Monthly Archives: October 2015

IASB : impairment requirement will result in fundamental change

Speaking today at a conference in London, Hans Hoogervorst, Chairman of the International Accounting Standards Board (IASB), said the forward-looking expected loss model in the new financial instruments Standard should provide investors with better insight on loan loss risks.

The conference is the third annual event for financial services institutions organised jointly by the IFRS Foundation and ICAEW. This year’s event is focussed specifically on the practical implementation of the impairment element of the financial instruments Standard, IFRS 9. The Standard was finalised in 2014 and becomes effective in 2018.

The new Standard requires banks to recognise 12 months’ expected losses on loans that perform as anticipated and full lifetime losses on loans that have experienced a significant increase in credit risk.

Read the full press release and access the speech here.

Historical cost and fair value are not as far apart as they may seem

Hans Hoogervorst, Chairman of the International Accounting Standards Board (IASB), has today delivered a speech on what he calls one of the most difficult topics in accounting—how assets and liabilities should be measured. Speaking at the IFRS Foundation’s conference in Paris, he presented high-level, general observations on when historical cost and current value measurement could be most appropriate.

When measuring an asset or a liability, different measurement models are available: historical cost and current value, which includes fair value. They are often seen to be at opposite ends of the measurement spectrum, and both have their own ‘fan clubs’ with strong views on which is the better model.

Hoogervorst outlined the benefits and challenges linked to the measurement models and said the differences between them are not as great as they may seem.

Read the full press release here.

Seminar : Global Investment Trends and the Implications for India ! , 3rd Nov 430pm IST, Mumbai

Asia Index Annual Thought Leadership Seminar  : India – Truly Emerging!

Date: TUESDAY, 3 NOVEMBER, 2015.
Time: 4:30 PM – 8:00 PM IST.
Venue: THE GALLERY, FOUR  SEASONS HOTEL, 1/136, DR. E. MOSES ROAD, WORLI, MUMBAI – 400 018.
Please register directly at the link below :  http://event.standardandpoors.com/LP=8720
Asia Index Private Limited invites you to an exclusive complimentary seminar bringing together key decision makers to discuss the factors currently shaping the Indian investment landscape. Join leading industry professionals for an evening of discussion and debate on topics including:

India’s Macroeconomic Outlook
A closer look at inflation, interest rates and equity market performance from 2015 provides insight on which factors may drive performance in 2016.

What’s Shaping the Indian Investing Arena?
Explore changing regulations, new investment vehicles and the race for FIIs in Chindia.

Global Investment Trends and the Implications for India 
What is smart beta? Will India follow global ETF trends? What are the challenges and opportunities in the Indian market?

16:30 Registration
17:00 :  Opening Remarks
Robert Shakotko, PH.D., Managing Director, S&P Dow Jones Indices
17:10 :  Welcome Address 
V Balasubramaniam,  Chief Business Officer, BSE Ltd
17:20  India’s Macroeconomic Outlook : 2015 – 2016 
Dharmakirti Joshi, Chief Ecomonist, CRISIL
17:40 :  Keynote Speaker: The Rise of ETFs in Indian Pensions
18:15 : What’s shaping the Indian Investment Arena in 2016?
•Understanding changing regulations and their impact
•Exploring new investment vehicles and techniques
•Chindia race for FIIs and what it means for India
19:00 : Global Investment Trends and the Implications for India
•A look at global hot topics including smart beta, ESG and low volatility
•The differences between the global ETF market and its Indian counterpart
•Challenges and opportunities in the Indian market
19:45 :  Thank You from S&P Dow Jones Indices
20:00 :  Dinner & Cocktails 
Thanks and Regards
Team AIWMI
+91 8097 66 1200/1201

Ind-Ra Friday Invite: Macro-economic headwinds – What lies ahead for India?, 30 Oct, 4pm, BKC

India Ratings and Research invites you to for a Hi-Tea with Dr. Devendra Kumar Pant, Chief Economist & Head Public Finance to discuss the current macro-economic affairs on October 30, 2015 at 4 PM.

