Banking Awards 2017

In keeping with a more-than-five-year trend in which those slow to change have fallen by the wayside, the banking sector has this year been awash with major regulatory and technological change. Virtually unrecognisable from that of a few years ago, this is a new era for banking: one in which the customer lies at the heart of every decision, and sustainability as opposed to profitability is key. Survival – it seems – rests on the ability of banks big and small to keep pace with the rate and scale of the transformation, and nowhere else is this more visible than among the banks featured in this year’s World Finance Banking Guide.

Banking Guide 2017

Trust in the banking sector has been restored, and customer-centricity has emerged as an absolute requirement if banks harbour any hopes of survival. People – not profitability – can make or break a business, and many a major name has committed to that sentiment in the hope of pushing ahead of its rivals. New operating strategies have emerged to put customers and employees at the centre of businesses, and technology has proven decisive in the sector’s transformation.

Aside from restoring faith in the sector, technology has paved the way for new and innovative names, and while they can hardly compete with industry stalwarts on scale, a technology-first mentality has opened the door to a range of new opportunities. Investment in IT is no longer an option but a requirement for any bank with aspirations of becoming a market leader. And as much as these investments have proven costly, the benefits to both bank and customer cannot be understated.

Elsewhere, a raft of regulatory reforms has done a great deal to redefine the operating environment. While the burden has, for some, proven too much to bear, others have treated this new regulatory system as an opportunity to stand out from the crowd. Of course, the debate over whether these reforms are beneficial at all will rage on, but the overhaul itself is proof of the fact that banking is a changed proposition.

As much as markets have regained a foothold this past year, stability rests in large part on the banking sector and its ability to push money into and around the economy. This is a banking sector that rests on a threefold commitment to customer service, compliance and innovation, without which this new economic landscape would not exist. The guide provided with this issue takes a look at how banking in all its various forms is spearheading these latest developments, and realising a more sustainable measure of prosperity.

As ever, we’ve scoured the globe for the names that have truly set their markets alight and the ones that have not only exceeded expectations, but also delivered where others have failed. Our research team, together with input from our readers, has delved into the markets to find out which individuals and institutions have pushed the envelope and provided the very best in leading financial services.

With our in-house judging panel, we have selected the finest performers of the year – a challenging task with many tightly contested categories. In the supplement, readers will find insight into each of the year’s leading institutions, as well as those individuals who have made a real difference on each continent. Once again, congratulations to our winners, who we hope to see much more of in the months and years to come.

 

