US market rally drives surging inflows to equity funds

UK investors are piling into equity funds at the fastest rate in almost three years, according to the latest Fund Flow Index from Calastone. They added £2.66bn to their holdings in February, making it the best month for inflows since May 2021 – and the fourth-best month on Calastone’s nine-year record.

February marked the fourth consecutive month of inflows, following a punishing eighteen months that saw £8.60bn flood out of equity funds. Since November, each month has seen ever more significant inflows as investors have increasingly bought into a strong stock-market rally, taking the four-month tally to £6.31bn.

The inflows are very selective and very concentrated, however. £2.54bn surged into North American equity funds, breaking records for the third consecutive month. Of this, three quarters (£1.88bn) was committed to American ESG funds in particular. Investors also continued to add to European equities to the tune of £363m, and in this case, all the new cash went into ESG funds – non-ESG European funds saw a small outflow. A mixed picture for ESG funds in other geographies meant an overall inflow of £1.54bn for ESG funds in February.

The renewed interest in ESG funds after months of outflows in 2023 made February’s inflows the fourth-best month on record after January marked the all-time high. Global equity funds also saw strong buying in February though this was focused on funds without an ESG label.

Meanwhile, Asia-Pacific funds had their third-worst month on record, shedding £229m, while UK-focused equity funds continued their long run of outflows. Investors withdrew £633m, in line with the average from the last couple of years.

Among other asset classes, money market funds saw inflows of £78m, slightly up on January but well below the £400m monthly average during 2023. During 2023, money market funds were strongly in demand as investors sought a safe, high-yielding home for their cash.

By contrast, fixed income funds had their best month since June 2023, attracting £329m of new cash, though this merely puts the month in line with the long-run average for the category. Mixed asset funds remain out of favour, while property funds continue to suffer structural outflows as the property investment industry turns away from the open-ended wrapper.

“Risk is back on with a vengeance,” said Edward Glyn, head of global markets at Calastone. “Investors are going cold on safe havens and jumping back into equities feet first. The US stock market has soared by a fifth since late October, driving accelerating fund inflows ever since. The rally has been driven by technology stocks in particular. These are heavily represented in ESG funds which may help explain why we are seeing such a surge of interest in US funds in this category”

 

Central Bank of Ireland sets out priorities for National Payments Plan

Central Bank of Ireland has published its recommendations in response to the public consultation on the Department of Finance’s National Payments Strategy.  The Central Bank has proposed four high-level priorities through to end 2030:

1. Coordinated action to realise the benefits of innovation and integration in a European context. Material payment account operators shall ensure that Irish consumers and small businesses benefit from payment innovations elsewhere in Europe. Where possible, emerging payment solutions shall be integrated with Europe and interoperable with other key markets.
2. Safeguarding cash as a means of payment. Cash should remain widely available and accepted as a means of payment, and this choice should be safeguarded for consumers and businesses.
3. Maintaining security and resilience in payments. Issuers, operators, participants, and enabling network providers engage collectively to ensure the security and resilience of the payments ecosystem.
4. Enhancing research and analytical insights. National public authorities, industry associations, and research bodies shall enhance capacity for better informed policy decisions on payments, through research and analytical insights.

Speaking at the BPFI National Payments Conference in Dublin, Vasileios Madouros, Deputy Governor, Central Bank of Ireland said, “Since the last National Payments Plan, a little over a decade ago, there has been remarkable change and innovation in domestic payments. But there are also important areas where Ireland is still lagging behind. Consumers having greater access to payment solutions is dependent on the market grasping the opportunities available. Despite the instant payments infrastructure being available since 2017, material providers of payment accounts in Ireland have not implemented it. For consumers and businesses, this is an unsatisfactory outcome.”

Madouros continued – “Ireland is host to a growing and innovative payments sector. Ireland is also the base of a very innovative technology sector. And people have shown they are willing, and eager, to embrace new technology in payments. Yet many of the benefits of technology in relation to payments for domestic consumers and the broader economy remain untapped. The development of the National Payments Strategy by the Department of Finance offers an opportunity to change that and we, in the Central Bank of Ireland, look forward to playing our part.”

