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Emerging Markets Offer Big Investment Opps for ESG-Focused Investors, Report Says – Environment + Energy Leader

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A new report touting the importance of ESG factors and their impact on investments and investment decisions has found that better environmental stewardship can unlock significant value in private equity. Another key finding is that emerging markets offer some of the world’s most consequential investment opportunities for investors focused on mitigating global climate and social risks.

The semiannual Global Intelligence report from Manulife Investment Management highlights the fact that “sustainable investing is no longer an option. It is a necessity…,” says Christopher P. Donkey, CFA, global head of public markets at Manulife Investment Management.

Emerging Markets

When it comes to emerging markets (EMs), the report finds that emerging market companies currently rival their developed-market counterparts in terms of the sophistication of sustainability practice and growth potential.

The IEA stated in 2019 that, “There is a new reality in clean energy.” The world’s major emerging economies — including China, India, and several others — are moving to the center stage of the clean energy transition, it said, adding, “In fact, taken as a whole, Asia — which dominates the MSCI Emerging Markets Index — is the world’s largest investor in low-carbon energy sources.”

The significant stake in green energy capacity couldn’t have arrived too soon for emerging markets — or the world — as Asia is expected to drive more than two-thirds of new global energy demand over the next 20 years, per the report. However, the report prevaricates that, “…if we see a collective failure to coordinate climate policy, practice, and investment, then EM growth itself is more likely to precipitate a disappointing and painful future of ongoing structural dislocations.”

Businesses Must Heed the Call

Businesses that are inattentive to growing calls for responsible stewardship of environmental and social capital are likely to lose competitive advantages and find themselves spurned by consumers and investors alike, the report warns.

“Whether coming from customers, employees, suppliers, or communities more broadly, the call for sustainable practices has only increased since the start of the pandemic,” it says.

Consumers say their spending is migrating toward companies conducting operations sustainably, and investors have been taking notice. In fact, sustainability has become an imperative since so many investors now demand it. While they still require strong investment returns, sustainability has risen to a commensurate level for many investors.

The reasons aren’t purely altruistic, according to the report. In fact, 66% of limited partners say that value creation is a leading driver of their ESG initiatives (per PwC).

Three-quarters expect sustainability to influence their investment decisions over the next five years, according to Coller Capital; additionally, says Ceres, 86% expect ESG investment opportunities to increase, and 93% agree that focusing on ESG themes will generate attractive investment opportunities.

Another recent indication of how ESG investing is on the rise was the announcement earlier this week that more than 20 leading companies — including 3M, ADM, Apple, Bank of America, FedEx, General Motors, Honeywell, Nike, Smithfield Foods and TD Bank Group — have invested in TPG Rise Climate, the climate investing strategy of TPG’s global impact investing platform. TPG Rise Climate announced its first-close of $5.4 billion in subscriptions to its inaugural fund, Environment + Energy Leader reported.

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Bitcoin edges off all-time high but momentum for more gains this year seen intact

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 Bitcoin fell slightly in Asian hours on Thursday, a day after marking an all-time high on optimism around the launch of the first U.S. bitcoin futures ETF.

The world’s largest cryptocurrency was last down 1.3% at $65,184 after hitting a record $67,016 on Wednesday, but still above a previous peak of $64,895 seen in April.

“We think its going to go higher and we can get to 80 or 90,000 by the end of this year easy, but that won’t be without volatility,” said Matt Dibb, COO of Singapore-based Stack Funds.

In the past few days, he said, traders were starting to pay high rates to borrow to buy bitcoin futures, “and that’s a sign that we could be a bit overextended, and there could be a pullback to come.”

He added he anticipated traders would rotate out of bitcoin and into major ‘altcoins’ – other cryptocurrencies.

Ether, the world’s second largest cryptocurrency, rose 1% to $4,203 and there were also sharper gains in smaller tokens.

