Indice Tracker
Macro
China’s forex reserves climb for the first time in 2022, but yuan depreciation pressure remains (Source: SCMP)
China’s foreign exchange reserves grew by USD 80.6bn in May, the first increase this year, according to official data, amid growing pressure on the world’s second largest economy that could further weaken the yuan.
The country’s foreign exchange reserves – the world’s largest – rose to USD 3.13tr last month from USD 3.12tr in April, according to data from the State Administration of Foreign Exchange (SAFE) released last Tuesday.
The exchange regulator said in a statement the 0.26% growth last month from April mainly reflected the valuation effect from exchanging other major currencies into US dollars – in which its reserves fund is denominated – and changes in global asset prices.
China’s moderating inflation leaves room for more easing (Source: Bloomberg)
Chart: China’s Consumer Price Index
China’s inflation moderated in May as global commodity prices cooled and consumer demand weakened, leaving room for the government to ease monetary policy and add stimulus to shore up the economy.
The producer price index rose 6.4% last month from a year earlier, the weakest pace since March 2021, National Bureau of Statistics data showed Friday. That compares to 8% growth in April, and it was in line with economists’ expectations.
Consumer prices, meanwhile, rose 2.1%, just under the median forecast of a 2.2% increase in a Bloomberg survey of economists, and unchanged from April.
Finance
Singapore prepares to kick off inaugural USD 25bn Green Bond Program (Source: ESG TODAY)
The Government of Singapore announced the publication of its Green Bond Framework, taking a step closer to its inaugural green bond issuance to help fund its green transition plan, and to support the development of the country’s sustainable finance market.
The government is anticipating its initial green bond offering in the coming months and has announced plans to raise up to SGD 35bn (USD 25bn) through green bond issuances through 2030.
Proceeds from Singapore’s green bond issuances will be used to finance expenditures and investments supporting the country’s recently launched sustainable transition strategy, the Singapore Green Plan 2030.
Temasek pledges USD 3.6bn for climate-focused investment platform (Source: Reuters)
Singapore's Temasek Holdings has committed an initial SGD 5bn (USD 3.6bn) to launch its GenZero investment platform aimed at accelerating decarbonisation, marking one of the largest such outlays by a state investor.
GenZero will invest globally across three focus areas, climate-driven technologies, solutions for protecting natural ecosystems and services to reduce carbon emission, Temasek said in a statement.
Neuberger Berman and UBS establish UN SDG fund (Source: Funds Europe)
Investment manager Neuberger Berman has reframed its existing USD 35m global high yield fund to focus on the UN Sustainable Development Goals (UN SDGs), in partnership with UBS Global Wealth Management.
The fund has been renamed the Neuberger Berman Global High Yield SDG Engagement Fund. It will be available to UBS clients in Switzerland and other select international markets exclusively for six months, after which the fund will open to all eligible global investors, excluding the US.
The fund’s managers will look to engage with issuers on objectives aligned with the UN SDGs. They have also pledged to deliver regular reporting on engagement progress by sharing case studies and key performance indicators relating to the issuers’ products, services, operations or processes.
SG-based Envision Digital scores USD 210m in round backed by Sequoia, GIC (Source: DealStreetAsia)
Envision Digital, a Singapore-headquartered AI and Internet technologies software provider, has announced raising USD 210m in a Series A funding round anchored by Sequoia China and backed by GIC.
The firm, which is a part of Chinese renewable energy-focused Envision Group, said in a statement last week that the fresh capital will help it accelerate its transition to net zero through global expansion, additional R&D and exploration of new strategic partnerships.
The company provides AI and Internet of Things software driving the transition to net zero. Its proprietary tech operating system connects and manages more than 200 million smart devices and 400 gigawatts of energy assets globally.
Chongqing-based Talent New Energy secures hundreds of million yuan in round A++ funding (Source: 36Kr)
Solid-state battery developer Talent New Energy has announced to secure hundreds of millions yuan in its round A++ funding, without disclosing the specific amount. The investment was led by CCIG, China Merchants Venture.
It is the company's second financing round completed in the past three months, following the round A+ announced in March.
Talent New Energy will utilise the funds to expand its production and talent pool, specifically to accelerate the commercialisation of its half-solid state lithium battery.
