Wednesday 10th February 2016
NEWS TICKER: JP Morgan Asset Management has appointed Paul Farrell as head of UK Institutional Clients. Based in London, Farrell will join JPMAM in April and will report to Patrick Thomson, head of International Institutional Clients. Farrell will be responsible for leading the sales team that manages and builds client relationships with Institutional Pension Funds in the UK & Ireland. He will have responsibility for direct client relationship management in the defined benefit as well as business development in the defined contribution marketplace and will work closely with our consultant client team led by Karen Roberton. Farrell joins most recently from Dimensional Fund Advisors, where he served as Head of UK Institutional Clients and was responsible for new business development, client service and consultant relations. Before that he was head of UK Strategic Clients at BlackRock - Vistra Group, a provider of fund admin services, has bought UK-based business expansion services provider Nortons Group, the accounting and advisory service. The Nortons team, led by Andrew Norton and Pete Doyle, is joining the Vistra Group to boost their existing range of services and benefit from Vistra’s global reach. Martin Crawford, CEO of Vistra Group, says: “Offering support services to companies moving abroad is a core business for Vistra and of growing importance. Nortons has the expertise, the experienced staff, and the network to add significant value to this service line. We are very proud to welcome Andrew Norton, Pete Doyle, and their colleagues to our international team and look forward to expanding our global reach with their experience and leadership". The acquisition of Nortons is expected to complete by the end of February and will take the combined headcount of the Vistra Group, inclusive of the soon to be merged Orangefield Group, to over 2,200 staff in 39 countries - Asian markets had another tough day. Japan's Nikkei Stock Average fell 2.3% to its lowest closing level since late 2014, and reaffirming a trend across the last few months the yen remained near its strongest level against the dollar in over a year. Despite the Bank of Japan's decision last month to introduce negative interest rates, a policy that tends to weaken the local currency, the yen has strengthened in recent sessions to levels not seen since 2014. The Japanese 10-year treasury yield traded shortly in negative territory, and touched -0.08%, before stabilising above the neutral mark. The dollar was last up 0.1% against the yen at ¥ 115.00. Australia's S&P ASX 200 fell 1.2%, the downward drift being led by energy stocks. The Australian Dollar consolidated yesterday’s gains and is currently testing the next resistance, which lies at $0.71. AUD/USD up 0.21 in local trading. Other Asian currencies did well today against the dollar. The South Korean won rose 0.74%, the Taiwanese dollar edged up 0.60%, while the Indian rupiah climbed 1.05%. That uptick was not reflected in equity markets. The Topix index slid 3.02%. In Singapore the STI slipped 2.14%, while New Zealand equities were down 0.85% respectively. China's markets are still closed for the Lunar New Year holidays – The story today is all about Federal Reserve chair Janet Yellen’s testimony to the US Congress. Analysts say that the market is pricing in no further rate increases in the near future and given the volatility in the markets and the general air of panic right now among investors, it would be a catastrophic move for the Fed to raise interest rates even a quantum in coming months. Truth is that no matter how well Yellen paints the US economy is it a story of two halves: yes, job numbers are rising, but there looks to be a lot of slack in the overall economy and this is contributing to a gradual weakening of the US dollar (but not against the euro). In fact, Europe is making the US look good; hence the wild swings in investor sentiment. Still, bank stocks look to remain vulnerable for the remainder of the quarter. This week's economic calendar is light; hence the focus on the Fed. The other bit of advanced market news is that expectations are rising for a rate cut by Norges Bank. Emerging market currencies are broadly trading higher this morning. The South African rand rose 0.85% against the US dollar, with USD/ZAR back below the 16.0 mark at around 15.9350. The Russian ruble also took advantage of this respite and gained 0.65% versus the greenback, which helped USD/RUB to edge lower to 79.10. In terms of data, watch out for industrial and manufacturing production figures from France, the UK and Italy and CPI data from Denmark and Norway - In commodities, Brent crude oil was last up 2.4% at $31.05 a barrel in thin trade on speculation about possible production cuts, but remains down nearly 9% for the week and roughly 19% for the year. Peter Rosenstreich, head of market strategy at Swissquote Bank explains, "Crude oil has been able to rebound off the 12-year low ($27.78) after falling sharply by nearly 8% on Tuesday. The positive catalyst was the news that Iran has indicated that they would be willing to work with Saudi Arabia on production limits. However, markets remain sceptical of this or any coordinated production cuts. There seems to be no relief on selling pressure in sight as the US government released reports indicating that demand will remain soft by lower demand growth forecasts. In addition, the Paris based International Energy Agency (IEA) has warned that the supply glut will continue through 2016 as production cuts have been made at a slower pace than forecasted.” In other market news this morning, spot gold in London was down 0.2% at $1188.05 an ounce, while three-month copper futures on the London Metal Exchange fell 0.7% to $4,463 a ton.

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JP Morgan DR survey reveals investor optimism about Russia

Monday, 18 June 2012
JP Morgan DR survey reveals investor optimism about Russia According to a survey released today by JP Morgan’s depositary receipts (DR) business, investors are optimistic about the investment opportunities that exist in Russia over the next three years due to the country’s economic growth rate, abundance of natural resources, low debt levels and healthy employment levels. The survey, conducted in March, covered 40 firms that invest in Russia and manage a combined $700bn in equity assets. http://www.ftseglobalmarkets.com/

According to a survey released today by JP Morgan’s depositary receipts (DR) business, investors are optimistic about the investment opportunities that exist in Russia over the next three years due to the country’s economic growth rate, abundance of natural resources, low debt levels and healthy employment levels. The survey, conducted in March, covered 40 firms that invest in Russia and manage a combined $700bn in equity assets.

Despite general investor optimism, North American and European investors say Russian companies must bolster their corporate governance standards and improve investor communications in order to attract and retain foreign investment. According to survey responses, while the country looks attractive from a macro economic perspective, government intervention, opaque corporate governance practices and a general lack of regulation to protect investors pose risks.

The survey of  Investor Opinions of Russian Companies, found the following:

  • Some 58% of survey participants hold a decidedly favorable three-year out look on Russia. This optimism is primarily based on strong commodity prices, especially oil. Many investors believe that strong demand for natural resources will bolster the rest of the economy and spur both consumer and infrastructure spending.
  • Investors surveyed agree that the best ways for Russian companies to improve their investor relations efforts are to equip investor relations officers with senior-level insight, adopt the financial reporting and disclosure practices of developed market companies, increase the accessibility and visibility of senior management, and establish consistent communication with the investment community.
  • In order to improve corporate governance standards, investors surveyed said that Russian companies should focus predominantly on aligning interests with minority shareholders by promoting independent board structures, clearly defining shareholder structures, and being good stewards of capital.
  • Over 50% of survey participants believe that a US or UK listing increases the appeal of a Russian company, citing the increased trading liquidity that it offers and stricter reporting and disclosure requirements with which an exchange-listed, sponsored company must comply.
  • A majority of survey participants revealed that government control is a significant issue when investing in Russia. Investors said that government demands too  often take precedent over companies’ responsibility to minority      shareholders, the result of which includes inefficient capital allocation decisions, limited return on invested capital, and insubstantial or nonexistent dividend payments.
  • A huge 80% of survey participants do not assign different risks to Russian companies that are      incorporated offshore versus those that are incorporated in Russia. Investors say they evaluate companies on a case-by-case basis and cannot   make generalisations based on where a company is incorporated.


 

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