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How major equities indices performed in the second month of the year p.3 Stock Exchanges World Map p.5 Dr Martin Steinbach EY Global & EMEIA IPO WORLD Leader “We anticipate IPO activity to spring into ac- Markets tion in H2 2019” Financial Markets Insights p. 07

Freely Distributed Monthly Edition ⎥ Volume II ⎥ Issue 07 ⎥ March 2019

Walter Schloss East & SE Europe MSCI 16 factors needed to make money Monthly performance reports and Quadrupling China A-shares’ in the stock market p.06 statistics from the region p.02 weighting in key indices p.03 TRADING INVESTORS SEE STOCK EXCHANGES

PRECIOUS METALS IN THE SPOTLIGHT WORLD Central banks are hungry for GOLD

Kyriaki I. Balkoudi Gold buying by central banks hits highest level in half a century

omething big is happening in the on 2017 and in line with five-year average in Q4, to 84.1tonnes, the report said. ETF APRIL RUDIN/ THE RUDINTHEGROUP RUDIN/ APRIL gold market and nowhere is that demand of 4,347.5 tonnes. The biggest Net central bank gold inflows fell 67%. However, Europe was more apparent than in central demand came from jewelry which, while the only region to see net growth over the Wealth Management purchases (in tonnes) banks. In 2018, central banks flat on the 2017 figure, accounted for just year as a whole. The total supply of gold Outlook added 651.5 tonnes to their hold- over half of the total. Gains in China (3%), ●Russia + 450.9 grew marginally by 1% in 2018, up from ings, a 74% increase from the pre- ●Turkey + 153.2 vious year, according to the World Gold the US (4%) and Russia (9%) broadly off- 4,447.2t to 4,490.2t. This growth was sup- Traditional Council (WGC). Not only is this a re- set sharp losses in the Middle East, where ●Kazakhstan + 83.1 ported by similar y-o-y increases in mine markable change from 2017, but it’s also demand dropped 15% on 2017. Indian de- ●Poland + 25 production – to a new record high – and Wealth the most on record going back to 1971, mand was stable at 598 tonnes, a drop of ●India + 28.7 recycled gold. Managers and when the U.S. ended the gold standard. only 4 tonnes from the previous year. ●Mongolia + 13.3 The WGC has estimated that central Bars and coins contributed 1,090 tons in ●Colombia + 7.1 Safety in diversity Fintech Cozy Up banks now hold nearly 34,000 tons of 2018, marking a 4 percent rise from the ●Iraq + 6.5 “I don’t see any of the risks that investors gold. Among the biggest purchasers were Traditional wealth manage- previous year.Coin demand surged to ●Kyrgyz Rep. + 5.5 and central banks are worried about fad- Russia, Turkey and Kazakhstan. Other reach a five-year high of 236.4 tnnes, the ●Tajikistan + 5.1 ment players and fintech firms central banks, such as Poland’s, Hungary's ing anytime soon and I expect gold to re- second-highest on record. Demand for ●Argentina + 5 main an attractive hedge in 2019 ”Alistair are finally going to accept and India's have returned to gold after ●Jordan + 2.2 each other this year and part- long periods of absence, for diversifica- gold bars held steady at 781.6 tonnes, the Hewitt, Head of Market Intelligence at the tion purposes, fuelled by worries over fifth year in succession of holding in a ●Egypt + 1.9 World Gold Council, said in a statement. ner up according to one fi- slowing global growth and heightened firm 780-800 tonnes range. Gold used in ●Philippines + 1.6 The gold boom could be far from over yet nancial services marketing geopolitical tensions. technology climbed marginally to 334.6 ●Qatar + 1.6 with central banks expected to acquire an strategist. Incumbent firms tonnes. After healthy gains during the first ●Thailand + 1.6 additional 600 tonnes of the precious will realise they must embrace Serbia + 1.4 Supply and demand three quarters of 2018, a combination of ● metal this year, according to the consult- technology to lure millennial ●Belarus + 0.6 slowing smartphone sales, the US-China ing firm Metals Focus Ltd. Are central clients, April Rudin writes figures ●Suriname + 0.6 trade war and mounting uncertainty over banks stocking up on gold only to diver- on a blog post at the CFA In- Malaysia + 0.6 Source: IMF IFS; World Gold Council (Jan. 2017-Oct. 2018) IMF IFS; World Source: ● WGC said total gold demand in 2018 global economic growth contributed to a sify or possibly to prepare for the next ●Indonesia + 0.5 stitute. The old guard wealth reached a total of 4,345.1 tonnes, up 4% 5% decline downturn? management industry will also come to accept that lever- aging technology can free up time to work on building suc- GREAT cessful relationships, accord- TRADERS William Eckhardt ing to Rudin, founder and president of the New York- ▶ One of the famous original turtle traders and a Master based Rudin Group, which “What works exclusively with finan- feels good of automated trading cial services firms and enter- prise firms who serve them. is often the f you're not familiar with William periment, set up by friend, partner and Fintech firms, meanwhile, wrong thing Eckhardt by name, perhaps you millionaire trader Richard Dennis, in will accept that at times clients to do. know him by reputation. Born in which an eclectic group of novice traders want the intimacy of a face-to- I 1955, Eckhardt began trading in were taught to trade futures with a rules- face meeting. “A robo-adviser 1974 after four years of doctoral research based trend following system ending up may be sufficient when a plan at the University of Chicago in mathe- making $100 million. Dennis called the is in place, but fintech and AI matical logic. He never finished his PhD traders "turtles" after recalling turtle have yet to replicate the in- in mathematics, but despite leaving aca- farms he had visited in Singapore and de- sights gleaned or the comfort demia prematurely for the trading pits, he ciding that he could grow traders as level achieved through one- has written academic papers on the phi- quickly and efficiently as farm-grown on-one conversations” she turtles. The experience was overwhelm- losophy of science. In 1991 Eckhardt writes. In the end, clients are launched his own systematic futures ingly successful with several of the orig- the ones who will benefit from trading firm (ETC) based in Chicago inal Turtle Traders going on to successful hybrid advice. While algo- which has produced a compound annual careers in professional trading and return of 17.35% over 20 years and money management. rithms can quickly offer port- earned 21.09% in 2010. The firm's inter- In addition to building trading systems, folio options that human national clientele includes "fund of Eckhardt has developed a science of adviser previously spent days funds", corporate, private, and institu- trading. He believes that studying the doing, adviser today can use tional investors. markets you can find some patterns that the time saved to analyse their repeat through significant periods of recommendations more criti- The Turtle Experiment time. He also believes that the correct ap- cally and offer more holistic plication of statistics and mathematical Prior to founding ETC, Eckhardt was advice. concepts is key for successful trading. Created by Ip also involved in the Turtle Trading ex- ROMANIAN MARKET3_Layout 1 4/10/19 3:11 PM Page 26

2 INSIDE THE MARKETS Issue 07 ⎥ March 2019

NZX’s debt market is off to a Egypt's government plans to offer Foreign institutional investors (FIIs) flying start in 2019. NZX will stakes in 8-10 state-owned compa- bought $2.37 billion in equity in hit the $2 billion issued mark in nies by end 2019, Minister Public February, their biggest purchase since the first three months of the Enterprise Sector Hesham Tawfik November 2017, according to data told Daily News Egypt. The last pub- compiled by the Securities and Ex- 1 year, which is the highest level 2 3 ASIA NEWS

AFRICA lic offering of state-owned compa- change Board of India (Sebi). 0CEANIA WORLD for Q1 in the past decade.

MARKETS nies was in 2005.

