Capital Market – Premudraja http://premudraja.net/ Mon, 26 Sep 2022 02:08:52 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://premudraja.net/wp-content/uploads/2021/06/icon-4-150x150.png Capital Market – Premudraja http://premudraja.net/ 32 32 After the economic storm, a bright future awaits https://premudraja.net/after-the-economic-storm-a-bright-future-awaits/ Mon, 26 Sep 2022 02:08:52 +0000 https://premudraja.net/after-the-economic-storm-a-bright-future-awaits/ CAI MENG/CHINA DAILY At present, the country’s economy is facing many serious challenges. Externally, the Russian-Ukrainian conflict, global supply chain issues and disputes with the United States are weighing on confidence. Internally, resurgences of COVID-19 and various long-term factors such as debt risks facing the real estate market and financial institutions as well as weakening […]]]>

CAI MENG/CHINA DAILY

At present, the country’s economy is facing many serious challenges. Externally, the Russian-Ukrainian conflict, global supply chain issues and disputes with the United States are weighing on confidence. Internally, resurgences of COVID-19 and various long-term factors such as debt risks facing the real estate market and financial institutions as well as weakening investor confidence in the market are creating uncertainty.

Indeed, many short-term difficulties are in sight, but the medium and long-term prospects are more promising. China has become the world’s second largest economy after more than 40 years of reform and opening up. And it will incubate more supply and demand growth opportunities than any other major economy over the next five to 10 years.

For example, from the supply side, there is a relatively high national savings rate, a complete industrial system, abundant human capital accumulated over 40 years, and institutional dividends from further reforms. From a demand perspective, as a nation with a large consumer market dominated by 400 million middle-income people, China has enormous consumer potential and growing trade ties with economies involved in the Belt and Road Initiative. It is fair to say that the medium to long-term growth prospects of the Chinese economy are promising.

But why is there still pessimism in the market? The answer depends on whether the aforementioned possibilities come true, whether there will be an inflection point in current development trends, or whether things will pick up speed soon. Everything therefore seems hazy and the current sentiment weighs on any motivation for investment and consumption. Therefore, medium and long-term sustainable development depends on whether the main problems in the functioning of the national economy lead to unclear expectations and a lack of confidence, and whether or not they can be resolved in a timely manner.

Trust of private actors

Private enterprises play a vital role in China’s economy, as evidenced by more than 40 years of rapid growth. However, some private companies are currently shifting their focus from physical activities to financial players, as many of them are struggling to resolve funding issues and cope with strict market surveillance, which dampens their expectations and entrepreneurial enthusiasm.

If we take the example of private investment, the ratio of private investment to total investment over the past 10 years, although lower, is still above 50%. However, the year-on-year growth rate of private investment itself, after a double-digit growth of 15.8% in 2014, started to slide to 8.8% in 2015 and then to 2% in 2016. In 2020 and 2021, both -annual average is less than 4 percent, and in the first half of this year — 3.5 percent.

The problem is worrisome, as other issues follow in the wake of investment declines: lack of tax revenue, slower GDP growth, declining employment and incomes, and possibly declining consumption by entire households. To solve the problem, which cannot be solved overnight, the government should focus on institutional reforms to help restore market confidence.

Therefore, the government should better protect the legitimate rights and interests of private companies. Governments at all levels, including ministries and commissions, should redouble their efforts to ensure that the various business entities compete openly, fairly and equitably while respecting the regulations and trade policies that have been formulated.

Also, the government should always have a clear view of the capital markets. The capital market must be well guided to better support economic growth, as it is essential to make good use of different types of financing to advance the market economy.

In previous years, there has been a “disorderly expansion” of capital observed in the sector, one of the main causes of which was the absence of various related regulations. To this end, it is necessary to further improve the regulatory systems according to the different types of capital and existing companies.

Consumption and livelihoods

According to consumption figures recorded in recent years, consumption’s contribution rate to GDP increased from 56.3% in 2014 to 65.4% last year, and reached 69.4% in the first quarter of this year. There is no doubt that consumption is playing an increasingly crucial role in driving economic growth. However, the sector has been under pressure and has seen declines in recent years.

After annual growth of 10.4% in household consumption in 2018, the segment recorded single-digit growth. The average growth rate in 2020 and 2021 is above 6%, while in the first half of the year, real consumption per capita increased by only 0.8% and the retail sales growth index fell by 0.7%.

It is common knowledge that the vitality of production is the key to employment, income and consumption, and the weakening of consumption has an effect on production, directly affecting the stability of economic growth and employment. In this respect, residential income, as we can see, is an important factor limiting consumption growth. And the continuous improvement of people’s living conditions is a fundamental issue directly related to the construction of a unified market and the smooth operation of domestic circulation. It is also a crucial task amid basic structural adjustments as China, as the world’s second-largest economy, strives to achieve sustainable development.

As we delve deeper into this question, we need to know what prevents consumers from increasing their consumption. According to the China Statistical Yearbook 2021, there are 870 million low-income people earning less than 2,000 yuan ($281.8) per month, and whose consumption power is understandably quite limited. Middle-income people, although they number 380 million and earn between 2,000 and 5,000 yuan per month, also keep their money due to budgetary problems concerning children’s schooling, the possibility of heavy medical bills, real estate and care for the elderly, which “scare” them from spending too much too.

To unleash the consumer power of these two consumer groups with a population of over a billion, political support is absolutely necessary, such as providing stable jobs and accelerating distribution reforms.

Fight against hidden risks

China is at a critical point as its growth slows, while the economy still has to suffer from structural adjustments and digest past stimulus, meaning risk reduction will remain a priority area for some time to come.

As we can see, there are potential risks in two sectors that should be better monitored: corporate debt and a sluggish real estate market.

