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● How major equities indices performed during the sixth month of the year p.3 ● Stock Exchanges World Map p.5

Invesco Terry Pan WORLD CEO of Greater China at In- vesco Hong Kong Ltd Sovereign investors pivot away from Europe toward MarkeFinancial Markets Insights ts China p. 07

Freely Distributed ⎥ Monthly Edition ⎥ Volume II ⎥ Issue 11 ⎥ July-Aug. 2019

Facts & figures Bill Gross Star Market Infographics about the economies of The superstar bond fund manager SSE’s new Nasdaq style market kicks CEE & SEE & CEE LISTING Central East& SE Europe p.02 INVESTORS and founder of PIMCO p.06 off trading with great success p.03

TRADING IN THE SPOTLIGHT Investors seek shelter in defensive stocks In a worsening economic climate these stocks are the well de- Kyriaki I. Balkoudi fended castles of the investing world

orld stock markets have had tween the US and China collapsed, veyed said that trade is the biggest tail risk their best first-half returns prompting a steep U.S. tariff hike on for markets, and many moved away from Flows into since 1997 and yet the risks $200 billion of Chinese goods. “Defen- risk, rotating into so-called safe haven as- 5 bn Morne van der Merwe, M. to the biggest rally in sive assets did well in Q4, they protected sets such abonds, cash, staples and utili- Defensive Equites Partner of Baker McKenzie decades are clear. What on the downside and they also picked up ties, as they ramped up protections against goes up must come down. that upside in Q1,” Nick Alonso, director a market slide. The Fund Manager Survey 4.5 bn Investors' mistrust toward the stock mar- of multi-asset at PanAgora Asset Man- respondents also said they increased their 4 bn Figures in S.African ket’s relentless rise increased their ap- agement in Boston told Reuters.The in- cash buffers to 5.6% from 4.6%-the US Dollars petite for more-defensive positioning. terest from prospective clients in biggest jump in cash since the 2011 US Panagora’s defensive equity strategies debt ceiling crisis- to whether a potential M&A value For the first time in two years, investors fund has more than doubled from the storm. An overall total of 179 fund man- 3.2 bn flock to the safety of defensive sectors, same period last year, he added. agers with $528 bn AUM participated in 3 bn jumps in H1 which provide constant dividends and the survey, which took place from June 7 stable earnings regardless of the state of Bearishness despite to June 13, so it reflects the period after Investors in South Africa have the overall stock market. Worldwide, util- some high-profile sparring between the been caught up in a dramatic con- ities stocks have drawn in $4.5 billion this surging stock markets U.S. and Mexico that stirred fears of an- trast in the first half of 2019: an year while consumer goods stocks have 2 bn Fund managers in the Bank of America other front in the tariff battle. Trade has economy which endured its worst pulled in $3.2 billion, EPFR data shows. Merrill Lynch June survey reported their been named a top fear for fund managers contraction in a decade in the first This breaks a two-year exodus from those positioning was the most bearish it’s been on 14 out of the past 16 surveys. Worries quarter and a stock market that sectors and is the latest sign that investors since the Global Financial Crisis. The pes- over the trade war and fears that the stock raced to its best start in 12 years. Utilities stocks view them as safer assets amid rising simism was driven by concerns over trade market rally in decades is about to come 1bn Consumergoods Meanwhile, mergers & acquisi- trade tensions and slowing world eco- war/recession, and monetary policy impo crashing down are among to the things Source: EPFR tions deal value rocketed by 347 nomic growth. The inflows accelerated at tence and low strike prices for policy puts. that continue to keep investors awake at Note: Data Jan - June 2019 percent in the country -from the start of May, when trade talks be- More than half of the fund managers sur- night. US$3.7 billion in H1 2018 to US$16.6 billion in H1 2019. However, the volume was lower according to data compiled by Baker McKenzie in Johannes- burg. Muriel Siebert A story of three deals GREAT The First Lady of Wall Street The rise in deal value was thanks TRADERS mostly to three large deals, with orn in 1928 in Cleveland, Muriel ures nationwide. a combined deal value of US$ 15 Faye "Mickie" Siebert was a secu- Siebert was an outspoken advocate for billion. The first being the pay rities trader who in 1967 became the women in the industry and devoted a sig- TV group MultiChoice spinoff; B first woman to buy a seat on nificant portion of her financial resources and the remaining two are Total the New York Stock Exchange (NYSE) to various nonprofit, civic, and women's SA’s acquisition of Anadarko and was the first woman to head one of the organizations. In 1990 she established the Petro-African Assets for US$8.8 NYSE's member firms. Siebert began her Siebert Entrepreneurial/Philanthropic Plan billion and Naspers’ acquisition career at the age of 22 after leaving West- (SEPP) which donated to charity half of of Russian company, Kekh ern Reserve University -where she en- the net profits from new securities under- eKommerts OOO. “While mar- rolled with the intention of obtaining a writing at Muriel Siebert & Co. The ket sentiment regarding large degree in accounting-due to her father's Woman of Finance was quoted as saying transactions in Africa tends to illness. She decided to pursue a career on "men at the top of industry and govern- focus on the risks of transacting Wall Street where she worked for a num- ment should be more willing to risk shar- in the region, mainly due to the ber of brokerages before starting her own, ing leadership with women and minority largescale political and economic Muriel Siebert & Co., Inc., in 1967 and members who are not merely clones of uncertainty on the continent, the that same year she joined the 1,365 male their white male buddies. In these fast- data could be beginning to tell a members of the Exchange, shattering a changing times we need the different different story, showing a trend longstanding gender barrier. viewpoints and experiences, we need the towards an increase in high value Strong performer and giver enlarged talent bank. The real risk lies in M&A transactions in the region, continuing to do things the way they've al- but at a lower volume,” In 1977, she was named Superintendent of ways been done." Siebert died on August said Morne van der Merwe (pic- Banks for the State of New York, with 24, 2013, aged 84. In 2016, Siebert Hall tured), Managing Partner and oversight of all of the banks in the state, at the NYSE was dedicated in honor of Head of the Corporate/M&A regulating about $500 billion. Not one her; this was the first time a room at the Practice at Baker McKenzie in bank failed during her tenure, despite fail- Exchange was named after an individual. Johannesburg. WM 11AAA_Layout 1 8/3/19 3:05 PM Page 26

2 INSIDE THE MARKETS Issue 11 ⎥ July-Aug. 2019

Some $13 trillion in sovereign Investors and dealing members will begin Virgin Galactic, Richard Branson’s debt bears a negative yield. Deutsche to pay value-added tax for transactions space-tourism venture, plans a stock Bank Securities’s Chief Economist carried out on the Nigerian Stock Ex- market listing by the end of the year. 1 Torsten Sløk notes that 25%, or one 2 change (NGSE) from July 25. This is due 3 The company will list its shares as out of every four bonds in the world, to the expiration of the Value-Added Tax part of a merger with Social Capital

World now yields negative rates. Graph: (Exemption of Commissions on Stock AFRICA

WORLD Hedosophia Holdings which will In Brief In AMERICA Markets Deutsche Bank, Bloomberg Exchange Transactions) Order of 2014. take a 49% stake in Virgin Galactic.