INVESTMENT TRENDS SEE MARKETS BSE-Sofia and LSEG's Activist investments are on the rise ELITE sign MoU More than 900 companies were targeted with activist campaigns last Creating an agile ecosystem of prosperous SMEs in Bulgaria year, and 417 of those were outside the US, according to the Activist Investing Annual Review 2019, produced by Activist Insight in as- ulgarian Stock Exchange (BSE) and implemented under the umbrella initiative of the sociation with Schulte Roth & Zabel. The review, now in its sixth London Stock Exchange Group’s ELITE Memorandum.“We saw the enormous potential year of publication, notes that 922 companies were targeted in 2018 B programme signed a Memorandum of Un- for the Bulgarian SMEs in developing through the worldwide compared with 856 in 2017. derstanding (MoU) to create an agile ecosystem network of the LSEG ELITE program almost a Asia hit a record high in 2018, the report suggests, adding that 111 of prosperous SMEs in Bulgaria, BSE said in a year ago and we started negotiating our strategic companies in the region were approached by activists, compared press release. The MoU, officially signed by Ivan partnership. We are very glad that now it is a fact with 93 in 2017. European companies experienced 148 run-ins with Takev, CEO of the BSE, covers the umbrella ini- and opens new global business horizons for the activist campaigns, making it the only region to see a reduction in tiative to educate and stimulate the most dynamic ambitious Bulgarian SMEs”, Takev said in a state- activist activity – by 6 percent – compared with 2017. In the U.S., and ambitious SMEs in Bulgaria to explore all the ment. Since its foundation in 2012, ELITE has 142 settlements were recorded in 2018, versus 119 in 2017 and 168 existing opportunities worldwide for raising cap- grown into a network that covers more than 1100 the year before. Australia also experienced a record number of ac- ital to invest in their growth. The signing cere- companies from 40 different countries, with tivist engagements in 2018, with 78 companies targeted, up 28 per- mony took place in front of the representatives of over €81 bn in combined revenues and accounting cent on 2017. more than 30 most dynamic Bulgarian companies for more than 478,000 jobs. who participated in the first strategic workshop Ivan Takev, BSE-Sofia CEO Photo Credit: BSE Norway’s sovereign wealth fund to divest East & South East Europe Stock Exchanges from oil Norway's $1 trillion sovereign-wealth fund, the world's largest, an- nounced that it will phase out oil and gas exploration companies from Every month you can see at a glance unless stated otherwise. World Mar- its portfolio. The move comes, following a 2017 recommendation the trading activity of the main stock kets undertakes all the reasonanble made by the Norwegian central bank, which uses the fund to invest exchanges of East and Southeast Eu- efforts to ensure that data included the proceeds of the country's oil industry. “The objective is to reduce rope. The data below concern the in this column was correct at the the vulnerability of our commonwealth to a permanent oil price de- month of February 2019, time of publication. cline,” Siv Jensen (pictured), Norway’s Minister of Finance, said in a statement. Oil and gas equities make up around 6% of the sovereign- Avrg no of trades per day: 324.30 wealth fund's in- ● ATHEX (ATHENS) ● CSE (NICOSIA) Turnover (EUR mln)Month value: 59.32 vestments. The Composite Index: 11.48% CSE General Index: -5.77% (Jan.) Market value (EUR mln) Month end: fund is a large Monthly value of transactions Market capitalisation of shares (EUR): 2,696.41 shareholder in (€ mln.): 885.89 1,75 billion many international Average daily value of transactions Total value of transactions (EUR): ● NASDAQ VILNIUS oil companies, with (€ mln.): 43.87 4,70 million OMXV: 0.56% investments includ- Average Daily number of trades: 22209 ● GPW (WARSAW) No. of listed shares: 27 No. of trades: ing a 2.5% stake in ● BJSE (BANJA-LUKA) WIG20: -2.01%(PLN) 3005 Avrg no of trades per day: Royal Dutch Shell, BIRS: 5.23% Market Capitalisation (PLN 150.24 Turnover (EUR mln)Month value: a 2.3% stake in BP Total Turnover for Securities: 49,872,960 mln): 1 199 990,20 4.52 PLC and a 2% Total number of trades: 1293 Domestic Equities (PLN) Market value (EUR mln) Month end: stake in Total SA Total capitalisation: 3,788.220.168 mln): 602 916,26 3,557.42 ● BSE (BELGRADE) Foreign Equities ● PSE (PRAGUE) BELEX15: -3.41% (PLN mln): 597 073,94 PX: 2.70% Japan to set up Africa Turnover RSD: 1.492.871.087 ● LJSE (LJUBJANA) Trade turnover-equities: Turnover EUR: 12.633.076 SBI TOP: 1.36% no of traded issues: 54 Turnover (CZK investment body No of transactions: 2.845 Index value on 28.02.2019: 844,01 000s):8 846 496.170 Turnover (EUR): 21.258.967 Volume (pieces): 36 090 366 Japan will launch a new permanent public-private council to promote ● BSE (SOFIA) No of transactions: 46 009 investment in Africa, the Nikkei Asian Review reported citing gov- SOFIX: -0.07% Average daily turnover (EUR): 1.118.893 ernment sources. The launch of the joint council will coincide with Total Capitalisation of BSE main Capitalisation of shares ● SASE (SARAJEVO) SASX10: -0.28% (Dec. 2018) the 7th Tokyo International Conference on African Development, or market: 8,689,155,820.71 (in EUR 000): 6.550.134 Total turnover: 106.302.831,18 KM TICAD7, which brings together Japanese and African leaders. This Turnover (BGN): 19,927,410 ● MSE (SKOPJE) which constitutes 66,21 % of the year's event is scheduled to be held in Yokohama, just west of the No of trades: 4,715 MBI10: 0.99% total turnover achieved on BH capital, in August, the sources said. Currently, more than 440 Japan- Market capitalization(denars): ● BSSE (BRATISLAVA) stock exchanges. ese companies, do business in Africa but the Asian country lags other 170.464.966.350 SAX Index Value: 2.32% No of transactions: 466 major economies when it comes to investment in the continent which Total Turnover (denars): 299.566.014 Total Trading Volume: € 10 771 536 Total no of securities traded: 3.350.474 is rich in mineral resources like cobalt and platinum, as well as oil Trades: 1552 and natural gas. Average Daily Trading ● ZSE (ZAGREB) Volume: € 538 577 ● MNSE (PODGORICA) CROBEX: 2.11% No of trades: 526 MNSE 10: 1.90 % Turnover: 186,308,594 Market capitalisation (28/02/2019) ● BVB (BUCHAREST) Market capitalisation: 247,292,691,998 KN 3.030.151.538 € FDI in Vietnam hits BET: 10.26% (RON) € No of listed shares:131 Index points (RON ): 5.629,96 Turnover: 683.119 record high Total turnover ( RON mil): 885,13 No of transactions: 190 With a record US$19.1 billion in foreign direct investment (FDI) dis- Market Capitalization ( RON mil): ● NASDAQ RIGA ALRO enters BET bursement in 2018, Vietnam has become one of Asia’s hottest in- 156.490,58 OMXR: 0.28% vestment destinations, a report of the Foreign Investment Agency Traded no. of finacial instruments No. of listed shares: 20 and BET-TR indices (FIA) under the Ministry of Planning and Investment has shown. (shares, bonds, rights and futures): No. of trades: 954 Bulk of the record FDI inflows came from more mature Asian 621.466.476 Avrg no of trades per day: 47.70 The Index Committee of the BVB decided

economies such as Japan, Korea, and Singapore. Data from the FIA No. of trades: 51.821 Turnover (EUR mln) Month value:1.65 on March 4th to include Alro (ALR) in BET, the main index, and in BET-TR, the showed investors invested in 18 fields and sectors, in which manu- ● BSE (BUDAPEST) Market value (EUR mln) Month facturing and processing continued to attract substantial attention end:778.93 total return version of BET. It is for the first BUX: -1.28 % time in the history of the local capital market with investment of US$16.58 billion, accounting for 46.7% of total BUMIX: 0.86% ● NASDAQ TALLINN when these indices will include 16 compa- capital approvals. Real estate was the second most heavily invested, CETOP: 0.40% OMXT: -1.69% nies. Alro becomes the first aluminum pro- with US$6.6 billion, or 18.6% of total registered capital, followed Cash market: Hungarian Equities: 609 No. of listed shares: 17 ducer present in the two indices. The changes by retail and wholesale with US$3.67 billion or 10.3%. Certificates and Warrants: 19 No. of trades: 6486 will come to effect from March 18th. ROMANIAN MARKET3_Layout 1 4/10/19 3:12 PM Page 29 I

