Wednesday 26th November 2014
NEWS TICKER: TUESDAY, NOVEMBER 25TH 2015 - Morningstar has downgraded its Analyst rating for the Fidelity European Opportunities fund to Neutral. Jeremy Beckwith, director of manager research, Morningstar UK comments: “We have assigned the Fidelity European Opportunities fund a Morningstar Analyst Rating™ of Neutral. The fund had previously been placed Under Review following the fund’s management change announced in the summer. It was previously rated Silver. Alberto Chiandetti—who has gained most of his investment experience in the Italian market—took over from former manager Colin Stone on 1 October 2014. He is also responsible for two single-country strategies: Fidelity Italy since 2008, which has a Morningstar Analyst Rating of Silver, and Fidelity Switzerland since 2011, rated Neutral”. According to Beckwith: “This is Chiandetti’s first time running a European mandate and we expect to see him bring in relevant changes to the strategy. Over a full market cycle, he has proven able to execute his process well at the helm of Fidelity Italy; that said, his past results are not fully relevant for this product, given the differences in the investable universe and the opportunity set compared to the country funds. We have therefore assigned a Neutral rating to reflect the uncertainties surrounding the future of this strategy.” - Among the five China ETFs listed on Singapore Exchange (SGX), the three most active China ETFs in the 2014 year-to-date have been db x-trackers CSI 300 UCITS ETF, db x-trackers MSCI CHINA INDEX UCITS ETF, and United SSE50 China ETF. These first two are traded in US dollars, and the latter in Singapore dollars. These three China ETFs are synthetic ETFs that use derivative instruments such as swaps to track the reference index as compared to physical ETFs that hold the securities or assets of the reference index. These three ETFs generated an average 2014 year-to-date total return of 8.4% - The Straits Times Index (STI) ended +4.46 points higher or +0.13% to 3344.99, taking the year-to-date performance to +5.69%. The FTSE ST Mid Cap Index gained +0.21% while the FTSE ST Small Cap Index declined -0.47%. The top active stocks were SingTel (+0.26%), Olam Intl (-2.27%), DBS (+0.20%), ComfortDelGro (-2.71%) and CapitaLand (+0.30%). Outperforming sectors today were represented by the FTSE ST Technology Index (+1.14%). The two biggest stocks of the FTSE ST Technology Index are Silverlake Axis (+2.40%) and STATS ChipPAC (-1.11%). The underperforming sector was the FTSE ST Basic Materials Index, which declined -0.84% with Midas Holdings’ share price declining -1.70% and Geo Energy Resources’ share price unchanged. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (-0.77%), SPDR Gold Shares (+0.43%), STI ETF (unchanged). The three most active Real Estate Investment Trusts (REITs) by value were Suntec REIT (+1.58%), Ascendas REIT (+1.76%), CapitaMall Trust (+0.25%). The most active index warrants by value today were HSI23800MBeCW141230 (unchanged), HSI23600MBePW141230 (-3.23%), HSI24400MBeCW141230 (unchanged). The most active stock warrants by value today were DBS MB eCW150602 (-2.96%), OCBC Bk MBeCW150413 (+1.08%), UOB MB eCW150415 (+6.25%) - Inter-American Development Bank (IDB) is providing financing under a Regional Public Goods Programme (RPG) that will be managed by Caribbean Export Development Agency in its capacity as the Secretariat for the Caribbean Association of Investment Promotion Agencies (CAIPA. The IDB has provided US$900.000 to CAIPA to support several initiatives geared towards increasing foreign direct investment (FDI) into the Caribbean and will be implemented over a two year period - Mexico has posted record FDI of $35.2bn inflow in 2013, nearly double the level seen in 2012, mainly due to Belgian brewer Anheuser-Busch InBev's acquisition of Mexican beer giant Grupo Modelo, which brought in over $13bn, according to figures released by the economy ministry - Eight Italian regions have hired banks to manage a round of bond buybacks for them, the treasury said on Tuesday, in a move aimed at giving indebted local administrations more time to repay their loans. Abruzzo, Campania, Lazio, Liguria, Lombardy, Marche, Piedmont and Puglia have hired Barclays, BNP Paribas, Citigroup and Deutsche Bank to manage any offers to buy back their bonds.

The push and pull of willpower & politics

Friday, 25 May 2012
The push and pull of willpower & politics June will be a battle between political will and economics. While European leaders continue to insist that they want Greece to remain in the eurozone, they are continually being reminded of the economic reality that a break-up of the single currency is almost certain. What is becoming more apparent day by day is that the markets will simply not allow the likes of Greece to have their cake and eat it without paying for it too. Whether Europe’s politicians will listen to those market siren calls for change has yet to be determined. http://www.ftseglobalmarkets.com/

June will be a battle between political will and economics. While European leaders continue to insist that they want Greece to remain in the eurozone, they are continually being reminded of the economic reality that a break-up of the single currency is almost certain. What is becoming more apparent day by day is that the markets will simply not allow the likes of Greece to have their cake and eat it without paying for it too. Whether Europe’s politicians will listen to those market siren calls for change has yet to be determined.

If the Germans and French remain reluctant to put their money in the pockets by either using the ECB’s potential firepower or create a special eurobond then they could themselves become the very nemesis of the single currency that they tell us they are so desperate to keep. Even so, risk aversion continues to whittle down the markets; at the time of writing the index is at 5380, down some 25 points. Traders are watching term support trends at 5335, 5300 and 5275; hopeful bulls out there will be looking for resistance at 5490, 5615/45. This near term downward trend sees the index capped by a downward trend line that also puts some resistance at 5450. Over the longer term now that the index has broken below its 200 day moving average and its upward trend line a close below 5400 could been seen as very negative and we’re now in the ­territory of people not wanting to catch a falling knife.

While immediate market focus will remain on Europe and its affect on the macro picture, there are a couple of important pieces of data that UK investors should note. First, following a surprising improvement in April, unemployment numbers are likely to show a weakening labour market.  There’s little in the way of encouraging data from the UK at the moment, but last month’s data was the first ­indication that unemployment is ­starting to peak. Job creation has come largely from part time rather than ­permanent work and the tick downwards to 8.3% in the rate of unemployment is expected to rise back to 8.4%. Second, it will be interesting to see whether the upcoming Bank of England’s inflation report will encourage the central bank to stick to their hawkish guns or whether the ­confirmation of the double dip recession and a further downgrading of growth projections will result in a more dove-ish tone.



Other European indicators are not great either: Italian ten year yields have crossed back above 6% and for Spain back above 6.5%, meanwhile risk adverse investors piled into German bunds driving their cost of borrowing even lower. This is classic fear gripping the markets once again as the vicissitudes of 2012 look to be playing out in a very similar fashion to 2011. Financial markets detest uncertainty and at the moment they are riddled with them since Greece has been unable to form a government and has had to call for a new round of  elections on 17th June. Up until that point we can expect volatility to remain high and continued pressure to the downside.

The euro made a low of $1.2720 as the situation in Greece continues to deteriorate. Bears sold the single ­currency heavily after socialist leader Evangelos Venizelos announced that talks to form a coalition government had failed and that the public would have to go back to the polls next month. Gold continued to fall as traders dumped risky assets and piled into the safety of the US dollar. Spot gold traded as low as $1541 an ounce.  With little technical support seen until $1531 and no turn around in Greece on the horizon, the down trend looks set to stay firmly in place.

On top of all the European woes there’s also the growing concern that China is slowing down quicker than was previously thought. Add any downturn to the euro crisis and it has negative connotations for global growth.

As ever, ladies and gentlemen, place your bets...

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