In South Korea, the Kospi gained 0.37%. Tech was mixed – with some Apple suppliers giving up erly gains that were made after the company beat earnings expectations. LG Innotek shed -1.84% after rising more than 2% previously.

Chinese shares slipped into the negative, as investors absorbed trade headlines and the release of a private survey of Chinese manufactring , which was found to meet expectations. The Caixin/ Markit Purchasing Manager’s Index came in at 50.8, which was down from 51.0 in June. The Shanghai Composite edged down by 0.32% and the blue-chip CSI 300 index tracked lower by 0.4%

The Hang Seng Index, of Hong Kong pared early gains to trade marginally lower – with Apple supplier Sunny Optical up 1.24%. Steep losses were seen in the real estate sector though.

The latest development in the ongoing trade dispute between the two largest ecnomies in the world came after US imposed tarriffs on $34bn worth of Chinese goods in early July—a move that met with rapid retaliation from Beijing.

MSCI’s index of shares in Asia Pacific, minus Japan, advanced 0.08% in the afternoon trade – with the slight advancement—following the news that US and China are attempting to restart trade talks.

Representatives of US Treasure Secretary Steven Mnuchin and Chinese Vide Premier Liu He remain in private talks to resume negotiations on trade matters – in order to avoid a full-on trade war – reported Bloomberg news. Munchin has told CNBC last week that “quiet conversations” were Beijing had continued to take place.

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The Saudi Stock Exchange ‘Tadawul’ announces amending the settlement cycle of listed securities to (T+2) starting from Sunday 23rd of April 2017. This step comes after completing all necessary pilot phases to ensure full technical and functional readiness and connectivity with market participants.

Given the background, on the 3rd of May 2016, Tadawul announced obtaining the CMA’s regulatory approval to amend the settlement cycle of listed securities within two subsequent working days of the trade execution date. Furthermore, Tadawul announced publishing draft rules for the T+2 settlement cycle for public consultation.

Amending the (T+2) settlement cycle of listed securities will increase the level of asset safety for investors by providing enough time to verify trades, and will unify the settlement duration for all types of listed securities.

Implementing the (T+2) settlement cycle of listed securities complies with settlement practices adopted in most international markets. It is also in line with Tadawul’s strategy to support developing the capital market, and Vision 2030 which calls for building a more advanced capital market open to the world.

The Saudi stock market is the 27th largest stock market among the 63 members of the World Federation of Exchanges and is the dominant market in the GCC comprising 42% of total GCC market capitalisation and 81% of value traded. It is the 10th largest stock market amongst its emerging markets peers.

The shift to T+2 is just one of a number of market innovations that Tadawul is implementing along the way in order to make the market more open and attractive to foreign investors and work toward inclusion in the MSCI Emerging Markets Index.

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IFM Correspondent

January 20, 2017: A gauge of UK house prices fell for the first time in five months in December as the supply of properties for sale remained weak and values slumped in London.

The Royal Institution of Chartered Surveyors (RICS) said its index declined to 24 from 29 in November, indicating that a smaller majority of respondents saw price gains. Predicted sales over the next three months also slowed, with only 4 percent more respondents anticipating an increase. However, the year-ahead sales outlook rose slightly.

“A familiar story relating to supply continues to drive both the sales and lettings markets, impacting on activity, prices and rents,” said Simon Rubinsohn, chief economist, RICS. “The latest RICS survey provides further evidence that both price and rent pressures are continuing to spread from the more highly valued to more modestly valued parts of the market, for good or ill.”

Supporting the predicted slow start to 2017, the survey showed that the number of new house buyers rose only marginally in December following much stronger figures for the previous four months.

According to the report, house prices are expected to rise in 2017 with the exception of London where expectations remain relatively subdued.

London was the only area to experience a drop in prices while the North West of England had the strongest price growth.

