Dual Currency Bond – Basket Village USA http://basketvillageusa.com/ Tue, 22 Nov 2022 05:16:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://basketvillageusa.com/wp-content/uploads/2021/03/basketvillageusa-icon-70x70.png Dual Currency Bond – Basket Village USA http://basketvillageusa.com/ 32 32 Children’s March Against Child Abuse – Magnetic Support https://basketvillageusa.com/childrens-march-against-child-abuse-magnetic-support/ Tue, 22 Nov 2022 00:23:13 +0000 https://basketvillageusa.com/childrens-march-against-child-abuse-magnetic-support/

#MontegoBay, Jamaica, November 21, 2022 – Children from all over Sainte-Élisabeth took to the streets of the parish capital of Rivière Noire on Friday, November 18, in an organized march against child abuse.

The event was planned by the Child Protection and Family Services Agency (CPFSA) and was part of a series of child-led marches across the island to commemorate ‘World Day for Prevention of Child Abuse”, observed internationally on 19 November.

The children, who represented St. Elizabeth’s primary and secondary schools, marched along High Street, North Street and Market Street, while carrying signs reading “Stop the Silence, End the Violence” to raise awareness of the problem of child abuse in the country.

The group then gathered at JAG Myers Park in the city, for a special ceremony to promote the safety and protection of Jamaican children.

In his address, the Minister without Portfolio in the Prime Minister’s Office, the Hon. Floyd Green, commended CPHA for its initiative to draw attention to such a “critical issue”.

Mr Green, who is also MP for South West St. Elizabeth, said simple support not only for children, but also for parents, can be the best way to prevent child abuse.

“That’s why I plan to partner with our National Parent Support Commission and CPHA to launch a Parent Mentor Program. [programme] because the reality is a lot of people who become parents have no idea how to be a good parent and we have to admit that and work with them to make sure their kids feel love,” he said. -he declares.

For her part, CPHA Southern Regional Director Francine Rhoomes said the entity continues to protect the country’s children, many of whom are in need of care and protection.

“With that [CPFSA] team across the region, we ensure that, as best as possible, [their] voices are heard. We act when there are incidents of child abuse, and we want to make sure people know what to do and where to call in the event of an incident,” she explained.

“As we celebrate, I want us to remember why we are here and that is because of the children,” she added.

Schools in attendance included Black River High School, Black River Primary School, Hampton School, Sandy Bank Primary School, Red Bank Primary, Fullerswood Primary and Infant School, Happy Grove Primary and Infant School, Lewisville High School, Lacovia Primary and Infant School, Holland Primary School and Pedro Plains Primary.

Contact: Okoye Henry

Version: JIS

Dimensional launches a new ETF https://basketvillageusa.com/dimensional-launches-a-new-etf/ Thu, 17 Nov 2022 16:29:41 +0000 https://basketvillageusa.com/dimensional-launches-a-new-etf/

After list of three new sustainable exchange-traded index funds on the New York Stock Exchange earlier this month, Dimensional Fund Advisors launched a new sustainable bond fund on NYSEDimensional Global Sustainability Fixed Income ETFs (DFSB ). According to the issuer, DFSB provides value-added exposure to global fixed income securities, seeks higher expected returns through systematic exposure to duration, credit and currency of issue, and applies strong risk management.

The fund seeks to reduce carbon footprint exposure by excluding or underweighting issuers with high carbon intensity or potential emissions from reserves. The strategy also applies targeted environmental and social exclusions.

“We believe that investing well and integrating sustainability values ​​need not be mutually exclusive. We believe we have been effectively implementing sustainability strategies with this dual purpose for nearly 15 years,” said Isabelle Williams, senior investment strategist at Dimensional.

Williams added: “Overall, our research shows that there is no strong evidence that ESG only these factors are a systematic source of higher returns or lower risk. But ESG considerations can be incorporated into diversified portfolios that target higher expected returns.

In a press release announcing the launch of its three sustainable equity ETFs, Dimensional co-CEO and Chief Investment Officer, Gerard O’Reilly, said, “Dimensional’s approach to sustainable investing incorporates exclusions and emissions-based weighting criteria to reduce carbon footprint exposure to both between and within sectors.

“In just a few years, Dimensional Funds has managed to capture the attention of advisors with its low-cost active management. ETFs range,” said Todd Rosenbluth, head of research at VettaFi. “Continued expansion of the product line to include sustainable strategies provides more tools for advisors to build asset allocation strategies.”

DFSB has an expense ratio of 0.25%.

For more information on Dimensional ETFs, visit dimension.com/etfs.

For more news, insights and strategy, visit VettaFi.

