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Finextra
5 days ago
- Business
- Finextra
Asic shares industry feedback on tthe future of Australia's public and private markets
ASIC today released more than 50 public submissions received in response to its discussion paper on the evolving dynamics between public and private markets, released in February 2025. 0 The paper examined the health and future of Australia's markets, including the growth in private markets, the decline in public listings, and the growing significance of superannuation funds. ASIC continues to meet with domestic and international stakeholders and has received almost 90 submissions. The responses have been overwhelmingly positive and reflect the views of industry bodies, market operators, superannuation trustees, fund managers and other stakeholders across the finance sector. ASIC Chair Joe Longo said the agency was closely considering the submissions to inform its next steps. 'ASIC has a mandate to drive financial system performance and improve investor confidence. 'ASIC wants both public and private markets to thrive and flourish - together, they drive more investment, more opportunities for companies to grow, and more jobs for Australians. 'I was encouraged by the breadth and richness of the responses we received, which recognised this is a timely discussion that will shape the future of Australia's capital markets. We heard our markets are strong but changing, and that public and private markets must complement, not cannibalise each other.' ASIC has distilled the feedback into themes, which are shaping further work and thinking, including learning from international experience. These include: Structural and cyclical factors are shaping both public and private markets Public market adjustments would improve and enhance their attractiveness Private markets are here to stay and grow, there is an acknowledgement of the need for any regulatory guidance to be measured, working closely with industry and aligning to international standards Private credit is good for the economy and investors, if done well. There may be work to do to ensure it is sustainably done well Superannuation is a mature investment force in Australia and a significant and structural influence in markets and investment More to do on data collection and transparency of private markets including in dimensioning the market itself and learning from international practices. 'I thank everyone for their feedback; ASIC is listening. We have noted a range of insights and actionable ideas, including streamlining IPOs and disclosure requirements. We will carefully consider the requests for urgency to improve the attractiveness of Australia's public markets, as well as the caution expressed in submissions to move carefully in adjusting any settings in private markets. 'We look forward to announcing the adoption of some of the proposed actionable ideas and will share our roadmaps for public and private markets in Q3 and Q4, respectively, this year. This work will be supported by further feedback from stakeholders, our ongoing surveillances, and views from market experts in the coming months,' Mr Longo said. Background On 26 February 2025, ASIC released a discussion paper which explored the changing dynamics in capital markets in Australia and abroad, including declining listings on public markets, the rapid growth in investment capital allocated to private markets and the growing significance of superannuation funds in markets. To further support its markets work, ASIC has commissioned the following expert insight papers on: the future state of Australia's capital markets; the private credit environment; and international approaches to data and transparency in private markets. ASIC's work will also be informed by current surveillance activity of retail and wholesale providers of private credit and private market managed investment schemes. The discussion paper followed ASIC's report, Equity market cleanliness snapshot report (REP 786), released in July 2024. The market cleanliness report showed Australia's listed equity markets have continued to operate with a high level of integrity and remain consistently among the cleanest in the world. The report provided a broader context for the findings in Report 787 Review of Australian equity market cleanliness: 1 November 2018 to 30 April 2024 (REP 787). ASIC's Moneysmart website has information for consumers about how to choose the right investments to reach their financial goals.