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IFM Correspondent

October 28, 2016: New Zealand managed to unseat Singapore from the top position in the World Bank’s ‘Ease of Doing Business’ Index, a globally followed ranking that is released each year by the World Bank. It ranks countries – as one would expect – according to the ease with which businesses can be set up and run in the nation. Singapore had had an unbroken stint at the top for 11 years.

The reasons

The World Bank attributed reductions in labour-related taxes and new regulations that make paying taxes easier as the key reasons for moving New Zealand to the top spot from its previous position as runner-up.

Methodology

A set of 10 parameters/topics is used to zero in on the ranking for each country. These include the ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

The rankings are determined by sorting the aggregate distance to frontier (the distance of each economy to the ‘frontier’, which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005) scores on the 10 topics, each consisting of several indicators. Equal weight is given to each topic.

Doing Business 2017: The Top 10

The Doing Business 2017 team studied 190 economies around the world. In general, European countries fared better, with Denmark, Norway, UK, Sweden and Macedonia all finding spots in the Top 10. New Zealand, Singapore, Hong Kong, Korea and the US also featured in this list.

Most of the top ten shifted around a bit, with Denmark staying in third place, Hong Kong edging higher to fourth from fifth, exchanging places with South Korea, and Norway rising to sixth. The United States, the United Kingdom and Sweden ranked slightly lower.

Other economies: Notable points

Brunei showed the biggest improvement in rankings over last year, moving to the 72^nd position from last year’s 84^th with a new insolvency law passed, increased protection for minority investors and more reliable supply of electricity.

Somalia came in at the bottom, indicating that it is the hardest country to do business in, while the most improvement was seen among several of the emerging market countries. The reason behind this trend is seen to be a move by the governments of these countries to pursue business-friendly reforms.

Implications of the rankings

The World Bank says better performance in the ‘Doing Business’ rankings generally equates to lower levels of income inequality and reduced poverty. “Simple rules that are easy to follow are a sign that a government treats its citizens with respect,” the World Bank’s chief economist Paul Romer said in a statement. “They yield direct economic benefits – more entrepreneurship, more market opportunities for women, more adherence to the rule of law.”

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IFM Correspondent

September 2, 2016: Things are not as bad as it was thought it would be post Brexit. A monthly business survey has found that more than half of the confidence lost in the aftermath of the referendum has been recovered. However, businesspersons remained largely pessimistic about the economic outlook, a survey by YouGov/Cebr UK Economic Index showed.

The report said 48% of the 500 decision-makers surveyed have an optimistic outlook now, which is up from 46% in July but still below the 53% figure recorded before the vote. This was explained by improved expectations for capital investment, revenue from domestic sales and revenue from exports over the next year — partly due to the weaker pound, the report said

The overall confidence index reached 109.7 in August from 105.0 in July. But companies remained downbeat about the economy in the next 12 months.

Prime Minister Theresa May has said she will not start the formal divorce procedure from the EU by triggering Article 50 of the EU Lisbon Treaty until next year, to allow time to come up with a negotiating stance.

“Once the UK shows its hand on Brexit and invokes Article 50, things could change for the worse quickly,” said Stephen Harmston of YouGov. “But as businesses and consumers don’t know when this will happen, they have seemingly decided to just get on with it.”

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August 16, 2016: The UAE showed a significant improvement in its innovation standing on the 2016 Global Innovation. The UAE ranked first among Arab countries and 41^st worldwide in terms of overall performance on the index, up from second in the Arab World and 47^th globally in 2015.

This year’s Global Innovation Index measured the performance of 128 countries and economies in the area of innovation which represents the majority of the global workforce and global GDP.

The index results attributed the outstanding progress made by the UAE this year to its sustainable achievements in innovation inputs, especially the strengthening of institutions and market sophistication. The UAE has one of the best political and legislative environments in the world along with outstanding development in information technology, communications, infrastructure and innovation linkages.

