The price of corporate research published by independent providers dropped 8 per cent last year as cut-throat competition from large investment banks continued to squeeze revenues for smaller analytics companies.
Independent research providers have complained to regulators in the UK and Europe that their businesses are being hurt by what they say is unfair competition after large banks slashed the cost of research services in recent years.
“Unfair, anti-competitive pricing by investment banks remains the single most fundamental problem for independent research providers. Seventy-eight per cent of independent research providers believe that urgent regulatory action is needed to address predatory pricing by investment banks,” said Steve Kelly, special adviser at Euro IRP, the trade body which represents 70 independent research providers.
Euro IRP estimates that research pricing by independent providers has on average declined by about 40 per cent since the introduction of the sweeping package of European market rules, known as Mifid II, in 2018.
Under Mifid, asset managers must split the cost of buying research from any trading costs incurred for buying and selling securities, an arrangement known as “unbundling”. This was designed to prevent investment banks and brokers from offering research to portfolio managers as an inducement to direct trading orders to them.
Investment banks responded by slashing the price of their research. JPMorgan, for example, now offers asset managers access to all of its written research output for an annual fee of $10,000, with face-to-face meetings with analysts costing more.
Large banks which primarily earn revenues elsewhere can absorb this drop but smaller, research-focused companies have been left exposed. Some independent providers also believe that investment banks are using research as a loss leader, funding this activity from other parts of their business in order to facilitate the selling of other more lucrative services to clients.
“Research for investment banks is a route to clients to whom many other, much more profitable services can be sold,” said Kelly.
JPMorgan declined to comment.
In April, the Financial Conduct Authority proposed that research produced by independent providers should be exempted from the Mifid rules covering inducements that apply to investment banks.
Prices charged per research assignment vary enormously but Kelly said “declines and ongoing pressure” were widely reported by Euro IRP members, particularly smaller providers.
Richard Kramer, founder and chief executive of Arete Research, an independent provider, said he believed that many investment banks were pricing research services below cost.
“Almost all of the investment banks are cross-subsidising the cost of their research services from other activities,” said Kramer. He also questioned the value of some research. “How are investors well served when 80 per cent of the recommendations by bank analysts are ‘buys’? The research produced by the sycophants and stenographers at investment banks is part of a promotion machine, advertising other banking services,” he said.
Saudi Arabia to set up investment fund for carbon capture – Aljazeera.com
The kingdom will also back a plan to feed hundreds of millions of people by providing clean cooking fuels, Crown Prince Mohammed bin Salman said in Riyadh on Monday at a forum attended by heads of state.
Published On 25 Oct 2021
Saudi Arabia said Middle Eastern economies will be boosted by efforts to cut planet-warming gases and announced a fund to invest in carbon-capture technology.
“Climate change is an economic opportunity for individuals and the private sector,” Crown Prince Mohammed bin Salman said in Riyadh on Monday at a forum attended by several heads of state. Reducing emissions will “create jobs and strengthen innovation in the region.”
The kingdom will establish a fund to improve carbon sequestration and back a plan to feed hundreds of millions of people by providing them clean cooking fuels, Prince Mohammed said. The two initiatives will cost 39 billion riyals ($10.4 billion) and Saudi Arabia will contribute 15%.
The government will also open regional centers for early warning of storms, for sustainable fishing and for cloud seeding.
On Saturday, the prince pledged that Saudi Arabia would neutralize greenhouse gas emissions within its borders by 2060. It marked a seismic shift for the world’s biggest oil exporter, though officials included plenty of caveats and emphasized that Saudi Arabia and others would need to pump crude for decades to come.
The kingdom will try to develop facilities that capture and store carbon emissions as part of that commitment. The technology will be used for the production of blue hydrogen, a fuel made from converting natural gas and seen as crucial to the green-energy transition.
The net-zero goal “is a major step forward,” U.S. President Joe Biden’s climate envoy, John Kerry, said earlier on Monday. “It’s critical to have one of the world’s largest producers of fossil fuels step up at a moment when all countries, no matter their circumstances, need to come together.”
Other leaders at the Riyadh conference emphasized the need for governments to accelerate efforts to slow climate change.
“Just in the last two years we have seen fires in Siberia, in California, in the Mediterranean — unprecedented,” Pakistan’s Prime Minister Imran Khan said. “I hope that collectively we take this challenge much more seriously than we have done.”
Pakistan is stopping all coal projects and wants to make renewables 60% of its energy mix by 2030, he said.
Is PayPal (PYPL) Still a Great Investment Choice? – Yahoo Finance
Polen Capital, an investment management firm, published its “Polen Focus Growth” third quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of 2.78% was delivered by the fund for the third quarter of 2021, outperforming both its Russell 1000 Growth benchmark that delivered a 1.16% return, and the S&P 500 Index that had a 0.59% gain for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Polen Capital, in its Q3 2021 investor letter, mentioned PayPal Holdings, Inc. (NASDAQ: PYPL) and discussed its stance on the firm. PayPal Holdings, Inc. is a San Jose, California-based financial technology company with a $293 billion market capitalization. PYPL delivered a 6.29% return since the beginning of the year, while its 12-month returns are up by 26.21%. The stock closed at $240.40 per share on October 22, 2021.