In 2021, the total social finance stock raised in the market was 314.13 trillion yuan. Excluding government bonds, residential loans and interest-free equity financing, the stock of interest-bearing financing in the corporate sector was 180.48 trillion yuan. If weighted by an average lending interest rate of 4.95 percent in 2021, companies would have to pay 8.93 trillion yuan in interest all last year. If the principal of each loan is repaid over an average period of three years, the principal repayment for that year would be 60.16 trillion yuan. So, in this case, in 2021, a total of 69.09 trillion in principal and interest will have to be repaid.

One wonders how much revenue a business needs each year to repay its principal and interest. In 2021, the operating profit of industrial enterprises above a fixed size was 127.92 trillion yuan, with a repayment capacity of 185.15%. Operating income always contains operating costs, among others, with operating costs usually accounting for 50-70% of operating income, not to mention that companies also have to pay taxes. Considering these factors, one can see the seriousness of the problem, reflecting the key role of monetary backers in the past and also in the future.

The second is real estate. The current situation in the sector is grim. Investment in property development, which accounts for a quarter of total investment, fell 5.4% year-on-year in the first half. Property sales fell 22.2%, home sales fell 28.9% and new construction fell 34.4%. Based on last year’s negative growth, the area of ​​land purchased fell 48.3% in the same year-over-year period.

Housing market instability has become an extremely important and urgent issue for China to address, and it has become a fundamental issue affecting all aspects related to market stability. And for this to be fixed, more policies would have to be perfected for sure.

It is also certain that some adaptation time will be necessary. And there is an even longer way to go to solve the problem, release the risks hidden behind the market and maintain long-term momentum. This is a tricky question, but one that will yield long-term benefits if well managed and supported in the short term.

The writer is chairman of the China Chief Economists Forum and a former adviser to the State Council, the country’s cabinet. This article is a translated version of an editorial by the author of CEF.

Opinions do not necessarily reflect those of China Daily.

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BMO Capital Markets raises Intact Financial (TSE:IFC) price target to C$230.00 https://premudraja.net/bmo-capital-markets-raises-intact-financial-tseifc-price-target-to-c230-00/ Fri, 23 Sep 2022 18:16:42 +0000 https://premudraja.net/bmo-capital-markets-raises-intact-financial-tseifc-price-target-to-c230-00/ Intact Financial (TSE: IFC – Get a rating) saw its price target raised by BMO Capital Markets research analysts from C$220.00 to C$230.00 in a report on Friday, BayStreet.CA reports. BMO Capital Markets’ price target would suggest a potential upside of 16.44% from the company’s previous close. A number of other equity analysts have also […]]]>

Intact Financial (TSE: IFC – Get a rating) saw its price target raised by BMO Capital Markets research analysts from C$220.00 to C$230.00 in a report on Friday, BayStreet.CA reports. BMO Capital Markets’ price target would suggest a potential upside of 16.44% from the company’s previous close.

A number of other equity analysts have also recently commented on IFC. Cormark lowered its target price on Intact Financial from C$210.00 to C$200.00 in a Tuesday, August 2 report. National Bankshares raised its price target on Intact Financial from C$227.00 to C$230.00 and gave the stock an “outperform” rating in a Friday, July 29 research report. Raymond James raised his price target on Intact Financial from C$206.00 to C$229.00 and gave the company a “Strong Buy” rating in a Tuesday, August 2 research report. TD Securities raised its price target on Intact Financial from C$215.00 to C$220.00 and gave the company a “buy” rating in a report released Friday, July 29. Finally, Scotiabank raised its price target on Intact Financial from C$210.00 to C$215.00 in a report on Friday. Eight research analysts gave the stock a buy rating and two gave the stock a strong buy rating. According to MarketBeat.com, the stock currently has a consensus buy rating and an average target price of C$215.64.

Intact Financial Trading down 0.6%

Shares of Intact Financial traded at C$1.28 midday Friday, hitting C$197.52. 166,485 shares of the company were traded, compared to its average volume of 389,465. The stock has a 50-day moving average of C$192.24 and a 200-day moving average of C$185.54. The company has a debt ratio of 30.85, a quick ratio of 0.27 and a current ratio of 0.44. The company has a market capitalization of C$34.63 billion and a PE ratio of 13.65. Intact Financial has a 12-month low of C$158.00 and a 12-month high of C$205.40.

Intact Financial (TSE: IFC – Get a rating) last released its quarterly earnings data on Thursday, July 28. The company reported EPS of C$7.29 for the quarter, beating the consensus estimate of C$2.84 by C$4.45. The company had revenue of C$5.34 billion for the quarter. As a group, equity analysts expect Intact Financial to post EPS of 13.0600009 for the current fiscal year.

Insider buying and selling at Intact Financial

In addition, Chief Executive Anne Fortin sold 350 shares of the company in a transaction that took place on Thursday, August 11. The stock was sold at an average price of CA$191.39, for a total transaction of CA$66,986.50. As a result of the sale, the insider now owns 8,936 shares of the company, valued at approximately C$1,710,261.04. In other Intact Financial news, Chief Executive Louis Marcotte sold 4,000 shares of the company in a trade dated Tuesday, August 23. The shares were sold at an average price of CA$194.91, for a total value of CA$779,640.00. Following the completion of the transaction, the insider now directly owns 26,155 shares of the company, valued at approximately C$5,097,871.05. Additionally, senior officer Anne Fortin sold 350 shares in a trade dated Thursday, August 11. The stock was sold at an average price of CA$191.39, for a total transaction of CA$66,986.50. As a result of the sale, the insider now owns 8,936 shares of the company, valued at approximately C$1,710,261.04.

