The week in investor relations: Sell-side decline, private markets and climate stress tests
– The sell-side industry is continuing to pull back with the ranks of equity analysts falling at least 8 percent this year, reported Bloomberg. The news service quotes figures from Coalition Development, which tracks sell-side analyst numbers across 12 major banks. Mike Carrodus, founder of Substantive Research, estimates that research budgets at asset managers will fall a further 20 percent-30 percent in 2020.
– The SEC proposed changes to the definition of a professional investor to encourage more investment in private companies, reported Reuters. The agency wants to increase access given that a growing number of companies are staying private for longer. The SEC thinks the current definition, which is based on wealth and income, could be too restrictive. There will be a public consultation on the changes.
– The Bank of England (BoE) launched a major project to better understand the risks posed to financial institutions by climate change, reported the BBC. BoE will conduct climate-related stress tests on banks and insurance firms in a similar manner to how it currently runs financial stress tests. The tests will focus on two types of risk: physical risks related to weather activity and transition risks related to moving to a low-carbon economy.
– In other BoE news, it’s been revealed that hedge funds have been receiving access to the audio of press conferences by the central bank before the rest of the market, according to The Times (paywall). One of the bank’s suppliers has been sending an audio feed to traders, who would then have the opportunity to trade on market-moving news ahead of competitors, stated the newspaper.
– Apple will face a vote on its human rights policies at next year’s annual shareholder meeting after failing to have a resolution struck from the agenda, reported the Financial Times (paywall). The tech giant has faced criticism over human rights after removing an application that helped protestors track police during demonstrations in Hong Kong. The resolution asks Apple to make a commitment to freedom of expression and explain how it responds to government actions that may limit free expression.
– The Tel Aviv Stock Exchange is considering measures to boost liquidity and attract retail investors, reported Reuters. The exchange is suffering from a drop in listings and falling volumes. The plans include encouraging market-making and restricting off-exchange transactions. During 2019, a quarter of securities trading volume resulted from transactions ‘entered into off the exchange,’ said Reuters.
The week in investor relations is taking a break for the holidays but will be back in January 2020.