Year: 2011

TomTom shares crash after profit warning

Posted on by

TomTom, the Dutch navigation system maker, on Tuesday lost an estimated €325.7m in market value as investors responded to the company’s profit warning published on Monday.

The company said in a statement that it expects profits to decrease by almost half in 2011 compared to the year before. The drop was attributed to a decline in personal navigation devices, particularly in the US.

“Consumer electronics markets have been weak over recent weeks and this trend is ongoing. The size of the European PND market is broadly as anticipated and for the year as a whole is expected to decline by around 10 percent. The North American PND market is experiencing a faster rate of decline than earlier in the year and we now expect this market to be down by about 30 percent for the year as a whole,” the company said.

It added: “As a result of these developments we now expect full year revenue of between €1,225m and €1,275m and earnings per share of between €0.25 and €0.30. Revenue for Q2 is expected to be between €300m and €310m.”

2011 Banking Awards, Part II

Posted on by

Best Banking Group in Argentina
Banco BICE

Best Commercial Bank in Argentina
BBVA Banco Frances

Best Banking Group in Australia
ANZ

Best Investment Bank in Australia
Macquarie Bank

Best Private Bank in Australia
BT Financial Group

Best Banking Group in Austria
Bank Austria – Unicredit

Best Banking Group in Azerbaijan
Eurobank

Best Banking Group in the Bahamas
First Caribbean International Bank

Best Private Bank in the Bahamas
CIBC Trust Company Ltd

Best Banking Group in the Baltics
Rietumu Bank

Best Commercial Bank in the Baltics
Lavijas Krajbanka

Best Investment Bank in the Baltics
LHV Bank

Most Innovative Bank in the Baltics
Baltic International Bank

Best Commercial Bank in Bangladesh
Islami Bank Bangladesh LTD

Best Banking Group in Belarus
Belagropombank

Best Commercial Bank in Belarus
Belarus Bank

Best Banking Group in Bermuda
HSBC Bank Bermuda Ltd

Best Private Bank in Bermuda
Bermuda Commercial Bank

Investment Banker of the Year in Bolivia
Jaime Dunn de Avila at BDP Sociedad de Titularizacion SA

Best Private Bank in Brazil
HSBC

Best SME Bank in Brazil
Banco Industrial do Brasil

Best Banking Group in Brunei
Baiduri Bank

Best Private Bank in Canada
BMO Harris Private Banking

Best Investment Bank in Chile
Celfin Capital

Best Banking Group in China
Bank of China

Best Commercial Bank in China
China Construction Bank

Best Investment Bank in China
China International Capital

Best Private Bank in China
China Merchants Bank

Best Bank in Colombia
Banco de Bogotá

Best Banking Group in the Czech Republic
Cheskoslovenska Obchodni Bank

Best Banking Group in Ecuador
Banco Del Pichincha

Best Banking Group in France
Crédit Mutuel-CIC

Best Banking Group in Germany
Deutsche Bank

Best Banking Group in Greece
Pireaus Bank SA

Best Commercial Bank in Greece
ATE Bank

Best Private Bank in Greece
Eurobank EFG

Best Banking Group in Guatemala
GYT Continental

Best Banking Group in Hong Kong
CITIC Bank International

Best Private Bank in Hong Kong
CITIC Bank International

Best Banking Group in Hungary
OTP Bank

Best Commercial Bank in Hungary
OTP Bank

Most Innovative Bank in Hungary
GRÁNIT Bank Zrt.

Best Banking Group in India
Bank of Baroda

Best Private Bank in India
ICICI Bank Limited

Most Innovative Bank in India
Punjab National Bank

Best Banking Group in Indonesia
Bank Mandiri

Best Commercial Bank in Indonesia
PT Bank CIMB Niaga

Best Investment Bank in Indonesia
PT Bank CIMB Securities

Best Private Bank in Indonesia
DBS (Bank Indonesia)

Best Banking Group in Israel
Bank Leumi

Best Banking Group in Italy
Unicredit

Best Commercial Bank in Italy
Intesa Sanpaolo

Best Banking Group in Japan
Mizuho Banking Group

Best Investment Bank in Japan
Daiwa Capital Markets Securities Co Ltd

Best Commercial Bank in Jordan
Cairo Amman Bank

Most Innovative Bank in Jordan
Jordan Investment and Financial Bank

Best Banking Group in Korea
Standard Chartered

Best Investment Bank in Korea
Samsung Securities

Best Commercial Bank in Kuwait
Commercial Bank Kuwait

Best Investment Bank in Kuwait
Ahli United Bank

Best Private Bank in Kuwait
Burgan Bank

Most Innovative Bank in Kuwait
Boubyan Bank

Most Sustainable Bank in Lebanon
BankMed

Excellence in Trade Finance in Lebanon
BankMed

Best Private Bank in Luxembourg
KBL European Private Bankers

Best Banking Group in Malaysia
Public Bank Berhad

Best Investment Bank in Malaysia
OSK Investment Bank

Best Private Bank in Malaysia
CIMB (Private Banking)

Best Banking Group in Mauritius
Standard Chartered Bank

Best Private Bank in Mauritius
AfrAsia Bank

Best Banking Group in Mexico
Banco Inbursa – Grupo Financiero Inbursa

Best Investment Bank in Mexico
Banco Interacciones

Best Private Bank in Mexico
Banca Mifel – Grupo Financiero Mifel

Best Banking Group in Mongolia
Khan Bank

Best Commercial Bank in Mozambique
BCI

Best Banking Group in Namibia
FNB

Best Private Bank in the Netherlands
ABN AMRO MeesPierson

Best Banking Group in New Zealand
Kiwi Bank

Best Banking Group in Nicaragua
Banpro – Grupo Promerica

Best Banking Group in Pakistan
Allied Bank Limited

Best Investment Bank in Pakistan
KASB Bank Limited

Best Banking Group in Panama
BLADEX

Best Banking Group in Peru
Banco De Credito

Best Banking Group in the Philippines
Security Bank

Best Commercial Bank in the Philippines
Rizal Commercial Banking Corporation

Best Investment Bank in the Philippines
First Metro Investment Corporation

Best Private Bank in the Philippines
Banco De Oro Private Bank

Best Banking Group in Portugal
Banco Totta Santander

Best Banking Group in Qatar
Qatar National Bank

Best Commercial Bank in Qatar
Doha Bank

Best Banking Group in Russia
Open Joint Stock Company Promsvyazbank

Best Commercial Bank in Russia
Open Joint Stock Company BANK URALSIB

Most Innovative Bank in Russia
Open Bank

Best Commercial Bank in Saudi Arabia
United Saudi Commercial Bank

Best Investment Bank in Saudi Arabia
Al-Rajhi Bank

Most Innovative Bank in Saudi Arabia
Bank Aljazira

Best Banking Group in Singapore
United Overseas Bank

Best Commercial Bank in Singapore
United Overseas Bank

Best Investment Bank in Singapore
DBS VIckers Securities

Best Private Bank in Singapore
United Overseas Bank

Best Banking Group in Spain
Santander

Best Commercial Bank in Spain
BBVA

Most Innovative Bank in Sri Lanka
Nations Trust Bank PLC

Best Banking Group in Taiwan
Fubon Financial

Best Commercial Bank in Taiwan
Bank of Taipei

Best Investment Bank in Taiwan
KGI Securities

Best Private Bank in Taiwan
Fubon Financial

Best Banking Group in Thailand
Krung Thai Bank

Best Commercial Bank in Thailand
Bank of Ayudha

Best Investment Bank in Thailand
Bualuang Securities

Best Banking Group in Turkey
Yapi Kredi

Best Commercial Bank in Turkey
Bank Asya

Best Investment Bank in Turkey
Garanti Securities

Best Commercial Bank in the UAE
Abu Dhabi Commercial Bank

Best Banking Group in the UAE
Emirates NBD

Best Investment Bank in the UAE
Mashreq Bank

Most Innovative Bank in the UAE
Commercial Bank of Dubai

Best Banking Group in Uruguay
Banco Republica Del Uruguay

Best Banking Group in Venezuela
Banco Mercantil Universal

Best Banking Group in Vietnam
Techombank

Best Commercial Bank in Vietnam
Asia Commercial Bank

Best Private Bank in Vietnam
HSBC Bank (Vietnam)

