Climate action is high on everyone’s agenda, and as such, there is a lot of focus on green bonds. The Covid-19 pandemic has also shone a light on social bonds – securities designed to fund measures aimed at addressing social
China was first to recover economically from Covid-19. However, its stock exchanges do not reflect this: equities have been under pressure since the Chinese New Year. That should not be a surprise since China’s growth momentum has been fading. It
Mid-Year Outlook 2021 The view of investors on the outlook for US growth and inflation has varied significantly over the course of the year. Following the positive vaccine trial results last November, and particularly with the Democratic Senate victories in
Market weekly: Being inclusive can lead to better results. It can also raise a company’s standing among the general public, in the labour market, among suppliers and customers and with regulators and investors. In our view, organisations that are more
Weekly investment update: Beginning last year, many companies stopped providing forward guidance, that is, their view on whether sales and profits would be higher or lower than the last time they had spoken with analysts and investors. At the time,
Weekly investment update: Another month, another US inflation report beating market expectations. Headline year-on-year consumer price index (CPI) inflation has gone from 1.1% last November to 4.9% in May. Even though economists knew that base effects meant the rate of
As an active shareholder, we opposed 34% of resolutions, a rate that has been rising for several years and is up from 32% in 2020. That percentage was already 10 points above the rate in 2018. We opposed 911 resolutions
Weekly investment update: New cases have continued to climb around the world and are now at 440 000 per day, up from 390 000 last week. A rise in cases in Asia, Europe, and North America has offset a decline
Bond defaults have been rising since the start of the deleveraging process in 2017. This has pushed up corporate bond spreads, kept them high and made them volatile. Defaults used to affect mostly private companies: They accounted for more than
Market weekly: We recently saw the consensus view held by the market on US interest rates bowled over by the Federal Reserve. Whereas the market expected no or at the most one interest rate rise over the next two years,
Climate change impacts human health in a number of ways. Rising average temperatures mean a higher risk of heatwaves – at the time of writing, the US Pacific Northwest is experiencing ‘life-threatening’ temperatures. Indeed, the Lancet has described climate change
It is becoming clear that the post-Covid recovery will resynchronise in the second half of the year as economies reopen while vaccinations campaigns pick up speed, especially in continental Europe. Global trade is bouncing back at a faster-than-expected pace, resulting
The latest ‘dot plot’ published after the June meeting of the US Federal Open Market Committee (FOMC), showing the participants’ assessment of the appropriate future level for the federal funds rate, had 13 out of 18 FOMC members foreseeing a
Market weekly: Investors are continuing to search for sources of income in the current low-yield environment marked by, for example, modest returns from equities and bonds, bringing to the fore the merits of an allocation to infrastructure debt. This source
Weekly investment update New Covid-19 cases around the world have risen and now stand at 390 000 a day. Rises in Europe, Asia, and Africa are offsetting a decline in South America. The UK accounts for more than a third
As the sustainable investor for a changing world, BNP Paribas Asset Management believes it is essential to understand the impact of environmental change on the economy as fully as possible. Accordingly, we have been assessing our dependencies and impacts to
As the sustainable investor for a changing world, BNP Paribas Asset Management is working to provide investors with sustainable investment solutions and investable insights through innovative and actionable research, Alex Bernhardt, the recently appointed global head of sustainability research, explains in
Market weekly: Addressing ecosystem restoration is just as pressing as tackling CO2 emissions and can generate billions of dollars of investment opportunities, as Ulrik Fugmann and Edward Lees, co-heads of the Environmental Strategies Group, explain. Much of the focus in the debate on
As economies reopen, stronger economic data demonstrates that the cyclical recovery is progressing well. Signs of an intensifying spread of the Delta variant of Covid-19 are, however, raising questions about the outlook. Worldwide new Covid-19 cases have now plateaued at
Diversification – exposure to multiple risky assets to help reduce portfolio risk – can enable a portfolio to thrive in many different market environments. However, after an exceptional 2020, events so far in 2021 – with US equities outperforming other
In wealthier countries, at least, there is now a sense that we have turned a corner in the pandemic. But what awaits us on the other side? Will central bank and government responses to the crisis prove to have been
Growth in the net-zero digital economy relies on increased production of critical ICT metals and rare earths. How can we green the world and connect it, while limiting the social and environmental impact? There is much talk about the scope
Pressure appears to be building for the People’s Bank of China (PBoC) to shift its tighter policy rates stance to an easing bias in the coming months. The latest macroeconomic indicators for May 2021 show that China’s economic growth remains
Market weekly: Emerging market equities offer investors a wide range of diversification opportunities across economies with a solid post-pandemic growth profile that include, but also stretch beyond, China and the wider Asian region. Quang Nguyen, head of global emerging market equities,
Resilient and essential in the Post-Covid environment As an asset class, infrastructure debt possesses key characteristics that contribute to resilient performance. These include the large physical nature of the underlying asset, high barriers to entry and stable revenues linked to