Here is what Polen Capital has to say about PayPal Holdings, Inc. in its Q3 2021 investor letter:
“Despite reporting solid earnings results, PayPal moved lower during the quarter. We believe the decline was primarily due to the company reporting near-term growth headwinds from the remainder of its eBay payment volumes, which have declined faster than expected. Our expectations included PayPal’s payment volumes from eBay declining rapidly, and much more importantly in our view, the fast-paced growth of the rest of PayPal’s payment volumes. This growth has been due to the increased adoption of its digital wallets (PayPal and Venmo) and checkout buttons. The shift to digital payments and e-commerce are significant tailwinds for PayPal. The pandemic further catalyzed these tailwinds, and we believe the move to digital payments is here to stay.”
www.BillionPhotos.com / Shutterstock.com
Based on our calculations, PayPal Holdings, Inc. (NASDAQ: PYPL) ranks 9th in our list of the 30 Most Popular Stocks Among Hedge Funds. PYPL was in 143 hedge fund portfolios at the end of the first half of 2021. PayPal Holdings, Inc. (NASDAQ: PYPL) delivered a -18.87% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
Integration of Assets, Investment in Future Secure NGM's Status as Industry Leader – Barrick Gold Corporation
Anchored by the massive Carlin and Cortez mines, NGM is building up the third Tier One asset, Turquoise Ridge, while Goldrush, a world-class project in its own right, heads up a long pipeline of quality prospects.
Elko, Nevada – Nevada Gold Mines (NGM) is demonstrating the impact of operator and majority-owner Barrick’s strategy of combining the best people with the best assets to deliver the best returns, Barrick president and chief executive Mark Bristow said here today.
Speaking at an update for local media and community leaders, Bristow said NGM – the world’s largest gold mining complex – stood out from the rest of the industry not only because of its size but because its wealth of projects and prospects secure its future as a high-quality, long-life operation for decades to come.
“The combination of the Nevada assets of Barrick and Newmont has unlocked the vast geological potential of this mineral-rich region by consolidating mines, processing facilities and landholdings. Anchored by the massive Carlin and Cortez mines, NGM is building up the third Tier One1 asset, Turquoise Ridge, while Goldrush, a world-class project in its own right, heads up a long pipeline of quality prospects,” he said.
“NGM has also built strong relations across the full spectrum of the mines’ previously neglected stakeholders, and its wide-ranging support for educational and other community development initiatives is securing its social licence as a valuable partner with Nevada and its people.”
Bristow cited Turquoise Ridge as an example of the transformative effect of asset consolidation. The high-grade underground orebody at Turquoise Ridge, then a Barrick property, was mined for years without a full understanding of its geology and was also constrained by the lack of its own processing plant. At the same time, Newmont’s neighboring Twin Creeks was facing the decline of production from its open pits and its processing facilities had never been pushed to deliver. The ramp-up of underground production at Turquoise Ridge, based on a completely new geological model, will pick up speed when its third shaft is completed next year, more than offsetting the drop in production from the now-integrated Twin Creeks. The integration of the two assets has also delivered new exploration opportunities in the gap between the two.
During the past quarter, the Goldrush project’s official Notice of Intent was published, putting NGM well on the way to permitting its next major orebody. The updated feasibility study and the successful processing of the first ore samples has strengthened confidence that additional resources will be converted to reserves later this year.
NGM continued to optimize its portfolio through the South Arturo/Lone Tree asset swap, which removed a closure liability from its balance sheet while securing additional ounces and geological upside by bringing the other 40% of South Arturo under its control. In the meantime, brownfields exploration is confirming a significant upside through prospects such as a major deposit in North Leeville and the promising Phoenix gold and copper satellite.
Bristow said NGM was continuing to invest in infrastructure capable of supporting mining far into the future. This includes advancing data analysis capabilities and reducing greenhouse gas (GHG) emissions. An example of the latter is the second phase of the TS solar power facility which will increase its solar capacity to 200MW and is the cornerstone of NGM’s commitment to cutting GHG emissions by 20% by 2025.
Reviewing the past quarter, Bristow said improved run times at all of NGM’s major processing facilities had lifted NGM’s performance while the restoration of the Carlin mill operations had set it up for a strong end to the year.
Investor and Media Relations
Kathy du Plessis
+44 20 7557 7738
Email: [email protected]
A Tier One Gold Asset is an asset with a reserve potential to deliver a minimum 10-year life, annual production of at least 500,000 ounces of gold and total cash costs per ounce over the mine life that are in the lower half of the industry cost curve.
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects, plans, or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “potential”, “will”, “continue”, “prospects”, “securing”, “strategy” and similar expressions identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, with respect to: Barrick’s plans to unlock the geological potential of NGM and secure its future as a high-quality, long-life complex for decades to come; the expected benefits and timeline for completion of NGM’s growth projects including the Goldrush and Turquoise Ridge Third Shaft projects; the ramp-up of production at the Turquoise Ridge underground; NGM’s ability to convert resources into reserves; the anticipated benefits of the South Arturo asset swap and operational improvements at the Carlin mill; NGM’s exploration strategy and planned exploration activities; Barrick’s sustainability vision, including the expected environmental benefits from the TS solar power plant and NGM’s greenhouse gas emissions reduction target; and Barrick’s partnership with Nevada, local communities and other stakeholders.
Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by Barrick Gold Corporation (the “Company”) as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation, and exploration successes; risks associated with projects in the early stages of evaluation, and for which additional engineering and other analysis is required; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary exploration permits and other permits approvals; uncertainty whether some or all of targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in the United States and other jurisdictions in which the Company or its affiliates do or may carry on business in the future; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; risks associated with artisanal and illegal mining; risks associated with new diseases, epidemics and pandemics, including the effects and potential effects of the global Covid-19 pandemic; litigation and legal and administrative proceedings; employee relations including loss of key employees; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; and availability and increased costs associated with mining inputs and labor. In addition, there are risks and hazards associated with the business of mineral exploration, development, and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.
Barrick disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
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