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Stock markets are unbalanced, investors warned
Wall Street is unbalanced, and investors are in danger of becoming complacent, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The warning from deVere Group’s Nigel Green comes as U.S. stock futures indicate another strong open for Wall Street on Tuesday following a long holiday weekend.
Mr Green says: “Wall Street and other stock indices around the world have been, in general terms, rallying in recent weeks as investors jump on fresh Covid-19 vaccine optimism and signals that global economies are beginning to be revived.
“There’s an over-riding and far-reaching bullish sentiment in stock markets. However, there are bonafide concerns that investors are in danger of becoming complacent.
“This is because the headline figures of rallying markets are not the best barometers of the economy right now. The upswing on Wall Street, for example, is being driven by a handful of companies all within the same sector: tech.”
He continues: “This global economic downturn is different to others as there are clear winners and losers, whereas in previous ones it has been far less clear-cut and more a question of how much all firms were impacted.
“This one has produced enormous financial benefits for some, like tech, and left many struggling and others failing completely.”
The deVere CEO says that while the booming sectors such as tech, home entertainment and online retailers might “indicate what the future, post-pandemic economy looks like”, it doesn’t reflect underlying economic conditions – and this “could catch investors out.”
He notes: “Buying an exchange-traded fund, or ETF, which are investment funds traded on stock exchanges, could expose a client to a potentially unbalanced market.”
To navigate the markets when they aren’t reflecting the slew of current poor economic data, investors are urged to work with an experienced fund manager to help them “seek the significant opportunities but to mitigate potential risks.”
Mr Green concludes: “The firms which are ‘winners’ in this downturn are over-represented on many leading global indices, including the benchmark S&P500 index.
“As such, they do not necessarily serve as the ideal economic gauge for investment decisions.
“Investors must bear this imbalance in mind.”
SRB launches public consultation on its ‘standardised Data Set’ proposals
New consultation covers minimum data needed for valuation of bank in resolution
The Single Resolution Board (SRB) today launches a public consultation on its ‘standardised Data Set’ to ensure that a minimum level of data is available to support a robust valuation for resolution.
In 2019, the SRB published its Framework for Valuation. Its objective is to provide independent valuers with the SRB’s expectations regarding the principles and methodologies for valuation reports, as required under EU law.
Read the full press release here
Pound could drop even further - to $1.18 - in June: deVere CEO
The pound – this month’s worst-performing major currency – could “easily drop to $1.18” at the end of June, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The warnings from deVere Group’s chief executive and founder Nigel Green come as it is revealed that the British currency shed almost 4% against the U.S. dollar in May and 3% against the euro.
Mr Green comments: “The pound is this year’s third-weakest major currency – just behind the New Zealand dollar and Norwegian krone, which have done even worse.
“The pound has been battered since the Brexit referendum in 2016 and the ensuing years of political uncertainty, losing around 20% of its value since the referendum.
“The Covid-19 crisis has been another hammer blow for sterling as it promoted a flight-to-safety and ramped-up the search for liquidity. This situation is a win for the U.S. dollar and, in turn, a loss for the pound.”
He continues: “There are legitimate concerns that the pound has further to fall in the next few weeks.
“It could easily drop to $1.17-$1.18 by the end of June due to renewed and heightened fears of a negative shock due to a no-deal Brexit combined with the far-reaching economic fallout of the pandemic.”
Negotiations between the UK and the EU on their post-Brexit future relationship stalled on Friday with the EU’s chief negotiator Michel Barnier saying the two sides risked reaching a “stalemate.”
The British Prime Minister Boris Johnson has repeatedly threatened to walk away from the talks if insufficient progress has been made by next month’s high-level negotiations. The UK has indicated the alternative of an “Australia-style” deal, a relationship where both sides trade on basic World Trade Organization terms, similar to a no-deal Brexit.
“An even weaker pound will help to reduce people’s purchasing power and a drop in UK living standards. Weaker sterling means imports are more expensive, with rising costs being passed on to consumers,” says Mr Green.
“The fall in the pound is good for exports some claim, but it must be remembered that around 50% of UK exports rely on imported components. These will become more expensive as the pound falls in value.
“A low pound is, of course, bad news for British expats, amongst others, who receive income or pensions in sterling.
“The country’s financial services sector – which represents 6% of all economic activity - will also be adversely affected because it is built on foreign investment that puts its faith in sterling being strong.”
The deVere CEO concludes: “The pound will remain volatile, and is likely to become weaker in the next month.
“As such, it can be expected that domestic and international investors in UK assets will be seeking the available international options available to them.”
Are rallying stock markets out of step with economic reality?
Buoyant stock markets are not necessarily ignoring alarming economic data, rather they are reflecting the post-pandemic era, affirms the CEO of one of the world’s largest independent financial advisory organisations.
The observation from deVere Group chief executive and founder Nigel Green comes as official figures on Friday revealed that more than 20 million people in the U.S. lost their jobs in April and the unemployment rate more than trebled.
Mr Green comments: “The staggering U.S. unemployment numbers wipe out a decade’s worth of job gains. There’s been nothing like this since the Great Depression.
“Yet U.S. stock futures climbed higher as global markets rose on Friday. This is highly unusual.”
He continues: “There are two things happening simultaneously here.
“First, a weak first half of 2020 has already been priced-in.
“As have the risks of a potential second wave – but the concerns of this are being largely contained as it is not such a ‘bolt out of the blue’.
“It is extreme uncertainty, the likes of which we saw at the peak of the pandemic, that typically upsets markets.
“Whether they are correct in their assessment remains to be seen, but markets are looking towards the second half of the year. They appear to believe that there is likely to be a steady economic recovery as key advances are made in coronavirus treatments, as central banks continue to implement and further bolster historic stimulus packages, and as lockdown restrictions around the world are eased to revive activity.”
He goes on to add: “Second, and perhaps more importantly, stock markets are reflecting what is going on in the economy right now and what it’ll look like post-pandemic.
“A closer look at the markets reveals that, of course, not all stocks and sectors are rising equally. They are being driven up across the board by the ‘winners’ of this new era including tech, biotech, home entertainment and established online retailers, amongst others.
“We can assume that these, and other stock market ‘winners’, are showing us what the future economy looks like.”
The deVere CEO concludes: “The optimistic stock markets seem at odds with the grim economic data. They may be being overly confident, even complacent.
“But it could also be the case that they are giving us clear signals for the current and future shape of the economy, in which there are and will be distinct winners and losers.
“A good fund manager will help investors seek out the opportunities and mitigate potential risks as and when they are presented to generate and build their wealth.”
Infographic: News Stories About the Death of Digital Currency Bitcoin Decline by 98 Percent
Reports in high-circulation newspapers forecasting the collapse of Bitcoin have fallen by around 98 percent since 2018. During the first four months of 2020, fewer critical BTC stories been published than ever before, according to a new infographic from Kryptoszene.de.
The study shows that only one article predicting Bitcoin's imminent demise was published between January and April this year. Last year, there were 15 articles in the same period, two years ago there were 51, and even at the end of last year there were significantly more critical articles with titles such as "Bitcoin is Dying", "All Crypto Currencies Will Disappear", or "Bitcoin, the End of an Era".
Between 2011 and 2018, of the 1,498 articles on Bitcoin analyzed, 53 percent were negative, 24 percent neutral and only 23 percent positive. However especially since the outbreak of the Corona crisis, it seems that more and more neutral and positive articles are being published concerning the crypto currency with the largest market capitalization.
In terms of its market price, the year so far has also been extremely successful for Bitcoin. While the DAX has lost 22% since the beginning of the year and the Dow Jones has also dropped 17.8%, the price of BTC rose by 21.8%. As the infographic shows, even gold - an insurance asset for times of crisis - could not keep up with Bitcoin. The market value of the precious metal increased by 15.2%.
"Various factors could be favoring the digital currency," says cryptoscene analyst Raphael Lulay. "This includes for example the limited quantity of Bitcoin, especially in times of inflationary fears. Even when compared to the currency Libra, however, Bitcoin performs comparatively well. The development is accompanied by assessments by policymakers who currently consider the potential risk posed by the digital currency to be 'low'".
The full story with the infographic, facts and more statistics:
Why responsible and sustainable (ESG) investing is now mainstream: deVere CEO
Economic and social upheaval plus the collapse of oil prices have pushed responsible and impactful investing further into mainstream finance, affirms the CEO of one of the world’s largest independent financial advisory organisations.
The comments from Nigel Green, the chief executive and founder of deVere Group, come as the global coronavirus emergency continues and as oil prices went negative this week for the first time in history.
Mr Green says: “At the start of 2020 I said that Environmental, Social and Governance (ESG) investing would reshape the investment landscape in this new decade – but this phenomenon has been dramatically and irreversibly accelerated by the current situation.
“Even before the start of the Covid-19 pandemic, ESG investments often outperformed the market and had lower volatility over the long-run.