H.E. Eng. Sultan bin Saeed Al Mansouri, Minister of Economy, said that the remarkable progress made by the UAE on the 2016 Global Innovation Index in leading Arab countries and elevating its global ranking adds to its impressive track record of comprehensive development witnessed under the leadership of H.H. Sheikh Khalifa bin Zayed Al Nahyan, UAE President,  his brother, H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, and H.H. Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.

The Minister added that innovation is a major pillar in advancing the state’s economic development and is at the heart of good government policies aimed at making the UAE among the top 10 countries in the world on the Global Innovation Index by the Golden Jubilee of the Union, in line with UAE Vision 2021.

The Global Innovation Index 2016 report highlights the exploration of the growing share of innovation achieved across global innovation networks. The report also examines the ways by which the innovation can help revive the global economy. Switzerland ranked first worldwide in this index this year, followed by Sweden and the UK.

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February 16, 2016: This month’s Lloyds Bank Private Banking Investor Sentiment Index shows how investor sentiment has taken a significant hit following the turbulent start to 2016. With ongoing market turbulence, the actual market performance of most asset classes dropped again this month. As a result, overall investor sentiment has fallen to its lowest level since May 2013.

Sentiment towards UK equities is now at its lowest level since the Index began in March 2013, dropping by over six percentage points (a 6.88% reduction) in the past month to a level of 6.38%.

US equities experienced a similar dip in sentiment, falling by 6.59% during the month to -0.80%, their lowest level since November 2013. Both UK and US equities also experienced their biggest ever year-on-year falls in February, with sentiment towards these two asset classes plummeting by 22.73% and 18.31% respectively.

When the actual market performance of equities is analysed, it is easy to see why sentiment has fallen so far. UK, Eurozone, US, Japanese and emerging market equities all saw their performance fall between 5.8% and 8.6% in the past month.

There is a similarly negative picture when comparing recent actual performance with that of six-months earlier; there were falls of between 9.3% (UK equities) and 14.3% (emerging market equities).

Markus Stadlmann, Chief Investment Officer at Lloyds Bank Private Banking, said: “This is a time for calm heads and careful research. As the trend of ‘growth’ investing dissipates, we may now be entering a period where investors have a preference for sectors with more predictable earnings. Now more than ever, identifying buying opportunities in the equity market requires a deep understanding of company valuations and how markets work.

“What’s more, both the understanding of risk, and the appetite for it have changed. It is notable that some investors seem to be adopting an increasingly negative attitude even towards lower risk assets, such as government bonds, which have seen performance improve in the last month. This shows the current levels of uncertainty among investors.”

Gold has been the stand-out performer when looking at actual market returns, and this has been reflected in investor sentiment rising by 8.57% over the month. In 2016, gold has over-taken UK equities as the second-most favourable asset class behind UK property.

The other positive actual market performance change over the past month was in government bonds, which improved by 2.2%. This asset class has experienced a 3.4% improvement in value over the past six months, making it the top-performing asset class over this period. However, investor sentiment has not reflected this, with confidence in government bonds dropping by 3.87% this month, following a fall of 4.08% in January.

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February 15, 2016: The insurance industry in Bangladesh is considered to be an untapped sector. It has one of the lowest insurance penetrations in the world (around 1%). While some choose to be pessimistic about it, insurance experts tend to view this as an area full of possibilities and opportunities. Lack of awareness regarding insurance is very much visible, which makes it hard to achieve our desired growth in the industry.

Currently, we are seeing a consistent 13%-15% growth every year in the insurance industry. If this reaches 20%, this will be a remarkable achievement for the industry. Being the market leader and the only AAA rated insurance company in Bangladesh; Green Delta Insurance believes that when the industry grows, they grow as well.

The market penetration of insurance is currently less than 1%. With our flagship project ‘Insurance For Everyone’ and the government’s recent praiseworthy initiatives related to safety net insurance to give coverage to the bottom of the pyramid group, we are hopeful regarding the possibilities of a 5% market penetration within 5-10 years’ timeframe.

