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The Risks of China’s Internet Companies on U.S. Stock Exchanges

October 31, 2014 Comments off

The Risks of China’s Internet Companies on U.S. Stock Exchanges
Source: U.S.-China Economic and Security Review Commission

In May 2014, Alibaba, China’s leading e-commerce website, filed for a U.S.-based initial public offering (IPO) in what is expected to be one of the largest in U.S. history. The highly anticipated IPO will be just one in a recent wave of Chinese Internet companies launching IPOs in the United States. The trend has raised some misgivings among U.S. regulators about the corporate structures of these companies. To bypass Chinese government restrictions on foreign investment in the Internet sector, Chinese Internet companies use a complex and highly risky mechanism known as a Variable Interest Entity (VIE). An addendum was added to this paper on September 12, 2014.

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Climatescope 2014

October 30, 2014 Comments off

Climatescope 2014
Source: Bloomberg New Energy Finance, Inter-American Development Bank Group, U.K. Government Department for International Development, U.S. Agency for International Development

The Climatescope is a unique country-by-country assessment, interactive report and index that evaluates the investment climate for climate-related investment worldwide.

It profiles 55 countries worldwide and evaluates their ability to attract capital for low-carbon energy sources while building a greener economy.

The Climatescope is a snapshot of where clean energy policy and finance stand today, and a guide to where clean energy can go tomorrow.

This marks the third year of the Climatescope project. In 2012 and 2013, the Climatescope focused exclusively on Latin America and the Caribbean. The first edition was developed by the Multilateral Investment Fund of the Inter-American Development Bank Group in partnership with Bloomberg New Energy Finance.

In 2014, the UK Department for International Development and the US Agency for International Development have joined as supporters and advisors. The project has been expanded to include 55 countries, states, and provinces in sub-Saharan Africa and Asia. Bloomberg New Energy Finance serves as research partner and author of the report.

Measuring Managerial Skill in the Mutual Fund Industry

October 23, 2014 Comments off

Measuring Managerial Skill in the Mutual Fund Industry
Source: Stanford Graduate School of Business

Using the dollar-value a mutual fund manager adds as the measure of skill, we find that not only does skill exist (the average mutual fund manager adds about $2 million per year), but this skill is persistent, as far out as 10 years. We further document that investors recognize this skill and reward it by investing more capital with skilled managers. Higher skilled managers are paid more and there is a strong positive correlation between current managerial compensation and future performance.

Cross-Border Data Flows, the Internet and What it Means for U.S. and EU Trade and Investment

October 23, 2014 Comments off

Cross-Border Data Flows, the Internet and What it Means for U.S. and EU Trade and Investment
Source: Brookings Institution

The most globally significant bilateral trade and investment relationship is between the U.S. and the European Union. An increasing amount of this economic relationship is underpinned by cross-border flows of data.

Whether the U.S. and the EU are able to take full advantage of the opportunities for international trade and investment presented by their increasingly online and digital populations will affect transatlantic economic relations. As the world’s two largest economies, the U.S. and EU decisions on support for cross-border data flows will also have global implications.

New From the GAO

October 22, 2014 Comments off

New GAO Report
Source: Government Accountability Office

Reissue

1. Individual Retirement Accounts: Preliminary Information on IRA Balances Accumulated as of 2011, by James R. McTigue, director, strategic issues, and Charles A. Jeszeck, director, education, workforce, and income security issues, to the Senate Committee on Finance. GAO-14-878T, September 16.
http://www.gao.gov/products/GAO-14-878T
Highlights – http://www.gao.gov/assets/670/665805.pdf

This statement was amended on October 22, 2014, to revise the estimated individual retirement account and defined contribution plan accumulations for our illustrative contribution scenarios with balances invested in an S&P 500 portfolio. The original estimates used a price index that did not include reinvested dividends. Table 2 and the text on page 8 have been updated to reflect total returns on the investments.

CRS — Conflict Minerals and Resource Extraction: Dodd-Frank, SEC Regulations, and Legal Challenges (October 15, 2014)

October 20, 2014 Comments off

Conflict Minerals and Resource Extraction: Dodd-Frank, SEC Regulations, and Legal Challenges (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Two sections of the Dodd-Frank Wall Street Reform and Protection Act (Dodd-Frank) require that the Securities and Exchange Commission (SEC or Commission) issue regulations to make public the involvement of U.S. companies in conflict minerals and in resource extraction payments. Supporters of the Dodd-Frank conflict minerals statute and the SEC implementing rule believe that such disclosures could have an impact on the amount of violence involved with the mining of conflict minerals. Opponents of the statute and rule argue that they require disclosures that are arbitrary and capricious and that some of the required disclosures violate the First Amendment guarantee of freedom of speech. Supporters of the resource extraction statute and the SEC implementing rule believe that they are needed to achieve the goal of the transparency of payments made by resource extraction issuers to governments in order to foster reform and anticorruption and to improve the tax collection process. Opponents believe that they are arbitrary and capricious and violate the First Amendment. Legal challenges to the statutes and regulations have occurred, based primarily on administrative law and First Amendment grounds.

UK — Social Investment by Charities: The Law Commission’s Recommendations

October 15, 2014 Comments off

Social Investment by Charities: The Law Commission’s Recommendations (PDF)
Source: Law Commission

We are pleased to announce the publication of our recommendations on social investment by charities as part of our ongoing project on selected issues in charity law.

Social investment provides financial returns while at the same time generating social benefits. It is an important and developing area for charities that helps them meet their charitable objectives by combining investment and spending.

We have been told that some charity trustees lack the confidence to make social investments because they are unsure whether their legal powers and duties permit them to do so. To clarify and simplify the law, we are recommending that charity trustees be given a specific statutory power to make social investments.

Law Commissioner Professor Elizabeth Cooke said: “Social investment represents a significant opportunity for charities, but the existing law is unclear. Our recommended reforms will clarify the law for trustees as to their powers and duties. They will make social investment more straightforward in law and give trustees the confidence to make the best of the opportunities it offers.”

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