– Turkey’s stock exchange suspended trading for five days and canceled all trades executed on Wednesday, following a sell-off that erased billions of dollars from the value of its main equities gauge after two devastating earthquakes, Bloomberg (paywall) reported. Trading in Turkish equities, futures and option contracts was halted on February 8 and will resume on February 15, according to a statement from Borsa Istanbul. It’s the first time in 24 years the exchange has stopped trading.
Borsa Istanbul also canceled trades that were executed on the morning of February 8 before transactions were suspended, citing low trading volumes. Before those cancellations, the benchmark Borsa Istanbul 100 Index had lost $35 bn in value and was headed for its worst weekly performance since the 2008 global financial crisis.
– The directors of Shell are being personally sued for failing to adequately manage the risks posed to the oil and gas company by climate change, in a case that could set a new precedent for climate-focused shareholder action against corporate boards, noted Investment Week. The lawsuit, filed by environmental law charity ClientEarth, a minor shareholder in Shell, alleges the firm’s 11 directors have breached their legal duties by failing to implement an energy-transition strategy that aligns with the goals of the Paris Agreement. ClientEarth said the claim, brought before the High Court of England and Wales, is the first such action to be brought against a company by a shareholder under the Companies Act.
The so-called derivative action suit has garnered support from a number of Shell’s other investors, with UK pension funds Nest and London CIV, Swedish national pension fund AP3, French asset manager Sanso IS, Belgium’s Degroof Petercam Asset Management and Danish outfits Danske Bank Asset Management, Danica Pension and AP Pension all having published letters of support for the action. The group collectively holds 12 mn of Shell’s 7 bn shares, accounting for less than 0.2 percent of its investor base.
– The head of Canada’s largest stock exchange operator told Yahoo! Finance he’s seeing a change in sentiment among retail investors as they take risk off the table and shift their focus to higher-quality stocks. ‘What we tend to see is that [in] trading activity, both retail and institutional in an uncertain market, you’ll see what I call a flight to quality in terms of more investment in higher-quality, higher-value names with more predictable earnings streams and dividend appreciation,’ John McKenzie, CEO of TMX Group, told Yahoo! Finance Canada in an interview.
Investors were interested in the TSX heavyweight sectors such as financials and energy, on both the equity and options side, he said, adding that overall trading volumes were down in 2022 but the dollar amount of trading activity was up, indicating more activity in higher-priced stocks. Retail trading revenues make up a very small fraction of TMX’s revenue, McKenzie noted, but added that it’s a very important part of the overall financial market because ‘it’s where a lot of the price discovery happens’.
– The SEC will increase its scrutiny of crypto-trading firms and investment advisers as well as ESG funds, among other issues on its list of top oversight priorities for 2023, reported CNBC. The annual list provides a roadmap for the SEC’s focus over the coming year and reflects areas it believes pose the most risk to investors and the health of US capital markets. Released Tuesday, this year’s list shows ‘the changing landscape and associated risks in the securities market,’ said Richard Best, director of the division of examinations a statement.
The priorities were released two months after the securities agency issued new guidance, requiring publicly traded companies to disclose their exposure to the cryptocurrency market. The release also follows SEC chair Gary Gensler’s warning to cryptocurrency firms to ‘come into compliance’ with securities laws after crypto exchange FTX filed for bankruptcy.
– Tech companies, whose stocks were battered in 2022, now face another beating of sorts, according to MarketWatch. They’re drawing the focus of activist investors, which see a chance to get in at cheaper prices and agitate for changes that will make them richer. An especially voluble bunch of billionaire investors are targeting some of the industry’s biggest names, which are stumbling through layoffs and watching their stock prices plunge and their growth slacken. The investors are preparing to swoop in, take some radical actions to raise stock prices – then sell at a profit.
‘No one is immune. We will see more of this given the market dynamic,’ said the chief executive of one publicly traded tech company that dealt with activist activity. ‘Activists are good at determining what is undervalued and how [that] can be fixed in discrete moves. It seems to be across the board. The larger the activist firm, the more it can invest in a target, so it correlates to larger companies.’
– ESG investment has taken the financial and corporate world by storm but an ESG backlash is now gathering steam, according to the Financial Times. The FT explains that while much of this criticism has come from the US right, it’s not just conservative politicians criticizing the ESG agenda, and these complaints are having an impact.