The week in investor relations: Active managers underperform, and Unilever nears share unification
– The belief that Joe Biden is going to win the upcoming US election drove a shift in US stock purchases, The Guardian reported. Despite failing to predict US President Donald Trump’s win in 2016, the newspaper wrote that there has been a shift from US government bonds and tech stocks to buying shares in smaller companies and renewables – ‘which could be boosted by the Democrats’ commitment to greener energy initiatives’.
– The UK’s active fund managers struggled to outperform the market during the first half of 2020, reported the Financial Times (paywall). In the six months to June, 45 percent of active funds failed to beat the S&P UK BMI index, noted the article, citing a report by S&P Dow Jones Indices.
– The rush to list in Hong Kong looked set to continue, with technology and biotechnology companies helping to fill the pipeline, said Bonnie Chan, head of listing at HKEx, in an interview with Bloomberg. The value of listings in Hong Kong is up 33 percent this year, according to the article.
– Staying in Hong Kong, it was also reported that Charles Li, chief executive of the Stock Exchange of Hong Kong, is to retire 10 months early. The South China Morning Post reported that Li’s right-hand man, Calvin Tai, ‘will take his place on an interim basis from January 1’, with the exchange saying that ‘good progress’ was being made in the search for a permanent replacement.
– Unilever took a step closer to ending its 90-year-old Anglo-Dutch dual structure after shareholders in the UK entity of the business voted in favor of a share unification, reported Reuters. Shareholders in the Dutch entity of the business voted in favor of the plan last month. Unilever believes a single listed company will be more nimble at buying and selling assets.
– China’s $1 tn sovereign wealth fund has set up a special team to divest stakes in soured assets, including investments in Noble Group, Teck Resources and Chesapeake Energy, reported the South China Morning Post. China Investment Corp has set up a special team, led by managing director Benjamin Bao, to tackle what the paper describes as a ‘growing pile of troubled investments’.
– Executive pay at Walt Disney was in the news this week. Reuters reported that US Senator Elizabeth Warren is demanding more information on the firm’s plans to lay off 28,000 workers while restoring payments to some executives who had taken cuts due to the pandemic.
– The EU ‘bowed to pressure’ on the deadline for its new anti-greenwashing rules, reported the FT. Asset managers will be given more time to gather information on the ESG risks in their portfolios given the complex nature of the data, said the paper, citing ‘people familiar with the matter’. The EU’s sustainable investing rules are being designed to clamp down on greenwashing.