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Event Highlights – Session Six – Markets and Investing

Event Highlights 

MARKETS AND INVESTING

The hunt for growth will always remain. But can investors help shape a more resilient global economy?

Speakers included:

  • Clare Akamanzi, CEO, Rwanda Development Board
  • H.E. Mansoor bin Ebrahim al-Mahmoud, CEO, Qatar Investment Authority
  • H.E Sheikh Abdulla bin Saoud Al Thani, Governor, Qatar Central Bank
  • Mohammed Dewji, President, MeTL
  • Henry Fernandez, Chairman and CEO, MSCI
  • Laurence D. Fink, Chairman and CEO, BlackRock
  • Jenny Johnson, President and CEO, Franklin Templeton
  • Dr. James Mwangi, Group Managing Director and CEO, Equity Group Holdings; Executive Chairman, Equity Group Foundation
  • Emmanuel Roman, CEO, PIMCO
  • David M. Rubenstein, Co-Founder and Co-Executive Chairman, The Carlyle Group
  • Stephen A. Schwarzman, Chairman, CEO and Co-Founder, Blackstone
  • Vera Songwe, Executive Secretary of the Economic Commission for Africa, United Nations
  • Jes Staley, Group Chief Executive, Barclays
  • Shriti Vadera, Chair, Prudential plc.
  • Axel A. Weber, Chairman of the Board of Directors, UBS Group AG
  • Bill Winters, Group Chief Executive, Standard Chartered
  • Yichen Zhang, Chairman and CEO, CITIC Capital

Moderators included:

  • Shery Ahn, Anchor, Bloomberg Television
  • Anna Edwards, Anchor, Bloomberg Television
  • Stephanie Flanders, Senior Executive Editor for Economics, Bloomberg
  • Caroline Hyde, Anchor, Bloomberg Television
  • Francine Lacqua, Anchor, Bloomberg Television 
  • David Malingha, East Africa Bureau Chief, Bloomberg
  • Erik Schatzker, Editor-at-Large, Bloomberg Television
  • Zain Verjee, Host and Executive Producer, Qatar Economic Forum

Below are some highlights from the session. Click here to register and access the full interviews.
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On Current Priorities: H.E. Mansoor bin Ebrahim al-Mahmoud, CEO, Qatar Investment Authority said “We have invested heavily in technologies, in particular we have been deploying investment in online education. And this is something that we had deployed before the pandemic. So the pandemic has changed the landscape but our philosophy remains the same, we remain as long term investors, we remain to invest for purpose in a very diversified way.” 

On Investing Opportunities, Inflation and Wages: Stephen A. Schwarzman, Chairman, CEO and Co-Founder, Blackstone said “It’s really like an avalanche now of opportunities — people want to sell things before their taxes are much higher for selling the same thing, potentially next year. It’s giving us a lot of opportunities, and what we have to do is be careful, always have a very exciting plan for growth.” Higher corporate valuations are also a strong motivator for people to sell their businesses, Schwarzman said. “The U.S. economy is really on fire, almost everything is growing much faster than almost anyone anticipated.” On wages, Schwarzman said stimulus programs have discouraged some from returning to work, meaning some inflation is likely to be “baked in at higher levels” than in the past decade.

On Inflationary Risks: Axel A. Weber, Chairman of the Board of Directors, UBS Group AG said “The risk is that the coming back of the economy, that the normalization in prices combined with bottle necks and base effects will lead to inflation readings we’ve not been used to in over a decade or two. And that may unnerve some investors and consumers and you need to monitor it very closely so it doesn’t become ingrained and embedded in wage price dynamics.” 

On the Exchange Rate: When asked about having a more flexible exchange rate, H.E Sheikh Abdulla bin Saoud Al Thani, Governor, Qatar Central Bank, said Qatar’s currency peg to the U.S. dollar had mitigated risk. “I don’t think we will change our regime at the moment.” he said. “There is no need.”

On Market Disruptors: When asked what is the most dominant force reshaping the global investment landscape, Jenny Johnson, President and CEO, Franklin Templeton said “I actually think that the underappreciated disruption force is really blockchain. And I think what’s happened with things like cryptocurrencies like Bitcoin have been the greatest distraction to understanding true disruption that I think is coming and I think we’re at the tip of the iceberg.”

