AGEFI Luxembourg - juillet août 2025

AGEFI Luxembourg 22 Juillet / Août 2025 Fonds d’investissement I n a year that sawglobal bondmarkets at- tract record inflows, the Luxembourg StockExchangewelcomed 15,000+ new securities and remained theworld’s leading exchange for the listing of international debt securities and sustainable finance. At its annual generalmeetingon June 19, theLuxem- bourg Stock Exchange (LuxSE) released its financial results for the financial year ending on 31 December 2024, reportinga solidperformance inayearmarked by a more stable and attractive investment environ- ment for bond investors. LuxSE reportedoperational revenues of EUR 45.5million for 2024, an increase of 9%comparedwith 2023. The operational revenues for 2024 reflect the com- pany’s strong listing activity throughout the year, re- sulting in the highest number of new financial securities admissions in a single year since the ex- change started its activities more than 95 years ago. The stock exchange also reported a net profit of EUR 8.1million for the same period, comparedwith EUR 10.6 million the year before. The fall in profit is at- tributable tonon-operatingprofit realised in 2023. “2024 was an excellent year for the Luxembourg Stock Exchange, with exceptional listing numbers and advancements in the field of trading and data. Ourstrategicfocusonsustainabilityanddigitalinno- vation has not only enhanced our services but also solidified Luxembourg’s position as the destination ofchoiceforissuersandinvestorsfocusedonsustain- able, digital or conventional bonds. We are commit- ted to continuing this trajectory and shapingmarket developments through innovation,” commented Julie Becker, CEOof LuxSE. Undisputedbond listing venue In 2024, LuxSEwelcomed 15,111 newsecurities, rep- resenting a 9% increase year over year. In total, EUR 1.5trillionwasraisedthroughthesenewsecurities,up 19%comparedtothepreviousyear,andgivingLuxSE a 33% global market share in listed international bonds in 2024. With 44,775 securities admitted on its marketsandontheSecuritiesOfficialListasof31De- cember 2024, includingmore than41,000debt instru- ments, LuxSE reported a 5% increase year over year inthetotalnumberoflistedsecuritiesatyearend.The exchangehasanexpansiveinternationalfootprintand serves 1,700 issuers across 100 countries. “In2024,theLuxembourgStockExchangemadesig- nificant progresson its 4-year strategicplanandcon- tinued to play a crucial role as a key pillar of Luxembourg’s financial centre. In a global market environment dominatedbymajor exchangegroups, we kept building on LuxSE’s unique strengths and agility, and the exchange remained the leader in its field. Our focus remains clear, we will continue to strengthen LuxSE’s core activities while exploring newfields created by the current market and politi- cal context,” stated Alain Kinsch, President of the Board of Directors of LuxSE. Global sustainable debt issuance on the rise After a record year for sustainable bond issuances in 2021 and a subsequent slowdown, 2024 saw an in- creaseinsustainablebondissuanceglobally.Thiswas reflectedontheLuxembourgGreenExchange(LGX), whichadded664newgreen,social,sustainabilityand sustainability-linked (GSSS) bonds in 2024, a 19% in- crease compared to the year before. The new GSSS bondsonLGXraisedatotalofEUR262billionin2024 for specific green and social projects and sustainable developments across the world, representing a 25% increasecomparedto2023,andgivingLuxSEaglobal marketshareof42%ininternationalsustainablebond listings. LGX reached an important milestone at the beginning of 2024, when it passed the EUR 1 trillion mark in outstanding GSSS bonds on the LGX Plat- form. At year end, LGX encompassed 2,199 GSSS bonds in total, up 17%year over year. Keydevelopments in 2024 In2024,LuxSEintroducedLuxSEPartner,adedicated partnershipstatusdesignedforlawfirmsandprofes- sional servicesfirms supporting issuers innavigating theissuanceandlistingprocess.Thestatuswillenable deeper collaboration across the ecosystem, and ulti- mately ease the listingprocess for issuers. LuxSE also streamlined its admission process Fast- Lanetoinclude7non-Europeanmarkets.Companies withshareslistedonanyofthesemarketsbenefitfrom a simplified listing process for their bonds onLuxSE. On the trading side, LuxSE completed themigration of its clearing activities to Euronext Clearing and on- boarded new prime liquidity providers. Moreover, LuxSE reported a 65%growth in sales of sustainable bond data compared to 2023. In recognition of LuxSE’s contribution to digital innovation in capital markets, LuxSEwasnamed the leadingexchange for DLTbondsbyOMFIFinitsDigitalAssets2024report. Throughout 2024, LuxSEaccelerated its digital trans- formation, which included the multiyear revamp of LuxSE’s core listing system and integration of AI- based solutions in its operations. Sustainability report 2024 released Along with its