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People moves: Amundi bags ex-hedge fund economist; Credit Suisse names new Asia-Pac CIO
Asset Management
<p>Credit Suisse appoints new Asia-Pac CIO. John Woods, a 25-year veteran of the investment arena, has been named Chief Investment Officer Asia Pacific, Private Banking &amp; Wealth Management by Credit Suisse. He will be responsible for developing the unit’s investment views across all assets, and will also help expand the firm’s strategies for its clients.</p> <p>Prior to joining Credit Suisse, Woods was Head of Fixed Income Asia Pacific for Citi Investment Management, and held the role of Chief Investment Strategist for Asia Pacific at Citi Private Bank before that. He also held several key roles in HSBC, including Global Head of Credit Research and Strategy. He will report to Nannette Hechler-Fayd’herbe, the Swiss firm’s Global Head of Investment Strategy, and will be based in Hong Kong. Credit Suisse</p> <p>Amundi Hong Kong nabs economist from Azentus. Mo Ji, an economist who studied under Nobel Laureate Joseph E. Stiglitz, has been appointed Chief Economist, Asia ex-Japan by Amundi Hong Kong.</p> <p>She joins Amundi after four years at Azentus Capital Management – the global macro fund run by ex-Goldman trader Morgan Sze – where she held the role of Global Chief Economist. Before that, Ji spent almost two years Deutsche Bank, working as a research associate for the German firm’s Hong Kong and China research unit. She will report to Amundi’s Global Head of Research, Strategy and Analysis, Philippe Ithurbide. Asia Asset Management</p> <p>M&amp;G Investments Asia MD steps down. Andrew Hendry, M&amp;G Investments’ point man in Asia, will be leaving the British investment firm by the end of the year. This is what they had to say about it:<br /> “His departure follows the successful completion of the first phase of our expansion in the region. Under Andrew’s leadership, M&amp;G has opened offices in Singapore and Hong Kong, hired teams in both locations and manages over $4.5bn of assets for clients.”<br /> Singapore-based Hendry was M&amp;G’s Managing Director for Asia the past 4 ½ years, joining the firm back in 2011 after a two-year stint as a director for Marpac. He also spent 10 years at the Capital Group, taking on several roles including Vice President of Global Distributor Relations. FundSelectorAsia</p> <p>For Capital Markets moves, click here.<br /> Photo: Luke Ma</p>
People Moves: HSBC names new APAC chief; RBC loses fixed income boss
Capital Markets
<p>HSBC names new Asia-Pac chief. Paul Skelton, a long-time HSBC man, has been named by the firm as its new Regional Head of Commercial Banking, Asia-Pacific. Here’s what Simon Cooper, HSBC’s Global Head of Commercial Banking, had to say:<br /> “Paul brings with him a wealth of experience from both MENA as well as from his time within Asia-Pacific. He will focus on capturing the region’s emerging wealth by connecting corporates to opportunities across the world, with a renewed focus on China’s Pearl River Delta as well as the rising Asean.”<br /> Skelton was previously Regional Head of Commercial Banking for HSBC Middle East and North Africa, a post he held after spending 13 years in HSBC’s corporate and investment banking business in the Asia-Pacific region. He will report to the aforementioned Simon Cooper, as well as to Peter Wong, the firm’s Deputy Chairman. Global Trade Review</p> <p>BAML appoints Greater China equities head. Xia Yang, a 10-year veteran investment banking veteran, has been appointed Head of Greater China equities by Bank of America Merrill Lynch.</p> <p>Yang joins BAML from the Swiss giant UBS, where he was most recently Head of Equities for UBS China and chairman of UBS Futures China. He spent almost a decade at the firm, working at its Tokyo office from 2005 to 2007 and at its Hong Kong office from 2007 to 2012 before relocating to Shanghai. He will report to Olivier Thiriet, Head of Asia-Pacific equities for the American firm. Finance Asia</p> <p>RBC loses fixed income boss. Frédéric Lainé, an old hand in Hong Kong’s fixed income trading scene, has reportedly left RBC Capital Markets sometime this month.</p> <p>Lainé, who has over 20 years of rates and currency experience under his belt, was the Canadian firm’s Head of Fixed Income and Currencies for Asia the past four years. Prior to joining RBC, he was Asia ex-Japan chief of Credit Agricole’s Financial Institutions Group, and served the French firm as its Asia ex-Japan fixed income trading head from 2004 to 2010. Before that, he spent 12 years at Credit Lyonnais, with his most recent post there being Head of Interest Rate Derivatives, Asia ex-Japan. Global Capital</p> <p>For Asset Management moves, click here.<br /> Photo: Wendy</p>
