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Interest rates stay at zero, for now
Capital Markets
<p>The Federal Reserve is keeping short-term interest rates near zero for now, but the central bank more strongly hinted that a rate rise could happen this year, reports The Wall Street Journal. Officials are less concerned about the global financial markets now than they were in September, and they specifically mentioned the next Fed meeting December 15-16 as a time to assess interest rates.</p> <p>“In determining whether it will be appropriate to raise [interest rates] at its next meeting, the [Fed] will assess progress—both realized and expected—toward its objectives of maximum employment and 2 percent inflation,” the Fed said in its statement.</p> <p>But hey, don't hold your breath waiting for rates to rise.<br /> Photo: Ekke</p>
Passive management: 1, Active management: 0
Asset Management
<p>Nine out of 10 actively managed European equity funds have underperformed their benchmark over the last 10 years, reports the Financial Times. Three-fourths of active U.K. equity managers continually fell short of their benchmark in the last decade. Less than half of the 489 U.K. equity funds and 1,192 European equity funds launched 10 years ago are still around.</p> <p>So active managers, are you worth your fees?<br /> Photo: Hans Gerwitz </p>
Next robo-advisor target: ETFs
FinTech
<p>Robo-advisors are seeping into the market, and in 10 years, they could be managing the $13 trillion of U.S. unadvised assets, reports Daily Fintech. Those robo-advisors could then push the ETF assets under management from $3 trillion globally to a massive $75 trillion in 10 years.</p> <p>&nbsp;</p>
3 reasons Microsoft has finally turned it around
Capital Markets
<p> The share price of Microsoft Corporation (NASDAQ: MSFT) has appreciated 23.46 percent over the past month, reaching a high of $54.25 on Monday.<br /> FBR &amp; Co.’s Daniel H. Ives has maintained an Outperform rating and price target of $60 on the company.<br /> Ives believes that CEO Satya Nadella has made three major strategic changes over the last 18 months that have helped the company turn around.</p> <p>Analyst Daniel Ives mentioned that the “three major fundamental and strategic changes” made by Nadella include realizing that the Nokia Corporation (ADR) (NYSE: NOK) acquisition would not be a ...</p> <p>Full story available on Benzinga.com</p> <p> Photo: Mike Mozart </p> <p>&nbsp;</p>
The scariest thing for investors this Halloween: volatility
Asset Management
<p>Volatility has become the zombie of the markets, lurking like the undead in the corners, waiting for its chance to suck the life out of a portfolio. Or at least that's how investors feel.</p> <p>More than half, or 55%, of financial advisors told Eaton Vance in a recent survey that protecting client wealth from volatility has become increasingly important in the last year. "Volatility's unpredictability has made investors uncomfortable in the current market environment and reduced confidence in their ability to reach their goals," says John Moninger, managing director at Eaton Vance, in a press release.</p> <p>Volatility doesn't have to mean the end of the world, says Eddie Perkin, Chief Equity Investment Officer at Eaton Vance, at an event Tuesday. "History has shown that the best opportunities tend to present themselves when uncertainty is running high," he says. The bears hawk volatility as a warning signal. "We're still living with the 2008 financial crisis," says Perkin. The Great Depression effected an entire generation, and it should be expected that 2008 will do the same. Pure equity funds have been in nothing but outflow-mode, he says. "There's still a lot of fear out there and I don't think it's going away any time soon."</p> <p>The financial advisors vary in just how scary they think the volatility is. For 39% this volatility is somewhat likely to lead to a bear market. Another 16% say it most likely will mean a bear market. But 38% say a bear market isn't likely at all. Some of the divide comes from the age of the investors. Younger adviors are more likely than their baby boomer counterparts to see an impending bear market, Eaton Vance found. Women too are much less bullish than male advisors.</p> <p>People need to focus on earnings and interest rates, says Richard Bernstein, CEO and CIO of Richard Bernstein Advisors, speaking at the Tuesday event. "Everything else that people are worried about is completely irrelevant," he says. It helps to know what to expect from earnings and interest rates. For instance, when interest rates go up, stocks get hurt. That shouldn't shock anyone.</p> <p>Fear is currently overriding greed in investors, and that's not a bad thing, says Bernstein. "[Confidence] leads to stupid things," he says. "When you start reporting how great everything is...realize we're in the eighth or ninth inning."<br /> Photo: Daniel Hollister <br /> &nbsp;</p>
Infographic: Grading 15 tech companies that declined big takeover offers
Venture Capital
<p>If you were to ask legendary investor Peter Thiel about the most important moment in Facebook history, he would point to an exchange in July 2006.</p> <p>Yahoo had made the lucrative offer of $1 billion for Facebook, and Peter Thiel as well as board member Jim Breyer got called into a meeting about the deal with Mark Zuckerberg.</p> <p>Courtesy of: Visual Capitalist<br /> This article was published by ValueWalk. <br /> Photo: Jason McELweenie </p>
Corruption kills entrepreneurship
Venture Capital
