Blog #8: Governance as the Keystone: Cultivating a Culture of Integrity in Organisations
At its core, integrity involves honesty, but it extends beyond truthfulness to embody the wholeness of a person's character. It is about being true to oneself and maintaining consistency in actions, values, methods, measures, principles, expectations, and outcomes. As an example, Integrity can be seen when individuals act according to their beliefs and values across all aspects of life, demonstrating reliability, trustworthiness, and fairness in personal, communal and professional contexts.
Last week I wrote an article on UBSS Blog:
Summary: “Integrity stands as a core principle in the very essence of ethical living and moral philosophy. It is an attribute that finds high regard among individuals and collective entities.”
“governance's role in cultivating a culture of integrity is intricate and imperative. It entails setting the ethical framework, creating definitive policies, fostering accountability, ensuring transparency, and enabling ethical decision-making processes. Robust governance infrastructure is indispensable for fostering a culture within an organisation that not only values but actively practices integrity.”
For the full article: https://www.ubss.edu.au/article/governance-as-the-keystone-cultivating-a-culture-of-integrity-in-organisations/
Written by: Associate Professor Mordechai Katash
Blog # 7 Contingent Inflation Across Major Economies
This week's economic data unveils an undeniable acceleration in economic growth and robust labor market participation, highlighting the enduring strength of major economies including the USA, Eurozone, Germany, and Korea.
Contingent Inflation Across Major Economies
This week's economic data unveils an undeniable acceleration in economic growth and robust labor market participation, highlighting the enduring strength of major economies including the USA, Eurozone, China, Germany, and Korea.
In an intriguing development, several Reserve Bank Presidents have signaled a notable shift in policy direction. Initially, there was an anticipation of seven rate cuts within the year. However, this perspective has recently been adjusted, with the forecast now suggesting up to three rate cuts. It's crucial to remember that the Federal Reserve operates as an apolitical entity. Historically, it has steered clear of initiating new policies within six months of the U.S. presidential elections.
To provide a clearer picture, let's delve into 10 key economic indicators that have shaped recent discussions:
China Exports (Feb) saw a significant jump to 10.30M (CNY) from 3.80M (CNY) in the previous month, with year-over-year growth for February hitting 7.1%, surpassing the 1.9% forecast.
China Imports (YoY) (Feb) also exceeded expectations, recording a 3.5% increase against a forecast of 1.5%.
Foreign Investments in Japanese Stocks stood at 283.9B, marking a shift from the previous period where foreign investors were net sellers at 206.3B.
Foreign Japanese Bond Buying reached 484.6B, in contrast to the previous phase where there was a net selling of Japanese bonds amounting to 250.1B.
Japanese Average Cash Earnings rose by 2.0%, outperforming the 1.3% economic forecast.
The USA Atlanta Fed GDPNow (Q1) estimate is 2.5%, higher than the 2.1% forecast.
USA JOLTs Job Openings exceeded expectations, registering at 8.863M.
USA Mortgage Applications (WoW) observed a 9.7% increase, compared to 5.6% in the preceding period.
German Exports (MoM) (Jan) surged by 6.3%, vastly outpacing the 1.5% increase forecasted by economists.
German Imports (MoM) (Jan) also saw a substantial rise of 3.6%, against a forecast of 1.8%.
These indicators not only underscores the robustness of global economic activity but also challenges the conventional understanding of inflation dynamics. As previously analysed, inflation is poised to remain a key concern into Q2,.
The evolving narrative around interest rate cuts by various Reserve Banks underscores a strategic pivot in response to global economic signals.
Written by : Associate Professor Mordechai Katash
Blog #6: Crafting an impactful presentation by preparing communication plan
In the business world where we are increasingly combating raging competition, the power of a meticulously crafted presentation cannot be overstated. It not only leaves a lasting impression but also serves as a cornerstone of success.
Navigating the journey from conceiving a groundbreaking idea to delivering it with the finesse of a Grammy Award Winner is no small feat. This is where the magic of an effective communication plan comes into play. Such a plan acts not just as a checklist but as a strategic guide to ensure your presentation resonates and achieves its intended impact.
So, have you ever paused to reflect on your routine to prepare for a presentation?
Please see Summary of the article written by Associate Professor Mordechai Katash on LinkedIn:
LinkedIn Article: https://www.linkedin.com/pulse/crafting-impactful-presentation-preparing-plan-katash-u4wmc/?trackingId=xYMrTnpRQ6OUwwwbv4W0XA%3D%3D
"In the business world where we are increasingly combating raging competition, the power of a meticulously crafted presentation cannot be overstated.
