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The new approach to 2021 management

The beginning of 2021 might have been good and showing positive results, but to see from a different point of view it might have brought new issues to work for. The vaccines surely have brought in a positive approach to the year but the issues like Brexit and US democrat majority, the fiscal imbalance and all other issues are not letting us celebrate the arrival of the positive notions. The issues of animal spirits concerns, green environment, the vast debts, the GDPs have all been affecting and will most certainly create a stagnation for the coming generation. To drive all these to a point of nurture it is very crucial for the investors to look for yields of alpha forces.

An improving vaccine outlook has sent these competitive markets reassembling to new highs, and we expect high level of demands to continue to fuel the macroeconomic energy. Gushing markets have also sparked a rage of retail trading, which has ascended during the pandemic, and the so-called gamification attacks on hedge-fund positions is nothing but just another sign of how COVID-19’s long reach is changing every aspect of our lives.  Within the topic of continuous accommodative central banks and reassuring governments, we should also see inflation pick up from its lowest pace. This stepping up will not be permanent. The long-term of “Japanification” trend of low growth and low inflation which does not rule out short revolutionary cycles will most certainly resume its strong pull on the economy towards the end of the year. And that is something to watch for. And once the recovery is well proceeding, that is may be towards the end of the summer, there are expectations from the governments and central banks to shift their tones steadily, emphasizing economic improvements rather than the downside risks they possess. As they anticipate the removal of supportive measures, markets will need to primarily re make the outlook. The removal of the well-known strategy can hurt possessions across the board and lead investors to re-evaluate the percentages they are prepared to pay for risks. 

With this in mind, the current rally grants a strategic window of opportunity to exploit the higher growth and inflation. Since November, when they recognized the possible for a return of growth, we have been gradually been doing the relocation of portfolios to capture more recurring equity exposure and less rate sensitivity. As economic data has progressively confirmed the upward trend, there has been a series of incremental changes from increasing the equity distribution and reducing the bias for quality growth stocks to procurement of the broad-based value experience through global ETFs (exchange-traded funds). 

Even though there might be no absolute certainty of the outcomes but the efforts should be made in high scale. The equity market however may continue to party through the pandemic or the music might stop and the party may drop, as it depends on the effects of the long trail events. As a reason, investor must also look to the long term, which is always often easier said than done, while grabbing on opportunities across the range to make effective and resilient gains in what is sure to be a instable period ahead.

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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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