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Q&A: A case for gender-smart investment – Devex

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Jen Braswell, director of value creation strategies at CDC Group. Photo by: CDC Group

GABORONE — Over the last few years, development finance institutions have turned their focus to gender-smart, or gender-lens, investing — a strategy that seeks to intentionally and measurably use capital to address gender inequalities and better inform investment decisions.

Initiatives such as the Gender Summit, organized by Business Fights Poverty, and the 2X Challenge — which resulted in $3 billion committed to gender-smart investing by the DFIs of G-7 leading industrial nations — have further served to bring together a wide ecosystem of players to this discussion.

To accelerate progress, the U.K. government’s DFI, CDC Group, in partnership with the International Finance Corporation, last month launched a guide to gender-smart investing for private equity fund managers.

Jen Braswell, director of value creation strategies at CDC Group, said that such collaborations have been the driving force behind the momentum in the sector. With continued collaboration, financial institutions will be able to build back better with gender in mind, she added.

“We have collaborated across multiple institutions and brought the learning that we have each had in terms of, ‘How do you operationalize this approach to share with each other?’ And in so doing, we have had a lot of momentum that we bring back into our institutions that helps push things faster,” she said.

Braswell spoke to Devex about the value of such collaborations and what needs to be done to ensure that the momentum toward gender-smart investments does not waiver.

This conversation has been edited for length and clarity.

What is CDC Group’s approach to gender-smart investing?

Opinion: How impact investing can help girls shatter the glass ceiling

There is currently more than $21 billion in existing impact investments relevant to the school-to-work transitions in emerging markets. Investing in the success of girls and young women makes economic sense and is also a smart way to maximize social impact.

When we launched our gender strategy in 2018, we focused on four key areas of the corporate value chain. We focused on where women participate in the leadership of a business; where women participate in the workforce; women’s ownership or entrepreneurship; and what the businesses themselves provide to women consumers. So looking across that whole spectrum of opportunity is what gender-lens investment means for us. It gives us a wide view of how we can influence and support gender equity through investing.

When we talk about the different elements of the corporate value chain, there is also a different impact that we can think about with these different elements. When we are talking about women in leadership or, more broadly, diversity in leadership, you are really looking at systemic change. You are looking to change the way that decisions get made in the private sector because there are different perspectives and different voices around the table.

Thinking specifically with a gender lens, you are looking to create a decision-making leadership framework that makes better decisions with women in mind for the business. For us, this systemic change is quite an important impact that we are looking to achieve as an impact investor.

When you are thinking about diversity in the workforce you are thinking about an impact that is around providing access and opportunity for economic participation that has a direct impact on the women who are employed in the business. So there is a direct-reach impact to individual women when we are thinking about the workforce.

Then when you are thinking about consumers, you are thinking about how we can improve the lives or help improve the lives of women directly by ensuring the private sector is producing goods that are designed for them and tailored for their needs or services that similarly support them.

Why should private equity play a role in bridging the gender gap?

The good news with gender-lens investing is it is not only the right thing to do; it’s the smart thing to do. So there is a really clear impact case and also a commercial case, which flows from all the research that has been done to show that investment teams that have gender balance at the senior decision-making ranks produce higher performance in their portfolios and that gender-smart businesses are higher performers commercially.

This is because of the diversity and the gender diversity dividend that we see in terms of more responsible business decision-making, better talent management, improved safeguarding for the workforce, better design for products that reach broader segments of the market. So all of those things provide a commercial upside.

On the impact side, we really believe that there is a huge opportunity here that is being missed at the moment. While investors across the industry are ramping up their capabilities, we are not currently as a group intentionally investing with a view for where women participate in our businesses. And when we don’t do that, we are missing an impact opportunity, as well as the commercial opportunities.

“It is kind of impossible to invest credibly with a gender lens if you don’t have the data to help support that effort.”

— Jen Braswell, director of value creation strategies, CDC Group

One of the motivations for the guide you worked on with IFC was to provide the data and research to make the case for gender-smart investing. How important is this data?

Data is key, and it is missing at the moment. When we started looking at this with all of our peers and we tried to get an understanding of where women participated in our portfolios, we realized that we really didn’t have gender-disaggregated data, so we really didn’t know where women were participating.