Embracing a comprehensive communication plan can be transformative. It aids in systematically compiling all necessary information, ensuring you are well-equipped and confident."
Blog #5: Eurozone Economy Witnesses Inflationary Trends
Inflationary pressures are not occurring in isolation. With the backdrop of rising energy costs, including crude oil (WTI and Brent) and expected cyclical and seasonal spikes in natural gas prices, the Eurozone is aligning with economies like New Zealand's. These regions are navigating the complexities of inflation, spurred by both base effects and escalating energy prices.
In recent discussions, I have highlighted the signs of an accelerating inflation rate within the US economy. Notably, January's Personal Income data revealed a monthly surge of 0.7%, surpassing forecasts by 0.6%, while the number of initial Jobless Claims stood at 215K. This comes as the Reserve Bank of New Zealand hints at an upcoming rate hike, signaling tightening monetary conditions.
The market's expectations have undergone a significant shift. A month ago, analysts were predicting seven rate cuts, totaling 175 basis points. However, current sentiment has adjusted to anticipate merely three rate cuts, equating to 75 basis points. This adjustment stems from the rapid pace of economic data, suggesting that rate cuts may be off the table until at least the third quarter of 2024.
Turning our gaze to the Eurozone, the latest figures illustrate the region's inflationary momentum. A closer look at the data reveals:
The Core Consumer Price Index (CPI) on a month-to-month basis stands at 0.7%, a stark contrast to last month's -0.9%.
Year-over-year, the Core CPI has risen to 3.1%, marking a 0.2% increase from the previous month's figures.
The monthly CPI has climbed to 0.6%, showcasing a significant jump of 1.0% from last month.
On an annual basis, the CPI has increased to 2.6%, up by 0.1% from prior data.
These inflationary pressures are not occurring in isolation. With the backdrop of rising energy costs, including crude oil (WTI and Brent) and expected cyclical and seasonal spikes in natural gas prices, the Eurozone is aligning with economies like U.S.A. and New Zealand. These regions are navigating the complexities of inflation, spurred by both base effects and rising energy prices.
Associate Professor Mordechai Katash
Blog #4: Low demand for U.S. Treasury
Blog #4: In today's #USBondsAuction focusing on 2-year and 5-year auctions, it was obvious that institutions are seeking higher discounts to purchase debt, underscoring a cautious stance towards current market conditions (refer to the attached chart for details).
As we anticipate the forthcoming release of key economic indicators, including this week's Gross Domestic Product (GDP) and inflation figures, there is a palpable increase in the level of uncertainty permeating the global investment community.
Our analysis of current financial trends, encapsulated by the Smart Money Index, reveals a prevailing expectation among investors of heightened inflationary pressures. This sentiment is poised to exert a consequential impact on the global economic panorama.
Observations from today's U.S. Treasury auctions, particularly concerning the 2-year and 5-year notes, reveal a pronounced inclination among institutional investors to demand greater yields in exchange for debt acquisition. This behaviour underscores a broader trend of caution prevailing in the market context, as detailed in the accompanying graphical analysis.
Furthermore, the current status of the 10-2 Treasury Yield Spread, standing at a negative 14 percent, signals a trend towards either a non-inverted or a flattening yield curve. Historically, such patterns have been precursors to potential economic downturns, warranting scrutiny.
On the commodities spectrum, we note immediate reactions among rate-sensitive assets. Specifically, Silver has registered a 2 percent decline, while West Texas Intermediate (WTI) crude oil has seen a 1.4 percent uptick. These fluctuations serve as critical barometers for assessing the commodity market's response to shifts in the economic climate, with further details expounded in the attached charts.
Associate Professor Mordechai Katash
Blog #3: Navigating Market Heights: Insights from the S&P 500's Record Levels
Blog #3: As the S&P 500 reaches unprecedented highs, the investment landscape buzzes with energy, especially noting the peak performance of leveraged CTAs. This moment is pivotal, stirring the perennial debate among investors: Is now the moment to dive deeper into the market, or is it wiser to step back and sell?
As the S&P 500 reaches unprecedented highs, the investment landscape buzzes with energy, especially noting the peak performance of leveraged CTAs. This moment is pivotal, stirring the perennial debate among investors: Is now the moment to dive deeper into the market, or is it wiser to step back and sell?
To inform this critical decision, let's delve into some compelling data that sheds light on the current situation:
A Decade in Review: We take a look back at the S&P 500's 12-month forward Price-to-Earnings (P/E) ratio, offering a broad perspective on its valuation trends over the past ten years.
