The week in investor relations: Investors suffer Fomo, Hong Kong enters recession and Fidelity warns boomers over equities
– Investors are lowering cash holdings and feel more optimistic about global growth, according to Bank of America Merrill Lynch’s global fund manager survey, Reuters reported. The monthly survey finds that average cash levels fell from 5 percent to 4.2 percent between October and November and are now at their lowest level since June 2013. The survey said investors are suffering from Fomo – fear of missing out – and are increasing positions in cyclicals and equities.
– The Hong Kong economy has entered a recession following months of anti-government protests, noted the BBC. The city’s economy shrank 3.2 percent in the three months to the end of September, the second consecutive quarter of contraction. Protests began in June after the government planned to bring in a law that would allow suspects to be extradited to mainland China to be tried. The law has been scrapped but protests continue every weekend, leading visitors to stay away from the city.
– Fidelity Investments has warned the baby boomer generation – those born between 1944 and 1964 – that they are investing too much money in the stock market, reported Bloomberg. In its third-quarter retirement report, the investment firm said more than a third of baby boomers had exceeded the recommended maximum level of 70 percent of assets in equities for those 10 years away from retirement. Savers have been increasingly drawn to equities by the long-standing bull market, noted the report.
– Two thirds of IROs say investors are putting more focus on long-term strategy when assessing companies, according to the results of a survey carried out by Citigate Dewe Rogerson, reported City AM. The survey says the growth of passive investing has prompted more interest in long-term strategies, given that passive funds are unable to sell their shares. The survey also finds growing concern over shareholder activism with one in five respondents saying they perceive an increased activist threat.
– The founder and chairman of British pub chain JD Wetherspoon has attacked the UK Corporate Governance Code during a trading update, reported Yahoo Finance. Tim Martin said the code hands too much power to non-executive directors, rather than executives and employees, among other criticisms. ‘A core problem is that corporate governance institutionalizes short-termism, inexperience and navel-gazing,’ he said, adding that it has led to ‘long and almost unreadable annual reports, full of jargon, clichés and platitudes.’