Issue 7 ⎥ March 2019 WORLD STOCK EXCHANGES 3 Most of them How 24 major equities indices extended their gains performed in February 2019

3.44% 2.97% 3.67% 3.9% 1.52% 5.0% 3.1% 4.7% 13.25% 2.9% -0.4% 0.7% 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)

-1.4% 2.5% 3.45% -1.1% 0.79% -2.6% -3.9% -2.2% 4.8% 4.03% 5.2% 3.4% JSX COMP HANG SENG TSE 50 SENSEX TASI IPC ASI MERVAL DJ RUSSIA EGX30 TSX COMP ASX 200 FTSE/JSE ASI (INDONESIA) (HONG KONG) (TAIWAN) (INDIA) (S.ARABIA) (MEXICO) (ARGENTINA) (RUSSIA) (EGYPT) (CANADA) (AUSTRALIA) (S.AFRICA)

MSCI EXPERTS TALK Quadrupling CEOs warn China A-shares' about slower weighting in key growth indices Does that mean stocks The world's second-biggest economy is likely to are headed for trouble? see billions of dollars into its stock market after index provider MSCI confirmed it will increase the op executives from big companies are weight of China A shares -yuan-denominated talking about slowing growth,particu- stocks traded on the mainland- in its larly in China and Europe and slashing global stock indexing system. “This decision fol- T their guidance but that doen't mean the lows an extensive global consultation with a large stock market is headed for another Decem- A pedestrian looks at an electronics stock indicator showing share prices on the ber-like tumble. Earnings may not be as bad number of international institutional investors, in- Tokyo Stock Exchange in Japan cluding asset owners, asset managers, broker/deal- as many fear. So far, six companies with quar- ers and other market participants worldwide” the ters ending in February have reported, and New-York-based financial data company said in a only FedEx-which has lowered guidance for statement on Thursday (Feb.28). The inclusion will a second time in a row- has missed. The other take place in three steps: World markets five, Autozone, Costco, Adobe, Oracle and General Mills, have all beat. And of the ‣ Step 1 group, only Adobe and FedEx gave lower MSCI will increase the index inclusion factor of all than expected guidance. China A Large Cap shares in the MSCI Indices from 5% to 10% and add ChiNext Large Cap shift higher Nick Raich shares with a 10% inclusion factor coinciding with CEO at Earnings the May 2019 Semi Annual Index Review. Easing trade tensions helped support Scout ‣ Step 2 equity market gains Most importantly, those The index provider will increase the inclusion fac- six that have reported have tor of all China A Large Cap shares in the MSCI Kyriaki I. Balkoudi Editor-in-chief beaten estimates by 9.1 per- Indexes from 10% to 15% coinciding with the Au- cent, Nick Raich, the CEO and Co-Founder gust 2019 Quarterly Index Review. fter January's exceptional performance, pointing economic data including zero growth during of The Earnings Scout-an independent macro- world stocks extended their gains in Feb- the fourth quarter. The Netherlands, Switzerland, and economic research firm that specializes in ‣ Step 3 ruary. Investor sentiment was buoyed by the U.K. posted solid gains while France was up 5%. earnings trends- said, well above the normal MSCI will increase the inclusion factor of all China signs of progress in U.S.-China trade ne- beat rate. And that includes FedEx. A Large Cap shares in the MSCI Indices from 15% gotiations, the implementation of Chinese Asia & Pacific “Consensus earnings estimates were cut so to 20% and add China A Mid Cap shares, including stimulusA measures as well as news that the US Fed- Asia-Pacific markets rallied. Hong Kong, Taiwan, dramatically, it looks like the beat rates will eligible ChiNext shares, with a 20% inclusion fac- eral Reserve has paused any further interest rate China, Australia and New Zealand likely be above normal,” Raich told CNBC. tor to the MSCI Indexes coinciding with the No- hikes. World stocks surged 11% during the first two generated strong returns. Chinese eqities were vember 2019 Semi-Annual Index Review. months of the year in U.S. dollar terms. buoyed by news that index provider MSCI would Michael Hartnett On completion of this three-step implementation, increase the weighting of China-listed shares in its Chief investment the MSCI Emerging Market index’s pro-forma Americas benchmark indices.The Japanese market rose strategist at weighting to Chinese A-shares will jump from 0.7% U.S. equities rose for the second straight month, as steadily to end the month 2.9% higher as a major to 3.3%. BofAML the Congress and the White House reached an agree- trade agreement with the European Union took ef- Data Analytics MSCI started to partially include China large-cap ment early in February to end the government shut- fect. The deal removes most tariffs between the two A shares in the MSCI Emerging Markets Index down and the US Federal Reserve adopted a economies and further opens the EU auto market to Every month, Bank of America in 2018. considerably more dovish stance. Japanese exporters The MSCI Japan Index gained Merrill Lynch conducts a closely followed sur- The Federal Open Market Committee (FOMC) con- 2% and the MSCI Pacific ex Japan Index jumped 5% vey of roughly 200 institutional, mutual and firmed that the central bank's plans for tighter mone- on a local currency basis. The MSCI China A Index, hedge fund managers. The latest BofAML GRAPH of the Month tary policy may be on hold for now. The news that which comprises companies listed on the Shanghai Global Fund Manager Survey finds that the top Washington has suspended the imposition of in- and Shenzhen stock exchanges, surged 17%. risk for investors remains a slowdown in China creased tariffs on $200 billion of Chinese goods that while the second-biggest concern is the U.S.- Index returns in was planned to take effect on 1 March was also sup- Emerging Markets China trade war, which had topped the worry list (%) portive. Meanwhile, economic growth in the US re- After January’s rally, emerging markets stocks for nine straight months. February 2019 mains on firm footing. Q4 GDP growth indicated recorded a marginal gain in February. The authors of the report, which include Chief quarter-on-quarter growth of 2.6% higher than expec- Upcoming political elections in some countries, weak Investment Strategist Michael Hartnett, admit the tations and the latest US composite purchasing man- activity according to the composite PMI reports and “pain trade” for stocks is still up. “Despite rising Source: agers’ index (PMI) improved to 55.8. resurgent oil prices, led to mixed returns in the devel- profit expectations, lower rate expectations and MSCI, FactSet, J.P. Morgan Economic The Dow Jones Industrial Average climbed 3.67 per- oping world. In India, where core inflation remains falling cash levels, stock allocations continue to Research, J.P. Morgan, Asset Management. cent. The Standard & Poor’s 500 added 2.97 percent, above 5%, stocks trailed amid escalating geopolitical drop. There is simply no greed to sell in equities.” while the NASDAQ Composite jumped 3.44 per- tensions with Pakistan. Markets in South Africa, After a strong stock market rally to start the year, INDEX GBP USD JPY EUR LOC cent.In Brazil, equities declined after a multimonth Turkey and Indonesia lost value amid a pick-up in fund managers see no evidence of euphoria. and Equities (MSCI) rebound despite the announcement of an ambitious the US dollar. The South African rand declined 6% have turned defensive. Fifty nine percent of those social security reform proposal. against the greenback while local currency bonds surveyed are bearish on both the growth and in- MSCI World 1.9 3.1 5.4 3.8 3.4 dropped 6.3% in dollar terms. Brazil and Mexico also flation outlook for the global economy over the MSCI USA 2.2 3.3 5.7 4.1 3.3 Europe fell back. By contrast, China was among the best per- next 12 months, the highest since October 2016. MSCI Europe 2.2 3.4 5.7 4.2 4.2 Eurozone equities also gained in February despite forming index markets. The MSCI Emerging Markets The cautious attitude is also seen from the fact signs of slowing economic growth in the eurozone and that allocation to cash is still a net 40 percent MSCI UK 2.3 3.4 5.8 4.2 2.3 Index increased in value but underperformed the ongoing political turmoil over the UK’s planned de- MSCI World. overweight, well above the long-term historical MSCI Japan -1.1 0.0 2.3 0.7 2.3 parture from the EU as the 29 March deadline draws average of 20 percent. MSCI AC Asia 1.0 2.1 4.4 2.9 2.3 closer. A source of support was the suggestion that the The rally in risk assets that began in January con- Fund managers get defensive: Long: cash, MSCI EM L.Am. -4.8 -3.7 -1.5 -3.0 -1.7 European Central Bank could restart its targeted tinued in February but for this rally to continue a REITs, utiltities, health care, emerging market MSCI EM -0.9 0.2 2.5 1.0 1.1 longer-term refinancing obligations (TLTROs), which more complete resolution of the US-Sino trade dis- Short: equities, UK, industrials, eurozone Con- offer cheap loans for banks. The MSCI Europe Index pute is needed and other geopolitical tensions need trarian signal: high cash levels is a buy signal for (Data as of 28 February 2019) rose 4%. Germany advanced 3.1%, despite disap- to be eased. equities. ROMANIAN MARKET3_Layout 1 4/10/19 3:12 PM Page 30

