Thursday 26th November 2015
NEWS TICKER, THURSDAY, NOVEMBER 26TH: In the last six months River and Mercantile Group (R&M) says has been appointed to design, execute and provide ongoing management of over £1.7bn of structured equity options mandates for pension clients, including the Royal Mail Pension Plan and another FTSE 100 company’s pension scheme. James Barham, global head of Distribution at R&M, says, "With increased volatility in equity markets, we have seen a growing number of clients that are taking advantage of our market leading derivative capabilities to manage the downside exposure in their equity portfolios. The derivatives team at R&M has an exceptional long term track record in designing and managing structured equity solutions for clients over the last ten years. We continue to see significant demand from pensions and institutional clients for structured equity to actively manage the profile of their equity investment returns while maintaining their allocation to equities. The design and execution of these mandate demonstrates R&M’s ability to design innovative, outcome oriented solutions for our clients, which are delivered to meet their governance requirements.” - Demand to borrow Asian stocks surged in the wake of the recent market volatility reports Markit. While short sellers have since pulled back slightly, the current demand to borrow shares across the region is still up by a fifth since the start of the year. Short interest across Asia is up by 18% year to date, reaching 2.7% of free float. However, says Markit, Japanese short selling has been relatively flat since the start of the year. The firm adds that consumer sectors have made Australia the most shorted country in the region - Trayport, a provider of energy trading solutions to traders and exchanges, says Power Solutions Enerji Ticaret ve Danışmanlık Anonim Şirketi has chosen Trayport’s GlobalVision Broker Trading SystemSM (BTS) for trading in the Turkish power market. Power Solutions, founded in Turkey in 2015, provides OTC Brokerage services in the Turkish electricity market.. The Trayport BTS offers brokers access to a growing network of traders using Trayport’s trading technology - The Dutch residential mortgage-backed securities (RMBS) market remained strong during the three-month period ended September 2015, according to the latest indices published by Moody's The 60+ day delinquencies of Dutch RMBS, including Dutch mortgage loans benefitting from a Nationale Hypotheek Garantie, continued to decrease to 0.73% in September 2015 from 0.81% in June 2015. The 90+ day delinquencies also continued to decrease to 0.56% in September 2015 from 0.64% in June 2015. Cumulative defaults increased to 0.78% of the original balance, plus additions (in the case of master issuers) and replenishments, in September 2015 from 0.70% in June 2015. This compares to cumulative defaults of 0.49% in September 2014. Cumulative losses increased to 0.15% in September 2015 from 0.14% in June 2015. Moody's has assigned definitive credit ratings to two new transactions since the last publication of the Index on September 9th, including five classes of notes issued by STORM 2015-II BV. and two classed of notes issued by Hypenn RMBS IV BV. As of the end of September, the 107 Moody's-rated Dutch RMBS transactions had an outstanding pool balance of €217.9bn, representing a year-over-year decrease of 4.8% - Thanksgiving holidays in the US has coloured trading today. In the Asia-Pac, low commodities prices are weighing on the Australian economy. Australia's S&P/ASX 200 gained 0.3% in thin trading volumes across the whole Asia-Pac region. With the exception of the Australian dollar, trading volumes were ridiculously small EUR/USD traded within a 10 pips range between 1.0615 and 1.0625. Similarly, GBP/USD traded sideways between 1.5115 and 1.5131. According to Yann Quelenn, market analyst at Swissquote: “When commodities price lower, there is a transfer of wealth between exporters (producers) and importers of commodities. The decline favours industries that need commodities as primary source for manufacturing products. Australia is on the exporters’ side. Indeed, an important part of the Australian’s revenues accounts for the revenues on the extraction of gold, silver, platinum and other metals. Materials shares fell 1.3%, and are down 4.6% so far this week, with commodities like copper and nickel having tumbled to multiyear lows. In Japan, The Nikkei Stock Average ended the day up 0.5% at 19944.41, while and South Korea's Kospi rose 1.1%. The Shanghai Composite Index fell 0.3% and Hong Kong's Hang Seng Index closed flat. Japan shares have posted one of the strongest rebounds in the region since September. The Nikkei is the second-best performing market in Asia year to date with a gain of 14%. China's Shenzhen Composite Index is up 65% year to date. The Straits Times Index (STI) ended 6.89 points or 0.24% lower to 2884.69, taking the year-to-date performance to -14.28%. The top active stocks today were OCBC Bank, which declined 0.91%, SingTel, which gained 0.26%, UOB, which declined 1.79%, DBS, which declined 0.36% and Global Logistic, with a 1.91% fall. The FTSE ST Mid Cap Index declined 0.05%, while the FTSE ST Small Cap Index declined0.84%.In Brazil, the BCB left rates unchanged at 14.25% yesterday in spite of rampant inflation. The latest economic survey by the central bank showed that inflation expectations are not anchored yet as it is expected to reach 10.33% by year-end and 6.64% by the end of 2016. Broadly, expectations the U.S. Federal Reserve will raise interest rates in December has pushed the yen weaker. The currency has weakened 3.1% against the U.S. dollar in the past three months. Japan shares nevertheless remain vulnerable to global central bank moves and geopolitical tensions - The London Metal Exchange's three-month copper contract closed down 1.3% at $4,549 a metric ton on Wednesday. Copper last traded at $4,692.50 a metric ton, up from the opening price of $4,538 a ton on Thursday. Overnight, the latest U.S. report on jobless claims pointed to a strengthening employment picture, pushing the dollar higher. U.S. stocks ended mostly unchanged as consumer discretionary and health-care shares offset losses in other sectors on the last full trading day of the week before the Thanksgiving holiday. Brent oil futures fell 0.2% to $46.06 a barrel. US crude-oil futures rose 0.2% to $43.13 a barrel. Gold prices were up 0.3% at $1,073.50 a troy ounce.