CBDC Report Released, Blockchain Settlement and Payment Initiatives Launched – Fin Tech https://basketvillageusa.com/cbdc-report-released-blockchain-settlement-and-payment-initiatives-launched-fin-tech/ Tue, 15 Nov 2022 10:41:23 +0000 https://basketvillageusa.com/cbdc-report-released-blockchain-settlement-and-payment-initiatives-launched-fin-tech/

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This week, the New York branch of the U.S. central bank released a report on the results of Phase I of Project Cedar, “a multi-phase research effort to develop a technical framework for a theoretical wholesale digital currency of the central bank (wCBDC)”. According to a press release, it currently takes two days for most spot foreign exchange (FX) transactions to settle, exposing senders and receivers of payments to “settlement, counterparty and credit risk that , among other things, can hamper an institution’s ability to easily convert its assets into cash. In Phase I of Project Cedar, “the experiment simulated spot foreign exchange (FX) trading and introduced a prototype wholesale central bank digital currency to test whether using blockchain technology could improve the speed , cost and access to cross-border wholesale payments”. In this test environment, the experiment would have revealed three key results:

  • Faster payments: In the test environment, transactions on the blockchain-enabled system settled in less than 15 seconds on average.

  • Atomic regulation: The simulated ledger network enabled atomic settlement, meaning that both sides of the simulated transactions settled simultaneously or not at all, reducing exchange rate risks.

  • Safer and more accessible transactions: The design of the distributed ledger system enabled 24/7/365 payments and supported goals related to interoperability between financial institutions, including central banks and banks of the private sector.

Separately, this week, a major global bank issued a press release announcing “the world’s first digital bond that is publicly listed and settled on blockchain-based and traditional exchanges.” According to the press release, “[t]The CHF375 ​​million bond is digital only and will be issued on the blockchain-based platform of SIX Digital Exchange (SDX) while being dual listed and traded on SDX and SIX Swiss Exchange (SIX).

In a recent notable post, a major South African grocery chain reportedly announced plans to start allowing customers to pay for groceries with bitcoin at 39 stores in South Africa using any lightning-enabled app. bitcoins. According to reports, customers will scan a QR code from the app and accept the conversion rate on their smartphone at the time of the transaction.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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Travel ban by Sri Lankan court won’t stop minister of state from traveling abroad https://basketvillageusa.com/travel-ban-by-sri-lankan-court-wont-stop-minister-of-state-from-traveling-abroad/ Sat, 12 Nov 2022 08:43:30 +0000 https://basketvillageusa.com/travel-ban-by-sri-lankan-court-wont-stop-minister-of-state-from-traveling-abroad/

ECONOMYNEXT – Tea prices in Sri Lanka fell through the highs with prices falling by 50 to 100 rupees per kilogram with the sale in the second week of November, extending the falls from a week earlier.

Sales in the first week of November with low growth teas fell from Rs 167 per kilogram to Rs 1,408.85 per kilogram, compared to the previous week, according to data from Ceylon Tea Brokers.

In the second week of November, weak growth averaged $3.88 per kilogram, down from $4.17 the previous week.

World prices also rise in dollar terms (commodity booms) when the US Federal Reserve prints money. However, the Federal Reserve has now started raising rates, which tends to drive down commodity prices. Coffee prices fell earlier.

At the Nov. 5 auction, the Low Grown/Tippy leafy variety had seen a drop in demand, selling only 2.2 million kilograms.

The Ceylon Tea Brokers auction statement shows that tea prices at all altitudes have fallen by 50-100 rupees.

Low Grown attracts the highest prices for Ceylon tea.

In the 2nd week of November auction, the average sales of Low Grown Tea was Rs 1,408.85 compared to Rs 1,516.83 the previous week.

In dollars, it had slipped to $3.88 per kilogram from $4.17 the previous week.

The best selected BOP1s declined, while the best and worst were irregularly lower. The poorest types are maintained.

OP1 Select the best with the best and below the best declined. The poorer types were fully firm.

Selected top teas from PEKOE/PEKOE1 as well as the full range of bold PEKs were perfectly firm. Cleaner below best and the rest was spotty.

FBOP/FBOP1 With the exception of a few selected top bills, all the others had a lower market.

The few well-made BOP bills held firm while all the others were lower.

The high and low of FBOPF/FBOPF1 lost value, while the high and low below had strong

High Grown

The average High Grown bid was 1,366.32, compared to 1,429.77 rupees.

BOP’s Best Westerns, a few selected bills were firm while others were down Rs.50/- per kg.

Teas at best shed below by Rs. 40-80/- per kg.

Simpler teas were firm to easier by Rs. 50/- per kg. Those of Nuwara Eliya were irregular and above all easier.

Those of Uda Pussellawa were lower by Rs. 100/- per kg while Uva is lost by Rs. 50/- per kg.

Best Westerns from BOPF, a few selected bills were firm while others were easier by Rs.50/- per kg.

Below are the best and simplest teas available at Rs. 50-100/- per kg.

Nuwara Eliya had almost no offerings. At Uda Pusselawa
shed by Rs. 50/- per kg while Uva was lower by Rs. 50-100/- per kg.

medium culture

The average Medium Grown auction for the week was 1,366.32 rupees compared to 1,429.77 rupees the previous week.

Last week BOPF’s types of cleaners held steady while all others fell by Rs 50 per kg

In BOP1, Select best and best were down Rs.50/- per kg, while all others were firm.