4 TRADING VENUES NEWS Issue 7 ⎥ March 2019 Iss ⎥ World Markets Insider

BME gets new Stay ahead of the market with the most ships to 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 CEO, NZX hits 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 record highs exchanges launches and new partner- regarding your investments.

BRVM (Abijan,Côte d'Ivoire) probably in the last quarter of the year, Minister HKEX (Hong Kong, Hong Kong) float factor for HOSE-Index at Section 3.3.5 of Rules Public Enterprise Sector Hesham Tawfik (pictured) for Management of the HOSE-Index Series – Ver- For the fifth consecutive year, capital markets told Daily News Egypt on March 2. The first stage Hong Kong Exchanges and Clearing Limited sion 2.3 issued under Decision No. 529/QD- around the world were pleased to "Ring the Bell of the government IPO programme was announced (HKEX) signed a licence agreement with MSCI Inc. SGDHCM dated December 20, 2018 as for Gender Equality" to celebrate International in March last year with the aim of strengthening the to introduce futures contracts on the MSCI China A follows: "3.3.5. Rounding the free-float factor when Women's Day 2019. The West African Regional Egyptian capital market and attracting more liquid- Index, subject to regulatory ap- calculating the index. The calculated free-float factor Stock Exchange (BRVM) joined ity to the Egyptian Exchange (EGX). On March 1, proval and market conditions. will be rounded to calculate the index and the Cap- the Women's Empowerment Prin- Tawfik announced the resumption of a programme The MSCI China A Index will ping Factor according to the following principle: ciples. This event was organized to sell stakes in state-owned Egyptian companies by comprise 421large and mid cap With a free-float ≤ 15%: Rounding up by 1%. With a as the result of a partnership be- offering 4.5% of shares of Eastern Tobacco Com- a A-shares, on a pro forma basis, a free-float > 15%: Rounding up by 5%. tween IFC, Sustainable Stock Ex- i c pany on the EGX. “The private placement has been accessible via Stock Connect

i changes Initiative, UN Global snatched by Arab and institutional investors, who

s upon the completion of MSCI’s NZX (Wellington, New Zealand) Compact, UN Women, the World

r accounted for almost 85% of the shares offered, inclusion process in November The S&P/NZX 50 (Gross) Index is the first in the Federation of Exchanges and while foreign investors acquired the other stake,” a & PACIFIC f 2019. The MSCI China A Index Women in ETFs. It aims to raise A Asia-Pacific region to hit record highs in 2019. It ad- senior company source told Egypt’s only daily in- will represent the A-share por- awareness among stakeholders of vanced 7.1 per cent this year, with a record high on A dependent newspaper in English. tion of the MSCI Emerging the regional financial system on .March 7 of 9442.54 the issue of women's economic Markets Index.“The interna- empowerment and on opportunities for the finan- tional trading community has wanted a product like ASX (Yerevan, Armenia) this for some time” HKEX Chief Executive Charles cial sector to advance gender equality for more On March 29 IDBank, CJSC will list its bonds on Li said. harmonious and sustainable development. Abond list of Armenia Securities Exchange (ASX). Total volume: USD 5 million. Nominal Value: EGX (Cairo, Egypt) HOSE (Ho Chi Minh, Vietnam) USD 100 Maturity period: 30 months Coupon The governement is planning to offer stakes in 8- Ho Chi Minh Stock Exchange announced the infor- Rate: 5,25% Payment Frequency: Quarterly. This 10 state-owned companies by end 2019, most mation on changing the principle of rounding free- is IDBank’s 4th ongoing listing so far on AMX.

MOEX (Moscow, Russia) occur on 24 May 2019.Euronext is the leading pan- B3 (Sao Paulo, Brazil) Intercontinental Exchange, NYSE's parent com- European exchange in the Eurozone, covering Bel- pany, will hold its 2019 Annual Meeting of Stock- On 11 March 2019, Moscow Exchange will launch Brasil, Bolsa, Balcão (B3) reported its fourth-quar- gium, France, Ireland, The Netherlands, Portugal holders on Friday, May 17, 2019 at 8:30 a.m. ET deliverable futures on ordinary shares of Polyus € ter earnings for the period. With the conclusion of and the UK. With 1,300 listed issuers worth 3.4 at The St. Regis Atlanta. The proxy statement and and Magnitogorsk Iron and Steel Works (MMK), trillion in market capitalisation as of end December the integration between the former admission procedures will be available in early as well as options on the futures. companies BM&FBOVESPA and 2018, Euronext is a blue chip franchise that has 24 April for stockholders of record as of March 19, The futures contract lot is 10 shares for Polyus and issuers in the Morningstar® Eurozone 50 Index℠ s Cetip, 2018 marked the first year 2019. A live audio webcast and replay of the annual 1,000 shares for MMK. Futures and a strong diverse domestic and international of B3 operation. B3 total revenues and options with an expiration

a meeting will be available on the company’s website amounted to R$5,351.9 million in client base. in the investor relations and media section. e date of June 2019 will be intro-

c 2018, increasing by 20.6% against duced at launch.In 2018, trading BME (Madrid, Spain)

i 2017. JSE (Kingston, Jamaica) p volumes of futures and options on As of April 25th, after the conclusion of the General r SX (Santiago, Chile) The Jamaica Stock Exchange (JSE) signed a Li- Russian shares increased by Shareholders' Meeting of BME, Antonio Zoido cense Agreement with Global Risk and Data Au- o 30.6% YoY to RUB 4.5 trln. e International investors represented (pictured) will drop the executive powers associ-

thority, a Cayman Island based company to provide r ated with his position in the Company to remain as 18,8% of the equity transactions in an integrated electronic platform for ‘Know Your EURONEXT 2018 at Santiago Exchange (SX). non-executive Chairman of the Board of Directors, m Customer’ (KYC) and Anti-Money Laundering u (Amsterdam, as planned since 2017. From that date Javier Her- The breakdown of Equity trading (AML). This platform uses dynamic decision tree (shares and funds quotas) states The Netherlands) nani will become the Company’s top executive. A intelligence to determine the regulatory journey of E Euronext announced its dividend that 42% of the transactions were the client including all the regulations, KYC ques- originated by national non-institutional investors, tionnaires, classifications and risk assessments that payment schedule for 2019.In line 29% by Chilean institutional clients, 9.7% by Pro- need to be adhered to and performed. Furthermore, with the current dividend distribution policy of Eu- prietary Account, 18.8% by International Investors it also determines all of the clients and counterparty ronext, it is proposed to distribute 50% of 2018 re- and 0.14% by MILA investors. data and documentation that are required to support ported net profit. As a consequence, subject to the KYC and regulatory compliance obligations. shareholder approval at the company’s Annual NYSE (New York, USA) General Meeting of Shareholders to be held on 16 May 2019, the annual gross dividend on the 2018 results to be paid in 2019 amounts to €1.54 per BSE (Baku,Azerbaijan) ian ruble correspondent account with the Eurasian share. Payment of the annual dividend would then Development Bank. The activation date of this new On March 12th, 2019 from 11:00 to 12:30 an auc- ruble correspondent account of the Exchange for set- tion on placement of bonds of Ministry of Fi- tlements on foreign currency exchange trading will since good IR has knock-on effects in terms of val- nance of the Republic of Azerbaijan will be held. QSE (Doha, Qatar)

