Tag Archives: calendar
Losses Mount For Global Markets As US Considers Syria Action
28 Aug 2013 | 07:14 Nick Paler Markets around the world sold off overnight while oil continued to soar, as the prospect of military involvement in Syria’s civil war grows. As British Prime Minister David Cameron and US President Barack Obama (pictured) meet to discuss the Syrian civil war – and specifically whether the regime has used chemical weapons on its own people – senior military staff in the US have already said they are “ready to go”. The rhetoric has spooked investors, and markets saw even heavier selling overnight, with the US Dow down 1.1% and the S&P 500 off 1.6%. The Nasdaq was impacted more, with the index finishing 2.2% lower, as shares including Apple racked up losses. Asian shares followed suit with the Hong Kong Hang Seng and the Nikkei shedding 1.4% and 1.3% respectively. As stocks dropped both oil and gold have seen an extension of recent rallies. Investors looking once more for safe havens have pushed gold back into bull market territory, up over 20% from lows, and the price climbed again overnight to reach $1,426. While Syria is not one of the world’s largest oil producers, the prospect of further unrest in the region has driven up the price rapidly in recent days, and last night was no different. Gaining another 2.5%, the price of Brent crude is now $117 per barrel. Continue reading
The Next Big Thing? Investors Switch From Emerging To Frontier Markets
27 Aug 2013 | 11:08 Anna Fedorova The poor performance of emerging market equities year-to-date has caused investors to turn to frontier markets in search of better returns. Assets under management in frontier market funds have more than doubled to $3.1bn since the start of the year, according to BofA Merrill Lynch, while EM funds have suffered outflows of $2.1bn. Frontier markets are enjoying a strong year, with MSCI Frontier Markets outperforming both developed and emerging market equities with a return of 14.7% for the year to 20 August, versus 12.1% for the MSCI World and 11.7% for MSCI EM. Adrian Lowcock, senior investment manager at Hargreaves Lansdown, said underperformance from major Asian markets in particular has led investors to look further afield. “With China having disappointed since the 2008 crisis, investors are now looking for the next big thing.” Charles Hepworth, investment director in charge of GAM’s discretionary fund management, has recently sold a global emerging markets fund and replaced it with Templeton Frontier Markets. “Frontier markets are a key area in the emerging market universe for us at the moment and we are shunning more generalist EM funds,” he said. Choosing a frontier markets fund can be tricky, as there are few on offer and many have recently soft-closed due to liquidity constraints. The Templeton fund soft-closed in May at $2bn and Goldman Sachs Asset Management soft-closed its Next 11 fund, which offers exposure to similar countries, in June at $1.7bn. Mona Shah, co-manager of multi-asset portfolios at Rathbones, tipped Renaissance Asset Management’s Eastern European fund as an option for investors wanting to gain access to these markets. Shah added that if the group was to overweight emerging markets, this would be an interesting option due to its exposure to high beta markets, particularly Russia. Meanwhile, Ben Seager-Scott, senior research analyst at Bestinvest, highlighted the BlackRock Frontiers investment trust, which has returned 48.7% over the year to 9 August, according to Morningstar. “The investment trust format means you do not have to worry so much about liquidity because it has a limited life, and it has a sizeable team covering the region, which is very important,” he said. Baring Asset Management is the latest provider to launch a Frontier Markets fund, and Seager-Scott expects many competitors to follow suit over the next ten years. The top performing global frontier markets equity fundsover one year to 19 August are the Schroder ISF Frontier Markets Equity and Charlemagne Magna New Frontiers funds, which have returned 38.9% and 24.3% respectively. Shah said frontier markets are particularly interesting because they have remained uncorrelated to both developed and emerging markets equities, with a correlation of 0.6% for the respective MSCI indices. Before the 2008 crisis, frontier markets followed the performance of developed and emerging equities but, after the crash, money failed to flow back into these markets. Seager-Scott said: “I particularly like frontier markets because they are not as mainstream as emerging markets and therefore not as sensitive to hot money flows and investorsentiment. When investors go into risk-off mode, they pull money out of EM, but that does not happen in frontier.” However, he cautioned frontier markets should be considered a long-term investment owing to their volatile nature. Continue reading
Property To Stabilise As Monetary Policy Normalises – UBS
22 August 2013 Property values are set to stabilise in many Eurozone markets this year and next as European monetary policy normalises, resulting in rising financing costs and risk-free rates, says UBS Global Asset Management. Retail should outperform. In its 2H13 Eurozone market outlook, signed by Head of Research Gunnar Herm, UBS said: “In 2013 and 2014, real estate investors will operate in a slightly improving but still subdued economic environment. UBS does not believe the European Central Bank’s monetary easing policy will continue further, which will result in higher risk-free rates and financing costs. debt availability will remain scarce for assets beyond core property. However, additional lending sources for value-add or opportunistic assets will emerge in the core Eurozone countries as well as for the prime segment in southern Europe. The retail sector will outperform office and logistics due to high income levels and stable capital value and rental growth in most markets from 2014. In the countries hit hardest by the financial crisis, stabilisation is expected for 2015. Best performers, on a total return basis, will be France and Ireland, worst Spain, Portugal and The Netherlands. Logistics remains attractive due to the high, relatively stable income returns in the current low interest rate environment. “We anticipate a broadening range of both returns and opportunities in the sector, with growing retail and manufacturing sector interest for new, tailored space in selective locations across Europe,” said the report. Occupiers will focus on regions and countries with a strong economic outlook. UBS sees Ireland and Norway as the most attractive options for a core portfolio over the next three years. In the office sector, cost-cutting continues as the main driver of leasing activity. Due to low development activities, vacancy levels in the prime segment have been falling, resulting in a supply shortage in CBD locations and rising prime rents. Outside the prime segment, UBS expects continued pressure on capital values. France and Finland are set to outperform on a total return basis, while Germany, The Netherlands, Spain and Italy are likely to underperform. “Even though we do not believe in improving occupier market conditions in the Dutch office market, counter-cyclical opportunities may arise in the prime office segment,” said the report. pie Continue reading