While Select the best easier by Rs.100/- per kg. Best lower of Rs.50/- per kg while all others are maintained.

OP/OPA’s Select best lower by Rs.100/- per kg. Best and best below paid by Rs.50/- per kg while teas at
the lower end maintained.

In the PEKOE/PEKOE1 – PEK Select best declined by Rs. 50/- per kg while all others were firm.

PEK1 in general, firm.

The Best and Best of FBOP’s Select fell by Rs.100/- per kg while all others fell by Rs. 50/- per kg.

FBOPF1’s top Selects were lower by Rs.50/- per kg while the top ones were down by Rs.100/- per kg.

Below, best mitigated by Rs.50/- per kg. The teas of the poorer types were firm.


The high growth BP1s had hardly any supply while PF1 got lighter by Rs. 50-100/- per kg.

The medium sized BP1s were irregular and the PF1 decreased by 100 rupees per kg.

The low growth BPIs offer almost no supply and PF1 has decreased by 100-200 rupees per kg.
(Colombo/November 12, 2022)

Continue reading ]]> Argentina plans $9.4 billion local debt swap to ease year-end payment crunch https://basketvillageusa.com/argentina-plans-9-4-billion-local-debt-swap-to-ease-year-end-payment-crunch/ Wed, 09 Nov 2022 00:16:14 +0000 https://basketvillageusa.com/argentina-plans-9-4-billion-local-debt-swap-to-ease-year-end-payment-crunch/

BUENOS AIRES (Reuters) – Argentina said on Tuesday it would launch a voluntary debt swap for some 1.5 trillion Argentine pesos ($9.4 billion) in upcoming payments as it seeks to ease the end-of-year repayment crisis and to extend maturities until 2023.

The country’s economy ministry said in a statement it would swap some 700 billion pesos of debt due in November and 800 billion pesos due in December, in exchange for bonds maturing in June, July and September. 2023.

“This conversion operation aims to extend the maturities of the Treasury peso debt profile,” the ministry said in the statement.

Market analysts expected this announcement given the severe economic crisis hitting the South American country, fueled by skyrocketing inflation estimated at 100% this year.

Argentina had carried out another voluntary debt swap in August for some 2 trillion pesos ($15 billion) for bonds maturing before November.

The Economy Ministry said the new bid would be opened on November 10 between 10 a.m. and 3 p.m. local time (1 p.m.-6 p.m. GMT) and settled on November 15.

Dollar-linked Ledes, Lecer and Boncer bonds are eligible for exchange, he said, adding that he would issue three dual-currency bond options with varying maturities in 2023.

($1 = 159.7100 Argentine pesos)

(Reporting by Eliana Raszewski in Buenos Aires; Writing by Sarah Morland; Editing by Matthew Lewis)

]]> HSBC to Launch Orion Blockchain Bond Tokenization Platform – Ledger Insights https://basketvillageusa.com/hsbc-to-launch-orion-blockchain-bond-tokenization-platform-ledger-insights/ Fri, 04 Nov 2022 23:26:12 +0000 https://basketvillageusa.com/hsbc-to-launch-orion-blockchain-bond-tokenization-platform-ledger-insights/

Today HSBC announced plans to launch HSBC Orion, its DLT-based bond tokenization platform. It says the European Investment Bank (EIB) could use it to issue a GBP tokenized bond under Luxembourg law.

The solution enables the tokenization of both the digital bond and the currency used for settlement, enabling atomic settlement or delivery versus payment (DvP).

“Digital assets are a rapidly growing part of financial markets. Our customers demand solutions that can deliver the benefits of tokenization in a reliable and secure environment,” said John O’Neill, Global Head of Digital Asset Strategy, Markets and Securities Services, HBSC.

“We plan to use HSBC Orion to facilitate the issuance of digital bonds and expand its use to other products in 2023.” HSBC Securities Services plans to expand digital asset custody support next year.

The digital bond initiative does not involve cryptocurrency but instead uses permissioned blockchain infrastructure. We’ve asked for more details regarding the technology, but haven’t yet received a response in time for publication.

“Tokenization opens up opportunities for fixed income issuance, including faster processing and improved operational performance,” said Asif Sherani, Managing Director, Head of DCM Syndicate, EMEA. The efficiency of using blockchain makes bond issuance cheaper, making smaller issuances more viable. A shared ledger reduces the need for reconciliation.

HSBC has already conducted blockchain bond trials. In 2020, it worked with tokenization platform Singapore Marketnode to issue a S$400m bond for agricultural company Olam and is one of the launch partners for the Marketnode solution.

At the end of 2021, he performed his experiments with the Banque de France using a wholesale central bank digital currency (CBDC) to settle digital bond transactions. This involved both Hyperledger Fabric and R3 Corda enterprise blockchains, with IBM as the technology partner.

In addition, HSBC has adopted Baton Systems’ DLT technology for foreign exchange settlement. Initially, HSBC Effects everywhere was used between HSBC group companies, then it partnered with Wells Fargo to settle bilateral exchanges.