Hedge Funds Awards 2011, Part I

Posted on by

Best Diversified Fund of Hedge Funds, Europe
GHFS Arbitrage Opportunities Thalìa SA

Best Specialist Fund of Hedge Funds, Europe
Rothschild / Blackpoint Limited

Best In-House Fund of Hedge Funds, Europe
CQS Diversified Fund – SP Alpha

Best institutional fund provider, Europe
Aberdeen Asset Management

Best Private Client Fund Provider, Europe
German Asset Management AG

Best Managed Platform Provider, Europe
Man Group

Most Innovative Fund of Hedge Funds, Europe
Tera Capital Fund

 

 

Best Diversified Fund of Hedge Funds, North America
Meridian Capital Partners

Best Specialist Fund of Hedge Funds, North America
Van Biema Value Partners LLC

Best In-House Fund of Hedge Funds, North America
Structured Portfolio Management LLC

Best Institutional Fund Provider, North America
Bridgewater

Best Managed Platform Provider, North America
AlphaMetrix

Most Innovative Fund of Hedge Funds, North America
Balestra Capital Ltd

 

 

Best Specialist Fund of Hedge Funds, Asia
Rasmal (Global Equity Opportunity Fund)

Best Institutional Fund Provider, Asia
MCP Asset Management

Best Private Client Fund Provider, Asia
Value Partners

 

 

Best Specialist Fund of Hedge Funds, Latin America
Phoenix Distressed Opportunity Fund

Best Institutional Fund Provider, Latin America
Tarpon Investimentos SA

Best Private Client Fund Provider, Latin America
Bresser Asset Management

 

 

Best Diversified Fund of Hedge Funds, Australia / New Zealand
New Zealand Assets Management Global Fund

Best Institutional Fund Provider, Australia / New Zealand
FRM (Australia) PTY Limited

Best Private Client Fund Provider, Australia / New Zealand
Challenger Limited

 

 

Best In-House Fund of Hedge Funds, Africa
SYmmETRY

 

 

Best Diversified Fund of Hedge Funds, Offshore
CVL CROSS GLOBAL FUND

New chief of IMF announcement imminent

Posted on by

The IMF board’s 24 members are due to make a decision on who will be the next IMF managing director after the two key candidates had an opportunity to present all relevant information concerning their candidacy to the executive board.


French finance minister Christine Lagarde remains a clear favourite for the top job as head of the IMF according to a Reuter’s poll despite a last minute endorsement on Friday by Canada and Australia for Mexico’s central bank head Agustin Carstens.


In a published statement, representatives for the two countries, said: “It is important that the new IMF managing director is selected in an open, transparent process with the candidate chosen on the basis of merit and not nationality.”
Japan and the US have yet to publicly support a candidate but are widely expected to back Lagarde in her bid.

At the forefront of professionalism

Posted on by

The Portuguese group Softlimits, which was established in 2006, decided it was time to change its name to BOND in late March to reflect its growth, accomplishments and progress as a united company. The idea was for BOND to consolidate in 2010 with the acquisition and integration of companies with innovative and fresh skills to add more substance to its client offerings. It was predominantly the entrepreneurial courage, belief and professionalism of the leaders at the helm of Softlimits which led to the capitalisation of openings to acquire various domestic companies in the information technology market. The five acquired companies that embody BOND are: Actis, Agile, Best for Business and Inforflow.

Paulo Ramos, the CEO of BOND, reflects on the company strategy: “After the acquisition of the different companies we decided to rebrand to incorporate all the previous company cultures into a single brand. We are building a new culture network dynamic to help symbolise consistency of cultures with different product offerings. The creation of BOND amalgamates all companies into one and assists them in trying to work together and grow together in what we call solid ties. A united spirit is important to us and defines our new identity.”

The re-brand of the company also marked a new era of growth for the business in its native Portugal and on an international level. The group indicated that the purchases were made also to increase the powers of the company and achieve the objective of upholding a distinguished place in the market because in the IT industry, according to BOND, “innovation and differentiation is everything”.  The push for growth has allowed the group to position itself as an organisation of reference in the development, management and commercialisation of novel technological solutions for both, the public and private sectors. BOND, which is an acronym for Building on Network Dynamics, presented its new identity to the market as part of a rebrand, to help it promote the idea of being a network of sector skills in the market offered through an ecosystem of companies.

Professional attitude
BOND has a wide-reaching and highly experienced team with advanced skills in state of the art technology. With 151 employees now spread across its office locations, which comprise two offices in Portugal’s Lisbon, Luanda in Angola and Maputo, Mozambique, the team is now able to offer solutions and services combined with IT and IS consulting. In addition BOND also has a vast array of technology partners to support the development of its products and solutions globally. Partners include Microsoft, Sas, SPSS, Siebel, Outsystems and MicroStrategy.

The organisation now counts over 500 clients to its roster. It has several high profile names on its private sector client list, but some of the most established ones include Mercedes Benz, Crédito Agrícola, Soares Da Costa, Bacardi Martini, BNA, Banco Espírito Santo, Unilever and Somague. Amongst the public administration arena, clients include amongst others, the Ministry of Foreign Affairs, the Ministry of Defence, the Ministry of Internal Affairs, the Ministry of Health and the Ministry of Culture. Ramos, commenting on BOND’s clientele, says: “Clients of any company are drawn to companies who offer dexterity, reliability and integrity. BOND possesses those qualities and is good at keeping its promises. Over the years the credibility and recognition of our professionalism has grown and clients tend to contract with us because we can deliver.”

Products and services
The company uses various tools to help its clients achieve the results required and has developed its own software to assist. “Solutions that focus in automating and optimising the processes of our clients and simplify dealings with their own clients are a speciality of ours. We go from business issues to technology solutions,” Ramos notes.

BOND’s Matriz software is used to register, classify, manage and provide tens of thousands of works of art from tangible and intangible cultural heritage. An estimated 120 museums countrywide are on our customer list. Ramos notes: “Matriz is a very significant product which aids in the management of all cultural heritage held by foundations and museums.”

Two other software programmes offered are OfficeWorks, which helps to manage millions of documents and processes and leads to a better efficiency and quality in information management, and MSWait which manages support processes and wait queues in hundreds of service counters.

A further tool used by BOND is IntraPub, which offers organisations an autonomous corporate TV channel. This clever resource helps to increase efficiency and impact of the organisation’s communication with customers, and aids in significantly increasing business and quality of service.

SGC – the Consular Management System is a smart software solution and the most profitable business management solution to BOND, as there are many Portuguese living abroad in constant need of consular services. The CMS reduces the distance between citizens’ resident abroad and the central administration of their countries.

The company also develops a Real Time BI that integrates with business intelligence engines in the back-end and offers users up to date information directly on their desktops.

In addition, BOND offers six areas of specialism to its clients:

Customer Process Management
This area provides automation solutions, process optimisation and integration for customer interaction through Bond’s own products.

Business Technology Consulting
This area offers the design of business solutions driven by technology.