Sector-Specific Insights: We also examine the forward P/E ratios at the sector level within the S&P 500, revealing nuanced insights from the last decade.
Analysis and Strategy:
The S&P 500's current stance, with a P/E ratio of 20.5, presents a quandary. Traditional investment wisdom, favouring value and dollar-cost averaging, suggests optimal entry points typically lie in the 15-17 P/E range.
A spotlight on the Energy and Utilities sectors reveals they are trading at levels some might label as a "#Discount," indicating potential opportunities for astute investors.
Strategic Implications:
The decision to buy or sell in such a dynamic market environment is complex and warrants careful consideration. The insights provided aim to equip you with a deeper understanding of the current market dynamics, guiding your investment strategy in these high-flying times.
I invite you to engage with these insights and reflect on your next move in the market. Are you poised to capitalise on the opportunities presented by the S&P 500's current levels, or do you see wisdom in caution?
Best Regards,
Associate Professor Mordechai Katash
Mordechai Katash Strategic Consultants
#Investing #Finance #MarketAnalysis
Blog #2: To Risk or Not to Risk: The Paradox of Risk Management in Business
Blog #2: In the complex world of modern business, the concept of risk stands as both a formidable adversary and a catalyst for innovation. Business owners, directors, and stakeholders are often caught in the dilemma of fostering an entrepreneurial spirit amongst their staff while safeguarding their companies from potential harm. This paradox of risk management prompts a critical question: To risk, or not to risk?
To Risk or Not to Risk: The Paradox of Risk Management in Business
In the complex world of modern business, the concept of risk stands as both a formidable adversary and a catalyst for innovation. Business owners, directors, and stakeholders are often caught in the dilemma of fostering an entrepreneurial spirit amongst their staff while safeguarding their companies from potential harm. This paradox of risk management prompts a critical question: To risk, or not to risk?
Understanding the Types of Risks
Before delving into the strategy of managing risks, it's essential to recognise the various types that businesses may encounter:
Operational Risks: Challenges arising from internal processes, systems, or human factors.
Financial Risks: The danger of financial loss due to market fluctuations, credit issues, or liquidity problems.
Strategic Risks: Risks associated with business decisions and strategy implementation.
Compliance Risks: The risk of legal or regulatory sanctions, financial forfeiture, or material loss due to non-compliance with laws, regulations, or standards.
Reputational Risks: The potential loss resulting from damages to a firm's reputation, affecting its ability to maintain current or establish new business relationships and engagements.
Market Risks: The risk of losses in positions arising from movements in market prices.
Environmental Risks: Risks related to environmental issues that can affect the business operationally and financially.
Social Risks: The impacts on a company due to changes in social trends, public opinion, or social conflicts.
Strategies for Addressing Risks
To navigate the complex landscape of risk, organisations must adopt a comprehensive approach. This involves several key steps:
Communicate and Consult the Risks: Engage stakeholders throughout the risk management process.
Establish Risk Scope, Context, and Criteria: Define the parameters within which risks will be managed.
Identify the Risks: Recognise what risks exist and their origins.
Analyse the Risks: Understand the nature of the risk and its potential impact.
Evaluate the Risks: Compare the level of risk against predefined criteria to prioritize.
Address the Risks: Implement strategies to mitigate, transfer, avoid, or accept risks based on their evaluation.
Report and Record the Risks: Document the risk management process and outcomes.
Monitor and Review the Risks: Continuously assess risk management activities and adjust as necessary.
Measuring and Calculating Risks
A balanced approach to risk involves both qualitative and quantitative analysis to assess the likelihood and impact of risks. This includes evaluating the probability of occurrence and the frequency of exposure to risks. The impact of risks is categorized into five levels ranging from insignificant to catastrophic, enabling organisations to prioritise and address them effectively.
Conclusion: Embracing Risk for Innovation
The essence of risk management lies not in the avoidance of risk but in its strategic embrace. As Bruce Arians, the NFL Head Coach of the Tampa Bay Buccaneers Super Bowl Champions in 2021, famously said, "No risk it, no biscuit." This stresses the absolute necessity of taking calculated risks to foster innovation and growth. By employing a structured and measured approach to risk management, organisations can navigate the precarious balance between security and entrepreneurial freedom, ensuring that the risks they take are not just necessary, but beneficial for their evolution and success.
Blog #1: Associate Professor Appointment at UBSS
Blog #1: Emeritus Professor Greg Whateley, and Associate Professor Mordechai Katash