INVESTMENT TRENDS Central East & South East Europe Markets

German companies Below you can find interesting facts and on the region. World Markets undertake- figures about the economies of Central and sall the reasonanble efforts to ensure that Eastern Europe (CEE) and South Eastern data included in this column was correct to invest in Russia Europe (SEE) that give you a perspective at the time of publication. Top German companies working in Russia plan to invest at least €395mn into Russia over the next 12 months, according to the Russian-German Chamber of Commerce, as cited by Tass on June SEE 27.Germany has ten times more companies registered in Russia than the other EU nations. At the same time investments by Ger- man businesses into Russia reached their highest level in the last Romania's iHunt valued at decade, topping €3bn, the RGCC reported in April. 2.59 mln in share listing UAE opens to The first online and mobile phone retailer listed on the unrestricted FDI AeRO market of the Bucharest Stock Exchange hares On 2nd July 2019 of iHunt, a Romanian direct im- of the iHunt is Cezar Catalin Stroe (99.5%), a the Federal United porter of mobile phones and accessories young Romanian entrepreneur while Liviu Cor- Arab Emirates (UAE) S from China, started trading on the alter- neliu Stroe holds 0.5%. According to the mem- Cabinet announced its native trading system (AeRO) of orandum of the listing, iHunt intends to grant decision to lift a the Bucharest Stock Exchange (BVB) on July 9, dividends to shareholders, striking a balance be- decades-old cap on following the company’s IPO which was inter- tween investment policy and dividend policy, foreign ownership mediated by Goldring, as Authorized Consultant. while taking into account investors' expectations. and and allow full iHunt (ticker symbol HUNT) is the first online iHunt is also one of the 15 finalists of the third foreign control of retailer and mobile phone producer listed on the edition of the Made in Romania project, organ- business ventures. "In BVB. Almost 1.7 million shares were traded on ised by the Romanian capital market operator. a cabinet meeting I the first day, representing over 12% of all the The initiative which started two years ago aims chaired in Abu Dhabi, we approved 100 percent foreign ownership company's shares. According to the BVB, 516 to promote Romanian entrepreneurship, improve in 122 economic activities," UAE vice president and prime minister transactions were made, with a total value of transparency, visibility and ensure the further de- Sheikh Mohammed bin Rashed Al-Maktoum (pictured) said on around RON 1.5 million. The main shareholder velopment of the companies. Twitter. The affected sectors comprise: transport and storage; agri- PHOTO: Cezar Catalin Stroe main shareholder of iHunt, a Romanian direct importer of mobile phones and accessories from China culture; space; manufacturing; renewable energy; hospitality and food services; information and communication; professional, sci- entific and technical activities; administrative and support services; IN FOCUS educational activities; healthcare; art and entertainment; and con- Infographics in SEE & CE Europe struction. The UAE is already the Arab world's top recipient of for- eign direct investment, attracting more than $11 billion last year. Bond issues ★ SEE markets facts and figures pick up SERBIA Eastern Europe had a good month Few investors held with issues of $5.1bn in June. In Cen- 1 bn On June 19 Serbia issued a 1 bln euro 10-year eurobond on the tral Europe the amount of bond issues their nerve during London Stock Exchange with interest rate at 1.6%. was also up to $29.1bn in the first six BULGARIA months of this year against the total of $25.9bn that was issued in the same Q4 2018 Exports of goods from Bulgaria to the EU and to third countries in- 7.3% period a year earlier. New research shows that only a fifth of investors said they stuck creased in May by 7.3% y-o-y according to the NSI. Issues are going well thanks to the with their investment plans during the final three months of 2018, MONTENEG very strong first quarter when well when global stocks suffered their worst quarterly fall in seven % The economy of Montenegro advanced 3% y-o-y in the first quar- over half of all the bonds issued this years. The study found that 70% of investors made some changes 3 ter of 2019, easing from a 4.8 % growth in the previous period. year were issued – collectively two to their portfolios in direct response to the instability. These in- ALBANIA thirds (64%) of all the bonds issued cluded, 37% who moved into lower-risk investments and 35% this year were issued in the first quar- who opted for higher-risk options. Only 21% of people kept their % On July 3 the Supervisory Council of the Bank of Albania de- ter. In Eastern Europe the market is up investments the same. The findings were part of Schroders Global 1 cided to maintain the base interest rate unchanged at 1.00%. marginally on last year with $18.1bn Investor Study 2019 which measured the views of 25,743 in- ROMANIA issues in H1 2019 respectively, up vestors in 32 countries throughout the world, The media and entertainment industry in Romania will reach in from the $17bn issued last year. 7.1% 2019 the $3bn US threshold, up 7.1% compared to 2018 ac- Amongst the issuers in Central Eu- cording to the PwC GEMO report 2019-2023. rope, there was heavy sovereign ac- tivity where the governments of Croatia, Serbia and Lithuania all is- Europe's alts assets sued bonds (€1.5bn, €1bn, €1.5bn respectively) with yields of between market is thriving ★ 1.125% and 1.65%. facts and figures Latvia had already issued its €1bn Despite a general air of CEE markets sovereign bond in May and Slovakia gloom descending on CROATIA did the same in April to complete the Europe, the continent's Ten companies and consortia have made bids to build part of a 297 set. June, July and August are nor- alternative assets in- 10 mally dead months for Eastern Eu- dustry is in rude health, million euro Croatian rail project , Croatian Railways said on July 22. BALTICS rope’s bond market and issues last according to a new year were next to nothing. report from research Lithuanian industrial production grew 1.6% y/y in June.The read- However, the outlook for this and house, Preqin. The re- 0.8pt ing marks a pick up of 0.8pp in the annual growth rate. next year is better. According to Raif- port titled Alternatives POLAND feisen Research, Central, Eastern and in Europe finds that Seasonally adjusted industrial production in Poland increased by Southeast European sovereigns will 2018 has seen record 5.1% 5.1% y-o-y in May (after an increase of 6.6% y-o-y in the previous return to debt markets on large scale activity across most alternative asset classes, and Europe-based al- month), Eurostat reported. in 2020. In 2020, “the maturing debt ternative asset fund managers hold €1.62tn in assets under manage- LATVIA will jump to €18.7bn and the re- ment (AUM) as of the end of June 2018 – up almost €300bn in just In May 2019 foreign trade turnover of Latvia was 3.5 % larger than a demption schedule will remain rela- three years. Mark O’Hare, Preqin CEO (pictured), says in the report 3.5% tively tough with overall €17.6bn in that “economic growth is not the same thing as activity and oppor- year ago, amounting to 2.5 bn euro, the Central Statistical Bureau said. HUNGARY 2021 too...Overall in CEE the larger tunities in alternative assets”. Preqin forecasts a near-doubling of redemptions in 2020 speak in favour global alternatives AUM over the next four years, and all the evi- Hungary’s chemicals industry grew 7.8% last year, outpacing the aver- of issuing more new Eurobonds to dence suggests that the European market will play a huge part in 7.8% age growth of the sector in the EU according to the Hungarian Chemi- help sovereigns rollover the expiring driving this growth. cal Industry Association debt,” the report says. WM 11AAA_Layout 1 8/3/19 3:06 PM Page 29 I

Issue 11 ⎥ July-Aug. 2019 WORLD STOCK EXCHANGES 3 Markets Almost all 24 major stock indices summary, monthly change closed in the green in June 2019

7.42% 6.89% 7.19% 4.28% 3.69% 6.36% 5.73% 3.93% 2.77% 3.28% 4.35% 6.54% NASDAQ S&P 500 DJIA STOXX 600 FTSE 100 CAC40 DAX SMI SHANGHAI C. NIKKEI 225 KOSPI STI (USA) (USA) (USA) (EUROPE) (UK) (FRANCE) (GERMANY) (SWITZERLAND) (CHINA) (JAPAN) (S.KOREA) (SINGAPORE)

2.41% 8.10% 2.21% -0.80% 4.06% 0.96% 23.11% 6.37% 2.39% 2.15% 3.47% 4.59% JSX COMP HANG SENG TWI SENSEX BOVESPA IPC ASI MERVAL MOEX EGX30 TSX COMP ASX 200 FTSE/JSE ASI (INDONESIA)(HONG KONG) (TAIWAN) (INDIA) (BRAZIL) (MEXICO) (ARGENTINA) (RUSSIA) (EGYPT) (CANADA) (AUSTRALIA) (S.AFRICA)

