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Politics and trade to lead the market in world economy

Due to Brexit and the commercial war between United States and China, the active management for an environment of political uncertainty is defend by the firm Allinaz GI. The risk of cyber security might reduce the value of actions is their main concern and returns are likely to be moderate over the next few course of time. A meeting was held at London investment Forum to discuss the approach of investors to the market for the state of global economy. It was clear that the global economy was functioning well but the politics and trade sectors may increasingly run the markets in uncertain ways.

By the active management of Risks and opportunities which include diversification among regions, asset class and sectors can help maintain the economy by selecting ‘winning companies’ said Dwane, global strategist of Allianz GI.

In spite of Donald Trump’s commercial policy and Brexit adding a climatic uncertainty it will be evident of who the winner will be in long term. Inequality posing the real threat to economic and social stability, growth will not be in sync with it as many other options are available for the companies to rectify their imbalances.

Since the Brexit will not be resolved in a single go and that not all sectors will be affected, the investors will look for those independent of the European Union and the companies who are better prepped for Brexit.

For the active investors the trade wars are not that bad, as the investors need to look for opportunities and buy from volatile partners from US as a result of the new bilateral agreements signed with Mexico, Canada and Germany. If China adopts a revenge strategy attitude there might be a slow emerge rate in markets which makes United States the safest place for investors.

More focus on ESG can be advantageous, the manager argues that despite the inequality becoming an increased problem and an important part of the political talks In US and Europe the wealth continues to grow. This should be taken as a warning for the investors as the inequality may lead to many social ills and crash the market causing upheaval and instability.

Next in line is the confrontation of cyber security, which is posing an equal threat to the companies as this type of risk can cause the stock price to deteriorate or damage the entire reputation. On the contrary many companies are making a very god progress in fighting against cybercrimes.

To maintain a balance in their portfolio investors are seeing the infrastructure as their investment scheme. Due to its healthy risk and return approach the investors are attracted to the alternative assets. As it also provides long term stable and potential yield, a better environment of diversified protection against inflation and thus the investment in infrastructure has quadrupled since 2008.

At the end the investors need to have an active approach for less cyclical strategies as the returns are going to be moderate in the next few years and thus they should fight with long-term investments.


LexisNexis risk solutions study reveals sharp rise of financial crime compliance costs

Decision makers inside banks, investment firms, asset managers and insurance firms identify the drivers impacting financial crime compliance. LexisNexis® Risk Solutions revealed that the results of its annual True Cost of Financial Crime Compliance Study for the U.S. and Canada. The total projected cost of financial crime compliance for the region is approximately $49.9 billion. The survey illustrates the sharp increase in financial crime compliance costs.

The study projects the average annual cost of financial crime compliance for U.S. financial institutions with $10 billion. Pandemic Continues to Spur Growth. The pandemic continues to negatively impact compliance operations. Sixty eight percent of U.S. respondents report longer times required to complete due diligence. Fifty five percent of U.S. respondents report reduced productivity compared.

More U.S. financial institutions now rank real estate and hospitality as top money laundering risk segments. Crime involving digital payments, trade-based money laundering and money mule schemes are on the rise. Digital currency is a growing problem for Canadian firms. Crimes involving digital payments have the greatest impact on compliance costs. Cryptocurrency crimes have the greatest impact on compliance costs for Canadian firms. The survey results demonstrate that financial institutions are battling a broader set of issues.

Survey respondents indicate that a lack of current and extensive data tops the list of Know Your Customer (KYC). Leslie Bailey, vice president of financial crime compliance strategy for LexisNexis Risk Solutions stated that the study shows clear linkages between the pandemic, digital crime and increasing regulations. Hence, financial institutions need to prepare for expanded compliance obligations and risks from emerging financial crime. Bailey added that digital transformation is a game-changer for financial crime compliance operations.

This will require a sophisticated approach that incorporates insight into digital behaviors. This study surveyed 145 decision-makers in the U.S. and Canada. Responses were collected in June 2019, August 2020 and June 2021. Organizations such as banks, investment firms, asset management firms and insurance firms. The total annual cost of compliance across firms was calculated using survey data. The spend amount was generated by multiplying the average percent allocated to financial crime costs.

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COP26 delegates agree on need to deliver on $100 BLN climate finance pledge

Delegates heading to the COP26 U.N. climate summit in Glasgow. These delegates agreed that they must deliver on the $100 billion per year pledge. COP26 president Alok Sharma said that, it is to help most vulnerable nations for tackling the climate change.

After many days of meetings at the pre-COP26 climate event, which happened in Italy, Sharma said that there was a consensus to do more. Which is to keep the 1.5 degrees Celsius target within reach, adding more needed to be done collectively in terms of national climate plans.

The COP26 conference in Glasgow aims to secure more ambitious climate action. This is from nearly 200 countries, those all that have signed the 2015 Paris Agreement for limiting the global warming, well below 2.0 degrees Celsius. And to 1.5 degrees, above pre-industrial levels.

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City’s exposure to Evergrande is very minimal-Hong Kong finance Chief

Hong Kong’s exposure to debt-laden developer China Evergrande Group is very minimal at 0.05%. This is of banking assets, South China Morning Post reported, citing the city’s finance minister. Financial Secretary Paul Chan told the newspaper that it is very minimal and won’t cause them any systemic risks. He added that he had arrived at the conclusion after a recent audit of the local banking sector’s exposure to the company.

Chan also said that the Hong Kong’s stock market was inevitably subject to some volatility. This is amidst a recent mainland crackdown on some industries. But still he believed any setback would be temporary. With liabilities of $305 billion, Evergrande has sparked concerns its cash crunch could spread through China’s financial system. This may reverberate globally and that is a worry that has eased with the Chinese central bank’s vow, to protect homebuyers’ interests. Evergrande has missed two bond interest payments. Bondholders have said this and its offshore debt, amounting to about $20 billion, trades at distressed levels.

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