“What is perhaps more impressive is that those investments with robust ESG credentials are still typically continuing to outperform throughout the coronavirus-triggered stock market crashes where major indices were extremely volatile, with some plummeting 20 per cent.
“Clearly, this is going to increasingly attract both retail and institutional investors seeking decent returns in turbulent times.”
He continues: “The collapse of oil prices, which are likely not to rebound to pre-crisis levels in the short-term, has also helped drive ESG investments to the top of the performance charts and keep them there.
“This is because ESG funds circumnavigate oil stocks, so their performance will not be adversely impacted by the fall in share prices.
“There is a wider and growing force behind the rise of Environmental, Social and Governance investing,” says Nigel Green.
“The current situation has acted as a wake-up call in many respects.
“It underscores that human health is reliant upon healthy ecosystems; that we need to ensure the sustainability of supply chains; and that those companies with robust corporate governance and good business practice fare better in difficult times and are ultimately best-positioned for the future.
“This growing collective awareness of mutual responsibility fits perfectly into the narrative of ESG investing.”
The deVere CEO concludes: “The collective wake-up call delivered by Covid-19 plus the search for profits in these highly unusual times are catapulting responsible, sustainable and impactful investing into the mainstream.”
Japan’s National Debt to GDP Ratio is 5x Higher than China’s and 2.5x than the US
Data gathered and calculated by Learnbinds.com indicates that Japan’s national debt to GDP ratio is at least five times higher than China and two and half times more compared to the US. From the data, Japan’s ratio is 279.34% while the United States is 111.41% and China has 52.30%.
Japan records a high national debt-GDP ratio
Japan’s ratio is the highest among the selected countries, with the United States occupying the fourth spot. On the other hand, China’s ratio is the lowest. Italy has the second-highest rate after Japan at 156.54% followed by France at 114.34%.
Canada's ratio stands at 107.65% followed by the Kingdom in the fifth slot at 104.27% while Brazil is sixth at 93.22%. In the seventh spot, India has 82.05% followed by Germany at 80.39%. According to the report:
“From an economic perspective, the ratio between a country’s national debt and its gross domestic product (GDP) is generally defined as the debt-to-GDP ratio. This ratio is a key indicator for investors to measure a country’s ability to manage future payments of its debts.”
The national debt to GDP ratio is a key indicator for investors to measure a country’s capability to manage future payments of its debts.
On the external debt to GDP ratio the United States (99.17%) figures are six times higher when compared to China (16.59%). The UK’s ratio is at least seventeen times higher when compared to China. Consequently, the UK occupies the top[ spot globally at 293.13% followed by France at 250.53%.
Germany occupies the third slot at 171.86% followed by Italy’s 148.85% while Canada closes the top five categories at 129.04%. Japan is sixth with a rate of 95.55% followed by Brazil at 35.52% while India’s 22.02%.
The full story, statistics and information can be found here: https://learnbonds.com/news/japans-national-debt-to-gdp-ratio-is-5x-higher-than-chinas-and-2.5x-than-the-us/
Stocks are ‘on fire’ – but a second coronavirus wave isn’t priced in
U.S. stock markets might be ‘on fire’ as earnings season begins – but Wall Street has not priced in a second wave of coronavirus, warns the CEO of one of the world’s largest independent financial advisory organizations.
The warning from deVere Group’s chief executive Nigel Green comes as the S&P 500 gained over 2 per cent in early trading, following gains in European and the Asia-Pacific markets.
Mr Green notes: “This week, with earnings season underway, we are going to see just the beginning of how corporate America and Europe have been hit by the coronavirus pandemic. The results are likely to be dismal and forecasts for the rest of the year can be expected to be revised down.
“However, investors are overlooking this. Instead, they are clinging on to relatively positive economic news from China, hints that some major lockdowns in Europe and elsewhere are being eased, and that confirmed cases are falling –meaning economic activity can be revived.”
He continues: “It’s truly astonishing that as global economic growth forecasts are looking bleak and most countries are battling potentially one of the worst downturns in a generation, the markets are on fire and trading as though these are normal times.
“They are not normal times. We are in unchartered waters. This isn’t the time to be complacent as I doubt the bear market is over. We shouldn’t call the bottom yet.
“It would appear that the financial markets are oblivious to the obvious and serious financial threat of a potential second wave of the coronavirus. Alarmingly, this does not seem to have been priced in.”
Mr Green goes on to add: “The markets’ bullish sentiment during this mass disruption and dislocation would be baffling enough, but there are also other headwinds on the horizon.”
These, he notes, include the U.S. Presidential election, the threat of a no-deal Brexit, and the longer-term inflation risks.
The deVere CEO observes: “We can expect markets to remain volatile in the short-term.
“Many savvy investors will be riding the wave of volatility to build up their portfolios through lower entry points and seeking value and decent returns in order to grow their wealth. Why? Because history teaches us that over the longer-term the performance of stock markets is fairly predictable: they go up.”
Nigel Green concludes: “The markets are growing more positive about the Covid-19 crisis.
“But to sidestep taking a potentially massive hit, investors must avoid complacency and emotional decisions through solid financial strategies.”
COVID-19 crisis: the SRB's approach to MREL targets
By Elke König
CHAIR AT SINGLE RESOLUTION BOARD
In this blog, I would like to provide additional clarity on the SRB’s approach to minimum requirements for own funds and eligible liabilities (MREL), taking the impact of the COVID-19 crisis into account.
First of all, the banking industry has made substantial progress in building up MREL to date and overall it is in a good position today. Nevertheless, during this challenging period, we are committed to ensuring that short-term MREL constraints do not prevent banks from lending to business and the real economy.
To achieve this, we are already working together with the banks under our remit and national resolution authorities to prepare for the implementation of the 2020 resolution planning cycle, including, in particular, the changes to MREL decisions under the new banking package (BRRD2/SRMR2). As part of this cycle, new MREL targets will be set according to the transition period in SRMR2, i.e. setting the first binding intermediate target for compliance by 2022 and the final target by 2024. The decisions will be based on recent MREL data, and reflect changing capital requirements.
As regards existing binding targets (set in the 2018 and 2019 cycles), in the current crisis, the SRB intends to take a forward-looking approach to banks that may face difficulties meeting those targets before new decisions (with 2022 intermediate targets) take effect. Our focus will be on the 2020 decisions and targets, and we ask banks to continue to make all efforts to provide the necessary data on MREL for the upcoming cycle.
We believe that this approach provides banks with the flexibility they may need in the coming months, as well as ensuring a level playing field. At the same time, our collective work on resolvability should carry on at a steady pace to ensure stability in our financial system.
About the article author
Dr Elke König is Chair of the SRB, responsible for the management of the organisation, the work of the Board, the budget, all staff and the Executive and Plenary sessions of the Board. She is a former President of the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) from 2012 until 2015. After qualifying in business administration and obtaining a doctorate, Dr König spent many years working for companies in the financial and insurance sector. Dr König was also a representative of the Supervisory Board of the Single Supervisory Mechanism.
Covid-19: covered bonds holding steady
Strong covered bond ratings coupled with the ECB backstop are giving banks access to funding if needed. Bank credit fundamentals and the credit quality of cover pools will likely weaken over time, but available buffers will support covered bond ratings.
Covered bonds have, once again in a crisis, become a preferred funding product. The public market is open: issuance has reached almost EUR 40bn in the last two weeks although it has become more challenging, as evidenced by 30bp-40bp of spread widening. “For now, we view this as an indication of changed investor perceptions of liquidity not concerns about credit quality. With 100bp widening seen on senior unsecured debt of the same issuer, covered bond spread volatility is much lower,” said Karlo Fuchs, head of covered bonds at Scope Ratings and co-author of a report out today on the impact on Covid-19 on this asset class.
Scope does not expect the safe-haven status of covered bonds to change, "although as differences in the credit risk of issuers and their cover pools emerge over time, covered bonds will reposition as a credit product,” Fuchs said, “especially as bank ratings deteriorate.” Banks will have to weather higher provisioning. The significance of asset-quality deterioration in their core corporate and retail lending activities will ultimately determine the impact on their ratings and ultimately on covered bond ratings.
“Mild one or two-notch bank downgrades will support covered bond ratings at current levels,” added Mathias Pleissner, a director in Scope’s covered bonds team and co-author of today’s report. “But significant asset-quality erosion could impact covered bond ratings if the ratings already rely on cover-pool support. The ability of a bank to generate sufficient liquidity to buffer against government-imposed or voluntary payment moratoriums or similar disruptive and system-wide events will be an important credit factor.”
The impact of missing repayments due to moratoriums is less relevant for covered bonds than for securitisations. The bank issuing the covered bonds must provide first recourse and make-whole payment delays. Unless a bank is close to regulatory intervention or a BRRD-like bail-in scenario, the share of loans subject to moratorium or payment holiday only serves as a traffic light for potential replenishment needs and potentially higher levels of over-collateralisation.
