Emerging Market Corporate Bonds Begin to Sparkle

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Photo courtesySabrina Jacobs, Pictet Asset Management's Senior Client Portfolio Manager

Professional investors joke that the UK is turning into an emerging market (EM). This is a disservice to actual EM economies. In fact, in some respects less developed countries are proving a relative haven of stability – not least in the corporate bond market.

Broadly speaking, EM corporate borrowers are less vulnerable to capital flight than in the past due to greater local investor ownership of their bonds, have relatively low leverage and are by and large based in countries with robust macro-economic fundamentals. And at a time of general bond market volatility, yields on short duration EM corporate credit look particularly attractive (see Fig. 1).

Of course there is plenty of variation between regions and sectors, so investors need to be diligent in analysing corporate nitty gritty as well as having good understanding of the macro-economic picture. But such efforts are likely to be well rewarded: in many cases, EM corporate bonds are cheap compared with their fundamentals, such as, for instance, the yield spread they offer relative to leverage.

Fundamental attractions

EM companies have done exceptionally well so far in 2022, with revenues up 22 per cent and earnings up 27 per cent during the second quarter on the same period a year earlier. At the same time, their balance sheets are looking healthy, with net debt down 7 per cent year-on-year in the second quarter. This has helped reduce the net leverage ratio to some 1.2 times from 1.3 times in 2021 (excluding Russia and Ukraine for obvious reasons and real estate), according to JP Morgan research.

Many EM companies have built up their profit margins in the wake of the pandemic. This, in turn, leaves them better able to absorb among other things, higher costs from commodity price inflation. Take steel companies in India. The sector has been one of the hardest hit from rising input costs and more recently export taxes. Yet, due to their post-pandemic profit surge, domestic operators have been able to absorb a reduction of 6 percentage points in profit margins to a 12–month average of 21 per cent in Q1 versus a peak of 27 per cent last year.

For credit investors, this still represents a good margin of safety. Furthermore, while these rising input costs might prompt a tick up in leverage, large Indian steel makers have also been on a deleveraging trend for the past few years. Similarly, most other commodity exporters have been doing well.

Meanwhile, many retail-focused companies and those with premium products are in a strong position to maintain pricing power and thus keep up with inflation. In China, large and highly rated tech companies have maintained strong margins as their ultimate customers are to a good extent retail, as well as to the fact that inflation has been running at a considerably lower rate in China than elsewhere. Signals from central government that its regulatory clampdown has come to an end has also helped. At the same time,  US restrictions on Chinese tech is having limited impact, restricted to chipmakers.

At the other end of the spectrum there are industries in which rapidly rising costs cannot immediately be passed on to customers and where there is no natural hedge against foreign exchange volatility, such as telecoms. We generally like the sector for its defensive characteristics and predictability of cash flow. But where companies have issued longer tenured contracts for instance for broadband, this means no opportunity to raise pricing for existing customers in the near-term.

What’s more, the more generic the product, the harder it is for companies to pass on costs. And some sectors have been heavily exposed to the energy shock – those utility companies not fortunate enough to be extracting oil or natural gas are feeling the pinch. This is especially the case for utility companies selling to retail customers, not least where governments have been keen to stem inflationary pressures by limiting how much costs are passed through to households.

Prudent financial policies and balance sheet deleveraging in the past five to 10 years have helped most EM corporations across Europe, Africa and the Middle East to prepare themselves for current financial market disruptions.

The wider good health of the EM corporate universe is reflected in its default rates. Strip out Russia, the Ukraine and Chinese real estate and the default rate is a mere 1.2 per cent year-to-date.

Sticking closer to home

EM corporations are also benefiting from increasingly mature domestic financial markets. Being less reliant on foreign sources of capital means that investment programmes are less prone to the whims of global finance and therefore can be more stable than in the past – domestic sources of finance also tend to be stickier. As these countries have grown richer, their banking sectors have become better able to service increasingly sophisticated domestic savers. Furthermore, domestic banking sector balance sheets have been built up in the wake of the Covid pandemic and thus enabled banks to extend credit actively again.