About Intact Financial

(Get a rating)

Intact Financial Corporation, through its subsidiaries, provides property and casualty insurance products to individuals and businesses in Canada, the United States, the United Kingdom, Ireland, the rest of Europe and the Middle -East. It offers personal auto insurance; insurance for motor homes, recreational vehicles, motorcycles, snowmobiles and all-terrain vehicles; personal property insurance, such as the protection of homes and their contents against risks, including fire, theft, vandalism, water damage and other damage, as well as coverage for civil liability; and property coverage for renters, condominium owners, non-owner occupied residences and seasonal residences.

See also

Analyst Recommendations for Intact Financial (TSE: IFC)

This instant alert was powered by MarketBeat’s narrative science technology and financial data to provide readers with the fastest and most accurate reports. This story was reviewed by MarketBeat’s editorial team prior to publication. Please send questions or comments about this story to contact@marketbeat.com.

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Is China done with the repression of its market? Ask for Fosun. https://premudraja.net/is-china-done-with-the-repression-of-its-market-ask-for-fosun/ Thu, 22 Sep 2022 02:14:10 +0000 https://premudraja.net/is-china-done-with-the-repression-of-its-market-ask-for-fosun/ Global investors these days are wondering if Beijing has moved to ease a year-long regulatory crackdown that cost them more than $1 trillion in losses. After all, China makes up about a third of the emerging market benchmark. It’s just too big to ignore. In the absence of a clear policy statement, asset managers have […]]]>

Global investors these days are wondering if Beijing has moved to ease a year-long regulatory crackdown that cost them more than $1 trillion in losses. After all, China makes up about a third of the emerging market benchmark. It’s just too big to ignore.

In the absence of a clear policy statement, asset managers have resorted to reading tea leaves. For example, a deal that would allow the US securities watchdog to review the audit documents of Chinese companies listed in New York in Hong Kong could be a sign that China is once again keen to attract investors. Foreign investments. Beijing may also attempt to appease capital markets by re-listing Didi Global Inc. and Alibaba Group Holding Ltd.’s fintech subsidiary, Ant Group Co.

So far, the signals are mixed. Take the housing market, where local governments have flip-flopped. Last Thursday, industrial hubs such as Qingdao and Suzhou removed restrictions on buying second-hand homes and non-residents respectively, only to roll back the next morning. These setbacks have prompted investors to conclude that President Xi Jinping’s mantra that housing should be lived in, not speculated upon, remains firmly in place. As such, August’s mini-rally of real estate developer high-yield dollar bonds quickly ran out of steam. Shanghai-based private equity giant Fosun International Ltd. and the French resort group Club Med. Its stocks and bonds have recently seen strong sales as global ratings agencies downgraded the company’s rating, citing refinancing risks.

These risks reflect investors’ concerns about interference from government authorities. Last week, Fosun’s Communist Party internal secretary visited the Beijing branch of Sasac – the State Council’s Public Assets Supervision and Administration Commission – the company said in a statement.

The powerful agency has recently witnessed selling pressures at some of its portfolio companies. In early September, a subsidiary of Fosun pledged a 7.9% stake in Beijing Sanyuan Foods Co. to a brokerage firm. Sanyuan’s main shareholder is a state-owned company directly supervised by the Beijing Sasac.

Fosun said Beijing Sasac has conducted a routine information-gathering investigation with the company, and the agency has already sent such notices to other companies. The two sides held in-depth exchanges on the long-term cooperation between Fosun and Beijing’s state-owned enterprises.

In another era, investors might have simply dismissed Fosun’s Sasac visit. But after a deadly crackdown, where little-known government agencies came out of nowhere to wipe billions of dollars off the market value of companies – think of the cybersecurity watchdog’s hawkish stance that ultimately led to the delisting of the giant Didi from New York – traders are naturally capricious.

If we use the loan-to-value ratio as a measure of financial security, at 39%, Fosun’s balance sheet is healthy for an investment holding company. However, with insufficient liquidity and access to the closed dollar bond market, Fosun must rely on bank loan refinancing and the rapid disposal of assets to meet its short-term obligations. About 53% of its debt will mature within a year, according to S&P Global Ratings. In other words, Fosun’s ability to quickly dispose of its investments is crucial.

With just 117 billion yuan ($17 billion) in debt, Fosun is nowhere near the height of indebted Chinese developers. However, the company is important because it is a key barometer of the high yield corporate bond market. Last year, when property developers collapsed – around a third of the top 100 builders defaulted or sought loan extensions – Fosun became the natural destination for investors to park their money. He has scale, cash – and until recently – a decent credit rating. Fosun has about $4 billion in dollar bonds outstanding, with its smallest issue at a respectable $450 million. It was a BB rated company.

Now, that safe haven may not be so safe. And the high-yield dollar corporate bond market cooled further.

When a company is nearing distress, credit analysts can always point the finger at one metric or another, saying its cash flow management could be better. However, even the best private companies can go awry if the government becomes overzealous or indiscreet.

In the capital markets, the Chinese government does not have the best reputation at the moment. If Beijing still wants foreign capital, it must tell its various agencies to keep a low profile and shut up. Their spontaneous visits with companies scare away investors.

More from Bloomberg Opinion:

• Private equity giants have cash flow problems: Shuli Ren

• The compromise on Chinese stock quotes is a victory for the United States: editorial

• Xi Jinping sends mixed messages to investors: Shuli Ren

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She holds the CFA charter.