Asia's bulging unicorn birth rate is close on US heels
Venture Capital
<p>When it comes to churning out unicorns - startups valued over $1 billion -  the US rides high, but the Asian stampede is growing. For now at least. </p> <p>Business Insider points out that while many expect a  unicorn extinction event soon, this does little to stop the rise in the number of unicorns coming into existence.</p> <p>CB Insights' Unicorn Tracker reveals that of the current 137 unicorns, 83  are in the US. The rest are found in Asia, Europe, and South America. China alone had 25.</p> <p>But the gap between Asia and the US is closing, In the second quarter of 2015, the US produced 12 new unicorns and Asia created nine, buoyed by several mega-financings. These included  Tujia, Panshi, and One97 Communications which each raised in excess of $200 million.</p> <p>A look over the past year shows that Asia has produced 20 unicorns, nearly two-thirds of the US's 34. This is impressive considering the relative infancy of Asia's start-up ecosystem compared with that of the US.  The only issue is whether Asia will maintain this kind of momentum in the face of slower economic growth in China.<br /> Photo: Owlana<br /> &nbsp;</p>
China’s President Xi and his reform agenda – really
Capital Markets
<p>&nbsp;</p> <p>Thanks to misguided stories about President Xi’s reforms, America risks losing the opportunity to participate appropriately in China’s massive economic rebalancing and reform drive.</p> <p>In their Animal Spirits, George A Akerlof and Robert J. Shiller, two Nobel Prize winners, show how human psychology drives the economy and why it matters for global capitalism. In particular, they show how stories move markets and are themselves a real part of how the economy functions.</p> <p>The same goes for other economies, including China. What “we” in America know about China is filtered through aggregate stories by Washington’s political pundits, policy wonks, economic analysts, and news oracles. Some stories reflect realities; others don’t. Still others are misguided and flawed, while the rest have self-serving agendas.</p> <p>As President Xi Jinping is in his first official state visit in the U.S., he remains an enigma to most Americans – not in spite of these stories, but because of them.</p> <p>Stories about Xi’s secret agenda</p> <p>After his first year in power, leading media, such as Bloomberg, reported that “Xi amassing most power since Deng raises reform risk.” After two years, the Chinese president was portrayed in the West as “Xi who must be obeyed” as The Economist put it in its cover story, calling him the most powerful Chinese ruler certainly since Deng, and possibly since Mao.</p> <p>What united these stories, which quickly spread across the world via lesser-tier media channels, was their common denominator: Xi had acquired too much power.</p> <p>More recently, Washington’s stories would like us to believe that the problem with President Xi is not that he has too much power, but that he is increasingly powerless.</p> <p>The new conventional wisdom came about after Chinese equity market volatility, which the Financial Times thought showed that “Xi’s imperial presidency has its weaknesses.” That wisdom was quickly seconded by the Wall Street Journal, which reported that crises put dents in Xi’s armor as “Chinese president is looking more vulnerable than at any time since taking office in 2012, insiders say.”</p> <p>Despite the demise of the Cold War, the West’s old imperial inclination to see the world through the glasses of good (“we”) and evil (“they”) permeates the Xi biographies. From Foreign Affairs and Foreign Policy to the Atlantic and the New Yorker, the story starts with an “insider” anecdote, a political recollection or recent event that presumably serves as an intro to the Xi narrative. In reality, it is a Potemkin bridge because of its basic point: If you serve in a Communist Party, you are “Born Red,” as Evan Osnos entitled his Xi story in the New Yorker – not one of “us” but “them,” and thus neither credible nor trustworthy.</p> <p>Xi’s policy stance d</p>
It’s not easy
Hedge Funds