Business Intelligence
Here the team uses technology solutions to optimise, extract and report information to assist the decision making processes.

Enterprise Management Systems Outsourcing
Solutions offered in this area allow for data, business processes and operations of any given organisation to be automated and integrated into a single system.

Outsourcing
This specialism focuses on the selection, employment, placing and support of resources and specialised ITS processes.

Education
Through this service the company provides training solutions for its clients in the following areas: Document Management and Workflow, Project Management, Business Intelligence, Performance Management, CRM Analytics and custom training solutions.

The company has several methods in place to ensure that customer satisfaction is consistently met. “An online customer survey is set up to daily check through a set of questions to assess how happy people are with the services they have received. We take this process seriously because people evaluate on a daily basis what we can do to improve client service,” BOND’s CEO says.

Ambitions
The company’s ambitions go far beyond the borders of its own country now as they start exploring opportunities in Congo, Kenya, and some countries in the Middle East. Latin America’s geography also poses an interest to BOND as there are many opportunities.

According to Ramos the company plans up to two more acquisitions for 2011. “Our approach is to take a closer look at the markets in Brazil, Peru, Mexico and Argentina because in those countries if we want to grow faster we will do this through an acquisition, joint venture or by buying a stake in a company. In Africa this will have to be through organic growth as we can grow with other international entities but will not buy any local entity.”
BOND has so far shown a rapid and sustainable growth with a €2m turnover in 2006, €5m in 2009 and €10m in 2010. Ramos notes: “If we grow organically we are looking at a turnover of €12m for 2011 and €15m for 2012. However, if we make acquisitions, 2011 could return between €12m-€17m while 2012 could bring in a turnover of €20m-€22m.”

Market recognition
With the status of Microsoft Gold Certified Partner, Gold Partner Oracle and SMES Excel and Innovate, BOND stands out for its products, solutions and highly accredited services.

BOND was recently recognised with an award from World Finance as the best “Business Intelligence Software provider 2011.”

“Market acknowledgement is important and highly rewarding. Not only is it is good for the ego of professionals, it is also significant because it certifies that the market recognises that we are providing something other companies cannot. The world will see this as a stamp of recognition. We are grateful to our clients for putting their trust in us,” Ramos said.

He added: “Things are moving and changing very quickly however and we take nothing for granted because the market is tough and quick and although we are resilient, flexible and adaptable we will continue to work hard.”

Investment Management Awards 2011

Posted on by

Best Investment Management Company, Austria
Hypo Landesbank Vorarlberg

Best Investment Management Company, Baltic
Trigon Capital

Best Investment Management Company, Belgium
Dexia Asset Management

Best Investment Management Company, Canada
Phillips Hager & North Investors Management

Best Investment Management Company, Caribbean
JMMB

Best Investment Management Company, Cyprus
CISCO

Best Investment Management Company, Denmark
Nordea Investment Management

Best Investment Management Company, France
CCR

Best Investment Management Company, Finland
Sampo Pankki

Best Investment Management Company, Germany
DB Advisors

Best Investment Management Company, Greece
EDEKT – OTE

Best Investment Management Company, Hong Kong
RCM Asia Pacific

Best Investment Management Company, Italy
ARCA

Best Investment Management Company, Ireland
Irish Life Investment Management

Best Investment Management Company, Latin America
Mirae Asset Global Investimentos

Best Investment Management Company, Luxembourg
Dexia Asset Management

Best Investment Management Company, Middle East
Qatar National Bank

Best Investment Management Company, Netherlands
ING Investment Management Europe

Best Investment Management Company, Norway
Nordea Investment Management

Best Investment Management Company, Russia
Troika Dialog Asset Management

Best Investment Management Company, Serbia
Citadel Asset Management

Best Investment Management Company, Singapore
Nomura Asset management

Best Investment Management Company, South Africa
Coronation Asset Management

Best Investment Management Company, Korea
Mirae Asset Global Investors

Best Investment Management Company, Spain
Amundi Iberia Asset Management

Best Investment Management Company, Sweden
Carlson Investment Management

Best Investment Management Company, Switzerland
Zurcher Kantonalbank

Best Investment Management Company, Taiwan
Allianz Global Investorsestors Taiwan

Best Investment Management Company, Turkey
AK Asset Management

Best Investment Management Company, UK
Aberdeen Asset Management PLC

Technology Awards 2011

Posted on by Ashton Wenborn

Best Accounting Technology, Western Europe
Sage

Best Accounting Technology, Eastern Europe
Kashflow

Best Accounting Technology, Asia
Intuit Quickbooks

Best Accounting Technology, Middle East
Unit4

Best Accounting Technology, Africa
Dynacom

Best Accounting Technology, North America
Sage

Best Accounting Technology, Latin America
Epicor

 

 

Best Agriculture Technology Company, Western Europe
Syngenta

Best Agriculture Technology Company, Eastern Europe
Caterpillar Inc

Best Agriculture Technology Company, Asia
Komatsu

Best Agriculture Technology Company, Middle East
Evogene

Best Agriculture Technology Company, Africa
Hyflux

Best Agriculture Technology Company, North America
Caterpillar Inc

Best Agriculture Technology Company, Latin America
Monsanto

 

 

Best Asset Management Software Provider, Western Europe
Numara

Best Asset Management Software Provider, Eastern Europe
Sage

Best Asset Management Software Provider, Asia
Temenos

Best Asset Management Software Provider, Middle East
Agile Financial Technologies

Best Asset Management Software Provider, Africa
Religare Technologies

Best Asset Management Software Provider, North America
Sungard

Best Asset Management Software Provider, Latin America
Cynel International

 

 

Best Automated Banking Branch Technology, Western Europe
Wincor Nixdorf

Best Automated Banking Branch Technology, Eastern Europe
Sanchez Computer Associates

Best Automated Banking Branch Technology, Asia
Fujitsu Limited

Best Automated Banking Branch Technology, Middle East
ERI

Best Automated Banking Branch Technology, Africa
SAS

Best Automated Banking Branch Technology, North America
IBM

Best Automated Banking Branch Technology, Latin America
Itautec S.A.

 

 

Best Banking Technology Company, North America
Sungard

Best Banking Technology Company, Western Europe
ObjectWay SpA

Best Banking Technology Company, Eastern Europe
Luxoft

Best Banking Technology Company, Middle East
Ashazi Services Co.W.L.L

Best Banking Technology Company, Asia
Polaris Software Lab Ltd.

Best Banking Technology Company, Africa
Fintech Kenya

 

 

Best Biotechnology Company, Western Europe
Farsight Bioscience Limited

Best Biotechnology Company, Eastern Europe
A&A Biotechnology

Best Biotechnology Company, Asia
Biocon

Best Biotechnology Company, Middle East
Viacentra

Best Biotechnology Company, Africa
Arvir Technologies

Best Biotechnology Company, North America
Amgen

Best Biotechnology Company, Latin America
Biogen Idec

 

 

Best Business Intelligence Software Provider, Western Europe
BOND, SA

Best Business Intelligence Software Provider, Eastern Europe
QAD

Best Business Intelligence Software Provider, Asia
CDC Software

Best Business Intelligence Software Provider, Middle East
Rocket Software

Best Business Intelligence Software Provider, Africa
Integral Fusion

Best Business Intelligence Software Provider, North America
IBM

Best Business Intelligence Software Provider, Latin America
Vink OS

 

 

Best Cloud Computing Technology Company, Western Europe
NetSuite

Best Cloud Computing Technology Company, Eastern Europe
Siemens

Best Cloud Computing Technology Company, Asia
Memset

Best Cloud Computing Technology Company, Middle East
Dell

Best Cloud Computing Technology Company, Africa
Memset

Best Cloud Computing Technology Company, North America
IBM

Best Cloud Computing Technology Company, Latin America
VMWare

 

