Wednesday 26th November 2014
NEWS TICKER, WEDNESDAY NOVEMBER 26TH 2014: According to local press reports, the chief of the UAE stock market regulator wants more industrial companies to list their shares on exchanges dominated by property and investment firms. Abdulla Al Turifi, chief executive of the UAE Securities and Commodities Authority (SCA), says the regulator is reviewing applications for initial public offerings of up to four companies to list on the UAE bourses and another three applications for a new secondary market for companies that currently trade only OTC. The UAE is seeking to broaden its industrial base and reduce its reliance on hydrocarbons, but the country’s two main stock exchanges are dominated by property and financial listings. Recent IPOs have come from retail, a sector also previously unrepresented on the exchanges. In February this year, the SCA and the Ministry of Economy issued a law requiring private joint stock companies to list their shares on a second market, in the hope that it would encourage firms to eventually move onto the main board- Moody's has placed the B3 corporate family rating, B3-PD probability of default rating and B1 rating on the senior secured facilities of Reynolds Group Holdings Limited under review for downgrade. The review follows RGHL's announcement that it had entered into a definitive agreement to sell its SIG Combibloc business to Onex Corporation for up to €3.75bn. The transaction is expected to close in the first quarter of 2015, pending final regulatory approvals and the satisfaction of other customary closing conditions - Morocco’s House of Representatives yesterday approved a new law authorising the establishment of Islamic banks and private companies to issue Islamic bonds. Since the Islamist-led government took office in 2011, it has been attempting to develop Islamic finance in the country. The bill was passed unanimously - According to Iran’s Fars News Agency (FNA) Iran’s non-oil exports have grown by 28% since the end of March. Iran’s non-oil exports have surged by 28% since the Persian new year (March 21), Fars News Non-oil export revenues, minus gas condensates, were approximately $18bn this year. Roughly $5bn from the non-oil exports revenues were from tourism (up 32%), though the bulk comes from engineering, workforce and transit services. Some 93% of the country’s non-oil export revenue comes from Asian countries. Imports since the end of March have risen 32% to $21.695bn -IXICO the brain health company, today announces that the contracts for two separate clinical trials in Huntington’s disease with two pharmaceutical companies have been extended. As a consequence, IXICO anticipates the revenue from these two contracts to be significantly enhanced to a potential £2.5m over approximately three years – Any announcement around the sale of Japan Post Holding’s projected IPO now looks to be postponed until January, according to the company’s president Taizo Nishimuro, at a news conference earlier today. In October, the government selected Nomura Securities and ten other underwriters for the initial public offering. The IPO is the first leg of the government's plan to sell up to two-thirds of Japan Post's shares. The government is hoping to raise more than $20bn from the sale - The US Commodity Futures Trading Commission (CFTC) filed notice to revoke the registrations of Altamont Global Partners LLC (Altamont), a commodity pool operator of Longwood, Florida, and John G. Wilkins a principal, managing member and approximate one-third owner of Altamont. The notice alleges that Altamont and Wilkins are subject to statutory disqualification from CFTC registration based on an order for entry of default judgment and an amended Order of permanent injunction. The orders include findings that Altamont and Wilkins misappropriated commodity pool funds and issued false quarterly statements to pool participants. The notice alleges that Wilkins is subject to statutory disqualification from CFTC registration based on his conviction for conspiracy to commit mail fraud and wire fraud. A US District Court has sentenced Wilkins to 108 months in federal prison - The Straits Times Index (STI) ended +0.94 points higher or +0.03% to 3345.93, taking the year-to-date performance to +5.72%. The FTSE ST Mid Cap Index gained +0.08% while the FTSE ST Small Cap Index gained +0.08%. The top active stocks were SingTel (+0.26%), Global Logistic (+1.52%), DBS (-0.40%), OCBC Bank (+1.26%) and UOB (-0.42%).The outperforming sectors today were represented by the FTSE ST Consumer Services Index (+0.40%). The two biggest stocks of the FTSE ST Consumer Services Index are Jardine Cycle & Carriage (+0.29%) and Genting Singapore (+0.44%). The underperforming sector was the FTSE ST Utilities Index, which declined -0.97% with United Envirotech’s share price declining -0.61% and Hyflux’s share price gaining +1.09%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.78%), SPDR Gold Shares (-0.22%), United SSE 50 China ETF (+2.33%). The three most active Real Estate Investment Trusts (REITs) by value were Suntec REIT (+0.26%), Ascendas REIT (+0.87%), CapitaMall Trust (+0.51%). The most active index warrants by value were HSI23800MBeCW141230 (+20.35%), HSI24400MBeCW141230 (+18.67%), HSI23600MBePW141230 (-20.00%) and the most active stock warrants by value today were OCBC Bk MBeCW150413 (+6.38%), KepCorp MBePW150330 (-5.88%), UOB MB eCW150415 (unchanged) - Sentiment in the Italian consumer sector has taken another step backwards according to the latest figures this month. The Italian Consumer Confidence indicator has now fallen for a seventh straight month to produce a November reading of just 100.8, from a peak above 106.0 this sentiment metric reached 101.3 last month, market expectations for today’s reading were for a slight rise to 101.6. The Organisation for Economic Co-operation and Development (OECD) yesterday published a less than optimistic report for the near term growth prospects of the Italian economy. The previous OECD report projected growth for Italy of 0.5% over the full 2014 year but this has now been revised downwards by almost a full point to forecast a 2014 contraction of -0.4%.