Reuters
19-05-2025
- Business
- Reuters
Bearish funds flee turbulent copper and turn to aluminium: Andy Home
LONDON, May 19 (Reuters) - The prospect of U.S. import tariffs on copper has been a bonanza for physical metal traders, but the resulting price turbulence has been a big headache for fund managers. Ever since U.S. President Donald Trump ordered an investigation into copper imports in February, copper trading has centred on the premium commanded by the CME's U.S. price over the London Metal Exchange's (LME) international price. It's been a highly volatile trade and the transatlantic rift in pricing has undermined Doctor Copper's customary investment role as a proxy for the state of global manufacturing. Many fund managers have simply given up. Both investor positioning and market open interest on the CME copper contract have dropped sharply over the last couple of months. Some, however, have rotated into aluminium as a new forum for expressing a negative view of the current global trade picture. Fund positioning on the CME copper contract amounted to 134,000 contracts at the start of the year, with money managers fairly evenly split between long and short bets. Total participation has since shrunk to 82,000 contracts, with investors now net long to the tune of 24,780 contracts, according to the latest Commitments of Traders report. Trading activity on the CME's copper contract fell 35% on a year-over-year basis in the January-April period, while market open interest touched a one-year low at the end of last month. That's surprising given that copper has hardly been out of the news since the initiation of the so-called Section 232 investigation into U.S. imports. But the relentless stream of headlines about both the copper tariff and the broader tariff stand-off with China has turned trading of the metal into a wild ride, particularly on the CME contract. Plenty of investors have reduced their exposure, whether voluntarily or otherwise. Funds expecting copper to fall in price due to the impact of trade tariffs on global growth have been particularly hard hit. Money manager short positions have fallen to their lowest levels since November 2022. But bulls are hardly rampant either. The collective investment long position has been flat-lining since the middle of April. There's no indication that the money leaving the CME has gone to the London copper market. Fund positioning on LME copper is also low amid a sharp reduction in bullish bets and an ongoing decline in bearish bets. Rather, it is aluminium which seems to have caught the attention of money managers looking to express a negative view of the macro picture. Aluminium is insulated from the sort of arbitrage turmoil seen in the copper market because the CME's aluminium contract isn't a U.S. customs-cleared price but rather mirrors the LME's international product. So even though the Trump administration lifted the tariff on aluminium imports to 25% in its early days of office, the tariff trade has been quarantined to the CME's U.S. Midwest physical premium contract. That's enticed funds to lift short positions on LME aluminium to the highest levels since last July. Investors have simultaneously slashed bets on higher aluminium prices, meaning that net fund positioning has flipped from super-bullish as recently as March to neutral. The rotation of fund money from copper to aluminium helps explain the two metals' recent price divergence. LME three-month copper has largely recovered from its "Liberation Day" tariff meltdown, bouncing back by 17% from the April 7 lows to the current $9,500 per metric ton. The LME aluminium price, by contrast, has staged a much more modest 6% recovery from the April sell-off. Three-month metal is trading around $2,450, down 4% on the start of the year and the second-weakest performer among the LME base metals next to zinc. Aluminium may yet prove to be a rocky ride for bears. LME warehouse inventory is steadily declining, time-spreads have contracted over the last month, and the benchmark cash-to-three-months period was flirting with backwardation last week. Fund managers, however, evidently feel it is still a lot less scary than attempting to ride the copper roller-coaster. The opinions expressed here are those of the author, a columnist for Reuters.
Hospitality Net
07-05-2025
- Business
- Hospitality Net
Resilience In Paradise: Caribbean Tourism Thrives Amid U.S. Travel Headwinds
Global leisure travel patterns are undergoing a notable realignment as economic and political headwinds emanating from the United States redirect international tourists toward more accessible and stable destinations. The Caribbean, in particular, has emerged as a prime beneficiary of this shift. Factors such as U.S. trade tariffs, policy uncertainty, and geopolitical tensions have dampened the appeal of U.S. travel for many overseas visitors, resulting in a 'travel diversion' effect in which sun-seeking travelers opt for Caribbean getaways over U.S. holidays. At the same time, the Caribbean region's robust tourism recovery and relative political stability have positioned its islands as attractive havens for both vacationers and investors. Introduction This whitepaper examines the confluence of trends behind this redirection of travel demand and capital flows. Drawing on recent industry data and insights from hospitality leaders, we