Meanwhile, bonds and fixed income securities are one of the most popular asset classes for tokenization.

Last year the EIB published a Bond of 100 million euros on the public Ethereum blockchain. Yesterday, UBS issued a Swiss digital bond with a dual listing on both SIX Digital Exchange (SDX) and SIX.

Switzerland, Luxembourg, France and Germany are the most favorable European destinations in terms of legal frameworks. Both UK and the EU launch DLT sandboxes to potentially update laws.

Herald: Taxing non-resident Goans https://basketvillageusa.com/herald-taxing-non-resident-goans/ Sun, 30 Oct 2022 19:49:38 +0000 https://basketvillageusa.com/herald-taxing-non-resident-goans/ Oct 31, 2022 | 05:48 IST

Tax non-resident Goans

Earlier this month, at the India Mobile Congress held in New Delhi, the CEO of a telecom operator made a significant statement that government levies on the telecom industry amounted to 58%, the highest in the world. My God ! When the government takes 58%, one can imagine the woes of the industry continually working with its back to the wall and expected to deliver best-in-class service with only a 42% margin to play with. The same story goes for gasoline, with government taxes amounting to around 50%. In short, when an Indian recharges his mobile by Rs 100, Rs 58 has already gone to the government and for a liter of petrol almost Rs 50 is the government’s share.

Meanwhile, in distant Melbourne last week, people of Indian descent were seen dancing in the streets long before the Virat Kholi magic happened on match day. Did the Indians have a certain premonitory power to know in advance the result and therefore the celebration? Or had they gone mad because Team India was visiting them after a long stay in their country of residence. Or maybe, just maybe, they were celebrating the fall of the Indian Rupee which has unfortunately been falling since the start of 2022 from below Rs 74 to above Rs 82 and changing. After all, a fall in the value of the Indian rupee primarily benefits NRIs as it increases their purchasing power by buying Indian assets. Not that the ticket for the match in Melbourne had to be paid for in Indian rupees, but it is quite possible that these NRIs have made some earnings on their recent purchases in India and have spent those earnings to come and watch the match almost for free, hence the rejoicings.

On the other hand, Indians who had planned to travel to Australia for the Cricket World Cup and had delayed buying their tickets and accommodation were shocked as they were told to pay more as the Indian rupee had slipped. Ok, the Indian rupee hasn’t fallen much against the Australian dollar, but the fact is that the Indian rupee has been in perpetual decline for ages and has no intention of reversing and becoming more strong. Whenever the government feels it needs to stop the rupiah’s fall, it approaches the NRIs with resurgent dollar-denominated bond issues with attractive interest rates. But here’s the difference, bond issues are not comparable to the tax paid by resident Indians. The money from the bond issues has to be returned, when the term is over, while the tax paid goes into government coffers and resident Indians these days can’t even question the government about what they have intend to do with our taxes.

The author is not suggesting that NRIs should be taxed because that might practically not be possible due to compliance issues and also because India will always have this eternal need for foreign currency, then don’t forget to approach non-residents to bail the country out of harm’s way. So far we have had four bond issues that have sailed and in all four cases bonds have been issued to stem the fall of the rupee. But that’s about all, that’s all the contribution that the NRIs have made to the country by filling the Indian coffers with foreign currencies that the government manages badly anyway. Comparatively, resident Indians have to pay taxes on their personal income as well as expenses (GST) and also have to deal with the music due to the slippery rupee, a triple whammy if you can call it. Therefore, it is necessary to understand that Indians who choose to live in India cannot be at a disadvantage compared to Indians who choose to reside abroad. Encouragement of the Indian team by the NRIs would make more sense if everyone, resident or non-resident, contributed equally to the exact amount of taxes in the growth of India’s infrastructure.

Again, taxing NRIs is impractical in terms of compliance or the double taxation problem that will arise, but this article is written for non-resident Indians to recognize the plight of resident Indians. So here is a solution to make a fair deal between residents and non-residents, it’s better India abolishes personal income tax for residents and suddenly everything will seem fair. Let the GST stay because it is a tax on your consumption, provided it is simplified with a maximum of two GST brackets. The GST council should be dismantled because its existence will make the GST more and more complicated. These guys from the GST council are really funny; they have even made eating pizza in India a complex affair as the pizza crust attracts a different GST rate and the toppings a higher rate.

The message they are trying to send is probably to eat more crust like chapatti without jam and forget the toppings. In fact, these GST council meetings are held in star hotels and the members travel from different parts of India. They must therefore be perceived as doing something. So they offer strange and complicated tariffs. If there’s only one or two GST rates, these guys won’t have anything to discuss and their tour won’t make sense.

