AVN 65.31 Decreased By ▼ -0.86 (-1.3%)
BAFL 30.25 No Change ▼ 0.00 (0%)
BOP 4.63 Decreased By ▼ -0.10 (-2.11%)
CNERGY 3.89 Decreased By ▼ -0.12 (-2.99%)
DFML 13.50 Decreased By ▼ -0.60 (-4.26%)
DGKC 42.15 Decreased By ▼ -1.54 (-3.52%)
EPCL 46.13 Increased By ▲ 1.48 (3.31%)
FCCL 11.45 Decreased By ▼ -0.38 (-3.21%)
FFL 5.19 Increased By ▲ 0.22 (4.43%)
FLYNG 5.82 Decreased By ▼ -0.28 (-4.59%)
GGL 10.04 Decreased By ▼ -0.34 (-3.28%)
HUBC 63.21 Increased By ▲ 0.91 (1.46%)
HUMNL 5.73 Decreased By ▼ -0.12 (-2.05%)
KAPCO 27.81 Increased By ▲ 0.26 (0.94%)
KEL 2.15 Decreased By ▼ -0.06 (-2.71%)
LOTCHEM 25.37 Decreased By ▼ -1.23 (-4.62%)
MLCF 21.65 Decreased By ▼ -0.87 (-3.86%)
NETSOL 84.95 Decreased By ▼ -1.25 (-1.45%)
OGDC 86.64 Increased By ▲ 0.37 (0.43%)
PAEL 10.96 Decreased By ▼ -0.31 (-2.75%)
PIBTL 4.21 Decreased By ▼ -0.07 (-1.64%)
PPL 78.65 Decreased By ▼ -1.43 (-1.79%)
PRL 13.61 Decreased By ▼ -0.05 (-0.37%)
SILK 0.88 Decreased By ▼ -0.02 (-2.22%)
SNGP 41.00 Decreased By ▼ -0.75 (-1.8%)
TELE 6.01 Decreased By ▼ -0.20 (-3.22%)
TPLP 16.02 Decreased By ▼ -0.25 (-1.54%)
TRG 111.89 Decreased By ▼ -0.66 (-0.59%)
UNITY 14.01 Decreased By ▼ -0.34 (-2.37%)
WTL 1.14 Decreased By ▼ -0.06 (-5%)
BR100 4,026 Decreased By -48.6 (-1.19%)
BR30 14,402 Decreased By -123 (-0.85%)
KSE100 40,451 Decreased By -396 (-0.97%)
KSE30 15,110 Decreased By -101.7 (-0.67%)
Follow us

ZURICH: The Bank for International Settlements, considered the central bank of central banks, warned Monday of a potential bubble forming around the boom for so-called green investments.

In its quarterly review out Monday, BIS said the financial markets have been sending “mixed signals” in recent months, reflecting “investor unease” about the economic prospects ahead.

The institution focused in on green investments, along with technology stocks, which are also in very high demand.

“Demand for investment products classified as delivering environmental, social and governance (ESG) benefits is booming,” BIS said.

It said the growth of the overall ESG market was riding mostly on investors’ focus on environmental considerations, particularly in fixed income markets.

However, “given the very fast growth of the new asset class, there are questions about the possibility that a bubble might develop unless market transparency can be ensured,” the BIS said.

“Could a fundamentally welcome development — helping to finance the transition to a low-carbon world — generate significant financial imbalances?” BIS asked.

Historically, the investments that accompany major economic and social changes tend to undergo large price corrections after an initial investment boom, BIS recalled.

It cited the examples of the surge in investments in railway stocks in the mid-1800s and internet stocks during the “dot-com” boom at the turn of the 2000s.

There are signs that ESG assets’ valuations may be stretched, BIS said.

However, quantifying the expansion of these assets remains a complex task given the vagueness of the criteria used to define them.

Some estimates indicate that ESG assets rose by nearly one third between 2016 and 2020 to $35 trillion, or no less than 36 percent of total professionally managed assets.

In a narrower definition, including only mutual funds and exchange-traded funds (ETFs) that self-report as having ESG mandates, shows even faster growth but at lower levels.

The assets managed by these funds have soared over the past five years, more than tenfold, and now stand at approximately $2 trillion.

By this yardstick, these assets represent around three percent of mutual fund and ETF equity investments and one percent of their bond investments.

BIS said developments in the ESG market should be closely monitored.

Established in Basel in 1930, the BIS is owned by 62 central banks, representing countries that account for about 95 percent of global gross domestic product (GDP).

Comments

Comments are closed.

BIS warns of potential green investments bubble

SBP rebuts claim capping dollar price caused $3bn loss in remittances, exports

At least 41 killed as passenger coach falls into ravine in Lasbela

6.3 magnitude earthquake jolts Islamabad, surrounding areas

Ten children killed in northwest Pakistan boat capsize

Blinken arrives in Egypt as Middle East violence erupts

Djokovic wins Australian Open to equal Nadal’s 22 Slam titles

China’s 2022 smartphone shipments the lowest in 10 years

Pakistan expresses interest in possibility of currency swap with Russia

Suddenly, ailing SOEs come under PDM govt’s focus

50pc duty imposed on import of ‘Mild Hybrid Vehicles’