Emerging markets

Hong Kong Shariah-Compliant Launch Sells

Sep 22nd, 2014 | Filed under: Behavioral finance, Best Practices, Emerging markets, Today's Post

If I should declare that I will never eat duck, and then I simply re-name certain ducks “chickens” and eat them, then people who genuinely as a matter of principle refuse to eat duck may consider me a false friend. And those who have no objection to the eating of duck may think me a silly goose.


BIS to US Fed: You’re Messing with the World

Aug 25th, 2014 | Filed under: Currencies, Emerging markets, Forex, Today's Post

There are several channels for spill-over effects, whereby the actions of the Federal Reserve and the ECB can have grave consequences around the world. Psychological consequence, in particular herding, is among them.


Eurekahedge: Europe-Focused Managers Took Hits in July

Aug 20th, 2014 | Filed under: Emerging markets, Performance, Analytics & Metrics, Today's Post

Banco Espirito Santo, and its CEO Salgado, had emerged from an earlier round of crisis (way back in 2012) with a roseate smell. Their latest smell ... not so good.


All Regional Mandates in Positive Territory YTD

Jul 28th, 2014 | Filed under: Alpha Strategies, Emerging markets, Performance, Analytics & Metrics, Today's Post

The latest report from Eurekahedge mentions that though instability is "brewing again in the Middle East," things have settled down a bit in Eastern Europe. This report was written prior to the shoot down of a Malaysian jet over the Ukraine.


Looking at the Future of World Wealth McKinsey-style

Jul 21st, 2014 | Filed under: Emerging markets, Institutional Investing, Today's Post

In Asia the high-net-worth population still consists largely of the first-generation wealthy. So: what are these Asian entrepreneurs looking for in their private banking services? That is one of the questions McKinsey considers.


Why Yellen is Wrong on ‘Resilience’

Jul 13th, 2014 | Filed under: Currencies, Emerging markets, Today's Post

The Chair of the Federal Reserve cannot with any plausibility look upon market bubbles as something exogenous, something that just happens to the earth, like a meteor shower, something from which she and others in her august circles can seek to protect us.


May Numbers: Long Equity Beats Event-Driven Peers in Asia

Jul 8th, 2014 | Filed under: Alpha Strategies, Emerging markets, Indexes, Today's Post

GFIA says that most of the Asia Pacific managers it tracks generated substantial returns above the relevant index in May 2014. The long-biased firms did best there, their event-driven peers … not so much.


SCOTUS Gives NML a Sweeping Win Over Argentina

Jun 25th, 2014 | Filed under: Alpha Strategies, Emerging markets, Regulatory, Today's Post

Justice Scalia's opinion has the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention, Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer are on board. On Monday, June 16th, the U.S. Supreme Court delivered a stunningly complete victory for NML Capital, the holdout bondholder in the much-watched litigation arising out of Argentina’s 2001 bond defaults. On the one hand, SCOTUS refused to hear Argentina’s appeal from the Second Circuit’s decision on what the issuing documents meant by the pari passu language. A decision not to decide has no precedential significance itself, but this of course leaves the Second Circuit’s decision, issued in October 2012, intact. Both as a matter of the law as it applies to this case, and as a matter of precedential significance for many similarly worded documents, the Second Circuit is the circuit that counts. What is Left Standing? The Second Circuit left standing, and now the Supreme Court has also left standing, a district court injunction against any payments that in any way rank holders of the restructured debt over the hold-outs. What the Second Circuit said was that in the pari passu clause in the issuing documentation of these Fiscal Agency Agreement bonds (FAA), the sovereign “manifested an intention to protect bondholders from more than just formal subordination.” The language was there to protect them precisely from what Argentina has more recently tried to do, that is, to protect them from any arrangement by which “Argentina as payor [discriminates] against the FAA bonds in favor of other unsubordinated foreign bonds.” On the same day (a few minutes later) SCOTUS also delivered a full-dress opinion on a related issue. The New York district court has interpreted the Foreign Sovereign Immunities Act of 1976 narrowly, so as to allow for discovery orders that assist NML in its search for Argentina assets in third countries where they may not be immune. Since Argentina owes NML more than $1.5 billion, it has plenty of incentive to continue this search. The Supreme Court upheld that statutory construction. The opinion wasn’t closely split. There was one dissent (Justice Ginsburg) and one recusal (Sotomayor). Still, the opinion for the other seven Justices, written by Justice Scalia, had the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention. The 7-justice majority included Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer. What Happens Next? Argentina’s immediate reaction was that it will fight on, apparently by continuing to pay the favored creditors [Exchange Bondholders] and by continuing to exclude from these payments the FAA hold-outs. “What I cannot do as President is submit the country to such extortion,” says President Cristina Fernandez. The legal fight is over, though. And I should add that part of what SCOTUS has let stand here is a district court order the copies of its pro-holdout injunction be provided to “all parties involved, directly or indirectly, in advising upon, preparing, processing, or facilitating any payment on the Exchange bond.” Argentina’s New York agents cannot now give out money to the Exchange bondholders without aiding and abetting the defiance of a court order. Argentina must now either pay $907 million to the plaintiffs by the end of this month, or lose the ability to use U.S. financial intermediaries of any kind to pay the holders it has favored. The only possible means by which Argentina can resist the “blackmail” now and continue to pursue the policy it has in recent years is if it can pay the favored creditors without the involvement of any financial intermediary subject to U.S. court orders. This would prove tricky, especially with a tight schedule. The Rest of the World And of course even success there leaves Argentine open to the second of SCOTUS’ two punches, discovery and perhaps successful seizure of assets in third countries. Leaving Argentine matters to the side: what will be the consequence of NML’s victory in this matter, and the now-regnant Second Circuit reading of the pari passu clause, on the market for EM nation bonds? If, as at least some authoritative sources have indicated through this long fight, the pari passu language used in Argentina in the FAA followed “standard language included in substantially the same form in numerous credit documents” and if this decision changes how that language has been understood, then the markets will have to develop work-arounds: because from time to time sovereigns will default, and some sort of restructuring will have to occur. How those work-arounds will work is beyond me. But then, given my poor record trying to predict the twists and turns of this saga that is perhaps for the best.


