of European Credit Analytics, building and managing a team of 12 professionals. He began his career in New York in 1999 at Orion Consultants, Inc. where he held a number of roles focused on US and international fixed income markets, before moving to Morgan Stanley in 2004. Thomas is a graduate of Harvard and Oxford Universities and holds an MBA from Columbia Business School. Moore’s appointment follows a series of promotions and additions to the Invesco Perpetual Fixed Interest team in 2015. The Henley Fixed Interest team is now 24 strong and manages assets of £28.8bn across a range of over 27 funds for investors -According to MEA Risk, Al-Qaeda in the Islamic Maghreb has released a statement to claim responsibility for an attack that it reportedly carried out recently at a Areva's uranium mining facility in Arlit, city of Agadez (northern Niger). AQIM statesthat the "Grand Sahara's el-Nosr" brigade conducted the attack, "despite reinforced security and airborne surveillance." In the same statement, the militant organization stressed that its main purpose in the region is to "undermine French and Western interests in the region", which it deems "legitimate targets." It is unknown whether this attack caused any casualties - Maitland, the global advisory and fund administration firm, has opened a new office in Miami. The office will provide Maitland’s LatAm team with a regional base, giving their growing private and institutional client base access to on-the-ground support. The new office is Maitland’s 15th across 12 countries. The firm says economic and political instability in Brazil and LatAm – alongside regulatory changes such as Brazil’s recently announced tax amnesty program – are driving increased demand for its services, especially for clients who have based themselves outside their country of origin. The move ultimately allows Maitland to forge closer relations with its clients, prospects as well as the growing community of service providers in the vicinity. Benjamin Reid, senior business development and client manager, LatAm, has relocated to Miami to the group’s business development efforts in the region and will be joined by Pedro Olmo and Camila Saraiva, as client relationship managers responsible for the day-to-day management of Maitland’s growing book of LatAm clients. Olmo joined Maitland from Turim family office in Brazil where he was the group’s in-house counsel. Meanwhile, Saraiva joins the team from Barbosa legal, a Miami based Brazilian law firm focused on servicing UHNW clients - Investec Bank plc has arranged the long term refinancing of a portfolio of four UK projects totalling 40MW solar portfolio owned by Canadian Solar Inc (NASDAQ: CSIQ. The long term debt was provided by Bayern LB after Investec ran competitive process for Canadian Solar. Investec originally provided a short term bridging facility that funded the portfolio shortly after its connection to the electricity grid - The European Energy Exchange (EEX), in its capacity as the transitional common auction platform acting on behalf of Poland, could not execute today's auction of EU Emission Allowances (EUAs), because it would have cleared below the reference price. The reference price is calculated on the basis of the secondary market price during the bidding window. In accordance with the rules governing the auctions (EU Auctioning Regulation), the auction has been cancelled. The auction volume will now be evenly distributed over the next four scheduled auctions. The auction calendar will be adjusted accordingly and an updated version will be published soon. The European Energy Exchange (EEX) is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and commodity products. At EEX, contracts on Power, Coal and Emission Allowances as well as Freight and Agricultural Products are traded or registered for clearing. Alongside EEX, EPEX SPOT, Powernext, Cleartrade Exchange (CLTX) and Gaspoint Nordic are also part of EEX Group. Clearing and settlement of trading transactions are provided by the clearing house European Commodity Clearing (ECC) - Commercial real estate investor Raven Russia has listed on the Channel Islands Securities Exchange (CISE). The firm is already listed on the LSE. Advisers to the transaction were UK legal advisers Berwin Leighton Paisner, Guernsey legal advisers Carey Olsen, broker N+1 Singer and listing sponsor Ravenscroft. The company has also announced a proposed fundraising of a minimum of £105.5m by way of a placing of new convertible redeemable preference shares with the intention that they will be listed solely on the CISE and traded on the SETSqx platform of the LSE - Allianz Global Investors says that that Deborah Zurkow, CIO and Head of Infrastructure Debt, is to take on a new, broader role, becoming head of the alternatives pillar within its global investment platform. Zurkow will join AllianzGI’s Global Executive Committee, effective June 1st. As head of alternatives, Zurkow will lead the continued build out of AllianzGI’s Alternatives capability, which comprises a diverse mix of both liquid and illiquid alternative investment solutions for clients. Since the creation of AllianzGI’s Alternatives pillar in December 2014, assets under management have doubled, growing from €7.9bn in December 2014 to €15.7bn by the end of Q1 2016. Andreas Utermann, chief executive officer and Global CIO at Allianz Global Investors, says, “Over the last few years, Deborah and her team have helped turn the idea of infrastructure debt as an asset class for institutional investors into a reality. In her new, expanded role, Deborah will be able to put her experience of developing innovative solutions that meet clients’ needs to work across the entire spectrum of Alternatives, one of the fastest growing parts of our investment platform, increasingly attractive to investors looking for alpha in era of financial repression.” In other related moves, Claus Fintzen will become CIO and head of Infrastructure Debt, reporting to Deborah Zurkow, assuming day to day responsibility of AllianzGI’s Infrastructure Debt team with immediate effect. Claus joined AllianzGI in 2012 along with Deborah and three other team members from Trifinium Advisors. As well as being instrumental in helping develop AllianzGI’s infrastructure debt platform, Claus brings 21 years of industry experience to the role – Aquila Capital is providing institutional investors with access to its latest diversified renewable energy portfolio (the Aquila Capital Renewables Fund III) via a bond solution. The securitisation, which already has been given an indicative investment grade rating by an ESMA-recognised rating agency, is targeting an A- rating thanks to the high quality of the underlying portfolio, its efficient structure and very modest structuring costs. Both the securitisation and a direct investment in the Fund provide investors with access to a conservative, broadly diversified portfolio of wind and photovoltaic plants in politically stable countries in Western Europe. The Fund is already invested in 13 operational renewable energy plants in Sweden, Germany, the United Kingdom and France, and benefits from a pipeline of potential investments in excess of €350m. Roman Rosslenbroich, chief executive officer and co-founder of Aquila Capital, says: ”We actively had the securitisation reviewed by a reputable audit firm with respect to its regulatory, legal and tax suitability for the Fund’s anchor investor - a leading German insurance company. Due to significant demand, we are now making this investment opportunity available to additional investors.” - UniCredit is entering into the Swiss ETF market by issuing two ETFs with SIX Swiss Exchange, for which it is also acting as market maker. This increases the number of ETF issuers on SIX Swiss Exchange to an unprecedented 22 and the product range on offer to a new record high of 1,240. The two newly listed ETFs on European convertible bonds offer investors a supplement to the diversification of their portfolios, while offering the advantages of on-exchange trading for what was previously an asset class that was heavily OTC-traded The ETFs are the Swiss franc denominated UC Thomson Rts. Bal. European Convertible Bond UCITS ETF ( LU1199448058) and the UC Thomson Rts. Bal. European Convertible Bond UCITS ETF (LU1372156916) –