“Banks are able to increase protection available to their covered bonds, which allows them to mitigate deteriorations in their own ratings and/or changes to the credit quality of cover pools. A correction of sovereign ratings will not uniformly impact the credit quality of covered bonds. Rather, changes to the credit quality of the first recourse for covered bonds – the bank rating – will drive the extent of potential rating changes,” said Fuchs.
Encumbrance levels are still low and most issuers have ample additional cover assets, allowing them to replenish if and when needed. At the same time, moratoriums might require more active liquidity management by issuing banks as scheduled payments for cover assets might be delayed.
About Scope Ratings GmbH
Scope Ratings GmbH is part of the Scope Group with headquarters in Berlin and offices in Frankfurt, London, Madrid, Milan, Oslo and Paris. As the leading European credit rating agency, the company specialises in the analysis and ratings of financial institutions, corporates, structured finance, project finance and public finance. Scope Ratings offers a credit risk analysis that is opinion-driven, forward-looking and non-mechanistic, an approach which adds to a greater diversity of opinions for institutional investors. Scope Ratings is a credit rating agency registered in accordance with the EU rating regulation and operating in the European Union with ECAI status.
Coronavirus: global economy could be in recovery mode within SIX MONTHS - but on two conditions
The global economy is likely to be headed for recovery from a coronavirus-triggered downturn within six months – but only if mass testing is rolled out now and governments guarantee to support demand.
The prediction from Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory and services organisations, comes as global stocks held steady on Tuesday, after rallying on tentative indicators the Chinese economy – the world’s second-largest - is stabilising following coronavirus lockdowns being lifted.
However, they retreated on Wednesday as the pandemic worsens in the U.S. – the world’s largest economy.
His forecast also follows the release of the UN’s latest trade report on Tuesday. It reads: “The world economy will go into recession this year with a predicted loss of global income in trillions of dollars.”
Mr Green says: “The economic fallout of Covid-19 is as severe as it is unpredictable.
“No-one knows for sure the full of extent of the impact of the public health emergency on the world economy – but a significant downturn is, unfortunately, almost inevitable.
“However, the signs from countries where lockdown restrictions are now being eased suggest that the economic downturn could be relatively short-lived if certain factors come into play sooner rather than later.
“Indeed, I believe that the global economy is likely to be headed for recovery from a coronavirus-triggered downturn within six months – but only if mass testing is rolled out now and governments guarantee to support demand.”
He continues: “Most of the world is currently in phase one: lockdown. The unprecedented lockdown measures are, of course, dramatically slowing economies as both supply and demand are hit.
“The next phase, phase two, needs to be mass testing. An aggressive mass testing agenda, the likes of which could soon happen in Germany according to reports, would allow potentially millions of people to leave lockdown early, get back to work, and help kick start economies.”
Mr Green goes on to say: “Once mass testing is implemented, we can expect to see supply increase. But what about the other essential factor: demand? Without it, economies will continue their downward trajectory.
“The coronavirus pandemic has been – and will continue to be for some time – a hammer blow to consumer confidence.
“This is why it is essential that governments around the world continue and increase their unprecedented support measures for these unprecedented times.
“G20 leaders must remain committed to fulfilling their pledge to do “whatever it takes” to minimise the social and economic damage of the coronavirus pandemic.”
Speaking to the media recently, the deVere Group CEO noted: “Investors around the world will now be looking at how China gets back on its feet economically. Did the extreme lockdown work? Were the public health facilities adequate? Will there be another outbreak as activity resumes? How will the authorities now kickstart the economy? How will these decisions, and the success of them, impact the rest of the world?
“I’m confident that global financial markets will stage a relief rally when there is a definitive signal that the infection rate is dropping and that cases have peaked. Investors will come off the sidelines and prices will jump.
“Therefore, the next stage in China’s public health and economic recovery is critical.”
Mr Green concludes: “The coming months will be extremely tough for many individuals, businesses and sectors, but there are also glimmers of hope that economic recovery might arrive relatively soon.
“But, ultimately, this will depend on the next two phases that we face.
“If mass testing is carried out stringently and immediately, we could be looking at recovery signs within six months. If there’s a failure to do this, we could be looking at much longer downturn.
“During these tumultuous times, people are being advised to review and revise their financial planning strategies to ensure they remain on track to reach their long-term financial goals.”
Google Searches for Buy Stocks Up by 466% Worldwide
Data gathered by Learnbonds.com indicates that global Google searches for ‘buy stocks’ have spiked by at least 466% between March 31, 2019, and March 27th this year. According to the data, there was a significant spike in the wake of rising COVID-19 cases.
March records highest searches
From the data, interest in buying stocks began in the last week of February. The phrase had a popularity score of 30, which remained the same in the first week of March.
In the second week of March, the searches shot up by 663% and later 809%. Between March 22 and 27th, the searches had increased by 466%.
With the effects of Coronavirus being felt all over, most stocks have seen their worst falls in history. The searches could mean that investors are aiming to take advantage of rock-bottom prices by buying certain stocks and seek to profit from it in the future.
The data further indicates that most searches originated from North America. During the period under review, the US and Singapore had a peak search score of 100 followed by Canada at 85.
Outside North America, United Arab Emirates has a popularity score of 39 searches with Australia occupying the fifth slot at 34.
Notable stocks that might be beneficial to investors include healthcare, technology, and consumer goods as they have a great potential of bouncing back.
The full story, information and statistics can be found here
Top 12 Gold Holders Worldwide by Country and Institutions in 2020
Data compiled by Finbold.com indicates that the United States holds the largest stockpile of the global Gold Reserves at 14.81% (8,965.15 tons). The data further shows that the global Gold Reserve stood at 58,710.48 tons by March 24.
The US controls 15% of all Gold Reserves worldwide, more than Germany and Italy combined
Germany has the second-highest gold reserves at 3,709.14 tons followed by the International Monetary Fund which has 3,101.53 tons in reserves. Italy is ranked fourth at 2,702.39 tons.
Interestingly, both Italy and Germany when combined have less Gold Reserves than the US. France occupies the fifth spot with Gold reserves of 2,684.98 tons.
Other countries and institutions with high reserves include Russia (2,504.21 tons), China (2,159.80 tons), Switzerland (1,146.12 tons), Japan (842.98 tons), India (686.03 tons), Netherlands (674.78 tons) and the European Union (556.04 tons).
According to the report:
“Countries usually buy gold as a defensive measure to protect against inflation, acquire loans and prevent economic meltdowns."
For most countries, Gold Reserves usually contributes to their creditworthiness in the issuance of currency and bonds.
An overview of the year to date (YTD) production of the world's top five precious metals shows that Lithium holds the top spot with a production of 21,420.80 tons. Silver comes second with 6,804.21 tons while gold has a production capacity of 821.54 tons.
Palladium and Platinum occupy the fourth and fifth spots at 48.23 tons and 36.75 tons respectively.
Precious metals are considered to be rare and have high economic value. These metals' high value is driven by factors like their rarity, uses in industrial processes and investment vehicles.
The statistics, charts and in-depth information can be found here: https://finbold.com/top-gold-holders-worldwide-by-country-and-institutions/
Glint sees gold buying soar as markets meltdown
Glint sees several hundred percent increase in the amount of gold clients buy over the last 5 weeks as global markets see meltdown and gold price reaches all-time high.
LONDON, UK.- Glint Pay Services Limited (“Glint”), the fintech company that makes gold an alternative global currency by enabling its clients to buy, sell, save and spend their physical gold instantly through Glint’s prepaid debit card (Mastercard)4 and multi-currency app, today announces that it has experienced a several hundred percent increase in its clients buying gold during the recent turmoil effecting global equity markets.
Glint’s clients have been the big winners as they flocked to gold, the safe haven currency of last resort, as the markets swung violently over the last few weeks on fears of a global economic downturn.
Global stock markets lost some USD 6 trillion to date, but even after a brief rally, shares around the world arguably had their worst day since the financial crisis of 2008, with the dramatic falls leading to the day being dubbed "Black Monday.” According to the Wall Street Journal  of 19 March 2020, the DJ Industrial Average and the S&P 500 have lost around 30% since they peaked in mid-February.
Compounding the situation is the ongoing tussle between Saudi Arabia and Russia over crude oil production levels, which has seen benchmark crude oil prices collapse to below USD 30/barrel for WTI and Brent crude.[2
Central banks around the world have cut interest rates and governments have injected massive amounts of money into the financial system to try to prevent further declines in equities and fend off corporate bankruptcies.
They are using the firepower they have to prevent what is by now a probable recession into becoming a serious depression.
Conversely the price of gold has hit some high points in both GBP and USD, trading on 19 March 2020 at USD 1,470 per ounce.
To date, Glint has more than 74,000 app downloads, tens of thousands of registered users and more than GBP 69 million in transacted volume.
Stock markets have recovered somewhat as central banks and governments have injected paper money into the financial system. However, this not a signal of ‘things returning to normal.’ Not least because it is no longer clear what that ‘normal’ might be – too many shocks are around.