“The National Payments Strategy offers an opportunity to take a longer-term view and develop a coherent, system-wide approach to the future evolution of payments in Ireland, within a European context,” concluded Madouros. “Like any societal transition, the technology-driven evolution in the payments landscape needs to be managed carefully from a public policy perspective. Making the most of that opportunity will be critical. Because a healthy and competitive economy relies on an innovative, inclusive and resilient payments ecosystem.”

 

Mastercard and Central Bank of Jordan to build national digital payment ecosystem

Mastercard is collaborating with the Central Bank of Jordan to develop a payment ecosystem digitisation blueprint for the country. The collaboration supports the Central Bank of Jordan’s broader efforts to unlock economic growth through promoting acceptance of digital payments, increasing financial inclusion, and combatting high cash usage. 

The Central Bank of Jordan will benefit from Mastercard’s global expertise to accelerate economic and payments digitisation and improve acceptance. Mastercard will use its an approach that includes a deep analysis of payment flows between businesses, consumers, and the government with a focus on addressing pain points, such as policy and regulation.

This collaboration represents a strategic roadmap to guide businesses and consumers towards a more efficient, secure, and accessible financial future. It paves the way for a more connected economy that fosters innovation, drives inclusion, and fuels economic growth.

Currently, most payments in Jordan are in cash. Economies that are cash-reliant bear significant costs in many forms, such as underreported income, with informal economies accounting for up to 40% of the GDP. Moreover, cash is less secure and can be costly for businesses to handle. Merchants and consumers can both benefit from enhanced financial education on the various benefits they can both reap from the use of digital payments.

 

Redcon Properties scores EGP925m syndicated factoring facility

Beltone Holding (Beltone) has announced that its wholly owned subsidiary, Beltone Leasing and Factoring, has signed the first syndicated factoring deal in Egypt worth EGP925m for Redcon Properties.

The main aim of this agreement is to provide financial support to Redcon Properties, the real estate development arm of Redcon Group. Beltone Leasing and Factoring has joined forces with several factoring companies, contributing EGP512.5m to the total deal, including Cairo Lease, Enmaa, Misr Finance, and AUR Leasing. Beltone Leasing and Factoring covered EGP412.5m. Banque Misr acted as the escrow bank.

“In the context of the broader real estate sector, the signing of this joint factoring deal holds significant importance as it enables real estate developers to obtain the proper financing tools required to grow their development portfolio,” said Tarek El Gamal, Chairman of Redcon Properties. “It will enable us to accelerate the pace of construction of the Golden Gate project, a cornerstone commercial development in Egypt, especially in East Cairo. This strategic move underscores our commitment to employing diverse financial instruments for project financing, ensuring timely and successful project delivery.”

 

Lansbankinn goes live on IBAS using Swift’s Transaction Screening Service

Norwegian software vendor Commercial Banking Applications AS (CBA) has announced that Landsbankinn in Iceland is benefitting from the seamless integration of Swift’s Transaction Screening Service (TSS) with CBA’s IBAS Global Banking Factory (GBF) which the bank uses to run its banking operations in payments and trade finance.

The integration with Swift TSS ensures that all incoming and outgoing messages, independent of banking products, are screened in real-time against the most up-to-date sanctions lists during IBAS business processing. Bank users are instantly alerted if anything suspicious is detected.

IBAS GBF enables all message types, including payments, trade finance and other banking transactions, to be scanned in real-time via Swift TSS whether these originate as MT messages, or in ISO-compliant MX or SEPA format. The integration uses REST APIs and the IBAS CLL (call) framework, enabling sanction screening to be automatically executed. IBAS GBF also automates all follow up actions, enabling transactions that pass the screening process to pass straight through, while those identified as potential hits are held and automatically flagged for further investigation.