As such, companies in Indonesia, the Philippines and India in particular have increasingly been buying back their outstanding dollar denominated debt and refinanced through cheaper bank loans priced in local currency. That shift is being accelerated by the US dollar’s appreciation and rising US interest rates – increasing the cost of dollar funding – and the cost of these liabilities has helped push companies toward domestic lenders. So, for instance, Indian banks, supported by strong and improving credit quality, have been happy to extend credit and as a result their loan books have grown at a rate of some 12-15 per cent through the first half of 2022 (see Fig. 2).

And with many EM central banks either well ahead of developed market peers in tightening monetary policy or not needing to act as forcefully in combating inflation, funding rates there are likely to grow less significantly than they are for dollar borrowers – though determining the balance of effects here needs good macro analysis on the part of investors.

A good place to start

Seasoned investors know that entry points matter. As with other asset classes, EM debt has been battered during the past year. Overall, there was USD62 billion in cumulative outflows by September, though there were signs that this was stabilising, with around a quarter of that likely to have been in credit products.

Spreads over US Treasury bonds are generous – at 400 basis points against a ten-year average of 315 basis points. And given that Treasury bond yields are themselves at highs not seen in a decade, actual EM corporate yields are at levels not seen in years – 8.3 per cent, last seen in August 2009.1

With lower demand and market volatility, gross supply of EM corporate debt has slumped to USD196 billion so far in 2022 (as per end Sept), against around USD450 billion during the same period in 2021 (see Fig. 3). However, EM companies are relatively well insulated against current fixed income market gyrations. Many firms took advantage of historically low rates during recent years to extend the maturity of their debt, so there’s little in terms of a near-term financing wall, especially in high yield EM, where only USD85 billion comes due in 2023, USD95 billion in 2024 and USD100 billion in the following year.

Times of market stress create opportunities for investors who can pick out the diamonds from the shattered glass. There are plenty of these in the EM corporate universe, where investors are increasingly well compensated for taking on risk with yields that haven’t been seen in many years generated by high quality, well-run companies.

 

 

Opinion written by Sabrina Jacobs, Pictet Asset Management’s Senior Client Portfolio Manager

 

Discover more about Pictet Asset Management’s Emerging Markets capabilities 

 

Note

[1] All for JP Morgan CEMBI Broad Diversified as per 14th October 2022; average rating of BBB-.

AXA IM Launches an Equity Fund Dedicated to the Plastic and Waste Transition

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AXA Investment Managers (AXA IM) announces the launch of the AXA WF ACT Plastic & Waste Transition Equity QI fund which supports, on the long-term, the United Nations Sustainable Development Goals (UN SDGs), in particular the SDG 12, Responsible consumption and production, by investing in companies that are limiting or managing in a sustainable way their plastic use or have efficient waste management practices.

Managed by the AXA IM Equity QI team, responsible for AXA IM’s quantitative equity capabilities, the fund invests in companies that are UN SDG 12 aligned, for example through the actions they are taking in their operations, such as production processes, recycling rates and supply chain management, to limit or manage in a sustainable way their plastic and waste footprint or because the company provides products that directly support responsible consumption and production. 

The fund invests in large, mid and small cap companies across developed and emerging markets. The selection and weightings of the stocks is based on a proprietary quantitative process that incorporates both financial and non-financial data with the objective of identifying fundamental drivers of risk and return whilst structuring the portfolio in a way that meets the fund’s SDG objectives. As an example, the management team uses Natural Language Processing (NLP) to increase exposure to companies that are actively articulating a plastic or waste approach in their earnings calls. 

The fund forms part of AXA IM’s ACT range. It harnesses both external and internal data (including AXA IM qualitative SDG insights) to measure positive contributions of the companies to the UN SDG 12. 

Commenting on the launch of the fund, Jonathan White, Head of Investment Strategy & Sustainability in AXA IM Equity QI team, said:“Companies that are reducing waste and supporting a more sustainable approach to their use of plastic play a key role in the effort to mitigate climate change and stem biodiversity loss.

