Capital Markets Union package: strong measures on sustainable finance and financial innovation

The EU Commission presented its package of measures to deepen the Capital Market Union. This includes proposals on FinTech and crowd- funding, covered bonds and the cross-border distribution of investment funds. The package also includes an action plan on sustainable finance. Priorities of this action plan are a classification (?taxonomy?) and a label for sustainable financial products as well as prudential regulations for banks and insurance companies. The Commission plans to publish a legislative package on sustainable finance in May.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented: “Our demand to systematically promote green financial markets is finally bearing fruit. The Commission’s action plan contains key projects, which are increasingly called for by large parts of the financial sector. Sustainable financial products also contribute to the climate targets agreed in Paris. Europe must now set the right standards to become the lead market for green finance. We must not let conservative sceptics obstruct this forward-looking initiative. In implementing the proposals, the Commission must ensure that its definitions and rules do not only promote good, but also actively exclude harmful investments. Nuclear and coal-fired power plants or fossil infrastructure cannot be part of any sustainable financial product; rather, they risk to ruin the reputation of this young market. A sustainable financial system can provide the right incentives as a framework, but it is not an alternative to green investments in the future and decisive environmental legislation. Financial markets can only finance what pays off. Capital adequacy rules for green investments by banks and insurance companies may only be alleviated if their lower risk can actually be demonstrated. Higher climate risks should accordingly also be backed by more equity capital. The disclosure of environmental and social factors must finally become compulsory for companies. Linking a unique label for green financial products to the EU Ecolabel is a landmark proposal and would allow small investors to make easier and more transparent investment decisions. It is right that the EU Commission takes, in principle, a positive view of financial innovations. More competition in the financial sector is also in the interests of consumers and the real economy. Where problems to consumers become visible, however, Europe must act swiftly in the FinTech sector. In the area of cryptocurrencies we must not tolerate any legal vacuum. Tough measures against money laundering and white- collar crime must become the norm here. To this end, the Commission has today failed to present proposals.”

WTO dispute settlement cases against Russia

The European Union requested the World Trade Organisation (WTO) to rule on a dispute concerning certain measures adopted by Russia affecting the importation of live pigs and their genetic material, pork, pork products and certain other commodities from the European Union, purportedly because of concerns related to cases of African swine fever.

В связи с нарушением соглашения ВТО, в части эмбарго на поставку свинины, с России ежегодно будет взыскиваться 1,39 млрд. евро. Сумма будет расти ежегодно на 15%.
Закончится тем, что на утвержденную сумму наложат санкции или введут пошлины для компенсации. https://t.co/EPA4pAI6p1

— Elders (@Elder_SH) January 7, 2018

Russia closed its market to the EU – cutting off almost 25% of all EU exports – at the end of January 2014. It based its decision on four isolated cases of African swine fever (ASF) detected in wild boar at the Lithuanian and Polish borders with Belarus.

The EU claims that the Russian import restrictions are inconsistent with the WTO, notably with the Agreement on the Application of Sanitary and Phytosanitary measures (SPS Agreement) and the GATT 1994.

EU – Mongolia partnership enters into force

 

 “The European Union and Mongolia are consolidating their strong ties, based on shared values and interests, and a common will to work more closely together. The entry into force of our Partnership and Cooperation Agreement, combined with the establishment of a European Union Delegation in Ulaanbaatar, which will take place in the coming days, consolidates existing areas of cooperation and engagement, and deepens and diversifies relations further in areas of mutual interest, for the sake of our peoples.”  Said the High Representative/Vice-President, Federica Mogherini.

#Mongolia-EU relations enter new phase https://t.co/dpwZNJSoyT via @MONTSAME_en

— Sodnomjamts .B (@altanargamj) October 30, 2017

On 1 November, the Partnership and Cooperation Agreement (PCA) between the European Union and Mongolia enters into force. Replacing the 1993 Agreement on trade and economic cooperation, the Partnership and Cooperation Agreement strengthens the existing relationship between the EU and Mongolia, consolidates existing areas of cooperation and engagement, and deepens and diversifies relations further in areas of mutual interest. The entry into force of the PCA coincides with the opening of an EU Delegation in Mongolia, for which implementing the Agreement will be a top priority.

