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  • EU: the musical, Hong Kong: the swan song, and a menacing ballet

    Each week Keeping Tabs beings you the most interesting and entertaining reading from around the web that we have uncovered. This week, the perils of the EU recovery fund through the lens of the subject of Broadway's hottest show, a menacing whiteness of swans and a grim view of Hong Kong's future in finance.

    • 31 Jul 2020
  • DoL proposal misses the mark on ESG

    The US Department of Labour (DoL) has proposed what it characterises as a reiteration of what has always been required of retirement fiduciaries — that they act in the best interest of their beneficiaries — urging them to disregard ESG considerations in investment decisions. In doing so, it appears not to have noticed the last decade in financial markets, which has shown that ESG investing is very much in investors’ interests.

    • 30 Jul 2020
  • Argentina’s PR offensive is just the start of political pressure on EM

    In recent weeks, Argentina’s public relations agency has been cramming the inboxes of financial journalists as the government goes on the attack in an apparent attempt to guilt-trip dissenting creditors into accepting its restructuring offer.

    • 30 Jul 2020
  • The EU is gaining credibility as a banking jurisdiction

    The Single Supervisory Mechanism has been making all the right moves during the coronavirus crisis.

    • 30 Jul 2020
  • Boutique wheel of fortune spins into another crisis

    Independent firms were the big winners of the 2008 financial meltdown. But they will find the Covid-19 crisis tougher to navigate, as they grapple with a unique set of challenges, writes David Rothnie.

    • 30 Jul 2020
  • Chinese SOE employees face tax rise

    American expats have long looked at their low-tax paying peers with envy. While Englishmen, Frenchmen and others in Hong Kong have enjoyed a 17% maximum tax rate, those born in the US are also forced to pay taxes in their country of birth, even if they’ve been absent for decades.

    • 30 Jul 2020
  • Argentina bondholders can expect more political pressure

    In recent weeks, Argentina’s PR agency has been cramming the inboxes of financial journalists as the government goes on the attack in an apparent attempt to guilt-trip dissenting creditors into accepting its restructuring offer.

    • 28 Jul 2020
  • Deposit tiering change less harmful for covered bonds

    A prospective improvement in the European Central Bank’s deposit tiering facility mitigating the punitive impact of negative rates should be bad for covered bonds, 95% of which are negative-yielding. However, the unprecedented scale of reserves held on deposit with the central bank implies that many key investors will still be looking for anything that pays more than its deposit rate of minus 0.5%.

    • 28 Jul 2020
  • AT1s are becoming a thorny issue for regulators

    When the European Central Bank (ECB) is suggesting the additional tier-one market could cost the euro area up to 0.25% of GDP growth in the next year and a half, it is probably time to start thinking about reforming the asset class.

    • 28 Jul 2020
  • Troika paranoia could hamper European recovery

    The European Stability Mechanism stands ready to lend eurozone countries up to 2% of their GDP at negative rates — but in spite of the clear cost savings compared to market funding, countries have yet to take up the offer. It is time to rid ESM lending of its stigma.

    • 28 Jul 2020
  • Supernova: Ant explodes beyond startup limits

    Ant Group revealed last week that it is planning a multi-billion-dollar dual listing in Hong Kong and Shanghai. The company is often referred to as a startup, but it will float at a valuation well above $100bn and has been in business for six years. What is the right term for a company like Ant? It is time for a new moniker.

    • 28 Jul 2020
  • EU recovery fund, Lebanon in trouble, mask persuasion

    This week in Keeping Tabs: what’s next after the EU recovery deal, assuaging public anger, and the Lebanese economy.

    • 24 Jul 2020
  • Covered bond spreads are no longer a one-way bet

    Surging redemptions and aggressive buying by the ECB — which is also offering issuers a cheaper funding alternative — mean a reduced supply outlook for the covered bond market and, therefore, ever tighter spreads. But higher yielding, safer alternative investments are on the horizon, meaning the asset class may soon lose its allure.

    • 23 Jul 2020
  • Boekhout lays out corporate client strategy at Commerz

    The double whammy of coronavirus and a crisis at the top of the bank makes the most testing of times for the new head of Commerzbank’s corporate clients division to make his mark. But Roland Boekhout has a broad vision for the firm’s corporate and investment bank and ideas for how to implement it, writes David Rothnie.

