DIRS.INFO The most relevant business & tech news

☆ Pension funds reform: Britain is banking on this $3 trillion cash cow to revive its economy
▼ + stars: | 2023-07-11 | by ( Hanna Ziady | ) edition.cnn.com time to read: +5 min

London CNN —The UK economy badly needs a boost — and the government hopes the nation’s vast pension savings might deliver one. All UK workplace pension plans offer default funds, which savers who don’t choose their own investment strategy are automatically enrolled into. Measures to tap pension fund cash come at a crucial time for an economy suffering from stubbornly high inflation, depressed investment and feeble growth. UK pension funds’ exposure to domestic stock markets has fallen even more sharply: from 53% in 1997 to 6% in 2021. The combination of measures is likely to have “far-reaching” effects on the types of assets pension funds invest in, easing companies’ access to the capital they need to grow, he added.

Persons: Jeremy Hunt, Mercer, ” Hunt, Hunt, “, ”, Nicholas Lyons, Julia Hoggett, Nigel Peaple Organizations: London CNN, Aviva, London, European, London Stock Exchange, Nasdaq, EU, chipmaker ARM, House, of London Corporation, City of, Financial, New Financial, Pension, Lifetime Savings Association Locations: London, Britain, Frankfurt, Paris, New York, United States, United Kingdom, Edinburgh, City of London

☆ Brits warned they are not saving enough for retirement and face a 'risky' future
▼ + stars: | 2023-04-24 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +4 min

Richard Baker / Contributor / Getty ImagesLONDON — Workers in the U.K face a "risky" future when it comes to their pensions, according to a report released by think tank the Institute for Fiscal Studies. Almost 90% of Brits aren't putting an appropriate amount of money into their pension pots — generally considered to be around 15% of earnings, according to the IFS report. Including self-employed savers within that framework would also boost their pension pots and reduce their dependence on the state pension later in life, Savova added. Most people in the U.K. are automatically entitled to a state pension, which is currently £203.85 ($253) per week. "Increasing the State Pension Age will only escalate pensioner poverty which falls disproportionately on those who have lower incomes and retire early due to ill-health," Peaple told CNBC via email.

☆ British pound whipsaws after mixed messages from the Bank of England
▼ + stars: | 2022-10-12 | by ( Abigail Ng | ) www.cnbc.com time to read: +3 min

In this photo illustration, the British pound is seen displayed. Karol Serewis | Lightrocket | Getty ImagesThe British pound on Wednesday morning recovered losses following a Financial Times report that said the Bank of England is privately signaling a willingness to extend its emergency bond-buying program. The Bank of England did not immediately respond to CNBC's request for comment on the FT's report outside of office hours. The pound fell as low as $1.0922 in Asia's morning trade before popping to $1.106 after the FT report was published. If bond purchasing is stopped, "additional measures should be put in place to manage market volatility," it added.

Governor of the Bank of England, Andrew Bailey, speaks during the Bank of England's financial stability report news conference, at the Bank of England, London August 4, 2022. And what they can't allow is for the bond market to be overly volatile," said Iain Stealey, CIO of fixed income at JPMorgan Asset Management. U.S. and German 30-year borrowing costs are up just 16 and 33 bps respectively , this month and the contrast highlights the scale of selling gripping Britain's bond market. The unprecedented bond market moves triggered hefty collateral calls on hedging strategies that many funds are still struggling to meet. Bond market volatility has also raised doubts about whether the BoE can press ahead with its plan to sell some of its bond holdings, a process known as quantitative tightening (QT).

While estimates of how much pension funds need to sell vary they are in the hundreds of billions of pounds, and it is not known how much funds have already raised in cash. Tuesday's BoE intervention was targeted at buying index-linked bonds, a far smaller market than gilts, dominated by pension funds and which suffered another significant selloff this week. He estimates pension funds could sell assets totalling around 300 billion pounds as they adjust hedging positions, although it is not clear how much they may have sold already. He estimated 100 billion pounds could come from gilts and the rest from assets such as global credit, global equities and asset-backed securities. "The bottom line is a lot of schemes need to rebalance their portfolios," he said.

☆ UK pensions: There's no quick fix for the market mess
▼ + stars: | 2022-10-12 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

Almost 20 days after Finance Minister Kwasi Kwarteng unveiled his much-criticized plan to jumpstart the economy, sparking an investor revolt, the UK bond market and the British pound remain under huge stress — despite three emergency interventions by the central bank. The country’s central bank is in a difficult position. It’s trying to restore the UK government’s lost credibility in markets, though its toolkit isn’t designed for this kind of effort. “Investment consultants are working feverishly.”Ongoing volatility in the bond market is further complicating those efforts, as rising yields once again put hedging strategies at risk. Yet as bond yields keep rallying, not everyone is convinced that approach makes sense.

