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Check out the latest M&A article on Pharmaceutical, Pfizer acquires California-based Arena! Hello Finance aspirants ! Check out the latest M&A article on How Microsoft Conquers the Gaming Sector and Beyond. On 11 April 2022, the New York State Common Retirement Fund called on shareholders to support resolutions demanding stricter fossil fuel financing policies at some of the world’s largest banks, marking one of the first such moves by a major pension fund - worth $280 billion. Meet, Explore and Apply! The Wall Street bull has become the most famous statue in New York's financial district and represents the entrepreneurial spirit of Americans. As inflation runs red hot in the US, the Fed is officially pushing toward Quantitative tightening after over two years of quantitative easing and will soon start shrinking its balance sheet. This phenomenon is relatively rare and is very hard to execute correctly. The central bank has to balance combating inflations while at the same time make sure that it does not cause recession. Tightening monetary policy usually destroys jobs, lowers investment, depresses stock prices, and makes people poorer so in most cases it is not the right option. However, right now it is the best thing to do with the tight labor market, increasing prices, which will all contribute to a spiralling inflation which is a a very dangerous outcome. So now the next question is whether a recession is looming around the corner. Deutsche bank is one of the first major bank to predict a recession in the secon half of 2023 due to the fed hikes but the other banks still give it a less than 50% probability. For now, the bull market is raging but one has to be on the lookout for the impact of monetary policy and make their investment choices accordingly. After last month's nickel incident, the London Metal Exchange is facing harsh scrutiny for mismanaging the situation. To their eyes, the problem arose from something they even couldn’t see. Since the 2008 financial crisis, over the counter contracts were thought to have been more transparent, but this surely doesn’t seem to be the case. On March 8, the LME had to cancel a whole day of trading and later suspend the nickel market for 8 days as a result of a record spike in prices. The market had increased by over 400% in just a week. Besides speculation being a primary cause for this rise, Chinese metal tycoon Xiang Guangda had accumulated a huge short position since the beginning of 2021. Essentially, they were betting that the market would crash. Once the market began its bull run, they quickly had to pay billions in initial margin to avoid having their positions closed. Although the LME knew about their huge position, nothing was done. With the current volatility, they could have at least increased margin requirements which would have surely lightened the situation. In 2021, global banks provided $742bn in financing fossil fuel companies despite their climate pledges at the Glasgow Financial Alliance for Net Zero (GFANZ) in April of the same year. Led by four US banks (JPMorgan Chase, Wells Fargo, Citi and Bank of America), the twenty biggest fossil fuel lenders include banks from North America, Europe and Asia Pacific. The $11.9bn deal between KKR & Co. and Telecom Italia SpA is set to be suspended if the former Italian phone monopoly doesn’t grant KKR the due diligence it requested since last November. The U.S. investment firm has made clear its intention to scrutinize Telecom’s finances even more in the light of the recent market changes such as Russia’s invasion of Ukraine, and the recent Telecom Italia’s credit rating downgrade. In an effort to prevent the delisting of many Chinese stocks on the US market, Chinese authorities have changed their audit secrecy rules. The pressure put on companies by the US authorities had led the equities to underperform heavily as the NASDAQ Golden dragon fund, the Chinese blue-chip stock tracker, fell by half this year. The Chinese government allowed the US to have a legal framework to be able to audit the financials of Chinese companies, which is an unprecedented move on the part of the CCP. This being said, recent geopolitical tensions between the US and China due to the Russia/Ukraine conflict may yet still be a threat to Chinese firms. The SEC Chief Garry Gensler went on to say that the Chinese would have to fully comply with US audit requirements in order even to begin considering keeping these companies listed on the US exchanges. Still, Chinese equities have managed to soar this week as investors are calmed by this news and hope for bettered relations between the two nations. Check out our latest Sustainable Finance article on The Implications of Ukraine-Russia Conflict on Green Energy Market Join us for the free Finance Accelerator simulation with AmplifyME taking place today Wednesday 30th March 2022 | 16:00-18:00 BST I 17:00 - 19:00 CEST in partnership with Morgan Stanley. Check out the latest M&A article on Houlihan Lokey’s Expansion in the Eur-Asian Market with a Focus on the Technology Sector Gas prices surged more than 30% after President Vladimir Putin announced plans to make the Russian ruble the only payment method accepted for natural gas purchases from European nations. This further exacerbated Europe's worst energy crisis since the 1970s. The U.K. government announced its intention to regulate the cryptocurrency market, focusing on stablecoins which are cryptocurrencies that attempt to peg their market value to some reserve assets such as currencies or commodities. This implies less volatility of the currency and thus greater price stability. Apparently, few investors are willing to take such a risk. Last week, Russia had paid around $100 million in interests to its international creditors. The payment was processed by JPMorgan who ensured it did not contravene US sanctions against Russia. Investors welcomed this news positively as it showed Russia’s willingness to avoid default despite all the sanctions imposed on the country. 