Comment EM and The Cover

Denmark’s debt officials have a highly original plan to issue green bonds in which the green element can be stripped off and traded separately. It’s going to put many a green nose out of joint. That’s no bad thing: the market needs to re-examine its claims to efficacy and virtue.

Crédit Agricole bagged a total loss-absorbing capacity eligible senior preferred Panda bond in China last week — the first of its kind onshore. But the confusion it created shines a light on a market that is still in dire need of education around these new structures. With Chinese banks set to come under pressure soon to issue their own TLAC-eligible bonds onshore, rapid change is needed before time runs out.

While capital markets professionals might be preparing to pop champagne corks in the expectation of a Conservative Party victory in the UK’s general election on December 12, they should remember that the government’s key policy is appalling for the UK.

The power sector — like other industries — is going green at an accelerating pace. It’s still not nearly fast enough. Governments must goad and drive the private sector horses faster. But they should not step off the driver’s seat and try to pull the coach themselves.

Axa’s proposal this week that the European Union should create a €500bn joint borrowing vehicle for climate change could easily be dismissed as pie in the sky. So it is, for now.

Bank bondholders should feel pretty good about the challenges facing the financial sector heading into the new decade.

Saudi Aramco’s decision to make its IPO a local affair, with no international marketing, is a lacklustre end to what is nonetheless a huge capital markets event. Unrealistic objectives and hype have taken the shine off a monumental deal.

Foreign banks hoping to break into China’s capital markets will have an open invitation at the end of next year, when final restrictions on their ownership of securities houses are removed. They will have some small successes with secondary trading but muscling in on primary capital markets will prove expensive ─ and risky.

Tuesday might be a day to spare a thought for any investor long Netflix as Disney launches is streaming service, Disney +. But the flotation of UK visual effects firm DNEG might just give them a way to profit from the coming war between the big streamers.

Saudi Aramco released an initial IPO prospectus on Sunday and some, mainly in the mainstream financial press, were outraged that it contained no details on price or deal size. However, a full two week investor education process is a perfectly normal feature of IPOs and the fact that Aramco is doing its deal by the book is a good thing.

Olaf Scholz, Germany’s finance minister, was playing all of the right notes in his ode to the Banking Union this week. It is a shame they are still not in the right order.

The launch of Saudi Aramco’s IPO on Sunday will begin a fortnight of feverish debates and valuation discussions among investors and banks. But Aramco is not just an investment in an oil company: it is an invitation to be a junior investor in the state of Saudi Arabia — with all the dangers and upside that entails.