Wednesday, April 23, 2014
MGI Report: Global flows in a digital age: How trade, finance, people, and data connect the world economy
Today, the movement of goods, services, finance, and people has reached previously unimagined levels. Global flows are creating new degrees of connectedness among economies—and playing an ever-larger role in determining the fate of nations, companies, and individuals; to be unconnected is to fall behind.
MGI scenarios show that global flows could reach $54 trillion to $85 trillion by 2025, more than double or triple their current scale.
The study finds that countries with a larger number of connections in the global network of flows increase their GDP growth by up to 40 percent more than less connected countries do. The penalty for being left behind is rising.
MGI’s new Connectedness Index ranks 131 countries on total flows of goods, services, finance, people, and data and communication, adjusting for country size. The index shows that developed economies remain more connected than emerging ones: Germany tops the list, followed by Hong Kong and the United States. Emerging economies are less connected to global flows, but some are climbing up the ranks rapidly: Morocco and Mauritius gained 26 places and 28 places, respectively, between 1995 and 2012—the largest increases in our index. Saudi Arabia rose 19 places, reflecting the rising value of oil exports and the recycling of oil wealth into global financial markets. India gained 16 places in this period, thanks to growth in services flows, and Brazil jumped 15 on the strength of expanding services and financial flows.
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Monday, March 17, 2014
This paper analyses the implications of macroeconomic policy interactions for financial stability, proxied by financial assets prices (equity and bonds). The empirical analysis applies a Vector Autoregressive (VAR) model and findings suggest that an accommodating monetary, and disciplined fiscal, stance has
been optimal for both stock and bond markets. There is also ample evidence of interdependence between policies, as an expansionary fiscal policy could persuade the monetary authorities to adopt an accommodating stance, whereas a contractionary monetary policy leads fiscal policy towards consolidation. The interrelation between monetary and fiscal policy necessitates coordination between them for the sake of financial stability.
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Tuesday, September 17, 2013
The 2008 financial crisis of the US was a watershed for economics discipline, especially macroeconomics. Several world leaders such as the Queen of England questioned distinguished economists of Ivey league schools such as the London School of Economics on why they failed to see what was happening and had not prevented the crisis through policy advice? Most did not have an answer. Why? One of the reasons is the supply side economics, which is also called Monetarism; and the Chicago School of Economics, which advocates that free markets function efficiently and self-regulate; and at best governments should tinker with monetary policy of money supply; has become the dominant intellectual basis for policy making for the last forty years. Models of this kind failed to predict the financial crisis because they are based on strong assumptions.
The lesson from the financial crisis is that macroeconomic models have to incorporate financial markets and account for asymmetric information, transaction costs and moral hazard behaviour of economic agents. Governments have to regulate especially the financial markets. Free market fundamentalist will ask the question as to why one should expect the government agents to do a better job than private agents because they are also subject to moral hazard behaviour of using tax payers’ money. One answer to this is that if a large number of private agents act autonomously, the sum of average transaction and information costs of markets is higher than if one large agent pools these costs and realizes economies of scale. Government does this job- the tax collected from each agent could be lower than the average information and transaction costs of private agents. As far as the moral hazard behaviour of government agents is concerned, it is a political economy issue of designing and implementing institutions.
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Thursday, June 13, 2013
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Thursday, June 06, 2013
Tuesday, March 12, 2013
- How can firms keep clients happy and win a bigger share of a very volatile revenue pool?
- What role does operations play in this strategic dilemma? .
- So how are some firms able to excel even amid today's new realities?
Tuesday, February 05, 2013
2008-09. Spillovers in volatility across the markets are found to be present due to both
innovations effects as well as volatility persistence.
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Tuesday, November 27, 2012
Wednesday, September 19, 2012
These leaders are building a different kind of operating model—one designed to embrace rapid, continuous change.
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Thursday, September 13, 2012
They aren't calling it the patent wars for nothing. The current battle between two of technology's biggest heavyweights could set a historic precedent in the sector. As both Apple and Samsung fight for the smartphone and tablet crown, the latest battle isn't being decided by flashy new phones or consumer preference, but by lawyers and judges.