<p>Memo to: Oaktree Clients</p> <p>From: Howard Marks</p> <p>Re: It’s Not Easy</p> <p>In 2011, as I was putting the finishing touches on my book The Most Important Thing, I was fortunate to have one of my occasional lunches with Charlie Munger. As it ended and I got up to go, he said something about investing that I keep going back to: “It’s not supposed to be easy. Anyone who finds it easy is stupid.”</p> <p>As usual, Charlie packed a great deal of wisdom into just a few words. Let’s take the first six: “It’s not supposed to be easy.” While it’s pretty simple to achieve average results, it shouldn’t be easy to make superior investments and earn outsized returns. John Kenneth Galbraith said something similar years ago:</p> <p>There is nothing reliable to be learned about making money. If there were, study would be intense and everyone with a positive IQ would be rich.</p> <p>What Charlie and Professor Galbraith meant is this: Everyone wants to make money, and especially to find the sure thing or “silver bullet” that will allow them to do it without commensurate risk. Thus they work hard (actually, study is intense), searching for bargain securities and approaches that will give them an edge. They buy up the bargains and apply the approaches. The result is that the efforts of these market participants tend to drive out opportunities for easy money. Securities become more fairly priced, and free lunches become harder to find. It makes no sense to think it would be otherwise.</p> <p>And what about the next seven words: “Anyone who finds it easy is stupid”? It follows from the above that given how hard investors work to find special opportunities, and that their buying eliminates such prospects, people who think it can be easy overlook substantial nuance and complexity.</p> <p>Markets are meeting places where people come together (not necessarily physically) to exchange one thing (usually money) for another. Markets have a number of functions, one of which is to eliminate opportunities for excess returns.</p> <p>Ed calls me and bids $10,000 for my car. Then he offers to sell it to Bob for $20,000. If Ed’s lucky and we both say yes, he doubles his money overnight. To put it simply, anyone who expects to make money easily trading cars this way either thinks (a) Bob and I are idiots or (b) the market won’t function in a way that enables us to know about the fair value of my car. If these conditions were met, it would be an “inefficient market.”</p> <p>But if Bob and I have access to market data on used car pricing, Ed’s chances of pulling off this deal are greatly reduced. In most markets, transparency tends to reveal and thus preclude obvious mispricings. (Thanks to the incredible gains in access to data by way of the Internet, this is certainly more true today than ever before.) In my view, this is a good part of the basis for Charlie’s comment: anyone who thinks it’s easy to achieve unusual profits is overlooking the way markets operate. This memo is largely about the challenges they present.</p> <p>Second-Level Thinking</p> <p>I always thought that when I retired, I would write a book pulling together the elements of investment philosophy discussed in my memos. But in 2009, I got an email from Warren Buffett saying that if I’d write a book, he’d give me a blurb for the jacket. It didn’t take me long to move up my timing.</p> <p>Columbia Business School Publishing had been talking to me about a book, and when I told them I was ready, they asked to see a sample chapter. For some reason, I was able to sit down – without previously having given the topic any organized thought – and knock out a chapter about the importance of something I labeled “second-level thinking.” This is a crucial subject that has to be unders</p>
Daily Scan: Japan ends higher on BOJ hopes, rest of Asia dips on choppy trade
Capital Markets
<p>Updated throughout the day</p> <p>September 25</p> <p>Good evening. The Japanese Nikkei 225 index ended on a upswing of nearly 2%, riding on a wave of optimism triggered by hopes that the Bank of Japan (BOJ) will step up easing at its October policy meeting. Prime minister Shinzo Abe met with BOJ governor Haruhiko Kuroda today following disappointing inflation data released early in the morning, the consumer-price index  fell for the first time in two years.</p> <p>The rest of Asia was largely down following a choppy day of trade, thanks to lingering growth anxiety. China markets closed lower: the Shanghai Composite Index is down 1.6%, while the Shenzhen Index finished down #.4%. Hong Kong's Hang Seng index rebounded before closing to finish up 0.4% but was still down for the week by 3.4%</p> <p>Here’s what else you need to know:</p> <p>Abe announces goal to boost Japan’s economy by 20%.Speaking at a news conference, Japanese Prime Minister Shinzo Abe announced his goal to expand his nation’s economy from around $4.05 trillion to $5 trillion. The Nikkei and the Topix sure loved it, but how he plans to do it is totally up to speculation. Wall Street Journal (paywall)</p> <p>PBOC: long term yuan depreciation “unlikely.” Sheng Songcheng, the head of statistics at People’s Bank of China, said in a speech that a long-term drop in the yuan’s value will be unlikely due to several factors including the nation’s higher domestic interest rates and fairly strong economic growth. MarketWatch</p> <p>Yellen receives medical attention. After struggling to finish the last few lines on