Environmental issues are a game changer for investors

Editor: Environmental and social issues affect valuation and financial performance. If your investment decisions focus only on the financial disclosures, you will not be looking at the complete picture. Share prices of firms that endorse sustainability have been proven to outperform those who have not in the long run (source: Harvard Business School (2012)). 81% of market value in the S&P 500 is due to intangible factors (environmental capital, human capital, sustainability governance and stakeholder relationships). Only 19% is accounted for by physical and financial assets.

Environmental risks can have significant costs, in terms of clean up costs and legal costs. Social risks such as employee strikes, third-party investigations and community protests may result in delays. Sustainability risks also have potential reputational damage.

By investing in companies that incorporate sound environmental and social practices, you are proactively endorsing companies that are investing in their future. Would you knowingly invest in companies that are emitting excessive toxic chemicals, polluting water sources or have poor labour practices? Or would you rather use your investments to support companies that are embracing sustainability and investing in their future?

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Sell in May and go away?

Following the recent rally in March, the question on most investors’ minds is whether this is simply a counter trend relief rally or a continuation of the longer bull market we have seen since 2009.

My expectation is the former and that the markets are likely to start selling off again as we move through the year. There is little potential news flow that could drive stocks or corporate debt higher over the next few months and, given valuations and downside risks, see little point to chase these markets. In terms of asset allocation, being marginally underweight risk assets would appear prudent.

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CNMC Seeks Concessions, Buffer Amidst Gold Surge
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CNMC Goldmine Holdings
SGX Code 5TP
Mkt Cap S$M 122
% Price Change YTD 58.7
% Change - Div Adj. YTD 58.7
% Change - Div Adj.[1 year ] 17.0
% Change - Div Adj.[3 years ] -1.3
% Change - Div Adj.[5 years ] N/A
Price vs. 12M High% -6.6
Price vs. 12M Low% 79.6
% Div Yld 1.8
% ROE 36.4
PE 8.5
P/BV 2.7
Source: SGX Stockfacts ( 4 May 2016)
Operating excavators and bulldozers, drilling and blasting rocks – this is the stuff of every boy’s dreams.

For CNMC Goldmine Holdings Ltd Chief Executive Officer Chris Lim, the fascination with mining began early.

“I’ve always wanted to be involved in the mining business,” said Lim, 42.
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How does IA help in protecting shareholders’ investment and enhancing shareholder value?
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As boards of directors are responsible for providing the direction for organizations, they must make decisions objectively and act in the best interest of the organizations, and be honest and diligent in carrying out their duties. They play a key role in business operations, providing oversight and support for corporate strategy. The board and management must ensure that all strategic initiatives are designed to enhance shareholder value. A director owes his duties to the shareholders to act in their best interests.

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