World Finance Banking Awards 2017

Best Banking Groups

AntiguaBOI Bank

AzerbaijanPASHA Bank

BruneiBaiduri Bank

ChinaICBC

ArgentinaBanco Macro

BoliviaBanco Mercantil Santa Cruz

ChileBanco de Crédito e Inversiones

CuraçaoBanco del Orinoco

CyprusEurobank Cyprus

EgyptArab African International Bank

GhanaZenith Bank Ghana

JordanJordan Islamic Bank

Dominican RepublicBanco Popular Dominicano

FranceCrédit Mutuel Group

IndonesiaBank Rakyat Indonesia

LebanonBankmed

MacauICBC Macau

MalaysiaMaybank

MexicoBanorte

MyanmarCB Bank

NigeriaGuaranty Trust Bank

PeruBanco de Crédito del Perú

PhilippinesRizal Commercial Banking Corporation

QatarQatar National Bank

Saudi ArabiaSamba Financial Group

SingaporeOCBC

South KoreaWoori Bank

Sri LankaPeople’s Bank

TaiwanMega International Commercial Bank

ThailandBangkok Bank

TurkeyAkbank

UAEUnion National Bank

Best Investment Banks

Brazil BTG Pactual

Bahrain Securities and Investment Company

Canada RBC

Chile BTG Pactual Chile

Colombia BTG Pactual Colombia

Dominican Republic Banreservas

France BNP Paribas

Germany BNP Paribas Germany

Iceland Arion Bank

Italy Mediobanca

Kazakhstan JSC Kazkommerts Securities

Pakistan Habib Bank

Saudi Arabia SaudiMed

Spain Haitong

Sri Lanka CAL

UAE Abu Dhabi Commercial Bank

Best Private Banks

ArgentinaICBC Argentina

AustraliaWestpac

AustriaErste Private Banking

BelgiumVan Lanschot

CanadaBMO Private Banking

ChileBanco de Crédito e Inversiones

Czech RepublicČeská Spořitelna

DenmarkDanske Bank

FranceBNP Paribas Banque Privée

GermanyBerenberg

GreeceEurobank

IndiaKotak Mahindra Bank

ItalyBNL Gruppo BNP Paribas

KenyaStanbic Bank

LiechtensteinKaiser Partner

MalaysiaMaybank

MexicoBanco Ve por Más

NetherlandsING

NigeriaFirst Bank of Nigeria

PeruBBVA Continental

QatarInternational Bank of Qatar

RomaniaErste Private Banking

Saudi ArabiaSaudi British Bank

SingaporeMaybank Singapore

South AfricaInvestec

SpainBancaMarch

SwedenSEB

ThailandKasikorn Bank

UAENational Bank of Abu Dhabi

UkraineOTP Bank

US (East)Brown Brothers Harriman

US(West)Bank of the West

Best commercial banks

VietnamSaigon Commercial Bank

AzerbaijanPASHA Bank

ArgentinaBanco Macro

BrazilBanco Bradesco

ChinaICBC

AngolaBancoSol

BelgiumKBC Bank

CanadaBMO Bank of Montreal

ColombiaBancolombia

Dominican RepublicBanco de Reservas

GhanaAccess Bank Ghana

HungaryING Bank Hungary

ItalyBNL Gruppo BNP Paribas

GermanyCommerzbank

Hong KongHSBC

IndonesiaBank Central Asia

KenyaKenya Commercial Bank

MacauBanco Nacional Ultramarino

MalaysiaMaybank

MexicoBanca Mifel

MozambiqueBanco BCI

MyanmarAYA Bank

NigeriaDiamond Bank

PeruBanco de Crédito del Perú

PhilippinesRizal Commercial Banking Corporation

PortugalActivoBank

QatarAl Khalij Commercial Bank

Saudi ArabiaSaudi British Bank

South KoreaShinhan Bank

Sri LankaSampath Bank

ThailandSiam Commercial Bank

UAEEmirates NBD

USBank of the West

Best Retail Banks

PortugalSantander Totta

AngolaBanco de Fomento Angola

ChinaChina Merchants Bank

EgyptEgyptian Gulf Bank

LebanonBankmed

ArgentinaBanco Santander Río

Dominican RepublicBanreservas

GreeceEurobank

MyanmarAYA Bank

netherlandsABN AMRO

NordicsHandelsbanken

QatarCommercial Bank of Qatar

TurkeyGaranti Bank

NigeriaGuaranty Trust Bank

PolandBank Zachodni WBK

Sri LankaSampath Bank

UAEUnion National Bank

Best Sustainable Banks

BahrainEskan Bank

BrazilEmpresta Capital

EgyptArab African International Bank

MexicoCompartamos Banco

BoliviaBancoSol

ChileBanco de Crédito e Inversiones

KenyaEquity Bank Kenya

MongoliaXacBank

MozambiqueBanco BCI

PeruMiBanco

QatarQatar National Bank

Sri LankaPeople’s Bank

NigeriaAccess Bank

PhilippinesBank of the Philippine Islands

Saudi ArabiaBanque Saudi Fransi

UAENational Bank of Abu Dhabi

Most Innovative Banks

North AmericaCapital One

Latin AmericaBanco de Chile

AfricaGuaranty Trust Bank

AsiaDBS Bank

Middle EastGulf Bank

AustralasiaANZ Group



A new ‘blank cheque’ company seeks to push unicorns to go public

On September 14, US firm Social Capital Hedosophia, created by a group of Silicon Valley entrepreneurs, started trading on the New York Stock Exchange, raising a higher-than-expected $600m from investors. This is unique in that the ‘blank cheque’ company represents a new investment vehicle targeted at tech unicorns that want to go public, while avoiding the spotlight of an IPO.

Essentially, Social Capital Hedosophia will invest the money raised in the market to buy a promising tech company, and then seek to keep a minority share. Thus, the firm is provided with fresh funding from the public market, but through an alternative path, according to The group, which is led by former Facebook executive Chamath Palihapitiya, said it will now look for US and European tech companies between $3bn and $20bn.

Data collected by Dealogic showed that, so far this year, 23 SPACS related to different industries have been listed on US markets

This investment instrument, known as a ‘special purpose acquisition vehicle’ (SPAC), represents an alternative that has been used more and more often during recent months. Data collected by Dealogic showed that, so far this year, 23 SPACS related to different industries have been listed on US markets. Investor response has been positive, supporting SPACs with a record $7.5bn, beating the $5.3bn registered in 2007.