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Responsible investment products set for growth

Wednesday, 11 December 2013
Responsible investment products set for growth Over three quarters of 85 pension fund managers polled by ING Investment Management believe that being environmentally and socially responsible – as well as encouraging good global governance – is important to the future of investment.

Over three quarters of 85 pension fund managers polled by ING Investment Management believe that being environmentally and socially responsible – as well as encouraging good global governance – is important to the future of investment.

Findings from the new survey show that two third of investment professionals responsible for pension funds, already integrate Environmental Social Governance (ESG) factors and/or a Socially Responsible Investment style (SRI) into their investment processes. Nearly half of this (48%) say their appetite for ESG and SRI has increased over the past six months.

Hendrik-Jan Boer, senior portfolio manager for ING IM’s SRI funds: “In recent years there has been a shift within the industry towards more responsible investment products. This research underlines the importance – both professionally and personally – of ESG factors. With three quarters of investors believing that the sector is important for the future of the industry, we expect the demand for socially responsible investments to grow further in the coming years and to become even more commonplace in investors’ portfolios.”

A greater reliance on responsible investment criteria was expected to bear fruit in terms of investment return over the next five years. However, when it came to the reasons for incorporating this in their investment strategy, the majority of respondents (58%) did so due to “a sense of personal responsibility”. In addition, just over half (52%) stated that it was the companies procedure to apply such criteria to investments.

In terms of the most proactive practitioners of these principles, developed economies were perceived to be the most keen with Western Europe (86%) cited by the most respondents, followed by North America (36%) and Australasia (24%). Turning to actual asset owners, pension funds were viewed as the most willing group to incorporate ESG factors within their portfolios – cited by 73% of respondents – while charities (62%) were the second most willing.

“It is certainly positive to see that investors not only believe in the social and intrinsic value of ESG factors, but also believe in the effectiveness of applying such criteria to their investments,” adds Boer. “It is encouraging to note an anticipated shift in attitudes towards ESG from simply being a filter that investors feel they should implement in their portfolios to becoming a genuinely strong investment tool in its own right.”

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