Barclays PLC (BARC.L)
- Bloomberg
Pandemic Is a Surprise Boon for Women in the World’s Back Office
(Bloomberg) -- The coronavirus pandemic has hit women worldwide with job losses and closures of childcare centers. Yet a surprising bright spot is emerging: India’s $200 billion technology services industry, where new rules are expected to provide female workers with a broad swath of flexible work arrangements and fresh employment opportunities.On the outskirts of New Delhi, Teena Likhari, 45, quit her job running operations for the Indian back office of a Silicon Valley company in 2018 because of a family medical emergency. Looking to rejoin this year, she expected a market stunted by lockdowns. Instead, the pandemic had made work-from-home mainstream in her industry, which had long shunned the practice.Not only did the operations manager quickly land a job with Indian outsourcer WNS Global Services, but working from her home in the city of Gurgaon, she began overseeing a 100-member team in the city of Pune about 900 miles away.Likhari is one of the early beneficiaries of India’s decision to lift decades-old restrictions on remote work in back office firms because of the pandemic. The tech services industry -- one of the country’s most important financially -- can now allow employees to shift from traditional offices to work-from-anywhere arrangements, permanently if needed. Indian women, who have often had to sacrifice for their husbands’ careers or other commitments at home, have much to gain from the policy change.“Even a year ago, an operations leader working remotely would’ve been unimaginable,” said Likhari, who has seen scores of women quit work after childbirth, marriage or when a family member fell ill. “The change will allow so many career women like me to do what we do from home, it’s a game changer.”India’s large numbers of English-speaking graduates and cheaper costs relative to the West have spawned a sprawling industry that’s often called the world’s back office because of its global reach. The broad outsourcing sector, which includes technology services in addition to business processes, employs about 4.5 million people. Foreign banks from Deutsche Bank AG to Barclays Plc run wholly owned centers handling everything from global payrolls to technology infrastructure maintenance for themselves and customers. Local outsourcers Tata Consultancy Services Ltd. and WNS offer everything from data analytics to support on financial and accounting processes to international clients.The pandemic has changed workplaces globally but the new norms are particularly significant in India. Social conventions that required women to move to their husband’s locations or stay with family in small towns, or simply be available inside the home to care for elders and children have shut out millions of qualified female workers. Greater flexibility and the opportunity to work from anywhere would give them choices they’ve never had before.Also, India’s old rules - originally designed to prevent misuse of leased telecom lines - had prevented permanent work from home arrangements in back offices. But the pandemic pushed the government to remove decades-old reporting obligations, such as those requiring companies to provide office network diagrams in order to get international communication circuit allocations. The changes opened the door for people to work from home on a long-term basis.A huge segment of working women in India, particularly the less privileged, have faced many of the same problems that have beset their global counterparts during the pandemic as they’ve had to juggle childcare, online schooling and office work from home, forcing some to drop out. Millions of female rural workers and daily wage earners lost jobs because they can’t work from home. Yet, the changes in the technology services industry show just how deeply the pandemic is forcing Indian companies to reimagine workplaces.Companies like WNS, which caters to the likes of Virgin Atlantic Airways Ltd., Tesco Plc and Avon Products Inc., are envisaging a hybrid office and home model, satellite offices in small cities and a blend of full-time employees and gig workers. “We’ll see work going to people rather than people going to work,” said Keshav Murugesh, group chief executive officer of WNS which employs 43,000 workers globally, nearly 30,000 of them in India. “With flexible hours or selected work days, over 100 million Indian women with secondary degrees, could potentially find employment,” he said.Mumbai-headquartered Tata Consultancy, closing in on half a million workers, has already committed to a “25-by-25” strategy -- by 2025, only 25% of its workforce will be working inside an office at any one time.“Given time and location flexibility, less women will quit after having children,” said N.G. Subramaniam, chief operating officer of Tata Consultancy, Asia’s largest outsourcer with $22 billion in annual revenue. “More women will stay in the workforce, more will reach senior leadership levels.”A third of India’s technology services labor force comprises women, already a better gender ratio than most other industries in the country, Nasscom, the industry trade association says. Work from home opportunities in back offices may now offer more opportunities to qualified women in small towns who aren’t allowed to migrate to bigger cities for work.Most of the back office outsourcing centers are located in sprawling campuses within big cities like Bangalore or New Delhi. Barclays, for instance, has over 20,000 workers providing technology solutions globally and UBS Group AG has 6,000 employees, about a third of them in Mumbai alone. Deutsche Bank employs 11,500, nearly half of whom are in the neighboring city of Pune. Most of these workers have been operating from home during the pandemic. India had one of the world’s strictest lockdowns this year. “There is so much talent in smaller cities that has been untapped so far,” said Madhavi Lall, head of human resources at Deutsche Bank India. “Flexible work arrangements would certainly bring that talent to the fore, especially women who find it difficult to migrate or shift their base.”The pandemic has pushed discussions on future work models and strategies, especially with regard to arrangements like staggering employee shifts, rotating days or weeks of in-office presence, she said. And that along with the change in India’s government rules will enable more women to join the workforce.While India is evolving, cultural norms need to progress further, said Debjani Ghosh, president of Nasscom. Added flexibility could certainly improve women’s participation in the workforce. But it could also increase pressure to simultaneously deliver on the home front.“If work-from-anywhere has to succeed,’ Ghosh said, “the mindset that women have to work as well as single-handedly manage the home has to change.”(adds details on lockdown)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Fed’s ETF Purchases Have Changed Markets Forever