financial results, LuxSE also pub- lished its Sustainability Report 2024. The report re- flects the progress made towards the three pillars of the exchange’s sustainability strategy, namely cli- mate transition, educationandgender equality, and describes howLuxSE is embedding its sustainabil- ity strategy into its operations and business strat- egy. In 2024, LuxSE kept a strong focus on advancing gender finance. LuxSE’sSustainabilityReport :https://lc.cx/9IWLSA Record listing numbers secure solid 2024 revenues for LuxSE From left to right: Jeffrey Dentzer, Member of the Board of Directors of LuxSE, Françoise Thoma, Vice-President of the Board of Directors of LuxSE, Alain Kinsch, President of the Board of Directors of LuxSE, Julie Becker, CEO of LuxSE and Pierre Schoonbroodt, CFO of LuxSE ©LuxSE By Jenny ZENG - Deputy CIO Fixed Income, AllianzGlobal Investors A s the world’s largest net creditor, we thinkAsia is uniquely positioned to lead the next wave of capital di- versification amid a waning be- lief in US exceptionalism. Outsized moves in the Taiwan dollar and Singapore dollar in May and June tookmarkets by surprise. Historically, even low-volatilityAsian curren- cies such as these tend to weaken,notstrengthen, against the US dollar during risk-offperiods – a reflec- tion of crucial trade ties with the US. Yet this time it wasdifferent.InTaiwan,theabruptmovesreportedly erased nearly two years of operating profit for major insurance investors. The news followed the outcome of JP Morgan’s Spring 2025 investor survey, (1) conducted during its annualseminaralongsidetheIMF-WorldBankmeet- ings. The results marked a divergence inmacro out- look between US and non-US investors. US-based investorslargelysawcurrentdisruptionsastransitory, expectingareturnto“USexceptionalism”–thebelief intheglobaldominanceoftheUSdollarandthesafety of US dollar assets. In contrast, non-US investors viewed recent events as structural shifts, indicating a broader change inworldview. In our view, these are signals that the longstanding narrative of US exceptionalism is weakening. Amid persistent fiscal deficits and shifting geopolitical al- liances, global investors are reassessing their concen- trationofriskinUSassets.Inthisevolvinglandscape, wethinkAsianbonds,especiallyinlocalcurrency,are growingincreasinglycredibleasadestinationforcap- ital diversification. What if theUSdollarwere to lose its safe-haven status inAsia? Asian attitudes towards the US dollar matter be- causeAsian countries have been significant holders of dollar assets for three decades and longer. Draw- ing from the lessons of theAsian Financial Crisis of 1997, Asian policymakers embarked on export-ori- ented growth models, supported by undervalued currencies, while funding investments with high levels of domestic savings. Persistent current ac- count surplusespropelledAsia tobecome the region with the largest gross international investment position. Of Asia’s international holdings, a colossal 41% is invested in theUS. (2) IfAsian investorswere to reduce this allocation, the scale of the investment flows couldbe vast. That prospect no longer seems farfetched. Onceviewedas a risk-free currency, theUS dollar has, of late, exhibited behaviour more akin to a risky asset, making the cur- rency a potentially less attractive option for Asian investors topark their excess savings. While the dollar’s dominance will not fade overnight, there are growing signs thatAsian investors are rethink- ing their approach. High conviction investment ideas fromourAsia fixed income team Foreign exchange: We are overweight the Korean won, Malaysian ringgit and Indonesian rupiah and positioned short the US dollar. We are looking to in- crease these positions on the back of selloffs. Duration: We are broadly positive onAsia bond du- ration, including Indonesia and Malaysia, given the increased space for monetary policy and conducive growth-inflation dynamics. We have a neutral posi- tion in somemarkets for valuation reasons. Credit: For Asian investment grade bonds, we are slightly long credit spread risk. For Asian high yield bonds, we remain long carry and expect security se- lection to be the key long-term positive contributor. We look to increase credit beta on the back of global- induced selloffs. Howmight investors play the dedollarisation trend? One short-term impact of this trend is likely to be a rise in currencyhedging. Economieswith substantial unhedged US dollar exposure are reassessing their approach to foreign exchange risk – the recent expe- rienceofTaiwan’slifeinsurancecompaniesofferinga cautionary tale. Currencyhedgingisusefulbecauseitallowsinvestors tolowertheirexposuretodollarvolatilitywithoutnec- essarily selling their underlying holdings. However, wethinkthatinthemediumtolongterm,manyAsian investors will go further and diversify away from some of theirUSdollar holdings. OneapproachistoconsiderswappingUSTreasuries