A quick note to non resident Goans, the title of this article was just to get your attention, taxing NRIs is just not practical but here is what you can do, at least start lobbying governments, the Center and the state to relieve resident Indians. Lobbying from Goa is difficult as there is no opposition taking over the cause. Moreover, most Goans treat politicians as handymen elected to do their personal work. The collective demand for the abolition of personal income tax seems far-fetched. While NRIs or people of Indian descent will change governments in their country of residence if spending gets out of hand, in Goa we mostly live with it as most Goans once took personal favors from politicians and therefore remain in mute mode. Also, the tax is very subtly masked by the government which most Goans find difficult to decipher. Even talking on the phone is taxed at 58% for resident Indians and most don’t know it. Hope you get the drift.

(The author is a business consultant)

How Xi Jinping can make Chinese markets investable again https://basketvillageusa.com/how-xi-jinping-can-make-chinese-markets-investable-again/ Wed, 26 Oct 2022 00:51:40 +0000 https://basketvillageusa.com/how-xi-jinping-can-make-chinese-markets-investable-again/


The question of China’s ‘investability’ first arose late last year when Beijing’s harsh regulatory crackdown on big tech and real estate companies wiped billions of dollars off the books of foreign investors. The answer seems sealed after President Xi Jinping outmaneuvered rival political factions to pack China’s top leadership with his longtime aides at the Communist Party Congress last weekend.

The financial markets have sent an unequivocal message. U.S.-listed Chinese stocks tumbled on Monday, posting their steepest decline on record. The offshore yuan fell to its lowest since the unit began trading in 2010. Stocks remained jittery on Tuesday. The rout came despite China posting better-than-expected third-quarter gross domestic product figures.

Ironically, investors may not care about a strong politician. After the 2012 party congress, when Xi first came to power, and the party rally five years later, when he started to beef up, Chinese stocks have performed well. Financial markets tend to prefer a focused administrative team to internal conflicts and competing goals between politicians.

But investors this time have doubts as they are unsure whether Xi’s so-called new development model, which focuses on closing the wealth gap and the role of the state in the economy, will work. Now that there are no dissenting voices at the top, Xi’s aides could sink China’s financial markets into the ground.

When investors flee, they sell indiscriminately. A weaker yuan, for example, exacerbates outflows from the Chinese government bond market. Shares of electric vehicle and battery makers, such as BYD Co. and NIO Inc., also fell despite the sector being favored by policymakers.

As such, Beijing still has an interest in keeping the markets open to fund its budget deficit and big industrial tech ambition. So how can Xi make China investable again?

At this point, optics matter a lot more than pink macro data. All it takes is a few gentle gestures from Beijing to stabilize the market.

First, show what “common prosperity” is not. This slogan, which aims to expand the middle class and narrow the wealth gap, received renewed attention at the party convention. While Xi has been careful to explain that this is not about egalitarianism and that China wants a bigger economic pie for everyone, investors and businesses are nevertheless spooked, seeing it as a prelude to a further destruction of wealth. After all, history has given them a bitter pill: this drive for common prosperity arose amid Beijing’s big tech crackdown last year.

So how about bringing the tech billionaires, such as Jack Ma of Alibaba Group Holding Ltd., Pony Ma of Tencent Holdings Ltd. and Wang Xing from Meituan, to Beijing for a constructive dialogue? Don’t “summon” them because investors associate that word with other crackdowns. Instead, invite them to discuss how China can push its technological frontiers and show that Beijing still values ​​the entrepreneurial spirit and contribution of these self-made billionaires to Chinese society.

Second, it now feels like China is closing itself off from the world. “Dual circulation,” another economic slogan promoted by Xi that focuses on the domestic economy and promotes exports in higher value-added sectors, is now included in the party constitution. With Covid Zero and a closed border for nearly three years, investors are rightly concerned that China is isolating itself. If so, why would China need foreign capital?

Xi says China is still open, so its bureaucrats must show it. How about reopening the border and reducing the number of quarantine days for incoming travellers? Let foreign businessmen come to see China for themselves, and let overseas Chinese go home to visit their families. It’s been too long. The Covid-Zero policy is a fiscal disaster anyway.

True, Xi does not care about optics. Had he done so, he would have included a woman in the new Politburo or helped a frail Hu Jintao avoid his predecessor’s unceremonious exit from the party congress.

But optics and gestures matter. To restore confidence in Chinese stocks, bonds and currency, welcoming self-made billionaires and foreigners to Beijing is the first step Xi can take.

More from Bloomberg Opinion:

• What a Defiant Xi at the Party Congress Tells Us: Shuli Ren

• Minsky’s real risk in China may be political: Matthew Brooker

• Xi’s ‘zero Covid’ is wrecking China’s economy: Niall Ferguson

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She holds the CFA charter.

More stories like this are available at bloomberg.com/opinion

]]> Intervention in yen: one and it’s done? PM Kishida suggests otherwise https://basketvillageusa.com/intervention-in-yen-one-and-its-done-pm-kishida-suggests-otherwise/ Sat, 22 Oct 2022 07:59:00 +0000 https://basketvillageusa.com/intervention-in-yen-one-and-its-done-pm-kishida-suggests-otherwise/

Baris Ozer

By Brian Manby, CFA, Principal Analyst, Research

Last month, I had the privilege of visiting the New York Stock Exchange to hear Japanese Prime Minister Fumio Kishida address investors while I was in town for the United Nations General Assembly. Japanese markets stung interest this year, driven by soaring yen weakness and the Bank of Japan’s (BOJ) commitment to accommodative monetary policy, as other central banks turn increasingly restrictive to combat record inflation.

