Summit Notebook

Exclusive outtakes from industry leaders

Is emerging Europe out of the woods yet?

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A surge in portfolio inflows is flooding into emerging central Europe, although yield-hungry investors are picking solid HUNGARY IMF/MATOLCSYpolicy and higher growth over countries still struggling to put the crisis behind them.

After deep contractions across the region, a two-speed recovery is underway, with countries boasting better debt fundamentals like Poland and the Czech Republic for the moment ahead of those who depend on foreign lending.

Investors are also dipping into countries like Hungary, but struggles by the new centre-right Fidesz government to get its budget deficit under control mean it is lagging for now, along with fellow International Monetary Fund benefactor Romania.

“There has… been clear differentiation between the more robust and the weaker economies of the region,” Goldman Sachs wrote in a research note on the region.

from Global Investing:

Time up for emerging markets?

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Well, not in the long-run, no. You would be hard pressed to find an economist, investor or even politician who does not reckon the global shift in growth to Asia and Latin America is going to be the story of the coming decade, century etc.

But in the shorter term, strange things are happening. MSCI's benchmark emerging market stock index is barely in the black for the year. Even more surprising is that it is underperforming its developed market counterpart.

Tax evaders on the run

  By Neil Chatterjee
    The U.S. has promised it will hunt down tax evaders.
    And it seems tax evaders are on the run.
    DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared.  
    Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
    DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
    Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
    Is this the end of offshore private private banking?

Independent in appearance

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Japan is edging towards the introduction of independent directors and auditors for publicly listed companies, but so far even the idea of having someone from outside at the top of a company remains a foreign concept.

The tradition is for someone to join a Japanese company at age 22 with the ultimate goal of serving on the company board, says Takeyuki Ishida, the head of Japan Research at RiskMetrics Group, which advises institutional investors on how to vote their shares.

AUDIO – Finding a model; then build, baby, build!

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Infrastructure spending. Public-private partnerships. Government buildouts.

This week, all of these kinds of phrases are much on the mind of our guests at the first ever Reuters Infrastructure Summit held in New York, San Francisco and Washington.

While infrastructure means different things to almost all of our guests (schools, roads, bridges, etc) — one of our first guests, Petra Todorovich, talked at length about the need for high speed rails.

from Funds Hub:

Counting sheep

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By Lorraine Turner

 

Speakers at the Reuters Hedge Fund and Private Equity summit this week were asked "what keeps you awake at night" and the answers were wide-ranging, from "my 7-week old daughter" to "the next meteorite".

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Some executives are left counting sheep over the heavyweight questions that are plaguing our economies such as how low investment markets will fall or how the credit crisis can be eased as businesses remain stymied by a lack of credit.

from Global Investing:

Reuters Funds Summit: Kingdom for a horse

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Anyone expecting investors to start galloping back into riskier assets in a rush might have something of a wait, according to Kathleen Hughes, who runs money funds for JPMorgan Asset Management in Europe. They are more likely to wander back in.

"Risk appetite returns in stages. It leaves on a horse but comes back on foot,"  she rather neatly told a Reuters funds summit being held in Luxembourg.

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