 

Best CRM Technology, Western Europe
SAP

Best CRM Technology, Asia
Eloqua

Best CRM Technology, Middle East
Zoho

Best CRM Technology, Africa
Infor

Best CRM Technology, North America
Amdocs

Best CRM Technology, Latin America
Consona

 

 

Best Environmental Services Technology Company, Western Europe
Siemens Energy

Best Environmental Services Technology Company, Eastern Europe
Eko-Project

Best Environmental Services Technology Company, Asia
Puncak Niaga Holdings Bhd

Best Environmental Services Technology Company, Middle East
Masdar

Best Environmental Services Technology Company, Africa
Veolia

Best Environmental Services Technology Company, North America
ABB

Best Environmental Services Technology Company, Latin America
Dow Chemical Company

 

 

Best Financial Technology Consultants, North America
Bearing Point

Best Financial Technology Consultants, Latin America
Bluepoint Technologies

Best Financial Technology Consultants, Western Europe
ObjectWay SpA

Best Financial Technology Consultants, Eastern Europe
Augeo Ventures

Best Financial Technology Consultants, Middle East
Mubasher

Best Financial Technology Consultants, Asia
KapronaAsia

Best Financial Technology Consultants, Africa
Seven Seas Technologies

Best Financial Technology Consultants, North America
Convergys

 

 

Best IT Outsourcing Company, North America
Wipro

Best IT Outsourcing Company, Latin America
Paradigma

Best IT Outsourcing Company, Western Europe
Wavex

Best IT Outsourcing Company, Eastern Europe
Softserve

Best IT Outsourcing Company, Middle East
Itar Qatar

Best IT Outsourcing Company, Asia
NCC Data

Best IT Outsourcing Company, Africa
Compu-Clearing Outsourcing

 

 

Best Medical Technology Company, Western Europe
Gambro AB

Best Medical Technology Company, Eastern Europe
BMT Medical Technology

Best Medical Technology Company, Asia
Johnson & Johnson Medical Asia Pacific

Best Medical Technology Company, Middle East
Sectra

Best Medical Technology Company, Africa
Inqaba Biotech

Best Medical Technology Company, North America
SCHOTT

Best Medical Technology Company, Latin America
Ache SA

 

 

Best Middle & Back Office Solutions Provider, Latin America
Contax

Best Middle & Back Office Solutions Provider, Western Europe
DST Global Solutions

Best Middle & Back Office Solutions Provider, Eastern Europe
Infosys

Best Middle & Back Office Solutions Provider, Middle East
Oracle Middle East

Best Middle & Back Office Solutions Provider, Asia
SmartStream Technologies

Best Middle & Back Office Solutions Provider, Africa
Calypso Technology

 

 

Best Mobile Banking Technology, North America
Pyxis Mobile

Best Mobile Banking Technology, Latin America
Technisys

Best Mobile Banking Technology, Western Europe
ClairMail

Best Mobile Banking Technology, Eastern Europe
Raiffeisen Bank Polska SA

Best Mobile Banking Technology, Middle East
Acette Technologies

Best Mobile Banking Technology, Asia
Audech

Best Mobile Banking Technology, Africa
Zain

 

 

Best Network Infrastructure Provider, Western Europe
Deutsche Telekom

Best Network Infrastructure Provider, Eastern Europe
networkers.pl

Best Network Infrastructure Provider, Asia
Zenith Infotech

Best Network Infrastructure Provider, Middle East
Siemens

Best Network Infrastructure Provider, Africa
Neotel

Best Network Infrastructure Provider, North America
Comscope

Best Network Infrastructure Provider, Latin America
HCL Technologies

 

 

Best Private Banking Technology Company, North America
Fiserv

Best Private Banking Technology Company, Latin America
Temenos Group AG

Best Private Banking Technology Company, Eastern Europe
Arbes Technologies, S.R.O.

Best Private Banking Technology Company, Western Europe
Temenos Group AG

Best Private Banking Technology Company, Middle East
Fidessa

Best Private Banking Technology Company, Asia
Tata Consultancy Services Limited

Best Private Banking Technology Company, Africa
Wipro

 

 

Best Retail Banking Systems Provider, North America
Fiserv

Best Retail Banking Systems Provider, Latin America
Itautec S.A.

Best Retail Banking Systems Provider, Western Europe
ObjectWay SpA

Best Retail Banking Systems Provider, Eastern Europe
CSoft

Best Retail Banking Systems Provider, Middle East
Sigma Core

Best Retail Banking Systems Provider, Asia
Yucheng Technologies

Best Retail Banking Systems Provider, Africa
Capital Banking Solutions

 

 

Best Security Technology Provider, Western Europe
McAfee

Best Security Technology Provider, Eastern Europe
Kaspersky

Best Security Technology Provider, Asia
Lumension

Best Security Technology Provider, Middle East
Symantec

Best Security Technology Provider, Africa
Avira

Best Security Technology Provider, North America
McAfee

Best Security Technology Provider, Latin America
Itautec S.A.

 

 

Best Wireless Technology Provider, Western Europe
NXP Semiconductors N.V.

Best Wireless Technology Provider, Eastern Europe
Metallic Security

Best Wireless Technology Provider, Asia
Ceyon Technology

Best Wireless Technology Provider, Middle East
Telecom Du

Best Wireless Technology Provider, Africa
3M South Africa

Best Wireless Technology Provider, North America
Sybase

Best Wireless Technology Provider, Latin America
Spring Wireless (Brasil) Ltda

 

 

Technology CEO of the year
Tan Sri Rozali Ismail – Puncak Niaga Holdings Bhd

Technology CFO of the year
Jeffrey Child, Amerigroup Corporation

Technology CTO of the year
Ronald Louks, HTC

Business Tablet of the year
Research In Motion

Business Laptop of the year
Dell

Foreign Exchange Awards 2011

Posted on by Ashton Wenborn

Best Forex Broker USA
Gain Capital

Best Forex Broker Latin America
InovaTrade

Best Forex Broker Canada
BMO

Best Forex Broker Asia
Instaforex

Best Forex Broker South East Asia
Hantec Markets

Best Forex Broker Australasia
FXOpen

Best Forex Broker Africa
Liteforex

Best Forex Broker Middle East
Royal Forex Trading S.A.L

Best Forex Broker Western Europe
Hantec Markets

Best Forex Broker Northern Europe
Saxo Bank

Best Forex Broker Southern Europe
Fx Pro

Best Forex Broker Central Europe
TMS Brokers S.A.