More stories like this are available at bloomberg.com/opinion

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Commercial Banking Market Expected to Accumulate $7.404.4 Billion Globally by 2031 at a CAGR of 11.5%: Allied Market Research https://premudraja.net/commercial-banking-market-expected-to-accumulate-7-404-4-billion-globally-by-2031-at-a-cagr-of-11-5-allied-market-research/ Tue, 20 Sep 2022 09:30:00 +0000 https://premudraja.net/commercial-banking-market-expected-to-accumulate-7-404-4-billion-globally-by-2031-at-a-cagr-of-11-5-allied-market-research/ Commercial banks allow transactions by checks, transfers and digital payments and bank drafts. In addition, commercial banks supply customers and small and medium enterprises. All these aspects are driving the growth of the global commercial banking market. PORTLAND, Oregon., September 20, 2022 /PRNewswire/ — Allied Market Research recently released a report titled “Commercial banking market […]]]>

Commercial banks allow transactions by checks, transfers and digital payments and bank drafts. In addition, commercial banks supply customers and small and medium enterprises. All these aspects are driving the growth of the global commercial banking market.

PORTLAND, Oregon., September 20, 2022 /PRNewswire/ — Allied Market Research recently released a report titled “Commercial banking market By Products (Commercial Loans, Cash Management, Project Finance, Syndicated Loans, Capital Markets, Others), By Application (Healthcare, Construction, Transportation & Logistics, Media & Entertainment, Others): Analysis of Global Opportunities and Industry Forecasts , 2021-2031.According to the report, the global commercial banking sector was estimated at $2,540.3 billion in 2021, and should reach $7,404.4 billion by 2031, growing at a CAGR of 11.5% from 2022 to 2031. The report offers detailed analysis of changing market trends, major segments, major investment pockets, value, regional landscapes and competitive scenarios.

Download a free sample report (Get a detailed analysis in PDF – 276+ pages): https://www.alliedmarketresearch.com/request-sample/6549

Drivers, constraints and opportunities

Commercial banks allow transactions by checks, transfers and digital payments and bank drafts. In addition, commercial banks supply customers and small and medium enterprises. All these aspects are driving the growth of the global commercial banking market. Furthermore, commercial banks play a key role in the economic growth of any nation, which also helps improve production, employment, and consumer spending. This will create new growth opportunities for the global players as well as the global market. However, the risk of theft and fraud is one of the key factors that may limit the growth of the global market in the coming years.

Covid-19 scenario:

  • The COVID-19 pandemic has severely hampered the expansion of the global commercial banking sector due to consumers’ reluctance to visit commercial bank branches for fear of being infected with COVID-19.
  • During the COVID-19 pandemic, commercial banks have adopted e-banking technologies to conduct digital transactions that have helped them provide seamless services to customers through e-banking applications on their smartphones, tablets, desktops and laptop.

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The project finance segment will dominate the global market in terms of revenue in 2031

Based on product, the project finance segment is expected to contribute the highest market share in 2031, accounting for around one-fifth of the global commercial banking market share. The growth of the segment over the forecast period can be attributed to the ability of commercial banks to finance the projects of small as well as large companies. However, commercial loans segment dominated the global market share in 2021. Additionally, the report also includes other segments such as commercial loans, cash management, syndicated loans, capital market and others.

The healthcare segment will contribute a huge share of the global market by 2031

Based on application, the healthcare segment accounted for a major share of the global commercial banking market in 2021. The segment contributed nearly one-third of the overall global market share. Furthermore, the segment is expected to dominate the market growth even in 2031. The growth of the segment over the forecast period can be attributed to the large-scale investments made by commercial banks in the healthcare sector. However, the transport and logistics segment recorded the Fastest CAGR 14.2% over the forecast period. The sectoral growth over the forecast period can be attributed to the provision of various commercial banking services to transportation and logistics companies.

Asia Pacific maintain global market dominance over the period 2022-2031

By region, Asia-Pacific is expected to contribute in particular to the global commercial banking market share in 2031. The region is expected to account for approximately one-third of the global market share in 2031. Market growth in the region during The forecast duration can be attributed to the increased acceptance of NFC and POS terminals in emerging economies in the region. In addition, the rise of mobile and Internet banking services and the expansion of ATM facilities are expected to improve operational efficiency. Moreover, the Asia Pacific The commercial market is expected to register the highest CAGR of 14.2% during the period 2022-2031. The report also analyzes other regions such as North AmericaLAMEA and Europe.

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Main benefits for stakeholders

  • This report provides a quantitative analysis of market segments, current trends, estimates and dynamics of the Commercial Banking market share from 2021 to 2031 to identify existing market opportunities.
  • The market study is offered with information related to the major drivers, restraints, and opportunities in the commercial banking market.
  • Porter’s Five Forces analysis highlights the ability of buyers and suppliers to enable stakeholders to make profit-driven business decisions and strengthen their supplier-buyer network.
  • An in-depth analysis of commercial banking market forecast helps in determining the existing market opportunities.
  • Major countries in each region are mapped based on their revenue contribution in the global commercial banking market outlook.
  • The report includes analysis of regional and global commercial banking market trends, key players, market segments, application areas and market growth strategies.

Key market segments

Some products

  • Syndicated loans
  • Capital market
  • Others
  • Commercial loans
  • Finance management
  • Project funding

Application

  • Health care
  • Construction
  • Transport and logistics
  • Media and Entertainment
  • Others

By region

  • North America (WE, Canada)
  • Europe (UK, Germany, France, Italy, Spain, NetherlandsRest of Europe)
  • Asia Pacific (China, India, Japan, Australia, SingaporeRest of Asia Pacific)
  • LAMEA (Latin America, Middle East, Africa)

Main market players

  • Bank of America Corporation
  • Bank of China (BDC)
  • Barclays Bank PLC
  • BNP Paribas
  • China Construction Bank
  • Citigroup Inc.
  • HSBC Group
  • JP Morgan Chase & Co.
  • American bank
  • well Fargo

The report analyzes these key players of the global commercial banking market. These players have implemented key business strategies such as strategic expansion, new product launches, alliances and joint ventures to improve market penetration and strengthen their position in the industry. The report helps the target audience to determine the performance of the market, the performance of each segment, the development of the product portfolio in the market, and the contributions made by each player to the expansion of the market.

