Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


TRust Index Advances into Positive Territory for First Time

Thomson Reuters TRust Index Advances into Positive Territory for First Time

Thomson Reuters TRust Index Results – Second Quarter 2014

• Financial institutions in the Americas and Asia post gains in trust sentiment, whilst European banks continue to decline

• Lower earnings growth expectations indicate a less bullish outlook for the global Financial sector

LONDON/NEW YORK, July 17, 2014 – Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the latest results of its proprietary TRust Index, showing that second-quarter 2014 trust sentiment in the top 50 global financial institutions continued to improve, as more banks – particularly those in the Americas - received positive scores to push the global TRust Index into positive territory for the first time since the index was launched in January 2013.

Tracking trust through news sentiment shows that the top 50 global institutions as a whole rose to score 0.5 percent (-1 percent Q1) in the second quarter, largely due to a substantial increase in trust scores for the Americas institutions, which rose to 5 percent (2 percent Q1). Institutions in Asia also received a positive score for trust sentiment in the second quarter, increasing to 1 percent

(-2 percent Q1). However, sentiment for European institutions fell to -5 percent (-2 percent Q1), as the European financial constituents of the TRust Index continued to suffer reputational damage from increasing regulation, customer issues, tax probes, lawsuits and fines.

“For the first time since the Thomson Reuters TRust Index's launch in January 2013, sentiment on the 50 largest financial institutions globally turned positive in Q2 2014,” said David Craig, president, Financial & Risk, Thomson Reuters. “Financial institutions in the Americas have led and built on this trend for the past two quarters, supported by strengthening economic and market conditions. Whilst this is encouraging news for our industry, we are not there yet. There is more work to do in Europe, which dipped into further negative sentiment as reputational damage from ongoing scandals, fines and concerns over the climate weakened the region’s results.”

Other features of this quarter’s TRust Index follow below; please click here for further insight and data:

The Confidence of the Marketplace – Investors and Analysts

Earnings growth estimates for the Financial sector of the S&P 500 are less bullish than previous quarters. Sridharan Raman, senior research analyst at Thomson Reuters, commented, “At -2.4 percent, the Financial sector has the lowest expected earnings growth rate this quarter of all sectors, mainly due to tough comparisons relative to last year. This is down from an expected 1.7 percent estimated earnings growth at the end of Q1 and 10.7 percent at the end of Q2 2013.”

According to Thomson Reuters StarMine, analysts forecast forward 5-year growth rate for the top 50 global financials at 8.8 percent, just above the 8.6 percent expectations for the S&P 500. Raman continued, “At a -1.8 percent market implied growth rate for the top 50 global financial companies, the difference between the market expected growth rates and analyst expectations, has increased to 10.6 percent, as investors continue to discount these institutions, at odds with analyst expectations. And for the first time in over a year the top 50 global banks actually have a negative share price change for the past 90 days, possibly as the market adjusts to the lower growth expectations for the sector”.

Aggregate changes to analyst recommendations for the top 50 global financial institutions over the second quarter reveal roughly equal numbers of analyst upgrades/downgrades as a group. Although the Americas institutions saw more upgrades, in Asia downgrades outnumbered upgrades by nearly two to one. Institutions in Europe saw marginally more upgrades than downgrades.


Counterparties: Credit Spreads as an Indicator of Trust

Credit default spreads (CDS) continued to tighten, as confidence amongst the top global financial institutions in pricing the relative risk of doing business with each other continued to grow. CDS for institutions in the Americas ended the second quarter with the tightest spreads (around 81.5 basis points), and Asia the widest (around 97.6). With the average spread for the top 50 global financials at about 86 basis points, CDS continue to be far below 2011’s high of nearly 350.

Regulation as a Barometer of Trust

The average daily number of regulatory alerts tracked by Thomson Reuters Accelus was 143, above 100 for the fourth consecutive quarter. A total of 17,800 alerts have been recorded as of the end of second quarter, well on track to exceed 2013’s total by year-end.

Tracking Controversy and Governance as Factors in Rebuilding Trust

Thomson Reuters ASSET4 environmental, social and governance data shows that there has been a reduction in the number of controversy events reported, with an average 19.8 percent of the top 50 global financials subject to a controversy in the second quarter, down from 22.4 percent in the previous quarter. The Financial sector as a whole also experienced a decline in the number of controversies reported, down to an average of 3.20 percent from the previous quarter’s 3.06 percent, although more than half of the top 50 global financials report some business ethics event.

Thomson Reuters TRust Index harnesses proprietary data analytics and news sentiment analysis. This latter indicator draws on over four million business and financial news and media sources to track the state of trust in the top 50 global financial institutions. This three-minute video, featuring Chris Perry, managing director, Risk at Thomson Reuters, explains further how the measures in this quarter’s TRust Index relate to the state of trust in the global financial market place over the quarter. Please click on second quarter 2013, third quarter 2013,fourth quarter 2013 and first quarter 2014 for previous results.

Thomson Reuters Data Sources: Thomson Reuters ASSET4, Thomson Reuters Accelus, Thomson Reuters Business Classification, Thomson Reuters Datastream, Thomson Reuters I/B/E/S, Thomson Reuters MarketPsych Indices, Thomson Reuters News Analytics, Thomson Reuters StarMine Quantitative Models.


About Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organisation. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges. For more information, go to http://thomsonreuters.com.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news