It was a timely opportunity to hear Prime Minister Kishida’s thoughts on the yen’s 23% fall against the dollar this year and, more importantly, the role of Japan’s central bank and government in supporting it. in the future. Just hours before Kishida’s speech, Japan’s Ministry of Finance (MOF) intervened in the foreign exchange markets for the first time since 1998 to support the currency. Before the intervention, the yen traded around 145 yen per dollar and fluctuated around 141 yen soon after. A few weeks later, he gave up his earnings entirely and is currently approaching ¥150.

2022: a challenge for the yen

2022: a challenge for the yen

The support was a brief respite from prevailing headwinds for the yen, which has been challenged this year as part of the BOJ’s commitment to policy accommodation. Japanese short-term rates remain in negative territory and yield curve control has capped longer-term bond yields. Earlier this week, the BOJ conducted an emergency bond buying operation to keep yields near its policy ceiling.

Yen Bears threaten MOF

But the Prime Minister spoke of another catalyst that forced the MOF to intervene: speculative betting on the yen. Kishida asserted his belief that foreign exchange markets should determine exchange rates, but reiterated that speculation may need to be addressed, especially as it creates excessive volatility.

The Prime Minister is right. According to data from the Commodity Futures Trading Commission (CFTC), non-trading net short positions in yen futures have increased since late summer and have held steady ever since. During this period, the currency weakened by about ¥18 to the dollar.

This marked a reversal from the early summer unwinding of short positions. The most recent contract data remains deeply negative despite the September intervention. Non-commercial yen positions have also remained net short since March 2021.

Short bets kept the pressure on

Short bets kept the pressure on

But regardless of the direction of the yen or the catalysts for its movements, Prime Minister Kishida’s involvement was clear. Japan will continue to intervene appropriately to stabilize the yen in the face of what it perceives as excessive speculation and related volatility.

He is likely hoping that the threat of further intervention in the currency markets could scare off yen bears as well, although a month later the intervention had the opposite effect of stoking more volatility. Speculators continue to test the MOF’s resolve and the BOJ’s policy commitment, with the yen selling further as it nears ¥150.

Equity Implications of Yen Tug of War

Yen weakness has always been a tailwind for equities due to the export orientation of the Japanese economy, which has resulted in a negative medium to long-term correlation between Yen and market returns. scholarship holders.

Rolling 60-month correlation: MSCI Japan and yen returns

Rolling 60-month correlation: MSCI Japan and yen returns

This year’s weakness resulted from traders shorting the currency due to the policy divergence between the United States and Japan, which will only widen with the Fed poised to continue raising interest rates while the BOJ remains inactive. This may give yen speculators the confidence to continue challenging the BOJ’s reactionary interventions.

However, we don’t know the frequency or magnitude of further MOF intervention, let alone where it will leave the yen in the short to medium term. Given the uncertainty amid opposing forces tug of war with the yen, we prefer a hedged approach to Japanese equity allocations, particularly with a focus on exporters.

Income diversification is key in weak yen environments

The Japanese equity market already contains a healthy mix of export-oriented companies, but seven of the 11 GICS® sectors still derive more than half of their revenue from Japan.

Geographic exposure of MSCI Japan segment revenues

Geographic exposure of MSCI Japan segment revenues

Part of this is due to the nature of the sectors themselves, but in a weak yen environment for the foreseeable future, it may be beneficial to have an overweight allocation to exporters. The WisdomTree Hedged Japanese Equity Fund (DXJ) allocates to dividend-paying, export-oriented companies that derive less than 80% of their revenue from Japan, resulting in greater revenue diversification relative to the MSCI Japan Index.

Geographic exposure of revenues

Geographic exposure of revenues

By design, DXJ also tends to overweight Japan’s more export-oriented sectors while maintaining an underweight exposure to those more dependent on domestic income. For example, Materials and Consumer Discretionary are more dependent on international income than domestic income and have historically been overweight in DXJ due to its export-focused methodology.

Sector exposure at 09/30/22

Sector exposure at 09/30/22

Japanese yields offer a premium over bonds

My colleague Jeff Weniger wrote about stock premiums in Japan and how it is now a global outlier. Japanese equities, as represented by the underlying index of DXJ, currently offer an 11.5% yield advantage over 10-year Japanese government bonds (JGBs), due to long-term yields capped by the BOJ’s commitment to controlling the yield curve. The index is currently trading at a price/earnings multiple of less than 9, offering an earnings yield close to 12%.

Earnings yield premium over 10-year domestic bond yield

Earnings yield premium over 10-year domestic bond yield

This illustrates the policy divergence with the US, which has widened over the past 10 years as the ripple effects of Fed policy changes have impacted the bond market. If the relationship were to change going forward, the compression could come from rising bond yields should the BOJ change course, but an 11.5% premium with bond yields currently close to zero is a big opportunity.