In such politically and macro-economically volatile times it is natural that people search for safe havens –and gold has throughout history been seen as one of the safest. Gold has historically been a better store of value than any government created currencies, which typically erodes over time. Since 1970, the U.S. dollar has lost 86% of its purchasing power due to inflation2, whereas over the same period if you had held your wealth in gold, your purchasing power would have risen 505%1 (inflation adjusted).
In 1970, a cheeseburger would have cost you USD 0.55 cents in the US. In 2018, the same cheeseburger cost USD 3.47 due to the increase of U.S. annual average inflation, thus decreasing the value of the U.S. dollar. In 1970, a gram of gold would have bought you two cheeseburgers, whereas today a gram of gold would allow you to purchase twelve cheeseburgers. 2
“Glint’s mission to bring a reliable gold currency to the fingertips of everyone in the world is being validated as the global economy unravels,” said Jason Cozens, Founder and CEO of Glint. “Glint offers an alternative that is valued globally anytime, anywhere. Welcome to money’s new standard.”
As a fintech company, Glint is at the cutting edge of finance, enabling its customers to stay ahead of the fast-moving world of currency depreciation and exchange. “Gold has a crucial historic role as money, and we see it defining a future whereby people can take control over their own income streams and not leave them to the mercies of banks,” says Cozens. “As the world inexorably moves to being cashless, Glint provides a future-proofed solution to 24/7 globalized living.” adds Cozens.
Glint offer an innovative multi-currency payments solution that provides instantaneous ownership of physically allocated gold and the ability to use it as money digitally through an app and prepaid debit Mastercard (gold is converted into e-money for transactions).
Physically allocated gold belongs outright to its owner, as opposed to unallocated gold, “exposure to gold” such as when the gold is owned by a FinTech company (e.g. Revolut) or a capital markets instrument such as an exchanged traded fund (“ETF”). By offering access to gold Glint helps shield clients them from the destructive effects of inflation and protects them from the systemic risk of future global financial crises
Glint enables you to save, spend, and exchange between USD, EUR, GBP and gold wallets. Glint’s clients know their gold is securely held in a Brinks Vault in Switzerland. Brinks is insured with Lloyds of London.
In the next few months, Glint will launch Person to Person (P2P) payments, giving clients the ability to send gold and currencies to fellow Glint clients as easily and instantly as you might send a text message.
Fees are transparent and simple with Glint when buying or selling gold or spending in foreign currencies. There are no hidden fees and Glint uses the best available market rates with no Glint margin added, when transacting in 150 currencies around the word.
Glint has recently launched the ability for clients to experience no fees when making a gold-based purchase in their home currency of residence using the Glint pre-paid debit card (Mastercard).
You should be aware that Glint’s gold offering is not subject to regulation by the Financial Conduct Authority (“FCA”). Always speak to an independent financial adviser if you have any questions or concerns.
Glint is a FinTech that uniquely enables physical gold to be converted into e-money for spending via a pre-paid debit card (Mastercard). Glint also offers a multi-currency account. Glint enables its clients to buy, save and exchange physical gold and other currencies.
Glint’s vision is a world where everyone has an equal opportunity to prosper, made possible by providing everyone with a reliable form of money, gold.
Glint’s clients know their gold is secured in a Brinks Vault in Switzerland. Brinks is insured with Lloyds of London. Glint issues clients with e-money, via the Glint app, upon receipt of fiat funds. All e-money issued by Glint is held in safeguarded and segregated accounts.
Already available in the UK, SEPA3 and the US, Glint is set to launch in Canada, Japan, and Scandinavia in 2020.
Gold is the world’s alternative to government-controlled fiat currencies and has been a secure and globally accepted form of payment since 4,000 BC. Glint is a tangible alternative to cryptocurrencies, because it provides ownership of physical gold and permits instant gold-based purchases. Glint interacts with the global banking system and is a form of instantaneous payment for goods and services.
About Jason Cozens (Founder & CEO of Glint)
Mr. Cozens has more than 20-years' experience within the eCommerce technology and digital marketing sectors. Mr. Cozens is Chief Executive Officer and Founder of Glint. In this role, he is responsible for shaping the company’s strategy and overseeing the Glint technology platform. Prior to founding Glint, Mr. Cozens was the co-founder of GoldMadeSimple.com, a website he co-created in 2009 to provide customers with a fast and easy way to purchase physical gold bullion bars and coins. Before GoldMadeSimple.com, he helped to found Bite Digital Ltd., a 360° digital marketing and ecommerce development agency. Prior to that, he was the Director of Online Capital at DISC (later sold to Bartercard PLC) where he helped evolve their online group discount retail channel by increasing sales and efficiency through the introduction of technologies, marketing and integrated supply chain processes. Before that, Mr. Cozens was the Founder & CEO of Visuality Ltd., a digital agency that produced pre-build virtual reality visualisations of projects such as the Sydney Olympic and Wembley Stadiums and built and maintained the first ecommerce platforms for some of Europe’s high street retailers and manufacturers.
Investors seeking positive opportunities amid coronavirus gloom
Investors are now actively seeking ‘new world’ sectors and companies as the world readjusts to life with coronavirus and looks ahead to an economic recovery.
The assessment from Nigel Green, the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory organizations with operations in 100 countries, comes as global stock markets rallied on Tuesday.
Mr Green notes: “Every economic downturn creates a new normal. The one being triggered by the coronavirus pandemic will be the same.
“The Covid-19 impact has hit firms across the world – there’s been immense international disruption - with many sectors experiencing major issues of supply, demand, or both.
“However there remain some sections of the economy which are benefitting from the coronavirus fallout.”
He continues: “Sensibly, investors are now actively seeking these ‘new world’ sectors and companies in order to grow and protect their wealth.
“This is evidenced by the tech-heavy Nasdaq Composite index which has done well, where other global indices have faltered.
“New industries will come into their own and, as ever, there will be winners and losers. This will mean job losses in some sectors and huge - possibly unprecedented - job and investment opportunities in others.”
Last week, in a media release, Nigel Green noted that a Covid-19 recession is likely “to fundamentally shift how we live, do business and invest.” He added that it could also be expected to “speed up the Fourth Revolution, which is fuelled by new technologies, such as Artificial Intelligence and mobile supercomputing.”
Mr Green goes on to say: “Big tech is just one likely winner. The likes of Apple, Facebook, Amazon, and Google’s parent company Alphabet have immense cash reserves to continue, maybe even bolster, research and development and to sustain their business operations.
“This sector is also likely to face higher demand as social distancing, isolation and quarantine affect much of its existing and potential consumer base.
“Plus, recently heightened regulatory restrictions and political opposition to their expansion and growth of influence is likely to be scaled back considerably.”
He adds: “For similar and other reasons, other sectors besides the Silicon Valley giants, are likely to continue to offer positives for investors.
“These include pharmaceutical and healthcare firms, delivery brands, supermarkets and manufacturers of electronic goods, such as fridges and freezers.”
Nigel Green concludes: “Of course, there will be a recovery from the global economic impact of coronavirus.
“But the world has already changed as a result of it - and will do so more - and savvy investors are aware of this new normal and are already readjusting their portfolios accordingly.
“Times of immense tumult can be times of great ingenuity, promise and opportunity.”
World’s Five Largest Banks see Investment Banking Revenue Slide to $26.1bn in 2019
Trade tensions, slow growth, and low-interest rates all left their mark on the world’s largest banks last year, affecting the investment banking revenue they racked up.
The five largest global banks hit $26.1bn in investment banking revenue in 2019, 3% down on the year, according to data gathered by LearnBonds. JP Morgan, ranked as the world’s largest bank, made almost $6.9bn profit from investment banking last year.
Global Investment Banking Revenue Slipped 4% in 2019
The keyrole of an investment bank is to help companies and governments raise capital from investors, such as pension funds or other money managers. The banks take the role of underwriter, making sure that bonds or stocks are competitively priced and sold. Investment bankers also help clients manage mergers and acquisitions.
In 2019, the twelve largest US and European banks generated $77.5bn from investment banking, or $3bn less compared to the previous year, revealed the Wall Street Journal and Dealogic data.
As market leader, JP Morgan gained 8.9% market share, a 0.3% rise compared to the year before. But investment banking income at the US giant dipped by more than $50m between 2018 to 2019.
Although the revenues of the world’s top investment banks plunged to a 13-year low in the first half of 2019, JP Morgan still managed to produce record income in the fourth quarter. The record earnings at the end of the last year were driven by the bond trading revenue, which surged 86% to $3.4bn, surpassing the $2.6bn estimate by roughly $800m.
Chief Executive Officer of the JP Morgan, Jamie Dimon said: “JP Morgan Chase produced strong results in the fourth quarter of 2019, capping off a solid year for the firm where we achieved many records, including record revenue and net income.
While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level and resolution of some trade issues helped support client and market activity towards the end of the year.”
Goldman Sachs, the second-largest investment bank in the world, ended 2019 with $5.8bn in investment banking revenue and a 7.5% market share. Compared to a strong 2018, the Wall Street institution suffered a near 7% slide in revenue from investment banking services. This fall reflected lower earrings in underwriting and financial advisory, partially offset by higher revenues in corporate lending during 2019.