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“We have also published some syndicated market studies in the same field that you may be interested in. Below is the title of the report for your reference, considering the impact of Covid-19 on this market, which will help you to assess the aftermath of the pandemic in the short-term, long-term and long-term growth trends of this market.”

BFSI Industry Trend Reports (Book Now with 10% Discount + Covid-19 Scenario):

Southeast Asia Commercial Banking Market size was estimated at $3,063.41 million in 2021, and should reach $16,341.98 million by 2031, growing at a CAGR of 18.3% from 2022 to 2031.

Internet of Things (IoT) in the banking market size was estimated at $12.7 billion in 2021, and should reach $237.4 billion by 2031, growing at a CAGR of 33.9% from 2022 to 2031.

Banking as a Service Market size was estimated at $2.41 billion in 2020, and should reach $11.34 billion by 2030, growing at a CAGR of 17.1% from 2021 to 2030.

Online banking market size was estimated at $11.43 billion in 2019 and is expected to reach $31.81 billion by 2027, growing at a CAGR of 13.6% from 2020 to 2027.

Core Banking Solutions Market size was estimated at $9,856.45 million in 2019, and should reach $28,785.85 million by 2027, growing at a CAGR of 14.6% from 2020 to 2027.

Neobank market – Opportunities and forecasts, 2022-2029

Banking services market– Global Opportunities Analysis and Industry Forecast, 2019-2026

About Us

Allied Market Research (AMR) is a full-service market research and business advisory wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global corporations as well as small and medium enterprises with unrivaled quality of “market research reports” and “Business Intelligence solutions”. AMR has a focused vision to provide business insights and advice to help its clients make strategic business decisions and achieve sustainable growth in their respective market area.

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SOURCE Allied Market Research

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Capital market struggling with a lack of confidence, governance: the stakeholders https://premudraja.net/capital-market-struggling-with-a-lack-of-confidence-governance-the-stakeholders/ Sat, 17 Sep 2022 16:49:00 +0000 https://premudraja.net/capital-market-struggling-with-a-lack-of-confidence-governance-the-stakeholders/ A file photo shows investors monitoring share price movements on computer screens at a brokerage in the capital Dhaka. — New Age Photo Bangladesh’s stock market is still grappling with lack of investor confidence for various issues including lack of governance and good quality companies, manipulation and poor diversification, panellists said on a show. Saturday. […]]]>

A file photo shows investors monitoring share price movements on computer screens at a brokerage in the capital Dhaka. — New Age Photo

Bangladesh’s stock market is still grappling with lack of investor confidence for various issues including lack of governance and good quality companies, manipulation and poor diversification, panellists said on a show. Saturday.

They made the comment during a panel discussion titled “Current Scenario and Prospects of Bangladesh Capital Market” held at the Westin Hotel in the capital Dhaka.

Dhaka Stock Exchange Chairman Eunusur Rahman said the market was struggling with two major issues: governance and trust.

“If we can’t improve market governance and protect investors, no initiative will work,” he said.

“We need to stop scams like Crest Securities that have embezzled a huge amount of money from investors,” he said.

He said: ‘The DSE Board found that 91 companies were listed on the stock market under the previous commission and that 50% of the companies are now trading below face value.’

Institutions and regulators that played a role in enlisting these companies should uncover their shortcomings to fix the problems, he said.

University of Dhaka Honorary Professor of Economics Abu Ahmed said the market was running with “undesirable and diseased” companies.

Of the 350 companies listed, a few could be considered successful, he added.

Ahmed said investors had less confidence in the mutual fund industry and the securities commission could also be held responsible for the situation, as it extended the duration of closed-end funds and allowed bonus dividends. .

Good multinationals, including Unilever and Nestlé, do not go public despite the country’s huge revenues, he said.

He said the government had narrowed the tax rate differential between listed and unlisted companies, which was not a good move as it would eventually discourage companies from listing in the market.

Faruq Ahmad Siddiqi, former chairman of the Securities and Exchange Commission of Bangladesh, said: “Our stock market is not developing properly. Good businesses are not coming to market and opportunities are not being created for new businesses to come.

“When banks are ready to provide long-term financing to good companies, they will not come to the market even if they have tax exemptions, because there are many ways to avoid tax in the country”, did he declare.

There are many rules and regulations, but implementing the rules is difficult, he said.

Al Amin, an associate professor at the University of Dhaka, called for ensuring transparency in the financial statements of listed companies and good governance in company operations to protect investors’ rights.

BSEC Chairman Shibli Rubayat-Ul-Islam said, “Principles and ideas written in books cannot always be followed because the practical world is totally different.

The request for “books” cannot be made in many cases and many decisions must be made taking into account reality,” he said.

The commission is trying to recruit successful companies as well as public companies in the stock market soon, he said.

Shibli also said that the country’s revenue would increase once the right companies entered the market because they could not escape taxes.

The BSEC chairman said the mutual fund industry is starting to improve now.

The commission has taken a step that asset management firms will charge a fee to funds under their management based on fund performance which would further improve the industry, he added.

