Investment Officer

Beyond the suffering and humanitarian crisis from Russia’s invasion of Ukraine, the entire global economy will feel the effects of slower growth and faster inflation, the International Monetary Fund said on Wednesday.

“We live in a more shock-prone world,” IMF Managing Director Kristalina Georgieva (pictured) recently said at a press briefing in Washington. “And we need the strength of the collective to deal with shocks to come.”

There are a number of important events expected this week that will affect investors. The most important is undoubtedly the decision of the Federal Open Market Committee (FOMC) on US interest rates on Wednesday.

European emerging-market bond funds pose limited contagion risk to the broader financial system in light of the conflict in Ukraine, rating agency Fitch said on Monday. The funds have low exposure to Russia, Ukraine and Belarus, which should limit the risk of a large increase in redemptions. 

Financial supervisors in Luxembourg and elsewhere in Europe on Monday stepped up their efforts to maintain financial stability, protect investors and ensure the orderly functioning of markets as part of the European Union’s overall response to the “tragic consequences” of Russia’s military aggression.

Luxembourg’s financial system has weathered the pandemic well, but the Russia-Ukraine conflict poses new risks to Luxembourg’s economy while the surge in housing prices from recent years threatens the attractiveness of the Grand Duchy, the International Monetary Fund (IMF) has concluded after a two-week mission.

Dutch financial group ING is bracing for a criminal indictment in Luxembourg over its failure to properly manage anti-money laundering (AML) processes at its unit in the Grand Duchy.

The bank said it was informed in January by a Luxembourg investigating judge that he intends to instruct the relevant prosecutor to prepare a criminal indictment regarding shortcomings in the anti-money laundering at ING Luxembourg.

Despite volatility sparked by Russia’s invasion of Ukraine at the end of the month, global inflows into equity funds and exchange traded products increased in February to 99.6 billion dollars from 74.4 billion in January, BlackRock said on Thursday in a note to investors.

Fixed income products again saw a resumption of inflows, of 16 billion dollars, compared to net outflows in February. 

The four leading international consultancy firms, known as the Big Four, have joined a growing list of companies that this week decided to cut their ties with operations in Russia because of the invasion of Ukraine.

PWC, KPMG, Deloitte and Ernst & Young collectively employ some 14.000 staff in Russia. The companies said ties with its Russian business will be severed, letting these operation continue but no longer as part of their networks.

Mutual funds and ETFs investing in Russian stocks and bonds posted unprecedented losses last week after Russian president Vladimir Putin decided to invade Ukraine. Managers of emerging market funds with Russia exposure are now also closely watching the effects of potential withdrawals and may face liquidity challenges now that the EU and US have collectively decided to remove Russia from the international payments network Swift.

Starlight Capital, a China-based venture capital group founded in 2021, has picked Apex Group to provide it with fund administration and corporate services, the companies announced on Monday.

Apex, active in the Luxembourg fund services ecosystem also with FundRock and LRI Invest, said it will service Starlight’s latest funds and provide it with its eFront software solution that will enhance efficiency and reporting transparency through a robust and scalable platform.