The week in investor relations: Trade-deal jitters, record ETF assets and world's largest IPO
– US President Donald Trump worried investors by suggesting a trade deal with China may not be imminent, the BBC reported. The president said at a NATO summit this week that he may wait ‘until after the election’ to strike a deal. The comments led US shares to fall sharply. Investors are still waiting to see whether a round of tariffs on consumer goods planned for December 15 will come into effect.
– The ETF market continues to grow rapidly with assets passing $6 tn for the first time, reported the Financial Times (paywall). Over the last four years, assets managed by ETFs have doubled in size. There remains plenty of room for growth in the industry, however, with Europe and Asia well behind the US in adoption. Regulators are paying closer attention to ETFs as they continue to spread their influence on the capital markets.
– Saudi Aramco has conducted the world's largest IPO after raising $25.6 bn, reported Bloomberg. The Saudi state oil company will become the world's largest publicly listed company when it starts trading next week. The IPO, which saw 1.5 percent of the company sold, relied on local and regional investors after international institutions worried over the high valuation sought by Saudi Arabia.
– The US Senate Committee on Foreign Relations could vote next week on approving new sanctions on Russia, according to Reuters. The sanctions, proposed as a response to interference in the US elections and aggression in Ukraine, would target a range of Russian interests including the financial and oil & gas sectors. Previous rounds of sanctions have led to sharp falls in overseas investment, followed by a quick rebound, IR Magazine reported last month.
– Ken Langone, the US businessman and Home Depot co-founder, said equities are the best place to invest right now, reported CNBC. ‘Where else can you go to get some kind of a decent rate of return [but] equities?’ he told the news service. In the interview, he said he had recently added to positions in JPMorgan and Parker Hannifin, while he became an investor in GE again earlier this year.
– The Stock Exchange of Thailand is trying to woo overseas companies to list real estate investment trusts (Reits), reported the Bangkok Post. The exchange has approached property owners in Laos, Cambodia and Myanmar, suggesting that spinning off assets as Reits would be an efficient way to raise long-term capital. Thai investors are looking for new opportunities but the process for foreign entities to list in the country is complicated.