Asia Pacific Media Coverage. 22 November 2017

Transcription

1 Asia Pacific Media Coverage 22 November 2017 The Age: Markets Live: Small ASX names have big impact The article picked up on Reuters market commentary on global equities. Michael Arone, Chief Investment Strategist at SSGA, was quoted saying that investors shrugged off the political impasse in Germany while the U.S. leading economic indicators are further evidence of fairly strong economic data and an economy that is still gaining traction. Arone also said that a tug of war among investors over how to view tax reform efforts in the US Congress has left the market without a strong impetus. Financial Standard: Capturing the Dividend Aristocrats Susan Darroch, Head of Global Equity Beta Solutions for Asia Pacific ex Japan at SSGA, discussed why focusing on yield sustainability, rather than the level of the yield alone, may deliver more benefits for income investors. Darroch commented that a better way to invest for yield in equities may be to seek alternative global strategies and build a portfolio that balances between high dividend yield, and dividend sustainability and growth. The Hans India: State Street opens CoE in Hyderabad Press Trust of India: State Street opens CoE in Hyderabad Deccan Herald: State Street opens new Offices in Bengaluru, Hyderabad Indo-Asian News Service: State Street opens centre of excellence in Hyderabad State Street Corporation announced the opening of a new centre of excellence in Hyderabad and expanding its facility in Bengaluru. Jay Hooley, State Street Chairman and CEO, said the company established a presence in India 10 years ago and today it was a key component of its centre of excellence network. Michael Brager, Senior Vice President and India Country Head at State Street, said with this expansion they will tap into India's deep pools of talent and high-caliber graduate population. Financial Standard: State Street global chief to retire State Street Corporation has announced that Jay Hooley will retire as Chief Executive by the end of 2018 after more than 30 years with the company. State Street s board of directors has appointed Ron O Hanley as President and Chief Operating Officer. Financial Standard: SSGA dismisses ETF bubble concerns ETF Stream: ETFs are not promoting a junk bond bubble: State Street Speaking as part of a SPDR Bites briefing, David LaValle, State Street Global Advisors US Head of Capital Markets, addressed concerns regarding the liquidity of ETFs and their role in causing valuation distortion in equity markets and promoting a junk bond bubble. CORPORATION 1

2 Full articles The Age Markets Live: Small ASX names have big impact Global equities markets advanced overnight as confidence over economic growth around the world helped investors brush off concerns about the collapse of government coalition talks in Germany, which sent the euro lower against the US dollar. In the latest indication of global growth, the central bank in Germany said the German economy is expanding into the end of the year on strong industrial activity and firms are struggling to find workers to satisfy orders. Adding to the growth story, the Conference Board's leading economic index for the United States rose 1.2 per cent in October, or double the rate economists polled by Reuters had expected. Investors shrugged off the political impasse in Germany while the US leading economic indicators provided further evidence of fairly strong economic data and an economy that is still gaining traction, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. A tug of war among investors over how to view tax reform effortsin the US Congress has left the market without a strong leaning, he said. "It doesn't seem the market can get any direction. As a result, it's two steps forwards, one step back," Arone said. European and US stocks gained. As the US dollar gained, precious metals declined, with gold recording its biggest drop since September. Silver and platinum also fell. West Texas intermediate crude retreated after surging the most in two weeks in the previous trading session. US Fed boss Yellen submitted her resignation to President Donald Trump, effective upon the swearing in of her replacement, Jerome Powell. The Fed minutes are due out Wednesday night, which will allow investors to gauge officials' eagerness to boost the benchmark interest rate in December, a move widely expected by the market. Treasuries edged lower. From a monetary policy perspective, the news of Yellen's resignation "shouldn't really affect anything,"ernie Cecilia, the chief investment officer at Bryn Mawr Trust, said. "If anything, Jerome Powell should be close to a continuation of the kind of monetary policy that Janet was doing. So I wouldn't think there would be any kind of ripple on the monetary side." CORPORATION 2

