May 2019

13May

US. Private equity’s allure poses big risks for the stock market and its investors in the next recession

Private equity has taken center stage in active investing, and that means the stock market and its investors could face more challenges — especially in a recession. The transition is already underway and according to asset manager AllianceBernstein, won’t be ending soon. In a note to clients this week, the firm outlined an upcoming decade in which the “main expression of active investing” is in private markets. Analysts say this shift introduces potential problems. Liquidity could dry up in...

May 13, 2019
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13May

Bermuda. Retirement age under review

The retirement age should be increased to 70 over a ten-year period, a Labour Advisory Committee report recommended yesterday. The report, tabled in the House of Assembly, said Bermuda’s ageing population had put pressure on pension plans and public sector finances. It also recommended that legislation should be amended or introduced to prevent discrimination against older employees and that a toolkit to help people prepare for retirement should be created. An LAC sub-committee compiled the Reviewing the Retirement Age...

May 13, 2019
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10May

Brazil pension overhaul could turn foreign investment flow into deluge

Long-term foreign investment of well over $100 billion a year is ready to pour into Brazil if the government passes business-friendly reforms, according to some economists, providing fuel for an economy that failed to take off following a brutal 2015-16 recession. Brazil ranks second only to China among emerging markets in terms of drawing foreign direct investment, or FDI, in recent years. However, economists say much more capital is waiting on the sidelines and how much of that makes...

May 10, 2019
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10May

US. Retirement Savings Will Suffer When The Current Debt Bubble Bursts

People with a lot of debt keep borrowing more, aided by lower interest rates and increasingly by lenders simply ignoring prudent rules. Those lenders can then bundle the loans and sell them to investors, who may not fully understand the large financial risks that they take on. This may sound like 2007, but this is happening in 2019. The only difference is that this time it’s companies loading up on debt, not households. The phenomenon is called leveraged lending,...

May 10, 2019
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09May

Kenya. RBA targets Sh2.4trn via mobile phones

The Retirement Benefits Authority (RBA) is counting on the informal sector to more than double pension savings to Sh2.4 trillion in the next five years, riding on mobile phone-based products. Chief executive Nzomo Mutuku on Tuesday said roping in the sector will help grow pension coverage from the current 20 percent to at least 30 percent by 2024. “Informal sector cannot use payroll system to remit savings, so we want to have mobile phone-based platforms where one can make contributions. And...

May 9, 2019
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09May

Pension fund giant KLP cuts coal related investment

BHP Group is among several companies a $106 billion international pension fund has excluded from its investment universe as it aims to rid its portfolio of coal. Norway's Kommunal Landspensjonskasse (KLP) took the decision to divest almost $520,000 of holdings in stocks and bonds of across 46 such companies. It used three exclusion criteria: companies that get more than 5% revenue from coal-based activities; produce more than 20 million tons of coal annually; and have more than 10,000 megawatts...

May 9, 2019
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09May

UN partners with KLP to Identify Financial Investments At Risk

The United Nations Office for Disaster Risk Reduction and KLP, Norway's largest pension company, announced today a partnership to geo-tag financial investments against vulnerability to disaster and climate risk. The UN Secretary-General’s Special Representative for Disaster Risk Reduction, Mami Mizutori, said: “This is a major breakthrough in the world of finance and investment. It is clear recognition of the need to include disaster risk in the investment portfolios of any self-respecting enterprise seeking to avoid exposure to climate and...

May 9, 2019
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09May

Stagecoach takes legal action against UK after rail bids rejected

Stagecoach Group said on Wednesday it had begun legal action against Britain’s Department for Transport after the company’s bid to continue operating a rail route was rejected due to concerns over pensions. The Department for Transport has asked rail franchise bidders to take on the full long-term funding risk of parts of the Railways Pension Scheme and disqualified Stagecoach’s bid for the East Midlands franchise because it did not comply with that request. It also disqualified the company from...

May 9, 2019
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09May

South African Investment Firm Looted Pension Fund With Insider Information

President Jacob Zuma’s surprise sacking of South Africa’s finance minister at the end of 2015 sparked economic panic: The rand plunged to a record low against the dollar and even the normally steady bond market roiled. But one investment company, a little-known boutique operation, raked in at least 133 million rand (US$9.2 million) by trading on the turmoil. Related deals under investigation may have raised the total profit to as much as 500 million rand (US$32 million) as the country...

May 9, 2019
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09May

Americans are saving more for retirement, but it may not be enough

The good news: Americans are saving more than they ever have for retirement. The bad news: They’ll probably need to save even more. Employees contributed an average of $2,370 per account to their 401(k) plans in the first quarter of 2019, a record level and 15% more than one year prior, according to Fidelity Investments, the Boston-based financial services firm that also manages retirement accounts. Employers also hit a record high with their own contributions to employee plans, partly...

May 9, 2019
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