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China Speeds Up Opening of Market to Investment Bank Giants – Yahoo Canada Finance

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China Speeds Up Opening of Market to Investment Bank Giants

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China brought forward the planned opening of its $21 trillion capital market by eight months, swinging the door open for global investment banks such as Goldman Sachs Group Inc.

The New York-based powerhouse, and rivals including JPMorgan Chase & Co. and Morgan Stanley, will now be allowed to apply to form fully owned units to do a broad array of investment banking and securities dealing in the Communist Party-ruled nation in April, compared with an earlier timetable set for December.

The decision was included in the signing of a trade deal with the U.S., partially resolving a protracted dispute that has weighed on the world’s second-largest economy. China had already committed to a broader opening of its $45 trillion financial markets, which also includes given access to its asset-management and insurance markets.

“China shall eliminate foreign equity limits and allow wholly U.S.-owned services suppliers to participate in the securities, fund management, and futures sectors,” according the text of the landmark Phase 1 trade agreement released Wednesday.

China said it won’t take longer than 90 days to consider applications from providers of electronic-payments services including American Express Co., Mastercard Inc. and Visa Inc. to handle transactions in the nation. It will remove restrictions to allow U.S.-owned insurance companies into its markets and also open its $14 trillion market to U.S. credit-rating companies.

As a reciprocal move, the U.S. will “consider expeditiously” pending requests by Chinese financial firms including Citic Securities Co., China Reinsurance Group Corp. and China International Capital Corp. It committed to “non-discriminatory” treatment of payment providers such as UnionPay Co. and Chinese credit rating companies.

China is also opening its market to allow more foreign investment into the country’s 2.37 trillion yuan ($344 billion) non-performing loan market, giving U.S. investors direct access to the market as part of its trade deal amid a surge in bad loans.

While Wall Street’s giants and their European counterparts have been present in mainland China for decades, and done deals for the country’s corporate titans, they have until now had limited opportunity to do direct business, having had to operate through joint ventures with local partners. Full ownership would be a final step after they in late 2018 were given the go-ahead to take majority control over their ventures.

Much Welcome

China has made “significant commitments” in the deal, Jake Parker, vice president at the U.S.-China Business Council, said in an e-mailed comment. “While China has already in the past year announced many of the commitments on the financial openings in the agreement, the inclusion of specific timelines on when these commitments will be implemented is very much welcome and will improve enforceability going forward.”

UBS Group AG, Nomura Holdings Inc. and JPMorgan already hold a majority in their ventures, while the others are in the process of applying for a 51% stake. It’s unclear if the application process will now move straight to the 100% hurdle.

By dismantling the wall to its financial market, China is counting on foreign financial firms to plow $1 trillion in fresh capital into the nation over the next few years, cushioning a slowdown in the economy and helping a transition to more consumer-led growth model.

The global banks, meanwhile, have a lot to gain in getting access to China’s still-fast growing economy and its increasingly prosperous population. Up for grabs is an estimated $9 billion in annual profits by 2030 in the commercial banking and securities sectors alone, Bloomberg Intelligence estimates.

But they will still need to steer an often opaque and precarious political landscape. After meeting with global banking executives in November, President Xi Jinping warned that China would seek to preserve its “financial sovereignty” even as he committed to the market opening.

China’s official People’s Daily newspaper said in a comment that the deal is generally in line with its direction of advancing reforms and opening up, and will support its need for “high-quality economic growth.”

The newspaper said that the reforms and opening up will be done “at its own pace.”

The nation has plans to create investment banking behemoths of its own to compete with the foreign influx and expand abroad. Right now, China has a fragmented market of brokerages, with about 131 firms and a limited global presence. Their combined assets equal to what Goldman Sachs sits on by itself.

(Updates with details on distressed debt in seventh paragraph.)

–With assistance from Jun Luo.

To contact Bloomberg News staff for this story: Lucille Liu in Beijing at xliu621@bloomberg.net

To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, Jonas Bergman, Dan Reichl

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Unpacking the finance sector's climate related investment commitments – NewClimate Institute

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First analysis of financial sector climate-related investment pledges

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Financial institution’s climate-related investment targets have rapidly grown in recent years. In this report, we provide insights into the magnitude and ambition of these targets, and investigate their relationship with GHG emissions in the real economy. Specifically, this report maps out the financial sector’s climate-related investment targets against a range of indicators, such as monetary investments in ‘green’ projects, and required ‘green’ investments and GHG emission reductions. It thereby considers both climate-related investment pledges made by individual financial institutions as well as those made by major finance-related international cooperative initiatives (ICIs).


