Foto: Sonny Abesamis
. La deuda de los mercados emergentes debería comportarse mejor en los próximos años
The Greek crisis dominated news flow over the month, culminating in the country defaulting on its IMF payment. The situation remains fluid and highly uncertain, however, aside from some short-term volatility, the InvestecAM team feels that the wider market impact for emerging market investors is negligible. There have been, in their view, much more pertinent developments for the asset class elsewhere during the month. First, there has been a palpable pick-up in US economic activity after the ‘soft patch’ earlier in the year, which has implications for US interest rates. Second, China’s fiscal and monetary policy appears to be becoming more stimulative, in an attempt to reduce the risks associated with a more severe economic slowdown, says the team in the Emerging Market Debt Outlook.
“Our base case remains that the US Federal Reserve (Fed) will start its rate hiking cycle in September.” It states. However, the firm remains of the opinion that we will see a very gradual tighteningcycle from the Fed thereafter, and even that first hike will likely be accompanied by very dovish wording. Market volatility over June saw investor inflows to EMs weaken to its slowest pace of the year, although EM debtflows remain positive (source: IIF). Volatility may persist until we see greater clarity on the path of Fed rate hikes, but they continue to believe that we will not see drastic outflows from the asset class.
Investec AM remains cautious in its global outlook for growth.The firm is encouraged by stronger data from developed markets, but data flow from emerging markets, in their view, remains disappointing. The asset management firm expects Chinese growth to moderate further. While recent easing measures should prevent a sharp deterioration, they see too little underlying domestic demand for an uptick in growth in the short-term.
“We believe that inflation remains well-contained across most EMs, and the moderate growth outlook in China means we don’t foresee upward surprises from commodity prices, while worries over any upside risks from El Nino weather effects are subsiding” the report says. “We believe that the asset class, despite short-term headwinds, should perform better over the next few years” it concludes.
Blanco, who returns to Spain to take on new responsibilities within the group, has been associated to the bank’s business in the United States for the past three years. As reported to Funds Society by a spokesman for the financial institution, during the first year, Blanco headed the business in Puerto Rico, and later assumed the position of CEO of Santander Bank, based in Boston.
In March, Powell took up office as head of the Holding under which all of the group’s businesses is concentrated, including Santander’s international private banking business in Miami and operations in Puerto Rico, which had has until then depended on Spain. Before joining the group, Powell spent eight years directing various businesses for JPMorgan Chase, having also worked for two years for Bank One and 14 years for Citi, always in the United States.
Furthermore, the bank has also appointed Michael Cleary responsible for Consumer and Business Banking, reporting to Scott Powell. In his new role, Cleary will be responsible for Retail Banking, Auto Finance and Business Banking and the respective area managers will report to him.
Cleary comes from Citizens Financial Group, where he was Group EVP and head of US distribution, overseeing branches, network planning, mobile and online banking, contact centers, sales planning and strategies, premier banking, wealth management, and business banking. He has over 30 years experience in banking and finance in the United States. Prior to joining Citizens, Michael held various leadership roles at JP Morgan Chase & Co. and Bank One, including EVP and CEO of Chase Business Banking, and CMO and COO of Chase Retail Bank. Michael has a BA from Princeton University and an MBA from Dartmouth’s Tuck School of Business.
CC-BY-SA-2.0, FlickrPhoto: Sasha Kohlmann. Innovation and Demographics: Growth Opportunities From Global Themes
Six years into a stock market recovery fuelled by coordinated and repeated bouts of quantitative easing, equities have arrived at a very interesting point in the road. The asset purchasing intervention by many of the developed world’s central banks drove bond yields to historic lows, forcing traditional yield-hungry fixed income investors to venture into the equity markets. While it is difficult to argue that, overall, valuations in equity markets are not now becoming somewhat stretched relative to historic levels, when compared to the meagre returns on offer from fixed income, the premium to historical averages looks easier to justify.
The Henderson Global Growth strategy applies a thematic overlay to identify areas of the market that are underpinned by a disruptive innovation or demographic trend, which is expected to drive long-term secular growth. Here, managers Ian Warmerdam and Ronan Kelleher analyse the themes of Energy Efficiency, Healthcare Innovation and Internet Transformation.
Higher growth has become overlooked
In recent years, there has been a keen focus and significant investment in high yielding equities, typically characterised by low growth and mature businesses, and this has led to a corresponding increase in relative valuations in this area versus the wider market. The knock on effect of this has been, in Henderson´s view, that parts of the higher growth areas of the stock market have become overlooked, resulting in attractive entry points for the longer term investor. This is precisely the area of the stock market in which we operate, scouring the globe for pockets of underappreciated long-term secular growth.