Industry
Biden to waive tariffs for 24 months on solar panels hit by probe (Source: Reuters)
President Joe Biden declared a 24-month tariff exemption last Monday for solar panels from four Southeast Asian nations after an investigation froze imports and stalled projects in the United States, as reported by Reuters.
The move comes amid concern about the impact of the Commerce Department's months-long investigation into whether imports of solar panels from Cambodia, Malaysia, Thailand and Vietnam are circumventing tariffs on goods made in China.
Biden also will invoke the Defense Production Act to drive U.S. manufacturing of solar panels and other clean energy technologies in the future, with the support of loans and grants, Reuters reported citing sources familiar with the matter.
Phase II of China's massive wind and solar project to commence with a RMB 3tr investment prospects (Source: Securities Daily, CN)
China's State Council has tabled the economic development policy package last week, including accelerating the progress of the second phase of the massive wind and solar projects.
Industry sources expect the phase II project will need a RMB 1.6tr funding, while its stimulation to the relevant sectors would mean a RMB 3tr investment in total.
Exxon’s stock hits first record high in eight years (Source: WSJ)
Chart: Exxon (XOM:NYSE) share price
Exxon Mobil Corp. shares notched their first record close since 2014, another milestone in a blockbuster year for energy stocks.
The oil giant’s stock gained 1.2% to close at USD 104.59, topping its previous closing high from 23 June 2014. The shares have gained 71% this year and 8.9% in June alone.
The Ukraine war has boosted oil companies' business outlooks as Brent price more than doubled in 2022 and is trading above $100 a barrel for the first time since 2014.
The energy sector is by far the top-performing sector in the S&P 500, up 65% in 2022 while the broad U.S. stock index is down 14%.
Japanese state-owned bank halts loans to Russian gas project (Source: WSJ)
Last Wednesday, Japan Bank for International Cooperation, Japan's state-owned bank said it has suspended its loans to Arctic LNG 2 operated by Russian energy company Novatek.
The USD 21bn natural gas project aims to ship liquefied natural gas to East Asian nations, particularly China and Japan, and has targeted 2023 for the start of exports.
The project has experienced a series of setbacks since the war in Ukraine began. France’s TotalEnergies SE, an investor both in the LNG project and in Novatek itself, took an USD 4.1bn accounting charge in April in connection with the project.
Trafigura posts record USD 2.7bn profit spurred by chaotic commodity market (Source: WSJ)
Commodity trader Trafigura Group earned USD 2.7bn in net profit on USD 170.6bn in revenue in the six months through March, the company said last Friday. Profit was 29% higher than in the same period a year earlier, making Trafigura a winner from a stretch of massive volatility in energy and metal prices. Two-thirds of revenue came from trading oil and other forms of energy.
Trafigura, based in Singapore and run from Geneva, was at the center of the disturbance. It was the biggest Western exporter of Russian oil before the war, having struck up a close partnership with Russia's state-aligned producer Rosneft PJSC. The company says it has wound down much of that business since war broke out to comply with sanctions imposed by the European Union and Switzerland.
Unprecedented gains and losses in energy prices preceded the Ukraine war, beginning with the run-up in gas and power prices in Europe and Asia last fall. Traders such as Trafigura generally don’t bet on the direction of markets. Instead they use sprawling logistical and financial operations to eke out money from gaps in prices between regions, or at different times.
Thai miner Banpu using coal windfall to add gas and renewables (Source: Bloomberg)
Thailand’s largest coal miner Banpu Corp. is planning to take the windfall profits it’s currently making from fossil fuels and use them to become a cleaner energy company.
Banpu is aiming to reduce the proportion of revenue it generates from coal from around two-thirds now to 50% by 2025, according to Chief Executive Officer Somruedee Chaimongkol. It will replace those earnings with a mixture of natural gas production and power generation, as well as green technologies including solar and carbon capture, Chaimongkol said.
Climate Impact X and Puro.earth partnership to bring net-zero-aligned carbon credits to the market (Source: Climate Impact X)
Singapore-based voluntary carbon market Climate Impact X and Puro.earth, Nasdaq-backed market of carbon removal credits have reached a partnership.
This partnership will help address growing imbalances in demand and supply in the voluntary carbon market, by making it easier for businesses and financial institutions globally to access new and emerging credit types which remove carbon from the atmosphere.