With two technology industry heavyweights finally coming to blows in the courtroom, the smartphone sector could be altered forever. The patent battle between Samsung and Apple will not only affect the companies, but the technology industry and consumers, too.
Friday, July 27, 2012
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The International Organization of Securities Commissions (IOSCO) Consultation Report titled “Principles for the Regulation of Exchange Traded Funds” (CR05/12, March 2012) was prepared by IOSCO Technical Committee Standing Committee on Investment Management (TCSC5).
The report presents what it describes as “proposed common investor-protection principles or guidelines on Exchange Traded Funds (ETFs)” and “touches on certain market structure and financial stability issues.”
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Please click here to read EDHEC-Risk Institute comments of the paper
Wednesday, July 25, 2012
The Platinum Metals Review - July 2012
A quarterly journal of research on the science and technology of the platinum
group metals and developments in their application in industry
is now available. Please click here to download
Monday, July 23, 2012
inflation. However, empirical evidence for a correlation between rules and inflation is
- The 2012 Pension Research Council Symposium, "The Market for Retirement Financial Advice"
- The 2012 Pension Research Council Special Forum, "Saving Pensions: What can the US and UK Learn from Each Other?"
Monday, May 12, 2008
banks beyond geographic and product centric boundaries.
Globalization is the single greatest opportunity – and yet also the greatest threat – facing the industry today. Over 40 percent of 644 bankers around the world cite expansion to global markets as their single biggest growth opportunity. Shifts in customer trends and new collaboration strategies will spell new prospects, particularly for those with a clear strategy to act promptly and decisively. However, this path is not without its challenges. With global interdependencies on the rise, many banks are struggling to deal with a credit crisis gone global and with aggressive new competitors.
In the IBM survey (url attached), conducted in cooperation with Economist
Intelligence Unit, the effects of globalization on the retail banking industry is examined.
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Thursday, April 24, 2008
Since the previous survey, the following developments most likely contributed to reduced financial sector confidence:
- The prime overdraft rate was increased for an eighth time in December 2007. Retail banks now face a further rise in nonperforming
- The implosion of the sub-prime mortgage market in the USA led to stress in financial markets, which in turn led to a major
world wide. These developments affected South African financial institutions adversely in several ways:
- Investment banking activity plummeted3.
- Investment managers saw a big drop in net inflows, probably as investors switched from equity investments to safer
havens, such as bank deposits and contractual investments4.
- Falling net inflows and fluctuations in the value of funds under management dampened income growth of investment
managers. This development hurt small managers disproportionately more than large managers.
- Life insurers experienced a big fall in investment income growth.
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Wednesday, July 11, 2007
The 2007 Sanlam Survey was conducted among principal officers of retirement funds. Respondents were selected at random to represent small (<100>
The survey recorded a 100% response rate with a total of 200 funds responding.
- In the past year, the amount of employee and employer contributions to pension funds has fallen by almost a full percent per year, with the total provision for retirement now at only 11.3 percent per year, the study reveals.
- Only 10.5 percent of retirement funds have a formal investment policy to invest a proportion of assets in socially responsible investment (SRI) portfolios.
- Almost 60 percent of funds are considering paying for financial education of members to address the perceived lack of understanding of the information provided to members.
Tuesday, July 10, 2007
The results of the KPMG and SAVCA ‘Venture Capital and Private Equity Industry Performance Survey’ for 2006 conclude that the private equity industry represents a significant sector within the overall financial services industry, and is an attractive asset class within the broader capital markets.Compiled from 44 private equity fund managers representing 71 funds, the survey data confirms that 2006 was a watershed year for the industry, with record activities across all measurement criteria, including fund raising, investment and exit activity. The survey, covering the 2006 calendar year, provides a vital summary of performance highlights and provides insights into current trends and forecasts of the industry, as well as comparisons to historical data and global trends.
South African investors are beginning to understand that private equity provides positive absolute returns and significant portfolio diversification benefits.
75% of funds raised last year were from offshore investors, of which half were from the US, contributing to the US overtaking Europe as the highest provider of foreign funds to the SA.