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CMU: a North Star for the long term https://premudraja.net/cmu-a-north-star-for-the-long-term/ Tue, 13 Sep 2022 17:20:52 +0000 https://premudraja.net/cmu-a-north-star-for-the-long-term/ If Europe manages to staying on the CMU path, our chances of actually delivering a stronger European capital market will stay strong. The engagement of retail investors is one of the main strengths of the European capital market. In the European Nasdaq markets, especially in Sweden, retail investors play an absolutely essential role in providing […]]]>

If Europe manages to staying on the CMU path, our chances of actually delivering a stronger European capital market will stay strong.

The engagement of retail investors is one of the main strengths of the European capital market. In the European Nasdaq markets, especially in Sweden, retail investors play an absolutely essential role in providing funding and growth opportunities for businesses, especially SMEs. On the Nasdaq First North Growth Market, retail investors provide up to 50% of the investments as well as trading volumes. Retail investors are stable shareholders who induce long-term sustainable capital. This helps to create favorable conditions for IPOs in the primary market as well as for the continued life of a company in the secondary markets.

I support the European Commission’s agenda for retail, but since retail investor activity is very much influenced by national policies, Member State initiatives are crucial, such as financial education, pension systems and savings-investment accounts, especially when they involve flat-rate taxation for investments and also automatic tax reporting, which significantly reduces administrative barriers for individuals. More than 3 million Swedes have such an account. In Finland, the introduction is more recent and the numbers are growing with currently over 225,000 accounts. In Estonia, the number of retail investors on the stock exchange has quadrupled in 5 years and now reaches 100,000.

The high participation of retailers on informed and multilateral exchanges means good quality of execution. In the Nordic countries, more than half of retail orders are traded within the spread between the best bid and ask price. In this context, I don’t see the need for dark execution for retail orders and am concerned about order flow payout. If it were widely introduced and accepted in Europe, there is a risk that retail volume would be diverted from enlightened and multilateral markets, with no real benefit.

Rather, retail investors are needed where IPOs take place, where stock prices are formed, and where they benefit from non-discretionary execution.

All investors, including individuals, need access to data to be active in the markets. Currently, Nasdaq stock data is available for free after 15 minutes and real-time data on the best bids and asks at cost, which we offer to retail investors for €1 per month. What investors lack is a picture of the off-exchange market. A consolidated strip in the EU could provide this by covering stock data from all stock exchanges, MTFs and systematic internalisers. What’s important to note is that the geography of Europe has a built-in natural latency. For a band in the EU to provide an accurate picture of all transactions equally and fairly for all users, it must have some delays.

In my experiences with market data, the greatest demand for the fastest data comes from larger, highly sophisticated professional market players and is for blue chip stocks. Making exchanges bear the cost of near real-time tape would therefore tend to benefit primarily the larger and more professional market participants, to the detriment of transparent markets. However, for smaller players such as retail investors, SMBs and small venues, a delayed tape is the product that would offer cost advantages. This is an example where it is important to keep the CMU as the North Star.

An initiative more in line with the spirit of CMU is the Listing Act initiative. The parts of this initiative that I support are clarifications within the framework of market abuse that should leave less room for divergent interpretations and sanctions. In addition, simpler prospectuses can be useful documents rather than obstacles for issuers and investors. I also insist that each issuer should have the power to decide when the cost of translating disclosure documents adds value, and that only English should always be permitted, as it is the predominant language in finance today. A single European access point will only add value if non-local investors can actually use it.

Letting the CMU be the North Star in all policy areas in the long term would increase the possibilities to further improve the European capital market and help Europe to strengthen its competitiveness in the global economy. Supporting stability and growth opportunities for individuals as well as businesses is what is needed to manage the current period of many levels of uncertainty and crises.

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Sebi: Sebi seeks details on startup valuation from PE, VC funds https://premudraja.net/sebi-sebi-seeks-details-on-startup-valuation-from-pe-vc-funds/ Mon, 12 Sep 2022 01:19:00 +0000 https://premudraja.net/sebi-sebi-seeks-details-on-startup-valuation-from-pe-vc-funds/ Mumbai: The capital market regulator is looking closely at how private equity firms (PEs) and venture capital funds (VCFs) value the startups and unicorns they fund. A substantiated valuation gives a positive image of a fund’s portfolio to investors and paves the way for the fund manager to attract more money from new and returning […]]]>
Mumbai: The capital market regulator is looking closely at how private equity firms (PEs) and venture capital funds (VCFs) value the startups and unicorns they fund.

A substantiated valuation gives a positive image of a fund’s portfolio to investors and paves the way for the fund manager to attract more money from new and returning investors in the next fundraising round.

Probably prompted by investor complaints and recent reports of opaque bookkeeping by a few unicorns, the Securities & Exchange Board of India (Sebi) in a Sept. 6 communication asked a slew of funds to disclose their practices. valuation and to share details such as the qualification of the valuator, whether the valuator engaged is a partner of the fund or its manager or sponsor, and whether there has been a significant change in the valuation methodology during of the past three years among others, two people with knowledge of the matter told ET.



“Sebi clearly wants to understand the credibility of the valuation exercise undertaken by the funds,” said Richie Sancheti, founder of law firm Richie Sancheti Associates. According to Tejesh Chitlangi, Senior Partner, IC Universal Legal, “As the regulator tries to get a sense of the performance of AIFs (alternative investment funds), they may also wish to understand the valuation practices prevalent in the industry. as the same may vary from fund to fund in the absence of any regulatory requirement.

Sebi


Consistency in the evaluation process

This may be a precursor to upcoming valuation policies, improved disclosure standards, etc. that Sebi can prescribe to the AIF industry to ensure consistency in the way valuations are made and increase transparency for the benefit of investors. and VCFs- are closed-end funds with a large exposure to unlisted equities. Closed-end funds may announce the net asset value twice a year, or even once a year if investors agree.

Although private companies and unlisted securities fall outside its jurisdiction, Sebi regulates pooled vehicles like PEs, VCFs, mutual funds, and portfolio management systems.