Main Findings:

Financial institution’s climate-related investment targets have rapidly grown in recent years. We find financial institutions with cumulative assets of at least USD 47 trillion under management are currently committed to climate-related investment targets. This represents 25% of the global financial market, which is around USD 180 trillion. The number and growth of such targets is significant and represents considerable momentum – even if the individual targets vary in their ambition and do not cover all assets under management.

While the trend and efforts of the financial sector are promising, it should be noted that financial institutions do not have full control over their investees’ emissions. Reducing the carbon intensity of a portfolio by divesting, with the objective of aligning it with the Paris Agreement, does not necessarily always lead to emission reductions in the real economy, as others can invest in the emission intensive assets that were sold. Only if a large share of the financial sector sets and works to actualise robust climate-related investment targets and effectively implements them, investees have to react and reduce their emissions. Currently, most financial institutions that have set such targets are located in Europe, the United States of America, and Australia. To align all financial flows with the Paris Agreement temperature goal, it is crucial that institutions in other parts of the world also commit to ambitious investment targets.

We distinguish between three main types of climate-related investment targets – or mechanisms – that financial institutions can use to influence global GHG emissions: divestment, positive impact investment, and corporate engagement. These mechanisms influence the actions investee companies must take – and correspondingly, global GHG emissions – in different ways (see Figure).

Cause effect relation between the different mechanisms, investee companies and global GHG emissions.

We identified a number of factors at the financial institution, company, and country level that can increase the likelihood that a climate-related investment targets will have an impact on actual emission levels. These include for example the size of a financial institution (measured by assets under management) and whether the targeted investee company has previous experience with ESG. The more these factors point in the right direction, the more likely that investment targets will lead to emissions reductions.

The factors play out differently per asset class and per target type. For example, a divestment target related to a government bond share may produce a different outcome than a divestment from a corporate bond; and corporate engagement is usually more effective if there is direct access to investee’s management.

Insights into the factors or impact conditions may support financial institutions in setting potentially more effective targets, policymakers to consider effective regulation and the scientific community, and the wider public, to better assess financial sector targets.


Contacts for further information: Katharina Lütkehermöller, Silke Mooldijk

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$90 million investment into connectivity infrastructure across B.C. – CKPGToday.ca

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Photo Courtesy: ID 180348991 © Michael Nesterov | Dreamstime.com

By Veronica Beltran

connecting B.C.

Sep 22, 2020 5:00 AM

VICTORIA—The Province is investing $90 million in connectivity to encourage a rapid expansion of high-speed internet access and drive regional economic development in rural areas, Indigenous communities, and along B.C.’s highways.

The one-time $90 million investment is part of B.C.’s Economic Recovery Plan for the Connecting British Columbia program and will target connectivity infrastructure projects for a new Economic Recovery Intake.

“Rural and Indigenous communities are an essential part of the province’s economic engine. Now is the time to invest in modern infrastructure so people living outside the city can also benefit from today’s technologies.”—Anne Kang, Minister of Citizens’ Services

“Ensuring people have the connectivity they need to be successful is a key part of our recovery from the COVID-19 pandemic. This investment will bring real and lasting benefits to families, workplaces and communities throughout B.C., ensuring the province emerges stronger than ever,” adds Kang.

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COVID-19 forces one of the biggest surges in technology investment in history, finds world's largest technology leadership survey – Canada NewsWire

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The largest technology leadership survey in the world of over 4,200 IT leaders, analyzing responses from organizations with a combined technology spend of over US$250bn, also found that despite this huge surge of spending, and security & privacy being the top investment during COVID-19, 4 in 10 IT leaders report that their company has experienced more cyber attacks.

Bev White, CEO of Harvey Nash Group said: “This unexpected and unplanned surge in technology investment has also been accompanied by massive changes in how organizations operate – with more organizational change in the last six months than we have seen in the last ten years. Success will largely be about how organizations deal with their culture and engage with their people.”

Steve Bates, Principal, KPMG in the US and global leader of KPMG International’s CIO Center of Excellence, said: “IT in the New Reality will be shaped by economic recovery patterns unique to each sector, location, and company. While every CIO is responding to these forces differently, one thing remains consistent; the urgency to act swiftly and decisively. Technology has never been more important to organizations’ ability to survive and thrive.

Full release here.

Media Contacts:

David Pippett
ProServ PR
[email protected] 
+44 (0) 7899 798197

Michelle Thomas
Harvey Nash
[email protected]
+44 (20) 7333 2677

Amy Greenshields
KPMG International
+1 416 777 8749
[email protected]

[1] See notes to editors.
[2] See notes to editors.

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SOURCE Harvey Nash Group

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