However, the bank ended the year with $36.6bn in overall net revenues, including the fourth-quarter revenues of $10bn, its highest quarter since 2007.
Goldman Sachs chairman and chief executive David Solomon said: “Strong performance in the fourth quarter helped us to deliver solid results for the year while continuing to invest in new businesses. We aim to drive higher returns in the future.”
Leading American Banks generated One-Third of Total Investment Banking Revenue
Behind the two leading banks, Morgan Stanley and Bank of America ranked third and fourth with revenues of around $4.8 bn and $4.7 bn in 2019, respectively. Citigroup took fifth place on this list, with $3.8bn of revenue last year.
The 2019 data show the five leading US investment banks generated one-third of total investment banking revenue in the last year, holding a market share of more than 33%. The position of American banks in this area has been strengthened as a host of European banks - such as Deutsche Bank, Royal Bank of Scotland and UBS - have withdrawn from investment banking after suffering crippling losses in the 2008 financial crisis.
Analyzed by sector, financial institutions represent the leading field for investment banking services in 2019 with $16bn in revenue. Technology and Energy and Natural resources followed with $11.3bn and $9.7bn profit, respectively. The statistics indicate that JP Morgan was the leading bank in seven out of ten investment banking sectors. Goldman Sachs ranked as the leading investment banking service provider in the fields of technology, business services, and transport.
Global financial markets to use China’s recovery as a critical gauge
Global financial markets will use China’s recovery as a sentiment tracker, affirms the CEO of one of the world’s largest independent financial advisory and services organisations.
The comments from Nigel Green come as European and Asian-Pacific markets and U.S. futures fell after a stream of stark headlines over the weekend.
His observations also follow Chen Yulu, a vice governor at the People’s Bank of China, giving a press conference on Sunday at which he noted that two ways the country is contributing to global financial recovery is by maintaining domestic financial markets’ stability and by being involved in international talks on macroeconomic policy collaboration.
Mr Green says: “Since the World Health Organisation upped its rhetoric on Covid-19 due to the rapid spread, financial markets – including stocks, oil, government bonds and gold - have experienced wild bouts of volatility and major sell-offs.
“Investors are now not only monitoring the habitual markers like the price of gold and oil and international fiscal and monetary policies, but they’re also tracking the global health policies and Coronavirus-death tolls.”
He continues: “The epicentre of Coronavirus has shifted from China to Europe. Europe has now registered more Coronavirus cases and fatalities than China.
“Almost immediately, the Chinese authorities launched intense lockdown measures to try and halt the outbreak. It appears to have been successful, with cases having fallen considerably.
“However, the adverse impact on the world’s second-largest economy – which drives in a large part – the global economy - has been significant.”
Mr Green goes on to say: “As such investors around the world will now be looking at how China gets back on its feet economically. Did the extreme lockdown work? Were the public health facilities adequate? Will there be another outbreak as activity resumes? How will the authorities now kickstart the economy? How will these decisions and the success of them impact the rest of the world?
“I’m confident that global financial markets will stage a relief rally when there is a definitive signal that the infection rate is dropping and that cases have peaked. Investors will come off the sidelines and prices will jump.”
The deVere CEO concludes: “Therefore, the next stage in China’s public health and economic recovery is critical.
“What takes place in the People’s Republic will be used by investors as a sentiment guide and a gauge for the rest of the world, particularly the U.S. and Europe where Covid-19 transmissions are yet to peak.”
Bitcoin’s sharp recovery to take price beyond $7,000 in next week
The price of Bitcoin is likely to recover to at least $7,000 in the next week, with the wider cryptocurrency market receiving a major resurgence.
This is the bullish forecast from Nigel Green, the chief executive of deVere Group, one of the world’s largest independent financial advisory and services organisations.
It comes as the price of Bitcoin, the largest digital currency with a current market capitalisation of around $130bn, shot up by more than 20 per cent in 24 hours on Thursday.
Mr Green, who launched the deVere Crypto app in 2018, says: “Global financial markets – such as stocks, oil, currency, bonds and gold – experienced a massive sell-off this week. Investors who needed cash went into panic-mode about the coronavirus pandemic and whether governments' and central banks' policies are enough to mitigate the economic impact.
“Bitcoin was no different from any of these other assets - including the safe havens – it was just another asset to sell at the time.
“However, it has recovered significantly better than many other assets, jumping 20 per cent in 24 hours.”
He continues: “I’m confident that this upward trajectory will remain strong. The price of Bitcoin is likely to recover to at least $7,000 in the next week as the volatility in traditional financial markets, including fiat currency markets, looks likely to remain in the near-term.
“As such, a growing number of institutional and retail investors will seek to diversify their portfolios and hedge against the turmoil by investing in decentralised, non-sovereign, secure crypto assets, such as Bitcoin.
“In other recent times of market uncertainty, a growing consensus has been revealed that Bitcoin is becoming a flight-to-safety asset.
“Up to now, gold has been known as the ultimate safe-haven asset, but Bitcoin - which shares its key characteristics of being a store of value and scarcity – could potentially dethrone gold in the future as the world becomes increasingly digitalised."
Mr Green adds: “Moreover, the upswing in Bitcoin’s price will remain on track because the fundamentals remain intact – namely that cryptocurrency is the future of money.
“Cryptocurrencies like Bitcoin are digital and global. Digitalisation is often called the fourth industrial revolution and cryptocurrencies are digital by their very nature. Meanwhile, the borderless nature of cryptocurrencies makes them perfectly suited to an ever globalised world of commerce, trade, and the movement of people.
“It is also about demographics. Younger people, who are of course the future, have always lived in a digital era, so using digital currency is going to be second nature.
“In addition, there will be an acceleration of institutional investment which is likely to be driven by greater regulatory clarity. More and more global jurisdictions can be expected to join the likes of Malta, Hong Kong, Japan and Switzerland in becoming crypto-friendly from a regulatory and pro-business viewpoint. The institutional expertise and capital will bolster prices significantly.”
The deVere CEO concludes: “Volatility in traditional markets, combined with a growing consensus of it being a flight-to-safety asset, plus its strong inherent fundamentals will ensure Bitcoin’s continued upward trajectory.”
Majority of top global VC investors witness growth in investment volume but decline in value in 2019, says GlobalData
Six of the top 10 global venture capital (VC) investors showcased year-on-year (YoY) growth in the number of investments, whereas seven of them witnessed YoY decline in the proportionate investment value in 2019, says GlobalData, a leading data and analytics company.
The top 10 global VC investors (by number of investments) participated in more than 1,200 funding rounds in 2019 as compared to 1,110 funding rounds in 2018. However, the proportionate investment value of these VC firms declined from US$13.4bn in 2018 to US$10.5bn in 2019. The decline could be attributed to the lower proportionate investment value for majority of these VC investors.
Of the top 10 VC investors, six (Sequoia Capital, Y Combinator, 500 Startups, Accel, Kleiner Perkins Caufield & Byers and High-Tech Grunderfonds) increased their investment volume in 2019. In contrast, seven of them witnessed decline in the proportionate investment value in 2019.
Aurojyoti Bose, Financial Deals Analyst at GlobalData, says: “Despite an upsurge in the investment volume, shrinkage in the investment value indicates a cautious approach of VC investors towards making big investments.”
Interestingly, Sequoia Capital, which registered the highest investment volume and value in 2019, also witnessed decline in its proportionate investment value by 40% compared to the previous year.
The other top VC firms that witnessed decline in the proportionate investment value in 2019 included 500 Startups, New Enterprise Associates, Andreessen Horowitz, Kleiner Perkins Caufield & Byers, IDG Capital and High-Tech Grunderfonds. Of these, New Enterprise Associates, Andreessen Horowitz and IDG Capital also witnessed decline in the number of investments.
Y Combinator registered the highest growth in the number of investments as well as proportionate investment value in 2019 as compared to 2018.
Bitcoin Infographic: Number of Transactions Decreased by 23%, Inequality of Distribution Is Getting Worse
According to a new Kryptoszene.de infographic, Bitcoin saw an average of only 293,447 transactions daily in the fourth quarter of 2019, compared to 381,652 BTC in the first quarter. The wealth inequality within the crypto-community also continues to grow: $59.88 billion worth of bitcoins are concentrated in the top 0.01% of BTC accounts.
18.26 million bitcoins– 85% of the maximum total amount – are already in circulation. This correlates with a clear upward trend of the crypto-infrastructure. In March 2017, there were 1,066 Bitcoin ATMs installed worldwide. Since then, the volume has increased by 568% to 7,129 ATMs. However, the regional distribution is still quite uneven. Almost 80% of all BTC machines are located in North America. 17.3% of ATMs are located in Europe.