be communicated later. Currently, all settlements on t uation, liquidity and ‘trust’ in the market. Auction volume: 25 000 000 AZN Face value: trading results on KASE in rubles are made through Qatar Stock Exchange held a 100 AZN Turnover period: 364 days Maturity the Exchange’s correspondent account in Sberbank s workshop for listed companies in KSE (Kuwait City, Kuwait) date: 10.03.2020 Underwriter: relation to the forthcoming intro-

of Russia PJSC. a Reinforcing its commitment to promoting capital Pasha Capital CJSC. Note: Total duction of a mandatory IR Rules market literacy among students, Boursa Kuwait has a number of bids presented by each E regime. QSE has invested in a participated in the first ever ‘Stock Exchange Week’ i bank should not exceed 2. During number of initiatives in the area of program organized by Kuwait University’s College the auction, total amount of non- e IR over recent years and this rep- of Business Administration (CBA) from 3-7 Febru- s competitive orders should not ex- l resents a further commitment to ary 2019. As part of its participation in the program, ceed 20 percent of issue amount. d a best practice in Qatar. Feedback Boursa Kuwait set up a booth at the CBA premises from local and international in- to promote its digital education portal, Boursa

r KASE

(Astana, d vestors suggests that Qatari listed Academy Online. which aims to create greater stock Kazakhstan) i companies are making significant market awareness among new and professional re- u Kazakhstan Stock Exchange strides in this area. but QSE rec- tail investors.The company also distributed M

E (KASE) announced opening a Russ- ognizes the need for improvement brochures

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Issue 7 ⎥ March 2019 STOCK EXCHANGES WORLD MAP 5

1 AMERICAS 3 EURASIA 6 ASIA PACIFIC NORTH AMERICA 69. ARMENIA Yerevan NASDAQ 119. AUSTRALIA Sydney ASX 0. BAHAMAS Nassau BISX 70. AZERBAIJAN Baku BSE 120. BANGLADESH Dhaka DSE 1. BARBADOS Saint Michael BSE 71. GEORGIA Tbilisi GSE 121. BANGLADESH Chittagong CSE 2. BERMUDA Hamilton BSX 122. BHUTAN Thimphu RSEBL 3. CANADA Toronto TSX 123. CAMBODIA Phom Penh CSX 4. CAYMAN ISLANDS Grand Cayman SXE 124. CHINA Shanghai SSE 5. DOMINICAN REP. S.Domingo BVRD 125. CHINA Shenzhen SZSE 6. EL SALVADOR San Salvador BVES 126. HONG KONG Hong Kong HKEX 7. GUATEMALA Guatemala City BNV 127. INDIA Mumbai NSE 8. JAMAICA Kingston JSE 128. INDIA Mumbai BSE 4 MIDDLE EAST 129. INDONESIA Jakarta IDX 9. MEXICO Mexico City BMV 130. JAPAN Fukuoka FSE 10. MEXICO Mexico City BIVA 72. BAHRAIN Manama BHB 131. JAPAN Nagoya NSE 11. NICARAGUA Managua BVDN 73. JORDAN Amman ASE 132. JAPAN Tokyo TSE 12. PANAMA Panama City BVP 74. IRAN Tehran TSE 133. KAZAKHSTAN Almaty KASE 13. SAINT KITTS & NEVIS Basseterre ECSE 75. IRAQ Baghdad ISX 134. KYRGYZSTAN Bishkek KSE 14. TRINIDAD & TOBAGO P. of Spain TTSE 76. ISRAEL Tel Aviv TASE 135. LAOS Vientiane LSX 15. UNITED STATES Chicago CHX 77. KUWAIT Kuwait City BK 136. MALAYSIA Kuala Lumpur BM 16. UNITED STATES New York NASDAQ 137. MALDIVES Male MSE 78. LEBANON Beirut BSE 17. UNITED STATES New York NYSE 138. MONGOLIA Ulaanbaatar MSE 79. OMAN Muscat MSM 139. MYANMAR Vientiane LSX 80. PALESTINE Ramallah PEX 140. NEW ZEALAND Wellington NZX SOUTH AMERICA 81. QATAR Doha QSE 141. NEPAL Kathmandu NEPSE 18. ARGENTINA Buenos Aires BCBA 82. SAUDI ARABIA Riyadh TADAWUL 142. PAKISTAN Karachi PSE 19. BRAZIL Sao Paulo BOVESPA 83. UAE Abu Dhabi ADX 143. PAKISTAN Lahore PSE 20. CHILE Santiago SSE 144. PAKISTAN Islamabad PSE 21. COLOMBIA Bogota BVC 145. PHILIPPINES Manila PSE 22. .EQUADOR Quito BVQ 146. SINGAPORE Singapore SGX 23. .HONDURAS Tagucigalpa BVC 147. SOUTH KOREA Busan KREX 24. PARAGUAY Asuncion BVPASA 148. SRI LANKA Colombo CSE 25. PERU Lima BVL 149. TAIWAN Taipei TPEX 26. URUGUAY Montevideo BVM AFRICA 150. TAJIKISTAN Dushanbe CASE 27. VENEZUELA Caracas BVC 5 151. THAILAND Bangkong SET 152. UZBEKISTAN Tashkent UZSE 84. SOUTH SUDAN Juba To be launched 153. VIETNAM Ho Chi Minh City HOSE 85. ETHIOPIA Addis Ababa ECX 86. ALGERIA Algiers IL BOURSA 87. ANGOLA Luanda BOVIDA 88. BOTSWANA Gaborone BSE EUROPE 89. CAPE VERDE Mindelo BVC 2 90. CAMEROON Duala DSX 28. ALBANIA Tirana ALSE 91. COTE D'IVOIRE Abidjan BRVM * 29. AUSTRIA Vienna WIENER BORSE 92. EGYPT Alexandria EGX 30. BELARUS Minsk BCSE 93. EGYPT Cairo EGX 31. BELGIUM Brussels EURONEXT 94. GABONE Libreville BVMAC ** 32. BOSNIA-HERZEG.Banja Luka BLSE 95. GHANA Accra GSE 32a.BOSNIA-HERZEG. Sarajevo SASE 96. KENYA Nairobi NSE 33. BULGARIA Sofia BSE 97 LESOTHO Maseru MSM 34. CHANNEL ISLANDS Guernsey TISE 98. LIBYA Tripoli LSM 35. CROATIA Zagreb ZSE 99. MADAGASCAR Antananarivo MEX 36. CYPRUS Nicosia CSE 100. MALAWI Blantyre MSE 37. CZECH REPUBLIC Prague PSE 101. MAURITIUS Port Louis SEM 38. DENMARK Copenhagen NASDAQ 102. MOROCCO Casablanca CASA SE For any corrections regarding the stock 39. ESTONIA Tallinn NASDAQ 103. MOZAMBIQUE Maputo BVM exchanges on this map contact: 40. FINLAND Helsinki NASDAQ 104. NAMIBIA Windhoek NSX [email protected] 41. FRANCE Paris EURONEXT 105. NIGERIA Abuja ASCE 42. GERMANY Frankfurt FWB 106. NIGERIA Lagos NSE 42a.GERMANY Hamburg BOERSE 107. RWANDA Kigali RSE 43. GIBRALTAR Europort GSX 108. SEYCHELLES Victoria SSE 44. GREECE Athens ATHEX 109. SOMALIA Mogadishu SSE 45. HUNGARY Budapest BSE 110. SOUTH AFRICA Johannesburg JSE 46 ICELAND Reykjavik NASDAQ 111. SUDAN Khartoum KSE 47. IRELAND Dublin EURONEXT 112. SWAZILAND Mbabane SSX 48. ITALY Milan BORSA ITALIANA 113. TANZANIA Dar Es Salaam DSE 49. LATVIA Riga NASDAQ 114. TUNISIA Tunis BVMT 50. LITHUANIA Vilnius NASDAQ 115. UGANDA Kampala USE 51. LUXEMBOURG Lux/urg City LUXSE 52. MACEDONIA Skopje MSE 116. UGANDA Kampala ALTX Stock Exchanges 53. MALTA Valletta MSE 117. ZAMBIA Lusaka LUSE 54. MONTENEGRO Podgorica MNSE 118. ZIMBABWE Harare ZSE 55.NETHERLANDS AmsterdamERONEXT World Map 56. NORWAY Oslo OSLO BORS * The Bourse Régionale des Valeurs Mo- 57. POLAND Warsaw GPW bilières, or BRVM, located in Abidjan, Cote 58. PORTUGAL Lisbon EURONEXT WORLD MARKETS d'Ivoire serves the countries of Benin, 59. ROMANIA Bucharest BVB ISSN 2668-1552 Burkina Faso, Guinea Bissau, Côte 60. RUSSIA Moscow MOEX published by d'Ivoire, Mali, Niger, Senegal and Togo. 61. RUSSIA Saint Petersburg SPB EuropaProPress Ltd 62. SERBIA Belgrade BSE 42 Marasesti Blv. ** The Bourse Régionale des Valeurs Mo- 63. SLOVAKIA Bratislava BSSE Bl.1, Sc.A, 2nd fl., Ap.7, 64. SLOVENIA Ljubljana LJSE bilières d'Afrique Centrale, orBVMAC, lo- 04255 District 4, 65. SPAIN Madrid BME cated in Libreville, Gabon serves the 66. SWEDEN Stockholm NASDAQ Central African Republic, Chad, Demo- Bucharest, Romania 67. SWITZERLAND Zurich SIX cratic Republic of Congo, Equatorial Commerce Registry 67a. SWITZERLAND Bern BX SWISS Guinea and Gabon. Code: J40/12206/2016 69. TURKEY Istanbul BORSA ISTABUL Tel.+40 314.228.321 69. UKRAINE Kiev UX 70. UK London LSE ROMANIAN MARKET3_Layout 1 4/10/19 3:34 PM Page 28 I