Market players say the latest wave of buying has been supported by the launch of the first U.S. bitcoin futures-based exchange-traded fund (ETF) with investors betting this will open a path to greater investment from both retail and institutional investors.

Existing bitcoin exchange-traded funds and products have seen sharp inflows since September.

Average weekly flows to bitcoin funds totalled $121.1 million in October, up from $31.2 million a month earlier, data from London-based CryptoCompare shows.

The three months prior to September had seen outflows following steep losses for bitcoin in May and June.

 

(Reporting by Alun John; Editing by Edwina Gibbs)

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China Evergrande shares fall in resumed trade after $2.6 billion deal collapses

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Shares of China’s Evergrande Group slid as much as 14% on Thursday after a deal to sell a $2.6 billion stake in its property services unit fell through, in the latest blow to the developer whose massive debt woes have rattled global markets.

Evergrande said on Wednesday it had scrapped a deal to sell a 50.1% stake in Evergrande Property Services Group Ltd to Hopson Development Holdings Ltd as the smaller rival had not met the “prerequisite to make a general offer”.

Both sides appeared to trade blame for the setback, with Hopson saying it does not accept “there is any substance whatsoever” to Evergrande’s termination of the sales agreement, and it is exploring options to protect its legitimate interests.

The deal is the developer’s second to collapse amid its scramble to raise cash in recent weeks. Two sources told Reuters last week the $1.7 billion sale of its Hong Kong headquarters had failed amid buyer worries over Evergrande’s dire financial situation.

The latest setback also comes just ahead of the expiry of a 30-day grace period for Evergrande to pay $83.5 million in coupon payments for an offshore bond, at which time China’s most indebted developer would be considered in default.

Evergrande in an exchange filing on Wednesday said the grace periods for the payment of the interest on its U.S. dollar-denominated bonds that had become due in September and October had not expired. It did not elaborate.

“The scrapped transaction has made it even more unlikely for it (Evergrande) to pull a rabbit out of a hat at the last minute,” said a lawyer representing some creditors, requesting anonymity as he was not authorised to speak to the media.

“Given where things are with the missed payments and the grace period running out soon, people are bracing for a hard default. We’ll see how the company addresses this in its negotiations with creditors.”

REASSURANCES

Trading in the Hong Kong-listed shares of China Evergrande, its property services unit and Hopson all resumed on Thursday after a more than two-week suspension. Evergrande trimmed opening losses and was down 9.8% in early trade. Its property services unit dropped 5%, while its electric vehicle arm plunged as much as 10.3%. Shares of Hopson rose 5.6%.

Mainland China’s property index gained nearly 2%.

Evergrande was once China’s top-selling developer yet is now reeling under more than $300 billion of debt, prompting government officials to come out in force in recent days to say the firm’s problems will not spin out of control and trigger a broader financial crisis.

The string of official reassurances are likely aimed at soothing investor fear that the developer’s debt crisis could ripple through China’s broader property sector, which contributes around a quarter to the country’s economic growth.

Since the government started clamping down on corporate debt in 2017, many real estate developers have turned to off-balance-sheet vehicles to borrow money and skirt regulatory scrutiny, analysts and lawyers said.

Statements from other property developers on Thursday exacerbated investor concern of contagion.

Chinese Estates Holdings Ltd said it would book a loss of $29 million in its current fiscal year from the sale of bonds issued by property developer Kaisa Group Holdings Ltd.

Modern Land (China) Co Ltd said it had ceased to seek consent from investors to extend the maturity date of a dollar bond due on Oct. 25. Its shares were suspended from trading on Thursday.

While Chinese high-yield spreads, as indicated in an index of Chinese corporate high-yield issuers, continued to narrow as of Wednesday evening U.S. time, Modern Land’s decision weighed on investors’ mood, said Clarence Tam, fixed income portfolio manager at Avenue Asset Management in Hong Kong.

“The market is worried all single-B companies will choose not to pay,” he said.