If you can’t measure it, you can’t manage it. So in order to be able to, first of all, help to convince the senior leadership of your private equity fund or your DFI that this is something that you should spend some resources and time to do, you should have some research to provide that correlation between the gender balance and performance and between gender balance and impact.

So data is key to beginning to shape strategy and be influential in helping decision-makers make the decision to invest with a gender lens. And it is also critical to be able to understand both the performance that you are having related to gender diversity and to the impact you have over time.

Right now, the data that is out in the market is patchy, partly because systems aren’t yet in place to be able to have a gender-disaggregated view. For example, many financial institutions do not automatically or currently know the gender of individuals they are lending to. It’s just not part of what’s systematically gathered. It is kind of impossible to invest credibly with a gender lens if you don’t have the data to help support that effort.

What are you doing to ensure that this data is available?

So within the four elements of the corporate value chain that we look at, we worked together with the broader community under the 2X initiative to develop a set of definitions and a series of percentage thresholds of what good participation looks like across emerging markets, and we codified them in the 2X criteria.

We have also then translated these thresholds into a suite of simple indicators that we, along with a number of industry bodies, are turning into the industry standard for data collection for gender. We want to ensure that the data gets standardized, that we are all asking the same thing and the systems that get built across the private sector are providing the same data that we can all understand in the same way.

How has COVID-19 affected the push toward gender-smart investment?

COVID-19 has been challenging for everyone on every level, and the work to change the way that an investment house does its investing is hard work.

Opinion: The business case for investing in women entrepreneurs

With the right support, women entrepreneurs living in poverty can contribute to community resilience and economic recovery during and after this pandemic. This op-ed shares some specific recommendations.

From the investment side, COVID-19 has shifted focus. Priorities have shifted to preserving portfolios as companies are starting to struggle under the challenges of COVID-19. Issues with retrenchment, issues with needing to pivot whole business approaches have meant that a lot of the work that has to happen to actually create a gender-smart investment process has slowed down, but I think that’s really going to be short-term.

In the macro sense, we are seeing that data now shows that women have been disproportionately affected by the pandemic, that women take on a greater burden of double duty with household and care duties in addition to work, and often it’s women who are first to step away from the workforce.

So more than ever, investing with a gender lens is going to be critical as we move from this preserve phase to thinking about how we proactively and intentionally invest to ensure that we can regain the ground and help to build more gender equity into our portfolios in this “build back better” phase.

How can we ensure that the momentum is not lost within this next phase?

It takes intentionality. The starting point is leadership from the top of the investment community. So chief executive officers and heads of boards need to keep this particular focus in mind. Gender and diversity, particularly in the leadership of the private sector, is going to be key to helping the world navigate out of the crisis.

And leadership is key because gender-lens investing and diversity investing is a change agenda. It’s a change from business as usual. And in order to realize the effects of the change and to drive it more quickly, it takes clear leadership and intentionality, and that leadership then goes through an organization to incentivize the business to think differently than it has done in the past.

Before the pandemic, we had a lot of momentum within the gender-lens investment space, and I haven’t really seen that waning. I think there is still a positive view on the benefits that gender-lens investing provides. So now it’s going to take some serious leadership to ensure that the momentum stays and we move to the next phase of gender-lens investing across the industry, and that it remains a top priority.

Devex, with support from our partner UN Women, is exploring how data is being used to inform policy and advocacy to advance gender equality. Gender data is crucial to make every woman and girl count. Visit the Focus on: Gender Data page for more. Disclaimer: The views in this article do not necessarily represent the views of UN Women.

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These Stocks That Are More of a Gamble Than an Investment – Barron's

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Some stock market trading activity has looked an awful lot like gambling as of late.


Getty Images

Some stock market trading activity has looked an awful lot like gambling as of late, with huge run-ups in companies that have shown little actual evidence of profits, or in some cases, sales.

Academics say there’s more in common between gambling and stocks than you might imagine. And researchers have a simple methodology for determining which stocks are gambles rather than investments.

