Comment EM and The Cover

Investors have got a fever, and the only cure is more pharma. Biotech equity issuance is surging, in line with rising stock prices in the secondary market, as stock pickers pan for the company that will cure Covid-19, among other maladies. But this is more speculating than investing and many are going to catch a cold chasing around a risky sector that is starting to look a lot like the dot-com bubble.

Each week, Keeping Tabs brings you the very best of what we have found most useful, interesting and informative from around the web. This week: what’s next for the US after its war on Huawei, the impact that more robots would have on the gender pay gap, and a look on the bright side of Europe’s mishmash of state guarantee schemes.

The Wirecard scandal — like other recent debacles such as NMC Health — shows that financial reporting, oversight and governance, as they are currently practised, are woefully inadequate.

The Shanghai Clearing House’s decision to give bond issuers insight into the holders of their debt is a smart move. China has enough regulation; what it lacks is information.

Equity capital markets are gearing up for a busy autumn and UK companies have been at the forefront of activity in Europe since the coronavirus pandemic began. Bankers and investors have said they fear the disruption a second wave of Covid-19 and volatility surrounding November's US election could bring, but they should not forget either that the UK is edging towards a no-deal Brexit at the end of 2020.

The UK is in many ways a green leader. Starting to issue green Gilts would be peripheral to that, and not necessary to environmental progress. But for a country that desperately needs to buff up its image, it is low-hanging fruit.

Asian supply chains are facing unprecedented disruption. Banks in the region should take notice.

The weakness of communication along the capital markets chain is one reason why so little progress has been made on greening the economy.

Clean, green energy exists; it is more or less unlimited and it is increasingly cheap to harvest through solar and wind farms. Why are we not converting to renewables wholesale — especially in poor countries, which tend to have abundant sunshine? A significant part of this market failure is financial, and capital markets must solve it.

The repeated presence of European issuers in the bond market of late is testament to the prudence with which they are building up capital for what could be tough times ahead.

The Covid-19 crisis, and particularly the equity rally since the bottom of the sell-off in March, should cause deep reflection for active fund managers at risk of underperforming if they stick to their principles.

‘Angrynomics’, a well-timed book on anger and how it relates to politics, economics and finance by Eric Lonergan and Mark Blyth, is published this week. GlobalCapital spoke to Lonergan to discuss its meaning.