Sustainably higher rates of return in combination with, in historic terms, lower default risks – this is the profile that corporate bonds from emerging economies offer in contrast to the bonds of European and US firms. Corporate bonds denominated in US dollars should therefore be a strategic component of any bond portfolio. Within the increasingly mature and growing bond markets of emerging markets, the corporate bond sector offers investors additional diversification options and in many cases great investment opportunities with a higher earnings potential.
(IFR) – The Bank of England will soon publish final guidance for how much loss-absorbing debt Britain’s major banks will each need to hold, as part of plans to better protect savers and taxpayers.
It is a key issue for the capital planning of the likes of HSBC, Barclays and Standard Chartered, and could see an additional £150bn of loss-absorbing debt issued.
An increasing demand for access to the credit market is driving innovation in credit-market products like ETFs, credit default swaps and futures, according to a report.
Approximately 90% of US-based credit investors interviewed by Greenwich Associates said their ability to trade has been impacted by reduced liquidity in the credit market.
Demand for credit exposure remains strong and has been driven by non-traditional credit participants’ recognition of the importance of credit for portfolio risk management, the report said.
Read more : Bank for International Settlements (5/2017)
Invitation: Delhi Roundtable: Green Bonds for Clean Energy: 19th May: Joint Event: Indian Green Bonds Council & USAID: Supported by Ministry of New & Renewable Energy & Climate Bonds Initiative
Growing Green Bonds for Clean Energy-Roundtable
When: 10:30am -14:30pm Friday 19th May 2017.
Where: Casuarina, India Habitat Centre, IHC Complex, Lodi Road, Delhi.
What’s it all about:
The Government of India has set a national clean energy target of 175 GW of renewable energy capacity by 2022, of which 57 GW has been installed so far.
Green Bonds have started playing a role in financing this capacity, and are expected to play a significant role in funding future renewable energy capacity addition.
The Roundtable will explore how an Indian green bonds market that benefits clean energy can be accelerated.
Hear about the experience of the pioneer Indian green bond issuers, the expectation of Indian institutional investors and about the support provided by USAID to prospective issuers under PACE-D TA program.
Is this Roundtable important for you?
Yes, if you are an asset owner, fund manager, bank, market regulator, fixed income or debt specialist, clean energy supplier or global infrastructure investor.
Registrations Now Open
A limited number of places are open to participate in the Roundtable.
The Last Word
Don’t miss this chance to engage and discuss first hand the prospects for clean energy and green bonds investment to support India’s climate plans and 175GW by 2022 renewables target.
We’ll see you in Delhi on the 19th.
Till next time,
Single factor “smart beta” indicized strategies that were once exclusive to the realm of active management. Multifactor indexing is beginning to garner much interest as the newest chapter of index innovation.
What is the value of ALM under the new regime of IRRBB?
Who runs a bank today: The treasurer, the risk manager or the regulator?
Date: May 15, 2017
Time: 3:00 p.m. UK
The latest guidelines illustrate the regulatory concerns of the current low interest rate environment. Our experts will discuss how interest rate management takes into account the treasury, the risk and the regulatory view.
Join this webinar and discover how you can:
- Strategically position against interest rate movements by optimizing the funding mix.
- Leverage your hedging strategies to effectively mitigate interest rate risk.
- Understand the new regulatory approach, both by Basel and the EU, to interest rate risk with a “non-mandatory” standardized approach.
- Understand technology impacts to achieve sustainable profitability under the new “dynamic earnings simulation and static value effect regime.”
- Colin Johnson, Head of Prudential Risk, Charter Court Financial Services
- Hadrien Van Der Vaeren, Manager, Avantage Reply
- Marco Seeliger, Director Product Management, Ambit Focus, Risk and Compliance
- Sven Ludwig, PRMIA Dusseldorf Regional Director and PRMIA Frankfurt Advisory Committee
In an earlier blog post, we provided a brief survey of recent monetary policy cycles in the U.S., showing that a higher Fed funds rate doesn’t necessarily affect the yield on Treasury bonds in the same way. Policy rate changes affects short-term bond yields much more directly than longer-term yields (see Exhibit 1). We argued that the difference in impact is likely a result of other macroeconomic factors that affect longer-term rates and segmentation in the market. In this follow up note, we focus our attention on the shape of the yield curve and returns over various tightening cycles.
As the importance of ESG investing grows, especially in the U.S., the ability to quantify and measure the impact of an ESG-incorporated portfolio will become more relevant. In evaluating performance, traditional investors focus on standard metrics such as return, risk, tracking error, and other familiar modern portfolio theory statistics; however, ESG investors require all of these metrics plus more. They seek ways to quantify the impact of their ESG investing; therefore, it’s beneficial to know the basics of how providers are reporting impact.
- How market participants are addressing the issues of IFRS 9 – a survey of the landscape in Asia
- Balancing different approaches in calculating Expected Credit Losses
- Lessons learned from Europe – approaches and challenges
- Implementation considerations in Asia – case study
Factor-based investing is a widely used approach in equity markets but far less known and used in bond markets. Yet compelling evidence is emerging of the value of applying factor investing to bonds.
The study ‘Factor Investing in the Corporate Bond Market’ by Patrick Houweling and Jeroen van Zundert finds that identifying corporate bond factors and then combining them in multi-factor portfolios may help enhance risk-adjusted returns. This study, by two investment practitioners, should interest not only bond investors, but also all institutional investors seeking to harvest the various premia offered in financial markets.
|Respondents to IACPM’s latest Credit Outlook survey note a certain amount of complacency that has settled into the financial markets: Credit spreads are tight and there is little or no risk premium, even while markets confront a number of challenging issues.
Most crisis managers agree: The world became a riskier place to do business in 2016. With cyber crime on the rise, the volume of social media undermining their ability to manage reputation and political disruption causing uncertainty within boardrooms, last year presented a minefield of risks. And it’s only to get worse over the next three years managers believe.
In his January blog post entitled “Try a TIPS Mixer in Your Equities Cocktail,” Phillip Murphy described the potential benefits of including Treasury Inflation-Protected Securities (TIPS) in one’s portfolio. In this blog aimed at Millennials, I would like to propose an easy way to build up a 30-year TIPS portfolio for retirement.
CRIF Ratings (‘CRIF’) has analyzed the evolution of the financial structure of more than 15,000 Italian Small and Medium Enterprises (SMEs), with a turnover between EUR10m and EUR500m over the last decade. The main finding of the study is the lack of financial flexibility that in CRIF’s view is a major factor constraining the companies’ growth.
Limited banks disintermediation, large recourse to short term debt and a relatively little amount of cash on balance sheet compared to short term debt are the most common features of SMEs’ financial structures. As a consequence, the financial profile of Italian SMEs remains generally weak and too much reliant upon the banking system to support the short and long term financial needs.