LISTING EXPERTS TALK SSE's new Looking for Nasdaq-style anti-bubble STAR Market investments he STAR market, Shanghai Stock Ex- As market volatily remains change's (SSE) Nasdaq-style technology the search for safe assets con- T board, started trading on Monday (July 22) tinues with shares of the first batch of 25 companies ubbles and subsequent busts occur in skyrocketing on their debut day. STAR-listed the investment world from time to companies -ranging from chip-makers to biotech B time. When the dot-com bubble and AI firms- posted average gains of 140%, rais- burst in 2000 it sent significant numbers of ing more than 37 billion yuan ($5.4 billion) from businesses to the wall . Fast forward 19 years their initial public offerings. Some shares of the and, following a similar “app” boom, invest- 25 Star Market debutants climbed as much as Brokers work on the Buenos Aires Stock Exchange floor in Argentina ment banks are bringing forward IPOs as they 520% and more than doubled the board's com- foresee volatile market conditions arriving bined market capitalisation. Only three of the 25 later in the year. But there stocks which could stocks didn’t hit a circuit breaker-designed to be termed “anti bubble” and places where in- calm frenzied buying- causing trading to be au- vestors' money is more safe as the U.S.- tomatically suspended for 10 minutes, with 14 Risk seeking investors China trade dispute drags on. being paused due to a rise of 30 per cent from their opening price and eight being paused after Rob Arnott falling 30 per cent. back to the markets RAFI founder. Lenient rules In its latest client note titled Hopes for a positive breakthrough in the ongoing US-China “Bubble, Bubble, Toil and Unveiled last November by Chinese President Xi Trouble”, Research Affili- Jinping and officially launched on June 13, the trade negotiations and further monetary policy easing by ates (RAFI) says that Tesla, STAR-the Science and Technology Innovation major central banks boosted risk appetite in June Bitcoin, and some US tech Board- is part of China's bid for becoming the stocks are valued by the dominant player in the technologies of the future. Kyriaki I. Balkoudi Editor-in-chief market way above their funda- The country's top securities regulator says the new mentals. According to the note: “These assets Shanghai market will welcome innovative compa- are well avoided by investors, as are US market nies in industries with major growth potential, ebounding from a rout in May, policy space existed to cut interest rates “if adverse cap–weighted indices, which have an histori- such as next-generation information technology, world equity markets rallied contingencies were to materialise”. The ECB chief cally large concentration of pricey and over- smart manufacturing, aerospace, new materials, sharply in June. Investor senti- also left the door open to further prospects for quan- valued large-cap tech stocks. Investors who renewable energy and biotech. In a first for China, > ment improved as major central titative easing and investors cheered the likely ex- take advantage of today’s anti-bubbles have the the STAR market allows the listing of unprofitable R banks confronted by weaker eco- tension of loose monetary policy. In the opportunity to add value by investing in the companies. It also allows listings of companies nomic data made a dovish turn, UK, markets recovered most of the ground lost dur- emerging markets, particularly state-owned en- with dual-class shares or weighted voting rights making it clear looser monetary policy is on the hori- ing May. The Bank of England voted to keep interest terprises (SOEs), and by averaging into the UK and waives the cap on IPO prices. The new market zon. Diminishing trade tensions also contributed to rates on hold at 0.75% but warned that it expects stock market where stocks are feeling the pres- has no daily trading limits in place for the first five market gains as G20 leaders met in Japan, where US economic growth to be flat sure of Brexit-related uncertainty. Value-ori- days of trading but companies will be subject to a and China agreed to resume trade talks, easing a ▪ ASIA/PACIFIC ented smart beta strategies in both the 20 per cent limit from the sixth day of trade. More long row that has contributed to a global economic Asian equity markets staged a recovery in June on developed and emerging markets offer in- than 100 companies have applied to raise funds on slowdown. Meanwhile the US promised to tem- expectations that the U.S. and China would reach a vestors promising investing opportunities out- the new market according to the Shanghai stock porarily halt a new 20% tariff on US$300bn worth détente in their trade dispute. Singapore and Thai- side the many bubbles in today’s global exchange. of Chinese imports, US President Donald Trump al- land led the gains in the region. The Bank of Japan markets.” lowed Chinese telecoms equipment maker Huawei left interest rates unchanged and joined the Fed and to once again purchase Andrew Gillan ECB in signaling its readiness to increase stimulus at Janus Henderson Investors. US products and China agreed to increase its pur- if needed. Hong Kong equities rose despite massive of the Month As the trade fight between GRAPH chase of US food and agricultural products. protests over a bill that would allow for the extradi- Washington and Beijing tion of Hong Kong citizens to mainland China. In ▪ AMERICAS goes on and on with both Index Returns for At its June meeting, Federal Reserve officials Australia, the central bank cut its overnight lending economic powerhouses elected to hold interest rates steady. Policymakers rate to a record low of 1.25% having placed tariffs on June 2019 (%) removed the wording about being“patient” in deter- ▪ EMERGING MARKETS each other’s goods, investors mining future adjustments in the interest rate leading Emerging markets stocks also rallied in June as trade have been seeking for places many investors to expect a full 50‑basis‑point tension between the US and China eased and the not impacted by duties. According to Andrew (0.50%) rate cut as early as July. The enthusiasm dovish stance by central banks worldwide reassured Gillan, head of Asia ex-Japan equities at Janus Source: helped ignite June's rally, with the S&P 500 gener- MSCI, FactSet, J.P. Morgan Economic investors that capital would continue to flow into the Henderson, investors should look at Southeast ating its best monthly gain since January. Returns Research, J.P. Morgan, Asset Management. developing world. The MSCI EM Europe, Middle Asia, where some countries have been a ben- were also supported by another soft inflation reading East and Africa Index rose 5.90%, led by Russia, eficiary of the dispute as trade flows divert. INDEX GBP USD JPY EUR LOC which could make a cut in interest rates more likely. where stocks were buoyed by a late‑month spike in The Philippines and Indonesia have been “a Equities (MSCI) In Latin America, markets got a boost from easing oil prices after shipping disruptions in the Gulf of little out of favour but still growing at very U.S.‑Mexico trade tensions after Mexico reached a Oman. U.S. dollar-denominated Chinese stocks and high rates,” he told CNBC. “We like those MSCI World 5.6 6.6 5.8 4.3 5.9 last-minute deal with the US to curb migration. Ar- yuan‑denominated A shares advanced while India markets,” he continued. “We’ve maintained MSCI USA 6.0 7.0 6.2 4.7 7.0 gentine stocks surged more than 26%, as MSCI fell modestly on higher energy prices. South Africa positions in the Philippines over the last few MSCI Europe 6.4 7.4 6.6 5.1 4.9 added Argentina securities to its emerging markets equity markets followed world markets higher. years but ... we’re happy to be significantly index, opening the potential for billions of dollars of MSCI UK 4.0 5.0 4.2 2.7 4.0 overweight.” Gillan also singled out the fi- investor inflows. nancial sector in Indonesia, where the stocks MSCI Japan 2.8 3.8 3.0 1.5 3.0 ▪ EUROPE Equity markets recovered strongly in June on hopes have “over the last decade delivered really MSCI AC Asia 5.6 6.7 5.8 4.4 5.4 Despite continuing political turmoil across the con- of easier monetary policy and the lessening U.S.- long-term structural growth and maintained ... MSCI EM L.Am. 5.2 6.2 5.4 3.9 3.8 tinent, European markets fared very well, benefiting China trade tensions. The markets' strong perform- high return on equity.” The PSE composite MSCI EM 5.3 6.3 5.5 4.0 4.7 from comments by Mario Draghi, President of the ance has made it a good quarter but wait to see index in the Philippines and Jakarta composite European Central Bank (ECB). The ECB's key pol- whether growth reaccelerates or slows further. in Indonesia have risen more than 10% and (Data as of 30 June 2019) icy rate stood at –0.4% in June. Draghi stated further Looking forward to the next critical economic data. 3% for the year, respectively. WM 11AAA_Layout 1 8/3/19 3:06 PM Page 30

4 TRADING VENUES NEWS Issue 11 ⎥ July-Aug. 2019 ⎥ World Markets Insider

Stay ahead of the market with the most ships this page aims to be your reliable interesting developments from world information centre. Every month we stock exchanges. From performance re- offer you a summary of events and trends MSCI adds Kuwait ports to changes in trading structures, that drive the financial markets so you from c-level executive positions to new stay up-to-date to make the best choices in its EM index exchanges launches and new partner- regarding your investments.

4AX (Johannesburg, South Africa) the ownership structure of the GSE from a non- IDX (Jakarta, Indonesia) sador paid a courtesy visit to Pakistan Stock Ex- Africa Exchange (4AX) announced on 2nd July profit member-based organisation into a profit- Starting in July, the IDX listed three companies' change (PSX) on 18th July 2019. They were re- making corporation with share ownership ceived and welcomed at PSX by Mr. Muhammad 2019 that as part of their 6-month succession and shares to be traded in the capital market. Precisely structure. Mr Albert Essien, the Chairman of the Rafique Umer, Managing Director (Acting) of the handover over plan, Fay Mukaddam has stepped on Monday (1/7), PT Krida Jaringan Nusantara down as the CEO. Sean Emery, CEO of RainFin, Council of GSE, who announced this at the 29th Exchange. During the meeting they discussed on Tbk. listed its shares under the KJEN code as the has been appointed as interim CEO AGM of the GSE, said consultations are cur- matters of mutual concerns, business prospects, 18th Listed Company in 2019. Then on Thursday of the exchange, it said. Mukad- rently ongoing with all stakeholders to ensure friendship and peaceful cooperation between both dam remains an active shareholder that the model for demutualization would be ac- (4/7), the shares of PT Indonesian the countries, PSX said in a statement. in 4AX and continues to support ceptable to all members. He said the decision to Tobacco Tbk. were officially reg- the business operations in other po- demutualise the organisation was to meet best istered. with ITIC code, and SGX (Singapore) sitions, as well as is leading a rig- international practices. shares of PT Darmi Bersaudara Singapore Exchange (SGX) on 9th July 2019 an- nounced a strategic investment in Smartkarma, a frica orous recruitment process for her Tbk. with WOOD code. The two

successor. Mukaddam will be tak- sia companies are the 19th and Singapore-based fintech that is building a global