FTSE Group’s March review of countering bribery criteria and FTSE4Good

Friday, 09 March 2012
FTSE Group’s March review of countering bribery criteria and FTSE4Good FTSE Group, the global index provider, has announced changes following its March FTSE4Good and ESG Ratings semi-annual review; including the roll-out of new countering bribery criteria to be applied to the assessments of over 1200 companies.  http://www.ftseglobalmarkets.com/

FTSE Group, the global index provider, has announced changes following its March FTSE4Good and ESG Ratings semi-annual review; including the roll-out of new countering bribery criteria to be applied to the assessments of over 1200 companies. 

The changes are expected to lead to improvements in the index; supported by new research from Edinburgh University that shows that the engagement FTSE carries out with companies regarding new FTSE4Good criteria has led to hundreds of companies globally improving their environmental, social and governance practices.

The FTSE4Good Index Series is designed to measure the performance of companies that meet globally recognised corporate responsibility standards, and to facilitate investment in those companies. The index series is now being complemented with the launch of the FTSE4Good ESG Ratings, to provide a broader range of ESG data and services.



The indices are governed by an independent ‘FTSE4Good Policy Committee’ which meets in March and September for index reviews.  This committee directs the evolution and development of the criteria for the index series, and approves additions and deletions to the index at reviews in line with the inclusion criteria and index ground rules. 

The FTSE4Good ESG Ratings can be used in a variety of ways, building a basis for active portfolio management, company engagement, customised indices, ESG risk analysis or research and analysis.

24 additions, 13 deletions to the FTSE4Good Index Series

The March semi-annual review has seen 24 new additions to the FTSE4Good Index Series from ten countries. This includes Siemens, a company which has faced up to the very costly and damaging bribery scandals of its past, through making considerable changes throughout its business to embed new governance and compliance systems.  Another company that has made significant changes and is added is EDF.

As a result of stringent criteria for nuclear safety and waste disposal being introduced in 2010, companies involved in nuclear power generation are no longer excluded from the index series. EDF has become only the fifth company globally to meet the detailed industry-specific criteria. The largest number of additions at this review are from the USA, contributing seven of the companies. Representation of South Korea has also seen a significant increase with four companies joining the existing eleven. At the same time, 13 companies are being deleted from the index for no longer meeting the FTSE4Good criteria. More details on additions and deletions are available on FTSE’s website (see notes section for more details). The changes to the index will be effective after the close of markets on 16 March 2012.

Details of the new criteria can be found at the following link upon free registration http://www.ftse.com/analytics/ftse4good-esgratings/

Countering Bribery Criteria Roll-Out

The practice of bribery is a risk to long term investors.  Although it can allow companies to secure lucrative contracts in the short term it can have disastrous consequences when these acts are uncovered, through litigation and impacts on intangible value such as brand and reputation.  As new bribery regulations, such as the 2011 UK Bribery Act, are introduced around the world, and with increased global communication, the risks associated with bribery are increasing.  FTSE is responding by providing investors with more detailed corporate bribery data through the FTSE ESG (Environmental Social and Governance) Ratings service and will also be incorporating this within the criteria assessments for the FTSE4Good Index Series.

Previously only those companies deemed to be facing the very greatest potential risk of bribery were being assessed, now the criteria will be rolled out to cover an additional 1200 companies that are defined as “medium risk” based on their industrial sector, countries of operation and public sector contracts.  Of these, approximately 550 are in the FTSE4Good Index Series, and 130 companies will need to make improvements in order to maintain inclusion in the index.  The criteria, set out in full on FTSE’s website, consider how well companies are reducing the likelihood of bribery and draws on Transparency International’s Business Principles for Countering Bribery Details of the new criteria can be found at the following link upon free registration http://www.ftse.com/analytics/ftse4good-esgratings/.

Edinburgh University research on the impact of FTSE4Good on corporate practices

Established over a decade ago now in partnership with EIRIS, the FTSE4Good Index has a track record of regularly strengthening the eligibility criteria. These enhancements provide investors with a more detailed analysis of ESG investment risk but also act to stimulate change in corporate practices.  FTSE’s Responsible Investment Unit undertakes a direct engagement programme with companies facing potential deletion from the index series. Research from Edinburgh University has identified that this form of engagement has been highly effective at stimulating improvements in corporate practices.  From an analysis of the responses of over a 1000 companies they found that the rate of improvement on ESG practices doubles when the company is in direct engagement with FTSE regarding FTSE4Good criteria. See Mackenzie et al (Nov 2011) at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1966474 It is expected that FTSE’s engagement with companies on the countering bribery criteria will also have this impact.

 

2 See Mackenzie et al (Nov 2011) at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1966474

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