Tag Archives: Capital Movement Data

Greece seduces private family wealth management services | Instant News


ATHENS (Reuters) – Greece is preparing new steps to attract family offices that offer special wealth management services to ultra-rich clients as it seeks to improve its image as an investment destination, two senior government officials said.

The center-right government’s reform plans were disrupted by last year’s coronavirus pandemic, but Prime Minister Kyriakos Mitsotakis has announced measures including special tax breaks to attract foreign investors and lure highly qualified Greek expats back home.

The latest move will allow the family office to reduce staff costs and operating costs from taxes, targeting both the Greek business dynasty itself and wealthy non-Greek families, said a senior official.

“Our target now is to attract very wealthy foreigners as well as Greeks who have their money abroad, in Switzerland for example, as well as investors,” the official told Reuters, but gave no details as the law was still being prepared. .

The drive to reposition Greece as an investor-friendly destination follows a decade-long financial crisis that has cut the country’s economy by a quarter and sparked regular street protests against its international creditors.

Mitsotakis is relying on a mix of investment in digital infrastructure, education and green energy as well as high-end green tourism to reshape Greece’s image abroad after the crisis years.

Family offices offering specialized services to extremely wealthy clients including investments, charitable donations, taxes and wealth transfers have mushroomed in the years since the 2008 global financial crisis.

While Greece is unlikely to challenge established centers like Switzerland, attracting “sophisticated, wealthy families” could help change perceptions about the country, said a second official.

“This is part of the government’s strategy to expand, redefine and enhance its tourism products,” the official said.

The Greek economy, which lost about half of its foreign investment during the financial crisis, has started to recover in recent years, but is expected to shrink by about 10% in 2020 due to the impact of the pandemic.

Additional reporting by Renee Maltezou; Edited by James Mackenzie and Alex Richardson

.



image source

UPDATED The 2-Draghi Effect pushed the Italy-Germany gap to its lowest level in 5 years | Instant News


* Italian 10-year yields fell 10 bps this week

* German yields rise despite poor industry data

* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Added details, latest prices)

MILAN / LONDON, Feb 5 (Reuters) – Italian 10-year government bond yields headed for their biggest weekly decline since July on Friday, while the spread on German yields narrowed to the smallest level in five years as former head of the European Central Bank Mario Draghi starts talks to form a new government.

Trading on eurozone debt markets was generally weak at the end of the week. It was slightly moved by data showing US job growth rebounded moderately in January, in line with forecasts and which economists said supported the case for more government aid money.

Global stocks approach record highs as progress in vaccine distribution and hopes of US stimulus pushes bets on further normalization in the global economy.

That backdrop boosted sentiment towards riskier assets such as European peripheral bonds, with Italy set to end the week at its highest following this week’s political developments.

Draghi, given the mandate to form a new Italian government, will end a round of consultations on Saturday. It remains unclear whether he can win support from the anti-establishment 5 Star Movement, the largest party in parliament.

Italian 10-year BTP, or government bonds, fell as far as 0.51%, the lowest level since January 11, before rebounding to 0.54%. It’s down more than 10 bps this week.

Italy / Germany’s 10-year yield difference narrowed to around 94 basis points, since at least the start of 2016.

“We have seen how the market is not only like Draghi, but also likes Draghi and foreign investors are supporting the rally in BTP,” said MFS fixed income research analyst Annalisa Piazza.

Piazza said room for further tightening was limited, although Italy could see further performance over its eurozone counterparts if Draghi’s government succeeds in executing its program in the medium term.

“The market is expecting a government led by Draghi. But even if the former ECB chief is unable to form a government, we will see a sell-off in the short term which will translate into interest rate compression in the long term, “said Althea Spinozzi, fixed income strategist at Saxo Bank.

The UniCredit analyst added that the spread of further compression in Italy will likely depend on the extent of parliamentary support for the government and the willingness of foreign investors to increase their exposure to the BTP market again.

They said 2015 lows of 88 basis points between German and Italian yields “don’t seem out of reach”.

Bond yields also declined in Spain and Portugal.

News of a decline in German industrial orders in December put a brief pressure on German yields.

But Bund yields soon headed higher, with the benchmark 10-year note touching the highest since early September at -0.413% and putting it on track for its biggest weekly jump since August.

Reporting by Sara Rossi and Tommy Wilkes Additional reporting by Dhara Ranasinghe Editing by Kirsten Donovan

.



image source

UPDATED The 2-Draghi Effect pushed the Italy-Germany gap to its lowest level in 5 years | Instant News


* Italian 10-year yields fell 10 bps this week

* German yields rise despite poor industry data

* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Added details, latest prices)

MILAN / LONDON, Feb 5 (Reuters) – Italian 10-year government bond yields headed for their biggest weekly decline since July on Friday, while the spread on German yields narrowed to the smallest level in five years as former head of the European Central Bank Mario Draghi starts talks to form a new government.