A ing a sabbatical in anticipation of 20thListed Companies on the presence with its pioneering investment research A focusing on special projects and her independent PACIFIC & IDX in 2019. Then, on Friday platform. This investment comes on the back of a growing trend towards self-directed and independ- advisor and non-executive board appointments. (5/7), PT Bima Sakti Pertiwi GSE (Accra, Ghana) ent research, creating growth opportunities for Tbk. registered with the PAMG code on the IDX Smartkarma’s platform that facilitates the use of al- Ghana Stock Exchange (GSE) expects to change Main Board as the 21st Listed Company in 2019. ternative data and wisdom sourcing in investment its legal status from a mutual entity limited by PSX (Karachi, Pakistan) research. Smartkarma is launching Corporate So- guarantee to a company limited by shares by end The Ambassador of United Arab Emirates (UAE), lutions, targeting Investor Relations and C-Suite at of the year, Ghana News Agency reported. The PHOTO: Albert Essien Chairman of GSE H.E Mr Hamad Obaid Al Zaabi along with Coun- listed companies worldwide. This extension to the process known as demutualization will change selor General Mr. Bakheet Ateeq Al-Romaithi and Smartkarma platform was developed after a suc- Mr. Ahmad Abdulla Albalooshi, Advisor to Ambas- cessful pilot programme led by SGX. BCBA (Buenos Aires, Argentina) announced on 19th July 2019 that The Central Bank of The Bahamas has become a BISX Broker- Buenos Aires Stock Exchange (BCBA) celebrated LUXSE (Luxembourg City, Luxembourg) amount of about ISK 7.5 billion and a maturity of the free trade agreement between the South Amer- Dealer Member. The Central Bank will become the On 20th June 2019, the Luxembourg Stock Ex- 36 years. The first issuance in the bond series was ican customs union Mercosur and the European seventh BISX Broker-Dealer Member. The Central change marked China Merchants on 18 February 2019. “We congratulate OR on this Union (EU), signed in Brussels on 27th June 2019, Bank’s addition as a BISX Broker-Dealer Member Bank’s first bond listing in Luxem- important milestone.” said Magnus Hardarson, after 20 years of negotiations, and called it a "his- is unique in that it is not becoming a Member for bourg since 1997. The €300 million Vice President at Nasdaq Iceland. “OR’s addition toric milestone". In a note signed by the purposes of transacting securities for individual bond is the Chinese bank’s first-ever to our sustainable bond market demonstrates con- its president Adelmo Gabbi, BCBA investors. Rather the Central Bank’s purpose as a listed Euro-denominated bond. The tinued growth in the market as we have seen strong stressed the role of Argentina in the Member is a part of the broader initiative to list Ba- Ring the Bell ceremony took place at interest from both investors and issuers in this re- realisation of the breakthrough and hamas Registered Stock (BRS), issued by the Gov- the Luxembourg Stock Exchange in spect. We anticipate more issuers to follow OR’s noted that the country "has the ernment of The Bahamas, on BISX. the presence of H.E. Mr Huang suit in the near future as greater weight is being human, institutional and natural re- given to sustainable operations than ever before.” BVES (San Salvador, El Salvador) urope Changqing, the Chinese Ambassador sources to turn this challenge into a The Stock Exchange of El Salvador (BVES) on to Luxembourg. The 3-year fixed- historic opportunity to improve the 24th June 2019 launched the first stock market app E rate bond is issued under China Mer- quality of life of all Argentines. in the country, a new communication channel that chants Bank’s US$5 billion Medium Term Note "The free-trade deal is worth almost brings together and improves the experience of in- Programme, and was listed on LuxSE’s Euro MTF €90 billion a year and will create a mericas vestors and participants in the stock market. The ap- market. market for goods and services cov- plication can be downloaded for free through the ering nearly 800 million con- NASDAQ ICELAND A Android and Apple operating systems with the sumers, making it one of the largest name "Bolsa Móvil". The platform is aimed at all (Reykjavik,Iceland) Nasdaq announced on 4th July 2019 that Reykjavik trade agreements in the world. Salvadorans, professionals, students, current in- Energy (OR) has listed its first green bond series BSIX (Nassau, Bahamas) vestors or people who are interested in knowing and on Nasdaq Iceland’s sustainable bond market. The PHOTO: Magnus Hardarson, Vice President at Bahamas International Securities Exchange (BISX) participating in the stock market in the country. bond series currently have an outstanding nominal Nasdaq Iceland

an emerging market asset manager. The ITI Funds AMX (Yerevan, Armenia) Market Authority (CMA) and the Kuwait Clearing Over 40 billion AMD (83857442 USD) was raised UCITS ETF SICAV (RUSB) was listed with quo- BHB (Manama, Bahrain) Bahrain Bourse (BHB) announced that its All Share Company’s (KCC) sweeping market development for the State Treasury of Armenia from the auction tation and settlements in US dollars. RUSB is also Index closed at 1533.97 points (+196.71 points) as efforts, MSCI Inc., announced on 26th June 2019 of government bonds on AMX - Armenia Securities listed on the London Stock Exchange and the of 15th July 2019 representing a the reclassification of Kuwait to ‘Emerging Mar- Exchange the week before July 12, which has be- Moscow Exchange (MOEX). Tim Bennett, AIX growth of 14.71% YTD and cross- ket’ from its previous ‘Frontier Market’ status in its come the largest auction of G-secs in Armenia since CEO welcomed ITI Funds to the Exchange, say- ing its 9-year peak, mainly led by 2019 Annual Market Classification Review. Com- 2017. At the primary allocation, 10-year Gbonds ing:“We are very pleased to welcome the first ETF positive performance of the Com- menting on the status upgrade, Mr. Hamad Al-Hu- (ISIN AMGB1029A292) worth a total of 40 billion issuer on Astana International Exchange. The list- ast mercial Banks sector. Commercial maidhi, Chairman, Boursa Kuwait, said: “MSCI’s AMD were offered and sold. Another 7.93 billion ing of the first ETF on the AIX will provide in- reclassification of Kuwait in its Emerging Markets E Banks was the best performing sec- was raised in an auxiliary auction on vestors with a simple and transparent tool to invest Index represents an important milestone in the his- in various assets worldwide.” toral index, as it gained by 30.75% 10th July 2019. The Gbond trading YTD. Services and Investment sec- tory of our capital markets and will bolster the is conducted through the State tors index performed positively as country’s standing on the global investment map. Treasury, which allows individuals well, by 15.31% and 6.18% YTD to buy and sell securities without a respectively. Total market cap stood TADAWUL (Riyadh, Saudi Arabia) broker. at BD 9.64 billion. Trading activity The Saudi Stock Exchange (Tadawul) was in- cluded in the FTSE EPRA\ Nareit Emerging Index AIX (Astana, Kazakhstan) iddle picked up, as volumes increased by The first ever exchange-traded 0.08% YOY to reach 741.13 Mil- (EPRA: European Public Real-estate Association) fund (ETF) to be traded on Kaza- on June 26. The index is specialized in REITs and

M lion shares. khstan’s Astana International Ex- real-estate companies, similar to other global in-

urasia change (AIX) was launched on BK (Kuwait City, Kuweit) dices, a group of securities have been chosen to In a landmark development that comes as a global be reviewed and added periodically and an- Wednesday (July 3) by ITI Funds, PHOTO: Tim Bennett, AIX CEO

E recognition for Boursa Kuwait (BK), the Capital nounced on the index official website.

Everyday on www.investopress.com WM 11AAA_Layout 1 8/3/19 3:06 PM Page 31

Issue 11 ⎥ July-Aug. 2019 WORLD MARKETS 5 ⎥ World Markets Dashboard

See at a glance the monthly perform- change %). World Markets undertakes One stop-shop for nce of the main indices of world stock all reasonable efforts to ensure the data exchanges. All figures below refer to included in this section was correct at Market Watchers the performance of June (MoM the time of publication.