"It is difficult to assess the current situation," says Kryptoszene analyst Raphael Lulay. "On the one hand, the infrastructure is constantly expanding. The price development and the number of transactions are, however, subject to strong fluctuations. The spread of the coronavirus is also making the situation more ambiguous. At first, the crisis seemed to strengthen Bitcoins standing as crisis-asset. Meanwhile, the Bitcoin price is on a downward slide, as are the stock indices”.
The full story with the infographic, facts and more statistics:
Oil price war and coronavirus: global recession is almost inevitable
A global recession is now almost inevitable this year, warns the CEO of one of the world’s largest independent financial advisory and services organisations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as global stocks and government bond yields fell after oil prices plummeted by almost 30 per cent on Monday.
He notes: “Oil’s sharpest one-day drop since the 1991 Gulf war has further fuelled the sell-off in global stock markets that started a couple of weeks ago on fears that coronavirus is going to severely damage economic growth.
“Every major stock market is getting hammered as oil prices plunge due to a price war following the breakdown of Saudi Arabia’s oil-cutting alliance with Russia over the weekend.”
He continues: “This is an issue that will not be resolved overnight and it can be expected to have far-reaching consequences.
“It comes as the world scrambles to deal with the market mayhem and economic fallout caused by the relentless global spread of coronavirus.
“With the combination of the implications of the oil stand-off and the outbreak, I now believe that it’s almost inevitable that there will be a global recession this year.”
Before the oil price drop, last week Mr Green noted: “The outbreak has already sent the stock market into bouts of volatility not seen since the 2008 financial crisis, severely disrupted global supply chains, shuttered factories, grounded flights, closed attractions and cancelled major events. Entire powerhouse cities in Asia and Europe are nearly shut down. Multinational companies have warned that coronavirus will severely hit profits. Workers are being evacuated and forced to work from home and to avoid travelling.
“We can see both supply and consumer demand are already being impacted in key sectors, such as travel and tourism, hospitality, manufacturing and retail, and it is going to extend to others.
“This scenario is then likely to feed on itself: a lack of consumer confidence and spending, lack of business investment, more job cuts, which means even less spending and demand, which leads to further job cuts.”
The deVere CEO affirms: “In times of increasing volatility, investors need to ensure that they remain in the markets with their suitably diversified portfolios - not only to safeguard their wealth, but to create and build it too.
“As ever, there will be winners and losers and savvy investors and their financial advisers will be eyeing the opportunities that fluctuations, panic-selling and mis-pricing generate, allowing them to revise and add high quality equities to their portfolios at lower prices.”
Mr Green concludes: “The ultimate impact that the oil price war will have on an already vulnerable world economy that’s struggling to cope with the spread of coronavirus remains unknown.
“However, the risk of a short but severe global recession in 2020 has now been heightened dramatically.”
New era of negative rates looming? Investors move to top-up portfolios
A fresh era of negative interest rates is looming and investors are now seeking to top-up their portfolios with equities, says the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green, the deVere Group chief executive and founder, is speaking out after the U.S. Federal Reserve’s emergency rate cut on Tuesday – the first since the 2008 financial crash – as it tries to limit the economic impact of the coronavirus outbreak.
Mr Green affirms: “There’s been one historic cut already and there are signals that the Fed – the world’s de facto central bank – will make deeper cuts imminently.
“As it scrambles to protect the U.S. economy from the far-reaching fallout of the coronavirus, it can be expected that it could take rates back down to zero – emergency territory - in the next few months.
“This then raises the spectre that the Fed will ultimately follow its peers in Europe and Japan by adopting negative interest rates.”
He continues: “There is much debate and scepticism regarding the effectiveness of slashing rates in response to a global public health crisis and the resulting market turmoil.
“Negative rates can be misinterpreted by the public. They have been viewed as a warning to consumers and investors, that the underlying economies are in a dangerously weak position, and hit investor and consumer demand.”
Mr Green continues: “However, while the jury is out on whether negative interest rates help the real economy, there is no doubt that they help boost financial asset prices.
“As such, with coronavirus possibly ushering in a fresh era of negative interest rates, investors are now seeking to top-up their portfolios with equities before the next round of cuts and the likely subsequent price jump. They are seeking the lower entry points before the market surge.
“Those with savings in the bank are already getting battered by the ultra-low interest rates they are getting,
“Negative rates will give more investors more reason to increase their exposure to equities.”
The deVere CEO concludes: “There question mark remains on whether cutting rates from their already low levels will solve the issues created by the coronavirus outbreak.
“But rate cuts – and it is likely there will be deeper ones to come – will push up financial asset prices and right now many investors are looking to get ahead of the curve on this.”
Global sell-off could be seen by investors as best buying opportunity
in a decade
The worst global market sell-off since the 2008 crash will become an important buying-opportunity for investors, affirms the chief executive of one of the world’s largest independent financial advisory and services organizations.
The prediction by Nigel Green, CEO and founder of deVere Group, comes after equities lost a tenth of their value this week as investors piled into havens on growing concerns the coronavirus outbreak will hit the world economy and impact corporate profits.
Mr Green notes: “Until this week, the markets had largely shrugged off the impact of the outbreak of coronavirus. We warned about complacency leaving many wide-open to nasty surprises.
“This has now changed. Investors have done a ‘one eighty’ – from a muted overly confident reaction to the serious and far-reaching global issue of coronavirus to running like headless chickens.
“Both extremes are worrying and could potentially wreak havoc on investors’ returns.”
He continues: “However, the worst global market sell-off since the 2008 crash will almost certainly become an important buying-opportunity for many investors.
“With markets on the brink of correction territory, panic-selling, mis-pricing of high quality equities, and lower entry points, this could turn out to be one of the key buying opportunities in the last 10 years.
“Some of the most successful investors will embrace volatility to create, maximise and protect their wealth.
“As ever in times of increased turbulence, there will be winners and losers. A professional fund manager will help investors take advantage of the opportunities that volatility presents and mitigate potential risks.
Earlier this week, Mr Green noted: “In the current volatile environment, investors - including myself - will be revising their portfolios and drip-feeding new money into the market to take advantage of the opportunities whilst reducing risk at the same time.”
The deVere CEO concludes: “Global investors should not be spooked by the return of volatility on stock markets but, where possible use it to their financial advantage.
“Of course, no–one knows for sure what will happen in the immediate future but, as stock markets typically rise over a longer-term period, now is the time to capitalise on the more favourable prices of decent stocks.
“It can be expected that in coming days, serious investors will be bargain-hunting.”
Germany set for first green bond with innovative structure but little scope for higher issuance
Germany (AAA/Stable) is set to enter the sovereign green bond market in the second half of 2020 as part of a longer-term strategy to shift debt towards green alternatives. Future issuance depends on the government’s willingness to move to a green economy.
The German debt agency (Finanzagentur) is planning to issue green bonds as so-called twin bonds. The agency will designate a portion of bonds sold in conventional debt auctions as green bonds with the same maturity and coupon as their conventional bond twin, though as separate securities with their own ISINs. The green security will comply with the Green Bond Principles as defined by the International Capital Market Association (ICMA) so will be comparable to green bond issues by France (EUR 7bn in January 2017), Belgium (EUR 4.5bn in February 2018), and the Netherlands (EUR 5.98bn in May 2019).
“As a sovereign issuer, Germany is entering the green bond market later than some peers, but with a new strategy. Tying green bonds to conventional bonds could help to enhance market liquidity compared to issuing green bonds independently,” says Bernhard Bartels, lead analyst for Germany’s sovereign rating.
It is worth noting that KfW (AAA/Stable), the German government development bank that is seen as a sovereign proxy by capital markets by virtue of a Federal Republic guarantee, has been a regular issuer of green bonds since 2014. By the end of 2019, KfW had a total of EUR 22.6bn in green bonds outstanding.
The Federal debt agency has communicated to market participants that the expected size of its first green bond will be in the high single-digit to low double-digit billion range and mentioned the government’s intention to offer green securities along the entire yield curve out to 30 years.
“The government’s intention to offer green bonds on a broad scale could help ensure its position as a benchmark issuer, especially at the longer end of the yield curve,” says Bartels. “However, as long as the government sticks to its “black-zero” commitment, we see little scope for large-scale green bond issuance. Moreover, the replacement of some conventional bonds by green bonds does not necessarily generate a higher volume of green projects if already-existing projects are simply re-labelled in accordance with the green bond principles,” Bartels adds.
The scope for German green bonds is limited since the federal government’s debt burden has declined by around EUR 64bn from end-2012 to 2018, specifically, from EUR 1.39trn to EUR 1.32trn in 2018. The central government debt-to-GDP ratio has declined by 10pp to 40% of GDP over the same period, driven by steady growth and balanced budgets, reducing the need for debt issuance. In the absence of a debt-increasing investment programme to finance plans to become carbon-neutral by 2050, the ability to issue sovereign green bonds could remain restricted. Current programmes focus on budget neutrality, for instance by refinancing investments with environmental tax revenues.