(Reporting by Clare Jim in HONG KONG and Andrew Galbraith in SHANGHAI, additional reporting by Anshuman Daga in SINGAPORE; Writing by Anne Marie Roantree; Editing by Jacqueline Wong and Christopher Cushing)

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Is This Crypto Investment Strategy Right For Cannabis? – Yahoo Finance

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You got to know when to HODL ’em, and know when to fold ’em.
If you’re a crypto investor or a fan of long-term holdings, then the strategy may already be part of your process. With cannabis awaiting federal legalization in the U.S. and further market maturation overall, some believe hodling is the way to enter the nascent market.
As is with most strategies, nothing is perfect for every investor.

What is HODL?

HODL dates back to 2013 and a drunken forum post discussing Bitcoin (CRYPTO: BTC) prices, namely BTC’s 39% decline in January.
Rather than bail on the plummeting coin, user GameKyuubi stuck with the stock.
He wrote, “WHY AM I HOLDING? I’LL TELL YOU WHY,” adding, “It’s because I’m a bad trader and I KNOW I’M A BAD TRADER.”
He emphasized the importance of holding in a bear market, a belief now championed by many in the crypto space concerning undervalued coins. September analysis from CryptoBuyer reported that 68% of altcoin buyers are hodling for the long haul.
Mark Lozzi, CEO of cannabis industry B2B and B2C platform Confia, said that “HODLing generally helps investors mitigate against short term volatility and downward market pressure, often resulting in hasty decisions that are by and large against your fundamental investment thesis.”
In crypto or otherwise, sources say hodling success is based on successful execution.
Lozzi noted that crypto assets are at risk of failing, leaving the investor to choose wisely before deciding to hodl. “It is still very important that a HODLER choose the right crypto assets that will endure the digital test of time,” he added.
Shaun Heng, VP of operations at CoinMarketCap, said crypto could be a substantial revenue stream for an investor when done correctly.
“By done right, I mean, you hodled for at least five years,” he said. “Hodling six months doesn’t count.”
Heng said the model works if someone is looking for an investment that won’t require much time. Though, he added, “It can definitely be a challenge to see massive fluctuations in your net worth, even if it trends upwards.”
Stefan Ateljevic, a crypto entrepreneur and founder of the review and information website Crypto Blokes, endorses the strategy but notes it isn’t for everyone.
“The price of crypto tends to be volatile and changes on a daily basis,” Ateljevic noted, adding that a good hodler is a stubborn investor who buys on the dip and remains committed to cashing out in the future for more significant returns.
Ateljevic didn’t always practice this investment methodology. Eight years ago, he invested in Bitcoin but didn’t hold the first time around. He told Benzinga that he “pretty much panic sold a good chunk when it was less than $10,000 per coin.”

To his good luck, he was mining Ethereum (CRYPTO: ETH) from day one.

Discussing potential coins worth considering, Ateljevic said, “Hodling for five years could see that give you massive returns on your investment.”

Should Cannabis Investors HODL?

As in crypto, cannabis investors may want to consider hodling if a long-term investment strategy suits their strategy.
Lozzi said a hodl-type strategy could pay off in sectors like genetics and brands though he isn’t as sure about cultivation, which could see commoditization and low-cost producers leading the pack. He noted that the best bet for seeing an eventual ROI in cannabis is investing in leading names, innovators and market share players. “The returns will come,” he said.
Investors often draw parallels between cannabis and crypto. However, Heng cautions that the two emerging spaces are not as similar as some assume.
“On the bullish side for cannabis, it’s an industry that still doesn’t have lots of established players, meaning there is room for competitors,” he said.
Heng then countered his point. “Nevertheless, Bitcoin is a deflationary digital currency, which is something the world hadn’t seen before.” As such, he sees Bitcoin’s market potential reaching heights that cannabis won’t.

Photo by RODNAE Productions from Pexels

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