The South African industry improved fund raising drive last year has caused funds under management to surge to R56, 2bn at the end of 2006 compared with R42, 5bn in 2005 .
Overtures from foreign private equity houses are confirmation of the stability of the SA political system, macroeconomics, a sound banking system, a functional regulatory system and, good economic growth prospects.Black economic empowerment (BEE) remains a major source of activity in the industry with investment in entities that are black owned empowered or influenced up 23% from R3.1 billion during 2005 to R3.8 billion during 2006.Funds returned to investors increased by R18, 4bn from R4bn during 2005 to R22, 4bn during 2006.
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Friday, June 29, 2007
The PwC survey titled Mine – Riding the wave, provides an aggregated view of the global mining industry in 2006, represented by 40 of the world’s largest mining companies.
Some of the highlights from the report
- The impact of hedge funds on the mining industry has been felt dramatically in the last two years, through their involvement in metal trading activities and the volatility this creates in commodity prices.
- With rising commodity prices, acquisitions that are cash funded lead to a rapid payback and 69% of major acquisitions in 2006 were funded this way. Cash is also being used to fund organic growth.
- The lack of good quality projects in “safe” areas is leading to exploration and development efforts in jurisdictions that have until recently been considered marginal.
- The pure “taxes” that governments levy on mining companies are only part of the story. A more accurate picture of the total contribution to government and the community by industry participants needs to emerge for the real position to be understood.
Thursday, June 28, 2007
publicly available data for the companies’ fiscal year 2005 (ended July 1, 2005-June 30, 2006). The report
also provides an outlook for the global economy; an analysis of market capitalization in the industry; and a
discussion of major challenges facing today’s retailers.
- Although the global economy has begun to show some signs of stress, fiscal 2005 proved to be another healthy year for the
of $2.84 trillion. Year-over-year growth, based on this year’s list of companies only, proved even more robust, with an 8.8%
increase over the group’s prior-year sales of $2.76 trillion.
- The ten largest retailers continue to capture market share.
or 29.4% of total Top 250 retail sales. This represents a robust 11.7% gain over their 2004 results, mostly as the result
of continued strong organic growth.
- The Africa/Middle East region has five companies among the Top 250. All are based in South Africa. Metcash Trading
- Although international sales are becoming increasingly important to many large retailers’ growth strategies, foreign
from 12.6% in 2000.
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Wednesday, June 27, 2007
The survey also compares the South African survey results with an equivalent PwC survey completed in the UK a year ago.
Key survey findings
- In general, funds are managed in accordance with the specific rules of the funds as well as with applicable legislation. Most trustee boards believe that they are up to date with all legislative requirements, but most of them indicate that they have not assessed compliance with the King II principles of corporate governance.
- Although most funds are aware of the importance of good governance, only a third have a formal governance mandate that is used for steering management processes and decision making.
- Only 14% of funds have not considered conflicts of interest. However, only 15% have a formal policy in place to identify conflicts. 75% of funds with assets under R500 million each have not considered a process for managing conflicts of interest.
- Although 85% of funds have considered the performance assessment of their advisers, the process of assessment can be improved. 37% of funds assess performance of advisers on an ad hoc basis only that is not standardised. 9% of funds do not assess their advisers at all. 55% of advisers are selected either on criteria that are subjective, or after informal debate and without any review.
- The survey also shows that on the management of defined contribution funds, SA funds are well advanced. They give considerable thought to the range of investment options they offer members. They also put considerable effort into communicating the risk/return relationships taking into account members’ risk profiles
|Financial Mail 22 June 2007|
One of the most experienced women in fund management, on both the sell-side and the buy-side and now head of business development at RMB.
In the early 1980s it was still unusual for company management to deal with female analysts, especially pregnant ones. But Yates says that the various stockbrokers and fund managers she has worked for have always been supportive.
After a stint as a journalist at The Star she was persuaded to join stockbrokers Mathison & Hollidge, which was keen to build up its female analyst base.
" I was notionally working half days when my children were young, but was more productive than some colleagues who were working a full day."
Yates believes portfolio management, unlike some other jobs, does not lend itself to working from home.