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Transcript of Internship Report.
Internship Report - Sovereign Credit Data Analysis chez AXA
Who/What is AXA ?
AXA Group is a French global insurance group headquartered in Paris and is a conglomerate of many independently run businesses.
The AXA Group encompasses five operating business segments, which are.
What is Sovereign Risk?
Where is AXA?
Axa's headquarter is in 8th district of Paris.
Currently AXA has it presence in 57 countries.
The company was originally founded in 1816 as the ANCIENNE MUTUELLE, and has been evolving since then expanding its operations worlwide.
The group operates primarily in Europe, North America, Asia Pacific region and the Middle East, Africa, Latin America.
I made a automated tool/mechanism in excel to download sovereign ratings for 64 countries from bloomberg and updating it automatically.
Als, I did the same for GDP (high, low, median) growth rate for 5 set of euro area country to observe the movement of growth trajectory at the begining and end of year.
THANK YOU !!!
Property & Casualty
My presence in Axa
I was working in the AXA GIE group (Group d'interet Economique).
I was in the GCT (Group Credit Team) under the supervision of the Senior Sovereign analyst, Sara Bertin.
Planning, Budget,reporting and Control
Direction des Affaires Financier
Domestic Financial and Non Financial
Sovereign & Domestic Markets
sovereign risk is referred to as risk to debt sustainability of a country, i.e., the probability that debt ratios may cross a certain threshold.
Sovereign risk is a complex combination of risks that feed through a number of channels into the sovereign balance sheet in a non-monotonic fashion . For instance, credit risk from systemic financial institutions will channel through the contingent liabilities component of the sovereign balance sheet, whereas market risk will affect the fiscal revenue and international reserves components.
To assess the economic health of the sovereign instead of a model approach we followed a more traditional approach which was facts and data driven.
My main work was to collect the Data building a dynamic database and dashoards for Euro Area, United States America and 21 Emerging Markets.
At a later stage an analysis on the economic health of US and 10 Emerging Markets was also done.
All the databases had same format.
The data sources were
ECB, AMECO, Eurostat, OECD, BIS, WB.
The main indicators that were analysed were:
GDP (all three aproaches), govt expenditure, budget balance, external debt, credit to economy, banking data, monetary aggregates, labor statistics, Trade statistics and competitiveness.
Undoubtedly growth driven by monetary easing is reducting umemplyment but is leading to uneven growth coming from uneven recovery in the US labor market.
the economy is still struggling to provide sufficient no. of jobs to those who were previously employed in leverage driven activites that are no longer sustainable.
with GDP growth rates at modest rates, accomodative monetary policy, low cost of borrowing, low inflation, crdit borrowing can lead to anticipation of a bubble in the long run.
rising public sector debt of about 88% of GDP pose downside risk for the economy.
Somehow, the improvement in fundamentals has not been inclusive of absolute improvement in labor market, with a lot of young graduates and highly qualified people still unemployed or pursuing part time work. There have not been enough job creations in US yet to absorb its high skilled labor thereby distorting the labor market structure.
We did a same kind of template for 10 EM with the analysis. like South Africa, India, Turkey, Mexico, Hungary, Russia,Colombia , Chile and Brazil
August 2013 had been the most significant month of 2013 after the speculation of Fed Taperig. The speculation for almost all Emerging markets took a toll on their currencies leading to capital flight resulting in huge depreciation of the respective currencies within a short period of time. Also, the rising tension at domestic front in these economies along with upcoming elections in 2014 for most of the emerging economies did lead to a sudden shift of the fundamentals.