Investor Relations Week: Digital Dollar ‘inevitable’, mom and pop bail and Saudi Arabia crowned king of Middle East IPOs

– The United States is likely just a few years away from a central bank digital currency (CBDC), according to Bank of America, reported Cash and risks. The bank predicts that the United States will issue government-backed digital coins sometime between 2025 and 2030. CBDCs “are an inevitable evolution of today’s e-currencies,” Bank of America strategists wrote. Alkesh Shah and Andrew Moss in a report. In the meantime, the use of digital currencies issued by private entities will likely increase, they said.

The Federal Reserve discussed the development of its own coin in a 35-page article last week, saying the article was just a first step and it had no plans to proceed without the support. of the White House and Congress. He pointed to a number of benefits, such as cheaper and faster cross-border payments, but also noted several potential risks, including possible runs on financial firms and a reduction in the number of deposits in the banking system.

– “I wonder what was the force that turned an orderly decline into a real rout [Monday] Morning?’ request Bloomberg (pay wall). The answer: “Mom and Dad are flowing”. In a “panicked selling spasm” early Monday, retail investors sold $1.36 billion worth of shares net by midday – most in the first hour – according to data compiled by JPMorgan strategist Peng Cheng Chase & Co. According to its estimate, stock sales were 3.9 standard deviations above the full-day average over the previous 12 months, the company added. As “the rush out” sent the Nasdaq 100 down nearly 5% in Monday morning trading, Bloomberg also noted that the news could be a sign of “seller exhaustion.” The leading averages staged a “breathtaking reversal within hours of the wave of sell orders arriving,” he said, with stocks actually ending higher.

Bloomberg reported that, according to Goldman Sachs, Saudi Arabia will remain the most active stock market in the Middle East, even if the United Arab Emirates pushes more companies to go public. John Wilkinson, head of emerging markets equity capital at the bank, based in London, described 2021 as an “outstanding year” for the Persian Gulf. The IPOs of ACWA Power, Solutions by STC and Saudi Tadawul Group in Saudi Arabia, along with several others in Abu Dhabi, pushed equity issuance in the Middle East and North Africa to around $23 billion. dollars last year. Riyadh had more registrations than any of its Gulf rivals over the past year, Bloomberg added. Saudi Arabia’s economy, the largest in the Middle East, has been boosted by soaring oil prices above $85 a barrel and the government’s easing of coronavirus restrictions. The Tadawul All Share Index is up 8% this year, according to Bloomberg data, making it one of the best performers in the world.

– The FinancialTimes (paywall) reported that international banks have warned Beijing of its plans for new overseas listing rules. Banks said an overhaul of China’s overseas registration regime could deter them from advising on IPOs, which “would jeopardize a source of funding that has fueled some of the most successful companies.” best known in the country”, according to the newspaper. Asia Securities Industry and Financial Markets Association, the region’s main banking lobby group whose members include Goldman Sachs, Morgan Stanley and JPMorgan Chase, has written to Chinese regulators seeking clarification on the proposed rules after the calamitous listing of the rideshare app DiDi Chuxing in New York last year, according to two people familiar with the matter.

– The SECOND reopened the comment period on proposed rules under the Dodd-Frank Act requiring the disclosure of information reflecting the relationship between executive compensation paid by a company and the company’s financial performance. The reopening is due in part to certain developments since 2015, when the proposal release was released, including changing executive compensation practices, according to the agency.

“If passed, this proposed rule would enhance the transparency and quality of executive compensation disclosure,” SEC Chairman Gary Gensler said in a statement. “The commission has long recognized the value of executive compensation information to investors. In 2015, [it] proposed rules to implement the Dodd-Frank Act’s “pay for performance” requirement. In this reopening release, we consider whether additional performance measures would better reflect Congress’ intent in the Dodd-Frank Act and provide shareholders with the information they need to evaluate a company’s executive compensation policies.

– Dow Jones has added its own ESG data to the growing information available to investors, reported Media Markets. The new dataset provides sustainability scores and sentiment on more than 6,000 publicly traded companies, Dow Jones said, with a scoring model aligned with SASB standards, covering five sustainability dimensions and 26 categories. To differentiate itself from the many ESG rating providers currently in the market, Dow Jones will combine “company-disclosed data with information from thousands of global sources,” Markets Media said, creating a service “uniquely focused on news”.

– The FT report that, according to the Conference Board, less than 10 eligible companies out of nearly 12,000 have demonstrated that they are ready to comply with the new environmental reporting rules that came into force in Europe at the start of the year. The group warned that the majority of European companies it has analyzed may not provide data at the end of their financial year on capital expenditure on key issues such as renewable energy.

New EU rules require any listed company with more than 500 employees to publish the percentage of revenue, capital expenditure and operating costs of activities covered by the green taxonomy – a classification system that defines the environmentally sustainable activities in line with EU climate change objectives. The global assessment found that “only a handful” had published taxonomy audits. There was widespread ignorance, said Anuj Saush, head of the Conference Board’s governance and sustainability center, which sends nearly 200 members a briefing on how to comply.

The Wall Street Journal (paywall) reported that the SEC has proposed measures that would significantly increase its understanding of private equity funds and certain hedge funds, the first in a series of plans to expand the agency’s oversight of private markets. The proposal would increase the amount and speed of confidential information that private equity funds and hedge funds report to the agency on a document known as Form PF. The primary goal, SEC Chairman Gensler said, is to enable regulators to better identify the risks that are building up in private markets.

Net assets managed by private funds reached $11.7 billion in the first quarter of last year, compared with $5.3 billion in 2013, according to the SEC. This growth has raised concerns among some policymakers that invisible risks may be accumulating in a sector of the market far less transparent than mutual funds or publicly traded companies.

– London Metal Exchange chief Matthew Chamberlain steps down after five years in role to join crypto start-up, reported AM from the city. Chamberlain will become the chief executive of digital asset custodian Komainu, a company that safeguards $5 billion worth of crypto on behalf of its clients. Commenting on his appointment, Chamberlain said: “I have always been passionate about creating safe and effective solutions to ensure that global markets operate as efficiently as possible.” He described Komainu’s model as combining “the best of traditional and decentralized finance, and truly [representing] the natural evolution of our industry.

Chamberlain is the latest experienced traditional markets executive to be “drawn into the crypto space,” the newspaper added, noting that last year former UK chancellor Philip Hammond joined digital asset custodian Copper as than advise. City AM said the move signals “a collision between the worlds of traditional and decentralized finance.”

– Gryphon Advisors became Tomorrow Sodali (Canada) following the December 2021 acquisition of Canadian proxy solicitation firm by global corporate advisory firm Morrow Sodali. The deal bolsters Morrow Sodali’s Canadian offering, with the company noting in a statement that the company ranked as the #1 activist advisor in the Canadian market, according to Bloomberg’s Global Activism Review 2021. Morrow Sodali was also ranked number one in M&A counsel by The Deal (US) and Mergermarket (globally) for 2021 and 2020, the firm added.

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