The Green Bond Principles leave ample room for policymakers to define the use of proceeds. While the ICMA lists a number of possible uses, this list is not exhaustive and allows issuers to provide their own definition of environmental sustainability. In addition, the ICMA recommends a second-party opinion or certification of green bond programmes. Typically, governments finance infrastructure projects, energy-efficient housing or renewable-energy projects.
“As of now, the established ICMA framework does not guarantee the use of proceeds from green bonds for green projects given that they only provide guidelines, which allow the use of many instruments to serve a general purpose,” Bartels says. The upcoming green bonds will refinance existing green projects as well as new ones. For instance, the government could use green issuance to finance projects via the public energy and climate fund (EKF), part of which is currently used to reimburse energy companies for premature closure of coal plants.
Investors in sovereign green bonds rely on the selection of projects by respective governments and ministries for green ends. At the same time, many highly-rated issuers can expect low if not negative interest rates on green bonds given heightened market demand for these products. This may incentivise issuers to invest mainly in the reporting of projects as being green rather than programming new green projects.
Bloomberg’s cryptocurrency policy puts him on the right side of financial history
Presidential candidate Michael Bloomberg’s proactive cryptocurrency plans place him on the right side of financial history, affirms the CEO of one of the world’s largest independent financial services and advisory organizations.
The chief executive and founder of deVere Group is speaking out after the New York-based billionaire presidential hopeful proposed creating a regulatory framework for cryptocurrencies in a new financial regulation plan.
The plan notes: “Cryptocurrencies have become an asset class worth hundreds of billions of dollars, yet regulatory oversight remains fragmented and undeveloped.”
Mr Green comments: “Michael Bloomberg is, to date, the only candidate to become president of the world’s largest economy who has devised a coherent plan for cryptocurrencies.
“The staggering pace of the digitalization of economies and our professional and personal lives underlines that there will be – must be - growing demand for digital, global, borderless money.
“Indeed, digital currencies are now almost universally regarded as the future of money.
“This is why most central banks around the world – including the Federal Reserve - major financial institutions, tech giants, and multinationals are all getting involved.
“As such, Bloomberg’s proactive and progressive approach, which could be the first step to providing regulations to protect consumers and prevent illicit activity in the new age, must be championed.”
Nigel Green has long been a vocal advocate for cryptocurrency regulation.
He notes: “Digital currencies are already becoming mainstream and that means that they should adhere to the same standards as the rest of the financial system.
“Regulation is necessary as it will provide further protection for the growing number of people using cryptocurrencies, the less likely it will be that criminals will use these digital payment methods, the less potential risk there will be for the disruption of global financial stability, and the more potential opportunities there will be for higher economic growth and activity in those countries which introduce it.”
Last year, the deVere CEO criticised President Donald Trump who took to Twitter to say: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
In response, Mr Green blasted: “Does the President seriously think that traditional, fiat currencies are the way forward?”
Nigel Green concludes: “Cryptocurrencies are redefining and reshaping the financial system. The Leader of the Free World needs to be ahead of the curve and on the right side of history on such a fundamental issue.”
Responsible and sustainable investing the ‘new norm in less than five years’
Environmental, social and governance (ESG) investing will be “the new norm in less than five years”, affirms the CEO of one of the world’s largest independent financial services and advisory organizations.
The bold prediction from Nigel Green, chief executive and founder of deVere Group, which does business in 100 countries, comes as Amazon boss Jeff Bezos commits $10bn to fight climate change.
Mr Green notes: “Responsible and impactful investing is already fundamentally reshaping the global investment landscape.
“It is the trend that will define the 2020s – so much so that I’m confident that environmental, social and governance (ESG) investing will be the new norm in less than five years.”
He continues: “The growth in responsible investing will be driven by demand by both retail and institutional investors.
“Global awareness has skyrocketed about environmental, social and governance considerations over the last 12-18 months, in part due to the activism of the likes of Greta Thunberg, Extinction Rebellion and Jane Fonda, and due to the growing media coverage of climate change and its serious effects.
“As a result, these issues now sit at the heart of the investment decision-making process amongst eight out of 10 millennials, according to a recent deVere survey. Some argue this is likely to be even higher for Generation Z.”
This is of major consequence due to the Great Wealth Transfer. “This will see an estimated $68 trillion pass down from baby-boomers to millennials over the next couple of decades – and it could make them even richer than previous generations. It’s expected that this significant wealth transfer will begin in the next few years,” affirms the deVere CEO.
Currently, the U.S. and Europe lead the charge in ESG investment, with 80% of the responsible-investing market. Asia is currently lagging behind. But, says Mr Green, this could change and will further fuel demand.
“By 2025, Asia will be home to 33 of the world’s 49 megacities, according to Global Data. The rise in the number of megacities – cities in which there are more than 10 million permanent residents – will be fuelled by millennials who seem to be fully on board with ESG.”
“In addition, ESG investing will allow governments across Asia to realise some of their wider major policies. These include shrinking labour forces and weakening economic growth, migration, and global low-carbon transition threats.
“Demand for ESG-related strategies will go stratospheric when Asia goes full throttle into this direction, which it will do.”
Nigel Green goes on to say: “As the sector develops around the world, naturally, institutional investors will pile in, bringing with them their institutional capital and institutional expertise. This will act as a further catalyst for the ESG investment arena.”
He goes on to say: “One of the most compelling reasons why responsible investing will be the defining trend in less than five years is due to an increasing amount of evidence and ongoing research that ESG-related strategies can regularly outperform the market.
“It would not be unreasonable to assume that those companies that offer ESG-compliant investment could ultimately become some of the world’s most valuable companies. Could they take over from the current big tech firms? I would not be surprised.”
The deVere CEO concludes: “The investment world is evolving perhaps more rapidly than it has in decades due to the rise and rise of responsible and impactful investing.”
SRB launches public consultation on changes to its MREL policy under the 2019 Banking Package
The Single Resolution Board (SRB) today launches a public consultation on a number of substantial changes to its policy on the Minimum Requirement for Own Funds and Eligible Liabilities (MREL). These changes bring the policy in line with the amendments introduced by the 2019 EU “Banking Package” to EU regulations and directives.
This document describes the proposals, provides the rationale and highlights several specific questions to which the SRB seeks responses. The SRB is eager to receive responses and suggestions from a full range of stakeholders.
The consultation is open until 12.00 Brussels time on 6 March 2020. The answers will support the SRB in preparing its final MREL Policy Statement, expected to be published by end April 2020.
The proposals cover the implementation of provisions related to, among others:
MREL requirements for Global Systemically Important institutions (G‑SIIs);
Changes to the calibration of MREL, including introducing MREL based on the leverage ratio;
Changes to the quality of MREL;
Dedicated rules for certain business models, such as cooperatives, and for resolution strategies, such as multiple point of entry (MPE);
How these changes will be phased in.
MREL decisions implementing the new framework will be taken based on this policy in the 2020 resolution planning cycle by Q1 2021.
This public consultation is part of the SRB’s commitment to listening to the views of industry and other stakeholders and being transparent about its approaches and decisions.
SRB announces the appointment of new Vice-Chair and Board Members
The Single Resolution Board (SRB) is pleased to announce the appointment of Jan Reinder De Carpentier as Vice-Chair and Pedro Machado and Jesús Saurina as Members of the Board and Directors of Resolution Planning and Decisions. They will take up their duties on 1 March 2020.
The European Commission, in consultation with the SRB, carried out a stringent recruitment process and proposed the appointees as candidates to the European Parliament. After the European Parliament approved the proposal on 30 January 2020, the Council, acting by qualified majority, adopted the appointments on 17 February 2020.
Meet the Vice-Chair
Jan Reinder De Carpentier joined the SRB in 2015 as General Counsel in charge of the Legal Service, SRB Secretariat and Compliance function, providing strategic legal advice across the organisation and to the Single Resolution Mechanism stakeholders. He joined the Dutch central bank in 2002 and held various management positions, with a focus on anti-money laundering supervision, legal advice, early intervention strategies and crisis management. A Dutch national, Jan Reinder started his career in 1995 as a lawyer in private practice in The Hague and Amsterdam and holds a master’s degree in civil and tax law from Erasmus University in Rotterdam.
Meet the Members of the Board and Directors of Resolution Planning and Decisions
Pedro Machado has worked in financial regulation and supervision for close to 20 years. He is the Director of Legal Services and Chief Legal Counsel at Banco de Portugal, where he has also previously served as Deputy Director of the Prudential Supervision Department. A Portuguese national, he was the Minister of Finance’s Chief of Staff between 2011 and 2013, and has worked in the European Central Bank and PwC. From 2012 to 2015, Pedro was a non-resident member of the European Investment Bank’s Board of Directors. He holds a law degree from the Lisbon School of Law and has done post-graduate studies in European Law at the European University Institute.
