Saturday 20th December 2014
NEWS TICKER: FRIDAY DECEMBER 19TH 2014: Scotiabank’s Commodity Price Index dropped -4.8% m/m in November (-6.1% yr/yr) and will end 2014 in a ‘deflationary’ mode, says economist Patricia Mohr. "Significant capacity expansion and the defence of market share by major oil and iron ore producers— against a backdrop of lacklustre world economic growth — account for the softness at the end of the year," she says. Mohr adds that the decision by Saudi Arabia not to reduce output to shore up international oil prices, but instead to allow prices to drop to levels curbing US shale development appears to be having a negative impact on confidence in a wide variety of other commodity as well as equity markets. She predicts prices will fall further this month, but will start to rebound in mid 201 - Jonathan Hill, the EU's financial-services commissioner, says he plans to pursue rules that separate a bank's proprietary trading from retail operations. "The sensible thing to do is to seek to make progress quickly" on the issue, Hill said. "There are still areas of risk in some of the biggest and most complicated banks,” reports Bloomberg- CME Group, said yesterday that it will change daily price limits in its CME Feeder Cattle futures effective today, pursuant to its emergency action authority. The current daily price limit for CME Feeder Cattle futures is $3.00 per hundredweight and will change to $4.50 per hundredweight effective on trade date December 18th Additionally, effective December 19th (tomorrow) these limits will have the ability to expand by 150% to $6.75 per hundredweight on any business day in the event that one of the first two contract months settles at limit on the previous trading day. CME Feeder Cattle futures have been locked limit for five consecutive days as a result of various factors. The change to daily price limits is necessary to ensure continued price discovery and risk transfer, says the CME. Daily price limits for CME Live Cattle futures will remain unchanged at $3.00 per hundredweight. Effective Friday, December 19th, these limits will have the ability to expand by 150 percent to $4.50 per hundredweight in the event that one of the first two contract months settles at limit on the previous trading day - The Straits Times Index (STI) ended +16.42 points higher or +0.51% to 3243.65, taking the year-to-date performance to +2.49%. The FTSE ST Mid Cap Index gained +0.29% while the FTSE ST Small Cap Index gained +0.71%. The top active stocks were Keppel Corp (+2.68%), SingTel (-1.02%), DBS (+2.36%), Global Logistic (-3.21%) and UOB (+0.30%). The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+3.13%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+6.38%) and Geo Energy Resources (unchanged). The underperforming sector was the FTSE ST Telecommunications Index, which declined -0.98% with SingTel’s share price declining -1.02% and StarHub’s share price declining-0.73%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+2.56%), DBXT CSI300 ETF (+0.42%), STI ETF (+0.61%). The three most active Real Estate Investment Trusts (REITs) by value were Ascendas REIT (-0.42%), Keppel DC REIT (unchanged), Suntec REIT (+0.26%). The most active index warrants by value today were HSI23400MBeCW150129 (+7.32%), HSI22600MBePW150129 (unchanged), HSI24000MBeCW150129 (+12.50%). The most active stock warrants by value today were KepCorp MBeCW150602 (+21.95%), DBS MB eCW150420 (+29.29%), DBS MB ePW150402 (-18.03%) - Spain’s Director of Public Prosecutions, Eduardo Torres Dulce, has resigned from the post for “personal reasons”, Spanish daily El Mundo reported this morning. A spokesman for the Public Prosecutor’s office confirmed the news by telephone to The Spain Report, saying that Mr. Torres Dulce had informed Justice Minister Rafael Catalá of his decision: “but that it perhaps would not come into effect until they find a replacement”. That decision is taken at cabinet level. The next cabinet meeting for Rajoy’s government is tomorrow morning - Hedge funds including Marshall Wace, Odey Asset Management and Lansdowne Partners are shorting OTP Bank Plc, a Hungarian lender with a Russian subsidiary whose shares have fallen almost 6% this month reports Albourne Village. All three London-based funds took or increased their position this month in OTP, Hungary’s largest lender, according to data compiled by Bloomberg. The ruble rose today in Moscow after plunging as much as 19%against the dollar yesterday, when Russia’s central bank increased interest rates to 17% percent from 10.5 percent in an attempt to stem the decline. The ruble is down 52% this year and has taken a disproportionate beating in the wake of sanctions and falling oil prices. The country still has the third largest currency reserves in the world and so is unlikely to default. According to Eric Chaney, Manolis Davradakis and Greg Venizelos from AXA IM’s Research and Investment Strategy team Russia will likely resort to fiscal stimulus to contain the risk of social and political unrest. Capital controls, political unrest and even default on private hard currency debts are possible outcomes they say. They credit default swaps market is pricing a one-third probability of sovereign default within five years - Indonesia is ramping up financing for its $439bn development program, planning an almost fivefold increase in sales of project sukuk. The government is seeking to raise IDR7.14trn rupiah (around $568m) from notes that will fund particular construction ventures next year, compared with IDR1.5trn this year, which say local press reports, will help finance its estimated spending of about IDR5,519trn from 2015 to 2019 to build roads, railways and power plants.