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The adjustment in France has not even begun

Wednesday, 30 May 2012 Written by 
The adjustment in France has not even begun The French have the impression that their economy has worsened significantly and that austerity policies are weakening employment and living standards yet this inevitable adjustment is still to come Indeed, when examining the situation of public finances, competitiveness, foreign trade, the sophistication of products and businesses, it is clear that the process of adjustment and improvement has hardly begun in France, whereas it has progressed a lot on some criteria in Spain, Italy and Portugal, and of course long ago in Germany. http://www.ftseglobalmarkets.com/

The French have the impression that their economy has worsened significantly and that austerity policies are weakening employment and living standards yet this inevitable adjustment is still to come Indeed, when examining the situation of public finances, competitiveness, foreign trade, the sophistication of products and businesses, it is clear that the process of adjustment and improvement has hardly begun in France, whereas it has progressed a lot on some criteria in Spain, Italy and Portugal, and of course long ago in Germany.

The impression in France of a significant deterioration of the economy and living standards

The French are extremely pessimistic about the economy and living standards, as showed by a recent international optimism poll conducted by BVA – Gallup international. Yet, the French unemployment rate is lower than Spain and Portugal, and households' real income and spending are still increasing while they are falling in Spain, Italy and Portugal. The French fear a reduction in of social welfare, even though the welfare system has actually become more generous at a time when it has declined in Germany.



State of progress in France’s adjustment

In terms of the adjustment process, let us look at French public finances, competitiveness and foreign trade, and the financial position of French businesses and their product sophistication.

1. Public finances

In 2012, only Spain will still have a fiscal deficit higher than that of France. Meanwhile, the debt ratio will continue to increase in France at a time when it is falling in Germany and has stabilised in Italy.

2. Competitiveness, foreign trade

France and Italy have a higher unit wage cost than Germany, which explains the continuing losses of export market shares for these two countries; whereas Spanish and Portuguese exports, where producer costs are low, are now growing rapidly.

Indeed, France has a large trade balance deficit in manufactured goods yet Spain and Portugal now have an even trade balance. Meanwhile, Italy and Germany have trade balance surpluses. As long as international capital mobility remains low in the euro zone, due to the “renationalisation” of investors' portfolios caused by the crisis; countries will be subject to an external balance constraint. Indeed, France is the only country that has not yet reduced its current-account deficit.

An improvement in foreign trade can be achieved either through an improvement in cost-competitiveness, hence a fall in wage costs, or through a contraction of domestic demand, which reduces imports. At present, the unit wage cost is increasing faster in France than in Germany and all the other struggling euro-zone countries causing domestic demand to continue to increase instead of fall as in Spain, Italy and Portugal.

3. Financial position of businesses and product sophistication

In contrast to other euro-zone countries, the financial position of French businesses continues to deteriorate. It is clear that the deterioration of corporate profitability is due to the low level of product sophistication in French industrial output, which means that French businesses find it harder to pass on rises in production costs to consumers, contrary to what can be seen in Germany, Spain and even Portugal. This is extended by France’s slow productivity gains (efficiency in producing products), which are recovering in Spain and Portugal.

All in all, practically everything remains to be done in France:

France still needs to reduce its fiscal deficit, improve competitiveness/ foreign trade, and restore profitability (productivity) and product sophistication.

Meanwhile, these adjustments have been completed in Germany and are progressing well in the other euro-zone countries. Italy and Portugal now have small fiscal deficits; Spain and Portugal have seen improvement in cost-competitiveness; external deficits have been reduced in Italy, Spain and Portugal while both corporate profitability and productivity have also improved; and Spanish and Portuguese products have become more sophisticated as shown from their ability to pass on higher production costs to consumers.

This all points to a risk of more restrictive fiscal policies in France, a fall in wages, and efforts to restore productivity by businesses (as in Spain and Portugal), which will inevitably be costly in terms of employment.

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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