Investor Relations Week: LGIM Climate Divestments, Wise Direct Listing and Fed Watch

– Legal & General Investment Management (LGIM) has announced that it will be divesting four new companies due to their approach to climate change, reported Investment week. The UK asset manager said the Industrial and Commercial Bank of China, AIG, PPL Corporation and China Mengniu Dairy had crossed red lines on environmental issues and / or had not sufficiently responded to the pledge, according to the ‘article. As part of LGIM’s climate policy, nine companies will remain on an exclusion list while Kroger, the US food retailer, will be reinstated in the funds following improved environmental policies and disclosure.

– Money transfer company Wise opted to register in London using direct registration, noted CNBC. The article describes the move as a “big win for Britain” as the country tries to attract more tech companies to the London Stock Exchange (LSE). Wise plans to be listed with dual class shares, where the higher voting shares will expire after five years. Companies with dual class shares are currently not allowed to register on the premium segment of the LSE. A government-sponsored review, however, recommended changing the rules to allow this as long as certain safeguards are in place, such as a five-year sunset clause on additional voting rights.

– The US Federal Reserve rocked the markets this week after central bank officials advanced their forecasts for interest rate hikes, reported the Financial Time (paying). The Fed’s dot chart, which shows each official’s interest rate forecast, indicated that rates are expected to rise in 2023, a year earlier than previous forecasts. In response, US stocks edged down as bond yields rose. Adding to the hawkish tone, Fed Chairman Jerome Powell also said the central bank is now “talking” about cutting its asset purchase program.

– Robeco Institutional Asset Management plans to start pressuring Australia for its dependence on natural resources, including coal, reported Bloomberg (paying). As institutional investors put considerable pressure on listed companies to align their business models with a low-carbon future, governments are under less pressure, the article notes. Australia has a “particularly high risk profile” in terms of climate management, said Peter van der Werf, senior director of engagement and active ownership at Robeco, in the article.

– “Meme stocks” – companies heavily discussed by retail investors on platforms like Reddit – may have “skewed” prices due to the amount of transactions that occur over the counter, said Stacey Cunningham, chairman of the NYSE, according to Reuters. The majority of retail business goes to wholesale brokers who attempt to match orders in-house, a process known as payment for order flow. Speaking at a CNBC conference, Cunningham called this “problematic.” “This price formation doesn’t really reflect what supply and demand is,” she said.

– Major U.S. corporations have made efforts to increase the number of black and Latino directors on their boards, the the Wall Street newspaper (paying). “S&P 500 companies have tripled the share of new black directors and more than doubled the share of Latinos,” the article reports, citing a study by executive search firm Spencer Stuart. “The change leaves nearly 80% of corporate board seats held by white directors and about 70% by men.”

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