DXJ is also 100% currency hedged, completely erasing any fluctuations in the yen-dollar exchange rate, so total returns are determined solely by stock performance. More importantly, it allows investors to avoid amplifying the effects of the ongoing yen tussle in their allocations to Japan.

Important risks related to this article

There are risks associated with investing, including possible loss of capital. Investing abroad involves special risks, such as the risk of loss due to currency fluctuations or political or economic uncertainty. The Fund concentrates its investments in Japan, thereby increasing the impact of events and developments in Japan which may adversely affect performance. Currency investments involve additional special risks, such as credit risk and interest rate fluctuations. Derivative investments can be volatile and may be less liquid than other securities, and more susceptible to the effects of various economic conditions. As this Fund may have a high concentration in certain issuers, the Fund may be adversely affected by changes in such issuers. Due to this Fund’s investment strategy, it may make higher capital gains distributions than other ETFs. Dividends are not guaranteed and a company currently paying dividends may stop paying dividends at any time. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.

Brian Manby, CFA

Brian Manby, CFA, Principal Analyst, Research

Brian Manby joined WisdomTree in October 2018 as an Investment Strategy Analyst. He is responsible for assisting in the creation and analysis of WisdomTree’s model portfolios, as well as helping to support the company’s research efforts. Prior to joining WisdomTree, he worked for FactSet Research Systems, Inc. as a Principal Consultant, where he assisted clients in the creation, maintenance and support of FactSet products in the investment management workflow. Brian earned a BA with a double major in Economics and Political Science from the University of Connecticut in 2016. He holds the Chartered Financial Analyst designation.

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.

The nation is moving forward with climate actions https://basketvillageusa.com/the-nation-is-moving-forward-with-climate-actions/ Wed, 12 Oct 2022 23:24:00 +0000 https://basketvillageusa.com/the-nation-is-moving-forward-with-climate-actions/


Commitments on the issue honored at home and abroad

Editor’s note: A survey of overseas readers of China Daily ahead of the 20th National Congress of the Communist Party of China shows that the nation’s ecological progress, economy, diplomacy, science and technology, as well as the The Belt and Road Initiative is part of the From today, China Daily will publish a series of special articles to provide readers with an in-depth look at these topics.

An intriguing cross-shaped skylight sits atop Hangzhou West Railway Station in the provincial capital of Zhejiang, giving the structure a truly modern appearance.

Covering 12,500 square meters, the skylight allows sunlight to reach a subway station under the 57-meter-tall building, significantly reducing electricity consumption needed for lighting.

Although overshadowed by the blue skylight, the black section of the complex’s huge roof has more roles to play than just keeping the wind and rain out. Composed of 7,540 photovoltaic modules, it can generate more than 2.3 million kilowatt hours of electricity per year, avoiding 2,300 tonnes of carbon dioxide emissions.

In addition, thanks to a type of high-tech material, the roof can reflect heat, which means a reduction in energy consumption for air conditioning in the complex with a total area of ​​510,000 square meters, which is equivalent to over 71 standard sized football pitches.

Designed and built with a low-carbon philosophy, the structure is an official high-level green building.

President Xi Jinping announced in September 2020 that China aims to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.

At an international event in 2020, he stressed that China always honors its commitments. “We will take strong steps to implement the goals just announced and contribute even more to tackling the global climate challenge,” Xi said.

China’s actions at home and abroad show that it has kept its word.

As China moves forward with its climate goals, the public has been inundated with a relentless stream of news about the country’s climate actions.

Hangzhou West Railway Station, which opened last month, is just one of many projects making headlines as many documents are introduced at the national and regional levels to deal with the crisis. global climate.

Climate action has not only been taken in bustling urban centers such as Hangzhou, but also in the country’s vast offshore areas, sparsely populated mountainous regions and even remote deserts. Abroad, pragmatic cooperation programs have been set up to help other developing countries in their climate efforts.

Efforts welcomed

Liu Dechun, an official with the National Development and Reform Commission, or NDRC, the country’s top economic planner, said at a recent press conference: “Over the past two years, under the strong leadership of the Communist Party of China Central Committee with Comrade Xi Jinping at its heart, the country has made a good start for its dual climate goals thanks to the efforts of different regions and government agencies to pragmatically promote related work. »

China’s high-level design for these goals – dubbed the “1+N” political system – was cited by Liu as an example of such progress.

The “1” in the system refers to a main directive issued by the CPC Central Committee and the State Council, the Chinese Cabinet, as an overall guide for the goals, while the “N” refers to a series of specific action plans for different industrial sectors. sectors and accompanying policies.

Liu said, “Relevant government agencies have developed implementation plans for different sectors and industries, as well as supporting policies. Provincial-level regions have also developed their implementation plans to peak carbon dioxide emissions.