3 Reasons why you should do the brand-new AmplifyME Finance Accelerator Simulation in partnership with Morgan Stanley🚀 Join the brand-new AmplifyME Finance Accelerator Simulation in partnership with their global sponsors Morgan Stanley🌏 The SEC is looking to make it mandatory for companies to disclose their ESG risk. The proposal would require annual reports to include data on emissions that fall in scope 1 and scope 2 i.e. owned direct and indirect emissions. This would mean that a firm would have to report its CO2 footprint from buildings and energy purchases. While this marks a significant step for a country that just recently re-joined the Paris Agreement, environmental groups worry about the implication for scope 3 emissions which have been omitted. Scope 3 include emissions linked to operations and usually account for the majority of total emissions. For the first time since 2018, the Fed increased official interest rates by 25bps. Mr Powell announced the tightening of expansive monetary policies that have been implemented to overcome the Covid-19 Outbreak and indicated the possibility of 6 rate increases this year. The rate increase did not come as a surprise as the recent inflation number reflected a new multi-year record with the US PPI growing by 10% between February 2021 and 2022. However, what surprised investors were the update of Fed Officials' projections on the median rates for 2023 and 2023. The latter implies that official rates will reach 2.8% in 2023, while previous Fed's projections were at 2.4%. Therefore, investors' price rates are to be at 2.6% and the possibility of larger than 25bps starting from next Fed's rate increase.  Chinese equities have seen an unprecedented dump from foreign investors. In 2022 the Chinese markets have seen an outflow of $6bn due to the speculation of the position of the CCP on the Russia Ukraine conflict and possible sanctions which might plague China as a result. That being said, there are multiple international reasons which have been listed, such as the possible de-listing pressures of Chinese companies on US-listed indices and a new resurgence of COVID-19 cases in mainland China. These combined events have resulted in a witch's cauldron of problems for the market environment in China. On the other hand, Morgan Stanley sees this sell-off as a potential buying opportunity. Morgan Stanley points to the potential impact of the increased inflation expectations in the US, which Chinese exporters may use as it exposes the weakness of the US dollar and Yuan. Another point brought up was China's lack of Fiscal spending, which may see the economy take an upswing quicker than that of the US as China avoids a fiscal drag. The volatile market in China provides many opportunities for investors, and as an emerging market, it is an important country to monitor, especially in these unprecedented times. On Thursday, the Russian ministry of finance announced that Russia had paid more than $117 million in interest to its international creditors. There were several questions about Russia’s ability to honour its debts: Was it willing to pay interest after the sanctions imposed on its economy? Did it have the necessary funds? Was it going to pay in Dollars or Rubles? A payment in Rubles would have been considered as a default by rating agencies, and it seems like the Russian government wanted to avoid that in order not to worsen its debt capacity in the future. However, even if Russia had sufficient dollar reserves to repay its debt in the following months,  it is not certain that it would be able to use them because of the current sanctions. “According to the US Treasury department, current US sanctions on Russia do not prohibit the country from making these payments to bondholders.” (Financial Times) 🚨 We are excited to announce ESCP Finance Society's new partnership with AmplifyME 🚨 Check our latest Sustainable Finance article on ESG Investments! On Wednesday 9 March, the Amazon’s board approved a 20-for-one stock split and a buyback of $10 billion. The US further hardened its stance against Russia by banning oil imports from the country. The UK and EU failed to follow suit but committed to phasing out the gas and oil supply over the year. According to experts, the EU should take the short-term hit and find alternative sources while it can and use the cushion of the coming summer months when oil demand is less. A long term reliance on Russian resources could increase volatility in EUs growth according to experts. Furthermore, the sudden gap in the commodities supply by Russia will continue to push the prices upwards as western countries try to find alternative sources and the world will continue to face the uncertainty of economic problems caused by the accompanying inflation. Developing countries will face the bigger brunt with strengthening dollar and rising prices which might increase current account deficits. Nike, the American sports giant, has decided that it will concentrate on sales in direct channels, i.e. in its shops and on its e-commerce site. Check out the latest M&A article on Ericsson's $6.2bn acquisition of Vonage The invasion of Ukraine will further strain energy markets in Europe and the world. Coal prices had already surged in the winter resulting in renewable energy installations falling behind. Coal consumption is now expected to increase significantly to reduce disruptions related to gas. It remains to be seen how the economic instability of the war will impact a green transition. Will it be a catalyst for renewables or will it inevitably lead to a setback?
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The ESCP Finance Society is the oldest and largest student-run Association active in the finance field of ESCP Business School.

The mission of the ESCP Finance Society is to help ESCP students to break into the Finance Industry, organising dedicated networking events and providing useful materials to support the application and interview process.

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