Register now

With collapse of the global commodity prices and a stable government at the centre, what is in store for the Indian Economy?

The issues to be discussed:

  • Update on macro-economic outlook for FY16
  • How consumption story had evolved?
  • An insight rural economy

Venue 

India Ratings and Research Corporate Headquarters, Wockhardt Towers, West Wing, Level 4, Bandra Kurla Complex, Bandra E, Mumbai 400 051.

We have limited seats. Register today.

Live Streaming: 4th Annual Municipal and Global Bond Forum – October 28, 9am ET

Market volatility. Rate uncertainty. Bond liquidity. Defaults. Times are unpredictable for global bond investors.

Register now

Join us as S&P DJI hosts our 4th Annual Municipal and Global Bond Forum that will explore the impact of economic and financial trends on Municipal and Global Bond markets. Hear industry experts share their ideas on how to navigate pitfalls and identify opportunities for bond investors against a backdrop of global growth uncertainty, market volatility, and Fed rate policy.

This year’s expanded two-part program includes:

Morning: Global Bond Forum- Global Bonds 2.0
Examine the growing transparency of the bond market, critically evaluate recent research around liquidity, and dissect bond duration target investing.

Afternoon: 4th Annual Muni Bond Forum-  Show Me the Muni
Explore the benefits of low-cost muni bond ETFs, whether liquidity in this market signals crisis or opportunity, the potential blowback from a Puerto Rico default, and muni laddering as a tool to deal with these issues.

WEDNESDAY.  OCTOBER 28, 2015

Detailed Agenda

 

MORNING SESSION: GLOBAL BONDS 2.0
9:00 AM – 12:45 PM EDT
AFTERNOON SESSION: SHOW ME THE MUNI
2:00 PM – 5:15 PM EDT
Register now

 

Managing culture with risk management techniques

Managing culture with risk management techniques

The interaction between governance, culture and performance is increasingly a topic around asset owner board tables. But little has been written about the relationship between culture and the financial crisis, and how to change culture in financial services organisations. Andrew Lo, professor of finance at MIT, has come up with a proposal to change culture by drawing on traditional risk management protocols used at major financial institutions.

Is the unthinkable becoming routine?

Globally, interest rates have been extraordinarily low for an exceptionally long time, in nominal and inflation-adjusted terms, against any benchmark. Such low rates are the most remarkable symptom of a broader malaise in the global economy: the economic expansion is unbalanced, debt burdens and financial risks are still too high, productivity growth too low, and the room for manoeuvre in macroeconomic policy too limited. The unthinkable risks becoming routine and being perceived as the new normal.

This malaise has proved exceedingly difficult to understand. The chapter argues that it reflects to a considerable extent the failure to come to grips with financial booms and busts that leave deep and enduring economic scars. In the long term, this runs the risk of entrenching instability and chronic weakness. There is both a domestic and an international dimension to all this. Domestic policy regimes have been too narrowly concerned with stabilising short-term output and inflation and have lost sight of slower-moving but more costly financial booms and busts. And the international monetary and financial system has spread easy monetary and financial conditions in the core economies to other economies through exchange rate and capital flow pressures, furthering the build-up of financial vulnerabilities. Short-term gain risks being bought at the cost of long-term pain.

Addressing these deficiencies requires a triple rebalancing in national and international policy frameworks: away from illusory short-term macroeconomic fine-tuning towards medium-term strategies; away from overwhelming attention to near-term output and inflation towards a more systematic response to slower-moving financial cycles; and away from a narrow own-house-in-order doctrine to one that recognises the costly interplay of domestic-focused policies. One essential element of this rebalancing will be to rely less on demand management policies and more on structural ones, so as to abandon the debt-fuelled growth model that has acted as a political and social substitute for productivity-enhancing reforms. The dividend from lower oil prices provides an opportunity that should not be missed. Monetary policy has been overburdened for far too long. It must be part of the answer but cannot be the whole answer. The unthinkable should not be allowed to become routine.