BNY Mellon releases outlook for Asian hedge funds

Wednesday, 06 February 2013
BNY Mellon releases outlook for Asian hedge funds According to a market outlook report released by BNY Mellon today, the year ahead will likely remain sharply challenging for Asian hedge fund managers looking to raise new investor capital. http://www.ftseglobalmarkets.com/

According to a market outlook report released by BNY Mellon today, the year ahead will likely remain sharply challenging for Asian hedge fund managers looking to raise new investor capital.

The “stars” of recent years that have lodged standout gains will continue to see moderate inflows from their traditional investors – US institutions – while new entrants are turning to ultra-high net worth investors, family offices and their own friends amid a dearth of institutional seed capital.

Commenting on the issues in the continued evolution of Asia’s hedge funds market, Aidan Houlihan, managing director for BNY Mellon’s alternative investment services says: “From my vantage point here in Hong Kong, I believe the gathering trend for 2013 is the continued gradual evolution of Asia’s hedge fund community. Although we expect fewer fund launches over the next 12 months, we do anticipate that the new crop will be more diverse in its range of investment strategies.  This will support Asia’s gradual shifting away from a monolithic emphasis on equity long-short strategies. Already, more esoteric credit and macro-oriented strategies as well as multi-strategy funds have entered the market. Today, equity long-short funds account for roughly 75% of hedge fund assets under management, down from 90% just a few years ago.



“We believe the hedge fund industry in Asia will continue to grow and evolve and provide investors with more options. Whilst it is certainly true that we expect to see fewer launches in 2013, we believe the quality of the funds coming to market and level of assets under management they will raise on launch date will continue to increase.

“In my opinion, one of the main headwinds for the average hedge fund in Asia in the year ahead will continue to be raising capital. The new capital coming into Asia will largely be limited to outliers that have significantly outperformed both peers and the broader market. These fund managers have consistently been rewarded with capital inflows, and investor interest in them remains high.

“Seeding arrangements for early stage hedge funds in Asia have become harder to secure. The spate of high profile launches in the first half of 2012 ultimately proved short-lived. Many, however, have found success tapping less conventional capital raising channels such as family offices, ultra-high net worth individuals and personal friends.  Smaller funds have also adapted by becoming creative in their investor targeting. And renewed interest in hedge funds in general should trickle down to the start-up space, both globally and in Asia. He added.

Investor Concentration

A tricky issue for funds in Asia is the over reliance on US investment,  with 80% of funds currently being raised for Asian products coming from American investment, the majority of the remaining 20% is from European sources, leaving a small amount from regional sources.

Mr Houlihan says : “I believe Asian hedge funds need to try and cultivate a deeper base of investors in their home markets. The majority are overly reliant on foreign capital, which is a trend we expect to continue into 2013.

“The formula for diversifying their shareholder base may be quite simple: better performance. The challenge for the hedge fund industry overall will be maintaining – and in some cases re-establishing – its reputation as an asset class that can outperform the broader market and provide uncorrelated returns. The last couple of years have challenged that reputation. But if hedge funds regain their footing this year, we expect fundraising to improve apace, and Asian fund managers should definitely participate in that trend.”

Related News

Related Articles

Related Blogs

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP