They say spring is for fresh starts and new opportunities. This certainly seems to have been the case for securities services.
In recent months, it’s been encouraging to see – and be part of – more in-person industry interactions. Most recently, I was delighted to connect with peers and clients alike at the International Securities Services Association (ISSA) Symposium 2022.
And with this year’s big events like The Network Forum Annual Meeting and SIBOS returning to in-person meets, we’re excited at the engagements ahead.
That’s not to say there aren’t challenges. The conflict in Ukraine, the lingering effects of COVID-19 and the changing monetary and fiscal responses to these events are presenting an unfolding set of risks and opportunities to both developed and emerging markets. Volatility, interest rates and prices are on the up. Economic recovery continues to be uneven, particularly in emerging and frontier markets.
Looking ahead, we see opportunities arising from these challenges – particularly in emerging markets. Take Africa where we’re seeing a great amount of innovation to develop APIs, chatbots and mobile apps. All of which are designed to make it easier and more enjoyable for investors to access and trade the local market.
While digital assets and ESG can be tricky to navigate in emerging markets, they also arguably offer the world’s most exciting investment possibilities. In both cases, we’re seeing increased investment in regulation and supporting infrastructure. Moreover, with less saturation than developed-market counterparts, there are first-mover opportunities to be had and hidden gems to be found. Working with a global partner that can help uncover these is more important than ever.
We explore the story of one such gem in our first article, Untapped Africa: A frontier for ESG. COVID-19 spurred volatility in many African equity markets, and sudden regulatory changes dented investor confidence. But with international investor attention returning and with regional efforts to strengthen sustainable bond markets increasing, Africa now presents enormous ESG investment potential.
In Smart regulation for digital assets: How the UAE and Singapore led the way, we assess the risk-reward equilibrium in the digital asset space. The fostering of digital-asset innovation and growth needs to be balanced with robust due diligence – something the UAE and Singapore have worked towards in recent years. And despite their different approaches, both markets now offer investors a gateway to digital assets across emerging markets in their respective regions.
Back to ESG, we reflect on the severity of the world’s climate change emergency in The climate crisis in numbers. Via the results of our new report on financing a just transition to net zero, we highlight the critical role the private sector – our industry included – must play. Once again, emerging markets are at the centre of the challenge, and the opportunity.
India is another emerging market peaking international-investor interest with its rapid pace of current industry development. In India’s reforms building momentum for increased investor interest, we review how the market is adapting to progressive regulatory developments. We also look at market practices that still need strengthening, and how such changes could spur both the adoption of new technology and a spike in foreign inflows.
In a first for The Custodian, we’re featuring a podcast. Listen to Innovative financing: a powerful tool to unlock investment as a force for good, to learn how capital projects could solve some of the world’s worst problems.
And finally, we head back to the digital world in Meaningful data products: Custodians enhance their solutions. While data is increasingly being sought to boost returns, investors and their sub-custodians must both act before we can all reap the efficiency rewards. Here, we look at how smart investments into flexible strategies will be critical to mutual success.
We hope you enjoy this mix of content and we look forward to seeing more of you in-person later in 2022.
Margaret Harwood-Jones Global Head, Financing and Securities Services, Financial Markets
