Hedge funds bet against emerging markets

Hedge funds bet against emerging markets

Hedge fund managers are positioning themselves to profit from a slowdown in developing economies, led by overheated credit markets in China. A number of them are buying protection on sovereign debt through credit default swaps.

Since the start of the 2008, China’s ratio of credit-to-GDP has exploded. London-based hedge fund investor Noster Capital believes it is now at higher levels than those seen on the cusp of the credit crises in the US and UK in 2007, Japan in 1990 and Korea in 1998.

Noster’s estimation is based on levels of business, household and local government debt in China but does not include bonds issued by the central government.

Trade of the Week: Porto shorto

Trade of the Week: Porto shorto

The fate of Portugal’s bailout returned to the top of policymakers’ concerns this week, as the resignation of a key government minister prompted market falls in the country's banks.

Trade of the Week: Porto shorto

With stocks in Portugal’s domestic banks facing significant pressure, the country’s stock-market regulator on Wednesday introduced a 24-hour short-selling ban until midnight on Thursday to protect three beleaguered institutions – but wily traders who acted quickly could have got away with a healthy profit.

Deutsche Bank adds UK dealmaker

Deutsche Bank adds UK dealmaker

Deutsche Bank has hired a veteran UK coverage specialist, who has previously worked on high-profile deals for Cookson Group and Logica, as it looks to build on a positive first half for UK investment banking revenues.

Simon Gorringe, a managing director in UK investment banking at Bank of America Merrill Lynch, left the bank late last month, according to the UK's Financial Services Register.

He is set to join the UK coverage team at Deutsche Bank in September, following a period of gardening leave, according to three sources. Gorringe could not be reached for comment.

Liontrust evokes spirit of ‘09

Liontrust evokes spirit of ‘09

 Strong net inflows at Liontrust Asset Management over the past three months have lifted the boutique investment firm to within touching distance of an AUM figure last held in 2009 – just before the departure of two star fund managers.

The UK-listed group said in an interim management statement this morning that assets had hit £3.3bn at the end of June, thanks in part to its 12th successive quarter of net inflows.
The £302m figure for the second quarter was more than three times the inflows for the same period last year and was driven by retail investors, who allocated £134m. Offshore funds brought in a net £179m, but institutional accounted for £11m of net outflows.

An LME dragon dance with David Beckham

The great and the good flocked to Hong Kong this week for the first LME Week Asia since the metals bourse was acquired by Hong Kong Exchanges & Clearing.

The occasion was marked unconventionally, with HKEx chief executive Charles Li dressing up as football legend David Beckham before partaking in a traditional Chinese dragon dance with outgoing London Metal Exchange chief Martin Abbott. Who knew metals could be so fun?

But beyond the glitz and glamour there was also some discussion about the future of the partnership between the two bourses.

With the costumes now firmly stowed and discussions beginning on how Hong Kong can raise its game even higher next year (Alex Ferguson maybe?), Financial News takes stock of where plans are at in the post-HKEx LME era.

KKR’s Genesis Care targets US debt market

Yet another private equity-backed Australian company is tapping the US debt market.

Following successful debt issues by Gresham Private Equity-owned Barminco and Pacific Equity Partners-owned cinema operator Hoyts Group last month, a KKR-owned healthcare business, Genesis Care, has launched a refinancing of its own.

Pickup in hiring points to U.S. economic resilience

(Reuters) - U.S. employers stepped up hiring a bit in May in a show of economic resilience that suggests the Federal Reserve could begin to scale back its monetary stimulus later this year.

The United States added 175,000 jobs last month after adding only 149,000 in April, the Labor Department said on Friday.
The pick up in hiring came despite tax hikes and sweeping budget cuts earlier in the year. The unemployment rate ticked up a tenth of a point to 7.6 percent, which economists called encouraging because more Americans were began to hunt for jobs.