Thematic-based opportunities
On the Henderson Global Growth strategy Ian Warmerdam and Ronan Kelleher, managers at Henderson, apply a thematic overlay to identify areas of the market that may provide stock ideas that fulfil our long-term, fundamental investment criteria. Both maintain a focus on a small number of themes; each underpinned by a disruptive innovation or demographic trend that is expected to drive secular growth over the long term. Henderson current themes include: Energy Efficiency, Paperless Payment, Healthcare Innovation, Internet Transformation and Emerging Markets Growth. Here, we touch on three, but all provide a breadth and depth of investment opportunities.
Energy Efficiency: going Continental
“Energy Efficiency is a theme that has served us well in recent times”, said Warmerdam and Kelleher. The quest for greater energy efficiency is being driven by a combination of factors; environmental concerns, rationalisation of finite reserves of carbon-based fuels and governments’ pursuit of energy independence. Confronting these issues, governments in countries covering 80% of global passenger vehicle sales have set stringent targets for fuel economy or emissions.
In the US, for example, the National Highway Traffic Safety Administration (NHTSA) has mandated that the average passenger car’s fuel economy must increase from around 35 miles per gallon (mpg) today to 56mpg by 2025. Continental, the German listed manufacturer of auto components and tyres, benefits from these trends. The company enjoys strong market positions across its powertrain division, which integrates innovative and efficient vehicle system solutions with a broad portfolio of engine parts from turbochargers to start-stop technology, geared towards increasing fuel efficiency and reducing emissions.
Healthcare Innovation: ‘MinuteClinics’
“Another fruitful hunting ground for long-term growth has been Healthcare Innovation. Here we are attracted by the demographic changes at play as an ageing global population, as shown in the chart below, struggles to contain ever rising healthcare costs. Increases in life expectancy mean that the global 60+ age group is expected to double by 2050 to two billion people. We are attracted to companies such as CVS Health, the US pharmacy chain, which provides an integrated health care service for its customers”, point out both managers at Henderson. For example, they said, CVS now operates around 1,000 walk-in “MinuteClinics” across its 7,800 stores where patients can get a variety of everyday illnesses and injuries treated at a fraction of the time and cost of going to see a GP.
Finally, Warmerdam y Kelleher explained that Rightmove, a long-term holding within our Internet Transformation theme, is a stock we continue to like. The leading online UK property listings company has had a turbulent 18 months following a period of uncertainty surrounding the impact of a third entrant into its market. “We believe the proficient founder-led management team at Rightmove has done an impressive job at the helm, and the company has rightfully emerged as a more dominant leader in a market that should continue to benefit from the structural shift in advertising spend from offline to online”, concluded.
CC-BY-SA-2.0, FlickrBurkhard P. Varnholt, director de Inversiones de Julius Baer. Julius Baer: “Todo se está poniendo en su sitio para que la segunda mitad del año sea más tranquila”
Global financial markets are entering calmer water. European policymakers once again bought some time with a last-minute deal for Greece, while the Chinese authorities flexed their muscles to contain the damage on their equity market. Even the negotiations with Iran yielded a positive surprise last week. According to Burkhard P. Varnholt, Head of Investment Solutions Group and CIO, still, an escalation of the conflict in eastern Ukraine or of some of the religious tensions in the Middle East can never be ruled out. “But the bottom line remains that we expect a period of moderate growth and limited disruptions. Central bank policy will remain accommodative, which is the backbone of our long-held strategy to maintain a meaningful exposure to equities”.
And things are falling into place for a calmer second half of the year, he says.
Greece: Buying Time
The latest support programme for Greece, as painful as it may look for the Greek pensioners and consumers, is not solving all problems. “We may argue how much damage the referendum has done and how necessary a debt restructuring may be. Yet at this juncture, we note that the Greek crisis has not derailed the eurozone recovery. A strong demand for Greek goods and services –in particular tourism – is the best for Greece to emerge from the crisis”.
The outlook for European equities remains favourable. Peripheral economies will benefit from a positive feedback loop of lower yields, better conditions for lending and stronger growth. “Our exposure to European equities thus remains meaningful”.
FED’s Yellen Stays on Course
Fed Chair Janet Yellen used the opportunity to repeat her mantra before the US Congress last week. She reiterated her positive view on the US economy and her conviction that the first rate hike is due later this year. Incoming data of consumer confidence and private consumption are not weak enough to keep the Fed from starting the interest-rate hike cycle.
At the same time, they are not strong enough either to boost earnings expectations. In fact, for the full year, US companies’ sales are expected to remain unchanged from last year. About one quarter of the S&P 500 companies have published their results for the last quarter so far, with sales down by an average of 0.5% and earnings up just 2.5%.