3 Financial Standard Capturing the Dividend Aristocrats CORPORATION 3

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5 The Hans India State Street opens CoE in Hyderabad Hyderabad/ State Street Corporation, one of the world's leading providers of financial services to institutional investors, on Tuesday announced the opening of a new centre of excellence (CoE) in Hyderabad and expanding its facility in Bengaluru. We are happy about State Street choosing Hyderabad as one of its key offices in India. We believe this partnership will enable both the corporation and Hyderabad to grow together, said Telangana IT Minister K T Rama Rao, while inaugurating the new centre. State Street currently has 2,800 employees in India based in offices in Bengaluru, Mumbai and Hyderabad. Over the next 12 months, the company will expand its existing facility in Bengaluru and build the new centre in Hyderabad. State Street Chairman and CEO Jay Hooley said the company established a presence in India 10 years ago and today it was a key component of its centre of excellence network. "This network gives us the coverage necessary to deliver services to clients more effectively and efficiently. Adopting a 'follow-the-sun' model enables us to take advantage of time zone differences to optimize workflows and deliver more timely services to our clients," he said. Michael Brager, Senior Vice President and India country head at State Street, said with this expansion they will tap into India's deep pools of talent and high-calibre graduate population. "These offices will create new employment as well as additional career opportunities for our existing employees across a range of management and technical positions," he added. CORPORATION 5

6 Press Trust of India State Street opens CoE in Hyderabad State Street Corporation, a New York Stock Exchange-listed firm, today announced opening of a new Centre of Excellence (CoE) here, and an expanded facility in Bengaluru. The company has 2,800 employees in India across its offices in Bengaluru, Mumbai and Hyderabad. Over the next 12 months it will expand its existing facility in Bengaluru and build a new centre in Hyderabad, it said in a statement. Jay Hooley, State Street's chairman and chief executive officer, who was in India to officially open the new offices, said the company established a presence in India 10 years ago and has become a key component of the Centre of Excellence network. "This network gives us the coverage necessary to deliver services to clients more effectively and efficiently. Adopting a `follow-the-sun' model enables us to take advantage of time zone differences to optimise workflows and deliver more timely services to our clients," Hooley said. CORPORATION 6

7 Deccan Herald State Street opens new Offices in Bengaluru, Hyderabad State Street Corporation, NYSE-listed company which provides financial services to institutional investors, on Tuesday announced the opening of an expanded facility in Bengaluru and a new center of excellence in Hyderabad. State Street currently has 2800 employees in India based in offices in Bengaluru, Mumbai and Hyderabad. Over the next 12 months the company will expand its existing facility in Bengaluru and build out a new center in Hyderabad. State Streets chairman and chief executive officer Jay Hooley, who was in India to officially open the new offices, said, "We first established a presence in India 10 years ago and today it is a key component of our center of excellence network." He said the network gives the company the coverage necessary to deliver services to clients more effectively and efficiently. "Adopting a follow-the-sun model enables us to take advantage of time zone differences to optimize workflows and deliver more timely services to our clients," said Hooley. The company provides financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $32.1 trillion in assets under administration and $2.67 trillion in assets under management as of September 30, 2017, State Street operates in more than 100 geographic markets worldwide. State Street Senior Vice President and India country Head Michael Brager said with this expansion the company will tap into Indias deep pools of talent and high-caliber graduate population. "These offices will create new employment as well as additional career opportunities for our existing employees across a range of management and technical positions," said Brager. State Streets offices in India currently support a number of business units across the company in functions such as technology, corporate finance, fund accounting, transaction services, reporting and reconciliations. CORPORATION 7

8 Indo-Asian News Service State Street opens centre of excellence in Hyderabad State Street Corporation, one of the world's leading providers of financial services to institutional investors, on Tuesday announced the opening of a new centre of excellence in Hyderabad and expanding its facility in Bengaluru. It currently has 2,800 employees in India based in offices in Bengaluru, Mumbai and Hyderabad. Over the next 12 months, the company will expand its existing facility in Bengaluru and build the new centre in Hyderabad, said a company statement. State Street Chairman and CEO Jay Hooley said the company established a presence in India 10 years ago and today it was a key component of its centre of excellence network. "This network gives us the coverage necessary to deliver services to clients more effectively and efficiently. Adopting a 'follow-the-sun' model enables us to take advantage of time zone differences to optimize workflows and deliver more timely services to our clients," he said. Michael Brager, Senior Vice President and India country head at State Street, said with this expansion they will tap into India's deep pools of talent and high-caliber graduate population. "These offices will create new employment as well as additional career opportunities for our existing employees across a range of management and technical positions." State Street's offices in India currently support a number of business units across the company in functions such as technology, corporate finance, fund accounting, transaction services, reporting and reconciliations. CORPORATION 8

