Saturday 25th April 2015
NEWS TICKER: FRIDAY, APRIL 24th 2015:Luc Luyet, CIIA – Senior Market Analyst AT Swissquote says that yesterday, “the SNB surprised the market by announcing that the number of sight deposit account holders that are exempt from negative interest has been reduced. This decision doesn’t change much the domestic banks’ situation as the “20 times the minimum reserve requirement” rule is still running. On the other side, the institutions associated with the Confederation, such as the pension fund of the Confederation or the pension fund of the SNB, are no longer exempt of negative interest. Consequently, only the account holders of the national social security system are still fully exempt.” - High yield debt issuance remains buoyant. Issuance volume for the week ending April 17, 2015, slowed down a bit from the previous week, but remained strong. Junk bond, or high-yield debt, issuers continued to issue bonds as yields remained favourable. High-yield debt is tracked by the SPDR Barclays Capital High Yield Bond ETF and the iShares iBoxx $ High Yield Corporate Bond Fund. According to data from S&P Capital IQ/LCD, dollar-denominated bonds amounting to $10.75bn were issued across 16 transactions in the week ending April 17th. The issuance volume fell by 3.2% from the week ending April 10. Pricing was evenly spread across the week. The number of transactions fell from 18 to 16 week-over-week. Last week brought the total US dollar issuance of high-yield debt to $115.8bn in 2015 YTD, up some 15% from the same period in 2014, the bulk of which is refinancing of older debt - Moody's says EMEA auto ABS performance remained stable during the three-month period ending February 2015. The sector's average performance trend was positive in terms of delinquency ratios and cumulative losses. The 60+ day delinquencies decreased to 0.66% in February 2015 from 0.77% in February 2014, while cumulative defaults decreased to 1.06% from 1.20% over the same period. This decrease was due mainly to the good performance of the German and Dutch markets. The prepayment rate increased slightly to 13.49% in February 2015 from 13.30% a year earlier. As of February 2015, the pool balance of all outstanding rated auto ABS transactions was €27.55bn - According to Sino specialists Red Pulse, China’s State Council is considering allowing daily repatriation for QFII. Currently, RQFII enjoys T+1 repatriation while QFII is restricted to T+5. QFII is the largest channel for foreign investment into China with quota of USD150bn, however, only half of the quota is in use, like at least partly due to the five-day repatriation stipulation - Malaysia’s state pension fund will offer a Shari’a-compliant investment option for its members by 2017, Prime Minister Datuk Seri Najib Razak said today. Najib says it will create the largest Shari’a fund of its kind in the world. Malaysia has one of the world’s largest Islamic finance sectors and the authorities are keen to develop it further. They envision the industry accounting for 40% of the country’s total banking assets by 2020 compared with latest figures of around 23% released last year. The $160bn (MYR577.4bn) Employees Provident Fund (EPF) already invests about a third of its portfolio in stocks and bonds that comply with Islamic principles, which ban interest payments and pure monetary speculation. The fund reportedly hired consultants last year to study the feasibility of a state-backed pension fund focusing entirely on Shari’a-compliant investments. Additionally, local press reports says that Malaysia’s sovereign wealth fund Khazanah Nasional has received regulatory approval to issue a MYR1billion (around $275m) socially responsible Islamic bond - The NASDAQ OMX Group, Inc has declared a regular quarterly dividend of $0.25 per share on the company's outstanding common stock, an increase of 67% from the prior $0.15 per share quarterly dividend. The dividend is payable on June 26TH 2015, to shareowners of record at the close of business on June 12TH 2015 - Lazard Ltd today reported operating revenue1 of $581m for the quarter ended March 31st. Adjusted net income was $103m, or $0.77 (diluted) per share for the quarter. These results exclude a pre-tax charge of $63m relating to a debt refinancing2. Q1 2015 net income on a U.S. GAAP basis, including the pre-tax charge, was $56m, or $0.42 (diluted) per share. "Our Financial Advisory and Asset Management businesses continue their strong performance," says Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "In the first quarter, we refinanced and repaid a portion of Lazard's long-term debt, significantly reducing our interest costs," adds Matthieu Bucaille, chief financial officer of Lazard. "Consistent with our capital management objectives, we have increased the quarterly dividend by 17%, the fifth increase in as many years." -

UK government shifts policy on executive pay

Wednesday, 20 June 2012
UK government shifts policy on executive pay Following its industry consultation, ‘Executive Pay Consultation on Enhanced Shareholder Voting Rights’, the Department for Business Innovation and Skills (BIS) has decided on a three year binding vote on future executive remuneration policy, including pay and exit pay. http://www.ftseglobalmarkets.com/

Following its industry consultation, ‘Executive Pay Consultation on Enhanced Shareholder Voting Rights’, the Department for Business Innovation and Skills (BIS) has decided on a three year binding vote on future executive remuneration policy, including pay and exit pay.

The Department for Business Innovation and Skills (BIS) has decided on a three year binding vote on future executive remuneration policy, including pay and exit pay.By making the binding vote on the remuneration policy effective for three years,  the government hopes to encourage greater dialogue on executive remunertaion between companies and shareholders. It should also encourage companies to adopt a longer term and transparent approach to their executives' pay.

This package of reforms will address failures in corporate governance by empowering shareholders to engage effectively with companies on pay. It will:

  • Give shareholders binding votes on pay policy and exit payments, so they can hold companies to account and prevent rewards for failure
  • Boost transparency so that what people are paid is easily understood and the link between pay and performance is clearly drawn
  • Ensure that reform has a lasting impact by empowering business and investors to maintain recent activism.


Business Secretary Vince Cable explains that: “At a time when the global economy remains fragile, it is neither sustainable nor justifiable to see directors’ pay rising at 10 per cent a year, while the performance of listed companies lags behind and many employees are having their pay cut or frozen.

“In January we kicked off a national debate aimed at encouraging shareholders to become more actively engaged as company owners in better aligning directors’ pay with performance. I have been greatly encouraged by the ‘shareholder spring’ and I want to see that momentum sustained. That is why I am bringing forward legislation to strengthen the powers of shareholders through a binding vote on pay,," he adds.

The government’s reforms will provide shareholders with new powers to hold companies to account, while making it easier to understand what directors are earning and how it links to company performance.

The current advisory vote gives shareholders a mechanism to register their dissatisfaction with a company’s remuneration report. “In practice, however, there has been too much reliance on investment managers to ensure consistent oversight of portfolio companies on corporate governance issues such as pay” says Aled Jones, senior consultant in Mercer’s Investments business. “Trustees need to adopt a more proactive stance by regularly monitoring their managers on how they raise strategic issues such as remuneration in their interactions with company directors. Ultimately this is about the effectiveness of board processes. Where these processes are not successful – such as when pay proposals are voted down; it is shareholders’ responsibility to understand what went wrong and take action.

The government will introduce the reforms through amendments to the Enterprise and Regulatory Reform Bill, which is currently before Parliament.

Revised, simplified regulations setting out how companies must report directors’ pay will be published at the same time. There will be a chance to comment on these regulations before they become law.

The government intends all these reforms to be enacted by October 2013.

 

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