A research paper released this month found that gambling accounted for about 14% of stock market volume in developed countries, and that stock market gambling is 3.5 times the combined gambling in casinos, lotteries, horse racing, sports betting, gaming machines, and online gambling. The U.S. and Hong Kong have the highest per capita levels of stock market gambling in the world.

The paper—from Alok Kumar of the University of Miami, Houng Nguyen of the University of Danang, and Talis Putnins at the University of Technology Sydney and Stockholm School of Economics—proposes looking at volume over market cap as a way of determining lottery stocks. “We assume that gambling in stock markets involves disproportionate amount of trading in lottery-like stocks,” they said.

Applying their methodology, Barron’s screened the

S&P 500

and

Nasdaq 100

components for volume over the last 30 days divided by market cap.

The list makes intuitive sense—a variety of travel and energy stocks, such as American Airlines Group (ticker: AAL) and

Marathon Oil

(MRO).

Broadening out the screen to any New York Stock Exchange or Nasdaq-listed company with a market capitalization of at least $500 million yields even more aggressive plays, such as cannabis stock Sundial Growers (SNDL) and genome analysis specialist

Bionano Genomics

(BNGO).

The analysis can also easily be extended across the world.

Argo Blockchain

(ARB.London) headlines the London-listed lottery stocks with market caps of at least $500 million. Solar play

GCL New Energy Holdings

(451.Hong Kong) is the biggest lottery play among Hong Kong-listed stocks.

One perhaps surprising finding from the researchers is that the stock-market gambling helps the broader market function. “Even if gamblers are relatively or completely uninformed traders, they can still contribute to market efficiency by making markets more liquid and thereby encouraging informed trading,” researchers found.

Write to Steve Goldstein at steven.goldstein@wsj.com

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Bitcoin – a Means of Financial Investment – Net Newsledger

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When it comes to money and financial assets, it’s only a thin line that separates them. Even though some people classify money as a particular type of financial asset, this, in turn, does pay back little or no interest at all. Other types of financial assets do have huge interests or returns on investments (ROI). Take for example, when you buy stocks and bonds, you would expect to get some kind of interest on it or receive dividend payments, you can even go as far as selling the stock at a very high price in the future.

Even though Bitcoin was developed with the intent of serving as an international currency, there have been changes over the year and the increase in demand for bitcoin has made it a means of investment for many people. Today, Bitcoin has turned into a high financial investment asset that can be used for different transactions.

Bitcoin which is being characterized as a means of financial investments has drawn the interest of many investors and at the same time, it has given room for financial loss. While it can be argued that the line between financial assets and money is very thin, investors’ actions generally have revealed the role asset plays in the economy.

Truly, Bitcoin price chart has really been inconsistent over the years, sometimes we experience a high run-up in price and sometimes, it is followed by some drastic crashes but checking through this chart, it has been studied that it consistently retained a large portion of its gains every time it plummets. Since the first introduction of Bitcoin, it has been the first digital asset to start the current ecosystem of cryptocurrencies. For quite a while now, investors have seen its future as a possible and replacement to the physical money we have now.

Today, the hype surrounding Bitcoin has basically been keeping it as a financial investment instead of using it as a means of payment for goods and services, You can start earning with immediate bitcoin. Jannet Yellen, who is a Former Federal Reserve said that Bitcoin is “not a stable store of value and it doesn’t constitute legal tender. It is a highly speculative asset”.

The amazing benefits Bitcoin introduced to the market cannot be over-emphasized. For one, it is a safe ecosystem for your peer-to-peer money transactions. There are little to no intermediates when it comes to Bitcoin transactions. That is why it is cost-efficient and also very fast. You can send millions of Bitcoin within a few minutes and the cost of sending this is very low compared to using fiat currency. Bitcoin has made international payments so easy in a previously unimaginable way.

If you are an investor looking to invest in bitcoin through the capital markets, then you should do that with Bitcoin Trader.Using Bitcoin Trader provides investors some certain advantages which makes an investment in bitcoin a more reliable option. For one, their system ensures a transparent trading environment through DLT technology. Also, they use trading algorithms that implement HFT trading techniques which generate profits from even the slightest market movement.