EU agriculture: new crops’ market observatory

“Today’s meeting is the fulfilment of a commitment to extend to the crops sector the successful story of the Market Observatories for Milk, Meat and Sugar. The EU Crops sector plays a key rolefor the global competitiveness of European agriculture. It is therefore our ambition for the Observatory to become an additional and useful tool to manage the market more effectively“. Said Commissioner for Agriculture and Rural Development Phil Hogan.

The Commission launched a market observatory for crops to ensure more transparency and increase availability of market data for European farmers and traders. A range of market information and short-term analysis will be made available on a new dedicated website. The observatory consists of 14 organisations representing various stages of the grain supply chain. A board of 23 market experts will meet twice a year, chaired by the Commission. Crops production is an essential part of the EU farming activity, with over 300 million tonnes of cereals, 30 million tonnes of oilseeds and five million tonnes of protein crops produced every year.

Global energy investment fell for a second-year in 2016

“Our analysis shows that smart investment decisions are more critical than ever for maintaining energy security and meeting environmental goals,” said Dr Fatih Birol, the IEA‘s Executive Director. “As the oil and gas industry refocuses on shorter-cycle projects, the need for policymakers to keep an eye on the long-term adequacy of supply is more important. Even with ambitious climate-mitigation goals, current investment activity in oil and gas will have to rise from its current slump.” 

Global energy investment fell by 12% in 2016, the second consecutive year of decline, as increased spending on energy efficiency and electricity networks was more than offset by a continued drop in upstream oil and gas spending, according to the International Energy Agency’s annual World Energy Investment report.

Global energy investment amounted to USD 1.7 trillion in 2016, or 2.2% of global GDP. For the first time, spending on the electricity sector around the world exceeded the combined spending on oil, gas and coal supply. The share of clean-energy spending reached 43% of total supply investment, a record high.

China, the world’s largest energy investor, saw a 25% decline in coal-fired power investment last year and is increasingly driven by clean electricity generation and networks, as well as energy efficiency investment. The United States saw a sharp decline in oil and gas investment, and accounted for 16% of global spending. India was the fastest-growing major energy investment market, with spending up 7% thanks to a strong government push to modernize and expand the power sector.

Dr Birol added: “The good news is that in spite of low energy prices, energy efficiency spending is rising thanks to strong government policies in key markets.”

For the first time, the report tracks investment financing sources across the entire energy sector. More than 90% of investments are financed from the balance sheets of companies, governments and households, reinforcing the importance of sustainable industry earnings in funding the energy sector.

After two years of unprecedented decline, global upstream oil and gas investment is expected to stabilise in 2017. However, an upswing in US shale spending contrasts with stagnation in the rest of the world, signalling a two-speed oil market. At the same time, the oil and gas industry overall is transforming itself by delivering large cost savings and focusing more on technology development and efficient project execution.

Global electricity investment was nearly flat at USD 718 billion, with growing network spending mostly offset by fewer coal-power additions. Investment in renewable-based power capacity, the largest area of electricity spending, fell 3% to USD 297 billion. While renewable investment is also 3% lower compared with five years ago, it will generate 35% more power thanks to cost declines and technology improvements in solar PV and wind. 

Energy-efficiency investment rose 9% to USD 231 billion with China, the fastest-growing region, accounting for 27% of the total last year. At this rate, China could overtake Europe, the largest spender on energy efficiency, within a few years. More than half of the global investment in energy efficiency went to buildings, including efficient appliances, which account for a third of the world’s total energy demand. 

For the first time, the IEA tracked global energy sector research and development spending. It estimated that over USD 65 billion was spent on R&D worldwide in 2015, based on a bottom-up assessment of spending by public and private bodies. Energy R&D is split about evenly between private money and public funding, but when it comes to low-carbon technologies the public sector takes a higher share. While the clean energy transition hinges on scaling up innovation, overall energy R&D expenditure has not risen in the past four years, nor has the clean energy component in particular. China has overtaken Japan as the world’s top spender on energy R&D as a share of GDP.

The IEA report also found that while carbon emissions stagnated in 2016 for the third year, investment in clean electricity generation was not keeping pace with demand growth. Growth in new wind and solar PV generation growth is almost entirely offset by a slowdown in final investment decisions for new nuclear and hydropower expected in the coming years. Consequently, investment in new low-carbon generation needs to accelerate just to keep pace with electricity demand growth. With well over 90% of electricity sector investments funded with regulated pricing or contracts to manage revenue risks, government policies and new business models will play a preeminent role in attracting more financing.

