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Top stock exchange CEO cautious on controversial volatility ETNs

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While long available to institutional players, short volatility trading has only in recent years become accessible through ETNs to retail investors — many of whom, it is suspected, did not fully know what they were getting into. One of the most popular of theseshort-volatility ETNs, known as the XIVand issued by Credit Suisse, lost approximately 90 percent of its value overnight. The losses led Credit Suisse and another short-volatility ETN issuing bank, Nomura, to shutter the respective funds. Credit Suisse has responded saying that investors were clearly warned about the potential risks.

Meanwhile, many firms, including asset manager BlackRock, have called for regulation of these products.

Asked whether he supported tighter monitoring and controlling of these products by regulators, Boujnah advocated rather for clearer dialogue with regulatory authorities.

“I think it’s always good to have a strong and positive dialogue with the regulators, that’s (not only) a matter of whether they should step in or not. It’s a matter of having good conversations on a regular basis with them to make sure that whenever there are loopholes, they’re addressed in due time, and in a way which is market-friendly.”

Euronext is the fifth-biggest stock market in the world by market capitalization, operating in France, Belgium, Portugal, the Netherlands, Ireland and the U.K.

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How a process using carbon dioxide could stop your wine from spoiling

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Whether it’s a dry Chablis or punchy, full-bodied Cabernet Sauvignon, a glass or two of quality wine can be one of life’s small pleasures.

A phenomenon known as “cork taint” can, however, create a host of problems including rancid smells and an off-putting taste.

It’s a problem that Fredérique Vaquer, a winemaker in the south of France, has first-hand experience of.

“One time, I was with a lot of customers, it was a very important tasting and I opened a magnum,” she told CNBC’s Sustainable Energy.

“I had only one magnum … normally, it’s a beautiful wine and that time it was ‘corky’.”

When it comes to cork tainted wine, the chemical compound 2,4,6-Trichloroanisole, or TCA, which can make its way into the cork, plays a significant role.

However, in France, a firm called Diam Bouchage has been developing a process that looks to tackle the issue head on through the use of carbon dioxide (CO2).

Dominique Tourneix, the company’s CEO, explained that its system addressed the problem by using pressurized, “supercritical” CO2.

According to a video demonstration on its website, Diam Bouchage takes this supercritical CO2 — a fluid state of carbon dioxide — and injects it into an autoclave containing granulated cork that’s been pre-sifted.

The idea is that the CO2 passes through the cork, removing all the substances, including TCA, that could taint wine.

The CO2 itself is then “removed, filtered and … recycled in a closed circuit,” while the cleaned and purified cork grain is turned into stoppers at a manufacturing site. Diam Bouchage has also developed a product range which incorporates beeswax and a bio-based binding agent. 

In his interview with CNBC, CEO Dominique Tourneix explained how by-products of the company’s process could also be recycled and reused. 

“Different companies are actually purchasing our extract coming from the cork to use the extract for their cosmetic applications,” he said.

The power of green chemistry

Diam Bouchage’s use of nature-based solutions such as beeswax within an industrial and manufacturing context is also interesting.

Some of the company’s work encompasses so-called “green chemistry.” A relatively broad term, the United States Environmental Protection Agency has defined it as “the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances.”

Paul Anastas is director of Yale University’s Center for Green Chemistry and Green Engineering. Together with John Warner — a chemist who is now president and chief technology officer of the Warner Babcock Institute for Green Chemistry — Anastas co-authored the book “Green Chemistry: Theory and Practice,” a key body of work in the field.

Speaking to CNBC’s Sustainable Energy, he was asked about the relationship between business and science when it came to green chemistry.

“People think I’m joking when they ask, ‘how did you come up with this name, green chemistry, all those years ago?’,” he explained. 

“And I say it’s true that green is the color of the environment but here in the U.S. it’s also the color of our money,” he added.

“So this was about how you accomplish both goals at the same time, that you align environmental and health goals with your economic and profitability goals.”

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China is set to join FTSE World Government Bond Index in October 2021

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A Chinese national flag seen in front of Oriental Pearl Tower in Shanghai on September 8, 2019.

Alex Tai | SOPA Images | LightRocket via Getty Images

SINGAPORE — Major index provider FTSE Russell said Thursday it will add Chinese government bonds to its flagship World Government Bond Index from October next year — a development that will bring billions of dollars of inflows into China.  

The inclusion — which will be China’s third entry into a major global bond index — comes at a time when investors are hunting for yield in an environment of ultra-low interest rates. Several investors estimated that at least $100 billion will flow into China after its bonds debut on the FTSE Russell index.

“I think this is another important landmark in China’s … internationalization of their domestic financial markets,” Ben Powell, BlackRock Investment Institute’s chief investment strategist for Asia Pacific, told CNBC’s “Street Signs Asia” on Friday.

He pointed out that 10-year Chinese government bonds are yielding around 3% which is “a very high number in the global context.”

Boosting foreign participation

China’s roughly $16 trillion bond market is the second largest globally, but is under-owned by international investors.

Pan Gongsheng, deputy governor of the People’s Bank of China and director of State Administration of Foreign Exchange, said in a statement that international investors held 2.8 trillion yuan ($410.69 billion) of Chinese bonds as at end August. That’s less than 3% of the entire Chinese bond market.

Chinese authorities have implemented significant improvements to the fixed income market infrastructure to expand access to international investors.

Joining the FTSE World Government Bond Index could further increase foreign investor participation in the Chinese bond market, which will also boost the yuan, according to Hong Kong-based CSOP Asset Management. The company said the Chinese yuan will be the fourth largest currency in the index, after the U.S. dollar, euro and Japanese yen.

FTSE Russell said it will confirm in March the exact date when Chinese government bonds will debut on its index. Before FTSE, Chinese government bonds had been added to the Bloomberg Barclays Global Aggregate Index and the J.P. Morgan Government Bond Index-Emerging Markets.

“Chinese authorities have implemented significant improvements to the fixed income market infrastructure to expand access to international investors,” FTSE Russell said in a statement announcing its decision on China.   

Those improvements include enhancing liquidity in the bond market, allowing additional choice of counterparties in foreign exchange trading, and better post-trade settlement processes, the company added.

— CNBC’s Eustance Huang contributed to this report. 

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The EU announces its first ever plan to regulate cryptocurrencies

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