When investing in Bitcoin, you can approach it from two different scenarios:

Short Positions on Bitcoin

When there is a Bitcoin bubble (which means rise in prices of bitcoin followed by a decrease in the price), investors might bet on bitcoin decreasing in value. With this, they might decide to sell bitcoin at a certain price, and after some time, they buy it at a price lower than the selling price. Take for example, if you buy bitcoin worth $1000 and later sell it at that same rate, and you wait for bitcoin to decrease in value before buying it back. You would be buying it at a very lower price, thereby making more profits.

But you have to be careful when taking this approach, there is a high possibility that the market might move against, which might result to losing money. Before going for this, as an investor, you should have a deep knowledge about leverage and margin calls.

Long Positions on Bitcoin

With this strategy, investors want a less immediate return. They purchase bitcoin and wait till the end of a price rally before selling it. This process can be approached in so many ways, one of them is relying on the cryptocurrency’s volatility for a high rate of return, should the market move in the investor’s favor. Several bitcoin trading sites like Bitcoin Trader now exist. These platforms have provided leveraged trading. Bitcoin Trader has a trading program that conducts bitcoin trading automatically.

Final Notes

The decision to make Bitcoin a means of financial investment boils down to your appetite for risk. The price could drop drastically, going against you as an investor, and a single online hacking or hard drive crashing can wipe out your stash of Bitcoin with no compensation or repayment. You need to transact with a reliable trader!

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India’s risky investment climate – Financial Times

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Last year, India celebrated a milestone in its long campaign to attract foreign direct investment, crossing the $500bn mark in cumulative inflows over the past two decades. For the government, it was a welcome piece of good news and a sign that overseas interest remained undimmed. The numbers, however, obscure a less promising reality. India’s economy, hard hit by the pandemic, has fallen into recession and there are worrying signs that the government of Prime Minister Narendra Modi, far from pursuing a path of liberalisation, is turning inwards.

There are good reasons to scrutinise the supposed momentum behind the foreign investment influx. While foreign companies, including Amazon and Walmart, have gained footholds, a shifting regulatory environment has all too often sent the wrong signal to international investors. And although Silicon Valley money poured in last year, a large chunk was directed at a single company: Jio Platforms, the telecom-and-digital services arm of Mukesh Ambani’s Reliance Industries, which attracted more than $10bn from the likes of Facebook and Google.

Foreign companies may be investing but the overriding trend is still through joint ventures or by taking minority stakes in companies owned by powerful Indian entrepreneurs. James Murdoch recently reunited with Uday Shankar on a media venture. All too often, the sums involved are not large and appear to be more defensive plays than a serious attempt to commit to the Indian market.

There are longstanding concerns that Mr Modi’s government, far from being the business-friendly administration that executives had hoped for when his Bharatiya Janata party came into power has, at best, an ambivalent attitude towards foreign investment. It has proven itself to be, in essence, an economic nationalist government. Regulation has remained unpredictable and frequent policy changes, including the recent increase in import tariffs, have fostered uncertainty

The precariousness for international investors has been exacerbated by New Delhi’s ambivalent attitude to the rule of law, in particular in reference to two corporate tax disputes, with Vodafone and Cairn Energy, which had gone to international arbitration. They stem from a decision by the previous Indian government in 2012 to change the tax code retrospectively, a move that gave it the power to claim taxes for deals struck years earlier if the underlying assets were in India. The government lost its case against Vodafone in September and against Cairn in December.

The government has since challenged the Vodafone ruling. Business expects it to do the same in the Cairn case. It is time for the government to accept the rulings. It should also make clear that it will no longer use or follow up on retroactive tax claims. Both actions would send a powerful signal that India is committed to the fair treatment of investors. Mr Modi commands strong popular support and should ignore dissenting voices that believe the government would look weak to its domestic audience. 

There is a risk that the recent backlash that has greeted government proposals to modernise India’s agricultural sector might reduce the incentive to liberalise in general. This would be a shame. As western companies seek to diversify their operations from China, India has a unique opportunity to become an alternative destination for manufacturing investments. As China has shown, export-oriented manufacturing is a critical factor for economic growth. India has a valuable opportunity to signal that it is open for business.

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