For example, one of the action plans concerns the low-carbon transition in the construction sector, which is a major emitter of carbon dioxide on a national scale. Released by the NDRC and the Ministry of Housing and Urban and Rural Development in July to achieve peak carbon dioxide emissions in the sector, the plan set out key specific targets for energy conservation and use. solar power generation installations in buildings.

According to the China Building Energy Efficiency Association, greenhouse gases emitted in the entire construction process, from material production to construction and operation, were equivalent to 4.9 billion tonnes of carbon dioxide in 2018, more than half of total emissions that year.

Energy-efficient transformations should be completed in all public buildings in major cities in China by 2030, typically increasing energy efficiency by at least 20%.

By 2025, photovoltaic panels will be installed in half of all newly constructed public buildings and factories nationwide, according to the action plan, which states that such panels will be added to more existing buildings.

China has also made efforts to harness the potential for renewable energy development in offshore areas and deserts. For example, the NDRC announced in May that the country plans to build 450 million kW of solar and wind power generation capacity in the Gobi and other desert regions.

As part of policies to support climate action, the People’s Bank of China, the country’s central bank, introduced a monetary policy tool late last year to support projects that reduce carbon dioxide emissions. . The political tool allows financial institutions to benefit from cheap loans.

China has seen robust growth in green finance over the past two years, according to the bank.

At the end of last year, the balance of green loans in domestic and foreign currencies stood at 15.9 trillion yuan ($2.24 trillion), up 33 percent from a year earlier. After a 180% increase from 2020, more than 600 billion yuan of green bonds were issued in China last year, making it the world’s second-largest green bond market.

Li Jing, climate change and sustainability services partner at Ernst & Young Greater China, said the country’s green finance market is in full swing. She expects more foreign investment in green financial products in China, such as green bonds and carbon-neutral exchange-traded funds.

Xie Zhenhua, China’s special envoy for climate change, said at a recent symposium: “The nation faces enormous challenges in achieving its climate goals, but a systematic low-carbon transition will create enormous market and investment opportunities for technological development and innovation.

He stressed that climate actions will also contribute to the synergy of efforts to strengthen the economy, employment, energy development, food production, health care and environmental preservation.

According to the Ministry of Ecology and Environment, China’s carbon emissions intensity – the amount of carbon dioxide emissions produced per unit of GDP – fell 3.8% last year. compared to 2020. “China has essentially reversed the rapid growth of its carbon dioxide emissions,” the ministry said.

The country’s hydroelectric, wind, solar and biomass capacities all rank first in the world.

In addition to climate change mitigation measures, the nation has moved towards climate adaptation.

Liu Youbin, spokesperson for the Ministry of Ecology and Environment, said: “China always attaches the same importance to climate change mitigation and adaptation by implementing a national response strategy. active in climate change”.

In June, 17 government departments, including the ministry, jointly released a new national climate change adaptation strategy. The document pledged to make significant improvements in the nation’s ability to adapt to climate change and build a climate-resilient society by 2035.

Liu said the ministry also recently issued a guideline to help provincial-level governments draft their climate adaptation plans.

Overseas measures

While promoting climate action at home, China has also announced a series of actions to shoulder its responsibility in building a global community with a shared future.

In September last year, President Xi announced that China would strengthen its support for other developing countries in promoting green and low-carbon energy, and would not build new coal-fired power projects at the stranger.

Earlier this year, in order to further promote green development under the Belt and Road Initiative, the Ministry of Ecology and Environment and the Ministry of Commerce updated a guideline of 2013 on Environmental Protection in Overseas Operations. Chinese companies were urged to adhere to environmentally friendly approaches for their projects from start to finish.

With climate change being one of the major concerns, the document includes environment-related requirements for large-scale procedures in companies’ overseas operations. For example, before overseas mergers and acquisitions, Chinese companies should assess the environmental risks caused by target companies, and greenhouse gas emissions should be prioritized in the assessment.

The directive explicitly states that priority should be given to renewable energy when Chinese companies develop energy projects.

The nation has also made consistent efforts to assist other developing countries in their climate actions through South-South cooperation.

According to the Ministry of Ecology and Environment, China has concluded 43 agreements with 38 countries in the framework of South-South climate cooperation. Besides allocating 1.2 billion yuan for such cooperation, China has provided training programs for some 2,000 civil servants and technicians working in climate-related positions in 120 countries.

On September 29, for example, China handed over to Uruguay a mobile earth system capable of receiving and processing data from meteorological satellites. The equipment is expected to improve the South American nation’s ability to deal with climate change by improving weather monitoring.

At a press conference in September, Ecology and Environment Minister Huang Runqiu stressed that China is determined to meet its climate goals. He said the goals are “a natural fit for achieving sustainable development of the Chinese nation” and “a solemn commitment to building a shared future for mankind.”

China will honor its promises with concrete actions, he said.

“While fully implementing the ‘1+N’ policy to peak carbon dioxide emissions and achieve carbon neutrality, we will actively participate in and lead global climate governance to make even greater new contributions to climate change. building a beautiful China and coping with climate change,” Huang added.