BB S. Michael BSE KH Phom Penh CSX AM Yerevan AMX ▪IT Milan BORSA ITALIANA, 1. Africa BM Hamilton BSX ▪ CN Shanghai SSE, AZ Baku BSE FTSE MIB: 7.23% 6. Middle East DZ Algiers SGBV ▪ CA Toronto TSX, Composite: 2.77% GE Tbilisi GSE ▪ LV Riga NASDAQ, BH Manama BHB AO Luanda BOVIDA Composite: 2.15% ▪ CN Shenzhen SZSE, OMXR: -2.78% JO Amman ASE BW Gaborone BSE KY Grand SXE Composite: 1.99% 5. Europe ▪ LT Vilnius NASDAQ, ▪IR Tehran TSE, TEDPIX: 10.7% CV Mindelo BVC ▪ DO S.Domingo BVRD HK Hong Kong HKEX, AL Tirana ALSE OMXV: -1.73% IQ Baghdad ISX CM Duala DSX ▪ SV S. Salvador BVES HANG SENG: 6.10% ▪ AT Vienna WIENER BORSE, LU Lux/urg City LUXSE IL Tel Aviv TASE, TA35: 3.47% ▪ CI, Abidjan, BRVM, ▪ GT G. City BNV IN Mumbai NSE, ATX: 2.77% ▪ MK Skopje MSE, KW Kuwait City BK Composite: -3.13% JM Kingston JSE NIFTY50: -1.12% BY Minsk BCSE MBI10: -1.29% LB Beirut BSE ▪ EG Cairo EGX, ▪ ▪ MX Mexico City BMV, IN Mumbai BSE, ▪ BE Brussels EURONEXT, MT Valletta MSE OM Muscat MSM EGX30: 2.39% IPC: 0.96% SENSEX: -0.80% BEL20: 3.51% ▪ ME Podgorica MNSE, PS Ramallah PEX EE Addis Ababa ECX ▪ NI Managua BVDN ID Jakarta IDX, ▪ BA Banja Luka BLSE, MNSE10: -0.35% QA Doha QSE GA Libreville BVMAC ▪ PA Panama City BVP Composite: 2.41% BIRS: -3.95% ▪ NL Amsterdam EURONEXT, SA Riyadh TADAWUL, GH Accra GSE ▪ KN Basseterre ECSE JP Tokyo TSE, BA Sarajevo SASE AEX: 3.94% TASI 3.58% KE Nairobi NSE ▪ TRINIDAD/TOBAGO TTSE NIKKEI: 3.28% ▪ BG Sofia BSE, SOFIX: 0.92% ▪ NO Oslo OSLO BORS UAE Abu Dhabi ADX, LS Maseru MSM ▪ U.S. New York NASDAQ, KZ Almaty KASE GB Guernsey TISE EURONEXT, OBX: 1.77% General: -0.47% LY Tripoli LSM Composite: 7.42% KG Bishkek KSE ▪ HR Zagreb ZSE, ▪ PL Warsaw GPW, MG Antananarivo mex ▪ U.S. New York NYSE, LA Vientiane LSX CROBEX: 1.72% WIG20 (PLN): 3.95% MW Blantyre MSE ▪ DJIA: 7.19% MY Kuala Lumpur BM, ▪ CY Nicosia CSE, ▪ PT Lisbon EURONEXT, MU Port Louis SEM WORLD MARKETS KLCI: 1.29% General: 0.65% PSI20: 1.95% MA Casablanca CASA SE SOUTH AMERICA ISSN 2668-1552 MV Male MSE ▪ CZ Prague PSE, PX: -0.23% ▪ RO Bucharest BVB, MZ Maputo BVM ▪ AR Buenos Aires BCBA, MN Ulaanbaatar MSE ▪ DK Copenhagen NASDAQ, BET (RON): 3.78% NA Windhoek NSX MERVAL: 23.11% MM Vientiane LSX OMXC20: 3.22% ▪RU Moscow MOEX 6.37% NG Lagos NSE ▪ BR Sao Paulo B3, ▪ published by NZ Wellington NZX, ▪ EE Tallinn NASDAQ, ▪ RS Belgrade BELEX, RW Kigali RSE BOVESPA: 4.06% EuropaProPress Srl NZX50: 3.79% OMXT: 1.23% BELEX15: -0.23% SC Victoria SSE ▪ CL Santiago SSE, 42 Marasesti Blv. NP Kathmandu NEPSE ▪ FI Helsinki NASDAQ, ▪ SK Bratislava BSSE, SO Mogadishu SSE IPSA: 1.88% ▪ Bl.1, Sc.A, 2nd fl., Ap.7, PK Karachi PSE, OMXHPI: 3.78% SAX: 0.50% ▪ ZA Johannesburg JSE, CO Bogota BVC 04255 District 4, KSE100: -5.76% ▪ FR Paris EURONEXT, ▪ SI Ljubljana LJSE, FTSE/JSE ASI: 4.59% EC Quito BVQ ▪ Bucharest, Romania PH Manila PSE, PSI: 0.37% CAC40: 6.36% SBITOP: 0.29% SD Khartoum KSE HN Tagucigalpa BVC ▪ SG Singapore SGX, STI: 6.54% ▪ GERMANY Frankfurt FWB, ▪ ES Madrid BME, Tel.+40 314.228.321 SZ Mbabane SSX PY Asuncion BVPASA ▪ KR Busan KREX, IBEX35: 2.16% [email protected]

World Stock Exchanges Stock Map World DAX: 5.73% TZ Dar Es Salaam DSE PE Lima BVL [email protected] KOSPI: 4.35% GIBRALTAR Europort GSX ▪SE Stockholm NASDAQ, TN Tunis BVMT UY Montevideo BVM LK Colombo CSE ▪ GR Athens ATHEX, OMXS30: 7.41% UG Kampala USE VE Caracas BVC ▪ TW Taipei TPEX, TWI: 2.21% General: 1.09% ▪ CH Zurich SIX 3.93% Commerce Registry ZM Lusaka LUSE TJ Dushanbe CASE ▪ HU Budapest BSE, ▪TR Istanbul BORSA Code: J40/12206/2016 ZW Harare ZSE 3. Asia Pasific ▪ THAILAND Bangkong SET, BUMIX: 6.89% ISTABUL, BIST100: 6.51% ▪ AU Sydney ASX, SET100: 7.11% ▪ IS Reykjavik NASDAQ, UA Kiev UX 2. Americas ASX200: 3.47% Printed by UZ Tashkent UZSE ICEX: -2.25% ▪UK London LSE, ▪ BD Dhaka DSE, Triantafillopouloi Bros LP NORTH AMERICA VN Ho Chi Minh City HOSE ▪ IE Dublin EURONEXT, FTSE 100: 3.69% Athens-Greece DSEX BROAD: 0.82% BS Nassau BISX ISEC: 1.20% BT Thimphu RSEBL 4. Eurasia

●BONDS ●STOCKS ●CURRENCIES ●FUNDS ● CRYPTO Falling yields LSE shares rally Gains for Ar- Bracing for' IMO IRS sending let- equals economy on Refinitiv deal gentina's peso 2020' storm ters to investors worries London Stock Exchange Group The JPMorgan Emerging Markets Investment funds are placing their The U.S. Internal Revenue Service Ten-year government bond yields shares surged to their biggest gain Currency Index weakened by bets as the shipping sector pre- (IRS) announced that it has begun in the US dipped to their lowest in more than a decade on Monday 0.5% in Q2 2019. Notable gains pares for “IMO 2020” rules limit- sending letters to taxpayers who level since 2016 during June 2019, (June 29), rising more than 15%, for the quarter were made ing sulphur emissions from own cryptocurrency, advising them as weaker global growth fears trig- as investors cheered its $27 bil- in the Argentine peso (17.4%), ocean-going vessels. Ever since to pay any back taxes they may gered expectations of lower global lion bid to buy Refinitiv Hold- Russian ruble (5.9%) and South the International Maritime Organi- owe or to file amended tax returns central bank rates. In Germany, ings, a data company best known African rand (4.7%), while the zation said the maximum sulphur regarding their holdings. “Taxpay- 10-year government bond yields for the Eikon desktop terminals South Korean won weakened content in marine fuel must drop ers should take these letters very slipped to their lowest level on that feed market data and news by 1.4%. A similar picture to 0.5% from 3.5% from 2020, seriously by reviewing their tax fil- record in the month, as shaky eco- to traders and portfolio managers emerged for the month of June, shipping companies have been ings and when appropriate, amend nomic data drove investors into across the world. The deal, with the biggest gains being made wrestling with how to comply past returns and pay back taxes, safe asset classes. Some experts which is valued at $27 billion in the Argentine peso (10.4%), without driving up costs at an un- interest and penalties,” IRS Com- are fearful that the low yields are including debt, could transform Colombian peso (5.6%) and certain time for global trade. missioner Chuck Rettig said in a indicative of concerns over the the more than 300-year old ex- Chilean peso (4.9%), while the Investors in turn are coming up statement. “The IRS is expanding economy as the US-China trade change into a global market in- SA rand was the fifth-best-per- with strategies and launching our efforts involving virtual cur- war is one of the biggest risks to frastructure and data giant. forming EM currency at 4%. funds with exposure to parts of rency, including increased use of global growth. The bond market is The news comes less than a year In the past six years, more EM the oil and shipping industries data analytics. We are focused on often watched for signals on eco- after Blackstone bought a major- central banks have cut interest they expect to benefit from the enforcing the law and helping tax- nomic performance. ity stake in Refinitiv from Thom- rates than those that have raised new emissions caps, Reuters re- payers fully understand and meet son Reuters. interest rates. ported. their obligations.”