 

Read full text

S&P Video – Top Investor Questions For 2015: Accounting And Governance

In this CreditMatters TV segment, Standard & Poor’s Senior Director Shripad Joshi answers some of the most frequently asked questions by investors concerning accounting and governance for corporate nonfinancial companies in 2015.Watch

ADB : Hometown Investment Trust Funds: An Analysis of Credit Risk

This paper underlines the importance of small and medium-sized enterprises, introduces hometown investment trust funds as a means of financing them, and proposes a scheme to evaluate their credit risk.

In Asia, small and medium-sized enterprises (SMEs) account for a major share of employment and dominate the economy. Asian economies are often characterized as having bank-dominated financial systems and underdeveloped capital markets, in particular venture capital markets. Hence, looking for new methods of financing for SMEs is crucial. Hometown investment trust funds (HIT) are a new form of financial intermediation that has now been adopted as a national strategy in Japan. In this paper, we explain the importance of SMEs in Asia and describe about HITs. We then provide a scheme for the credit rating of SMEs by employing two statistical analysis techniques, principal components analysis and cluster analysis, and applying various financial variables to 1,363 SMEs in Asia. Adoption of this comprehensive and efficient method would enable banks to group SME customers based on financial health, adjust interest rates on loans, and set lending ceilings for each group. Moreover, this method is applicable to HITs around the world.  Read more

London, 22nd October, Roundtable on Climate Bonds Standard for Agriculture, Forestry and Other Land Use (AFOLU) Investment

Invitation: London, 22nd October, Roundtable on Climate Bonds Standard for Agriculture, Forestry and Other Land Use (AFOLU) Investment

Roundtable for asset owners and managers, prospective issuers and underwriters

The Climate Bonds Initiative, Banking Environment Initiative (BEI) and Swiss based Clarmondial invite you to a Roundtable on investment opportunities in Agriculture, Forestry and Other Land-Use (AFOLU) under the Climate Bonds Standard.

The Roundtable is kindly hosted by Northern Trust.

Date: Thursday 22 October, 8-10am; Breakfast will be served 
Venue: Northern Trust Office, 50 Bank St. Canary Wharf, London, E14 5NT
Google Map Ref
Access via DLR or Jubilee Line 
RSVP to: info@climatebonds.net
Who Should Come: This event is designed for asset owners and managers, prospective issuers and underwriters
Keynote Speakers: Tanya Havemann, CEO Clarmondial, and Justine Leigh-Bell, Climate Bonds Manager-Standards and Certification

  
Tanja Havemann      Justine Leigh-Bell
The event will include a presentation on the AFOLU Guidance. It will also include an update on the green bonds market and investment opportunities for the sector.

The University of Cambridge Institute for Sustainability Leadership (CISL), who host the Secretariat for the BEI, will facilitate proceedings under the Chatham House rules.

Places are strictly limited and will be allocated on a first come first served basis.
Please RSVP by Tuesday, October 20.

 

Background to AFOLU

The BEI and Climate Bonds Initiative have partnered to accelerate consensus on green bond standards and therefore contribute to the stable growth of the green bond market.

Issuance by governments, corporates and financial institutions in the AFOLU sectors could relate to a wide variety of investments, including sustainable improvements in productivity of land or fisheries and or financing programmes for suppliers and associated infrastructure or technology requirements.

Recent analysis has identified over US$ 4bn in outstanding bonds aligned with the AFOLU sector. The International Institute for Applied Systems Analysis estimates that future financing needs focused on deforestation and land degradation could be up to US$ 50bn per year by 2020.

What is the Climate Bonds Standard?

The Climate Bonds Standard is the only international certification standard for the bond market. There are over 80+ organisations involved in its development with member organisations holding over US$ 34tn in Assets Under Management.

The AFOLU guidance has been led by a Technical Working Group, comprised of internationally recognized experts, complemented by an Industry Working Group of over 30 leading corporations.

The AFOLU Standard is kindly supported by Credit Suisse, the Swiss Government and Rabobank.

