Sector

As an international financial hub, Luxembourg is seen as well positioned to play a key role in talks about strengthening and financing the recovery of Ukraine’s economy once the war is over. A Luxembourg roundtable, scheduled for 22 February, will discuss Luxembourg’s potential role and seeks to create a number of expert-based working groups.  (Free to read)

Trading shares during the day that a company releases its earnings reports by going long on ones with positive news and short on the ones with negative news can generate a daily return of 1.3 percent.

That is the bold conclusion of a study conducted jointly by the Amundi Institute and the Toulouse School of Economics. Using artificial intelligence software from Causality Link and a long-short portfolio, the researchers were able to confirm that news signals influence short-term price movements.

So which part of the financial services sector in Luxembourg contributes most in terms of added value to the grand duchy’s economy? It’s the banks, not the investment funds, says a new study published this week by Luxembourg For Finance and Deloitte.

In 2021, the banking sector remained responsible for the most significant contribution, representing over half of the financial services industry’s added value, with the fund industry following at just under 31 percent, the study said.

Discussing and agreeing a single and coordinated EU “industry policy” has often been difficult and controversial in Brussels. Yet, all of a sudden, the “i-word” is back in fashion; the European Union should even make it the reason for its existence, according to newly reported internal documents. Investors however have few fond memories of plans like these. 

Uncertainty regarding monetary policy, inflation, and the pace at which the climate crisis is worsening are known factors that will determine the shape of investment charts in 2023. On top of that, the risk exists that an unexpected event will leave its mark. Investment Officer’s experts and columnists are clear in their expectations for this year. “The list of tough questions for 2023 is long.”

In a year when war broke out in Ukraine, the S&P 500 lost about 20 percent of its value, the US Federal Reserve raised interest rates seven times and when the global inflation rate spiked, investors looked for wisdom in market research reports on bubbles, grey swans and investing in niche markets, a look at the most popular reports downloaded from Investment Officer shows.

While Europe is survival-mode as a result of a war and an energy crisis, the rest of the world is working diligently and purposefully for the future. A notable news item in this context received limited attention: Chinese President Xi Jinping’s visit to Saudi Arabia. During that visit, a straw fire was lit up that could eventually blow up the petrodollar’s omnipotence. 

Financial regulators across the European Union next year will embark on a comprehensive review of costs that investment firms charge to investors for their investment funds. Claude Marx, director general of Luxembourg financial supervisor CSSF, speaking at the Alfi private assets conference on Wednesday, elaborated on some of the next steps. The industry, he said, needs to maintain its focus on efficiency, which also is in the interests of investors.

A widening equity gap and a subdued securitisation market are clear signs that the European Union is failing to deliver on its ambitious Capital Markets Union plan to boost the popularity of risk capital and financial markets, a fresh industry report warned on Thursday.

Luxembourg financial supervisor CSSF, a long-time ally for Luxembourg’s booming fund industry, is drawing reluctant criticism from some people in the sector over its recently announced initiative to review pricing mechanisms for Ucits and AIF investment funds. Responding to press questions in this context, the finance ministry signalled that “certain features” of Luxembourg’s fund legislation will be modernised “in the near future”.