​On November 29, Michael S. Falk, CFA visited from the Chicago region of the US as part of a multi-leg European Travelling Conference and presented his recent work done in conjunction with the support of the CFA Institute Research Foundation. His talk was highly interactive and dynamic as he illustrated to the audience how we might re-imagine health care, retirement and education policies to usher a new ERA (from Entitlement to Re​sponsibility with Appreciation) of sustainable long-term economic growth. Hardcopies of the CFAI Research Foundation works were available to event participants. Members can learn more about Mr. Falk's views and the book here and directly obtain a softcopy (Acrobat version) of the work here.

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On September 18, after the summer break, roughly 70 CFA Society Luxembourg members came out to network and catch up over cocktails and hors d'oeuvres at The JFK.

in partnership with

Approximately 35 members of the Luxembourg CFA Society gathered at the Sofitel in Kirchberg to listen to an interesting presentation on the Renminbi Bond Market by Prof. Jot Yau (Seattle University), Glenn Ko (UBS), and Bing Li (ICBC).

 Jot Yau and Glenn Ko (pictured left) began with a review of the evolution of the Offshore Renminbi Bond Market (aka Dim Sum Bonds). The market first appeared in 2007 with an issue in Hong Kong, and a total of 5 bonds were issued in 2007. The market has developed significantly since 2007, with 191 issues in 2014, with Hong Kong remaining the leading market. At the same time the market has been diversifying with issuers from industry, and governments. The tenor of the bonds remains short term, with 80% of the bonds being of 2 or 3 years. 38% of the bonds are rated with the interesting anecdote that the funding cost of the rated issues is higher than the non-rated issues. Glenn Ko put forward the theory that this is a result of the more credible issuers feeling that they don’t require a rating, so it is the lower quality issuers that have their bonds rated. Of the bond issues, 51% are listed on exchanges, with the top exchanges being Hong Kong, Singapore, Luxembourg, London and Dublin. Investors in the bonds are mostly in Asia (88%), with the remainder (12%) in Europe.

There is an increasing demand for Renminbi, which has risen to 5th in a ranking of currencies used to settle international payments from 13th one year earlier. With the tightening of the Chinese economy, the offshore market has become more attractive to Chinese issuers. In comparison to the USD bond market there is less liquidity and issuances are smaller – investors tend to buy and hold – however the presenters expect the market to continue to grow.

Bing Li then gave a presentation on the onshore Renminbi bond market, which is the third largest bond market in the world, after the US and Japan – and at USD 5.75tn much larger than the offshore market. The development of the bond market has reduced reliance on banks for financing. A series of reforms starting in 1981 have gradually opened up the bond market, by creating different markets for trading, eventually leading to opening up to individual savers (in 2002) in the OTC market. The interbank market dominates the other markets and commercial banks dominate most of the markets. Of the bonds issued, 60% of the value is rated AAA, with defaults being exceedingly rate in China. The first default occurred in 2014, when an issuer was unable to make payment, however that payment was later rectified. Yields are 3-4.5% for maturities up to 30 years. Questions from the audience followed and further illuminated the potential of this category of investments.

On 10 June 2013, we celebrated our 10th Anniversary during which we were honoured to welcome:
 
H.E. Mr Luc Frieden
Minister of Finance of the Grand Duchy of Luxembourg
 
Mr Frederic P. Lebel, CFA 
Board of Governors, CFA Institute
 
Mr Nitin Mehta, CFA 
Managing Director EMEA, CFA Institute  
 
Our keynote speakers presented the CFA Institute Future of Finance project, a long-term global effort to shape a trustworthy, forward-thinking financial industry that better serves society.  The project aims to provide the tools to motivate and empower the world of finance to commit to fairness, improved understanding, and personal integrity.
Together with CFA Institute, we will continue to be a driving force working with regulators and other stakeholders to shape an investment industry that serves the interests of investors and society.
 

One of the first outputs from the project is the Statement of Investor Rights, a list of principles intended to help buyers of    financial service products demand the conduct they are entitled to expect from financial service providers. The Future of Finance project is focused on six primary topics of interest for all who rely on finance:

• Financial Knowledge - Empowering investors to make better decisions
• Putting Investors First - The fiduciary duty to protect investor interests
• Regulation & Enforcement - Protecting investors and preserving capital market integrity
• Retirement Security - Sensible solutions to protect pension systems worldwide
• Safeguarding the System - Promoting stability and minimizing systemic risk
• Transparency & Fairness - Standards to promote an open and honest financial system
 

The cocktail recepetion was Kindly supported by J.P. Morgan Asset Management.

Read about our event in the press:

Ethik ist ein Erfolgsfaktor - Tageblatt

Une charte professionnelle d’excellence - Luxemburger Wort

Doing the right thing - Luxembourg for Finance

L'homme pressé - Journal