ADB: Evidence on Investor Compensation for the Credit Risk of Structured Products

This presentation given on 6 July at ADBI analyzes the pricing of issuer credit risk in retail structured products. Since the default of Lehman Brothers, investors have been compensated for the counterparty risk they bear if products are not constructed to provide an implicit “credit enhancement,” i.e., if they do not feature a sufficiently high correlation between the promised payout and the issuer’s financial health.

Alexander Wagner is an associate professor of finance at the University of Zurich and a faculty member of the Swiss Finance Institute. View the video here

Why investors should look beyond a company’s financials ?

How social and environmental issues impact a company’s bottom line is crucial for investors, but too often that information is not disclosed.

Sustainability reporting — the disclosure of non-financial information into financial reports — is becoming routine in Europe. Last year, the E.U. adopted an amendment to its general accounting directives, requiring that certain large companies include reporting of “sustainability” factors—such as environmental aspects, social and employee-related matters, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors—in their management reports.

 

Read more

Did you know that CCRA program includes  detailed principles on ESG analysis for Credit…. Find out more at www.aiwmindia.com/ccra

Webinar : UP IN SMOKE: LESSONS LEARNED FROM THE VOLKSWAGEN SCANDAL, Oct 15, 930am ET

The Volkswagen (VW) scandal caught many investors off guard. The repercussions are likely to be felt across the automobile industry for many years to come affecting companies and investors alike. The scandal shines a light on the need for greater corporate transparency. It also ignites the debate over the value of ESG data to detect signals which may be missed by conventional analysis.

Join our panel of experts to examine what ESG data and research can tell us about the scandal. The lessons learned. What are the possible repercussions for automobile industry and what signals are available to investors to potentially detect future black swans.

Register Now

SPEAKERS

Chair – Linda-Eling Lee, Global Head of ESG Research, MSCI
Alan Brett, Head of Corporate Governance Ratings Research, MSCI
Arne Klug, Senior Analyst for the Automobiles Industry, MSCI
Ian McVeigh, Head of Governance, Jupiter Asset Management

Webinar: Extensions of CreditMetrics Methodology: Developing Deeper Credit Risk Insights, OCT 15, 11AM EDT

WEBINAR: EXTENSIONS OF CREDITMETRICS METHODOLOGY: DEVELOPING DEEPER CREDIT RISK INSIGHTS

Please join us for a webinar focusing on RiskMetrics® CreditManager, and the underpinning CreditMetrics methodology, which has been used by practitioners for years to help quantify credit migration and default risk at horizons of one year and longer.

Recent extensions to the CreditMetrics methodology allow for deeper insights into credit risk.

Agenda Topics

  • Parameter Selection and Validation: Is Definition of ‘Risk’ Appropriate in Terms of Quantile Used and Correlation Modeled?
  • Correlated Recovery: A Must, or Too Much? Should Recovery Rates Depend on Market Factors?
  • Concentration Add-Ons: How Much Risk is Driven by Concentration?
  • Interpreting Economic Capital Contributions: What Factors Drive Risk at a Given Quantile?

REGISTER NOW

Webinar : Cross-border private placement; new trends, new issuers October 14 2015 | 4:00pm GMT

Cross-border private placement; new trends, new issuers
October 14 2015 | 4:00pm GMT (London time)

Register online

REMEMBER even if you can’t make the live webinar you can still register and listen to it at a time and place that’s convenient for you.

Ind-Ra Webinar: Indian Corporates – Decade High Leverage Meets Dis-inflation The Long Road to Credit recovery, October 14, 2015 Time: 1:30 PM IST

The credit metrics of the 500 largest listed  corporate borrowers has not shown any meaningful improvement. In fact some credit metrics continued to deteriorate well into FY16. The recovery of corporate credit is facing challenges due to disinflation in the economy. As such corporate growth may continue to surprise on the downside since some corporates are in active deleveraging mode and are not chasing growth like in the past. Additionally, the weaker corporates are facing a curtailed ability to access capital (debt/equity) which has been stifling corporate performance.

