Many poor countries lost market access in the first half of 2020 with the arrival of the pandemic, forcing them into pro-cyclical austerity. Since then, and up to the end of last May, the IMF had provided unconditional financing to 78 countries to the tune of $109.6 billion. But the bulk of the assistance will come in August, when the IMF’s board of governors approves an allocation of $650 billion…
James Barrineau (Schroders) | Emerging market bonds and currencies sustained serious damage in the 2013 “Taper Tantrum”, but are much better placed this time around. Some financial markets have reacted as if Federal Reserve (Fed) Chair Jay Powell rang the bell for tapering of easy financial conditions at the 16 June policy meeting. Investors have naturally dusted off the playbook from the last episode, the notorious “Taper Tantrum” that began…
Matthias Fawer & Thomas Trsan ( Vontobel AM) | If oil greases the wheels of the global economy, water helps to make its turbines spin. The amount of water used in industrial processes may be less publicized than the “blue gold’s” significance for planting crops, but it is no less significant. Earlier this year TSMC, one of the world’s largest manufacturers of electronic chips based in drought-hit Taiwan, had to resort to water imports to maintain production. Whilst crude oil and its derivatives are part of a well-established industry that may be past its peak, water and its varieties – green, blue, grey, or any other color – may still have surprises in store for us.
Irene Lauro (Schroders) | While climate change is affecting all regions around the world, global warming and precipitation rates will not be distributed evenly around the globe. There will be winners and losers. The effects of climate change – and what it could cost investors – will vary significantly around the world.
Garth Heutel, Givi Melkadze & Stefano Carattini via The Conversation | In 2008, as big banks began failing across Wall Street and the housing and stock markets crashed, the nation saw how crucial financial regulation is for economic stability – and how quickly the consequences can cascade through the economy when regulators are asleep at the wheel. Today, there’s another looming economic risk: climate change. Once again, how much it harms economies will depend a lot on how financial regulators and central banks react.
In this period, the company has advanced in the decarbonisation objectives laid out in its 2021–2025 Strategic Plan. The plan and related actions have enabled the company to benefit from the incipient recovery in demand, still below 2019 levels, and the improvements in raw material prices. As a result, Repsol was obtain positive cash flow in all business segments and a net debt reduction of 6%. Adjusted net income, specifically…
Fernando González Urbaneja | The government narrowly (by one vote and in a second vote) passed the decree law (which will be processed as a bill subject to amendments) opening the door for up to 800,000 temporary public workers to consolidate their employment with stable contracts. Governments (state, regional and local) have been using and abusing interim workers for decades. To such an extent that the European Commission and the…
Fernando González Urbaneja | The description as “anachronistic” of the fact that the rapporteur of the Court of Auditors – in the case of the possible embezzlement of pro-independence leaders – was a minister in an Aznar government deserves some reflection. It begs the question of how the president’s mentality works, his concept of the constitutional system and the balance of powers. Added to this are the considerations of Catalan…
Daniele D’Alvia via The Conversation | Spacs have been around since the 1990s, but they exploded in popularity in 2020 and early 2021. This is partly because there has been more and more capital looking to make money, since bonds have been paying unattractively low interest rates, and far fewer companies are listing than in previous decades. Regulations have made traditional flotations slower and more expensive. Flotations are also traditionally underpriced on the day of listing to drum up investor interest. But a crucial advantage of Spac deals is that they are privately negotiated and avoid the risk of money being “left on the table”.
Ricardo Jimenez (Sigma Rocket) | In the last 18 months, sustainability has definitely made its way to the top of investors’ agendas. Gone is the old Corporate Social Responsibility driven by companies, a kind of philanthropic activity towards society, corporate marketing with little interest for fund managers. This change in mentality, supported by the circumstances arising from Covid 19, is being driven directly by investors, both institutional and retail. There…