9 Financial Standard State Street global chief to retire CORPORATION 9

10 Financial Standard SSGA dismisses ETF bubble concerns State Street Global Advisors US head of capital markets David LaValle believes the concerns regarding ETFs causing valuation distortions in equity markets are founded in some fundamental misunderstandings about these investment vehicles. Speaking as part of a SPDR Bites briefing, LaValle said that "there is a common misconception that every single ETF trade results in a trade in the underlying constituents," referring to the different liquidity characteristics of the issuance market and the exchange. "That's actually not the case. The vast majority of ETF trades that happen on exchanges in US markets do not result in a creation or redemption with the fund. Risk is transferred on an exchanged based on a particular underlying investment thesis," he said. "Whether it's a domestic equity product, an international equity product, an emerging market product or different segments of the fixed income market, this will determine what the ratio between dollar volume traded on an exchange versus dollar value being traded in the underlying constituents. But it's not a 1:1 ratio." While LaValle conceded "the jury is still out" on whether the growth in passive investments more broadly is impacting volatility, price discovery and liquidity, "it's something we're looking at quite closely." He added that it's a further misconception to suggest the ETF market is strictly a passive one, given the proliferation of exchange-traded products that go beyond a "market-cap methodology" into factor-based indices and different patterns of portfolio rebalancing. "If you look at the indices being used, despite being rules-based, it can have quite an active feel to it," he said. One particular subset of the ETF market that has raised liquidity concerns is synthetic vehicles, which attempt to mimic the return characteristics of a particular index via derivative instruments rather than by holding the relevant underlying securities. An example of this is commodities ETFs, which can track an index measuring the futures price of a commodity rather than physically holding the relevant commodity. In Australia, ASIC collaborated with the ASX to set certain regulatory restrictions on these products, including that derivative counterparties hold Australian deposit-taking institution (ADI) licences, or their offshore equivalents. Regulations differ across international jurisdictions. While LaValle said SPDR does not offer synthetic vehicles, he argued "it's important to note that not every ETF is created equally, and not every ETF issuer is created equally. There is a due diligence responsibility that we recognize and it comes down to educating oneself as an investor and an adviser and see how the product is constructed. "When we talk about derivatively-backed products, you have futures-based ones or swap-backed ones, and that swap might come in the form of a debt instrument of the underlying issuer. The wrapper is transparent, though, and you have to look through that wrapper to understand the product's true liquidity profile." Ultimately, LaValle said that despite the rapid growth of the ETF market, it's still "generally a new product." "It's about 25 years old and despite the relative growth it hasn't yet been fully adopted by some of the largest and most sophisticated institutional investors around. There's a lack of education broadly - it's a tool available to investors, and no disrespect to any member of the media, but often the story being told is an incomplete one, and we have to fill in some of the gaps with our end-clients." CORPORATION 10

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12 ETF Stream ETFs are not promoting a junk bond bubble: State Street Despite the rocketing rise of passive investing, some investors remain suspicious of ETFs. Many believe they could be responsible for nasty market dynamics, like bubbles, Ponzi schemes and systemic risk. This is especially true in the corporate junk bond space. Thus the financial press this year has carried several pieces claiming corporate junk bond ETFs are weapons of mass destruction. But according to State Street this is wrong. ETFs only make up 2% of fixed income assets, said David LaValle, State Street s head of capital markets, on a conference call with the press. The biggest winner by market share in the fixed income ETF landscape have been high yield bonds. But despite that relative growth notionally the market share of high yield ETFs has not passed 4% of the high yield exposure in the market. While equity ETFs have been kicking off around the globe for several years, bond and fixed income ETFs have only just started to draw in big money. Though it may seem counterintuitive, corporate junk bonds have been among the most successful with investors, attracting more money than safer types of fixed income ETF. This is partly because they offer something new. Historically, corporate junk bonds have been available only to institutional investors and kept off exchange. When households wanted to buy in, they have had to work through unit trusts or some other kind of fund. But ETFs are changing that, allowing corporate junk debts to trade both on exchange and opening up a previously obscure (and risky) asset class to retail customers. CORPORATION 12