The new vehicle has been launched at a time when the IPO market is after a slowdown. In 2016, with a total of 41 deals raising $8bn, listings activity in the US marked its slowest pace since 2009.

The reason is that in the last few years, an increasing number of tech companies have opted to stay private. For example, Airbnb and Uber have based their growth on venture capital and still remain in private hands. At present, the availability of capital at later stages allows companies to expand without the urgency of going public.

One other example is Spotify, which has said it will opt for a direct listing rather than going through the process of an IPO. This way, the audio streaming company is seeking to save money on the fees involved.

Diplomatic standoff has cost Qatar $38.5bn so far

A Moody’s released on September 13 has estimated that the Qatar Central Bank has injected $38.5bn into its economy over the past two months as the state grapples with the impact of the ongoing embargo instigated by its neighbours. In June of this year, Saudi Arabia, the UAE, Egypt and Bahrain joined forces in imposing far-reaching measures against Qatar, accusing it of propping up terrorist organisations including Al-Qaida, ISIS and Hezbollah. The Saudi-led coalition has cut diplomatic ties and imposed steep trade and travel bans, which has forced Qatar to deepen ties with alternative trade partners in an attempt to stabilise social and economic conditions.

According to Moody’s, the impact of the sanctions is “credit negative” for all members of the GCC, but Qatar and Bahrain are feeling the effects more acutely than others. “The diplomatic rift will inevitably impair the functioning of the grouping, the more so the longer it persists,” the report said.

According to Moody’s, the impact of the sanctions is “credit negative” for all members of the GCC

The negative impacts of the measures have been concentrated on the tourism, trade and banking sectors. The ratings agency predicts that Qatar has seen capital outflows in the vicinity of $30bn over the course of June and July, and this is likely to continue into the future. In response, the Qatar Central Bank has fallen back on its reserves to support bank funding, and has supplied an injection into the economy the equivalent of 23 percent of its GDP. Bahrain is also exposed to the effects of the embargo, owing to its more precarious financial situation, which has rendered it more susceptible to possible changes in risk assessment from foreign investors.

While it is facing steep social and economic costs, Qatar has denied all of the allegations coming from the coalition of four, and has refused to comply with demands from the group. Qatari officials have lodged a formal complaint with the World Trade Organisation, claiming that the blockade is politically motivated and arbitrary. Upon filing the complaint, Qatar’s Minister of Economy and Commerce, Sheikh Ahmed bin Jassem bin Mohammed Al-Thani, argued in a that the blockade amounts to an “illegal siege” that is “a clear violation of the provisions and conventions of international trade law”.

According to Steffen Dyck, Moody’s Vice President: “The severity of the diplomatic dispute between Gulf countries is unprecedented, which magnifies the uncertainty over the ultimate economic, fiscal and social impact on the GCC as a whole.”

Austria makes record €3.5bn century bond issuance

On September 12, Austria raised €3.5bn ($4.2bn) in 100-year bonds at a 2.112 percent yield, in a move that the market has billed as the largest ever century-long debt deal. The success of Austria’s debt issuance – with bids reaching €11.4bn ($13.5bn) – means the country will enjoy one of the lowest funding costs in history for the century ahead, according to .

Moreover, the bonds maturing in 2117 are the longest-dated since the country raised €2bn ($2.3bn) in 70-year securities in October 2016. Although the issuance represented the biggest in terms of the amount raised, Austria is not the first country to opt for ultra-long bonds. In total, governments worldwide issued $63.5bn in similar transactions in 2016, .

In Europe, Belgium and Ireland issued €100m ($119m) last year, each in century bonds in private placements

In Europe, Belgium and Ireland issued €100m ($119m) last year, each in century bonds in private placements. Austria’s issuance, on the other hand, was an open market offering.

The trend is related to monetary policy. Low interest rates in Europe and the US – something that is slowly starting to reverse – have led funds with pension or insurance liabilities to make different choices. Today, they are opting for higher risks or long-term debt in order to cover their needs with better returns, according to Bloomberg’s analysis.

For example, Argentina issued $2.75bn in century bonds in June, just a year after it returned to international markets after a payment to its creditors to leave its 2001 default debt behind. The yield was eight percent. In addition to low rates, Austria’s achievement is also explained by its position as a high-quality issuer, given that the market priced its long-term maturities slightly higher than two percent.