We expect the next few years to be pivotal in plastics pollution mitigation driven by both government regulation and changing end-consumer preference. These structural trends are likely to drive significant growth in segments of the markets such as sustainable packaging and plastic recyclying.

As such its our view that companies that are facilitators or leaders in waste management and plastic-use are not only sustainable investments but could also be an attractive long term investment opportunity.”

The fund is or will be registered and available to professional and retail investors in Austria, Belgium, Denmark, France, Germany, Italy (institutional only), the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Snowden Lane Partners Secures $100 Million Credit Facility

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Snowden Lane Partners and Estancia Capital Partners (“Estancia”), announced that Snowden Lane secured a new $100 million credit facility.

The new facility replaces a facility originally secured with ORIX Corporation in 2018 and subsequently expanded in early 2022. The $100 million of available credit will enable Snowden Lane to significantly bolster its recruiting momentum and position itself for sustained growth through 2023 and beyond.

In 2021, Snowden Lane recruited $2.4 billion in client assets and 13 advisors, and in 2022 the firm recruited over $1.5 billion in client assets and 10 advisors, making it one of the fastest-growing firms in the independent RIA space. Snowden Lane currently services ~$9 billion in client assets.

“We’re excited to kick off the new year with this announcement, as this additional, non-dilutive capital will allow us to execute our vision for the firm’s next stage of growth,” said Rob Mooney, Managing Partner & CEO of Snowden Lane Partners. “We are extremely grateful for Estancia’s support. Estancia continues as a committed partner since the early days of our business and played a crucial role helping Snowden Lane realize its potential. We look forward to continuing our shared success in the coming year.”

Takashi Moriuchi, Managing Director and Co-Founder of Estancia added: “Estancia’s most important investment criteria is always partnering with companies who have experienced management teams capable of executing on their growth strategy and maximizing value. Snowden Lane and its executive team is a prime example of why this is so important. Under the management team’s leadership, the firm rapidly become a key player in the independent wealth management space and is an attractive destination for advisors seeking a full-service alternative to the wirehouses. As Snowden Lane’s partner, we believe this financing provides even more support for management to continue attracting amazing financial advisors leading to even greater growth.”

Since its founding in 2011, Snowden Lane has built a national brand, attracting top industry talent from Morgan Stanley, Merrill Lynch, UBS, JP Morgan, Raymond James, Wells Fargo, and Fieldpoint Private, among others, the firm said.

Similarly, Estancia raised $420 million in committed capital and nearly $150 million in co-investment capital across two funds, completed 14 platform investments and 18 add-on investments over the last decade.

Snowden Lane employs 132 total professionals, 72 of whom are financial advisors, across 12 offices around the country: Pasadena and San Diego, CA; New Haven, CT; Coral Gables, FL; Chicago, IL; Pittsburgh, PA; Baltimore, Salisbury and Bethesda, MD; San Antonio, TX; Buffalo, NY, as well as its New York City headquarters.

In connection with the new facility, Apogem Capital served as joint lead arranger, joint bookrunner, and administrative agent. Monroe Capital also served as joint lead arranger and joint bookrunner.

Franklin Templeton names Manraj Sekhon CIO for Templeton Global Equity Investments

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Photo courtesy

Franklin Templeton has announced that effective March 31, 2023, Manraj Sekhon will assume the role of CIO of Templeton Global Equity (TGEI), leading both Templeton Global Equity Group (TGEG) and Franklin Templeton Emerging Markets Equity (FT EME), following the departure of Alan Bartlett, CIO of TGEG, who will be leaving the firm to move on to the next phase of his career.

As announced in early 2022, Manraj Sekhon was named head of Templeton Global Equity Investments (TGEI), which combined the businesses of Franklin Templeton Emerging Markets Equity (FT EME) and Templeton Global Equity Group (TGEG) under a single umbrella, while retaining the integrity of their respective investment philosophies and processes and continuing to share best practices. 

“Sekhon is a seasoned investor and investment executive, who has been leading FT EME for the past five years, since joining as its CIO in 2018. He has more than 25 years of experience researching and investing in global and international markets and managing investment teams and processes,” the firm said. 