Jesús Saurina is currently Director-General at Banco de España, responsible for Financial Stability, Regulation and Resolution, as well as being a member of its Executive Board and Governing Council. He has developed his whole career in the Banco de España, starting in supervision and then setting up and leading the Financial Stability Department. A Spanish national, Jesús has also been a board member of the Spanish resolution authority, FROB, as well as of the Spanish Deposit Guarantee Fund. He is currently a member of the Basel Committee on Banking Supervision, as well as a board member of the SRB’s Plenary Session and of the European Banking Authority. Jesús holds a Ph.D. in Economics from the Universidad Complutense de Madrid, and did postgraduate studies at CEMFI.
The new appointments replace Vice-Chair Timo Löyttyniemi and Board Members Antonio Carrascosa and Dominique Laboureix.
“I am delighted to welcome Jan Reinder, Pedro and Jesús. They each bring vast experience and knowledge to the SRB. Jan Reinder has been instrumental in building up the organisation, while Pedro and Jesús have had impressive careers in their respective central banks with a deep engagement in financial stability, as well as bank resolution. Together we will focus on our mission to make all banks resolvable, which in turn protects financial stability and the taxpayer.”- Elke König, Chair of the Single Resolution Board
“It is an honour to be taking up the role of Vice-Chair of the SRB. I have been with the SRB as General Counsel for more than four years and this new position is a challenge I am looking forward to, as the SRB continues its important work to promote financial stability.” - Jan Reinder de Carpentier, newly appointed Vice-Chair
“I am very pleased to be joining the SRB in the coming weeks. Resolution has been part of my work in different periods of my career over the last decade. I feel very committed to bringing my experience to improving bank resolvability through sound planning. It will be an honour to serve at the SRB and contribute in a meaningful way to the Banking Union, a fundamental endeavour of the European project.” - Pedro Machado, newly appointed Member of the Board
“It is both inspiring and challenging to be part of the SRB, an institution that has already demonstrated that it is possible to resolve a bank protecting taxpayers’ money, depositors, financial stability and the critical functions of the bank.” - Jesús Saurina, newly appointed Member of the Board
Bitcoin’s price jumps to $10,300 – what’s the REAL driving force of the rally?
Bitcoin’s price has soared to $10,300 on comments made on Tuesday by the U.S. Federal Reserve Chair – but there are other major factors at play driving the price, which has jumped more than 40% since the beginning of 2020.
This is the warning from Nigel Green, deVere Group CEO and founder, as the world’s largest cryptocurrency jumped more than 4% on comments made by Jerome Powell that the Fed is investing a significant amount into digital currency development.
Mr Green states: “This is further evidence that not only all major banks, government agencies, plus most sectors including tech, entertainment and real estate, are piling into cryptocurrencies – but that central banks are too.
“The previously sceptical Fed has not, until now, admitted how rapidly digital currencies could become a systemic risk to the U.S. dollar’s status as global reserve currency.
“This is a major step in underscoring – especially to those backward-looking traditionalists – that, whether they like it or not, digital global currencies are not only the future of money, they are increasingly the present too.”
He continues: “The development from the Fed comes following news that China – a communist state and the U.S.’s main economic rival – is currently developing what has been described as an all-powerful cryptocurrency. It could be ready this year and be the world’s sovereign digital currency.”
Mr Green goes on to say: “Whilst there will be minor peaks and troughs – as in all markets - I predict the overall trajectory of Bitcoin to remain upward for the next few months.
“Besides increasing institutional awareness and development, other major factors driving its price advance will be coronavirus.
“Bitcoin’s price is likely to continue to jump until the coronavirus peaks because of the growing consensus that the digital currency is a safe-haven asset.
“Its status comes from the fact that it is a store of value, scarce, perceived as being resistant to inflation, and a hedge against turmoil in traditional markets.”
He adds: “Another major price driver will be the next halving event.
“The code for mining Bitcoin halves around every four years and the next one is set for May this year. When the code halves, miners receive 50% fewer coins every few minutes. History shows that there is typically a considerable Bitcoin surge resulting from halving events.”
The deVere CEO concludes: “The Fed’s public acknowledgement of cryptocurrencies was important, but most investors have already known that major central banks around the world are developing crypto.
“As such, the main drivers for Bitcoin price for the next few months will remain coronavirus and May’s having event.”
German cryptocurrency IOTA by 2035 - 100 times the value of today
Signs of IOTA breakthrough are evident: rising ratings, exchange rate explosion and bitcoin outperformance
IOTA share price increased by around 119% since January 1st
Highest ranking on Google in a year
According to the study, market capitalization could increase more than a hundredfold by 2035
IOTA is again in the top 20 most valuable cryptocurrencies
According to an infographic by Kryptoszene.de, 2020 began with a bang for the cryptocurrency IOTA: within a few weeks, the exchange rate increased by around 119%. The Demand has peaked, and, as the graph shows, experts even see it as realistic that the price of the cryptocurrency “Made in Germany” will rise hundredfold over the next few years.
On January 1, the Internet of Things currency was still trading at $0.16. Just over a month later, on February 3, the cryptocurrency broke the $0.35 mark. IOTA even developed far better than all the altcoins and bitcoin. BTC price climbed around 29.3% during this period. In a market capitalization ranking, IOTA is currently at the 17th place and is back in the top 20 after several months.
An evaluation by Kryptoszene.de based on data from Google Trends shows that IOTA has never ranked as high in the past 365 days as it did in the last week of January. The Google Trend Score was at 100, which stands for the highest possible search volume. It is also evident that the investors are not only greatly interested in IOTA, they are also extremely optimistic about it. On February 3, 94% were optimistic about the development of the cryptocurrency, only 6% expressed their skepticism.
Here is the detailed article with further interesting information and infographics:
Saudi investment rises despite controversies, says GlobalData
Following the news that foreign direct investment (FDI) inflows to Saudi Arabia grew 10.2% year-on-year (y-o-y) to reach $3.5bn in the first nine months of 2019 compared with January-September 2018, when the amount equaled $3.18bn;
Colin Foreman, Deputy Editor at GlobalData, a leading data and analytics company, offers his view:
“Saudi Arabia’s economic reforms and new construction projects continue to attract growing volumes of FDI into the Kingdom. However, while the latest FDI figures show that progress is being made towards its Vision 2030 economic goals, there are signs that the growth rate could be plateauing.
“In the January-September 2018 period, inflows to the Kingdom grew by more than 170% compared with the corresponding period in 2017, when inflows were valued at just $1.16bn.
“The simple explanation could be that after starting an initial jump from a low base, the rate of growth for FDI is now less spectacular. Another more challenging explanation may be that international controversies involving Riyadh have tempered Saudi Arabia’s ability to attract FDI.
“The 2019 FDI numbers came shortly after the murder of Jamal Khashoggi by Saudi government officials in Istanbul in October 2018. The incident had an impact on business, with the likes of the UK’s Richard Branson suspending his business activities in the Kingdom.
“In 2020, Saudi Arabia is looking to move forward. The raft of projects that it launched in 2017 is now moving into construction and requires investment.
“The government’s privatisation drive will also continue following the initial public offering of Saudi Aramco at the end of last year.
“While economic strides are being taken, the controversy will nevertheless persist. In mid-January, there were claims that Saudi Crown Prince Mohammed bin Salman bin Abdulaziz al-Saud had hacked a mobile phone owned by Amazon owner Jeff Bezos.
“Although the Saudi government quickly dismissed the allegations as ‘absurd’, it could, as with the Khashoggi murder, have a dampening effect on FDI.
“That said, the data for 2019 shows that the weight and scale of Riyadh’s economic reforms and new projects across the Kingdom are still an attractive proposition for investors, and as long as that continues the outlook for Saudi Arabia remains positive.”
Seed and Series A funding rounds registered highest share of global VC investment volume and value in Q4 2019, says GlobalData
Seed and Series A funding rounds accounted for a 38.3% and 24.4% share of global venture capital (VC) funding volume and value in the fourth quarter (Q4) of 2019, which is the highest among all funding rounds, according to GlobalData, a leading data and analytics company.
Early stage funding rounds (Seed and Series A funding rounds) continued to dominate VC investments with a 74.7% share of total investment volume during Q4 2019.
On the other hand, late stage funding rounds such as Series E, Series F, Series G and Series H were fewer in number compared to early stage deals but much larger in average deal value.
A total of 2,753 deals (with disclosed funding rounds) worth US$45.5bn were announced during Q4 2019 compared to 2,325 deals during Q4 2018 that were worth US$39.2bn.
The US accounted for 43.8% of total early stage funding volume and 42.4% of growth/expansion/late stage funding (comprising Series B, Series C, Series D, Series E, Series F, Series G and Series H). It was followed by China, which accounted for 14.7% of early stage funding volume and 23.5% of growth/expansion/late stage funding volume in Q4 2019.
Other key countries that attracted a significant number of early stage funding during Q4 2019 included the UK, India, Germany, Canada, France, Japan, Israel and South Korea.
Growth/expansion/late stage funding accounted for around 70% of funding value in Q4 2019. China’s share of the capital raised through these rounds accounted for approximately 64%, followed by India with approximately 26%.
Other key countries that raised notable funding during Q4 2019 included Japan, Hong Kong, Indonesia, Australia and South Korea.