Investment Banking MC

Investment Banking MC

Volatility drives decline in equities popularity

Posted by Anton Murray Consulting on . Posted in Funds Management MC

InvestorDaily

Investor confidence in equities fell significantly in the first half of 2016, suggesting investor sensitivity to volatility, according to research from Colonial First State Global Asset Management. The company’s Equities Preference Index (EPI) declined by a total of 29 per cent in the first six months of the year Colonial First State Global Asset Management (CFSGAM) said, compared with only 3 per cent and 9 per cent declines respectively in the second and first halves of 2015. “The decline was relatively evenly spread from January to May, averaging about 5 per cent per month, suggesting investors took some time in reacting to the market weakness and volatility early in the half,” the company said.

“Surprisingly, the decline in June ahead of the Brexit vote was smaller at just 1 per cent, however this may be because investors already reduced their positions ahead of the vote.” CFSGAM said the sizeable decline in preference for equities was significant due to the “already low starting point” from which it fell. The company’s research also highlighted “a significant difference in equity preference by age”, with younger investors (aged under 35) increasing their preference for the asset class by 3 per cent, where those between 50 and 59 years of age decreased theirs by 39 per cent.

The rest of this article can be found at investordaily.com.au.

Credit Suisse Hires HSBC’s Yeung for New Credit Trading Desk

Posted by Anton Murray Consulting on . Posted in Investment Banking MC

Viren Vaghela, Bloomberg

Credit Suisse Group AG has hired Edwin Yeung from HSBC Holdings Plc to set up a U.S. and European credit trading desk in Hong Kong. Yeung joined the Swiss bank as a director at the end of August and reports locally to Andy Mellor, head of Asia Pacific convertible bond and cash bond trading, according to an internal memo seen by Bloomberg News. He reports globally to Steven Feinberg, head of investment-grade trading for America, and Chris Orr, co-head of investment-grade trading for the Europe, Middle East and Africa region, the memo said. Yeung spent a decade at HSBC and has traded U.S. credit since 2010.

The hiring of Yeung is in response to “significant demand” from customers in Asia to trade U.S. and European investment-grade corporate bonds during local hours, the memo said. It didn’t provide details of the size of the team that would work with Yeung, or whether further hires are planned. Credit Suisse spokeswoman Yukmin Hui, who confirmed the memo, declined to give more details. Bond desks in Hong Kong have been recruiting from rivals in recent weeks amid record sales. UBS Group AG hired two traders, one each from Goldman Sachs Group Inc. and Citigroup Inc., earlier this month, people familiar with the matter said, while Standard Chartered Plc added three in credit trading and sales.

The rest of this article can be found at bloomberg.com.

It’s Not Just Deutsche. European Banking is Utterly Broken

Posted by Anton Murray Consulting on . Posted in Insights

Jeremy Warner, The Telegraph

A little while back I somewhat unwisely penned a column declaring the financial crisis essentially over. All I meant by this was that with the return of full employment and rising living standards, most of the economic wounds of the crisis had healed, at least in the US and the UK. Yet as is evident from the events of the last week, the banking crisis itself is far from over.

Nine years after the initial eruption, it still rumbles on, with the epicentre now moved from the US to Europe. Only it’s not the same crisis; in large measure, it is completely different. Today’s mayhem is not so much the result of reckless bankers and people asleep at the wheel of regulation, but rather of the public policy response to the last crisis itself – that is to say, regulatory overreach and central bank money printing. All eyes are naturally focused on the specific problems of Deutsche Bank, but Deutsche is in truth no more than the canary in the coal mine.

As Tidjane Thiam, chief executive of Credit Suisse, observed last week, as an entire sector, European banks are still “not really investable”. Much the same disease as afflicts Continental banks also applies to British counterparts, including Royal Bank of Scotland, Barclays and even Lloyds. All are fast being enveloped by a perfect storm of negatives, and this time around, it is substantially the policymakers and law enforcers who are to blame.

The rest of this article can be found at telegraph.co.uk.

The Amazing Survival (So Far) of Deutsche Bank

Posted by Anton Murray Consulting on . Posted in Investment Banking MC

Alan Kohler, The Australian

It is quite amazing that Deutsche Bank has so far managed to avoid a run on its deposits — has a bank ever worked harder to earn insolvency than this one? A year ago it announced a new CEO followed by a $2.5 billion fine for rigging Libor and a massive cost reduction. That was just a curtain-raiser. In January, it announced a €6.8bn loss; in February, the CEO told staff that the bank is rock solid — a very bad sign indeed; in March, it disclosed €52bn worth of derivatives on its books and then, on June 29, the IMF put out a report containing this statement: “Deutsche Bank appears to be the most important net contributor to systemic risks in the global banking system.”

The very next day, the US Federal Reserve followed up by announcing that Deutsche had failed its stress test. By July, the share price had halved, but Deutsche Bank was — groggily — still standing. Why any depositor would stick with a bank after all that is anybody’s guess, but, incredibly, it survived.

The rest of this article can be found at theaustralian.com.au.

‘Fearful’ corporates stifling future growth: UBS

Posted by Anton Murray Consulting on . Posted in Funds Management MC

Tim Stewart, InvestorDaily

The decision by business leaders to preference dividends over new investment spending is undermining the potential for future economic growth, says UBS Asset Management. Head of investment strategy at UBS Asset Management Tracey McNaughton said workers, consumers and business leaders have been weighed down by what she called the ‘fear factor’ since the global financial crisis. Business investment has been “lethargic” worldwide, and inflationary pressure continues to evade the world’s developed economies – as indicated by Australia’s low inflation reading last month, Ms McNaughton said.

On the consumer side, the savings ratio in Australia has averaged 9.8 per cent of income since the GFC, more than double the average of the 20 years prior to 2008 (3.9 per cent), she said. “Just as the Great Depression left lasting scars on the household psyche, the GFC has left workers, consumers and business leaders fearful and conservative,” Ms McNaughton said. “Yield-hungry” conservative investors are encouraging companies for paying dividends and conducting stock buy-backs instead of undertaking new capital investment, she said.

The rest of this article can be found at investordaily.com.au.

Nearly Half of Australia’s AUM in Responsible Investments

Posted by Anton Murray Consulting on . Posted in Funds Management MC

Tim Stewart, InvestorDaily

Almost half of Australia’s $1.24 trillion total assets under management is now invested within an environmental, social and governance (ESG) framework, according to a new report by the Responsible Investment Association Australasia (RIAA). The 2016 Responsible Investment Benchmark Report, released by the Responsible Investment Association Australasia (RIAA), found that 47 per cent ($633.21 billion) of Australian managed funds are invested responsibly. The RIAA divides responsible investment into ‘broad responsible investment’ (or ESG integration) and ‘core responsible investment’ (more aligned with ethical and socially-responsible investment).

Core responsible investment is defined as investment that applies at least one of the following strategies: screening of investment (negative, positive or ‘norms-based’); sustainability-themed investing; impact or community investing; and corporate engagement and shareholder action. Only $51.51 billion is invested in core responsible strategies, according to the report, while $581.63 billion is directed towards broad responsible investment. However, while it is still relatively small, the amount invested in core responsible investment strategies increased by 60 per cent in the year to 31 December 2015, the report revealed.

The rest of this article can be found at investordaily.com.au.

 

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