6 LEGENDARY INVESTORS Issue 7 ⎥ March 2019

A low-profile Key dates superinvestor in the life of Walter J. Schloss

1916 Walter J. Schloss was born on August 28, 1916, in New York, USA. 1934 Walter He got his first job on Wall Street in 1934. Occupation: runner at Carl M. Loeb & Co. 1946 Schloss started working for Benjamin Graham, the "father of value investing”, J.Schloss at Graham-Newman Partnership, where he met Warren Buffett. 1955 The money manager He left Graham's company and started his own investment firm, Walter J. Schloss who was Associates, where compounded money at searching for value 16% per annum for the next forty nine years. 1984 “Investing is an art, and Buffett called Schloss a “superinvestor” we tried to be as logical in a speech at Columbia Business School. 2000 and unemotional as Schloss closed out his fund and stopped possible.” actively managing others' money in 2003. 2015 He was also a patron of the Tenement He passed away at the age of 95 on Feb- Museum in ruary 19, 2015 at his home in Manhattan. New York which promotes tolerance The cause was leukemia. and historical perspective on the immi- grant experience. Upon Schloss’ death, Warren Buf- fett, released the following state- ment: “He had an extraordinary investment record, but even more Walter Schloss' important, he set an example for in- tegrity in investment management. 16 Factors Needed To Walter never made a dime off of his investors unless they themselves Walter J. Schloss (August 28, 1916 – February 19, 2012) made significant money. He charged no fixed fee at all and merely shared Make Money In The was an American investor, fund manager, and philan- in their profits. His fiduciary sense was every bit the equal of his invest- Stock Market thropist who earned accolades from Warren Buffett for ment skills.” In a financial world, filled with dishonesty and corruption, Schloss be- the steady returns he achieved by applying lessons 1. Price is the most important factor to learned from the Benjamin Graham school of investing. lieved honesty was the best policy. “I think, in the first place, that we are honest people. We have tried to prevent our investors from losing money, use in relation to value. Like Buffett, Schloss was a direct student of Graham, and we have not tried to make money at their expense”. 2. Try to establish the value of the com- whose name is synonymous with conservative - and suc- His approach to value investing worked for pany. cessful - investing. more than 50 years and still remains rel- 3. Use book value as a starting point to evant for investors today. The try and establish the value of the enter- chloss is not nearly as well known as other investors. He did not archive of one of the investment prise. attend college but took investment courses taught by Benjamin greats is held at Columbia Uni- 4. Have patience. Stocks don't go up im- Graham, author of The Intelligent Investor, at the New York versity. mediately. Stock Exchange Institute and eventually went to work for him 5. Don't buy on tips or for a quick move. for nearly 10 years as a security analyst. He left in 1955 to form Let the professionals do that, if they can. Walter J. Schloss and Associates and over the next four and a half Don't sell on bad news. decades, delivered his investors (which numbered 92 at their 6. Don't be afraid to be a loner but be sure peak) annualised returns of 15.3% versus 10% for the S&P 500, an achievement that you are correct in your judgment. matched by few other investors. 7. Have the courage of your convictions once you have made a decision. Dedication to value investing 8. Have a philosophy of investment and try to follow it. His investment philosophy is straight from Benjamin Graham. He advocated that 9. Don't be in too much of a hurry to sell. investors diversify to avoid one investment sinking a portfolio. He also disliked 10. When buying a stock, I find it helpful debt and liked to have the background on companies in which he was investing. to buy near the low of the past few years. He believed investors must be disciplined in following whatever philosophy they 11. Try to buy assets at a discount than to choose and use a philosophy that they are comfortable with so they can sleep well buy earnings. at night. Schloss was also known for being very frugal, running his partnership “You never re- 12. Listen to suggestions from people with ultra low expenses. His total office expense was an ally know a you respect. estimated $11,000 while his partnership generated a net profit of $19,000,000. 13. Try not to let your emotions affect When he was 72, he summed up his passion for investing, “At my age, most people stock until you your judgment. want to retire to Florida and play tennis and relax. But I get a great deal of pleasure own it.” 14. Remember the word compounding. from what I do.” Schloss closed out his fund in 2000 and stopped 15. Prefer stocks over bonds. actively managing other people’s money in 2003. He then became a treasurer for 16. Be careful of leverage. It can go the Freedom House, a think tank that monitors the state of liberty around the world. against you.

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Issue 07 ⎥ March 2019 TRADING & OPINION 7

Miami International Holdings Inc. Saudi Aramco's board will reportedly approve Eurasian Development Bank raised is preparing to launch its MIAX the issuance of a bond which could help the KZT9.8 bn on Kazakhstan Stock Equities Exchange toward the end state-run company finance its planned acqui- Exchange (KASE) on March 5 by of this year or in early 2020, CEO sition of a controlling stake in Saudi Basic In- placing debut issue of short-term

4 USA Thomas Gallagher said in an inter- 5 dustries. Corporation (SABIC), according to 6 bonds KZ2D00005808 a report by Reuters. The bond is expected to (EABRK050619) at weighted aver- view with WSJ. EURASIA MID. EAST MID. be issued in Q2 2019. age yield of 9.2032 % APR

PUBLICLY Dr. Martin Steinbach, EY Global and EY EMEIA IPO Leader, has over 20 STOCKS TRADED COMPANIES years of experience in the corporate finance field: IPO, M&A, private eq- uity, venture capital and mezzanine finance. Chinese stocks Mergers & Acquisi- rally tions, IPOs revenues IPO momentum Easier financial conditions at home, a weaker

s dollar and easing trade tensions have sent China’s benchmark Shanghai Composite and more O Index soaring 18% this year, its best two-

