The week in investor relations: Geopolitical risk, trade wars and arrest warrants
- Oil prices and safe haven assets have jumped in value after the US killed a senior Iranian military officer in Baghdad, reported the Financial Times (paywall). Brent crude and gold climbed on the news, which has severely escalated tensions between the US and Iran. Iran has said it will respond with retaliatory measures.
- US President Donald Trump said he will sign ‘phase one’ of a trade deal between the US and China in mid-January, reported the Guardian. The deal, announced on December 13, suspended a new round of tariffs on consumer goods imported from China, although the full details of the agreement have not yet been released.
- Interpol has sent an arrest warrant to Lebanon for Carlos Ghosn, the former chairman of Nissan who escaped from Japan while awaiting trial for alleged financial misconduct, reported Reuters. Ghosn has deep ties in Lebanon, which does not have an extradition treaty with Japan.
- The stellar returns achieved by a range of asset classes in 2019 will be difficult to repeat in 2020, reported Bloomberg in a roundup of investment outlooks by financial institutions. Bloomberg has collated more than 500 views on the upcoming year, which can be grouped by key theme, asset class and institution.
- China has denied that the Shanghai-London Stock Connect scheme is being temporarily blocked for political reasons, reported Bloomberg. Previous reports stated the project had been blocked over the British response to protests in Hong Kong. The scheme, which launched last year, aims to connect investors and listed countries across the UK and China.
- The cannabis industry expects a number of bankruptcies during 2020, reported the Financial Post. Over the last year, the sector has struggled with oversupply, falling prices and a lack of retail outlets. The industry’s biggest ‘red flag’ is the lack of interest from institutional investors, said Narbe Alexandrian, CEO of venture capital firm Canopy Rivers.
- The global drop in IPOs during 2019 has raised further concerns over the future of public stock markets, reported the Financial Times (paywall). The number of IPOs globally fell by a fifth last year and capital raised dropped by 10 percent, said the newspaper, citing data from Dealogic. The decline comes amid a rise in interest in private markets, such as venture capital and private equity.
- The number of hedge funds declined for the fifth year in a row in 2019, reported Bloomberg, quoting data from Hedge Fund Research. Hedge fund managers have found it hard to beat the market during what has become the longest bull market in history. Looking at data for 2019 up to the end of November, the Bloomberg Equity Hedge Fund Index had returned 10 percent, compared to 28 percent for the S&P 500.