    • 23 Jul 2020
  • The EU is taking back control

    Agreement in the EU this week on a €750bn recovery fund should remind market participants of the UK’s newfound vulnerability.

    • 23 Jul 2020
  • Where there is a will, there is a way to get drunk

    The Covid-19 pandemic could forever change the way we as a society live and travel. Bankers may find it hardest to adjust to the new normal.

    • 23 Jul 2020
  • SSA market must brace for incoming flood of EU paper

    The euro SSA market has grown used to investors flush with cash, itching to buy anything that comes on screens with a good enough rating. But with the EU preparing to issue more than €850bn over the next few years, the balance will shift against issuers, and they must be prepared.

    • 21 Jul 2020
  • Investors need to stop imagining auditors or anyone else offers fraud protection

    Several companies boasting Big Four accounting firms as auditors have emerged as fraudulent, leading many to wonder what value auditors bring to an investors' understanding of a company. The big issue is that auditors have little obligation to detect fraud at companies they audit, and neither it seems does anyone else. Until they do, investors need to stop believing a Big Four sign-off is a seal of approval. In fact, for a system supposedly built with its own reputation in mind, developed markets have offered investors very little protection.

    • 21 Jul 2020
  • Deep divides will form as loan providers prepare to ditch Libor

    The syndicated loan market is facing a schism in the way it deals with the transition away from Libor — and unless the famously ponderous market starts to co-ordinate fast, fissures will keep appearing as different regions stick by their favoured replacement benchmark rates.

    • 21 Jul 2020
  • Biotech surge whiffs of dot-com bubble

    Investors have got a fever, and the only cure is more pharma. Biotech equity issuance is surging, in line with rising stock prices in the secondary market, as stock pickers pan for the company that will cure Covid-19, among other maladies. But this is more speculating than investing and many are going to catch a cold chasing around a risky sector that is starting to look a lot like the dot-com bubble.

    • 21 Jul 2020
  • Food for thought: Chinese issuers in euros

    Chinese food and beverage company Bright Food’s ability to court investors and push for a tight price for its euro-denominated bond shows the benefits ─ and downsides ─ of an aggressive approach to the euro market.

    • 21 Jul 2020
  • The war on Huawei, robots and female pay, state aid’s real state of play

    Each week, Keeping Tabs brings you the very best of what we have found most useful, interesting and informative from around the web. This week: what’s next for the US after its war on Huawei, the impact that more robots would have on the gender pay gap, and a look on the bright side of Europe’s mishmash of state guarantee schemes.

    • 17 Jul 2020
  • Regulators need to think like short sellers

    The Wirecard scandal — like other recent debacles such as NMC Health — shows that financial reporting, oversight and governance, as they are currently practised, are woefully inadequate.

    • 16 Jul 2020
  • Time for the tough to get going, before the going gets tough

    It’s time to get the toughest deals done as market conditions are likely to deteriorate in the autumn, when a second coronavirus wave and a more material deterioration in banks’ balance sheets could knock sentiment.

    • 16 Jul 2020
  • A virtual picture is worth a thousand words

    This year has been a strange one on many fronts, but one of the oddest things we’ve been forced to confront is the virtual meeting.

    • 16 Jul 2020
  • HSBC looks to crack ECM conundrum

    HSBC’s global head of equity capital markets is under no illusions about the challenges the bank faces, but says HSBC’s restructuring is not one of them. David Rothnie reports.

    • 15 Jul 2020
  • It’s time for the UK to send in the choppers

    Rishi Sunak, the UK chancellor of the exchequer, has already thrown some cash from the air to boost the economy and prevent a more serious downturn, with job retention measures, a cut in VAT and meal vouchers. But that won’t be enough. The UK needs a full scale helicopter drop.

    • 14 Jul 2020
  • UK ECM needs structural change for retail to play bigger role

    UK equity capital markets have undergone changes during the Covid-19 pandemic, including allowing retail investors to participate in accelerated recapitalisations of London-listed companies via PrimaryBid. The rise of the app represents a long overdue change but its impact is likely to be limited.

    • 14 Jul 2020
  • Data for debt relief offers coronavirus NPL solution but must be handled with care

    When mortgage payment holiday schemes start to run out at the end of the year, there looms a genuine risk of a wave of defaults. Allowing investors access to borrower-level data may be the only way banks can clean up their balance sheets and maintain lending to the real economy but it is fraught with hazard and must be deftly handled.