<p>On Tuesday night, Nobel Laureate Professor Dan Shechtman spoke at the Hong Kong University of Science and Technology about “How Technological Entrepreneurship Can Be Nurtured”. </p> <p>The distinguished chemist sees five important factors that are keys to promoting get-up-and-go risk-taking:</p> <p>“We need good basic education for everyone. And then we need a good engineering and science education, government policy and support for entrepreneurship, a free market economy, and, most important of all, no corruption, for corruption kills entrepreneurship.”</p> <p>Schechtman’s delivered his lecture at the UC RUSAL President’s Forum and HKUST 25th Anniversary Distinguished Speakers Series. UC Rusal is the world’s second biggest aluminium producer and is controlled by Oleg Deripaska, one of Russia's richest and best-connected oligarchs.<br /> Photo: Fred S.<br /> &nbsp;</p>
Innovative trade financing
Capital Markets
<p>Companies still find it tough to access trade finance. Bank-led funding has plummeted by a half from a peak of $14 trillion before the global financial crisis in 2008 to about $7 trillion, according to a report in September by law firm Clyde &amp; Co.</p> <p>More intense regulatory scrutiny and tougher lending rules have curbed both the capacity and appetite of banks to open up the credit valve. </p> <p>That’s forcing producers, suppliers and purchasers to rely on a patchwork of financing to meet their needs, turning to private equity, trade-finance funds or credit provided by major commodity-trading houses.</p> <p>But some banks have found ways to overcome the hurdles by forging agreements with third parties.</p> <p>Today, Citi and the IFC, a member of the World Bank Group, announced the signing of a $1.2 billion risk-sharing facility to help stimulate the growth of trade in emerging markets.</p> <p>It marks the extension of two existing facilities that have financed a total volume of $20 billion for 3,368 trade transaction through 163 Emerging Market issuing banks in 40 countries, of which 23 are low and lower middle-income countries, according to a Citi statement on October 28.</p> <p>“As the availability of global trade finance continues to decline, IFC is committed to working with Citi to find innovative ways to help expand trade finance flows in the developing world,” said Marcos Brujis, IFC director of financial institutions group.</p> <p>Citi says it will use the funding “to originate and fund trade finance transactions in Africa, Asia, Central and Eastern Europe, Latin America, and the Middle East, enabling its bank clients to extend financing to local importers and exporters. The funding is expected to support emerging market trade flows of more than $6 billion through 2019”.<br /> Photo: Andrew Priest<br /> &nbsp;</p>
Asia's growing HNWI populace needs fintech solutions — Fintech O-2-O Meetup
FinTech
<p>As Asia's population of high-net-worth individuals (HNWIs) explodes, so is the growing demand for fintech solutions to serve them, wealth management professionals told an audience at yesterday's Cyberport NexChange Fintech O-2-O Meetup.</p> <p>The event, held in Hong Kong's Cyberport Tuesday, opened with a keynote speech by Mads Faurholt-Jorgensen, founder of fintech-focused investment firm Nova Founders, which was followed by two panels.</p> <p>The first panel included Joanne Murphy, CAIA Association's Asia Pacific managing director, and Peter McMillan, head of wealth management Asia at Thomson Reuters, and featured a discussion on the growing demands of an increasingly sophisticated HNWI client base.</p> <p>"Investors are smarter," said Murphy,"and they have a need for greater accessbility."</p> <p>She added that clients want more transparancy and information regarding their investments, but pulling out the relevant information for each client can be expensive and time consuming. This is just one area where fintech innovation is needed, the panelists said.</p> <p>The second panel included Dr. Cedric Jeannot from APrivacy, and Phillip Yoon of Phinary Advisors, both managers of their respective wealth management-focused fintech startups. Both expressed similar sentiments to the first panel.</p> <p>Dr. Jeannot observed that small family offices and asset managers were also more nimble when it came to adopting fintech solutions. Yoon meanwhile added that it was important that wealth managers did not focus on innovation for innovation's sake, saying:<br /> "Innovation brings assurance. Regardless of what tools you bring, clients want assurance."<br /> &nbsp;</p>
Japan Post's mega IPO: A saving grace for Abenomics?
Capital Markets
<p>Japan Post's complex three-piece stock market debut is now coming to frutition with Japan Post Holdings pricing at the top end of  its indicative range at 1,400 yen, raising 693 billion yen ($5.7 billion).</p> <p>The pricing comes a week after Japan Post's banking and insurance units also priced at the top of the range after strong appetite from individual investors. About 11% of the companies will be sold with each listing seprarelty, but simultaneously, on November 4.</p> <p>The IPOs are expected to raise a combined 1.6 trilllion yen. It's the Japan's biggest listing since NTT Docomo in 1998, and its largest privatisation since Nippon Telegraph &amp; Telephone Corp in 1987.</p> <p>Due to the political sensitivity of Japan Post's privatisation it has taken the government about a decade to get to this point. With strong demand coming from retail investors — despite recent volatility in Japanese stock markets — the triple offering is proving to be a massive coup for Abenomics, the name for Prime Minister Shinzo Abe's raft of sweeping economics reforms.</p> <p>Abe has been in for a lot of flak recently thanks to stalled progress on his strucutral reforms, the so-called third arrow of the Abenomics agenda. His government's decision to abandon the country's pacifist constitution has also seen the leader's approval ratings sink like a stone.</p> <p>If all goes well when the bell rings,  Japan Post's successful listing will help validate Abenomics and restore public faith in the government's reforms.<br /> Photo: Konstantin Leonov</p>