China’s ‘Whatever It Takes’
The widely observed correction of the Chinese domestic equities must be put in perspective. It only occurred after a triple-digit advance of the market, and the Chinese benchmark indices for domestic shares are still up materially year-to-date. The volume of margin balance accounts, i.e. levered trades, had surged from CNY 1 trillion at the beginning of the year to CNY 2.3 trillion by mid-June and is down to CNY 1.4 trillion now. These figures may look massive but they are dwarfed by the volume of international reserves and other buffers the Chinese administration has at its disposal to pursue its policy targets. Given the strong commitment of the government and the central bank to support the equity market, the risk of a further implosion of the Chinese equity market is rather small. “Hence we maintain our positions in Asian equities as well as Chinese renminbi offshore bonds”.
PBOC at Odds with Gold
Over the course of the last two decades, China has grown so much in size and influence that its moves and intentions can hardly been ignored. The collapse of the gold price last Friday is the latest example of China’s impact. For the first time since April 2009, the People’s Bank of China (PBoC) published its official gold holdings. They were up 604 tonnes during this six-year period, much less than the market had anticipated. Indeed, gold accounts for only 1.5% of China’s international reserves, while it can make up to 75% in Western central banks’ balance sheets. The price of gold fell immediately after the publication of the figures, as strategists had to scale down their estimates for central bank absorption as investors’ confidence in the precious metal was further eroded. “We have no exposure to gold in our asset allocation and are not intending to change this anytime soon”.
Iranian Deal Weighs on Oil
Political news flow is almost too good to be true. The US and Cuba have restored diplomatic relations, while Iran has signed an agreement to swap better control of its nuclear facilities for an end to the embargoes. The latter deal is weighing on the oil price as Iran’s production is likely to come on the market in the medium term. It is our long-held view that supply is outpacing demand on the global commodity market, arguing against taking a position in commodities for the time being.
“Among the central bank meetings scheduled for the next couple of days, it is fair to say that the Fed stands out. We expect the US central bank to confirm its positive economic view and to reiterate its pledge to raise rates later this year. Barring any negative surprises, we should have no EU summit anytime soon, leaving us some respite from the hectic of late”.
Foto cedidaDe izquierda a derecha, Cristina Caamaño, Guillermo Viñuales y Celia Galofré.. credit suisse
Credit Suisse has announced that Harald Réczek has been appointed Head of EMEA and Swiss Distribution for Asset Management. He will take on this new role effective immediately.
The hire emphasizes Credit Suisse Asset Management’s renewed commitment to investing in and building out its distribution in EMEA and Switzerland with a focus on institutional and wholesale markets. As Head of EMEA and Swiss Distribution, Harald Réczek will be responsible for managing the distribution of Core and Alternative Investments in Switzerland, Continental Europe, the United Kingdom and the Middle East.
Harald Réczek will be based in Zurich, and will report functionally to Charles Shaffer, Head of CSAM Global Distribution, and locally to Tim Blackwell.
Harald joins Credit Suisse from Deutsche Asset & Wealth Management where he most recently served as Co-CEO of Deutsche Asset Management Switzerland, as a member of the Deutsche Bank Switzerland Executive Committee, and as a member of the EMEA Distribution Management Board of the Global Client Group. Prior to this, he was Head of the Global Client Group Switzerland, Italy, Austria and Central and Eastern Europe. In these roles he successfully managed both retail and institutional distribution for the division.
Tim Blackwell, Head of Global Core Investments, said: “Harald has an impressive track record in the industry, in-depth experience, and a strong network. He will play a key role in growing our direct distribution efforts both in the Swiss and European markets.”
Photo: Mark Hillary. Bradesco to Buy HSBC Brasil’s Unit for US$ 5.2 Billion
Banco Bradesco SA, Brazil’s No. 2 private-sector bank, agreed to buy HSBC Holdings Plc’s Brazilian unit for BRL 17.6 billion (US$ 5.2 billion), narrowing the gap with larger rivals while boosting its base of affluent customers in Latin America’s largest economy, according to Reuters.
The deal between Bradesco and Europe’s largest banks includes the latter’s Brazilian retail banking and insurance units. The agreement, which still requires regulatory approval and was sealed on July 31, could close by June.
The purchase price, which could change to reflect the net asset value of both businesses, is equivalent to 1.8 times book value, way above what analysts expected and above Bradesco’s own valuation. On July 20th, it was reported that Bradesco had entered exclusive talks with HSBC after offering to pay about BRL 12 billion, or 1.2 times book value. Shares of Bradesco posted their steepest drop since July 23, shedding 4 percent.
The all-cash acquisition will allow Bradesco to close the asset gap with larger rivals Itaú Unibanco Holding SA and state-controlled banks Banco do Brasil SA and Caixa Econômica Federal.
HSBC Brasil’s focus on high-income customers fits well into Bradesco’s plan to ramp up sales of specialized financial services for the wealthy and larger corporations.