EU-Japan: LNG cooperation deal

 

“International LNG markets are set for major change with substantial new liquefaction capacity coming on stream. LNG prices across the Atlantic and Pacific basin are converging and the LNG market moves towards higher liquidity and flexibility. For the EU, the current developments in the global LNG market offer an opportunity to let LNG play its full role in diversifying gas supplies to all member states and in enhancing the competitiveness in the internal gas market.” Commissioner Miguel Arias Cañete said ahead of the sign of a joint Memorandum of Cooperation on LiquefiedNatural Gas (LNG).

Commissioner for Climate Action and Energy Miguel Arias Cañete and Japan’s Minister for Economy, Trade and Industry Hiroshige Seko on 11th July, will sign a joint Memorandum of Cooperation on Liquefied Natural Gas (LNG). As the EU and Japan taken together account for nearly 50% of overall global LNG consumption, reinforced cooperation between the EU and Japan will promote the liquidity, flexibility and transparency of the global LNG market. The signature takes place just days after leaders at the EU-Japan Summit in Brussels reached a political agreement on two landmark agreements, the Economic Partnership Agreement and the strategic partnership agreement.

EU News: EU, Japan to ink LNG cooperation deal https://t.co/9LhEooNuHn via @New_Europe pic.twitter.com/9oaDE2ruxM

— Berlaymont (@Berlaymont) July 10, 2017

Commissioner Cañete concluded: “Japan is the world’s largest LNG importer. Being natural allies in this regard, the EU and Japan both want to promote the liquidity, transparency and flexibility of the global LNG market. This will ensure competitive LNG supplies and make the international market more resilient and prepared to respond to emergencies.”

Looking further ahead at the MICAM

The international footwear exhibition is back at Fiera Milano September 3 to 6, 2016

It is possible to respond to the challenges of the global market and do business in a changing world, drawing on the strength of a quality product and increasingly qualified know-how. This is the premise of the 82nd edition of theMICAM, the key event in the footwear industry world-wide, coming up at Fiera Milano (Rho) September 3 through 6, 2016. More than 1,400 enterprises will attend this key event on the trade fair calendar, which attracts a lot of interest among dealers, not only because it offers a sneak preview of the new collections, but above all because it is the most reliable thermometer of the market and of one of the most important sectors of Italian industry, directly employing more than 77 thousand people in almost 5 thousand companies.

This year the vast, highly qualified range of participating companies will include Missoni, Pollini, F.lli Borgioli and Gattinoni, historic Italian fashion brands. The exhibition area will include a new “Luxury” sector alongside a product design area, the International Designers Area; an area with a

special focus on “Contemporary” style; an “iKids” area showcasing children’s footwear featuring “iKIDS Square”, and lastly, the “Active” and “Cosmopolitan” areas for leisure footwear. The 82nd theMicam will feature screening of a short film, “Niente per caso”, by Consorzio Vero Cuoio Italiano, the association of Italian leather enterprises. This short fashion movie pays homage to the Italian fashion system, looking back over half a century of Italian fashion with a focus on footwear, a fantastic voyage through fascinating, mysterious places featuring extraordinary

characters who talk about themselves in different languages and dress with Italian style. This special project features Caterina Murino, a successful Italian actress who is the epitome of elegance.

THE FIGURES

2016 began with an air of caution and stability in the footwear industry: the long-awaited upswing has not yet arrived, and the sector, which has

always been a pillar of the Italian fashion system, has not yet navigated its way out of the shallows of economic crisis. “In the first quarter of 2016,” notes Assocalzaturifici chair Annarita Pilotti, “exports held their ground, growing 2.2% by value, though this increase was not matched by growth in volume, which dropped 2%. The few markets that did grow, such as the United States, remain the territory of a small number of enterprises. theMICAM offers the right occasion to re-launch Italian footwear, an essential event for everyone working in the industry offering an opportunity to meet buyers from all over the world and establish or consolidate business relations and finalise their international marketing strategies.”

 

Trade boosted by five years of EU-Korea Free Trade Agreement

EU exports to South Korea have increased by 55% since the free trade agreement (FTA) between South-Korea and the EU entered into force five years ago, according to a detailed European Commission report released today to mark the agreement’s anniversary.

