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Global Top 100 companies bounce back from March 2020 lows

Global equity markets have seen a strong bounce back from the low points seen in March 2020, but volatility remains elevated, according to a new quarterly update to the Global Top 100 companies by market capitalisation rankings, released today by PwC.

The report notes that, most immediately, a disappointing reporting season for H1 2020 earnings could cause a re-evaluation of recession risks and associated stock valuations.

Having decreased by 15% ($3,905bn) from December 2019 to March 2020, the market capitalisation of the Global Top 100 as at June 2020 was only 1% ($335bn) behind December 2019.

By comparison as at 30 June 2020 the MSCI World Index (representing large and mid-cap equity performance across 23 developed markets) was 7% behind December 2019, having recovered most of the ground lost in the first quarter of 2020.

Ross Hunter, IPO Centre Leader at PwC says ‘With the significant volatility in financial markets, the world’s largest companies provide relative security for investors. The concentration of Technology and Consumer Services companies is a key driver of the Global Top 100 outperforming the wider market index.

‘This is a challenging environment for all companies, but there are clear distinctions in the relative performance of different regions and sectors. I hope this quarterly review will provide interesting insights into how the markets are viewing the world’s largest businesses as they adapt to this uncertain landscape.’

Regional analysis:

  • Global Top 100 companies from the US and China and its regions recovered first quarter losses in March to June 2020 – Europe and the rest of the world did not recover the lost ground.
  • Technology companies contributed to a 21% market capitalisation increase for US companies from March to June 2020.
  • The performance in China and its regions since December 2019 benefitted from a combination of being further advanced in recovering from the effects of COVID-19 and a strong Technology and eCommerce (Consumer Services) component.

Companies highlights:

  • Eighty seven of the Global Top 100 companies as at June 2020 saw an increase in market capitalisation from March to June 2020, compared with just ten from January to March 2020
  • 10 companies included in the Global Top 100 as at March 2020 have dropped out and did not qualify for the June 2020 list.

February news update by Nina Boteva Law Office

Ordinance No. 50 of 2015 on capital adequacy, the liquidity of investment intermediaries and the supervision of their compliance (hereinafter referred to as the Ordinance) were changed at the beginning of February. The purpose of the legislative changes is to harmonise the Ordinance with the new Markets in Financial Instruments Act – MFIA (in force as of 16.02.2018). The Ordinance rescinds the criteria that the investment intermediary should meet in order to be considered relevant in view of the size, internal organisation, nature, scope and complexity of its activities. These criteria are already regulated in the MFIA, and the Ordinance specifies the additional requirements for the significant investment intermediaries.

Under the new Art. (3a) of the Ordinance, where the company holds property rights over immovable property there are the following requirements:

  1. The value of these rights shall not exceed 20 per cent of the required minimum amount of the capital referred to in Art. 10 MFIA;
  2. These rights shall be directly related to the activities and services under Art. 6, para. 2 and 3 of the MFIA.

Art. 8 of the Ordinance was abrogated, which has so far regulated the development of internal recovery plans in the event of a significant deterioration in the financial position of the investment intermediary. This matter is at present regulated in the MFIA.

The next major change concerns the order for issuance of permits and approvals under the terms of the Ordinance, MFIA (in relation to prudential supervision) and Regulation (EU) No 575/2013. For the issuance of such permits and approvals an application shall be filed to the Financial Supervision Commission, respectively to the Deputy Chairperson, to whom shall be evidenced the compliance with the relevant requirements. Following the amendment of the Ordinance, it is established that if the submitted data or documents are incomplete or irregular or additional information or evidence of the correctness of the data is required, the Deputy Chairperson shall send the applicant a notice of the incompleteness or discrepancies found or of the requested additional information and documents and determines a time limit for their removal, which may not be shorter than 20 working days and longer than 30 working days. The Financial Supervision Commission, further to a proposal from the Deputy Chairperson, shall rule on the application within 14 days of its receipt, unless another deadline is specified and when additional data and documents have been requested – as of the date of their receipt. The applicant shall be notified in writing of the decision taken within 3 days of its issuance.

The changes to the Ordinance also affect the policy for the payment of the variable remuneration of the employees of the investment intermediary. The stipulated conditions for the payment of such remuneration may be disregarded if the total amount of the annual variable remuneration of the person concerned does not exceed BGN 30,000 and does not exceed 30 per cent of the total annual permanent remuneration and in case the requirements of Art. 24 of the Ordinance are respected.

For more information about Nina Boteva Law Office, please visit http://www.nbotevalaw.com/

How businesses can make smarter energy decisions

Ever since the Intergovernmental Panel on Climate Change and United Nations Framework Convention on Climate Change were established, the UK has been on a journey – a journey to become a low-carbon nation. The recent announcement of the Streamlined Energy Carbon Reporting scheme (SECR), designed to help businesses as they become more energy conscious, is just the latest stage in this transition.

The SECR is a proposed new reporting scheme from the Government. It is set to replace the Carbon Reduction Commitment (CRC), which is due to end in 2019. It aims to use energy efficiency as a mechanism to help increase business productivity. And it will also improve the security of energy supplies, as the goal is to reduce current use by at least 20 per cent before 2030.

So who will this affect and what will it involve?

SECR is aimed at companies with at least 250 employees or an annual turnover greater than £36m, as well as an annual balance sheet greater than £18m. The number of companies reporting into the SECR will include those in the Energy Saving Opportunities Scheme (ESOS), taking the number of businesses involved from 1,200 to 11,900.

If you fall into this category then you’ll be automatically entered into the scheme and your energy use, carbon emissions and energy efficiency actions will be made publicly available, with a suitable intensity metric for reference.

What does this mean for these businesses?

For those who aren’t already on their energy efficiency journey, SECR will likely mean additional administrative costs. But if 20 per cent improvements in energy efficiency can be achieved, that can have its own financial advantages.

So what can businesses do?

An energy management system that encompasses people, process and technology will make reporting for regulatory purposes a much smoother process. But companies should go back to the basics of energy management and analyse their operations to understand the meaningful and sustainable changes they can make.

Here are our six steps to help:

Step 1 – Get everyone involved

Start everyone from across your business talking about energy. Make sure to get buy-in on any new initiatives from your senior management. After all, without their commitment, energy management may falter and can be marginalised.

Step 2 – Write an effective energy policy articulating your organisation’s commitment

This should: set an objective, define targets, develop an action plan, establish accountability, ensure continuous improvement and ensure compliance.

Step 3 – Assess your energy performance

As they say, “to measure is to manage”. Understand your past and present energy performance in order to establish benchmarks and begin understanding your energy use patterns and trends. SECR will be a good starting point.

Step 4 – Conduct energy audits

This will help you identify areas of energy savings within your organisation, whether this be by engaging staff, streamlining processes or installing energy efficient technology. Perhaps all three. So dust off that ESOS report or energy survey or perhaps take a fresh look and audit all aspects that affect energy performance: people, process and technology.

Step 5 – Prioritise

Make sure to prioritise your projects and get them done.

Step 6 – Monitor the benefits

Keep an eye on the results of your projects and communicate these to your senior management. It might make justifying capital expenditure easier in future if your energy projects have a proven record of delivering savings. So, sit back, relax and reap the rewards…but don’t get complacent, always strive to improve.

Ultimately, the best thing businesses can do is to get on board the energy efficiency band wagon as soon as possible.

Energy efficiency is beneficial to all businesses, including SMEs, as it removes unnecessary costs from your business. By understanding where your starting point is, you are already on your first steps to helping the UK’s clean energy agenda, as well as becoming a more cost-effective business.