for Asian government bonds denominated in local currency. The region offers a diversifiedmix of sov- ereign bonds, ranging from the credit strength of AAA-ratedmarkets like Singapore andAustralia to thegrowthpotential of investment-gradeeconomies such as India and Indonesia. Asia’s government bond markets are still small compared with the US – and, with the exception of China, to the UK, Ger- many and Canada. But, with GDP growth rates in Asiaoutstripping those inEuropeandNorthAmer- ica, we expect the gap to narrowover time, creating abiggermarket for investors toaccess.Wehave seen aboutUSD60billioninflowsintoAsiaex-Chinalocal currencybondmarketsoverthepastthreeyears,and there is room for more. The incoming capital flows would continue the vir- tuous cycle in Asia, where capital inflows and eco- nomic growth reinforce each other to reprice local currency assets. Moreover, we would argue that the job of central banks across Asian countries is getting easierbythedayinaglobalmacroenvironmentwith aweakerUSdollar, lower energyprices, benign food inflation and China’s policymakers taking steps to stimulate domestic consumption. We think that, should there be a global slowdown, Asian central bankswould be able to cut policy rates more aggressively thanmarkets anticipate –without worrying about capital outflows or imported infla- tion. This backdrop is very supportive forAsian sov- ereign local currency bonds. Adecline in the dollar could makeway for the renminbi AstheinfluenceoftheUSinAsiacomesintoquestion, China’s power – both political and economic – con- tinues to rise, and that, in turn, supports the growing importance of China’s currency. This is happening alongsidegrowthinintra-Asiantrade,ofwhichChina is an important engine. In 2020, the Association of Southeast Asian Nations (ASEAN), a group of 10 states including Indonesia, Thailand and Vietnam, overtooktheEuropeanUnionasChina’sleadingtrad- ing partner. In 2023, China accounted for nearly 20% of totalASEANtrade. (3) Thisdeepeningofregionaltradetiesaccompaniesthe rising use of the renminbi in cross-border payments, whichChinahassupportedbyestablishingrenminbi clearingbanks,cross-bordersettlementinfrastructure, and broader access to China’s domestic capital mar- kets. Together, these measures contribute to a more developedrenminbiecosystemcapableofsupporting central banks’ reserve diversification strategies. WewouldarguethatChinesegovernmentbondsare becoming an increasingly credible alternative to US Treasuries for Asian investors. Indeed, long-term analysis shows they have outperformed both Treas- uries and German Bunds over the past decade (Ex- hibit3).Thatperformancecomesalongsidearelatively low correlation with other corporate and sovereign bonds, suggesting that these assets have substantial diversificationbenefits. AsPanGongsheng,GovernorofthePeople’sBankof China, pointed out in the recent Lujiazui Forum, the globalmonetarysystemismovingtowardsmulti-po- larisation as investors look to diversify their invest- mentallocationsawayfromtheUSdollar.Wethinkit is inevitable that the renminbi will becomemore im- portant as one of the major anchor currencies in the region over the long term. Thus, we believe it makes senseforlong-terminvestorstoexplorerenminbi-de- nominatedassetssuchasChinesegovernmentbonds in the years ahead. Asia is better able to survive tradewars than in the past The trends pointing towards dedollarisation inAsia are the same ones that have bolstered the regiondur- ing the recent tradewars initiatedby theUS. Compared with the previous tariff cycle imposed duringDonaldTrump’s first presidency,mostAsian economies now benefit from diversified trade rela- tionships with multiple trading partners. The deep- ening of intraregional trade flows reinforces longer term economic resilience and growth prospects for Asia,reducingtheregion’sdependenceonthegrowth trajectoryof countries inEurope andNorthAmerica. MostAsianeconomieshavealsoeithermaintainedor strengthenedtheirmacroeconomicbuffers,including larger foreign exchange reserves and improved cur- rent account positions. The implication is that it is different this time. Asia is moreresilientandlessdependentonitstradewiththe US.Thatsupportstheinvestmentcasefordiversifying intoAsian local currencybonds, aswell as for explor- ingotherassets,suchasAsiancorporatebonds,which can diversify country-of-risk exposures even where such assets areUSD-denominated. Astheworldmovestowardamoremulti-polarstruc- ture, in which the US is no longer the unrivalled su- perpower,Asiancurrencies – especially the renminbi – are becoming important alternative options for in- vestorsinsearchofdiversification.Wethinkthistrend has only just begun. 1)JPMorgan,asat29April2025. 2)MorganStanleyResearch,AllianzGlobalInvestors,asat27May2025. 3)ChinaMinistryofCommerce,McKinsey&Co,asat3September2024. The decline of US exceptionalism inAsia?