Green Delta Insurance holds 13-14% of the market share of the insurance industry being the leader of the non-life insurance sector at the moment. In the decade ahead, if our projections work out properly, we will be more aggressive in the market and aim to capture 22-25% of the market share.

Green Delta Insurance is the first non-life insurance company from Bangladesh to introduce the retail insurance department. The department was created with the motto ‘Insurance for Everyone’. Ms. Farzana Chowdhury, MD & CEO of Green Delta, was the person who gave birth to the concept. After the formation of the retail department, the people in the department are working hard to take it forward. The direct sales team is going door to door to build awareness regarding insurance and convince people about the brighter side of having an insurance policy.

The insurance penetration in Bangladesh is less than 1%, which shows the current scenario of the market. There’s always a negative aura regarding insurance among the general people of our country. We see people try to avoid buying a policy unless it’s mandatory by law. So, naturally the job for the Retail Insurance department is very challenging. But Green Delta is coming up with innovative branding strategies to create a positive buzz in the market. A wind of change can be felt already. The market is growing slowly but consistently. Green Delta is not only promoting its own products but also promoting the overall sector.

The main products that the retail insurance department sells are Motor Insurance, Overseas Mediclaim Insurance, Personal accident insurance, People’s personal accident policy, Health Insurance, All risk insurance and Nibedita – Comprehensive Insurance scheme for women. There are few other projects under Retail and SME. They are Niramoy-micro insurance for rural people, Shudin- micro insurance for garments workers, Weather index based Crop Insurance and Probashi- Comprehensive Insurance Scheme for Migrant workers.

The insurance penetration in Bangladesh is less than 1%, which shows the current scenario of the market. There’s always a negative aura regarding insurance among the general people of our country. We see people try to avoid buying a policy unless it’s mandatory by law. So, naturally the job for the Retail Insurance department is very challenging. But Green Delta is coming up with innovative branding strategies to create a positive buzz in the market. A wind of change can be felt already. The market is growing slowly but consistently. Green Delta is not only promoting its own products but also promoting the overall sector.

As the market leader, Green Delta wants to grow with every other insurance company because that’s the only way to materialise the concept of insurance for everyone. It will be difficult for a single company to change the scenario regarding insurance penetration so the support of the other insurers is expected.

Green Delta is confident about the success of this department. The number of people who started believing in insurance products is increasing every day, which promises a better day for the industry. Green Delta is leaving no stone unturned to educate the general people regarding the necessity of insurance. Positive results can be noticed through public behaviour on social media.

A country’s strong economy is very much interrelated with its insurance market. Bangladesh’s economy will grow rapidly once people start realising the importance of insurance in everyday life. Retail & SME Insurance in Bangladesh is committed to bring about a positive change in the insurance market.

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Eurozone equities continued to be viewed more positively than last month, increasing by six percentage points (6pp) to build on the seven percentage point (7pp) increase in September. With the European Central Bank’s continued quantitative easing programme potentially having an impact, this is the third consecutive monthly improvement for the asset class.

In a reversal of fortunes, the perceived safe havens of gold (-2pp) and UK government bonds (-1pp) were the two asset classes to see marginal falls in sentiment in October, as returning confidence may have encouraged some investors to look towards those asset classes with a greater perceived risk-reward potential.

UK property continues to surge ahead as the stand out asset class when it comes to investor sentiment. With a further six percentage points (6pp) increase in sentiment in October, overall investor sentiment towards this asset class stands at 53%, far higher than the next highest, UK equities, at 24%.

Ashish Misra, Head of Portfolio Specialists at Lloyds Bank Private Banking, said, “With the US Federal Reserve not raising interest rates in September, and ongoing concerns over China, there is still much uncertainty in the global economy. It is encouraging to see investor sentiment increase, however, and the strength of the sterling denominated asset classes, which continue to keep levels of sentiment in positive territory.”

