Max Severijns

US politicians will have to raise the debt ceiling again on 15 December to avert the first ever default on US obligations. A so-called “default” puts at risk payment obligations such as interest on debt. Investors are getting very nervous about this. 

“The equity market is moving towards a bubble”, said Jeroen Blokland said during the annual Fondsnieuws Investment Outlook, organised by Investment Officer Luxembourg’s Dutch sister publication. High valuations and exaggerated growth expectations make the probability of corrections in 2022 very high. This statement did not meet with unanimous approval. According to Edin Mujagic, chief economist at OHV Asset Management, this is in fact the ideal environment for equities.

“The world needs to be prepared for a debt crisis in emerging markets. Rising interest rates will draw capital away from vulnerable countries”, warned Kristalina Georgieva, director of the IMF. For the time being, not everyone feels moved by this warning, “emerging market debt is a paradise for active investors”, according to Wouter van Overfelt, senior portfolio manager EM debt at Vontobel, in an interview with Fondsnieuws, Investment Officer Luxembourg’s Dutch sister publication.

The warning that climate-related damage will be more difficult to insure is growing. A challenging time is coming for real estate investors, as their investment horizon becomes riskier.

Despite much debate in the market about the hows and whys of ESG integration, impact investing is steadily making its way into the financial mainstream. In 2021, the first year in two decades in which extreme poverty once again rose, with lasting consequences for the world’s most vulnerable people in particular, the financial industry once again demonstrated the importance of real, tangible impact.

Chinese President Xi Jinping, leader of the world’s largest CO2 emitter, is conspicuous by his absence at the COP26 climate summit in Glasgow. Critics consider the ‘unclear’ Chinese climate policy the nail in the coffin of the Paris Agreement. 

Gamestop and Dogecoin are passé. The world of internet memes – “fast-spreading internet jokes” - has a new hobbyhorse: Nancy Pelosi. The buying and selling of shares by the “Queen of Stocks”, as the Speaker of the US House of Representatives is called on financial meme pages and TikTok accounts, is being closely watched by retail investors.

In the run-up to the Japanese elections later this month, Prime Minister Fumio Kishida has promised to discontinue “Abenomics”. According to him, the economic programme has not led to broader growth. Lodewijk van der Kroft, managing director at Comgest, said investors need not worry about such statements. “This is election rhetoric for the stage, Abenomics will not be thrown out with the rubbish.”

While the price of gas shot through the roof last week, it seems that a real energy crisis can be avoided in the short term now that Vladimir Putin is going to supply extra gas. Nevertheless, the unexpected turbulence in the energy market is reason for ING to reassess its investment strategies. It is a perfect storm.

With the upcoming COP26 Climate Change Conference in Glasgow, the pressure on pension funds to green their investment portfolios increases. At the same time, the debate on fossil investments is intensifying. But what is the best roadmap: exclusion or engagement? Pension fund PME chooses option 1, while asset manager PGIM explicitly favours option 2. 

PME: disinvestment logical