analyze how the Caribbean is capitalizing on diverted travel demand. We assess the implications for hotel investment and consider the challenges that fund managers and developers face in raising capital for Caribbean ventures. The findings underscore a central narrative: the Caribbean's long-term viability as a tourism market remains strong, even as global economic uncertainty persists. U.S. Economic Headwinds and The 'Travel Diversion' Effect International tourism to the United States has been challenged in recent years by a combination of economic headwinds and policy-induced friction. Trade disputes, stricter immigration and visa policies, and geopolitical frictions have dampened the U.S.'s allure for global travelers. The United States is now running an annual $50 billion travel trade deficit, a stark reversal from the $3.5 billion surplus recorded as recently as 2022. A sentiment shift is also at play. Analysts note a perception among some global travelers that the U.S. has become a less welcoming or more uncertain destination. Negative sentiment and travel barriers have led to a redirection of international tourism away from the U.S., setting the stage for alternatives. Diversion To 'Stable And Accessible' Alternatives Many of these alternatives lie in the sunny Caribbean. The region's proximity to major source markets, widespread use of English, and tourism-friendly policies make it a convenient and attractive substitute. Caribbean tourism has rebounded robustly, capturing a larger slice of global travel demand. In 2024, the region welcomed over 34 million international visitors, surpassing pre-pandemic volumes. Spending has also increased, with visitor expenditures expected to rise by approximately 9% year-over-year. Hospitality executives confirm the boon, with travel to the Caribbean and Latin America rising between 5% and 10% in 2024. Major hotel companies are actively expanding, driven by optimism in the region's stability and growth potential. Caribbean Tourism Fundamentals: Growth and Resilience The Caribbean's ability to capture redirected demand is bolstered by excellent tourism fundamentals: Hotel Occupancy and RevPAR at Record Highs : STR data reveals that Caribbean hotels have exceeded pre-pandemic performance metrics. In January 2025, the region recorded 72.9% occupancy and an ADR of $404, translating to a robust $294 RevPAR. : STR data reveals that Caribbean hotels have exceeded pre-pandemic performance metrics. In January 2025, the region recorded 72.9% occupancy and an ADR of $404, translating to a robust $294 RevPAR. Tourist Arrivals Climbing and Diversifying : The Caribbean has seen broad-based growth in arrivals. Countries like the Dominican Republic, Curacao, and Turks & Caicos have logged record-breaking tourism growth. : The Caribbean has seen broad-based growth in arrivals. Countries like the Dominican Republic, Curacao, and Turks & Caicos have logged record-breaking tourism growth. Resilient Demand Through Challenges : Despite events such as hurricanes or travel advisories, leisure demand in the Caribbean has remained resilient. Travelers prioritize experiences, and all-inclusive resorts continue to attract guests willing to spend. : Despite events such as hurricanes or travel advisories, leisure demand in the Caribbean has remained resilient. Travelers prioritize experiences, and all-inclusive resorts continue to attract guests willing to spend. Positive Outlook from Industry Leaders: Sentiment from executives at the 2025 ALIS CALA conference was upbeat. Major hotel brands continue to grow their Caribbean footprints, reflecting sustained confidence. Investment Trends: From U.S. Dry Powder to Caribbean Deals Investment capital is increasingly flowing toward Caribbean hospitality, given U.S. market challenges and the Caribbean's performance: Dry Powder Searching for Yield : With U.S. hotel deal volume down, investors are looking to deploy capital in higher-growth markets like the Caribbean. Cross-border hotel investment rose significantly last year. : With U.S. hotel deal volume down, investors are looking to deploy capital in higher-growth markets like the Caribbean. Cross-border hotel investment rose significantly last year. Compelling Resort Value : Caribbean resorts offer strong yields, especially where luxury properties are priced below comparable U.S. markets. The environment is described as 'frothy,' with demand outpacing available assets. : Caribbean resorts offer strong yields, especially where luxury properties are priced below comparable U.S. markets. The environment is described as 'frothy,' with demand outpacing available assets. Big Moves by Brands and Funds : The acquisition of Playa Hotels & Resorts by Hyatt for $2.6 billion exemplifies growing strategic interest. Private equity firms are also exploring partnerships and acquisitions in the region. : The acquisition of Playa Hotels & Resorts by Hyatt for $2.6 billion exemplifies growing strategic interest. Private equity firms are also exploring partnerships and acquisitions in the region. Branded Residences and Mixed-Use Resorts: These models are rising in popularity, helping developers raise capital and investors diversify revenue streams. Projects like Marriott's developments with branded villas are drawing premium pricing. These models are rising in popularity, helping developers raise capital