her speech on inflation, Federal Reserve Chair Janet Yellen was seen by the medical staff at UMass Amherst for possible dehydration. She’s feeling much better now though, and appears ready to let rates rock. Reuters</p> <p>JP Morgan still knows how to make money. Its metals storage and commodity businesses may have posted a loss last year but that doesn’t mean JP Morgan doesn’t know how to make money out of it. Filings show that just before it sold loss-making commodities unit, Jamie Dimon’s port in the storm managed to grab a one-time $150 million dividend. Reuters</p> <p>Macau casino losses pile up.Much like some of its clientele, Macau’s casinos are losing money at a fast clip. After posting a 36.5% year-on-year revenue dive, the casino sector’s daily run rate slipped 19% from the week before and 18% from the quarter’s average, prompting people to withdraw their deposits from various junkets. SCMP (paywall)</p> <p>Cushing drawdowns spike oil prices. Oil prices climbed as much as 1% today after energy intel firm Genscape estimated a 625,000 barrel drawdown out of the Cushing, the mammoth delivery hub of the U.S. oil industry. The estimate came after a 462,000 barrel stockpile drop reported by the EIA, compounding supply worries. Reuters</p> <p>August home sales rise. The revision of new single-family home sales in the U.S. shows a 5.7% rise last month. Reuter</p>
Prosper Marketplace acquires BillGuard
<p>Prosper Marketplace is strengthening its competitive stance through an acquisition of financial security startup BillGuard.</p> <p>Prosper Marketplace, an online loan market, is hoping the addition of BillGuard will help them edge out their competitors, reports the New York Times. Lending Club, OnDeck, and other online lenders have seen their stocks drop sharply this year. Prosper has also struck up deals with companies like American HealthCare Lending, which helps finance elective surgeries.</p> <p>The BillGuard deal, valued at about $30 million, is mostly in cash, with some stock as retention incentives for BillGuard staff. BillGuard services will add fraud monitoring and financial management to Prosper.<br /> "It really takes us from being a one-dimensional marketplace to potentially a multiproduct company providing more value," says Stephan Vermut, executive chairman at Prosper Marketplace.<br /> Photo: Simon Cunningham</p>
Daily Scan: Caterpillar slashes jobs and drags down Dow; Stocks drop for third straight day
Capital Markets
<p>Updated throughout the day</p> <p>September 24</p> <p>Good evening,</p> <p>Stocks fell for the third straight day Thursday. The Dow lost 0.5%, recovering slightly from its lowest mark earlier in the day. The Nasdaq fell 0.4% and the S&amp;P 500 slipped 0.3%. President Xi JinPing isn't letting on if the latest news on an alleged Chinese hacking is ruining his visit. On Wednesday, he met with 28 high tech executives, including Facebook's Mark Zuckerberg. Facebook is a no-go in China. This week, the news went from really bad to worse on the Office of Personnel Management hack. The government now says hackers stole 5.6 million fingerprints. Thursday, Xi leaves the West Coast to join President Obama, Secretary of State John Kerry, and National Security Advisor Susan Rice at a working dinner.</p> <p>Here's what else you need to know:</p> <p>Janet Yellen says interest rates should rise this year. Yellen told the University of Massachusetts that inflation pressures should build in the coming years. Read the 40-page speech here.</p> <p>Caterpillar to cut 10,000 jobs. Caterpillar slashed its 2015 revenue forecast, adding that as many as 10,000 jobs will be lost through 2018. Equipment orders have fallen as miners and energy companies put projects on hold. Reuters</p> <p>Duck boat, bus collision leaves at least two dead. A duck tourist boat and a tour bus collided in Seattle Thursday, killing two and critically injuring at least nine. It's not clear why the duck boat hit the bus. CNN</p> <p>Towers Watson CEO sold stock before merger deal. CEO John Haley made almost $10 million by selling his company's shares before a merger deal was announced between Towers Watson and Willis Group Holdings. The deal, announced at the end of June, valued Towers Watson stock at $125.13 a share, a 9% from the prior day's close. Wall Street Journal</p> <p>Suicide bombs in Yemen kills at least 25. The bombing in a mosque Thursday hit during prayers commemorating the beginning of the Muslim holiday Eid al-Adha. A Yemeni-affiliate of ISIS claimed responsibility. A similar attack in Sana killed 32 people earlier this month. New York Times</p> <p>Pope Francis racking up historic moments. The pontiff addressed a joint session of Congress -- a first for the Vatican. The pope challenged Congress to fight climate change, overcome income inequality, battle the victimization of minorities, and be more accepting of undocumented immigrants. Pope Francis then went on to have lunch with homeless people at Catholic Charities in D.C. CNN</p> <p>Putin and Obama to meet in NYC. The embattled world leaders will discuss the tensions regarding Syria and Ukraine, while the leaders are in New York for the U.N. General Assembly. Wall Street Journal</p> <p>Volkswagen to name new CEO. Matthias Muller, current CEO of Porsche, will replac</p>
