Reuters (August 29)
“The prospect of a no-deal Brexit is becoming increasingly feasible in the eyes of investors who are hedging against the risk of the currency tanking if Britain is left isolated from the EU, its largest trading partner.” Bank of America Merrill Lynch has warned that central bank selling of more than 100 billion pounds in reserves “could be a major catalyst for a significant sterling downturn” should the UK leave the EU without a deal.
Tags: BAML, Brexit, Central bank, Currency, EU, Hedging, Investors, No-deal, Reserves, Risk, Sterling, Trading partner, UK
Barrons (August 13)
“Turkey makes up less than 1% of the emerging markets index, but its small size hasn’t kept it from creating big ripples during the dog days of summer. Most investors are steering clear of Turkey, as it grapples with the fallout from years of binging on dollar-denominated debt, but the bigger question is who else could get caught up in Turkey’s crisis.”
New York Times (August 9)
The $30 trillion U.S. stock market hogs the attention, but “the larger domestic debt market—at around $41 trillion for the bond market alone—reveals more about our nation’s financial health. And right now, the debt market is broadcasting a dangerous message: Investors, desperate for debt instruments that pay high interest, have been overpaying for riskier and riskier obligations…. with little concern that bonds can be every bit as dangerous to own as stocks.” The mispricing of risk is still rampant and when spreads rise and defaults begin, “trillions of dollars in invested capital could be lost.” Although, we’re not necessarily “on the verge of a recession. But the corporate debt bubble inevitably will play a role in causing it.”
Tags: Bonds, Bubble, Dangerous, Debt market, Desperate, Interest, Investors, Mispricing, Overpaying, Recession, Riskier, Stock market, U.S.
Forbes (July 9)
“Investors seem willing to bet that the near-term winner of the trade war is Trump. However, the detrimental effects of an escalating trade war are being considered by central bankers here and in Europe. The negative impact mainly comes from a worsening in business sentiment and corporate investment.”
Tags: Business sentiment, Central bankers, Corporate investment, Europe, Investors, Negative impact, Trade war, Trump, U.S., Winner
Institutional Investor (July 5)
“Behind the best performing endowment funds are investment committees stacked with professional investors in alternative asset management, according to new research which found that “Board expertise within alternatives broadly and private markets specifically was proven to lead to higher performance among endowments.”
Tags: Alternative asset management, Board, Endowment funds, Expertise, Investment committees, Investors, Performance
Reuters (July 5)
“Investors watching the trade tit-for-tat between the United States and China may well have reason to fear the havoc a full blown conflict between the world’s two biggest economies could wreak on the global economy.” Furthermore, the collateral damage could be worse than that done to the principals. Due to global supply chains, countries like Taiwan, Hungary, the Czech Republic, South Korea, and Singapore could be equally if not more vulnerable” to fall out from the spat between the U.S. and China.
Tags: China, Collateral damage, Conflict, Czech Republic, Global economy, Hungary, Investors, Singapore, South Korea, Supply chains, Taiwan, Tit-for-tat, Trade, U.S., Vulnerable
Wall Street Journal (June 21)
Investors aren’t quite sure “how to trade a trade war.” Some obvious stocks like Boeing and Caterpillar are being hit hard, but for many others there’s a lack of information on the potential impact, “partly because supply chains are so complex.” While there’s much to “suggest that trade war fears haven’t sunk in properly,” the bigger issue is that it is challenging “to price in something you don’t understand, and the implications of a trade battle are obscure, at best.” We don’t know “precisely which products will be targeted in the next round, or how long the tariffs will last.”
Tags: Boeing, Caterpillar, Complex, Fears, Impact, Implications, Investors, Obscure, Products, Supply chains, Targeted, Tariffs, Trade war
Institutional Investor (June 18)
“Morgan Stanley remains undefeated in its ability to grant investors access to Asian companies—but perhaps not for much longer.” The firm has bagged Institutional Investor’s top spot since 2013, but this year “the New York-based bank tied for first with rival UBS Group, which has been gradually moving up the roster from its fourth-place debut five years ago.”
Tags: Access, Asian companies, Investors, Morgan Stanley, UBS Group, Undefeated
LA Times (June 5)
In a prime example of “hype and plunder,” Domo’s filing for an IPO “may be setting a new low for self-indulgent IPOs.” Once valued at $2-billion, this unicorn is “deeply in the red and burning through cash so fast that if it can’t stage its IPO by August or borrow millions, it will have to shrink drastically—conceivably, reading between the lines, to nothing.” But the “most disturbing aspect of the IPO filing” is the voting rights associated with the new shares. Before the IPO, the founder “has 91.7% of the votes. The IPO won’t change that materially.” This “points to a persistent flaw in Silicon Valley financing: the willingness to give start-up founders unassailable control of their companies, to the point that investors have no recourse if things go blooey.”
Tags: Control, Disturbing, Domo, Flaw, Founders, Hype, Investors, IPO, Plunder, Self indulgent, Silicon Valley, Unicorn, Voting rights
South China Morning Post (May 21)
“The direction is clear, and the pace is picking up. For investors around the world, the biggest mistake would be to ignore China’s markets and their enormous potential now.” As China’s capital markets continue opening up, “investors—be they European hedge funds, pension funds in Australia, sovereign wealth funds from Asia, or ordinary savers around the world—will need to look at what might be a once-in-a-generation opportunity.” The June 1 inclusion of 200 of the mainland’s large-cap companies into the MSCI alone might “prompt well over half a trillion US dollars to pour into Chinese stocks in the next five to 10 years, as institutional investors adjust index-linked portfolios to MSCI’s change.”
Tags: Capital, China, Direction, Hedge funds, Index, Institutional investors, Investors, Large-cap, Mainland, Markets, MSCI, Pension, Portfolios, Sovereign wealth, Stocks
