Comment EM and The Cover

Do responsible investing, ESG and sustainable finance mean anything? If so, they must mean investors cannot buy Saudi Aramco’s IPO. When the world is desperately trying to cut carbon emissions, ploughing billions into a newly listed oil company is the definition of a backward step.

Europe’s IPO market is not broken — deals get done and in some years activity is quite brisk — but it has little to be proud of. The failure rate of deals this year has been stark and the market needs to adapt.

The Public Works Loans Board has given investment banks and asset managers the Christmas present they have been praying for for years. By hiking the cost of loans to local authorities, it will force them into private capital markets. Big mistake.

UniCredit’s search for a more efficient corporate structure shows how an incomplete Banking Union is beginning to weigh on pan-European financial institutions.

After another delay to the IPO of Saudi Aramco, Saudi Arabia’s crown prince Mohammed bin Salman (MBS) may have to accept that international fund managers may never value the kingdom’s prize asset as much as its royal family does, but local investors just might.

Chinese regulators are planning to rate the bond underwriting ability of securities firms. That may appear a sensible solution to an exchange bond market that has become cutthroat and chaotic. But the proposed solution is too vague to have much impact.

The branding may be on the way out, but there are plenty of reasons to be encouraged about the potential for real progress in the next phase of the Capital Markets Union.

It isn't often that equity investors are asked to buy assets subjected to physical attack. The drone strikes on Saudi Arabia’s Abqaiq and Khurais oil facilities on Saturday could lead to Aramco demanding a big discount on any upcoming listing. The IPO market has suffered its fair share of geopolitical tumult of late, but this long and keenly anticipated deal could wind up being the riskiest of them all.

China’s move to remove the quota limits on the Qualified Foreign Institutional Investor (QFII) and renminbi QFII (RQFII) schemes could help in the long-term development of the country’s financial market. But this is not nearly enough. If the regulators want to see some serious change, they need to tackle two key hurdles facing foreign investors.

The sustainability-linked bond issued by Enel on Thursday opens a new chapter in the green finance market. Anyone tempted to think this will be a freak should think again. The idea is sure to catch on.

When E.On raised the curtain on the autumn corporate bond issuing season in euros a fortnight ago, a dramatic tableau was revealed.

Foreign banks can now get a licence to act as lead underwriters for all deals in China’s domestic interbank bond market, signalling a further opening up of the Mainland’s financial market. But these licences will only make a marginal difference to a bank’s business.