In his expanded role, Sekhon will have CIO responsibilities for both groups and will be supported by the respective Management Committees of FT EME and TGEG, which have representation from senior investment and business leaders, who manage day-to-day investment and business development activities and work jointly to set the strategic direction of the two teams.

“We expect this change to be seamless for our clients, as day-to-day investment decision making for both teams remains unchanged. Bartlett is not a named portfolio manager for any TGEG strategies or portfolios,” the press release added. 

Franklin Templeton Emerging Markets Equity consists of over 70 investment professionals across 13 offices globally, and manages USD 30 billion in global, regional, single-country, small cap, frontier and specialty strategies as of November 30, 2022.   

Templeton Global Equity Group consists of 38 portfolio managers and analysts located across seven offices globally, and manages USD 36 billion in Opportunities, Select, Sustainability, Balanced, Leaders, Asia Pacific, Europe, and Small Cap strategies as of November 30, 2022.  

BlackRock plans to lay off 2.5% of its global workforce

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BlackRock plans to dismiss about 500 employees, about 2.5% of its global workforce.

“The uncertainty around us makes it more important than ever that we stay ahead of changes in the market and focus on delivering for our clients,” CEO Larry Fink and Chairman Rob Kapito wrote Wednesday in a note to employees accessed by Bloomberg.

One of the world’s biggest asset managers faced steep declines in equity and fixed-income markets last year.

It is the first round of job cuts at BlackRock since 2019, and will still leave the workforce about 5% higher than a year ago, Bloomberg claims.

The firm, which will report its fourth-quarter results this Friday, had about 19,900 employees at the end of September.

Rising inflation and rising interest rates have rattled asset managers and markets, with the S&P 500 index plunging 19% in the past year.

The firm, with $7.96 trillion in assets under management at the end of the third quarter, did not specify which businesses will be most affected by the job cuts.

The company’s two leaders said in the note that they would work to “manage expenses prudently” and invest profitably.

The executives sought to emphasize the firm’s ability to take in new client money. Flows into its long-term investment funds increased by $250 billion through the first nine months of last year, and analysts surveyed by Bloomberg predict they brought in an additional $116 billion in the fourth quarter.

“Our breadth and resilience,” Fink and Kapito wrote, “allow us to play offense when others pull back.”

BNP Paribas To Open New Office in Miami

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BNP Paribas announced its plans to open a new office in the metro-Miami area.

The Miami office will support the continued growth of its Global Markets business in the US, amongst others, and the increasing number of clients with a foothold in South Florida. The hub will provide an additional gateway to its regional clients, as well as expand on its network of US campuses.

The new office will be located at 801 Brickell Avenue in Miami’s financial hub, officially open for business in the 4th Quarter 2023, and employ nearly 50 full-time professionals in credit, equities, and macro products. A seven and a half year lease for the office was recently signed.

José Placido, Chief Executive Officer of CIB Americas at BNP Paribas, said: “Our new office is another recent example of scaling our business in ways that fully support our client’s ambitions, as more of our clients build a presence in South Florida. With this opportunity to better serve our clients, we deliver on our ambitions to grow our corporate and institutional banking franchise in the Americas. Our new Miami office also continues with our ‘workplace of the future’ model, focusing on wellbeing and employee experience.”

John Gallo, Head of Global Markets Americas at BNP Paribas, said: “We’re very excited to be in the growing business environment of South Florida. This office will allow us to be closer and better serve our clients, many of whom have also migrated to the area, particularly Miami and Palm Beach.”

BNP Paribas has recently made several large real estate actions in the US including opening a new office in the Philadelphia area in October 2021. The bank has also made significant facilities and work space commitments in its two metro New York City offices in Midtown West Manhattan and Jersey City, NJ. BNP Paribas signed 20 year leases for all three properties in the greater NYC and Philadelphia areas in July 2020. The group also has offices in the following major cities* (Boston, Chicago, Dallas, Denver, San Francisco and Washington, DC).

BNP Paribas’ Miami campus will be the latest example of the bank’s efforts to create best-in-class platforms and products for its local Miami-area clients, the report says. As BNP Paribas continues to pursue and execute on its growth ambitions in the region, the Miami office will integrate seamlessly with its other offices.