Climate prediction markets could be the next step for the financial sector

Investment management firm Winton Investments has set out its vision to create a market for climate prediction that will enable players to bet on the future of environmental variables like carbon dioxide levels. The project is being launched with the support of researchers from the London School of Economics and Political Science (LSE). Perhaps conscious of its dystopian overtones, Winton Investments asserted that the primary purpose of the market would be to reveal information to inform the climate change debate, rather than to create a betting venue for entertainment or risk transfer.

The key challenge, according to Winton, is that specific predictions about the environment are difficult to obtain due to the multidisciplinary nature of research in the area. What’s more, the scale of the possible implications of the climate debate can create biases in opinion. “Are peoples’ positions driven by what they want to be true or what they believe to be true?” Mark Roulston, Winton’s Research Director, at a lecture proposing the idea to experts from across the field at the Royal Society in London.

Winton would act as market maker, generating the infrastructure to enable players to trade contracts based on variables like future global temperatures

The new market, according to its makers, will be able to play the valuable role of synthesising the vast and dispersed knowledge base of researchers in the field. “A scientific gambling market could aggregate and organise the wide range of opinions and potentially reveal useful information that is hidden among the hyperbole,” said a press from Winton.

In the proposed set-up, Winton would act as market maker, generating the infrastructure to enable players to trade contracts based on variables like future global temperatures and levels of carbon dioxide in the atmosphere. Contracts could be bought and sold on the back of predictions about such variables decades into the future.

At first, the market will remain restricted to certain participants, but it will ultimately invite both industry experts and the general public to make bets on the future of the environment. The desired result is a single consensus estimate for the extent of encroaching environmental damage, which can be neatly incorporated into the debate on climate change and used to inform decisions.

“The process of climate prediction raises fundamental, fascinating research challenges and there is value in getting more people engaged in the topic and drawing information together from a range of experts,” said David Stainforth, Associate Professorial Research Fellow at LSE.

 

London remains world’s top financial centre amid Brexit concerns

London has retained its position as the world’s foremost financial centre, cementing its lead over New York, according to a report published on September 11. The latest edition of Z/Yen Group’s Global Financial Centres Index placed the UK capital 24 points ahead of its US rival.

The gap between the two financial powerhouses is actually the largest since the index began in 2007. This has come as something as a surprise to many analysts, who predicted that uncertainty caused by last year’s Brexit vote would undermine London’s position as a financial hub.

With London’s overall rating declining by two points when compared with last year’s survey, the fact that it retained top spot says as much about US economic anxieties as it does UK resilience

With London’s overall rating declining by two points when compared with last year’s survey, the fact that it retained top spot says as much about US economic anxieties as it does UK resilience. New York saw its rating fall 24 points year-on-year, with investors and businesses showing concern over President Trump’s isolationist economic policies.

The index cited London’s business environment, infrastructure and human capital as some of its main strengths, but there were a number of warning signs that should help offset any growing complacency. Frankfurt, Paris and Dublin – three cities that are waiting to capitalise on any sign of post-Brexit weakness – all saw their position in the rankings increase.

Following the report’s publication, TheCityUK noted that London’s long-term position at the top of the pile still relies heavily on the outcome of ongoing Brexit negotiations. “Many firms have already started to activate their contingency plans and others will undoubtedly follow suit if these aren’t confirmed as soon as possible – and by the end of this year at the very latest,” said Miles Celic, CEO of .

Among all the lingering uncertainty, one thing is assured: London cannot simply rely on the insecurity of other financial centres to prop up its position on the world stage. Issues of trade and employment rights must be resolved quickly if the UK capital is not to be overtaken by European competitors.

Equifax executives hit by insider trading allegations following data breach

On Thursday September 7, credit monitoring firm Equifax revealed that information relating to 143 million customers may have been compromised by a cybersecurity breach. The hack exposed names, dates of birth, addresses and social security numbers, while 209,000 customers also had their credit card details accessed.

The US company confirmed that the attack took place between May and July this year, after cybercriminals exploited vulnerabilities in a website application. The breach was discovered on 29 July, but was not announced publicly until yesterday. CEO Richard Smith described the breach as “a disappointing event for the company”.