It enables a first of its kind blend of nature- and technology-based removal credits in a single solution, meeting demand for portfolios that map to The Oxford Principles for Net Zero Aligned Carbon Offsetting. These principles recommend a progressive increase in the volume of long-term carbon removal and storage in the blend of credits used by corporations to reach net zero.
Tesla plans 3-for-1 stock split, joining other big tech companies (Source: WSJ)
Tesla Inc. is planning a 3-for-1 stock split, joining other technology companies with lofty share prices that have taken such a step to make ownership more accessible to individual investors.
Already this year, two of the largest tech companies have pursued stock splits. Amazon.com Inc. recently implemented a 20-for-1 stock split, following shareholder approval last month. Shareholders of Google parent Alphabet Inc. earlier this month approved the company’s proposal for a 20-to-1 stock split, which takes effect in mid-July.
Back in 2020, Tesla’s announcement of its first stock split also set off a buying spree. The day after the company said it would split its shares 5-for-1, individual investors bought a net USD 39.5m of its shares, more than 11 times as much as in the previous session, VandaTrack data show. The stock was trading above USD 1,300 at that point.
Policy
EU lawmakers set board diversity requirements (Source: ESG TODAY)
The Council and European Parliament announced an agreement on a new law setting targets for EU companies to improve gender balance on corporate boards. The new directive would promote increased representation of women on boards, targeting at least 40% of non-executive director positions, and 33% of all board positions, by 2026.
According to the European Commission, 60% of current university graduates are female but women are underrepresented in corporate boards, accounting for only 30.6% of board members and 8.5% of board chairs. Representation has improved significantly over the past decade however, from only 10% representation of women on boards in 2011.
Connecting Workplace
IFRS Foundation Trustees appoint four further members to the International Sustainability Standards Board (Source: IFRS)
On June 8, the IFRS Foundation Trustees announced the appointment of Richard Barker, Verity Chegar, Bing Leng and Ndidi Nnoli-Edozien as inaugural members of the International Sustainability Standards Board (ISSB).
Richard Barker is currently deputy dean and professor of accounting at Saïd Business School, University of Oxford, UK. Verity Chegar joins from the California State Teachers’ Retirement System (CalSTRS). Bing Leng is currently a Director in the Accounting Regulatory Department of the Chinese Ministry of Finance, where he oversees sustainability reporting initiatives. Ndidi Nnoli-Edozien served most recently as the inaugural Group Chief Sustainability and Governance Officer of Dangote Industries Limited—one of Africa’s largest manufacturing businesses.
Macquarie Asset Management appoints Kristina Kloberdanz as Chief Sustainability Officer (Source: ESG TODAY)
Macquarie Asset Management announced the appointment of Kristina Kloberdanz as Chief Sustainability Officer. Kloberdanz joins the firm after serving as SVP, Chief Sustainability Officer at Mastercard.
In her new role, Kloberdanz will lead the delivery of the company’s ESG commitments, while scaling efforts to operationalise sustainability and ESG across the firm’s investment and asset management processes.
Climate champion Nigel Topping appointed to board of National Infrastructure Bank (Source: BusinessGreen)
The UK Infrastructure Bank (UKIB) appointed the former We Mean Business CEO Nigel Topping as one of its first non-executive directors.
Topping, who is currently serving as High Level Climate Action Champion for COP26, is part of a group of four senior business leaders to be appointed to the new bank in non-exec roles as it looks to ramp up its investment activity following its launch last year. He is set to work alongside fellow non-executive directors Bridget Rosewell, Tania Songini, and Marianne Økland, several of whom also have experience working in the green economy.
The bank is expected to work with the private sector to help de-risk and catalyse investment in strategic infrastructure that can support the net zero transition and the government's levelling up agenda.
Blackstone’s ESG software company Sphera appoints David Batchelor as Chairman (Source：ESG TODAY)
ESG performance and risk management software, data and consulting services provider Sphera announced the appointment of insurance and capital markets veteran David Batchelor as Chairman of the board of directors.
Batchelor’s risk, insurance, and capital markets-focused career spans 40 years, including nearly two decades at global risk advisory firm Marsh, where he served as Vice Chairman from 2015 to 2019, and also led the group on emerging sustainability risks associated with climate change.