Pictet Asset Management: The Investment Landscape in 2023

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Luca Paolini, Pictet Asset Management's Chief Strategist, and Arun Sai, Pictet Asset Management's Senior Multi Asset Strategist

2023 will be a year when the investment environment slowly gets back to normality. Inflation will come down – even if not quite as fast as the market seems to expect. Economies will struggle for growth, but manage to stave off a deep downturn.

Equities are set to tread water, but fundamentals will suit high quality bonds. Meanwhile, emerging market assets, particularly local currency debt, are set to shine amid a weakening dollar and a revival in the Chinese economy.

The global slowdown – a number of indicators suggest various leading economies might already be in recession – has been the most anticipated one in living memory. Central banks have responded to this year’s surge in inflation by putting on the brakes, and that’s filtering through to their economies. As a result, global annualised quarterly real GDP growth is set to run at below potential through to at least the final three months of 2023 (see Fig. 1).

But at the same time, the slowdown is likely to be less painful than past recessions. Corporate and household balance sheets are healthy, both still have excess savings built up during the Covid crisis, particularly in the US. This has allowed them to absorb some of the impact of inflation, while at the same time banks have continued to lend. Nominal growth, which is key to economies’ resilience, has been running at some 10 per cent, largely on the back of very high inflation. So, unlike during the global financial crisis of 2008, this time there is no sign of a looming debt crisis in any of these economic segments.

An inflationary hurdle

Inflation will remain a hurdle, but it won’t be the market’s primary driver during the coming year (see Fig. 2). While there are signs it has already peaked in most major economies, we think investors are too optimistic about how fast inflation is likely to fall. The jobs market especially in the US remains strong, supporting wages. And components such as rents, which are a sizeable proportion of the consumption basket, are slow moving, taking longer to normalise.

We also believe central banks will be cautious about entering into a new easing cycle – certainly, they won’t make the switch anywhere near as quickly as the market expects. In part that’s because central bankers are particularly sensitive to the risks of cutting rates before inflation has been fully suppressed. To do so would risk another, even less controllable surge in inflation, which would shatter their credibility and force even more drastic efforts to get back to price stability. We don’t think they will start to ease policy until 2024.

Direction of travel is key

What matters most for markets, however, is that official rates will have stopped rising. The end of monetary tightening will be greeted with relief, giving a lift to high quality debt – both sovereign bonds and investment grade credit. Shorter maturity debt is likely to benefit first, with bonds further along the yield curve showing more modest gains amid expectations of an economic revival. Investors should be more cautious about higher yielding debt, with the economic downturn is set to push up default rates.

And once rates peak, equities should start to benefit from improving valuation multiples offsetting weaker earnings – though that’s more a story for the second half of the year.

With the US further along its tightening cycle than other major central banks, a peak in US rates is likely to put downward pressure on the dollar. The greenback is already considerably overvalued and its long-term fundamentals are poor – a currency’s long-term value is determined by fiscal discipline and productivity growth and the US scores badly on both counts.

A weakening dollar will be beneficial to emerging market assets, particularly emerging market local currency debt, which we see as a bright spot on the investment landscape, not just during the coming year but for some time to come. Further support for emerging market bonds and stocks is set to come from China’s economic revival. We think that the government will have to respond to recent protest against its draconian zero-Covid policy by relaxing restrictions. At the same time, it has been offering some support to the country’s vital but beleaguered real estate sector. Together, we think these effects will underpin growth of some 5 per cent over the coming year. Healthier Chinese growth will also benefit other emerging Asian economies.

In a nutshell, 2023 will be a year of caution for investors. But after a miserable 2022, when virtually all asset classes suffered drawdowns (with the notable exception of energy), there will also be reasons for cautious optimism.