Asset class performance

In September, actual market returns were more negative than the improvements in sentiment would suggest. Only UK property and UK government bonds saw significant increases of (2.3% and 1.7% respectively). Eurozone shares saw the biggest decrease in returns (-3.2%), followed by commodities (-2.7%) and emerging markets shares (-2.4%).

In terms of the change in actual performance over the last three months, seven out of the 10 asset classes recorded a fall in returns earned, with commodities (-18.4%) and Japanese shares (-11.5%) seeing the biggest declines. UK government bonds lead the way in terms of the largest growth rate (4%), followed by UK property (2.4%).

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Suparna Goswami Bhattacharya

July 17, 2015: While the world is focused on the Greece crisis, there is something more serious brewing in the east. The tumbling stock prices in China has left everybody wondering what went wrong with the market that grew by 150% in the past one year.

More than 40 million new stock accounts were opened between June 2014 and May 2015. But the dream ride hit a roadblock. By the middle of July first week, the benchmark Shanghai Composite Index tumbled over 30% from its highs of June.

However, it is not the falling stock prices that have attracted the attention of the world. It is the way the Chinese government reacted to this crisis. The government has taken drastic measures to artificially halt the meltdown. These include stopping major investors from selling, a ban on short selling, injecting money into the market via the state-owned China Securities Finance Commission (CSF).

“The CSF could be a beast the Chinese authorities wish they had never created. It is a state controlled body that lends money to brokerages so they can provide loans to clients to buy in the stock market. And guess who the shareholders are. The major exchanges,” says Nigel Green, founder and chief executive of deVere Group, an independent financial advisory organisation.

The Communist Party newspaper warned people not to “lose their minds” over this and urged patience with the government’s measures to produce results. “If you read such a statement in the Communist Party’s own press, you do panic. Basically, the bubble has burst,” says Satyajit Das, a former banker and author of Extreme Money and Traders, Guns & Money.

Unlike in most other countries where the government has little control over the markets, the situation is quite different in China. Here the government can actually ban people from selling/buying shares or buy as many shares as it wants to boost the market. As a result, the Chinese government’s performance is linked to the returns people earn from the market.

To be fair, it is certainly not the first country to prop up the economy after a massive fall in stock prices. The US, Japan and many countries in Europe have done the same. But the manner in which the Chinese government intervened has made the situation more worrying that what it actually is.

For some, the government reaction is not surprising. “This kind of government reaction would be extreme in any other country, although it is not surprising within China. The Chinese government is hugely stability oriented, and moreover was a strong proponent of the bull market. Thus they felt obligated to intervene, even if unnecessary for economic reasons,” says Brian Jackson, Senior Economist at IHS Global Insight.

Impact on global market

“China’s financial market is not well integrated with global markets. But the worry is the combination of property bust, stock bust, banking system problems and slowing growth,” says Das.

The impact is primarily indirect and speculative. “In that sense, foreign markets are importing speculation from Chinese markets. The real impacts should be relatively limited over the medium term, once volatility settles down,” remarks Jackson.

One also has to take into account that China puts restriction on foreign investors when it comes to trading in their stock markets. For instance, they are not allowed to buy China A shares, which are shares of the renminbi that are purchased and traded on the Shanghai and Shenzhen stock exchanges. “But if the falling market leads to a financial crisis, and puts already weak banks under further stress, it will negatively impact the Chinese economy. Since China is closely interlocked with the global economy, weaker global growth and trade will follow. That can only be bad news for global stock markets,” says Tom Elliott, deVere Group’s International Investment Strategist.

The stock prices are hugely significant because it will send shock waves throughout global capital markets, not least because China is the world’s second largest economy and one of the largest consumers of commodities and other goods sold by other countries.

“As such, China, not Greece, is arguably the main cause for concern for investors right now. Bearing in mind the potentially enormous fallout of China’s plunging markets, I would urge investors to urgently reassess their portfolios to ensure they are appropriately diversified,” says Green.

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