CRUDE OIL GOLD

Middle East ten- Solid gains again sions support prices Precious metals posted solid gains; gold prices topped $1,400/oz., the highest level Commodity returns were positive in since 2013, as Treasury yields fell on ex- June. Crude rebounded as flaring ten- pectations for looser monetary policy and sions in the Middle East supported slowing global growth; Financial market prices. Prices were also buoyed after the uncertainty and accommodative monetary U.S. Energy Information Administration policy will likely support gold investment reported a 12.8-million-barrel decline in demand over the next 6-12 months, ac- inventories, the most in nearly three cording to the World Gold Council's years, with exports hitting a record high. “Gold mid-year outlook 2019”. WM 11AAA_Layout 1 8/3/19 3:05 PM Page 28 I

6 LEGENDARY INVESTORS Issue 11 ⎥ July-Aug. 2019

PHOTO by Lucy Nicholson/Reuters Montage: WM TIMELINE Bill H. A look at the life of BILL H.GROSS, founder of PIMCO Gross 1944 Born April 13, in Middletown, Ohio, U.S. 1966 Graduated from Duke University with a de- The superstar fund gree in psychology. 1966-1969 Served in the Navy as an assistant chief engi- manager who neer aboard the USS Diachenko, leading several sorties of SEALS to landing sites along the coast of Vietnam controlled more 1971 Hired as a junior bond analyst for Pacific bond money than Mutual Insurance Company. PIMCO is formed as a division of Pacific Mutual with colleagues William Podlich and James F. anyone in the world Muzzy. 1985 PIMCO formally splits from Pacific Mutual. 1999 German insurance giant Allianz agrees to buy 70% stake in PIMCO for $3.3 billion. 2003 Gross founds the William and Sue Gross “It seems, perhaps, that Family Foundation, through which millions of dollars are donated to universities, hospi- the longer and longer you tals and organiSations. keep at it in this business, 2007 A stamp collector since childhood, Gross the more and more time auctions his collection of British stamps for you have to expose your $9.1 million and donates the proceeds to Doctors Without Borders. Achilles heel. 2009 Donates $8 million for the establishment of a stamp gallery at the Smithsonian's National Postal Museum in Washington, DC. Named after him, the William H. Gross Stamp Gallery is the world's largest gallery dedi- ubbed the "Bond King", Bill Gross transformed bond cated to philately. investing over a storied four-decade career The new Era 2014 building one of the largest, most accomplished asset man- Gross sued PIMCO for breach of good faith in 2015. The case was settled in Unexpectedly resigns from PIMCO to join agement organisations in the US. The American billion- 2017 for $81 million, which went to the Sue and Bill Gross Family Foundation, Janus Capital Group (currently Janus Hen- aire moved markets with his colourful investment letters through which millions of dollars are donated to universities, hospitals and or- derson) and made bond investing headline news. ganizations. 2015 After leaving PIMCO, Gross sought to quickly revive his reputation by joining The Smithsonian Institution includes Gross's Gross was born in 1944 in Middletown, Ohio. He graduated from Duke Uni- global asset-management firm Janus Henderson, run by his former Pimco col- old Bloomberg keyboard in its American En- versity in 1966 with a degree in psychology after which he served as U.S. naval league Dick Weil. At Janus, Gross managed a smaller portfolio of $1.5 billion terprise exhibition at the National Museum officer, leading several sorties of SEALS to landing sites along the coast of Viet- and invested a large chunk of his fortune in a global unconstrained bond fund. of American History. nam. After his military service, Gross went on to business school at the Univer- The fund returned negative 3.88 percent in 2018, according to Morningstar. After 2019 In February, Gross announces he will retire. sity of California in Los Angeles, earning an MBA. His legend includes a brief more than 40 years in the financial industry, in February 2019, Gross announced In March, he ranks No. 1511 on Forbes' an- professional foray onto the blackjack tables of Las Vegas, counting cards for up his retirement from Janus Henderson. nual list of billionaires with a net worth of to 16 hours a day, that helped fund his MBA. He said at the time that he would focus on managing his personal assets and pri- $1.5 billion. Gross turned to investing in 1971 when he was hired as a junior bond analyst vate charitable foundation, with two of his three children. In a letter to investors, for Pacific Mutual Insurance Company. Gross's big innovation after joining Pa- he wrote, "“I’ve had a wonderful ride for over 40 years in my career – trying at Fast Facts cific Mutual was to disrupt the staid world of fixed income with an aggressive all times to put client interests first while inventing and reinventing active bond Certification: Chartered Financial Analyst. style of trading. He said that he applied many of his gambling methods for management along the way... I learned early on that without a client, there can Author of: “Everything You’ve Heard About spreading risk and calculating odds to his investment decisions. During the same be no franchise. I’m off – leaving this port for another destination with high Investing Is Wrong” (1997) and “Bill Gross year, he co-founded Newport Beach, California-based Pacific Investment Man- hopes, sunny skies and smooth seas!” What a ride for "the Bond King"! His life on Investing” (1998). agement Co., or PIMCO as a division of Pacific Mutual with colleagues William has been a fascinating story to follow. Wishing you fair winds Captain! Awards: First portfolio manager inducted Podlich and James F. Muzzy. Under his watch, PIMCO became the world's into the Fixed Income Analysts Society’s largest bond fund manager, a $2 trillion asset-management powerhouse, Gross ow that one of Wall Street's biggest luminaries has packed up his office Hall of Fame (1996). Bond Market Associa- was so influential that he advised the Treasury on the role of subprime mortgage and set off on a well-deserved retirement, he sat down for a 90-minute tion’s Distinguished Service Award (2000). bonds during the 2008 financial crisis. conversation with Bloomberg and had “Lunch with FT”. Institutional Investor magazine’s Money In 2010, Morningstar named Gross Investor of the Decade saying: “No other In a series of post-retirement revelations, Gross told Bloomberg Television that he Management Lifetime Achievement Award fund manager made more money for people than Bill Gross.” His tenure at had recently been diagnosed with Asperger syndrome, a form of autism, after read- (2011). PIMCO-where he served as the managing director and chief investment of- ing about the symptoms experienced by hedge fund manager Michael Burry in Philanthropy: In addition to his philanthropic ficer- ended abruptly and acrimoniously in September 2014. The the book "The Big Short" by Michael Lewis. Gross also told FT's US markets offerings, he has also donated millions of news of his resignation shook the investment community. His editor Robin Wigglesworth that he attributes his ouster from Pimpco dollars to Duke University, University of flagship Pimco Total Return Fund, which he started in 1987 partly to Asperger’s, which made him a “singular, dominating, angry, California, Cedars-Sinai, and Mercy Ships. Spouses: Sue (Frank) Gross (1985-2017, di- and managed nearly $300bn at its peak in 2013- began to quiet, introverted person”. Gross followed up his lunch with a round of golf with his new girlfriend and later departed for an post-retire- vorced); Pamela Roberts Gross (divorced). hemorrhage investor money amid a battle at the firm’s top. ment trip to Bora Bora, before returning to a life of casual personal Children: with Sue Frank: Nick; with Pamela investing, philanthropy and more golf. “I am a happy man. I am a Roberts: Jeff and Jennifer. Photo by Paul Bersebach, Orange County happy man,” Gross told Wigglesworth. “It’s not like the wounds have healed, but I’m having a good time.” PIMCO at a glance Industry: Financial Services Founded: 1971 Bill H. Gross Headquarters: Newport Beach, California, in his 1965 Duke yearbook. Duke University U.S. Archives Offices: 17 throughout the Americas, Europe You may know and Asia Products: Investment management Bill Gross as the Bond King, but there’s another as much as $20 million, according to his curator, Employees around the world: 2700 realm over which he presides: stamps. Beginning Charles Shreve, at Siegel Auction Galleries. In this Countries in which clients are based: 50+ in the early 1990s, the billionaire built the largest picture Gross is standing in front of the 1847 Wash- Assets Under Management: $1.84 trillion (as and most valuable private collection of U.S. stamps ington 10¢ stamp which was sold in an auction. of June 30, 2019) in the world, exceeding other major collections by Register/SCNG) WM 11AAA_Layout 1 8/3/19 3:05 PM Page 27

Issue 11 ⎥ July-Aug 2019 TRADING & OPINION 7

In the first half of 2019, the Vienna Stock Ex- Qatar has bought some Lebanese gov- NZX has released a new change saw the strongest inflow of domestic com- ernment bonds as part of a planned Margin Calculator Service panies in the last decade with seven new listings $500 million investment to support allowing users to 4 despite the challenging international environ- 5 Lebanon’s economy, a Qatari govern- 6 calculate the current mar- ment. Bond listings also strongly expanded. Out ment official told Reuters on June 30. gin required by NZX's Qatar has not disclosed the timing or clearing house on a of the 337 new bond listings, 189 were issued by 0CEANIA EUROPE Austrian and 148 by international companies EAST MID. size of the bond purchases made so far. futures or options position.