Odey: We are already in a deflationary downdraft amidst currency wars
Hedge Funds
<p>It's been a rough year for Odey Asset Management's OEI Mac fund. Year-to-date the fund is down 15.8%, although, after a strong August, the fund has managed to regain some composure. according to a September 23rd letter to investors reviewed by ValueWalk.</p> <p>Odey Asset Management founder Crispin Odey’s flagship hedge fund slumped 19.3% during 'Bloody April' after it was caught out when the Australian dollar strengthened against the US dollar.</p> <p>During August, the OEI Mac fund's USD share class gained 6.8%. The performance is even more impressive when compared to the MSCI Daily TR Net Europe USD return of -6.9% and an MSCI Daily TR Net Europe GBP return of -5.3%. Over the past twelve months, the OEI Mac fund has gained 8.7%, a relative outperformance against the MSCI Daily TR Net Europe index of 16.9%.</p> <p>Odey OEI MAC Fund performance</p> <p>Odey's short book and active currency positions were the largest contributors to the fund's performance during the month. Active currencies made a positive contribution of +1.3% to performance; this was attributable to the short AUD/USD position. All other active currency positions made negative contributions.</p> <p>Odey OEI MAC Fund currency exposure</p> <p>Odey: Equity performance<br /> Moving away from currencies onto equities, Odey's short book made a sizeable positive contribution of +12.7% during August after accounting for currency hedging. Positions that contributed most to this performance, before currency hedging were Las Vegas Sands Corp. (NYSE:LVS) (+157bps), Sands China (+99bps) and Swatch (+84bps). A negative performance from Kellogg (-10bps), Antofagasta (-9bps) and Netflix, Inc. (NASDAQ:NFLX) (-9bps) detracted from performance.</p> <p>On the long side, the equity book made a negative contribution for the month of 6.7%. Positive contributions before hedging came from Pendragon (+44bps), Circassia<br /> Pharmaceuticals (+7bps) and TUI (+6bps). However, negative contributions far outweighed these gains. Holdings in Sky, LM Ericsson Telefon, and Barclays PLC (NYSE:BCS) (LON:BARC) detracted -142bps, -45bps and -39bps from overall performance respectively.</p> <p>Government bonds held by the fund returned -0.4%.</p> <p>Odey: Cloudy outlook<br /> Crispin Odey's uses his Manager's Report within the Odey OEI MAC Fund monthly newsletter to warn of further pain ahead for financial markets.</p> <p>The developed world averted a recession in 2008 by cutting rates to 0%, then embarking on QE. We all hoped we would get healing, then growth, then inflation, then rising rates. But we have experienced the distortions of QE without generating enough growth or inflation. Now central banks have ended up with the safe assets and driven pensions and savers into everything else. We haven’t achieved inflation, so we haven’t worked through our debt and the solution may ha</p>
11 European unicorns hit $1B valuation
Venture Capital
<p>The U.S. may be the unicorn kingdom, but Europeans are creating their own tech unicorns too.</p> <p>In the last 12 months, Europe has birthed 11 new startups with valuations of $1 billion or more, reports Business Insider. Most of the list comes from London or Germany, and three are finance related. Here they are:</p> <p> Farfetch-$1 billion- London-based fashion startup. Serves as a storefront for more than 300 global boutiques.<br /> Funding Circle- $1 billion- London-based peer-to-peer lending platform.<br /> TransferWire- $1 billion- London-based, with a background from Estonia, peer-to-peer money transfer service.<br /> Auto1 Group- $1 billion- German-founded car sale startup.<br /> Shazam- $1 billion- Music identification app with ambitions to move beyond just songs.<br /> Home24- $1.03 billion- Online German furniture store.<br /> Ayden- $1.5 billion- Netherlands' payments company.<br /> BlaBlaCar- $1.6 billion- European car sharing service.<br /> HelloFresh- $2.9 billion- German-based food delivery startup.<br /> Delivery Hero- $3.1 billion- German-based platform that allows apps and local websites to partner with local restaurants in other countries.<br /> Global Fashion Group- $3.1 billion- A compilation of fashion startups in emerging markets.</p> <p>Photo: Steven Depolo</p>