Eq: Asia

Seems that fixed income’s calling and it might pay to presume it’s not someone hawking insurance.

 

In 2023, it “has a huge potential” to dispense strong returns, according to Joanna Gallegos, co founder of BondBloxx Investment Management, reported yahoo.com, which carried an article earlier in the year which originally was published on ETFTrends.com. That said, it remains a good idea to be cautious.

Worth investing time in, especially: high yield corporate debt. That’s because they offer high yields and it’s projected by Bond Boxx that corporate defaults, compared to their long term average, will remain lower.

Tormented by hyper interest rate spikes that culminated in spiraling bonds yields, 2022 was one of the worse for fixed income, added money.usnews.com.

It sparked a deep dive of price of fixed income assets, and longer duration issues in particular.  

This year? Oh how the page turns. Paul Malloy, head of municipals at Vanguard, said "the 2023 outlook is drastically different than the position we found ourselves in last year,” Indeed, fixed-income investors started 2022 with a near-zero federal funds rate, but are now entering 2023 with a rate of 4%-plus. According to Malloy, the Federal Reserve "front-loaded" much of its policy tightening this cycle and is likely nearing a wrap.

 

“The fixed income asset class has a huge potential to deliver better performance in 2023,” Gallegos said on CNBC’s “Worldwide Exchange.” “We’re at new rate levels we haven’t seen in over a decade plus, and so, you’re really resetting valuations in a way that are very attractive.”

 

If your clients are invested in Chinese companies and have a preference for ESG, it may be time for a change in their portfolios. It appears sustainability rules in western countries are at odds with what’s happening in China. While Chinese equities offer strong growth potential, their ESG ratings rank lower than western nations and most emerging markets. For instance, Sustainalytics, a sustainable rating agency owned by Morningstar, downgraded three Chinese big-name tech companies on its watchlist in October. The three stocks, Tencent, Weibo, and Baidu, were moved to the category of “non-compliant with UN principles.” In addition, Hong Kong Watch, a UK-based group that researches investment and human rights issues in China, recently said in a report that “many of the biggest asset management, state pension, and sovereign wealth funds were passively invested in companies allegedly involved in the repression of Uyghur Muslims in China’s Xinjiang region.” The report found three major stock indices provided by MSCI included at least 13 companies that “have allegedly used forced labor or have profited from China’s construction of internment camps and surveillance apparatus in Xinjiang.” Another problem is that Chinese companies are less likely to respond to queries from ESG rating agencies.


Finsum:With ESG investing continuing to gain momentum, it appears that many Chinese companies are at odds with ESG due to censorship and repression in China.

Following two years online, October 28-30, the Esports and Gaming Summit took place again onsite. Organized by Gariath Concepts, the event’s renowned as the largest Gaming Convention in Southeast Asia. “At Globe, we are very happy and excited to be part of ESGS this year. In line with our Game Well Played campaign, we have activities in our booth and throughout the entire ESGS event area that promotes multiple products, experiences, and most of all, opportunities to do good,” said Rina Azcuña-Siongco, head of Globe’s Get Entertained Tribe, during a press conference ahead of the summit.

Yet, all might not be peaches and cream on the ESG front. In recent posts, Kevin LaCroix, an attorney and executive vice president, RT ProExec, indicated ESG has a fundamental flaw: it’s void of definition, leading to what he characterized as “sloppy thinking,” according to dandodiary.com.

These ESG related trepidations are explored in a recent post on the Harvard Law School Forum on Corporate Governance. Leveraging cybersecurity as an example, Douglas Chia of Soundboard Governance LLC, illustrates one of the “biggest flaws” of ESG is “the subjective open-endedness of what counts as E, S, or G.”

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