    • 14 Jul 2020
  • Indian banks have a rough road ahead

    India’s banking sector has long been in trouble. However, while a few banks can appeal to the equity capital markets to restore their capital levels — and their reputations — this won’t be easy or cheap.

    • 14 Jul 2020
  • The CARES Act, liquidity tracked and green AT1s unpacked

    Each week, Keeping Tabs brings you the very best of what we have found most useful, interesting and informative from around the web. This week: liquidity in the age of central banks, making bank capital green, and US fiscal stimulus.

    • 10 Jul 2020
  • EM restructuring — spare us the posturing

    After striking a remarkably swift restructuring deal with creditors, Ecuador’s government deserves praise. But it is unrealistic to expect such smooth discussions elsewhere, as emerging market sovereign defaults inevitably rise.

    • 09 Jul 2020
  • Imperious JP Morgan shows its crisis credentials

    JP Morgan has extended its lead in European investment banking, scotching accusations of a retreat and dashing hopes of a change in the status quo, writes David Rothnie.

    • 09 Jul 2020
  • A green troika for Europe

    Conditionality has become a central area of contention as the EU shapes its coronavirus recovery plan. The bloc should focus on the environment, not on fiscal responsibility.

    • 09 Jul 2020
  • What a Vision! Loans banker gets curious

    When I was a banker, you only signed a non-disclosure agreement if you had serious interest in joining a deal. Not anymore.

    • 09 Jul 2020
  • China bonds: transparency push a clear win

    The Shanghai Clearing House’s decision to give bond issuers insight into the holders of their debt is a smart move. China has enough regulation; what it lacks is information.

    • 08 Jul 2020
  • Maturity issue shows how green debt really functions

    Some parts of the market are talking about the benefits of ultra-short, money market debt that has a sustainability theme, while on Tuesday BBVA issued a perpetual green bond, albeit with a call. The viability of both these forms of debt shows that the common perception of green bonds is not quite true.

    • 07 Jul 2020
  • World Bank pandemic bond should be the prototype, not the end

    The World Bank has abandoned its plans for a follow-up to its pandemic bond. That is a pity. Although its attempt wasn’t perfect, the format is a valuable concept and shouldn’t be abandoned because of one flawed deal.

    • 07 Jul 2020
  • Don’t forget about Brexit

    Equity capital markets are gearing up for a busy autumn and UK companies have been at the forefront of activity in Europe since the coronavirus pandemic began. Bankers and investors have said they fear the disruption a second wave of Covid-19 and volatility surrounding November's US election could bring, but they should not forget either that the UK is edging towards a no-deal Brexit at the end of 2020.

    • 07 Jul 2020
  • China Covid-19 bonds: don’t give up yet

    Chinese issuers hoping to put the pandemic behind them should not abandon coronavirus-linked bonds.

    • 07 Jul 2020
  • Reacting to Wirecard, EM outlook is marred, climate risk is hard

    Each week, Keeping Tabs brings you the very best of what we in the GlobalCapital newsroom have found most useful, interesting and informative from around the web. This week: supervising financial reporting, a discordant health and financial picture in emerging markets, and managing climate risk.

    • 03 Jul 2020
  • Time for SSAs to be more social

    Money market investors are beginning to feel left out of the ESG revolution sweeping capital markets. With the coronavirus pandemic bringing social concerns to the fore, the time is ripe for SSAs to show the kind of leadership they have demonstrated in the bond markets.

    • 02 Jul 2020
  • After a decade, why rush GSE reform now?

    It can hardly be said that the process of releasing Fannie Mae and Freddie Mac out of government conservatorship has been rushed. The painstaking process has taken place over the course more than a decade and has consumed the Federal Housing Finance Agency (FHFA) through two presidential administrations. And yet, FHFA capital requirements proposals published this week for the government-sponsored enterprises (GSEs) may not go far enough to ensure their safety and soundness.

    • 02 Jul 2020
  • Three is the magic number for BofA

    Bank of America hopes that a new management team built on a culture of intensity will enable it to meet its top three goal in Europe, the Middle East and Africa, writes David Rothnie.

    • 02 Jul 2020
  • When 'energy' dictates our bank balance

    Hong Kong has been my home for two decades, and there is so much I love about it — its vibrancy, the food, the people, and above all, the low tax rates.

    • 02 Jul 2020