In response to the breach, Equifax is offering every US customer a comprehensive package of identity protection and credit file monitoring for free

“I apologise to consumers and our business customers for the concern and frustration this causes,” he said. “We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations.”

In response to the breach, Equifax is offering every US customer a comprehensive package of identity protection and credit file monitoring for free, but that will provide little in the way of comfort for affected individuals. Although larger data breaches have occurred in recent history, including a 2014 hack that exposed the personal data of , few have involved such a broad spectrum of sensitive information.

In related news, three top executives at Equifax are facing accusations of insider trading following the data breach. The individuals concerned sold nearly $2m of company shares in the days that followed the breach’s discovery, but before the attack went public. They claim that they had “no knowledge” of the incident at the time of the sale.

For now though, the threat of investigation by the Securities and Exchange Commission is the least of Equifax’s concerns. Aside from damaging the economic security of millions of US customers, the company also saw its share price fall by 13 percent in the wake of the attack.

Twitter co-founder applies to launch digital challenger bank

Square, the mobile payment company founded by Twitter CEO Jack Dorsey, has submitted an application for a banking license in a move that looks to expand the company’s remit beyond payments services. The license would allow the company to fully engage in banking services, through which Dorsey is looking to construct a banking unit that offers loans and deposit facilities to small businesses.

Square, which was built on the premise of leveraging digital technology to enable convenient payments, has in fact already been extending loans to small businesses since 2014. However, at present it can only do so through its partnership with Celtic Bank, while the new license would enable it to offer loans independently of a partner bank. Indeed, as it stands, Square Capital has already lent over $1.8bn to over 140,000 small businesses throughout the US. Its average loan size amounts to just $6,000.

As it stands, Square Capital has already lent over $1.8bn to over 140,000 small businesses throughout the US

In an interview with The Wall Street Journal, Jacqueline Reses, who is set to become chairman of the new bank, : “As we scale, it’s becoming increasingly important that we have direct relationships with regulators.”

The Twitter co-founder’s foray into banking comes at a time when disruption from fintech companies is becoming a common trend across the banking industry. A comment on Twitter argued the decision to take on banking services consisted of a move into a “crowded space”, to which Dorsey responded by saying: “We did that eight years ago, too,” referring to the launch of Square in 2009.

France kick-starts privatisation plan with €1.5bn asset sale

The French Government has announced the sale of a 4.5 percent stake in utility firm Engie, kick-starting France’s privatisation strategy. Finance Minister Bruno Le Maire confirmed that funds from the sale, confirmed on September 5, which amount to €1.53bn ($1.8bn), would be used to finance the country’s innovation fund.

The divestment represents the first concrete action taken as part of France’s €10bn asset sales plan. However, the Finance Ministry did declare that it would continue to play a leading role in Engie’s “strategic transformation”. Despite the sale, the French state will remain the largest shareholder in the company and retain a third of voting rights.

New French President Emmanuel Macron has set his sights on overhauling France’s labour market

In order for France to fund its ambitious innovation strategy, additional businesses that are not deemed to be of strategic importance to the state are set to be sold over the coming months. Although it has not been confirmed which organisations are likely to be privatised next, banking sources told that airport operator ADP and the national lottery could be put up for sale this autumn.

New French President Emmanuel Macron has set his sights on overhauling France’s labour market and reducing the country’s 9.5 percent unemployment rate. However, with Macron also promising to cut the national deficit, the French Government must raise funds from asset sales before it can commit to further spending.

Speaking in early July, shortly after the innovation fund had been announced, Macron reaffirmed his pro-business credentials by promising to turn France into a “”. Since then, however, the political newcomer has seen his approval rating plummet following controversial labour reforms and clashes with trade unions. The new president will be hoping his innovation fund and wider economic policies yield positive results, for France’s sake and his own.

Xi Jinping warns BRICS summit about protectionist risks

On September 5, Chinese leader Xi Jinping said the global economy has picked up with increased international trade and investment. However, he warned about risks growing at the same pace due to protectionism, in a speech at the BRICS summit hosted by China in Xiamen.

In front of the leaders of the group formed by Brazil, Russia, India, China and South Africa, and other developing countries, the president of the world’s second-largest economy reinforced its strategy of positioning the country as the new leader of globalisation. Xi has stuck to this position since he made a stand in favour of an open world economy at the World Economic Forum in January, opposing US President Donald Trump.

“Recently, the world economy has taken a turn for the better. International trade and investment has picked up,” Xi said on September 5, according to . “At the same time, we must take note that risk and uncertainty in the world economy are also increasing.”

