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Tuesday, 16 October 2018

A quick spotlight on ESG and responsible investing

** #7 A growing number of asset managers are taking environmental, social and governance issues into account when pulling the trigger on an investment, but they’re more likely to do so with public markets investments than with private equity transactions, according to research by Cambridge Associates. That’s one of the more interesting takeaways from the firm’s September study Gender lens investing: Impact opportunities through gender equity. A long teaser is linked there, and you can get the full study by handing over a bit of information about yourself.

We were reminded of the Cambridge paper as the Financial Times came out with its latest special report on responsible investing, with stories including:

The full landing page for the package is here.

World leaders point to uneven global growth as Bali meeting wraps up: Global leaders emerged from the IMF and World Bank fall meetings with apparent consensus that “a synchronized pickup in global growth” is not in the cards, Mohamed El Erian writes for Bloomberg, noting that “in a tone that contrasted with the optimism of their spring meetings in April, members of the International Monetary and Financial Committee, or IMFC, listed many fragilities, and cited a set of risks that ‘are increasingly skewed to the downside.’

Key takeaway #1: “The less optimistic outlook for the global economy comes with a long list of gathering clouds that were listed not only in the [traditional IMFC] communique but also in virtually every one of the public statements by officials from the most influential countries. I suspect the worries were even more pointed in private. They include heightened trade tensions, ongoing geopolitical concerns, tighter financial conditions that affect many emerging economies, policy uncertainty, historically high debt levels, rising financial vulnerabilities and limited policy space, which could further undermine confidence and growth prospects.”

Key takeaway #2: Markets are “undergoing a gradual transition from an overwhelmingly liquidity-driven paradigm to one that is more reflective of the underlying fundamentals. This shift is made more complicated by, in particular, divergence and trade.”

US buys Saudi story that Khashoggi was killed in an interrogation gone wrong? US President Donald Trump appears to have bought into Saudi Arabia’s trial balloon that dissident journalist Jamal Khashoggi was killed during an interrogation gone wrong. Both CNN and the New York Times cited anonymous sources yesterday saying that Saudi was prepared to acknowledge Khashoggi’s death after days of denying involvement in his disappearance, succumbing to pressure from the international community. Trump, who had threatened to take punitive measures against Saudi earlier this week, dispatched State Secretary Mike Pompeo to Riyadh to meet King Salman, who he also spoke to yesterday, Reuters reports. “The king firmly denied any knowledge of [the incident],” Trump said after. “He didn’t really know … maybe these could have been rogue killers. Who knows?” The Wall Street Journal, FT, and Bloomberg are all singing the same tune.

US stocks fluctuated amid the tension on Monday while the USD dropped to a two-week low, Bloomberg reported. The Saudi riyal fared even worse, dropping to its lowest level in two years. More high-profile speakers also continued to drop-out of Saudi’s upcoming Future Investment Initiative conference, including Ford Motor Company’s Bill Ford, the Financial Times says. JP Morgan boss Jamie Dimon had earlier bowed out, as had Uber boss Dara Khosrowshahi.

In miscellany this morning:

Whether you grew up in the US, worked there, or did college / grad school / a year abroad, odds are good you’ve shopped at Sears, the once-iconic retailer that shaped and dominated retail in the US and parts of Canada for much of the twentieth century. About a year after it went bust in Canada, the chain has filed for bankruptcy protection in the United States. A judge approved some USD 300 mn in financing to keep it open through the holiday season and give it a chance to continue in business. The only people who are happy: Real estate investment trusts in the US, which have apparently long wanted Sears out of their malls.

Also this morning:

Living with a teenage vegetarian.“On one hand, inhumane levels of animal cruelty; on the other, cheeseburgers.” (Financial Times)

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