Join us for a webinar on “Decade High Leverage Meets Dis-inflation- The Long Road to Credit recovery” to discuss our latest research and analysis on this issue on October 14, 2015 at 1:30 PM IST.   Click on Register Now

India Ratings and Research in a report titled Deleveraging by Indian Corporates an uphill task published in December 2014 mentioned that to even moderately reduce leverage levels, the 500 largest borrowers in India will require around 4 years or an immediate equity infustion of INR 7 lakh crore.

Back in July 2014, India Ratings in a report had highlighted that the profitability of Indian corporates was unlikely to improve. It was possibly the first report, highlighting deterioration in the earnings of India Inc.

India Ratings was also the first agency to preempt the concentration risks in banks, FCCB redemption pressure, refinancing risk and corporate earning woes.

In this webinar, we will also cover the corporate growth trajectory ahead and share insights about the small yet growing number of companies, whose credit profile is steadily improving.

Click on Register Now

S&P Webinar : The Low Volatility Effect in Global Equities, Oct 13, 2 PM EDT

Given the broad range of low volatility indices available in the market, advisors have the advantage of dialing up or down volatility exposure on a global scale.Can low volatility strategies be applied across global benchmarks with the same success as in the U.S.?

Register now to explore

    • Where theory meets application –a pragmatic look at domestic and global equity exposures through the lens of volatility.
    • The effects of incorporating low volatility strategies to varying degrees on a range of portfolio holdings.
    • Volatility 2.0: combining currency hedging with low volatility strategies.

Speakers:

Vinit Srivastava, Director, Strategy Indices, S&P Dow Jones Indices

Scott Kubie, Chief Investment Strategist, CLS Investments

John Feyerer, Vice President, Director of Equity ETF Product Strategy,Invesco PowerShares

Speaker Bios

Webinar FINRA: Fixed Income Report Cards Online Demo – 10/22

Fixed Income Report Cards Demonstration
October 22, 2015
2:30 p.m. – 4:00 p.m.

FINRA is hosting a WebEx presentation discussing new and updated fixed income-related Report Cards. This session provides an overview of these Trade Reporting and Compliance Engine (TRACE) and municipal report cards, presents the features and benefits of each, and includes suggestions for how firms can use them to support their compliance activities. FINRA also highlights the implementation of a monthly member outreach program relating to report card statistics.

The WebEx session is designed for those who use TRACE or municipal report cards.

Register for this event.

If you have any questions you would like addressed during the presentation, please email them in advance to tracefeedback@finra.org.

Please note:
Since there are a limited number of lines available for this call, please register as soon as possible and plan to share a phone line with others at your firm to help us maximize participation.

 

S&P 2016 Global Economic Outlook – Live Video Webcast And Q&A, Oct 14, 11am ET

2016 Global Economic Outlook

Live Webcast and Date & Time: Wednesday October 14, 2015 11:00 a.m. EDT

 

Please join the Global Economics Team from Standard & Poor’s Ratings Services on Wednesday, October 14, 2015 at 11:00 a.m. Eastern Daylight Time for an interactive, live video Webcast and Q&A on highlights from their 2016 Global Economic Outlook.

Register for the Webcast

Speakers are:

Beth Ann Bovino
Chief Economist, Untied States
Standard & Poor’s Ratings Services
Joaquín Cottani
Chief Economist, Latin America
Standard & Poor’s Ratings Services
Paul Gruenwald
Chief Economist, Asia Pacific
Standard & Poor’s Ratings Services
Jean-Michel Six
Chief Economist, Europe, Middle East & Africa
Standard & Poor’s Ratings Services
Moderated by:
John Kingston
President
McGraw Hill Financial Global Institute

A replay will be sent to all registrants.

 

Watch Live: World Economic Outlook Press Conference, Tuesday, October 6, 2015, 10:00 AM EDT

Watch the release of IMF’s World Economic Outlook Tuesday, October 6, 2015, 10:00 AM EDT you can plan to follow our press conferences, panel discussions, and other events when they happen!

The live webcast of the press conference for the World Economic Outlook will be available here: http://www.imf.org/external/pubs/ft/weo/2015/02/index.htm?email=true

The last released report in July can be accessed here

http://www.imf.org/external/pubs/ft/weo/2015/update/02/