Trading on eurozone debt markets was generally weak at the end of the week. It was slightly moved by data showing US job growth rebounded moderately in January, in line with forecasts and which economists said supported the case for more government aid money.

Global stocks approach record highs as progress in vaccine distribution and hopes of US stimulus pushes bets on further normalization in the global economy.

That backdrop boosted sentiment towards riskier assets such as European peripheral bonds, with Italy set to end the week at its highest following this week’s political developments.

Draghi, given the mandate to form a new Italian government, will end a round of consultations on Saturday. It remains unclear whether he can win support from the anti-establishment 5 Star Movement, the largest party in parliament.

Italian 10-year BTP, or government bonds, fell as far as 0.51%, the lowest level since January 11, before rebounding to 0.54%. It’s down more than 10 bps this week.

Italy / Germany’s 10-year yield difference narrowed to around 94 basis points, since at least the start of 2016.

“We have seen how the market is not only like Draghi, but also likes Draghi and foreign investors are supporting the rally in BTP,” said MFS fixed income research analyst Annalisa Piazza.

Piazza said room for further tightening was limited, although Italy could see further performance over its eurozone counterparts if Draghi’s government succeeds in executing its program in the medium term.

“The market is expecting a government led by Draghi. But even if the former ECB chief is unable to form a government, we will see a sell-off in the short term which will translate into interest rate compression in the long term, “said Althea Spinozzi, fixed income strategist at Saxo Bank.

The UniCredit analyst added that the spread of further compression in Italy will likely depend on the extent of parliamentary support for the government and the willingness of foreign investors to increase their exposure to the BTP market again.

They said 2015 lows of 88 basis points between German and Italian yields “don’t seem out of reach”.

Bond yields also declined in Spain and Portugal.

News of a decline in German industrial orders in December put a brief pressure on German yields.

But Bund yields soon headed higher, with the benchmark 10-year note touching the highest since early September at -0.413% and putting it on track for its biggest weekly jump since August.

Reporting by Sara Rossi and Tommy Wilkes Additional reporting by Dhara Ranasinghe Editing by Kirsten Donovan

.



image source

Analysis: Sovereign wealth, giant public pension caught in the US-China technology battle | Instant News


LONDON (Reuters) – Some of the world’s largest sovereign wealth funds and public pension funds are caught in rising technology-related tensions between the United States and China, according to a Reuters analysis of their archival data and public disclosures.

FILE PHOTO: General view of the Norwegian central bank, where the Norwegian sovereign wealth fund is located, in Oslo, Norway, 6 March 2018. REUTERS / Gwladys Fouche / File Photo

These range from the sovereign wealth funds of Norway and Singapore to the Swiss central bank and the US $ 1.1 trillion TIAA, which was founded more than a century ago by Andrew Carnegie as the American Teacher Insurance and Annuity Association.

US investors are barred from owning stakes in more than 40 Chinese companies seen as having military ties in a series of moves since November as US President Donald Trump seeks to strengthen his hardline policies toward Beijing.

That prompted Nuveen’s TIAA unit to sell stakes in blacklisted companies including China Telecom, China Mobile and China Unicom, as well as microchip giant SMIC, state oil company CNOOC and cellphone and gadget maker Xiaomi.

Other US public pension funds are expected to follow.

CalPERS, the largest fund, holds Hong Kong-listed ‘H’ shares in several companies, including a 1.1% stake in China Telecom and 0.2% of China Mobile and China Unicom respectively, according to Refinitiv data. CalPERS, which has been criticized by Republican politicians for its investment in China, did not respond to a request for comment.

Florida State Administration, which manages $ 200 billion in assets and has small stakes in China Telecom, China Mobile and Xiaomi, according to Refinitiv data, told Reuters it would comply with the ban.

“Those sanctions really bite US institutions,” said Elliot Hentov, head of policy research at State Street Global Advisors.

And the ripples aren’t just felt in the United States.

A number of sovereign wealth funds (SWF) have been affected as the New York Stock Exchange and index providers MSCI, S&P Dow Jones, and FTSE Russell have removed blacklisted companies from the benchmark, causing some share prices to drop more than 20%.

Norway’s $ 1.3 trillion SWF, the world’s largest, owns a 0.2% -0.6% stake in China Telecom, China Mobile, Xiaomi, CNOOC and China Unicom Hong Kong as part of its $ 35 billion Chinese equity portfolio. more broadly, according to the most recent disclosure running through early 2020. It said it would not comment on specific holdings.

Singapore’s GIC, which is referred to as an “independent country investor”, owns 10% of Hong Kong-listed China Telecom’s ‘H’ shares and owns about 1.4% of mainland’s SMIC, A- and H-shares, Reuters calculations based on stock exchange filings shows. GIC declined to comment.

Other holders are the Canadian pension fund Caisse de Depot et Placement du Quebec (CDPQ), British Columbia Investment Management, CPP Investment Board, PGGM Vermogensbeheer, an independent pension fund based in the Netherlands and APG Asset Management.