Best Forex Broker Eastern Europe
XTB

Best Global Binary Options Trading Provider
Nadex

Best Payments Systems
Markets.com

Best Vendor For Signals
esignal

Best Software Plug-ins
MetaStock

Best Active Trading Tools
Superderivatives

Best Chinese Language Brokers
Azurite

Best Post Trade Services
Deal Hub

Best Data Networking and Infrastructure Provider
BT Global Financial Services

Best Social Trading Network
eToro

Best Mobile Trading Platform
eToro

Best Trading Software Provider
eToro

Best Global Professional Trading Platform
Squared Financial Services Ltd

Best FX Order Management
Squared Financial Services Ltd

Best FX Global Execution Provider
Squared Financial Services Ltd

Best Algorithmic Providers
Flextrade

Best Technical Analysis Website
Ninja Trader

Best Portfolio Management
Beiley Software

Best Automated Trading Platform
FXCM

Best Dealing Room
GFTUK

Best Rebate Provider
TradersChoiceFX

Best Institutional FX Provider
QuantumFX

Fastest Growing FX Provider
Alpari (UK)

Best Islamic Forex Provider
TADAWUL FX Ltd

Most Transparent Forex Provider
MIG Bank

Best Affiliate Programme
Liteforex

Best Global Liquidity Provider
Commerzbank – Corporates & Markets

Best White Label Solution Provider
Saxo Bank

Best Trading Platform – Global
AVA FX

Best Trade Executions – Global
AVA FX

Best FX Newcomer
IronFX

Best Mini Forex Broker
FBS

Best Global FX Education Provider
LTG Goldrock

Best Dealing Room
Royal Forex Trading S.A.L

GCC Awards 2011

Posted on by Ashton Wenborn

Best GCC Inward Investment Agency
Bahrain Economic Development Board (EDB)

Best GCC Outward Investment Company
Aabar Investments

Best GCC Private Equity Firm
Noor Financial Investment Company

Best GCC Asset Management Company
Jadwa Investment

Best GCC Shariah-compliant Investment Advisory Company
Muthanna Investment Company

Best GCC Conventional Investment Advisory
Bayan Investment

Best GCC Bond Issuer
International Petroleum Investment Company

Best GCC Fund Management Company
Kuwait Investment Company

Best GCC Securities Dealing Services
Taib Securities

Best GCC Development Fund
Saudi Fund for Development

Best GCC Real Estate Development Project
Baniyas Investment & Development

Best GCC Sport & Entertainment Project
Qatar World Cup 2022 Bid

Urban Planning Excellence Award
Abu Dhabi Urban Planning Council

Best GCC Tourism Development Agency
Dubai Tourism and
Commerce Marketing

Best GCC Industrial Development Company
Al-Tuwairqi Holding Company

Best GCC Hotel & Leisure Development
Action Hotels

Best GCC Free Trade Zone
RAK Free Trade Zone

Best GCC Infrastructure Development Project
Al Madina AZarqa (Blue City, Oman)

Best GCC Shopping Malls Development
The Dubai Mall

Best GCC Passenger Transport Development Project
Dubai Metro

Best GCC Air Cargo Company
Qatar Airways Cargo

Best GCC Airport Facility
Dubai International Airport

Best GCC Industrial Hub
ZonesCorp

Best GCC Holding Company
Kingdom Holding

The GCC Environmental Concern Award
Salalah Port

Major GCC Regional Philanthropist
Emirates Foundation

2011 Banking Awards, Part I

Posted on by

Best Banking Group in Andorra
Banc Internacional d’Andorra – Banca Mora (BIBM)

Best Banking Group in Angola
Banco Millennium Angola, S.A.

Best Commercial Bank in Angola
Banco Espirito Santo Angola

Most Innovative Bank in Azerbaijan
International Bank of Azerbaijan

Best Banking Group in Belarus
Belagroprombank

Best Bank in Bolivia
BancoSol S.A.

Best Commercial Bank in Bolivia
Banco Mercantil Santa Cruz

Best Commercial Bank in Brazil
Banco Pine S.A.

Best Banking Group in Brazil
Banco Bradesco

Best CEO Banker in Brazil
Ricardo Guimaraes at Banco BMG

Best Private Bank in Canada
BMO Harris Private Banking

Best Banking Group in Cape Verde
Banco Interatlântico

Best Banking Group in Chile
Corp Banca

Best Commercial Bank in Colombia
BANCO POPULAR

Best Banking Group in Cyprus
Bank of Cyprus

Best Banking Group in Denmark
Nordea Bank

Best Investment Bank in France
BNP Paribas

Best Private Bank in Germany
Berenberg Bank

Most Innovative Bank in Greece
Black Sea Trade and Development Bank

Best Banking Group in Iceland
Arion Bank

Most Innovative Bank in Indonesia
Bank BRI

Best Banking Group in Iran
Bank Pasargad

Best Banking Group in Jamaica
National Commercial Bank Jamaica Limited

Best Banking Group in Jordan
Jordan Islamic Bank

Most Innovative Bank in Korea
Daegu Bank

Best Banking Group in Laos
ANZ Laos

Best Banking Group in Lebanon
BLOM BANK S.A.L

Best Banking Group in Liechtenstein
LGT Group

Best Banking Group in Luxembourg
EFG Group

Best Banking Group in Macau
ICBC Macau

Best Banking Group in Macedonia
Komercijalna Banka AD Skopje

Best Banking Group in Malta
Banif Bank (Malta) Plc

Best Commercial Bank in Mexico
Grupo Financiero Banorte

Best Banking Group in Morocco
Attijariwafabank

Best Banking Group in Mozambique
Banco Millennium Mozambique

Best Banking Group in the Netherlands
ING Bank

Best Banking Group in Nigeria
First Bank of Nigeria

Best Banking Group in Norway
Nordea Bank

Best Banking Group in Oman
Oman Arab Bank SAOC

Best Investment Bank in Oman
Oman Arab Bank SAOC

Best Banking Group in Paraguay
Sudameris Bank

Best Investment Bank in Portugal
Espirito Santo Investment Bank

Most Innovative Bank in Portugal
Banco ActivoBank SA

Best Investment Management Firm in Portugal
Banif Investment Bank

Best Investment Bank in Russia
VTB Capital

Best Banking Group in Slovakia
Slovenska Sporitelina

Best Private Bank in Spain
BANCA MARCH

Best Banking Group in Sweden
Nordea Bank

Best Private Bank in Switzerland
Credit Suisse Group

Best Investment Bank in Switzerland
UBS

Best Banking Group in Syria
Syria Gulf Bank

Best Banking Group in Tunisia
Banque Internationale Arabe de Tunisie

Best Banking Group in the UK
Santander Bank

Best Investment Bank in the UK
Barclays Capital

Best Banking Group in the Ukraine
Privatbank

Best Banking Group in the USA
PNC Bank

Best Investment Bank in Vietnam
Viet Dragon Securities

Does Dodd Frank meet the test of our times?

Posted on by

With financial reform legislation barely a year old, Republican policymakers, urged on by Wall Street’s influential figureheads, have been vehemently spinning the yarn of the Dodd Frank Wall Street Reform and Consumer Protection Act (DFA) into new regulatory fabric, trying to ignore the distraction of initiatives to tear up certain aspects of the existing law. They condemn DFA because a vast amount of the rules that put it into effect are yet to be written. Simultaneously they are trying to restrain the control, influence and power of the new Consumer Financial Protection Bureau so as to diminish DFA’s authorities by restraining funding and consequently ascertaining less rigorous rules on derivatives trading.

When President Obama signed the DFA into law on July 21 2010, the event was proclaimed as the most comprehensive makeover of financial regulations since the Great Depression of the 1930s. Its 2,315 pages – 10 times longer than Glass Steagall – took around 18 months to produce and have attracted stern criticism from the start. The rules within the DFA call for more stringent liquidity and capital standards, quicker oversight, limitations on certain investments and greater accountability by rating agencies.

However, anti-regulatory Republicans on the House Financial Services Committee are attempting to hinder implementation of several DFA rules which they maintain will hurt the US financial sector. Among those, the Volcker rule, which they believe eradicates proprietary trading by banks for their own accounts and restricts bank investments in hedge funds. The committee states that the law includes “a hastily rewritten derivatives provision that has the potential to do more lasting harm to the US economy than perhaps anything else in this 2,315-page legislation.” The committee’s position on the Volcker rule was as gloomy, saying: “Because no other major European or Asian country has adopted similar restrictions, imposition of these rules on US firms amounts to unilateral disarmament in a highly competitive global marketplace.”