Without mentioning it directly, Xi took a swing at protectionist policies in the US

Without mentioning it directly, Xi also took a swing at protectionist policies in the US. “Some countries have become more inward-looking, and their desire to participate in global development cooperation has decreased,” he said, calling on the group and its partners to oppose protectionism.

Since Trump took office, the country has taken a tough position on international trade issues. Under the slogan ‘America First’, for example, the new administration triggered the renegotiation of NAFTA, in order to give the US more power in trade with Mexico and Canada,

In this context, China is working to strengthen its global leadership. Xi said at the summit he hosts that developed countries should improve their assistance to developing nations, and announced China will provide $500m for a South-South cooperation fund with this purpose.

Xi also indirectly addressed the US withdrawal from Paris climate agreement. “Multilateral trade negotiations make progress only with great difficulty, and the implementation of the Paris Agreement has met with resistance,” Xi said.

In parallel, Xi’s political strategy is oriented towards his re-election as party leader the coming National Congress of the Communist Party in China.

China declares ICO fundraising illegal

China has declared an immediate ban on all initial coin offerings (ICOs), citing a lack of regulatory oversight. The People’s Bank of China announced the ban on September 4, and ordered all businesses and individuals to issue refunds for any investment raised.

ICOs represent a relatively new way for businesses to conduct fundraising, whereby virtual tokens, essentially mini-cryptocurrencies, are created and sold to investors. These tokens then grow in value as the company becomes more successful, but concerns have been raised about the legality of some of the organisations involved.

There is currently a lack of regulation surrounding the issuing of new ICOs which, when coupled with the anonymous nature of cryptocurrencies, makes them attractive propositions for fraud and other criminal activities. This year, phishing scams connected to ICOs have cost investors an .

In China alone, $394.6m has been raised from ICOs this year

China is far from the only market to take issue with the growing popularity of ICOs as a fundraising method. In July, the US Securities and Exchange Commission ruled that tokens issued via ICOs are subject to the same regulation as other securities.

“This is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions – the short story is we all know regulations are coming,” Jehan Chu, a partner at Kenetic Capital, told . “China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action.”

Aside from any criminal associations, there is a feeling that ICOs are creating a financial bubble that must be reined in. In China alone, $394.6m has been raised from ICOs this year. Although ICO bans may end up being temporary measures, approved platforms and greater regulatory scrutiny will need to emerge before the fundraising method gains approval from national governments.

Brazil reduces its stake in Eletrobras

On August 21, the Brazilian Government unveiled a plan to curb its fiscal deficit. A key element of the plan is the sale of the government’s stake in power utility company Eletrobras, according to a released by the country’s Ministry of Mines and Energy.

The sale of the electricity provider, which could represent one of the largest privatisation moves , comes at a time when Brazil’s economy is slowly emerging from a two-year recession, amid a series of corruption scandals. President Michel Temer, whose position was confirmed this year despite being investigated over bribery allegations, is focused on tackling an increasing budget deficit of around 10 percent of Brazil’s GDP.

The decision over the governance of Eletrobras is part of a wider programme to alleviate pressure on Latin America’s largest economy

Fernando Coelho, Minister of Mines and Energy, said in a statement that the transaction, in which the government will retain a minor percentage of the shares, is expected to be concluded in six months and will provide the country with around BRL 20bn ($6.3bn). Coelho added that, after years of “inefficiencies”, the privatisation would give the company “agility [and] capillarity”, highlighting successful examples of privatisation in Portugal, France and Italy.

The decision over the governance of Eletrobras is part of a wider programme to alleviate pressure on Latin America’s largest economy. The plan includes 58 projects that are estimated to attract private investment of around BRL 44bn ($13.9bn) in sales and concessions, according to local newspaper . In addition to Eletrobras, ports, airports, routes and even the Olympic Park in Rio de Janeiro will be offered to the private sector.

According to the World Bank, Brazil’s economy is forecast to grow 0.3 percent this year and 1.8 percent in 2018. This represents an underperformance according to projected figures for the wider region.

China issues new guidelines to limit overseas investment

The Chinese Government has issued new guidelines to curb overseas investment. The country’s State Council confirmed the regulations on August 18, adding that they should help to reduce risk and strengthen the country’s Belt and Road Initiative (BRI).