Market weekly: Thanks to central bank largesse, corporate bond markets weathered the depth of the Covid crisis well. Risks to credit markets today appear low with gradually improving fundamentals, neutral central bank policy and no major supply-demand imbalances. Listen to
Market Weekly: On account of the region’s strong economic growth, Asia has a considerable impact on climate change, but at the same time is, perhaps disproportionately, exposed to its effects. That makes engaging with companies and working with the authorities
At its heart, sustainability is about protecting investors from reputational, operational and financial risks associated with controversial companies or countries, but it also provides a wealth of new investment opportunities to support a more responsible economy. This is why BNP
It’s only a matter of time before companies will have to report on their climate-related risks. They should get ahead by putting the processes in place to do so now, says Thibaud Clisson. For the financial sector to respond adequately
The growth in China’s GDP and equity market over the last 30 years has not been matched by its allocation in investor portfolios. Foreign investment amounts to only about 3% of China’s stock market capitalisation, even though the country now
Asset Allocation Monthly – June 2021: Investor attention is turning to where economic growth will accelerate next as vaccine rollouts allow more and more economies to reopen. The current leaders, the US and UK, will soon pass the baton to
Biodiversity and economic activity are closely linked, so biodiversity loss endangers the economy, us and our prosperity. Nature and healthy ecosystems provide ecosystem services ranging from pollination to flood protection worth an estimated USD 125 trillion dollars. That is almost
Having hit a record high in late April, global equities peaked again in May after a choppy spell. Inflation appears to worry investors less now than it did at the start of the year. The latest indicators are beginning to
Markets are worrying about rising inflation, but to date, there has been no evidence yet of ‘demand-pull’ inflation amplifying cost-push pressures, especially in Asia. There is also no sign of a global wage-price spiral. Nevertheless, we believe there are reasons
European equities have staged a spectacular rebound: Since their March 2020 low, they are up by more than 60%. So far this year, they have gained more than 13%. Still, there is the perception that the European market has significantly
Fund flows to date have massively favoured US equities, but European equities now have considerable scope to catch up as the economic recovery broadens and investors reassess their valuations relative to their more expensive US counterparts. Peter Abbott, European equities portfolio
Our biodiversity roadmap: We are in the midst of Earth’s sixth mass extinction event. Approximately 25% of all species on Earth is at risk of extinction by 2050, representing roughly one million species of plants and animals. By the end
The aviation industry and its emissions are both projected to grow over the coming decades. What policies and technologies can help limit the sector’s impact on the environment? It’s said that aviation only contributes around 2.5% to global CO2 emissions.
Allocations to Chinese equity and fixed income should stand alone rather than be part of global or emerging market strategies for investors looking for diversification and potential excess returns from the vast opportunity set that Chinese financial assets represent. A
Reimagine. Recreate. Restore. Together, these form the theme of World Environment Day 2021 on 5 June, a day when the UN seeks to focus the attention of investors, businesses, governments and communities on the increasingly urgent need to restore the
Climate change and pollution are among the factors reducing biodiversity. The result is considerable damage to society and the economy. Robert-Alexandre Poujade, ESG analyst at our Sustainability Centre, warns not to underestimate the consequences of biodiversity loss and underscores the role
Evolving consumer tastes. In the USA and Europe, a growing number of people are cutting their meat intake or giving it up altogether. As a result, in addition to vegans and vegetarians, there are an increasing numbers of flexitarians –
Increasing regulatory control, due to central banks protecting their economic policy sovereignty and national governments seeking to control climate change, is an imminent risk for cryptocurrencies. In particular, China’s official digital currency is ‘anti-cryptos‘. Cryptocurrency anonymity, notably in the case
US core consumer prices jumped by 0.9% on the month in April. When combined with the big fall in prices 12 months ago dropping out of the annual calculation, year-on-year core consumer price index (CPI) inflation was pushed up to
On the tail of hard pandemic lockdowns that imposed the deepest economic contraction on record, the US economy is reopening amid a rapid COVID-19 vaccination roll-out and an avalanche of fiscal spending. So, investors are naturally now contemplating what kind
The economic recovery should broaden into a synchronised global upturn in the course of the second half of this year, favouring risky assets including commodities, equities generally and notably emerging market equities. An equity correction should be seen as a
US inflation looks set to rise significantly heading into the summer. Contrary to the view that this will be a temporary increase, a number of forces could combine to create greater structural pressure pushing prices higher for longer. Markets are
It’s never been more important for the financial sector to take steps to help safeguard the planet’s biodiversity. In which areas can it make a difference? Ahead of the 2021 International Day for Biological Diversity, Robert-Alexandre Poujade explores the possibilities.
Equity and fixed income markets have benefited from both stepped-up central bank support and governments shifting from austerity as a response to economic shocks to fiscal generosity. Equity valuations are now at 20-year highs, partly on the back of the
Inflation has been quiescent in developed economies in recent years. Today, the possibility that we may be on the brink of a secular shift away from the low-flation regime is a topic of intense debate among investors. Nowhere is this