(Bloomberg Opinion) -- Last week’s public spat between Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell may have set an end date for the central bank’s unprecedented intervention in U.S. credit markets. But make no mistake, the legacy of this episode will most likely permanently change investors’ mindset during periods of crisis.In particular, the Fed’s swift purchases of corporate-bond exchange-traded funds set a clear precedent for the type of policy response that traders can expect during the next period of economic distress — or what section 13(3) of the Federal Reserve Act calls “unusual and exigent circumstances.” In contrast to the central bank’s Main Street Lending Program and Municipal Liquidity Facility, which didn’t get many takers, the Secondary Market Corporate Credit Facility revved up in a hurry and provided an even stronger backstop to financial assets than traders saw coming.Recall that on March 23, the Fed unveiled the credit facility, explaining that it could buy high-grade corporate bonds and exchange-traded funds tracking that market. Then on April 9, it amended the parameters to allow for purchases of double-B rated junk bonds as long as the company had investment grades as of March 22. Just for good measure, it also added a provision that it could buy high-yield ETFs, even though that seemingly defied explanation. By May 12, the facility was gobbling up ETFs, executing 35 separate trades totaling $305 million, according to disclosures to Congress. The next day it bought $330 million. And on and on it went until July 23, the last day the central bank added corporate-debt ETFs. By that time, it had switched over to individual bonds, seemingly by skirting the law and creating an entirely new class of eligible assets called “Broad Market Index Bonds.” Those purchases have continued unabated through at least Oct. 29, when the Fed bought debt of Amazon.com Inc., Kroger Co. and Visa Inc., among others.It’s telling that the Fed plunged first into ETFs through secondary-market purchases. The central bank sought to ease financial conditions as quickly as possible, and corporate-bond ETFs, which trade transparently in real time and represent the broad market, are an easy way to do that. In fact, by the time the facility got around to buying individual bonds on June 16, the yield on the Bloomberg Barclays U.S. Corporate Bond index was already at a record low of 2.18%.The ETF purchases were so successful, and so relatively effortless, that such a strategy is not only likely to serve as the blueprint for the next corporate credit crunch, but it also raises the obvious prospect of the Fed going even further during a market meltdown and buying another financial asset that trades on exchanges: U.S. stocks.Powell didn’t exactly slam the door on this option when Politico’s Victoria Guida brought it up during his July 29 press conference. She asked: “What is the scope of your authority under 13(3)? What type of assets are you allowed to buy? Could you buy equities through an SPV, for example?”Here’s his response (lightly edited for clarity):We haven’t done any work or thought about buying equities. But we’re bound by the provisions of 13(3), which requires that we make programs or facilities of broad applicability, meaning it can’t just be focused on one entity. It has to be a broad group of entities. There’s a lot in 13(3) about the solvency of the borrowers. Remember, it was rewritten or amended after the financial crisis, and it was written in a way that was meant to make it challenging to bail out large financial institutions. There was a lot in there to make sure that they were going to be solvent and things like that. So we have to meet those requirements. We haven’t looked and tried to say, “what can we buy?” and “let’s make a complete list.” None of this seems to preclude equity ETFs. Certainly, indexes tracking the broad stock market could include companies that are struggling to stay solvent. But in April, the iShares iBoxx High Yield Corporate Bond ETF (ticker: HYG) had 11.3% of its assets in bonds rated triple-C or double-C. The Fed’s facility now has a $325 million stake in it.Guida even followed up to give Powell one more out to differentiate the Fed from the Bank of Japan, which has been buying equity ETFs for several years: “Is it generally supposed to be primarily directed at debt instruments, since you talked about borrowers?” Powell replied:The statute doesn’t say that, but, yeah, you could read the statute that way if you want. Honestly, we haven’t tried to push it to, you know, what’s the theoretical limit of it. I mean, I think, clearly, it’s supposed to replace lending. That’s really what you’re doing. You’re stepping in to provide credit at times when the market has stopped functioning. That’s fundamentally what you’re doing with 13(3). And so I think you’ve got to sort of work within that framework.In truth, the secondary-market credit facility never functioned like this once it was operational. It’s hard to see how buying ETFs, or even individual bonds on the open market, replaces lending. It mostly serves to prop up debt prices to encourage private lenders to engage in public markets. Ironically, the Fed program that would have actually stepped in to provide direct credit to corporations, the Primary Market Corporate Credit Facility, has never been used. Mnuchin noted on Friday that Fed officials “always like to keep things open.” He added that while some other facilities would be extended for 90 days, “we don’t need to buy more corporate bonds.”He’s right on both counts. As of the end of October, the Fed holds $8.6 billion of corporate-bond ETFs and $4.8 billion of individual securities. While that’s still just a fraction of the facility’s potential firepower, adding more debt in the secondary market with yields at record lows isn’t serving as a “backstop” in any sense of the word. However, I’ve argued for extending the lifelines for municipal and Main Street borrowing precisely because they’re only ever used by those who need it the most, like New York’s Metropolitan Transportation Authority, which is facing a fiscal reckoning.It’s still unclear how much of Mnuchin’s decision was driven by prudence versus politics. Either way, Powell said in a letter released late Friday that the Fed would return the money to Treasury as asked, meaning the central bank’s corporate credit facilities will be shut down after New Year’s Eve, earlier than it anticipated.That shouldn’t bother investors too much. Instead, they’ll likely take comfort in knowing what the central bank and Treasury are capable of in credit markets during the next unforeseen crisis and how that’s just a stone’s throw away from directly intervening in equities. For better or worse, the “Fed put” is here to stay.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Fool.co.uk
Are value shares coming back into favour? I hope so and this is what I’ll be buying
With value shares potentially set for higher gains in the coming months and years, Andy Ross explains some of the ones he’ll likely buy. The post Are value shares coming back into favour? I hope so and this is what I’ll be buying appeared first on The Motley Fool UK.