Non-US investors are not legally obliged to make any changes and many will see the value of their Chinese investment soar in recent years.

China’s equity market is at a 13-year high and the market capitalization of a major technology index has doubled from two years ago.

“We view our investment in China – an important country in the global economy – with a long-term perspective,” CDPQ told Reuters, declining to comment on specific investments.

Graph: Increased Chinese equity investment from the Norwegian sovereign wealth fund –

GAME WEIGHT

While China’s increasing weight in global markets is driving state funds to hold onto a larger Chinese portfolio, recent cyber espionage bans and claims of 5G company Huawei and the social media dance craze app TikTok show how technology is now a major geopolitical battleground. .

With no indication of a new approach by US President Joe Biden, China Telecom, China Mobile, Xiaomi and CNOOC shares have fallen between 12% and 22% since being blacklisted in November or this month.

SMIC has bucked the trend with double digit gains.

“Some of the shares that are being released may be taken from owners of bargain-hunting assets outside the US,” said Winston Ma, a former managing director of the sovereign wealth fund China Investment Corp. “However, it may be difficult for them to absorb all of them.”

Graph: Gains mixed for Chinese companies amid blacklist uncertainty –

It wasn’t just Washington’s actions that caused trouble.

Beijing shocked markets in November when it suspended Ant Group’s $ 37 billion IPO plan by a few days and just as the Trump administration pushed through with its ban.

Alibaba, which owns a third of Ant, saw its market value shrink by more than a quarter. These are the top 10 global stocks and are widely held by government funds and pension funds.

US Stock Exchange Commission data sec.report/CIK/0001582202 suggests the Swiss central bank has doubled Alibaba’s stake in the past two years to $ 1.4 billion from the company’s $ 650 billion stake in September.

The November fall will remove about $ 350 million from that holdings. Alibaba shares recovered nearly half of their January losses after escaping a US blacklist.

Graph: Ownership of China Mobile by sovereign wealth funds, pension funds –

Graph: Ownership of Xiaomi Corp by sovereign wealth funds, pension funds –

Graph: Ownership of China Telecom Corp by sovereign wealth funds, pension funds –

Additional reporting by Terje Solsvik in Oslo, Brenda Goh in Shanghai, Anshuman Daga in Singapore, Maiya Keidan in Toronto and John Revill in Zurich; Edited by Catherine Evans

.



image source

The EU needs a ‘master plan’ to wrest euro finances from London | Instant News


LONDON (Reuters) – The European Union needs a “master plan” to move euro financial services from London to the bloc if it is to expand the role of the single currency in a global economy dominated by the US dollar, a senior EU lawmaker said Monday.

FILE PHOTO: Outside view of European Commission headquarters during the coronavirus disease (COVID-19) outbreak in Brussels, Belgium, April 23, 2020. REUTERS / Johanna Geron

Markus Ferber, a senior member of the European Parliament, said if the EU is to compete with the greenback, it needs an appropriate financial system.

“We need a clear step-by-step master plan that helps major financial sector businesses move from the UK to the European Union,” said Ferber.

He was speaking ahead of the publication of a European Commission paper on Wednesday on promoting the global role of the euro that sets out how to reduce dependence on the City of London, Europe’s biggest financial center, after Brexit.

“The COVID-19 crisis has highlighted vulnerabilities in the dollar-dominated international financial system,” said the commission paper.

“Britain’s withdrawal from the EU reinforces the need to further deepen the Union’s capital markets.”

This paper recommends better enforcement of EU sanctions, and makes EU-based financial market infrastructure less vulnerable to unilateral sanctions from third countries.

EU-based securities depository Clearstream and Euroclear, and messaging services such as Swift were affected by President Donald Trump’s actions against Iran.

Trading in euro-denominated debt securities, commodities and other instruments should also be encouraged, the paper said.

The EU’s “MiFID” securities reform and benchmark rules should aim to help the euro-denominated energy index emerge, and increase the attractiveness of euro bonds and stocks, he said.

EU and European Central Bank executives will also review the policy, legal and technical issues arising from the possibility of a digital euro.

The Commission, ECB and the bloc’s market and banking watchdog will work with industry to assess “possible technical issues” associated with the shift in derivatives positions from London to the EU, the paper said.

This paper may minimize the likelihood that the EU will provide UK financial services access to the EU beyond the temporary access it has granted to derivatives clarifiers by mid-2022.

About 6.5 billion in euro stock trading switched from London to the bloc overnight on January 4 and city officials do not expect this to return, with swap trading by EU investors also under pressure to leave.

“A related source of risk is the excessive reliance of EU banks on the foreign currency exchange market,” the paper said.

When looking at company takeovers, the Commission will also check whether they make EU companies “more vulnerable” to comply with sanctions from third countries, the paper said.

There was also a need to cut the bloc’s “over-reliance” on foreign investment banks and foreign currency funding, he said.

Reporting by Huw Jones; Edited by Catherine Evans

.



image source