Investment
Investment industry groups target key issues in pre-budget submissions – The Globe and Mail
The House of Commons Standing Committee on Finance has requested that submissions for the federal budget focus on the theme of ‘Climate Emergency: The Required Transition to a Low Carbon Economy.’
franckreporter/iStockPhoto / Getty Images
Investment industry associations are calling on the federal government to tackle key issues such as sustainability, tax fairness and caring for Canada’s growing aging population as Ottawa readies to deliver its next federal budget on March 30.
In keeping with the House of Commons Standing Committee on Finance’s request for submissions on the theme of “Climate Emergency: The Required Transition to a Low Carbon Economy,” the Investment Industry Association of Canada (IIAC) has focused on climate-friendly investing this year.
The association’s pre-budget submission recommends that the federal government work with the provinces, territories and the private sector to “map out the necessary investments, financing requirements and sources of financing to meet Canada’s climate objectives” and emissions reduction goals for 2030.
The IIAC recommends using a combination of public and private capital to fund the creation of energy-efficient infrastructure; improving the efficiency and functioning of Canada’s green bond market; and returning revenue from carbon pricing back to consumers in the form of reduced tax rates for citizens and businesses.
But the first step to achieving any of these goals is to establish consensus about environmentally-minded investing among Canadians, says Ian Russell, the IIAC’s president and chief executive officer.
“[The government needs to] flesh out commonly understood definitions in terms of what do we mean by ‘green’? What do we mean by ‘sustainable’? How do we actually measure the progress of meeting these objectives?” Mr. Russell says. “You need definitions around it to make it effective. You want to encourage investors to participate in these projects, and so the way you do that is to [have] some kind of a measure or methodology.”
That applies to developing widespread public understanding of “what qualifies as a green bond,” the IIAC’s submission states. Mr. Russell says that “building or encouraging a more vigorous market for green bonds” while Canada strives to make the transition away from fossil fuels may require tax incentives, like reimbursing first-time issuers for setup costs for issuing green bonds and offering “super tax deductions” for contributions to registered retirement savings plans (RRSPs) designated to “climate-conscious products” such as green bonds.
“There should be a set of provisions within the budget to encourage the growth and expansion of these kinds of bonds,” he says.
Strengthening Canadians’ retirement savings is another priority for key investment industry organizations. As the aging population continues to grow, the Portfolio Management Association of Canada (PMAC), which represents 280 investment-management firms that have more than $2.8-trillion in assets under management, is striving for “tax fairness and levelling what is currently an uneven playing field between different types of investors,” its pre-budget submission states.
Specifically, Canadians whose defined-contribution pension plan assets are invested in pooled funds such as target-date funds are subject to higher tax rates on the non-registered portions of their investments than those who invest in mutual funds or segregated funds. And according to Melissa Ghislanzoni, association general counsel at PMAC, “there’s no policy rationale supporting that different treatment.”
As such, the organization’s pre-budget submission calls on Ottawa to adjust this rule and others that it says are “out-of-date [and] have not kept pace with their international counterparts, or with the evolution occurring in the investment fund industry.”
Meanwhile, the Conference for Advanced Life Underwriting (CALU) is setting its sights on the removal of provisions in the Income Tax Act that prevent small business owners from selling shares of their companies to younger generations of their family.
Section 84.1 of the act subjects private corporations to higher tax rates on the sale of shares to family members than to arm’s-length purchasers. While federal Finance Minister Bill Morneau indicated in 2017 that Ottawa would work with “family businesses, including farming and finishing businesses” to improve the efficiency of handing companies down to the next generations, CALU hopes to extend the same effort to a wider range of small businesses.
Its pre-budget submission deems these penalties “unfair” given that the agricultural industry employs just more than 1 per cent of all employees in the small business sector, Statistics Canada data show.
“This is a bit puzzling because, from a tax fairness and from a tax policy standpoint, … why would you offer that only to a subset of Canadians?” says Guy Legault, CALU’s president and CEO.
The organization is also asking Ottawa to develop a national seniors’ strategy that looks at the impact of the aging population, reduce costs for prescription drugs through pan-Canadian partnerships with governments and insurers and establish a standard list of prescriptions to remain universally covered by both private and public insurance plans.
Specifically, Mr. Legault says funding long-term care for a growing population of seniors is “going to be quite a burden on the next generation. … This is a conversation that has to start now.”
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2 hours ago
Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.
The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.
On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.
BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.
Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.
It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.
The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.
777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.
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Investment
Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance
Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.
One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.
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He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.
Buffett’s Take on Bitcoin
Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.
“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.
Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.
For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon
Is Buffett Wrong About Bitcoin?
Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.
Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.
“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.
Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.
Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.
“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”
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This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?
(Bloomberg) — Ping An Insurance (Group) Co.’s profit dropped 4.3% in the first quarter as stock-market declines and falling bond yields eroded investment returns.
Net income fell to 36.7 billion yuan ($5 billion) in the three months ended March 31, from 38.4 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Tuesday.
Operating profit, which strips out one-time items and short-term investment volatility, fell 3%.
China’s stock market rout at the start of the year and lower bond yields have weighed on insurers’ investment returns. They hurt profit even as more customers seek to buy savings products. Co-Chief Executive Officer Michael Guo said last month that profitability will recover after a 23% drop in net income last year.
“China’s macroeconomy gradually recovered in the first three months of 2024, but there were still challenges,” the company said in a statement, citing weak domestic demand. “In response to volatile capital markets and declining treasury yields, Ping An continued to pursue long-term returns through cycles via value investing.”
Read More: Ping An Trust Wins First Court Ruling Over Delayed Trust Product
Net investment yield of insurance funds dropped to 3%, the statement said, down from 3.1% a year earlier. Real estate investments fell to 4.2% of the 4.9 trillion yuan portfolio, from 4.6% the year earlier.
The CSI 300 Index slumped as much 7.3% this year through the start of February, before government intervention fueled a rally.
New business value, which gauges the profitability of new life policies sold, rose 21% in the first quarter. That followed a 36% jump last year as the company’s efforts to improve the productivity of life agents started to bear fruit. NBV per agent jumped 56% from a year earlier, the statement said.
Ping An shares rose 3% to HK$33.00 in Hong Kong trading on Tuesday, trimming the year’s loss to 6.7%.
(Updates with company comment in fifth paragraph, more details afterwards)
©2024 Bloomberg L.P.
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