☆ U.S. dollar rises, yen not far from 24-year trough that prompted intervention
▼ + stars: | 2022-10-11 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +4 min

"I can see it propelling the dollar higher still, even though people think it's a crowded trade. Overall, dollar sentiment remained positive as worries about rising interest rates and geopolitical tensions unsettled investors, while the yen hovered near the level that prompted last month's intervention. In afternoon trading, the U.S. dollar index rose 0.2% to 113.25, not far from a 20-year high of 114.78 it touched late last month. The dollar touched a three-week high against the yen of 145.895 , just shy of the 24-year peak of 145.90 hit before the Japanese government stepped in to prop it up three weeks ago. Meanwhile, the risk-sensitive Australian dollar hit a 2-1/2-year low of $0.6248 and was last down 0.4% at US$0.6270.

☆ S&P 500, Nasdaq end lower; BoE comments add to market jitters late
▼ + stars: | 2022-10-11 | by ( Caroline Valetkevitch | ) www.reuters.com time to read: +3 min

Trading was volatile, with investors cautious ahead of key U.S. inflation data and the start of third-quarter earnings later this week. The S&P banks index (.SPXBK) was down 2.6% ahead of quarterly results from some major banks later this week. The reports are expected to kick off the third quarter reporting period for S&P 500 companies. read moreDeclining issues outnumbered advancing ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners. The S&P 500 posted one new 52-week high and 104 new lows; the Nasdaq Composite recorded 33 new highs and 590 new lows.

☆ The Bank of England should extend its emergency bond-buying to manage the volatility that's rocked the country's debt market, UK pensions group says
▼ + stars: | 2022-10-11 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

A UK pensions trade group on Tuesday called on the Bank of England to continue its emergency bond-buying operations to manage volatility in the debt market. The central bank began its bond-market intervention last month as fears of a UK financial crisis risked damaging investments held by pension funds. The BoE is expected to continue purchasing long-dated UK bonds until Friday under its £65 billion intervention aimed at stemming a massive sovereign debt sell-off. The BoE last week said $1 trillion in UK pension funds' investments could have been lost if it didn't intervene with its emergency bond purchases. The group said pension funds over the last couple of weeks have, among other actions, taken steps to strengthen their financial resilience.

☆ Bank of England's Bailey tells pension funds they have 3 days to rebalance
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, Oct 11 (Reuters) - Bank of England Governor Andrew Bailey told pension fund managers to finish rebalancing their positions by Friday when the British central bank is due to end its emergency support programme for the county's fragile bond market. We think the rebalancing must be done," Bailey said at an event organised by the Institute of International Finance in Washington on Tuesday. "And my message to the funds involved and all the firms involved managing those funds: You've got three days left now. But Bailey stressed that the programme was part of the BoE's financial stability operations, not a monetary policy tool, and had to be temporary. "Things seemed calmer again today," Bailey said, referring to conditions in the gilt market.

☆ BoE should extend bond buying to Oct 31 or "possibly beyond"-pensions trade body
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 11 (Reuters) - The Bank of England should consider continuing an emergency bond-buying programme aimed at stabilising the market for UK government debt to October 31 "and possibly beyond", the Pensions and Lifetime Savings Association said on Tuesday. "...many feel it should be extended to the next fiscal event on 31 October and possibly beyond, or if purchasing is ended, that additional measures should be put in place to manage market volatility". The BoE on Monday doubled the maximum size of the buybacks and on Tuesday expanded the programme to include inflation-linked gilts, a move welcomed by the PLSA. read more read more"We continue to encourage all pension funds and service providers to use this period to take further steps to rebalance portfolios and ensure necessary measures are in place to protect their strategies in uncertain times," the trade body said. ($1 = 0.9061 pounds)($1 = 0.9057 pounds)Register now for FREE unlimited access to Reuters.com RegisterReporting by Carolyn Cohn, editing by Sinead CruiseOur Standards: The Thomson Reuters Trust Principles.

Compounding the pain, providers of so-called liability-driven investment strategies (LDI) are demanding more cash to support new and older hedging positions. The cash buffers now required are about three times bigger than previously requested, according to four consultants advising pension schemes, as market players seek bigger cushions against more volatile moves in bonds. Estimates of how much pension funds need to sell range but are in the hundreds of billions of pounds, although it is not known how much in assets schemes have sold already. "We are definitely not there," he said, referring to whether funds were close to raising the required cash by selling assets. He estimated 100 billion pounds could come from gilts and the rest from assets such as global credit, global equities and asset-backed securities.

Search resuls for: "Lifetime Savings Association"

12 mentions found