Critical volley
Jamie Dimon, JPMorgan Chase CEO, told the US Chamber of Commerce recently that increased capital requirements intended to protect banks from collapse would “greatly diminish growth” and threaten to “put the nail in the coffin for big American banks.” George Soros, who made billions in international finance and is now considered the 35th wealthiest man in the world, criticised the Dodd-Frank bill, saying: “I can see its failure to address the issues as it was lobbied into incomprehension and inconsistency by special interests of various kinds.” Even former Federal Reserve Chairman Alan Greenspan took a swipe in a recently published FT article, stating that Wall Street under the DFA “may create the largest regulatory-induced market distortion since America’s ill-fated imposition of wage and price controls in 1971.”

However, in what seemed the harshest response to critics of financial reforms thus far, Deputy Treasury Secretary Neal S. Wolin said of the Dodd Frank Act: “We will continue to oppose efforts to slow down, weaken or repeal these essential reforms.” Mr Wolin, at an event organised by the Pew Charitable Trusts, hit back at bankers, lawmakers and lobbyists whose aim according to him has been to weaken or delay Dodd Frank’s rulemaking.

Targeting the law’s critics he questioned whether they had forgotten the damage caused by the financial crisis and the regulatory gaps that facilitated in causing it. “Our response to them remains the same. Regulators have been and are moving quickly but carefully to implement this legislation,” Mr Wolin said.

On the defensive
One by one, Mr Wolin attempted to break down the unrelenting critique he had encountered over the past few months and addressed each in turn.  Among others, he commented on the “pace of reform,” pointing out that some of the critics who demanded quick clarity on Dodd-Frank after the law was passed are now saying that Treasury and regulatory agencies are moving too fast on implementation and are coming out with too much information too swiftly.

He also addressed the critique that “there is a lack of coordination by the regulators,” saying: “Our financial regulatory system is built on the independence of regulators and independent regulators will have different views on complicated issues.” He added: “Dodd-Frank forces regulators to work together to close gaps in regulation and to prevent breakdowns in coordination. We have already worked through the Financial Stability Oversight Council (FSOC) to develop an integrated roadmap for implementation, to coordinate an unprecedented six-agency proposal on risk retention, and to develop unanimous support for recommendations on implementing the Volcker Rule.”

Commenting on increased transparency in the derivatives markets, he said the act will tighten spreads, reduce costs and increase understanding of risks for market participants.

“The critics argue that requiring standardised contracts to be traded on open, transparent markets will harm liquidity. This position ignores the history and the basic structure of our financial system.  The equities market, where stocks are traded publicly and price information is readily available, is one of the most liquid markets in the world, because of, not in spite of, transparency.”

However, despite Wolins’ persistence, the act continues to pose numerous issues that are troubling Wall Street. According to leading US lawyers however, there are four key DFA regulatory issues which require close attention:

The Volcker Rule
The Volcker Rule continues to be the focus of much scrutiny and debate. A few financial holding corporations have already taken measures to separate themselves from proprietary trading activity in its purest form. The existing and proposed relationships between banking entities, hedge funds and private equity funds will remain particularly complicated until regulations are in place to implement the substantive provisions of the Volcker Rule. In spite of the ambiguity that remains about the scope of potential exceptions, some organisations have concluded that private equity investment is decidedly non-core to their business and have made plans to spin them off.  

SIFIs
Under section 113 of the act, a non-bank financial company may be elected by the FSOC as a systemically important financial institution (SIFI) and become subject to the act’s regulation by the Federal Reserve Board (FRB). This includes heightened prudential standards and limitations if the FSOC determines that material financial distress, or the nature, extent, size, concentration, inter-relatedness, or mix of the corporations’ conduct could create a threat to the financial stability of the US.  Close attention should be paid by asset managers, insurers, specialty lenders and brokers or dealers to an ongoing proposal by the FRB. It is looking at companies which are “predominately engaged in financial activities,” and has established $50bn or above in total consolidated assets as an asset threshold for non-bank financial companies.

Compensation issues
As part of DFA’s compensation-linked reforms, the SEC released for comment proposals to implement section 952, which are terms concerning compensation committees and compensation consultants. The new rule imposes numerous significant executive compensation and corporate governance requirements on public companies. These include shareholder advisory votes on executive compensation and ‘golden parachutes,’ heightened independence rules for compensation committee members, mandatory claw-back policies and enhanced executive compensation disclosures.

Derivatives
Participants in the derivatives market and bankers should be watching developments at CFTC, SEC, the FDIC and other banking regulators. The CFTC let loose a flood of proposals designed to regulate – in a thorough manner – the over-the-counter swaps market, while the SEC is trying hard to keep up with its proposals to regulate the security-based swaps market. The Treasury Department, to the delight of many, announced plans to exempt FX derivatives from the new Dodd Frank rules.  However, it is essential that board members keep informed of the probable impact of all of DFA’s regulatory developments. The act’s derivatives reform is said to bring about an elevated degree of transparency, liability and risk management into the derivatives markets with a greater availability of data.  Questionable however is who will be able to take advantage of it, and how the cost of compliance will impact the effectiveness of the new market dynamic.

The investor’s choice in Morocco, Africa, and beyond

Posted on by

CDG manages saving funds mainly composed of social security funds and postal savings. The company also manages two public retirement and provident funds: CNRA and RCAR. Territorial development has been a key feature of CDG’s strategy in recent years. Here, the group has five core business areas under the umbrella holding company, CDG DEV:

– An integrated urban development and management strategy, including new cities and urban renewal
– Infrastructure in specific economic zones developed by the leading subsidiary, MedZ
– Property development, including the creation of social housing, commercial centres, commercial property and offices, golf courses and holiday resorts
– Services to local municipalities, including the management of car parks and landfill management
– Engineering services and facility Management

As a result of the combination of these operations and initiatives, CDG’s business has grown apace, with a net income reaching $241.6m − a net growth of 160 percent over the previous year. World Finance consulted Anass Houir Alami, the Director General of CDG, on what makes the organisation successful.

How has the company evolved over the years and how has this development reflected changes in the Moroccan economy and business scene?
“Since its inception it has become one of the leading institutional long term investors in the Moroccan economy and has expanded its remit to cover a wide range of high-growth sectors including finance, banking, insurance and territorial development (property development, tourism and infrastructure).”

With approximately $25bn in assets under management, CDG plays an important role in Morocco’s economic and social development.

Today, CDG’s operations can roughly be categorised under three principal businesses: savings mobilisation, banking and insurance; and territorial development. In the former it also holds majority stakes in some of the country’s leading banks and insurance companies.

CDG’s growth in many ways tracks Morocco’s own success story. With an average annual GDP growth of five percent over the last decade (rising from $37bn in 2000 to $88.5bn in 2009), Morocco is defying the economic downturn.

“One visible manifestation of this success is the recent commencement of construction of Morocco’s first financial district, known as Casablanca Financial City.”

The aim of this new development is to both attract foreign investment as well as finance local projects. It is projected that it will also contribute up to two percent of Morocco’s total GDP and create 35,000 new jobs. In a recent interview, the Moroccan minister for finance announced that the hub will be ‘a centre for the whole of Africa.’

The director general of France Telecom has said that Morocco is an extremely attractive place to invest, because of its political and economic environments.

In September 2010, CDG, FinanceCom and France Telecom entered into a strategic partnership through which France Telecom acquired a 40 percent stake in Médi Télécom (Méditel), Morocco’s second largest telecoms operator.