Eurekahedge: Vehicles Ran More Smoothly in May Than In…

Jun 22nd, 2014 | Filed under: Alpha Strategies, Emerging markets, Today's Post

Given recent political news, it is perhaps unsurprising that, in the words of Eurekahedge, hedge fund managers "investing with an India focus and employing systematic trading strategies [posted] strong gains" in May 2014.


Contexts for Population Growth, U.S. and China Co-Dependence, Fracking

May 26th, 2014 | Filed under: Agriculture, Book review, Emerging markets, Today's Post

What is the big picture for these authors? Are China and the U.S. trading places, so that China will have a middle class and the U.S. won’t? No. What is happening is a bit more subtle than that.


Brave Phalanx: Asian Managers & Investors Remain Undaunted

May 21st, 2014 | Filed under: Alpha Strategies, Emerging markets, Today's Post

Investors continue to "crave for exposure" to Asia, and even to Japan. India is especially exciting to some, perhaps because of hopes for the near-term political success of the BJP.


Argentina v. NML Capital: The Discovery Question

Apr 24th, 2014 | Filed under: Alpha Strategies, Emerging markets, Legislation/Court rulings, Today's Post

The Deputy Solicitor General for the U.S. took Argentina's side in a discovery dispute arising from the debt collection efforts of NML Capital, arguing for international reciprocity: that is, from the notion that sovereign nations must help each other keep some things secret.


‘Prediction is Tricky, Especially about the Future’

Apr 22nd, 2014 | Filed under: Alpha Strategies, Emerging markets, Today's Post

Some respondents told Intralinks that Germany is a less attractive M&A target for international investors than it might be, due to the impact of rising energy costs there, especially on manufacturing.


Investment Views on Emerging Markets Exposure Brighten

Mar 24th, 2014 | Filed under: Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

Have the emerging market assets and the funds focused thereon warranted this return of confidence by their recent returns? The answer to this question can't be any more emphatic than, "yes, somewhat."


Managers and Skill: Japan, India, and the Arab World

Feb 2nd, 2014 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Emerging markets, Today's Post

A new report from GFIA highlights some asset manager successes: in the Japanese markets riding the wave of Abenomics; in India benefitting from the weakness of the rupee; and in the Arab world thriving against the backdrop of political turmoil.


Celent on a Turning Point in China: Three Trends

Jan 28th, 2014 | Filed under: Currencies, Emerging markets, Risk management, Today's Post

The need for risk management in general and, more specifically, the inability of HNW Chinese otherwise to hedge against RMB exchange risk, is driving them to invest overseas.


Sovereign Immunity and Global Discovery Demands

Jan 15th, 2014 | Filed under: Emerging markets, Insolvency, Today's Post

The U.S. Supreme Court has agreed to hear an appeal from a 2d Circuit decision in the long-running litigation between hedge fund NML Capital and the Republic of Argentina. Specifically, it is set to address whether a judgment against Argentina opens the door to discovery of Argentina's assets around the world, commercial and non-commercial alike.


Alternatives and Thailand’s Infrastructure

Jan 14th, 2014 | Filed under: Alternative Mutual Funds, Emerging markets, Infrastructure, Today's Post

Despite the uncertainties generated by contemporary politics, Cerulli is convinced that "investing in alternatives such as property and infrastructure funds should remain a major theme in the Thai mutual fund space in 2014."


The Global Economy in 2014 – 5 Key Trends

Dec 26th, 2013 | Filed under: Emerging markets, oil, Today's Post

Guest columnist Shane Brett looks at the year ahead.