The announcement formally codifies policies that first emerged in November 2016. Investments that do not benefit China and those that are in conflict with the country’s macroeconomic policies will now be restricted.

“In addition, the guideline also prohibits domestic enterprises being involved in overseas investment that may jeopardise China’s national interests and security, including output of unauthorised core military technology and products, gambling, pornography and other prohibited technology and products,”

There is concern among China’s ruling Communist Party that some foreign acquisitions are being rushed through, with domestic companies taking on increasing levels of debt

There is concern among China’s ruling Communist Party that some foreign acquisitions are being rushed through, with domestic companies taking on increasing levels of debt. As such, new regulations will discourage companies from investing in the entertainment, property and hotel industries, in favour of supporting economic cooperation zones in Central and East Asia.

The new guidelines also suggest that the Chinese Government is pursuing greater control over capital flows in and out of the country. However, investment opportunities relating to infrastructural development, mining and hi-tech manufacturing, all of which have become key strands in the BRI, will continue to be encouraged.

According to the , Beijing’s attempts to limit outbound investment already appear to be having an effect. Non-financial foreign investment is down by 44 percent in the first seven months of 2017, compared with the same period last year.

German employment hits highest level since reunification

German employment reached a record 44.2 million in the second quarter of 2017, according to data released by the country’s Federal Statistical Office on August 17. The figure is the highest recorded in the country since reunification, and represents a 1.5 percent increase on the same period last year.

Growth in the service sector was the main driving force behind the increase, with the public service, education and health sectors posting a year-on-year rise of 2.1 percent. A spokesperson for the Federal Statistical Office also explained that although employment figures typically increase in the second quarter, the German results still represent a rise in absolute terms.

“Seasonal growth in employment is typical in the second quarter of a year due to the general increase in outdoor work in spring,” . “In 2017, however, the increase was higher than the relevant average of the past five years. After seasonal adjustment, that is, after the elimination of the usual seasonal fluctuations, the number of persons in employment increased by 138,000, or 0.3 percent, in the second quarter of 2017 compared with the previous quarter.”

The figure is the highest recorded in the country since reunification

However, the second-quarter results were not universally positive for the eurozone’s biggest economy. Employment continues to decline in the financial and insurance sectors, while a fall in the number of home building permits could cause a future slowdown in Germany’s construction industry.

for the first half of the year, with authorities issuing 13,400 fewer when compared with the same period in 2016. Construction, and home building in particular, has become a key driving force in the German economy, with population growth and the low cost of borrowing causing a rise in demand.

This year’s fall in home building should, however, be placed in the context of 2016’s higher-than-average figures. Residential building permits reached their highest levels since 1999 last year, with more homes being required to cope with Germany’s record influx of refugees.

Romania confirmed as EU’s fastest growing economy

Romania has been confirmed as the fastest growing economy in the EU, following figures released on August 17. The non-eurozone country expanded 5.7 percent in the second quarter of 2017, surpassing its predicted year-on-year growth rate of 4.8-5.1 percent.

Other results from statistical body revealed that Romania’s economic performance is in keeping with the general EU trend, whereby Central European economies are growing at a faster rate than their western counterparts. As the second-fastest growing EU economy, Latvia posted a growth rate of 4.8 percent during the second quarter of 2017, while the Czech Republic, Poland and Lithuania all delivered strong results.

Although the figures are encouraging, analysts have warned that such high levels of growth are largely being stimulated by government spending programmes and will prove difficult to sustain

Although the figures are encouraging, analysts have warned that such high levels of growth are largely being stimulated by government spending programmes and will prove difficult to sustain. “Romania definitely stands out, but the quality of growth is not as impressive as the headline figure, because the economy is mainly driven by government’s fiscal stimulus,” Piotr Matys, an economist at Rabobank, told the . “That means the current rate of growth may not be sustainable when the positive impact of fiscal measures fades and both exports and investment remain sluggish.”

Although fiscal stimulus is not the only reason behind Romania’s strong performance – increased demand is also causing growth in many Central European economies – government policies to reduce taxes and increase wages for public sector workers are a major factor. They also mean that Romania is predicted to run a budget deficit of 3.5 percent this year, the largest in the EU.

The prospect of increased borrowing rates could ultimately make the monetary policies being pursued by many Central European governments look short sighted, but Brussels will no doubt be broadly pleased by the EU’s current economic performance. The bloc as a whole grew by 2.3 percent in the second quarter of 2017.