PUBLICLY Invesco is an independent investment management firm headquar- tered in Atlanta, USA with regional offices in 25 countries. The com- SOVEREIGN WEALTH TRADED COMPANIES pany was founded in 1935, has over 8,000 employees and manages $1,197.8 billion in assets on behalf of clients worldwide (as of June 30, 2019 ). Its FUNDS AND STATE Mergers & Acquisi- common stock is a constituent of the S&P 500 and trades on the New York stock exchange INVESTORS tions, IPOs revenues ADIA to ‘scale up’ and more Sovereign investors active investing News and announcements from companies Abu Dhabi Investment Authority (ADIA) listed on stock exchanges around the world. which manages around $700 billion in assets, Earnings, spin-offs, take-over bids, capital in- pivot away from plans to increase active investments in fixed-in- creases, recent and upcoming IPOs, expansion come. In a report, ADIA stated that its Fixed In- into new markets, signing of alliances, M&As... come & Treasury Department has begun scaling Europe toward China up its active investing, with a view to going ■ CENTURIUN (S. AFRICA) fully active in coming years, compared with Centurion Law Group is set to become the first Sovereign wealth funds (SWFs) and central banks are preparing for an around 40 per cent currently. The move comes African legal and energy advisory firm to be pub- as ADIA has been reducing its reliance on ex- licly-listed this year, as it prepares to join one of end to the current business cycle ternal fund managers and boosting in-house in- Europe’s leading stock exchange. “The African vestment capabilities. The fund outsources 55 legal market has changed a lot and we are proud to per cent of its portfolio to external managers, be a leader for legal transformations in Africa. We Invesco IGSAMS 2019 managing 45 per cent in house. ADIA is the are looking at being listed in a few months and are world’s third-biggest sovereign wealth fund be- truly excited about this new phase of growth for the overeign wealth funds (SWFs) and asset allocation de- hind the Norwegian sovereign fund and China company and for our clients” NJ Ayuk CEO at central banks are shifting into defen- cisions for 64% of Investment Corporation. Centuriun said in a statement. Centurion is a lead- sive mode amid end-of-cycle fears, ac- sovereigns. Only ing pan-African legal and energy advisory group >S cording to a new report. 13% of sovereigns with extensive experience in the oil and gas sector. The 2019 “Invesco global sovereign plan on increasing asset management study” (IGSAMS) found sur- allocations to Eu- Temasek's shareholder ■ GAZPROM (RUSSIA) vey respondents – 139 chief investment officers, rope this year, returns take a dip compared to a Russian natural gas giant Gazprom will have its heads of asset classes and senior portfolio strate- Singaporean state investment firm Temasek 40% allocation to subsidiaries Gazprom Gerosgaz Holdings BV gists who are managing over US$20 trillion in as- Holdings reported a plunge in its returns over a Asia and 36% to (Netherlands) and Rosingaz Limited (Cyprus) sets across almost 140 SWFs and central banks – one-year period amid global stock market Emerging Markets. place 693mn shares of the company or 2.93% of were easing off equities in favour of fixed income, volatility. In its latest annual report, Temasek, the share capital on Moscow Exchange (Moex), the Chinese assets and alternative asset classes at the ■ ESG into which focuses on equity investments, said its company said on July 25. In June Gazprom’s shares expense of European exposures. The survey was the spotlight one-year shareholder return was 1.49% for the soared after the management revised up the com- conducted immediately after the global equity ESG is an increas- financial year to March 31. That’s a major de- pany's dividend strategy. sell-off in the fourth quarter of 2018. The majority ingly important Terry Pan has been cline from 12% in the prior 12 months. “We re- of sovereigns (89%) anticipate the end of the eco- the Chief Executive Of- issue for sover- main watchful around the risks of a late cycle nomic cycle within the next two years. This com- ficer of Greater China, ■ MERLIN ENTERTAIN- eigns and central recession in the US. Brexit and political frag- bined with volatility concerns and the prospect of Singapore, and Korea mentation continue to weigh on Europe, while MENTS (UK) negative returns from equities has led to increased banks. Since 2017, Madame Tussauds owner Merlin Entertainments at Invesco Hong Kong China has yet to move fully to restructure its fixed income allocations and more diversification the percentage of announced an agreement to be acquired by a con- Limited since February economy for longer term sustainability,” Lim in allocations to infrastructure, real estate and pri- sovereigns with a sortium that includes the founding family of Lego, 2015. His industry ex- Boon Heng, Temasek’s chairman, said in the an- vate equity markets. Other key findings of the re- specific ESG pol- private -equity firm Blackstone Group and the perience is in asset nual report. Still, the investment company's net port include: icy rose from 46% Canadian Pension Plan Investment Board -- management and fi- portfolio was valued at a new high of S$313 bil- to 60%. 20% of Canada's national pension fund -- in a deal valuing nancial services. lion (about $230 billion) as of March 31, up ■ Sovereigns optimistic on China central banks now the world’s second-largest operator of visitor attrac- China's attractiveness rating for sovereign in- from S$308 billion a year earlier. have an ESG policy, compared to 11% in 2017. tions after Disney and its debt at nearly 6 billion vestors has improved more than any other major Approaches to ESG are increasingly sophisticated, pounds ($7.6 billion). region since 2017. Some 82% of sovereigns cited trade tensions as having had an influence on asset having moved beyond screening to incorporate Schroders acquires ■ TITAN (GREECE) allocation decisions, yet China's attractiveness as more advanced forms of integration. Shares of Titan Cement International SA, the new an investment destination over the next three years ■ Renminbi in portfolios majority stake in parent company of Titan cement group, began trad- scored an average rating of 6.1 out of 10 among Central banks continue to diversify away from the ing, simultaneously, on July 23 on the Euronext sovereign investors, a marked increase on 2017's negative yields of government bonds (especially BlueOrchard Brussels, the Athens Exchange and Euronext Paris. 5.2 rating. The unique competitive dynamics of in Europe) into bank deposits; and away from the British asset manager Schroders with more than Commenting on the listing Dimitri Papalexopou- China are appealing for sovereigns seeking more US dollar. The main beneficiary has been the $500 billion in assets under management, inked los, CEO of Titan Cement Co. SA and chairman of diversification, the survey found, with equities Renminbi and between 2017-18, allocations to a deal to purchase a majority ownership interest the group executive committee, stated: “The listing continuing to be the asset class most favored. China's currency overtook the Australian and in Switzerland-based BlueOrchard Finance of TITAN Group, through TITAN Cement Inter- Approximately 90% of sovereigns with China ex- Canadian dollar, with 43% of central banks now Limited, an impact investment manager. Blue- national SA, on Euronext Brussels, the Athens Ex- posure held Chinese equities, showing that the holding it in their portfolios, compared to 40% in Orchard Finance was founded in 2001, initially change and Euronext Paris, marks one more government's measures to open the market to for- 2018. Over a quarter (27%) of central banks ex- as a United Nations (UN) initiative to focus on important milestone in TITAN’s over 100 years’ eign investors are bearing fruit. Fixed income pect to continue to increase Renminbi reserves in commercial investments in the microfinance growth, which, starting allocations are also likely to increase with China's 2019, making it the most favored currency for the debt sector. BlueOrchard offers investors impact its operations in Greece inclusion in major bond indices and initiatives, year ahead, with increased allocations expected to investment solutions across asset classes, in- in 1902 has expanded such as Bond Connect, giving foreign investors be taken from the USD, EUR and GBP. cluding credit, private equity and sustainable in- beyond its Greek roots to access to the local bond market, Terry Pan, In- frastructure. The Switzerland-headquartered become an international vesco chief greater China, said in the report. ■ Fixed income displaces equities impact investment business had approximately company. Our goal is to Fixed income allocations increased to 33% in 2019 $3.5bn in assets under management as of 30 continue strengthening ■ Less economic attractiveness from 30%, becoming sovereigns' largest asset May 2019. “Schroders has a strong belief in our international foot- in Europe class. Meanwhile, allocations to equities fell from the value that investment can create in society, print and to always oper- A combination of slowing economic growth and 33% to 30%, marking the end of a five-year trend particularly within emerging and frontier mar- ate with respect towards perceptions of rising political risk have led to a de- between 2013 and 2018 during which fixed in- kets. BlueOrchard’s expertise in this area is people, society and the D. Papalexopoulos- cline in the perceived attractiveness of major come fell from 35% to 30% as equities posted exceptional,” Peter Harrison, chief executive environment.” Titan Cement CEO European economies. Brexit is now influencing strong gains. of Schroders said.