A Bird’s Eye View of India’s Real Estate Development and Regulation

Dec 23rd, 2013 | Filed under: Emerging markets, Infrastructure, Real Estate, Today's Post

Guest columnist Sourabh Jeswani explains regulatory changes in India's real estate market and the opportunities these changes may offer.


Cerulli on the Zombie Apocalypse in China

Dec 22nd, 2013 | Filed under: Emerging markets, Institutional Investing, Today's Post

The numbers of undead mutual funds in China has created a sharp disparity between the fund count and the AUM count. Since no one ever drops out, the fund count only goes up.


Anti-Fragility: South African Central Banker on Dollar and Rand

Dec 9th, 2013 | Filed under: Conference report, Emerging markets, Forex, Today's Post

It is certainly true that a lot of foreign-denominated debt would worsen prospects for South Africa. But even in the absence of such a trap: can a nation boast of anti-fragility (or even, more aptly, of robustness) simply because it has the option of devaluation?


Japan, China, India: Two Big Exceptions and a Rule

Dec 8th, 2013 | Filed under: Emerging markets, Performance, Analytics & Metrics, Today's Post

Even after the worst of the U.S. debt ceiling crisis passed, concerns about the Yen and unsatisfactory second-quarter performance numbers weighed the Nikkei down.


Chinese Challenges and Waiting Games: Cerulli

Dec 1st, 2013 | Filed under: Emerging markets, Forex, Today's Post

The QFII advisory business will for tricky for the smaller fund management companies, because the private firms with which they compete there "tend to boast better investment teams."


The Billionaire’s Club: A 2013 Snapshot

Nov 25th, 2013 | Filed under: Emerging markets, High-net-worth investors, Timely Research, Today's Post

The average billionaire owns four homes. Though most billionaires are “still based” we’re told, “in the same locations where they were raised,” it must certainly be nice to have the three getaway locales.


Slow Growth and Much Tumult for India’s Mutual Funds

Nov 13th, 2013 | Filed under: Emerging markets, Retail Investing, Today's Post

A new report from Celent wonders why the mutual fund industry is growing so slowly in India, and why it is so over-represented in just five of the cities of the subcontinent.


Cyprus: The Land That Money Forgot

Oct 30th, 2013 | Filed under: Alpha Strategies, Emerging markets, Today's Post

Guest columnist Doug Friedenberg turns over a few rocks in Cyprus and finds that there might still be something left.


Argentina: Redefining the Gears of Default & Restructure

Sep 4th, 2013 | Filed under: Emerging markets, Insolvency, Today's Post

On August 28, President Cristina Fernandez of Argentina announced a new bond swap plan. Argentina will offer to swap its outstanding bonds, apparently either of the FAA or of the exchange bondholder vintage, with newly issued bonds that will not have the New York or U.S. law connections the older issuances did.


Three Crises that Will Dominate the Rest of 2013

Aug 30th, 2013 | Filed under: Emerging markets

Shane Brett looks at the remainder of 2013


PrevInvest on EM Funds and the Cycles of Hype

Aug 29th, 2013 | Filed under: Alpha Strategies, Emerging markets, Today's Post

The BRICs as a group have been a disappointment to those who thought they were at a take-off point at the turn of the millennium. In the cycles of investment-market hype, BRICs have been replaced by CIVETS. PrevInvest offers words of caution.


France Enters the Fray over Argentina’s Bonds

Aug 7th, 2013 | Filed under: Emerging markets, Insolvency, Today's Post

France has filed a brief with the U.S. Supreme Court making the case that a Second Circuit decision in the matter of NML v. Argentina "is based on an erroneous understanding of the meaning of pari passu clauses...." Why this is important.


Tolstoy, Happy Families and Asian Managerial Success

Jul 8th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

Asset managers within the Asian boutique universe keep telling GFIA that "asset raising is hard" in the present climate. It isn't going to become easy any time soon, but there is a new level of stability.


Allen & Overy Sides with Pari Passu Pessimists

Feb 26th, 2013 | Filed under: Alpha Strategies, Emerging markets, Today's Post

Allen & Overy’s white paper puts it among those who take a rather gloom-and-doom attitude toward the likely consequences of a recent Second Circuit decision on Argentina's default. Personally, I don't agree that the sky is falling on the sovereign debt market.


Africa: Equities and Beyond

Nov 26th, 2012 | Filed under: Emerging markets, Today's Post

One of the Africa-oriented hedge funds showcased, Altree, expects that as the African market matures short opportunities will become available. Another, Nubuke Africa Multi-Strategy, makes a point of limiting its exposure to South Africa and Egypt (presumably the two most tempting countries of concentration) to no more than half its portfoilio, to ensure that its investments will remain pan-African.


The Perils of Sterilization: Calvo (1991) Was Right

Sep 16th, 2012 | Filed under: Emerging markets, Today's Post

As Guillermo Calvo noted in 1991, one of the problems with sterilization is simply that the larger amount of government debt itself induces higher inflationary expectations "because sticking to a stable price level ... would make servicing the public debt excessively costly from a social and political point of view."