CDG has both the ability to work with overseas institutions and to attract investment from abroad. As testament to this, CDG has formed several partnerships with international groups. “It holds a 47.62 percent shareholding in Renault’s factory in Morocco, located next to Tanger Med Port.” This operation has the capacity to deliver 400,000 cars per year. It also holds 9.7 percent of the total issued share capital in tourism company Club Med and five percent of the travel company TUI.

When it comes to attracting foreign investment, CDG has been equally successful. For example, in 2009, CDG and its Moroccan partner FinanceCom sold 40 percent of the capital of the Moroccan Telecom operator to Orange, in a deal valued at €718m. Furthermore, Club Med has entered into a lease agreement with CDG and investment fund MADAEF, in relation to the six Club Med villages in Morocco, dating back to the 1960s.
These deals are a clear indication of the role that CDG plays as a financial investor, serving as a real catalyst for the country’s continuing economic development.

What are the key things any potential investor in Morocco should know?
“Morocco enjoys free trade agreements (FTA) with both the US and the EU. Off-shoring continues to be a very attractive option for foreign businesses, as companies continually look to Morocco as a gateway to the high-growth central African markets. Investors looking to work with Moroccan businesses or invest in the country as a stepping stone to access wider Africa, should appreciate that the infrastructure of the country is far more developed than many of its neighbours, especially in terms of a railway network, highways and ports.”
Thanks to such a well-developed infrastructure, the Government of Morocco has had the confidence to expand upon its already thriving international import/export agreements.

The US FTA was signed in 2004 and since then the US goods trade surplus with Morocco has risen to $1.2bn in 2009, up from $79m in 2005. At the same time, in 2009, the US exported goods to the value of $1.6bn to Morocco, a rise of 12 percent over the previous year.

What’s the outlook for the Moroccan economy, and the company’s place within it?
According to a report published by the Economist Intelligence Unit (EIU), Morocco’s financial sector – which remains one of the most robust in the region – will be a major force for the country to make of the Casablanca stock exchange a regional financial centre. Anass Houir Alami says that the financial hub will expand significantly, “with both western investors and those from emerging markets such as India and China turning to Casablanca Financial City as a platform to launch into the next big emerging market – central Africa.

The report also highlighted the growth of the Moroccan banking sector and the increasing presence of Moroccan banks in African countries such as Mali and Senegal. In short, in terms of financial dynamism, Morocco currently lies in third place behind South Africa and Egypt.

Anass Houir Alami concludes by saying: “CDG is probably the best positioned Moroccan institution to help international investors realise their ambition of gaining a foothold in the central African market.” Thanks to its forthcoming infrastructure developments in the next few years, the firm, as a long term institutional investor, holds potentially lucrative returns for those savvy enough to work with the right partner.

Power to the people

Posted on by Ashton Wenborn

As discussed in previous columns, financial crashes have similar statistical properties as earthquakes, craters on the moon, and many other natural phenomena, in that they follow what is known as a scale-free, power-law distribution. This means in effect that there is no typical size or scale: only the rule that, the larger an event is, the less likely it is to happen.

For example, if you double the size of an earthquake, it becomes about four times rarer, so earthquake frequency depends on size squared, or size to the power two – hence “power law.” There is no such thing as a “normal” pattern, and there is the ever-present possibility of extreme events.

This may sound like depressing news. What is the point in planning for the future if we can’t know what it will look like? However, there is a flip-side, for it isn’t just financial disasters which follow a power-law. The same thing holds for financial opportunities. The distribution of company sizes, for example, is scale-free: there are many tiny firms consisting of just a few people at one end of the scale, and a handful of global behemoths at the other. Opportunities are constantly bubbling up from the bottom. Most go nowhere, but a few will become massive.

The inverse question to the risk of disaster, is therefore the possibility of outlandish success – the bio-tech company that invents or accidentally discovers a blockbuster drug, the rash entrepreneurial gamble that pays a million to one. These are events that don’t register in the ‘normal’ economy of mainstream economics, exactly because they are statistically unlikely. And yet it is just such extraordinary events that define the economy.

Who would think that a small hamburger restaurant could grow into a global fast-food chain, or that a new author could produce a huge bestseller? Such events always come as a surprise, which is why we should always be open to new opportunities.

Individual wealth also follows a power-law distribution, at least for the top 50 percent of the population. The graph to the right combines two sets of data. The solid line on the right is from a UN report on the world wealth distribution (I have excluded those with less than $10,000 because the power law breaks down beyond that point).

The UN data only extends up to the richest one percent of the adult population, ie those with about half a million dollars or more of assets. The world’s billionaires are shown by the solid line on the left. The difference in magnitude between these two data sets is obviously enormous, and one might think there could be no connection between a billionaire and the rest of the world. However, a feature of scale-free distributions, is that they appear as a straight line when plotted on log-log scale (on this scale, 104 is 10,000, 106 is a million, 109 is a billion, and 1011 is a hundred billion).

I have interpolated the missing data with a dotted line, but data from individual countries show a similar pattern, and it is reasonable to conclude that the power-law distribution holds remarkably well over this range. As with “extreme events” on the stock market, billionaires are not random freak events or black swans, but part of the same picture as everyone else.

Power-law distributions are ubiquitous in nature, and are the signature of complex systems which have evolved to the edge of chaos – they are neither completely ordered, nor completely chaotic, but are on the boundary between the two.

This points to a major problem in economic theory. Most mainstream ideas, including chestnuts such as the ‘law of supply and demand’ or the ‘efficient market’ only make sense if you assume that there are a large number of essentially identical consumers, investors and firms. Drop those assumptions, and the theories don’t stand up.

However, while power-law distributions cannot easily be accommodated by the tools of mainstream economics, they do come easily in the framework of agent-based models. These are an important tool in life sciences such as ecology and biology, and are increasingly being used to model the economy.

One of the earlier examples of an agent-based model was a kind of computer game called Sugarscape, which involves agents moving over an imaginary grid looking for sugar. The rules for each agent are simple. To stay alive, they need food, so at each time step, they look around them, move towards any sugar they see, and eat it. Like a crop, the sugar grows back, but slowly. The agents have diverse characteristics, so some can see further or move more quickly, and can also reproduce through a process in which a couple’s attributes are randomly mixed up to produce a new agent.

While the rules are simple, the emergent behaviour is quite life-like. The agents swarm around like ants, and soon organise into separate tribes based on the geographical distribution of sugar. The more successful find mates and start large families. Some become exceedingly well-off, and hoard their excess sugar. The wealth distribution is seen to follow a scale-free power law, just as in the real world.

The system can occasionally lapse back to a disorganised state of conflict, as when population pressures result in a sudden shortage of food. The program has been used to study everything from economics to warfare.

Sugarscape has been criticised by feminist economists as being design to reflect male values. As Hazel Henderson points out, “if they had programmed half of their ‘agents’ with the behaviour females so often exhibit… they might have produced different results.” As with any model of society, it reflects our own biases and beliefs. But perhaps one day more realistic versions of such agent-based models will help us understand how wealth is distributed in the economy – and even spread the sugar a little more fairly.

Costing renewables

Posted on by

The cheapest reserves of oil and gas are disappearing and continuing to use those fossil fuels which remain emits carbon is increasingly disrupting the global climate and economy. Older oil wells, such as those around the Persian Gulf, are economical with oil at $7 a barrel, but many of these retain just a third or less of their original reserves; while newer resources, such as the oil sands of Canada, are economical only with oil over $80 a barrel. At the same time, atmospheric carbon dioxide is now 37 percent above its preindustrial level, and average global temperatures are up by nearly a degree Celsius – enough to noticeably shift weather and agricultural patterns, but still only a fraction of what will follow if carbon emissions are not controlled.