News and announcements from companies P slows but expected to month start since 2000, making it one of the listed on stock exchanges around the world. I strongest performers in a global rally span- Earnings, spin-offs, take-over bids, capital ning stocks and commodities, the WSJ re- d

increases, recent and upcoming IPOs, expan- l ported. sion into new markets, signing of alliances, r pick up in Q2 2019

M&As... o Global IPO activity fell in Q1 2019 following ongoing CURRENCIES ● JUMIA NIGERIA W Lagos-based e-commerce geopolitical and trade uncertainty but will bloom in Q2 firm Jumia has filed for an once fog of uncertainty has lifted Coruna set to Initial Public Offering on the NYSE, which will Only four cross-border IPOs listed in the US in Q1 strengthen vs euro make it the first African technology company to list EY Report 2019, in comparison with 15 companies in Q1 2018. The Czech coruna is expected to gain almost 2 on the American exchange. Asia-Pacific IPO market sentiment impacted by percent against the euro in the coming year as Jumia was founded in espite positive performance of main the trade tensions A lull in IPO activity also spread the Czech National Bank (CNB), Central Eu- Nigeria in 2012 and is cur- stock indices and a decrease of volatility across the Asia-Pacific region in Q1 2019 as global rope’s most hawkish, keeps raising interest rently operating in 14 D in many markets, ongoing geopolitical economic uncertainty and geopolitical issues pre- rates to fight inflation, a Reuters poll of analysts countries including Kenya, tensions, trade issues between the US, vailed. Ongoing trade tensions between China and and foreign exchange strategists predicted. Morocco and Egypt. China and Europe, and the uncertainty the US in particular weighed heavily on market sen- Meanwhile, NBA player created by Brexit continue to dampen investor en- timent and the region saw a decline of 24% by deal Andre Iguodala (pictured) thusiasm, resulting in the number of IPOs in the first numbers (126) and 30% by proceeds (US$8.4b) has joined the Board of Di- three months of 2019 (YTD 2019) falling to 199 versus Q1 2018. However, Asia-Pacific continued BONDS rectors of Jumia. globally and US$13.1b in proceeds, according to to dominate global IPO activity in Q1 2019, with USA EY quarterly report, Global IPO trends: Q1 2019. 63% of global IPOs and 64% by proceeds. This re- ● MARRIOT gion accounted for eight of the top 10 exchanges US icons issue Marriot International, the largest hotel chain in the This is a 41% decrease in deals and a 74% world, said that it plans to open more than 1,700 decrease in proceeds from YTD 2018. globally by deal number and six ex- their first Aussie- hotels and return up to US$11 billion to sharehold- Technology, healthcare and industri- changes by proceeds. The Hong Kong ers by 2021 as part of its three-year growth strat- als were the most active sectors in Stock Exchange ranked first by both egy. The owner of Ritz-Carlton and St Regis luxury the first quarter of 2019, collec- volume and proceeds respectively, dollar bonds hotel brands also forecast its annual profit in a tively accounting for 101 IPOs among the top 10 global ex- Overseas appetite for Australian money, known range of US$7.65 per share to US$8.50 per share (51 percent of global IPO by changes. Mainland China saw 30 as kangaroo bonds, has been increasing in recent by 2021, largely above analysts' average estimate deal numbers) and raising $5.4 IPOs raising US$3.7b in Q1 years as fund managers look for something to do of US$7.72 per share, according to Refinitiv data. billion (42 percent of global pro- 2019. Although these numbers are with all the superannuation money they are man- Last month, Marriott missed Wall Street estimates ceeds). By proceeds, technology lower when compared with Q1 aging on behalf of workers.McDonald's and Gen- for fourth-quarter revenue and forecast a lower- was the strongest sector with $2.1 2018, they are notably up from Q4 eral Motors' financing arm, GM Financial, than-expected full-year profit. billion raised (16 percent of global 2018, suggesting the Mainland China issued their first ever Australian-dollar coporate proceeds), the report states. “While Q1 IPO market may be showing signs of a re- bonds in late February. McDonald's sold $1.4 bil- ● VODAFONE UK covery. Japan continued to demonstrate strength lion across four different bonds, with annual in- Vodafone Group Plc announced its intention to is usually a quiet IPO quarter across regions, in in its IPO markets with Q1 2019 numbers exceeding terst rates ranging from 3 per cent to 3.8 per cent. raise approximately 4 billion euros of sterling-de- 2019 we’ve seen IPO markets sent into a cautious those from Q1 2018 (23 IPOs in Q1 2019 versus 18 GM Finance sold a $400 million four-year bond nominated Mandatory Convertible Bonds or wait-and-see mode as a number of factors collide. The dense fog of ongoing geopolitical tensions, IPOs in Q1 2018). at 3.85 per cent. Most of the five-year McDon- MCBs, to be issued in two tranches maturing no ald's bonds went to Australian asset managers trade issues among the US, China and Europe, as later than March 2021 and March 2022. After while most of the GM bond was also snapped up well as uncertainty as to how the UK will leave the EMEIA IPO activity delayed the Bonds have been issued, the British multina- by Australian asset managers tional telecommunicationsconglomerate intends to European Union, slowed down IPO activity in all with Brexit uncertainties looking for safe and reliable investments. apply for the Bonds to be admitted to trading on regions. As we look to Q2 2019, we only need a suc- Euronext Dublin's Global Exchange Market or an- cessful mega IPO or unicorn from the robust IPO In EMEIA, deal volumes and proceeds were down other recognised stock exchange. pipeline for the fog of uncertainty to clear and global substantially from Q1 2018 with EMEIA exchanges IPO markets to spring into bloom toward the second posting only 42 IPOs raising a total of US$1.4b in FUNDS ● UBS HONG KONG half of 2019” Dr. Martin Steinbach, EY Global and Q1 2019. However, although Q1 2019 was a re- Hong Kong’s Securities and Futures Commission EY EMEIA IPO Leader, said. markably slow quarter, those EMEIA IPOs that did (SFC) fined the Swiss investment bank UBS come to the main markets experienced average first- GPFG plans rise HK$375 million ($47.77 million) for failures Americas IPO markets quiet day returns of 4% and current returns of around when sponsoring IPOs, the largest fine it has given 46%, giving IPO investor sentiment a boost. In Eu- in UK investments to a sponsor. The regulator also banned UBS from with the US Government shut- rope and the UK, the ongoing uncertainty around sponsoring IPOs domestically for a year and sus- down Brexit continued to plague IPO markets, and risk of Norges Bank Investment Management, known pended the licence of UBS banker Cen Tian for slow growth in large European economies resulted officially as the Government Pension Fund two years. In response to the announced penalties, Americas IPO activity fell sharply in YTD 2019, in only 23 companies issuing IPOs, with proceeds Global (GPFG), said it will continue investing UBS said it “takes note of the findings of the Hong with deal proceeds decreasing 83% to US$3.3b and of US$0.4b.Cross-border IPO activity in Q1 2019 in the UK, shrugging off Brexit fears. “We will Kong Securities and Futures Commission’s (SFC) deal numbers falling by 44% to 31 IPOs, compared continue to be significant” investors in Britain, remained at 2018 levels, accounting for 9% of investigations. We are pleased to have resolved with Q1 2018.The US accounted for 65% of Amer- the fund’s chief executive Yngve Slyngstad told EMEIA companies’ IPO activity, EY found. these legacy issues relating to our Hong Kong IPO icas’ IPOs (20) and 92% by proceeds (US$3.0b). Reuters after the fund presented its 2018 annual sponsorship license. We look forward to continuing However, in the US, market volatility caused for- “We anticipate IPO activity to spring into action report. “And we foresee that over time that our to service our clients in Hong Kong.” eign issuers to choose to postpone their listings. in the second half of 2019” Steinbach added. investments in the UK will increase” he added.