Bilateral trade in goods between the two trading partners has been growing constantly since 2011, and reached a record level of over 90 billion euros in 2015. The EU-Korea trade deal has helped turn the EU’s trade deficit with South Korea into a trade surplus, and has turned Korea into one of the EU’s top ten export markets. EU Commissioner for Trade Cecilia Malmström commented: “The numbers speak for themselves. The evidence of our agreement with Korea should help convince the unconvinced that Europe benefits greatly from more free trade. When our companies can export more easily, or when money saved from scrapped customs duties can be reinvested in company development, it spurs European growth. It safeguards and creates jobs. This anniversary gives us many reasons to roll up our sleeves and conclude all other pending EU trade deals that are on the table.” The agreement has opened new opportunities for many small European businesses in such diverse sectors as food and drink, pottery, packaging, sports equipment and book binding technology. In total, European companies have saved €2.8 billion in scrapped or discounted customs duties over the past five years.

Marché boursiers en baisse: encore les banques centrales

 Les politiques monétaires sont toujours les grands déterminants des mouvements des paires de devises. La devise européenne a été affectée par la publication des minutes (le compte-rendu) de la dernière réunion de la BCE, laissant la porte ouverte au rachat de nouveaux actifs.

En effet, la BCE mène depuis près d’un an une politique massive d’assouplissement quantitatif consistant notamment à racheter 60 milliards d’euros d’actifs obligataires chaque mois. Ce faisant, la BCE  charge et dégrade la qualité de son bilan, qui constitue la contrepartie ultime de la devise dont elle a la charge, l’euro, et donc la valeur relative de ce dernier.

Or le président de l’institution monétaire, Mario Draghi, a ces derniers mois prévenu qu’il se tenait prêt à faire encore plus si le besoin s’en faisait sentir. Par exemple en étendant le montant mensuel des rachats. La prochaine réunion du conseil des gouverneurs de la BCE, prévue le 10 mars, pourrait donc être l’occasion d’annonces nouvelles.

Même si tout le monde n’est pas d’accord à ce sujet : selon Saxo Banque, les membres du conseil des gouverneurs ont expriméé des inquiétudes légitimes au regard du contexte macroéconomique mais ne semblent pas disposés, ou plutôt en mesure, de sortir un nouveau bazooka monétaire. L’exercice du 10 mars sera très difficile pour Mario Draghi qui est assuré de décevoir.

Notons que le risque de voir le Royaume-Uni quitter l’Union européenne, à l’issue d’un référendum attendu a priori en juin, reste pesant pour la monnaie unique, même si la livre reste indépendante. En effet, une UE sans Royaume-Uni verrait se renforcer le poids relatif de l’Allemagne dans le reste de l’union et aussi dans la zone euro. Tout en portant en germe le risque de dislocation de l’ensemble.

Que fera la Fed, qui devrait ces prochains mois continuer de relever ses taux directeurs comme elle l’a fait en décembre, pour première fois depuis 2006 ?

Selon une enquête, réalisée auprès des ééconomistes des primary dealers, le prochain mouvement de la banque centrale américaine sera une hausse de ses taux directeurs mais la probabilité d’un retour de la politique monétaire de taux zéro à horizon de deux ans a fortement augmenté.

M.L.

Guy Wagner (Banque de Luxembourg) : “Ne pas faire de concessions au niveau de la qualité des entreprises” #banking #investment #business

Lors d’un point presse à Bruxelles, Guy Wagner, chief economiste de la Banque de Luxembourg ainsi que les gestionnaires de fonds, Ivan Bouillot (actions européennes) et Tanguy Kamp (actions asiatiques), ont donné leur avis sur les perspectives des marchés financiers en 2016 et leurs portefeuilles spécifiques. L’année 2016 risque de s’avérer difficile pour les marchés boursiers et un investisseur en actions devra pouvoir supporter une volatilité accrue. A l’intérieur des marchés boursiers, il sera d’autant plus important de ne pas faire de concessions au niveau de la qualité des entreprises.

