One meeting to watch out for today is the sustainable stock exchanges event in New York, hosted by several United Nations’ bodies including the the UN Principles for Responsible Investment.
The aim of the gathering is to take stock of how the world’s exchanges can work together with investors, regulators and companies to increase corporate transparency and encourage responsible long-term investing.
This will involve tackling environmental, social and corporate governance issues. Eiris, the Ethical Investment Research Services, says one of the key drivers will be to include ESG disclosure into listing rules and corporate governance standards.
Paul Abberley, chief executive of Aviva Investors London says little support from listing authorities “who play a crucial role in setting out what companies report to the market” has come so far.
Many present today will be hoping to discuss measures to encourage best practice among companies through sustainable indices. Some exchanges such as Johannesburg Stock Exchange Socially Responsible index or the Deutsche Borse Daxglobal Alternative Energy Index, and the Indonesian exchange have already done this but there is plenty of scope for others to follow.
Global stock exchanges are likely to hear some challenging calls to take action.
This is very odd – instead of talking about how the last year has destroyed the efficient markets hypothesis and its friend modern portfolio theory, here’s someone pointing out that they couldn’t have been disproved because Nobody Believed In Them anyway.
It’s not the first time someone has pointed this out, but it is a nice succinct summary. This disposes very usefully of a strawman that has been brilliantly used by both sides to divert attention from the real problem, which is that markets have always been and always will be inefficient and clever greedy people like to capture the economic rent from this fact.
Consumers have low levels of financial literacy
Are we financially savvy enough to make the right decisions about how to invest for retirement or calculate mortgage payments or avoid the danger of repossession?
Not enough people are, according to the OECD. In a recent study the organisation found consumers not only have low levels of financial literacy preventing them from making informed financial decisions but they often overestimate their knowledge and skills.
Now Allianz has launched a website where people can find out about a whole range of financial terms to help their decision making, from estate planning to merging portfolios after marriage. There’s even a chance to trace how the price of coffee has increased in the past 30 years or how it might change in the future.
And if that doesn’t help to demystify some of the jargon then try the Financial Times lexicon.
Sun and sand make their siren call in August, tempting investors to a remote island or perhaps a crowded European beach. After all, summer tends to be a quiet time for stock markets with low trading volumes, or at least that’s what holidaying investors like to think.
But what happens if unexpected economic news or currency trends trigger sharp stock market moves, asks Colin McLean, managing director of SVM Asset Management? It has happened before. This time two years ago, world markets were in turmoil as the credit crunch began to bite, and August was an abysmal month for hedge funds as they hit summer blues and most hedge strategies failed to perform.
In July and August 2008 there was a sharp market rotation from resources to financial stocks, while this summer’s surprise is a continuing strong recovery in commodity prices, driven by encouraging growth in China, Mr McLean reminds us.
And today Barclays unveiled interim profits of nearly £3bn, helped by BarCap, the bank’s investment banking arm, while equities rose to the highest levels of the year.
But whether the markets head north or south, Mr McLean recommends staying cool and avoiding any hasty decisions. So just in case there is a really big surprise over the next few weeks, shake the water out of your eyes, make sure your laptop screen is not obscured by the sun, and take a deep breath before pressing send.