 

 

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist, and Arun Sai, Pictet Asset Management’s Senior Multi Asset Strategist

 

Discover Pictet Asset Management’s full Annual Outlook for 2023

Insigneo Adds Mauricio Viaud as Senior Investment Strategist and Portfolio Manager

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Photo courtesyMauricio Viaud, Senior Investment Strategist & Portfolio Manager en Insigneo

Insigneo announced the hiring of Mauricio Viaud as Senior Investment Strategist & Portfolio Manager. He will report to Ahmed Riesgo, Chief Investment Officer.

Prior to joining the firm, Viaud worked as a Senior Equity Research Analyst at Janney, Montgomery, Scott, where he provided equity research insight and analysis for global stock portfolios. Before this, he was a buy-side equity research analyst at Bank of New York Mellon, where he provided equity research coverage for the energy and materials sectors for three large institutional mutual funds.

“Incorporating Mauricio within our CIO office will better position us to meet the growing demand from our network for high-quality research and asset allocation guidance,” said Javier Rivero, President and Chief Operating Officer of Insigneo. “This strategic hire further evidences our commitment to invest in our firm and expand our team, which is particularly exciting in light of our company’s international leadership positioning as well as the current market conditions.”

Viaud has over 22 years of experience in capital markets and the financial services industry, including experience in equity research, portfolio management, and formulating and communicating firm-wide investment strategies.

He also has significant experience providing equity research for institutional mutual funds, writing equity research reports, formulating investment strategy as a member of various strategy committees, and executing portfolio management responsibilities.

“We are pleased to add a professional of Mauricio’s caliber to our growing team, as part of our commitment to align ourselves with the industry’s best and brightest talent and continue to expand our asset management, research, and data analytics capabilities,” Riesgo said. “Mauricio’s outstanding track record of execution, his impressive market insights and strategic thinking make him an ideal fit for this important leadership role at Insigneo, where he will have a pivotal role in helping chart the path for our next chapter of success.”

Specifically, Viaud will join the CIO Office in a dual role as a Senior Investment Strategist and Portfolio Manager. He will become an integral part of the firm’s research team and investment committee, as well as the service offering of the team. On the research side, he will issue equity research reports for major Latin American companies, provide investment recommendations and opinions, and participate in high-level client meetings. In addition, he will publish a weekly newsletter for clients. On the portfolio management side, he will manage a Latin American Equity SMA focused on providing alpha in the space for equity investors in the region.

“I am thrilled to join Insigneo and consider it a natural next step in my career,” Viaud said. “Insigneo’s powerful platform, market leadership and dynamic growth opportunities will enable me to apply my knowledge, skills and talents in a rewarding, collaborative team environment.”

Viaud’s diverse financial-services experience spans high-net-worth client relationship management, equity analysis, portfolio management and equity strategy. He has provided analyst coverage for a wide range of global stocks and helped manage equity portfolios and formulate investment strategies. He has appeared on a variety of radio and printed media publications, including Financial Times.

Viaud has a bachelor’s degree in finance and international business from the University of Richmond, as well as an Executive MBA focused on asset and wealth management from Carnegie Mellon’s Tepper School of Business and HEC Lausanne in Switzerland. He is currently working on attaining the CFA charter, having completed the Level II examination.

Blackstone Announces the Ten Surprises for the 2023

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Byron R. Wien, Vice Chairman together with Joe Zidle, Chief Investment Strategist in the Private Wealth Solutions group at Blackstone, issued their list of the Ten Surprises of 2023.

This is the 38th year Byron has given his views on a number of economic, financial market and political surprises for the coming year.

Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.

Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. Byron joined Blackstone in September 2009 as a senior advisor to both the firm and its clients in analyzing economic, political, market and social trends. In 2018, Joe Zidle joined Byron Wien in the development of the Ten Surprises.