DESIRED DETAILS

According to the Sebi Directive, funds must also share the following information: the date of the last valuation, the cost of the cumulative investments made, the last valuation of the investment portfolio, whether the valuation exercise is based on audited data audited or unaudited beneficiary undertakings, whether the valuation is carried out by an independent or internal valuator, whether an additional valuation exercise has been carried out during a financial year, details of the valuation methodology and whether there has had deviations from said methodology, and whether the scheme has a review committee.

“The real saving for the manager is only based on cash distributions under a structured waterfall construction. The current exercise seems to be to ensure that a fund projects an accurate state of health to the investors on an ongoing basis,” Sancheti said. .

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Why Focusing On These Paanch Pranas Can Lead To Capital Market Growth https://premudraja.net/why-focusing-on-these-paanch-pranas-can-lead-to-capital-market-growth/ Sat, 10 Sep 2022 06:26:00 +0000 https://premudraja.net/why-focusing-on-these-paanch-pranas-can-lead-to-capital-market-growth/ This year, on Independence Day, the Hon. The Prime Minister appealed to Paanch Prana from the ramparts of the Red Fort and set a goal for the nation for the next 25 years. This prompted me to think about it from the perspective of the financial markets. In my previous article titled “Indian Capital Markets […]]]>
This year, on Independence Day, the Hon. The Prime Minister appealed to Paanch Prana from the ramparts of the Red Fort and set a goal for the nation for the next 25 years. This prompted me to think about it from the perspective of the financial markets. In my previous article titled “Indian Capital Markets During Amrut Kaal”, I had talked about the expected growth of our capital markets during Amrut Kaal. Our capital market has the potential to approach twice our GDP over the next 25 years. According to various estimates, our GDP is expected to be around US$25 trillion by 2047. As a result, capital markets could touch around US$50 trillion.

Given the enormous potential for growth in our capital markets over the next 25 years, I would like to discuss five key areas to focus on to facilitate this growth. These are like Paanch Pranas for capital markets.

First Prana – growing financialization in the country
Modeled on the Jan Dhan yojana in which every Indian’s bank account was opened, we must deepen financial literacy and responsibly communicate capital market opportunities across the country. There is great potential to channel untapped reserves of financial capital invested in cash, bank deposits or gold into the capital markets. Currently, only 5.5% of our population, or approximately 7.7 million retail investors, participate in capital markets. This number can potentially reach almost 75 crores, which would represent about 45% of the country’s population in the next 25 years. Technology will need to be leveraged significantly to support such a massive inclusion campaign. Technology-driven distribution solutions, differentiated product strategy for different segments and ease of transaction including KYC standards will have to be the backbone of the market. Promoting the growth and distribution of mutual funds across the country could be one answer to this.

Second Prana – the growth of private capital
India recorded attractive returns in public and private markets. Over a period, our public markets developed very well. We have a strong primary and secondary market and the mutual fund industry is also growing. India’s public equity market has generated a return of around 14% over the past 10 years, while private market funds have generated a median net return of around 16%. Over the next 25 years, there is an opportunity and a need to establish a strong private market ecosystem. Private markets could include private capital (debt or equity), long-term project financing, private trading, and providing liquidity to founders or employees against their equity stakes. Again, technology and digital platforms can be used to connect private companies with institutional and accredited individual investors to reduce time to market.

Third Prana – capital markets as a viable alternative to banks
We need to build our capital market as a potential alternative to deploy a deeper pool of capital available in the form of savings and deposits to Indian households. In the United States, only 16% of personal financial assets are in the form of cash or savings accounts: in contrast, Indians still hold more than 60% of their wealth in the form of cash or accounts. savings. This is an opportunity for us to channel savings into the capital markets. We can achieve this by expanding the reach of financial markets, offering products in different asset classes, offering a wider variety of market-traded products, and conducting massive investor education programs.

Our companies remain heavily dependent on bank loans. In addition, the financing of M&A activities and leveraged buyouts are not permitted in the capital markets. Promoting financing for these companies through capital markets could lead to more competitive pricing in a regulated environment.

In addition, equity capital is also needed for small businesses that are currently unable to access capital markets. Our markets today have about 5,000 large and medium-sized companies. We believe there are about 10,000 other medium to small-sized companies that are entirely dependent on bank financing and founder capital. This number will only increase with a growing economy. These companies can be authorized to finance their growth through the capital markets within an appropriate regulatory framework.

Fourth Prana – digitization of most asset classes
Our goal should be to digitize all assets which can then be publicly listed/traded. Here, the first thing that comes to mind is gold. We should focus on digitizing physical gold which is owned by households and various other institutions. Several initiatives are already underway to monetize gold. Gold can also be monetized through a gold derivatives exchange backed by a robust infrastructure for the physical movement of gold. The other class of new assets that can be digitized is real estate, where the experience of SCPIs is already quite successful.

Fifth and last Prana – modernization and harmonization of regulation and supervision.

The regulatory framework is the backbone of any market. To capture the massive market growth and complexity expected over the next 25 years, we need two fundamental changes to our regulatory framework. First, we would need to harmonize various regulatory disciplines such as banking, insurance, pensions, company law, competition commission and capital markets. All these regulatory frameworks at certain levels are linked to each other. One option could be to have an apex regulator that takes care of all the regulatory framework related to financial markets. This will lead to a harmonization of the regulatory framework.

In addition, we should modernize our regulations, our governance and our oversight system. A regulatory framework integrated with technology would be the solution to manage the expected high volume.