The total energy available annually from renewable sources, meanwhile, is thousands of times what the world economy consumes and the engineering knowledge needed to extract it is largely in place. Physically speaking, it seems obvious that the transition to renewables should happen swiftly and immediately.

Economic and political factors, however, impede the transition. In both our infrastructure and our ideas, fossil fuels have the advantage of incumbency, making them harder to displace. The environmental costs of carbon emissions are not properly incorporated into market prices for energy, so private economic returns from fossil fuels remain higher than those from renewables. And escalating fuel prices resulting from tightening supplies will only stimulate development of new energy sources when it is already too late.

Systemic change is needed, and only government can break the deadlock. But which policies do we need? To answer this question, we must look at the current cost competitiveness of renewable energy and how policy can improve this. In doing so, I will look mainly at renewable energy in electricity generation.

Price comparison
For any power source, the principal economic considerations are the initial capital cost per unit of generating capacity, the rate at which this capacity is utilised, the operating costs per unit of electricity, the price of electricity, interest rates on financing and the project lifespan. Renewables tend to have higher capital costs than other power sources, often because the technology is not mature, and to have much lower capacity utilisation, because of intermittency of the resource. But they also have dramatically lower operating costs because no fuel is needed.

The total costs of generating electricity from different sources, taking all of the above factors into account, are as shown in Figure 1. This also shows the cost that would be incurred if a carbon tax at ¤25 per tonne of carbon dioxide were imposed on fossil electricity. The range of valuations that economists attach to the full social and economic costs of carbon emissions is ¤20-€30 per tonne, though even €30 may be an under-estimate.
The key point is that, because fossil fuels are much cheaper, energy firms will mostly put their money into these rather than renewables. So, without policy support, renewables cannot yet compete.

The costs of wind energy are unlikely to fall much. The technology is mature and whatever incremental cost benefits are realised from new turbine designs and materials are likely to be offset by the need to move onto less amenable sites than those initially exploited. In solar power, however, radical refinements such as ‘multi-junction’ cells that capture far more energy by having multiple layers that absorb sunlight at different wavelengths, or ultra-thin solar cells that use raw materials more efficiently, could make solar competitive without government support within a decade or two.

Until then, governments must intervene to level the playing field and make renewables competitive. The simplest way to achieve this would be a carbon tax on large emitters. If this reflected even a fraction of the wider cost of fossil fuels (reflecting the full cost immediately would likely be too disruptive and politically difficult), it would instantly make renewables more competitive than smokestack power stations.

Energy taxes, in some cases based partly or largely on carbon content, and often applying to transport and power generation in different ways, are in place in many European countries. Sweden has a carbon tax at up to ¤100 per tonne – albeit with several exemptions – and has experienced a substantial shift to low-carbon energy while suffering no economic harm. Denmark has a carbon tax at ¤18 per tonne. India introduced a carbon tax on coal power in 2010 but it is at less than ¤1 per tonne – potentially enough to finance research and development but enough not to affect the economics of power projects. State, provincial and local governments in the US and Canada have also introduced modest carbon taxes and other governments have considered them.

The European method
Another approach to achieve the same outcomes as a carbon tax is a system of cap-and-trade for carbon emissions. This involves selling permits to large polluters to emit carbon up to a certain quantity over a given period, and allowing them to trade these permits so that those emitters who do not utilise their full limit can sell permits to those who will exceed their limits. Companies who emit more than their permits allow face a fine per tonne of carbon substantially more expensive than the cost of permits. The result is that carbon emissions carry a price and, if the number of permits supplied by government is shrunk over time while the cost of their initial purchase and that of fines is increased, this price can be adjusted to exceed the ¤30 per tonne level deemed critical to fully reflect the damage done by carbon emissions.

The European Union introduced just such a system, centred on the European Union Allowance and the Emissions Trading Scheme in 2005. However, the initial issue of permits was free of charge and their quantity has not been sufficiently reduced over time. The EU carbon price currently sits around ¤17 per tonne but firms involved have paid much less due to the effect of free permits. Carbon prices under this system are also susceptible to arbitrary swings driven by sentiment and momentum, as happens in all financial markets, and the complexity of the system has permitted fraud. A simple carbon tax with appropriate indexing to inflation would be a better way to give firms a clear expectation of future carbon prices – making them frame their investment decisions accordingly.

More carrot, less stick
Feed-in tariffs are a different way to support renewable energy. These entail guaranteed access to the electricity grid, long-term contracts and a guaranteed price for renewable energy, often up to a certain maximum amount of power per supplier. Electricity distribution firms, be they publicly or privately owned, may then be obliged to meet this cost but can pass it on to consumers. Alternatively, the state may pick up the extra cost of renewable electricity through subsidies.

Rather than worsening commercial returns from fossil power, feed-in tariffs improve those of renewables – potentially making this approach more politically acceptable. Such tariffs have been employed in over 60 countries, mainly in Europe but also the US, Canada, Brazil, China and others. They were first introduced in the United States from 1978 but had limited impact there. It was in Germany, from 1990, that the policy was first pursued with vigour. Initially renewable energy producers were guaranteed a price of 65-90 percent of the final price for electricity from all sources. This resulted in 4400MW of wind power capacity being deployed in Germany during the 1990s and in renewables accounting for six percent of German electricity production by 2000.

German policy was reformed in 2000 with electricity prices paid by utilities to suppliers of renewable energy thereafter being based on cost of production in a manner that tended to offer investors a certain minimum annual return. This return was below what the technology can now achieve without state support but this was not the case when the policy was introduced, and putting a floor under returns is still effective in ensuring that renewables get a larger share in energy investment portfolios than would otherwise be the case.

Other countries have followed the German example, notably Spain and Denmark – with the former focusing on solar power and the latter on wind. Spain now gets nine percent of its power from renewables and Denmark 20 percent. The resulting increase in consumer electricity bills, meanwhile, has been modest; estimated at ¤4 per month for the average German household. Some cuts have recently been made to feed-in tariffs in the face of Europe’s sovereign debt crisis – a shockingly short-termist response. The UK, meanwhile, plans a minimum carbon price and feed-in tariffs for low-carbon energy but its policy outlook remains unclear after the recent austerity budget.

The path ahead
Many other policy instruments have been tried. Governments have set targets for the percentage of power they will get from renewables (15 percent by 2020 in the UK) and are using other policy instruments to meet these goals – with targets themselves also acting as signals when investors form their expectations. Building and vehicle standards for energy efficiency are being tightened and subsidies offered to refurbish buildings, with ¤20,000 refurbishments to old houses potentially cutting fuel bills and carbon emissions in half. R&D in new energy technologies is being financed. Installation of solar panels on houses in Germany has been subsidised – a policy that helped the global solar manufacturing industry establish scale, but which also inflated global prices for crystalline silicon and put many of the world’s solar panels in cloudy Germany.

Policymakers are looking to make electricity grids more amenable to renewables. Developments include lower electricity prices for certain domestic and industrial processes in return for halting when the supply of renewable power is low; long-distance power lines for exchanging renewable electricity over thousands of kilometres; power storage facilities to smooth supply intermittency and arrangements for feeding power generated by homes or businesses back into the grid.

Public policy has triggered flows of private capital into renewables. Total annual investment in new capacity (priced in constant dollars) rose from less than $10bn globally in 1995 to more than $150bn today. R&D investment has shown a similar trend. And major global players such as Suzlon and Vestas in wind power and First Solar and Q-Cells in solar have emerged. Eventually, as technology improves, such firms will be able to carry renewables forward without government help.

But we are not there yet. Renewables need state support and we know what works on this front. Governments need only learn the lessons and redouble their efforts.