Dans son discours, Guy Wagner a passé en revue l’environnement économique actuel, marqué par des taux d’intérêt bas, des marchés boursiers volatils ainsi que des risques de contagion liés à l’effondrement des prix du pétrole. Il était accompagné par Ivan Bouillot, le gestionnaire des actions européennes et Tanguy Kamp, responsable des actions asiatiques, qui ont commenté l’impact des derniers développements sur leurs portefeuilles. Alors que le ralentissement de l’activité économique en Chine est indéniable, les derniers indicateurs publiés n’ont pas été particulièrement mauvais, précisait Guy Wagner, chef économiste de la Banque de Luxembourg et administrateur-directeur de la société de gestion BLI – Banque de Luxembourg Investments lors d’un point presse à Bruxelles : « Ils montrent que la transition vers une économie davantage basée sur la demande interne, et dans laquelle le poids des secteurs primaire et secondaire – agriculture et industrie – diminue au profit du secteur tertiaire, les services, est en bonne voie. Il serait cependant illusoire de penser que cette transition s’effectue sans heurts ou que l’économie chinoise puisse continuer à croître au rythme des dernières années. »

Aucune corrélation entre la croissance économique et les performances boursières

Tanguy Kamp qui gère le fonds en actions BL-Equities Asia, peut comprendre les craintes des investisseurs : « Suite au ralentissement économique en Chine et à la baisse du prix des matières premières, on pourrait assister dans le monde émergent, à plusieurs faillites d’entreprises dans les secteurs des métaux de base et de l’énergie. Ces défauts pourraient à leur tour porter préjudice au secteur financier qui devrait faire face à une hausse des créances douteuses ». Il mentionne aussi que le ralentissement économique en Chine n’est pas nouveau et que la correction observée sur les bourses chinoises résulte avant tout de l’éclatement d’une bulle qui s’était formée suite à la politique très accommodante de la Banque Centrale de Chine qui avait poussé les actions chinoises à des valorisations trop élevées. Enfin Tanguy Kamp, tout en restant très sélectif, entrevoit davantage d’opportunités d’achat suite à la faiblesse des cours et souligne que l’histoire a montré qu’il n’y avait aucune corrélation entre la croissance économique et les performances boursières.

La chute des marchés marquée par des éléments psychologiques 

Une partie de la chute actuelle des marchés s’explique par ailleurs par des éléments psychologiques. « Le dernier exemple récent d’un début d’année aussi mauvais fut en 2008, année qui reste dans beaucoup d’esprits. Les comparaisons avec 2008 abondent dès lors et sont utilisées comme raison pour sortir des marchés boursiers », pense Guy Wagner. « Après un deuxième semestre 2015 plus volatil et moins performant, les actions risquent effectivement d’enregistrer une année 2016 difficile malgré l’absence de placements alternatifs compte tenu du ralentissement de la conjoncture et des bénéfices, de la forte augmentation des cours boursiers depuis 2009 et des tensions géopolitiques mondiales. »

Ne pas faire de concessions au niveau de la qualité des entreprises 

Ivan Bouillot, le gestionnaire des fonds en actions européennes, ajoute : « En Europe, les statistiques économiques restent favorablement orientées par rapport à des attentes faibles, mais le rythme de croissance en absolu demeure limité. » Une gestion active se justifie d’autant plus à l’intérieur des classes d’actifs, et notamment des actions. « Dans la mesure où l’environnement économique et financier reste fragile, il est certes important de ne pas faire de concessions au niveau de la qualité des entreprises dans lesquelles on investit, mais certainement aussi au niveau de la résilience de leur activité et de leur valorisation », précisait-il. Il importe de revenir sur ce que les gestionnaires définissent comme une entreprise de qualité. « Par entreprise de qualité, nous entendons une entreprise qui dispose d’un avantage compétitif durable qui lui permet de se différencier de la concurrence et de créer des barrières à l’entrée sur ses marchés. » Ces entreprises se caractérisent par un rendement sur fonds propres élevé, un endettement peu important et une faible intensité capitalistique.

Une gestion active combinant qualité et dividendes

Un deuxième thème d’investissement, étroitement lié à celui de la qualité, reste celui-ci des dividendes. Une des stratégies d’investissement ayant produit les meilleurs résultats sur le long terme consiste à acheter des entreprises combinant dividende attrayant et faible taux de distribution des bénéfices. Guy Wagner : « Le niveau élevé du dividende rend ces entreprises particulièrement attrayantes pour les investisseurs à la recherche de revenus récurrents, alors que le faible taux de distribution rassure sur le caractère soutenable de ce dividende, voire de son potentiel d’augmentation. »