In conclusion, we want our financial markets to be one of the largest in the world over the next 25 years and we have the ability and capacity to do so. The five pranas are the basic elements needed to make the foundation strong and help achieve the goal.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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White & Case Hires Two Capital Markets Partners in Mexico https://premudraja.net/white-case-hires-two-capital-markets-partners-in-mexico/ Wed, 07 Sep 2022 18:00:06 +0000 https://premudraja.net/white-case-hires-two-capital-markets-partners-in-mexico/ White & Case has rehired two well-established financial markets practitioners in Mexico City to replenish expertise lost with the death of a key partner and several recent defections. Eduardo Flores Herrera and Narciso Campos Cuevas are known for their extensive contacts in the banking sector, having both worked for the Mexican Ministry of Finance during […]]]>

White & Case has rehired two well-established financial markets practitioners in Mexico City to replenish expertise lost with the death of a key partner and several recent defections.

Eduardo Flores Herrera and Narciso Campos Cuevas are known for their extensive contacts in the banking sector, having both worked for the Mexican Ministry of Finance during the administration of former President Enrique Peña Nieto.

Flores was a partner of Creel, García-Cuéllar, Aiza y Enríquez, SC, a leading Mexican company, until July and Campos was also a partner of Creel until 2021, according to their profiles on LinkedIn.

Law.com International has contacted Creel for comment.

Flores also says he is an independent member of the board of directors of Amafore, the Mexican association of pension funds, and of the Mexican unit of the French investment bank BNP Paribas.

Previously, Flores served as Vice President of Securities Supervision for Mexico’s National Banking and Securities Commission (CNBV), where he contributed to the development of regulations and the supervision of issuers, underwriters and other participants in the Mexican securities market. This commission reports to the Mexican Ministry of Finance.

Campos, meanwhile, served as Assistant Secretary for Banking, Securities and Savings at the Mexican Ministry of Finance, where he oversaw public policy related to the development, supervision and regulation of the banking and financial sector. securities market. He is also a former chief of staff to the Secretary of Foreign Affairs in Mexico, where he played a key role in the negotiation of the free trade agreement between the United States, Mexico and Canada.

“Continued expansion of our market-leading capabilities in Mexico, and more broadly in Latin America, has been a strategic priority for the company, and we expect to continue to see strong growth and customer demand for our team. experienced in Mexico,” John Vetterli, head of White & Case’s global capital markets practice, said in a statement.

Both attorneys began their careers at White & Case and spent more than 10 years in the firm’s Mexico City office.

The rehires should help fill a void left by the sudden death in May of Vincent Cortaan influential partner of White & Case in Mexico whose practice focused on the regulatory and transactional aspects of banking, project finance, securities and insolvency matters.

Like Flores and Campos, Corta spent years in Mexico’s finance ministry and had strong ties to the financial industry.

Corta’s loss was preceded in January by the defection from White & Case of six corporate lawyers who left for DLA Piper in Mexico.

“As Mexico’s investment landscape continues to evolve and its economy becomes even more integrated with the United States, more and more transactions are multi-jurisdictional, requiring an attorney who can navigate multiple areas of the law,” said Francisco de Rosenzweig, executive partner of White & Case’s Mexico City office. .

Flores advises issuers and underwriters on public and private securities offerings, including real estate investment trusts (FIBRAs), capital development certificates (CKDs), securitizations, and unsecured and subordinated debt. White & Case said it also has considerable expertise in working with fintech clients and representing domestic and international lenders in a wide range of financings.

Campos advises financial institutions on complex regulatory issues such as licensing, compliance, anti-money laundering, corporate structures, corporate governance and internal controls. He also has extensive experience in a wide range of bank financing, capital markets and mergers and acquisitions transactions.

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Volkswagen launches historic Porsche IPO, defying market doubts https://premudraja.net/volkswagen-launches-historic-porsche-ipo-defying-market-doubts/ Mon, 05 Sep 2022 23:57:55 +0000 https://premudraja.net/volkswagen-launches-historic-porsche-ipo-defying-market-doubts/ Volkswagen has also approved the sale of 25% plus one ordinary share of Porsche AG to Porsche SE, give the controlling Porsche and Piech families a blocking minority and bolster their push for a tighter leash on the automaker. Loading Volkswagen said an IPO would be an important step in the company’s transformation as it […]]]>

Volkswagen has also approved the sale of 25% plus one ordinary share of Porsche AG to Porsche SE, give the controlling Porsche and Piech families a blocking minority and bolster their push for a tighter leash on the automaker.

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Volkswagen said an IPO would be an important step in the company’s transformation as it aims to expand its software and electric vehicle offering.

Porsche’s status as a luxury brand capable of driving up prices makes it a source of revenue for the Volkswagen Group. Its operating profit jumped 22% in the first half of this year, compared to an 8% decline for the mass market-focused Volkswagen brand.

But some investors say that with European stocks on a downward spiral, inflation at record highs and gas supplies to Russia shut off, it’s a dangerous time for a stock market debut.

Insisting on listing even amid such market turmoil is exclusively in the interests of the Porsche and Piech families who want greater control, said Hendrik Schmidt, governance expert at Volkswagen Investor DWS.

“Market conditions are currently very unfavourable,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment, one of Volkswagen’s top 20 investors, declining to say whether Deka would buy Porsche shares. .

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If the IPO is successful, Volkswagen will call an extraordinary general meeting in December to propose to shareholders a special dividend of 49% of the proceeds to be distributed in early 2023.

“VW should work on its timing: the IPO plan was announced the same day Russia invaded Ukraine, ‘intent to float’ comes out exactly when Russia stops supplying gas to Germany,” Stifel analysts said.

The German auto association expects a 4% drop in passenger car deliveries in Europe this year as the hoped-for post-pandemic recovery has yet to emerge.

Reuters

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