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8 EVENTS Issue 07 ⎥ March 2019

EVENTS Financial stability reports East & Economic South East Calendar minutes of monetary Europe From Below is a selection of business events that 1st to 30th April take place across the region. 2019 policy meetings 11/04/2019 LENDING 2019 Announcements of interest rate decisions, statements by central banks, Budapest, Hungary other key data released worldwide that move stock markets Venue: Marriot Hotel Organiser: Portfolio Where is the Hungarian banking sector now? 02/04/2019 ment, financial markets, and expected reading should be governors of the euro area ten times in a calendar year. Roundtable of bank executives. International expe- ● AUSTRALIA financial institutions and taken as negative/bearish central banks vote on where 15/04/2019 riences in evaluating lending risks RBA Interest Rate Decision publishes its findings in the for the USD. to set the rate. A higher than ● KAZAKHSTAN Financial Stability report. expected rate is 12/04/2019 Reserve Bank of Australia ● CANADA NBK interest rate decision positive/bullish for the MOSCOW INTERNATIONAL (RBA) holds monetary pol- 05/04/2019 Employment Change Kazakhstan Central Bank EUR, while a lower than PROPERTY SHOW icy board meeting. RBA ● CZECH REPUB- Statistics Canada releases announces interest rate de- expected rate is board members come to a LIC data on the employment cision. A higher than ex- Moscow, Russia negative/bearish for the consensus on where to set change which measures the pected rate is positive/ Venue: Tishinka exhibition centre CNB March Minutes EUR. the rate. A higher than ex- Czech National Bank change in the number of bullish for the KZT, while a Organiser: AI Group pected rate is positive/ bull- (CNB) will release the min- people employed. A higher ● UK lower than expected rate is Launched in 2003 Moscow International Property ish for the AUD, while a utes of its March 2019 mon- than expected reading Manufacturing Production negative/bearish for the Show attracted developers and realtors from over lower than expected rate is etary policy meeting. The should be taken as posi- (MoM) (Feb) KZT. 30 countries. Russians are keeping many overseas negative/bearish for the supreme governing body of tive/bullish for the CAD, Office for National Statis- 16/04/2019 markets alive and are still buying heavily in Europe, AUD. the CNB is the Bank Board, while a lower than expected tics releases data on manu- ● POLAND North America and parts of Asia. reading should be taken as 04/04/2019 consisting of the CNB Gov- facturing production which NBP Meeting negative/bearish for the 16-18/04/2019 ● INDIA ernor, two Vice-Governors measures the change in the National Bank of Poland CAD. total inflation-adjusted EE & RE EXHIBITION RBI Interest Rate Decision and four other Bank Board (BBP) holds monetary pol- value of output produced by Sofia, Bulgaria Reserve Bank of India members. All Bank Board 09/04/2019 icy council meeting (no in- manufacturers.A higher (RBI) holds monetary pol- members are appointed by ● SERBIA terest rate announcement) Venue: InterExpo Centre than expected reading icy board meeting. RBI the President of the Czech NBS Interest Rate Decision 18/04/2019 Organiser: Via Expo Ltd. should be taken as posi- board members come to a Republic for a maximum of National Bank of Serbia International Congress & Exhibition on Energy Ef- tive/bullish for the GBP, ● TAJIKISTAN consensus on where to set two six-year terms. (NBS) to unveil interest rate ficiency & Renewable Energy Sources for South- while a lower than expected NBT Meeting the rate. A higher than ex- ● THAILAND decision. NBS board mem- East of Europe. reading should be taken as National bank of Tajikistan pected rate should be taken bers come to a consensus on Exhibitors from Austria, Bulgaria, Belgium, Croa- 23rd ASEAN Finance Min- negative/bearish for the holds monetary policy com- as positive/bullish for the where to set the rate. A tia, Germany, Greece, Italy, Poland, Romania, isters' Meeting GBP. mittee meeting. INR , while a lower than ex- The Finance Ministry of higher than expected rate is 25/04/2019 Spain, the Czech Republic, the Netherlands, pected rate should be taken Thailand will host the 23rd positive/ bullish for the 11/04/2019 Turkey, and Switzerland. as negative/bearish for the RSD, while a lower than ex- ● MEXICO ● UKRAINE ASEAN Finance Ministers’ NBU Meeting 17-20/04/2019 INR. pected rate is negative/bear- Banxico March Minutes Meeting (AFMM) along National Bank of Ukraine SEBE ● UGANDA with the 5th ASEAN fi- ish for the RSD. Mexico Central Bank (Banxico) issues the min- holds monetary policy Belgrade, Serbia BoU Interest Rate Decision nance ministers and central 10/04/2019 meeting. Bank of Uganda announces bank governors’ meeting ● CROATIA utes of its Board of Gover- Venue: Belgrade Fair Grounds interest rate decision. BoU (AFMGM). The meetings HNB nors March Monetary 26/04/2019 Organiser: Belgrade Fair board members come to a will focus on connectivity, Croatia National Bank Policy Meeting. ● RUSSIA International Building Trade Fair. consensus on where to set sustainability and immunity (HNB) holds monetary pol- ● PERU CBR Meeting Research and designing, construction and mainte- the rate. A higher than ex- ● USA icy meeting. The Council of BCRP interest rate decision Central Bank of Russia nance of buildings, building construction and civil (CBR) holds board of direc- pected rate is positive/ bull- Nonfarm Payrolls the Croatian National Bank The central bank of Peru engineering, hydro construction, construction ma- tors monetary policy meet- ish for the UGX while a The Bureau of Labor Statis- is the highest body of the (BCRP) announces interest terials, structures equipping, machines, devices and ing. lower than expected rate is tics releases data on non- Croatian central bank and it rate decision. In March, equipment, adaptation, reconstruction, restoration negative/bearish for the farm payrolls which is responsible for the BCRP maintained the pol- 30/04/2019 24-26/04/2019 UGX. measure the change in the achievement of the objec- icy interest rate at 2.75% ● TURKEY EXPO GAS number of people employed tive and for carrying out the ● FIJI TCMB Inflation Report ● ICELAND Kielce, Poland CB Financial Stability during the previous month, tasks of the CNB. RBF Board Meets Central Bank of the Repub- Venue: Targi Kielce Report excluding the farming in- ● EU Reserve Bank of Fiji holds lic of Turkey (TCMB) pub- Twice a year the Central dustry. A higher than ex- ECB Interest Rate Decision board meets to announce in- lishes its inflation report and Organiser: Targi Kielce Bank of Iceland conducts an pected reading should be The six members of the Eu- terest rates.The Reserve summary of its monetary 10th Gas engineering Fair. Abundance of materi- in-depth appraisal of the taken as positive/bullish for ropean Central Bank (ECB) Bank of Fiji Act stipulates policy committee meeting. als, equipment and fitments for gas pipelines con- macroeconomic environ- the USD, while a lower than Executive Board and the 16 that the Board meets at least struction, gas pressure regulators, compressor stations. Informal Meeting of the 05-06⎥ 04⎥ 2019 EU Finance Ministers Bucharest-Romania

Romania took over the EU's ro- and the negotiations of the next long- April 2019. The governors’ meeting tating presidency for the first term European budget for 2021-2027. will be held at the National Bank of Ro- time on Tuesday 1st January Throughout the six months that Roma- mania headquarters (pictured) on 5 S 2019. The Eastern European na- nia is holding the rotating presidency of April. Official Council meetings are or- C

I tion -which joined the bloc in the EU Council, tens of events covering ganised by the Council of the EU and T

I 2007- will be in charge of the all areas of EU policy are taking place chaired by the Council presidency.

L EU Council until 30 June 2019, in Bucharest and throughout the coun- However, each Council presidency also

O as the EU faces a series of chal- try. A highlight event, is the Informal organises informal meetings of minis-

P lenges – most notably Brexit, Meeting of the EU Finance Ministers ters to discuss initiatives related to a European parliamentary elec- and Central Bank Governors, to be held particular topic or Council configura- tions in May, a migration crisis in the Romanian capital on 5 and 6 tion.

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