and investors diversify revenue streams. Projects like Marriott's developments with branded villas are drawing premium pricing. Investment Challenges: Financing remains complex. Bid-ask spreads, hurricane risks, and regulatory hurdles make execution challenging. Still, long-term players see opportunity. Capital Raising Hurdles: Layered Financing and High Barriers Capital raising remains a key barrier to Caribbean hospitality development: Conservative Lending Practices : Hotel loans in the region typically max out at 55% loan-to-cost and carry high interest rates, necessitating large equity contributions. : Hotel loans in the region typically max out at 55% loan-to-cost and carry high interest rates, necessitating large equity contributions. Multi-Layered Capital Stacks : Developers often rely on creative structures, including presales of branded residences, joint ventures, and alternative funding. : Developers often rely on creative structures, including presales of branded residences, joint ventures, and alternative funding. Barriers for New Entrants : Execution complexity, low liquidity, and lack of conventional financing options favor seasoned players. : Execution complexity, low liquidity, and lack of conventional financing options favor seasoned players. Climate Risks and Insurance Costs: Insurance premiums are rising due to climate-related risks, increasing the cost of operations and capital. Despite these barriers, well-capitalized and experienced investors can succeed with innovation and patience. Portfolio diversification and careful structuring are key. The All-Inclusive Advantage Drawing on Horwath HTL's insights, the all-inclusive model remains a powerful driver in the Caribbean. Historically concentrated in the Dominican Republic, Jamaica, and Mexico, the model has evolved to attract luxury travelers through enhanced experiences, off-site excursions, and higher service standards. Definition and Guest Benefits : All-inclusive properties offer bundled rates covering room, F&B, and entertainment. This promotes longer stays, high guest satisfaction, and stronger loyalty. : All-inclusive properties offer bundled rates covering room, F&B, and entertainment. This promotes longer stays, high guest satisfaction, and stronger loyalty. Financial Performance : Properly managed, all-inclusive resorts can achieve strong contribution margins. The inclusion of all-inclusive metrics in the latest USALI edition reflects their growing global importance. : Properly managed, all-inclusive resorts can achieve strong contribution margins. The inclusion of all-inclusive metrics in the latest USALI edition reflects their growing global importance. Regional Success Factors : Markets benefit from efficient cost structures, airlift, and consumer preference for simplicity. Luxury brands have entered the space, narrowing the quality gap with European Plan hotels. : Markets benefit from efficient cost structures, airlift, and consumer preference for simplicity. Luxury brands have entered the space, narrowing the quality gap with European Plan hotels. Emerging Opportunities: Destinations like Miches, Pedernales, and parts of Costa Rica and Belize show promise for future all-inclusive developments. Adults-only all-inclusives are gaining traction due to higher ADRs and curated experiences. Destinations like Miches, Pedernales, and parts of Costa Rica and Belize show promise for future all-inclusive developments. Adults-only all-inclusives are gaining traction due to higher ADRs and curated experiences. Brand Expansion: Major global brands are actively growing in the all-inclusive space, helping drive loyalty, diversify portfolios, and capture higher total property revenues. Outlook: Sustained Caribbean Strength Amid Global Uncertainty The Caribbean is well-positioned to retain its momentum amid global uncertainty. Diverted demand, solid fundamentals, and investor interest support its long-term appeal. As interest rates gradually ease, capital is likely to become more available for projects with strong fundamentals. Caution remains necessary due to execution hurdles and capital constraints. Still, experienced players with strategic partnerships can unlock significant value. Horwath HTL's analysis underscores that the Caribbean offers an attractive blend of high growth and resilience, making it a smart bet for hospitality investment. Bibliography Horwath HTL (Apr 2025). 'The all-inclusive edge: a smart bet for Caribbean and Central America investors.' Quartz (C. Arnst, Apr 2025). 'America's travel industry is in sharp decline.' HotelBusiness (A. Perkowsky, Apr 2025). 'Report: Federal policy turbulence impacts U.S. hotel demand.' U.S. Travel Association – Travel Snapshot (Apr 2025). WTTC Economic Impact Report (May 2024). 'Caribbean tourism sector to reach USD 91 billion by 2024.' Caribbean Journal (Feb 2025). 'STR: Caribbean Hotels Gaining Momentum.' LinkedIn post by F. Robert (CHICOS summary, Nov 2024). 'Lots of Factors Slow Hotel Transactions.' AG&T Caribbean Capital Markets Outlook (Dec 2023). Hotel Investment Today – ALIS CALA (May 2025). 'Can CALA teach the US how to deal with instability?' CoStar/Hotel News Now (Feb 2025). 'Hyatt to buy Playa Hotels & Resorts for $2.6B.' Lodging Magazine (Jan 2025). 'C-Level Execs Express Optimism During ALIS.' Bryan Younge Managing Partner +1-888-800-7258 Horwath View source