On the High-Yield Bond Rally: Emmanuel Roman, CEO, PIMCO said “In March 2020, you had real opportunity in high yield, and in private credit. A lot of it has played out. You may have another bite at the apple if there is some taper tantrum down the road. There are sectors that will be incredibly exciting to keep on investing in. Real estate being one of them.”  

On Fed Rates: David M. Rubenstein, Co-Founder and Co-Executive Chairman, The Carlyle Group said “It’s been clear to us that the Federal Reserve is not going to increase interest rates this year and almost certainly not for a number of months into next year. As long as interest rates are reasonably attractive, as they certainly are now, and as long as Congress doesn’t do anything that deleterious to the economy I think the private equity world is generally doing pretty well.”

On the Liquidity and Sustainability Facility: Vera Songwe, Executive Secretary of the Economic Commission for Africa, United Nations discussed her proposed facility to bolster the liquidity of the secondary market for emerging and frontier-market debt. That would aim to reduce the premium some issuers are charged by investors that can’t immediately trade their bonds. She also discussed the facilities sustainability features. “We can reduce the cost of the bond or give an additional premium if you’re going to invest the resources in sustainability or green growth, renewable energy, better infrastructure.”

On Sustainability Reporting: Henry Fernandez, Chairman and CEO, MSCI said “Measurement is not enough at this point. Quite a lot still needs to happen of the disclosure by companies about ESG in general but particularly climate change. We estimate that only about ⅓ of the companies in the MSCI all country world index are reporting net zero pledges. We still have a long way to go. But we believe that there will be an acceleration of this this year.” 

On the Sustainable Investing Acceleration: Laurence D. Fink, Chairman and CEO, BlackRock said “We are seeing more demand for sustainable strategies, more investors world wide believe that climate risk is investment risk. More investors around the world are asking how do we determine the path towards decarbonization and how each company is performing in that path. Fink added “I think from the Exxon Mobil vote we are seeing vast change very rapidly.”

On Getting to Net Zero: Bill Winters, Group Chief Executive, Standard Chartered said “Businesses in poorer countries only have access to about a tenth of the funding they need to transition to net zero. It’s clearly a gap that governments, that the private sector, the public sector, multilaterals, export credit agencies: we’re all going to have to work together to close that financing gap.” 

On Barclay’s Return to Office Strategy: Jes Staley, Group Chief Executive, Barclays said “We’ve had close to 20,000 people between the UK and India and elsewhere working. All of our branches and call centers have been fully staffed. Our trading desks have 60% to 70% occupancy, so we have a lot of people coming into work around the world. However he did acknowledge that working patterns at the British bank are permanently changed by Covid-19. We “would be surprised if most people are in more than four days a week,” even after restrictions are lifted, he said.

On an Unequal Recovery: Shriti Vadera, Chair, Prudential plc. said “There is this differential pace of economic rebound is very difficult in an interconnected world, it slows down recovery especially for open economies who have supply chain and demand dependencies. Vadera added “the multiplier effect of everyone recovering simultaneously is huge and the unevenness of the recovery will hold us all back.”

On China, U.S. Tensions: Yichen Zhang, Chairman and CEO, CITIC Capital said the dispute is going to continue to escalate and is unlikely to ease any time soon. “China will probably in a couple of years’ time be the largest market in the world, so there’s plenty of room to grow for tech companies,” Zhang said. “At the same time, China is not shutting itself off. In fact, it’s opening up more.”

On Lessons from the Pandemic: Dr. James Mwangi, Group Managing Director and CEO, Equity Group Holdings; Executive Chairman, Equity Group Foundation said “We learned a couple of things. This first one is how fragile the African economy was. The second was how dependent it was on global supply chains. The third one was the vulnerability of our people.”  

On Rwanda’s Economic Recovery Plan: Clare Akamanzi, CEO, Rwanda Development Board said “We are betting on manufacturing because the key with manufacturing is the domestic market is very important in consuming the products from the manufacturing sector. If you look at our strategy before the pandemic it was based on attracting tourism and conferences, which were dependent on external consumers. This time our key recovery plan is around manufacturing.

On Tanzania’s New President: Mohammed Dewji, President, MeTL said “I think our new president just wants to create a conducive environment so that we invest, we create jobs, and we pay taxes. Dewji added “Infrastructure projects are going to continue. But in the past the government was more involved in trying to do business.”

 

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