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8 EVENTS Issue 11 ⎥ July-Aug. 2019

EVENTS East & Interest Rate Decisions, Mone- South East Economic Europe Calendar tary Policy Meeting Minutes Below is a selection of conferences, trade From 1st August to fairs and exhibitions that take place across 30th September 2019 Unemployment rates, economic bulletins, PMI, GDP, the region in July and August 2019. and more data that affect stock and forex markets 09-11 /09/ 2019 ▪ BALTEXPO Gdansk, Poland Venue: Hala Oliwia 04/08/2019 by the economy. It is the decision on where to set in- minutes. the monetary policy meeting Organiser: Zarzad Targow Warszawskich S.A ■ CHINA broadest measure of eco- terest rates. 24/09/2019 of the Governing Council of International Shipbuilding and Shipping Exhibi- Caixin Services PMI. nomic activity and the pri- ■ BRAZIL the ECB. tion. The biggest and the oldest event in Poland Services PMI in China is re- mary indicator of the BCB Copom Meeting Min- ■ POLAND among economic events related to the maritime ported by Markit Econom- economy's health. utes. NBP Meeting Minutes. economy. Shipbuilding, offshore; port and mar- ics. The Caixin China 09/08/2019 The Monetary Policy Meet- The Monetary Policy Meet- itime industry infrastructure; transportation and maritime logistics; navigation; coastal, port and General Services PMI (Pur- ■ SWITZERLAND ing Minutes are a detailed ing Minutes are a detailed shipping safety and environmental protection. chasing Managers' Index) is Unemployment Rate. record of the Central Bank of record of the Bank of 17-21 /09/ 2019 based on data compiled The State Secretariat for Eco- Brazil (BCB) policy setting Poland's (NBP) policy setting ▪ FOR ARCH from monthly replies to nomic Affairs releases data meeting, containing in-depth meeting, containing in-depth Prague, Czech Republic questionnaires sent to pur- on the unemployment rate insights into the economic insights into the economic Venue: Prague Exhibition Centre Letnany chasing executives in over which represents the number conditions that influenced the conditions that influenced the Organiser: ABF a.s. 400 private service sector of unemployed persons ex- decision on where to set in- decision on where to set in- International building trade fair. During the companies. The index tracks pressed as a percentage of the terest rates. terest rates. 29 years of its existence, it has become the single variables such as sales, em- labour force. 18/09/2019 USA 25/09/2019 On its June 5 meeting, while most important and most attended fair of build- ployment, inventories and 28/08/2019 ■ SOUTH KOREA discussing monetary policy, ing industry in the Czech Republic. Exhibitions prices. A reading above 50 ■ ISRAEL Fed Interest BOK Financial Stability the Council decided that in- are presented by leading manufacturers, suppli- indicates that the services BOI Interest Rate Decision. Board Meeting. terest rates should remain ers, artisans, as well as investors, developers and sector is generally expand- The Bank of Israel's (BOI) Rate Decision The Bank of Korea (BOK) unchanged. Therefore it an- representatives of other fields associated with the ing; below 50 indicates that "headline" rate of interest is The U.S. Federal Reserve's Financial Stability Board nounced that the NBP inter- building industry. it is generally declining the rate of interest announced Federal Open Market meeting is a meeting that dis- est rates will remain stable: 18 /09/ 2019 07/08/2019 by the Governor at the end of Committee (FOMC) cusses credit markets, the reference rate at 1.50%, ▪ INTERNATIONAL RECRUIT- ■ CANADA every liquidity month. These members vote on where to (household credit market, the lombard rate at 2.50%, MENT TOUR Ivey PMI. announcements have been set the rate. FOMC Eco- corporate credit) assets mar- the deposit rate at 0.50% and Vilnius, Lithuania The Ivey Purchasing Man- made since the end of 1993, nomic Projections and kets (Treasury bonds, Corpo- the rediscount rate at 1.75%. Venue: Radisson Blu Hotel Olümpia agers' Index (PMI) measures and provide the commercial FOMC Statement are also rate bonds, Stock markets), 27/09/2019 Organiser: Studycentral Ltd the activity level of purchas- banks with a benchmark for released. The first is a re- financial institutions, capital ■ VIETNAM The biggest Baltic State specialised public fair ing managers in Canada. The their rates on local currency port which includes the flows, financial market infra- GDP YOY. for International Education is taking place in index is a joint project of the unindexed deposits and FOMC's projection for in- structures. Financial Stability The General Statistics Office three capitals – Vilnius (18/09), Riga (21/09) and Tallinn (22/09). The fair features unique educa- Purchasing Management As- credit. flation and economic Board seeks international co- of Vietnam releases data tional institutions that represent the wide range sociation of Canada and the 16/09/2019 growth over the next 2 operation on finding ways to about the Gross Domestic of educational and professional programmes in- Richard Ivey School of Busi- ■ AUSTRALIA prevent a financial crisis, ef- Product (GDP) of the country years. cluding BA/BSc, Masters/MBA, postgraduate. ness. A reading above 50 in- RBA Meeting Minutes. PHOTO: Fed Chairman fectively address it when it which measures the annu- 19-22 /09/ 2019 dicates expansion; a reading The Reserve Bank of Aus- Jerome Powell occurs and strengthen the sta- alied change in the inflation- ▪ IMOBIL MOLDOVA below 50 indicates contrac- tralia (RBA) Monetary Pol- bility of the international fi- adjusted value of all goods Chisinau, Moldova tion. Traders watch these sur- icy Meeting Minutes are a nancial system. and services produced by the Venue: Moldexpo veys closely as purchasing detailed record of the bank's 19/09/2019 26/09/2019 economy. Organiser: Poliproject Exhibitions Ltd. managers usually have early most recent policy-setting ■ TURKEY ■ EU 30/09/2019 Real Estate show: Construction companies , de- access to data about their meeting, containing in-depth CBRT Meeting Minutes. ECB Economic Bulletin. ■ INDIA velopers, Real Estate agencies , appraisers, credit company’s performance, insights into the economic The Monetary Policy Meet- The European Central Bank's RBI Monetary and Credit In- institutions, banks, innovative materials and which can be a leading indi- conditions that influenced the ing Minutes are a detailed (ECB) Economic Bulletin formation Review. technologies, specialised publications, relevant cator of overall economic rate decision. record of the Turkish central (formerly Monthly Bulletin) This monthly periodical of government agencies and more. performance. ■ RUSSIA bank's (CBRT) policy setting contains the statistical data the Reserve Bank of India 22/ 09/ 201923-28/ 09/ 2019 08/08/2019 CBR Meeting Minutes. meeting, containing in-depth that policymakers evaluate (RBI) helps keep abreast ▪ INFOTECH ■ JAPAN The Monetary Policy Meet- insights into the economic when setting interest rates. with new developments and Plovdiv, Bulgaria GDP, The Cabinet Office re- ing Minutes are a detailed conditions that influenced the The report also provides de- important policy initiatives Venue: International Fair Plovdiv leases data on the Gross Do- record of the Central Bank of decision on where to set in- tailed analysis of current and taken by the RBI in the world Organiser: International Fair Plovdiv mestic Product (GDP) which Russia policy setting meet- terest rates. The breakdown future economic conditions of money and credit. The International exhibition of Information Tech- measures the change in the ing, containing in-depth in- of the MPC members' inter- from the bank's perspective. RBI was founded in 1935, nologies, specialised software exhibition present- inflation-adjusted value of all sights into the economic est rate votes tends to be the The Economic Bulletin is Monetary Policy Committee ing companies from the rapidly developing IT goods and services produced conditions that influenced the most important part of the published two weeks after was established in 2016. sector.

04 - 06⎥ 09⎥ 2019 5th Eastern Economic Forum Vladivostok, Russia

he Eastern Economic Forum (EEF), nationally and internationally, and showcas- cooperation, Narendra Modi commissioned established by Decree of the President ing new investment and business opportuni- several business missions to the Far East T of the Russian Federation Vladimir ties such as advanced special economic consisting of Indian business and regional Putin in 2015, takes place each year in zones, Vladivostok Free Port, and state sup- representatives. Up to five Indian state gov- Vladivostok. EEF focuses on strengthening port for high-potential investment projects. ernors are to participate in the missions, a ties between the international investment Around 6,000 guests are expected to attend statement from the Roscongress Foundation, community, Russian business, and federal, the EEF this year while around 1,300 jour- organiser of the forum said. Roscongress

INVESTING regional, and local government bodies, con- nalists are expected to cover the event. In- Foundation is a non-financial development ducting a comprehensive expert assessment dian Prime Minister Narendra Modi has institution and major organizer of congress of the economic potential of the Russian Far been invited as the guest of honour’ to EEF and exhibition events. The Foundation’s East and improving the region’s competi- 2019. To prepare for the participation in the events draw more than 80,000 participants tiveness and attractiveness to investors both EEF 2019 and to enhance Russian-Indian each year from 195 countries.

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