Byron and Joe’s Ten Surprises of 2023 are as follows:

  1. Multiple candidates on both sides of the aisle organize campaigns to secure their party’s presidential nomination. There are new headliner names on the respective tickets for 2024.
  2. The Federal Reserve remains in a tug-of-war with inflation, so it puts the word “pivot” on the shelf alongside the word “transitory.” The fed funds rate moves above the Personal Consumption Expenditures price index and real interest rates turn positive, a rare phenomenon relative to the last decade.
  3. While the Fed is successful in dampening inflation, it over-stays its time in restrictive territory. Margins are squeezed in a mild recession.
  4. Despite Fed tightening, the market reaches a bottom by mid-year and begins a recovery comparable to 2009.
  5. Every significant correction in the market has in the past been accompanied by a financial “accident.” Cryptocurrencies had a major correction and that proved not to be a systemic event. This time, Modern Monetary Theory is fully discredited because deficits have proven to be inflationary.
  6. The Fed remains more hawkish than other central banks, and the US dollar stays strong against major currency pairs, including the yen and euro. This creates a generational opportunity for dollar-based investors to invest in Japanese and European assets.
  7. China edges toward its growth objective of 5.5% and works aggressively to re-establish strong trade relationships with the West, with positive implications for real assets and commodities.
  8. The US becomes not only the largest producer of oil, but also the friendliest supplier. The price of oil drops primarily as a result of a global recession, but also because of increased hydraulic fracking and greater production from the Middle East and Venezuela. The price of West Texas Intermediate crude touches $50 this year, but there’s a $100 tick out there sometime beyond 2023 as the world recovers.
  9. The bombardment, destruction and casualties in Ukraine continue for the first half of 2023. In the second half, the combination of suffering and cost on both sides necessitates a ceasefire and negotiations on a territorial split begin.
  10. In spite of the reluctance of advertisers to continue to support the site and the skepticism of creditors about the quality of the firm’s debt, Elon Musk gets Twitter back on the path to recovery by the end of the year.

The “Also Rans” of 2023

Every year there are always a few Surprises that do not make the Ten, because we either do not think they are as relevant as those on the basic list or we are not comfortable with the idea that they are “probable.”

  1. Because of medical breakthroughs across the board, many people decide on a cryogenic burial, expecting to be defrosted when a cure for the disease that caused their demise is discovered. Funeral homes across the country advertise that “It’s Nice to Be On Ice.”
  2. A technology breakthrough in reducing the carbon emissions of coal-fired plants takes the edge off the climate / global warming scare. This lowers the political pressure on emerging markets to make a rapid transition to renewable energy sources.
  3. India begins to compete seriously to win/retain the manufacturing base that started looking for a new home after becoming increasingly uneasy with the uncertainty that has continuously surrounded US–China policies. The country initiates a campaign to attract global multinationals, focusing on its young population, relatively low income and growing consumer market, and prioritizing policies that incentivize investment in the auto, energy, pharma and tech sectors. Apple and Samsung are a proof of concept after successfully producing their respective flagship phones for global markets.

iCapital Appoints Regulatory Expert Agnes Bundy Scanlan to Its Board of Directors

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Agnes Bundy Scanlan

iCapital announced the appointment of Agnes Bundy Scanlan to the company’s board of directors, effective January 1, 2023.

Bundy Scanlan brings a wealth of experience from her 30-year career in regulatory risk management and compliance.

Since May 2020, she has served as president of The Cambridge Group, a regulatory risk management firm that advises financial services and fintech firms. A former chief regulatory and compliance officer and global chief privacy officer at TD Bank,

She also serves on the boards of AppFolio, R1 RCM, and Truist Financial. In 2021, she was recognized as one of Savoy’s Most Influential Black Corporate Directors.

“Having an active and engaged board of directors with a variety of backgrounds and experiences is vital to the success of iCapital. I’m delighted to welcome Agnes to our board,” said Lawrence Calcano, Chairman and Chief Executive Officer of iCapital. “We look forward to working with her and benefiting from her wisdom and experience.”

Before joining The Cambridge Group, Ms. Bundy Scanlan worked as a senior advisor for consulting firm Treliant and northeast regional director at the Consumer Financial Protection Bureau. She also has held various executive roles at Bank of America and FleetBoston Financial. Earlier in her career, she was counsel at the U.S. Senate Banking Committee.

“I’m excited to join iCapital’s board of directors,” said Bundy Scanlan. “iCapital is a leader in making alternative investments more accessible to advisors and investors. I look forward to working with Lawrence and iCapital to continue to deliver on this mission.”