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Institutional investors across the globe are largely standing firm despite acknowledging the rising geopolitical risks impacting their portfolios.
Recent research by investment consultancy firm Bfinance, involving over 160 institutional investors worldwide, reveals that most entities have not adjusted their strategic investments amidst the current economic turbulence driven by trade conflicts.
The survey found that a significant 82% of respondents have noticed an increase in geopolitical risks since the start of the year. European investors particularly feel the pressure, with 85% responding to increased risks, compared to 80% in the Americas and other regions. Unstable political environments and shifting global alliances are major factors contributing to this sentiment.
Despite these challenges, 75% of the institutional contingent report their risk appetite remains unchanged, indicating resilience amid turbulent times. Bfinance highlighted that the view of increased risk is shared across all investor categories, from pension funds to sovereign wealth funds, suggesting a wide-reaching consensus on the issue.
In terms of ESG (Environmental, Social, and Governance) considerations, nearly half of the investors report no change in strategy. However, opinions are shifting, with 24% viewing ESG as less appealing amidst growing policy resistance in the US. Around 50% are actively reassessing their approaches to ESG-related investments, focusing particularly on sustainability and climate-oriented strategies.
This divide on ESG priorities varies among investor types. Mission-linked investors like endowment funds are staying committed to ESG objectives, while those under more economic performance scrutiny are reconsidering their positions. Notably, institutional investors showed a split stance: 36% are staying the course, yet significant proportions are either downgrading (25%) or upgrading (17%) the appeal of ESG.
Ultimately, Bfinance's study shows a strategic recalibration phase for institutional investors, even as geopolitical uncertainties and policy shifts, especially in the US, prompt reassessments of certain tactics. Yet the dedication to long-term goals persists, with European investors leading in maintaining ESG principles whereas US investors navigate a shifting policy environment.
In response to the growing demand for small and medium-sized enterprise (SME) financing in Australia, non-bank lender So Money has expanded its services to include tailored lending solutions for self-employed borrowers and SMEs. This strategic move aims to simplify the income verification process and strengthen partnerships with brokers, thereby enhancing access to business financing. - read more
The Australian Securities and Investments Commission (ASIC) has issued a call for the private lending sector to elevate its standards to align more closely with traditional banking practices. This initiative follows an extensive review by the regulator, which uncovered inconsistencies in reporting, downplayed risks, and opaque fee structures within the rapidly growing private credit market. - read more
Westpac Banking Corporation has announced a significant restructuring initiative aimed at bolstering its presence in the business lending market. The bank plans to replace a substantial number of in-branch tellers with business bankers, a move designed to enhance support for small and medium-sized enterprises (SMEs) and capitalise on the growing demand for business financing. - read more
The Australian Securities Exchange (ASX) has announced a reduction in its dividend payout ratio to 75-85% of underlying net profit after tax. This decision follows the Australian Securities and Investments Commission's (ASIC) imposition of an additional A$150 million capital charge on the exchange operator. The regulatory action stems from an inquiry into ASX's operational shortcomings, including a failed software upgrade and recurring trade-processing issues. - read more
The Australian government has approved South Korean conglomerate Hanwha's proposal to increase its shareholding in Australian shipbuilder Austal from 9.9% to 19.9%. This approval comes with stringent conditions concerning security and data access to safeguard Australia's strategic and national security interests. - read more
In November, Australian business conditions experienced a decline, as reported by the National Australia Bank (NAB) survey. The business conditions index fell by 3 points to +7, indicating a softening in sales and profits after a period of strong performance. The business confidence index also dropped by 5 points to +1, suggesting a potential cooling in consumer demand following October's strength. - read more
The Reserve Bank of Australia (RBA) has announced its decision to maintain the official cash rate at 3.60% during its December meeting, signaling a potential extended period of stability through 2026. This move reflects the central bank's response to higher-than-expected inflation and a robust economic environment. - read more
Embarking on a startup journey in Australia is both thrilling and challenging. You have a groundbreaking idea, but starting a business involves numerous hurdles—capital being a primary one. This is where business loans come into play. They are crucial lifelines that help convert entrepreneurial dreams into reality. - read more
Embarking on a business endeavor often requires substantial financial support, and securing a business loan can be a crucial step towards progress and expansion. A well-prepared loan application not only showcases your business in its best light but also significantly enhances the prospects of obtaining the needed funds. Attention to detail and a thorough understanding of the lending process can streamline your journey to approval. - read more
In the ever-evolving landscape of Australian business, equipment leasing has emerged as a pivotal financial tool for companies across the spectrum. Whether you're a small start-up or a well-established corporation, the agility to pivot and adapt to market changes is critical. This introduction seeks to shed light on the concept of equipment leasing and its significance in bolstering the operational efficiency of Australian businesses. - read more
In the dynamic world of business, navigating credit challenges is a reality for many Australian business owners. These challenges can stem from various sources, including unpaid customer invoices, unexpected expenses, or the complexities of managing cash flow. Such hurdles often come at inopportune moments, leading to recurring stress for entrepreneurs trying to maintain a stable financial standing. - read more
Financial planning plays a crucial role when businesses are poised for growth. As enterprises expand, a well-crafted financial plan acts as a guiding framework to navigate the complexities that come with scaling operations. This plan helps in ensuring that resources are meticulously allocated and potential financial hurdles are effectively managed. - read more
Starting a business often requires a substantial amount of capital, which many new business owners may not have readily available. Business loans can provide the necessary funding to help get your startup off the ground, from purchasing equipment to hiring staff and everything in between. - read more
Securing financing is a pivotal step for any startup looking to establish itself and grow. In Australia, the startup lending landscape is buoyant, offering a mix of traditional and innovative financing options. The financial ecosystem is robust yet competitive, and understanding how to navigate it is crucial for new business owners. - read more
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Certificate of Deposit (CD): A savings certificate with a fixed maturity date and specified interest rate, typically higher than a standard savings account.