ISO 20022 CBPR+ is also expected to deliver benefits in reducing false positives. According to a recent eBook from Swift, in practice, some 5-10% of payments generate an alert and industry figures suggest that of those alerts, 99% are false positives. ISO 20022 CBPR+ addresses the challenge by providing distinct, well-defined data elements in clear structures and including more elements and space than existing standards.  With a more targeted approach to screening, it is estimated that financial institutions could reduce false positives by 25-30%.

 

PNC Bank and Koxa add embedded banking integration in Workday

Koxa Corp. has announced an embedded finance integration with PNC Bank, which will deliver an embedded banking experience to the bank’s clients using the Workday ERP system.

With the integration, PNC’s corporate and commercial banking clients can retrieve real-time balance and transaction information, and submit, approve and reconcile payments from inside their ERP system using the PINACLE Connect for Workday integration.

“This Workday integration helps us continue to create efficiencies for our clients by delivering the power of our treasury management platform within the systems they use to run their businesses,” said Howard Forman, executive vice president and head of Digital Channels for PNC Treasury Management. “Our Workday integration, powered by Koxa, is further proof of our commitment to deliver modern technology to help our clients manage their cash position and automate manual financial processes.”

 

Morgan Stanley launches Private Markets Transaction Desk

Morgan Stanley Wealth Management has launched its Private Markets Transaction Desk, a concierge service that lets eligible shareholders and investors buy and sell eligible private company shares in the secondary market. The offering is part of Morgan Stanley’s broader Private Markets ecosystem that provides a suite of solutions for companies, employees and investors to serve a diversity of client needs.

Growth-stage venture-backed global companies worth over US$1bn in value have grown from 150 in 2015 to over 1,000 today, with a current cumulative valuation of US$4.3 trillion. The Private Markets Transaction Desk has been launched to assist clients seeking liquidity in a highly fragmented and opaque secondary market.

Clients who use the desk can benefit from direct support for one-off sales of private company shares. Conversely, clients intent on investing in private companies can gain access to investments not widely accessible. This offering complements the existing private investment platforms for clients offered through Morgan Stanley Wealth Management.

 

PayCargo and Rippey AI to automate logistics payments network

Logistics payments and data infrastructure platform PayCargo has announced a partnership with Rippey AI, which as the name suggests is an artificial intelligence (AI)-driven company that produces automation solutions for freight forwarders/NVOCC, 3PLs, ocean carriers, trucking companies, and shippers.

“Through our partnership with Rippey AI, we are looking to utilize AI-based technology to connect two critical parts of the supply chain that will drive even more efficiency across the industry – invoice automation and transaction processing,” said Eduardo Del Riego, PayCargo CEO. “The innovations that Matt Motsick and his team have already brought to the logistics industry, along with the payments expertise and technology of our PayCargo platform, make this an ideal partnership.”

PayCargo and Rippey AI plan to use their expertise in invoice automation and payment processing to take that technology further by automating the payment transaction for the payer and receiver after an invoice has been issued.

 

Ethiopian Airlines opens e-commerce logistics facility at Bole International Airport

Ethiopian Airlines Group has launched an e-commerce logistics facility inside the Ethiopian Cargo & Logistics premises at Bole International Airport. The facility, which is dedicated to e-commerce, mail, and courier logistics services, aims to bridge logistical gaps and position Addis Ababa, Ethiopia, as the cross-border e-commerce logistics hub for Africa and beyond.

This e-commerce Logistics Facility will offer various services, including consolidation, deconsolidation, sortation, repacking, and labelling. Customers can now track and trace their shipments from anywhere.

“The inauguration of this cutting-edge e-commerce logistics facility is a significant breakthrough for Ethiopian Airlines Group and the entire African economy,” commented Mesfin Tasew, CEO, Ethiopian Airlines Group. “We have implemented high-end technologies in the infrastructure that revolutionise the way goods are transported and delivered in the e-commerce industry in Africa.”