The takeover, Bradesco’s first since the 2009 purchase of Banco Ibi SA, will increase its assets by 16%, number of branches by 18% and staff by 23%. Bradesco expects the purchase to contribute to earnings starting in 2017.
Bradesco paid BRL 10.4 billion for HSBC Bank Brasil, BRL 4.7 billion for the HSBC Serviços insurance unit and BRL 2.5 billion for a measure of future additional revenues or scale gains, it said in a presentation.
Following the acquisition, Bradesco’s capital regulatory ratio, a measure of solvency strength, will decline to 9.9% from 12.8% currently. Analysts estimated that Bradesco could deduct as much as BRL 6.5 billion in goodwill from the HSBC acquisition.
On the other hand, HSBC’s sale of its Brazilian business represents a retreat from the second-largest emerging market economy after years of disappointing performance.
HSBC, which arrived in Brazil late in the 1990s, never gained enough size to pose a real threat to Itaú, Bradesco or Banco do Brasil, the nation’s top lender by assets. HSBC Brasil has 854 branches and 21,000 employees. Its assets of about BRL 170 billion represent about 2.3 percent of the total for Brazil’s banking system.
HSBC was advised on the deal by its own investment banking unit and Goldman Sachs Group Inc. Bradesco was advised by its own investment banking unit Bradesco BBI, as well as JPMorgan Chase & Co and NM Rothschild & Sons Ltd.
Photo: Hernán Piñera. Henderson Global Investors Launches Global Multi-Asset SICAV
Henderson has expanded its global multi-asset portfolio offering with launch of the Henderson Horizon Global Multi-Asset Fund (SICAV). This is Henderson’s first UCITS multi-asset fund and further broadens the range of global products offered by Henderson Global Investors.
The Fund will be managed by both Bill McQuaker and Paul O’Connor, with additional support provided by Chris Paine, Director of Research. The team has a 10 year track record in multi-asset investing.
The Henderson Horizon Global Multi-Asset Fund will launch upon the merger of the Henderson Diversified Growth SIF, and its initial assets under management will be around £100 million.
The Fund expects to build long term attractive returns with lower volatility than equity markets. This is achieved by making flexible, conviction-led asset allocation decisions across a broad range of asset classes and strategies.
Greg Jones, head of EMEA retail and Latin America says, “The launch of the Henderson Horizon Global Multi-Asset Fund allows clients based outside of the UK to access the skill set of our highly regarded multi-asset team in a structure that is more familiar to them.
“Following the launch of the All Asset Fund in our US mutual range almost three years ago, the new fund will effectively complete the footprint of our global multi-asset offering.”
Bill McQuaker, co-head of multi-asset adds, “The multi-asset market continues to grow, with the total market valued at around £126.5bn.
“The current environment of historically low interest rates and elevated asset prices exposes investors to a range of risks and opportunities.
“By actively managing allocations to a range of asset classes and strategies, we aim to capture returns while protecting investors’ capital during more difficult market environments.”
CC-BY-SA-2.0, FlickrPhoto: historias visuales, Flickr, Creative Commons. Pioneer Investments Posts Record €10.7 Billion Net Sales in First Half of 2015
Global asset manager, Pioneer Investments, posted record inflows of €10.7 billion globally for the first half of the year, reflecting continued positive momentum across all regions and channels. Building on the first quarter of 2015, Pioneer Investments saw €3.6 billion positive net sales in the second quarter positioning the firm as one of the leading players in the industry. According to Morningstar mutual fund flows data, Pioneer Investments ranked 8th in Europe and 15th worldwide year-to-date through June.
The firm’s AuM increased by 19% YoY with assets under management standing at €221 billion as of June 30, 2015. Pioneer Investments’ product range attracted strong flows from markets such as Germany, Italy, Iberia and Latam amongst others, with the firm’s US and Asia businesses also recording positive momentum.
Commenting on these results, Giordano Lombardo, CEO and Group CIO of Pioneer Investments said, “We are extremely pleased to have again ranked amongst the industry’s top players in terms of fund flows, reflecting our clients’ trust in Pioneer’s investment process. We are seeing especially strong growth in our liquid alternative and outcome-oriented strategies. Our multi-asset mutual fund range attracted particularly strong inflows ranking third worldwide year-to-date through June.”
He added, “While our macroeconomic outlook remains reasonably optimistic for the rest of the year, we do expect market volatility to remain heightened, largely driven by geopolitical factors. Our priority remains to deliver strong investment results and industry-leading service and support to our valued clients.”
Foto: Alberto Carrasco, Flickr, Creative Commons. Thomson Reuters lanza una estrategia que combina los modelos de búsqueda de alfa en renta variable de StarMine
Thomson Reuters has announced the release of the StarMine Combined Alpha Model (CAM), a model that combines all the available StarMine equity alpha models into one comprehensive and powerful alpha-generating signal. The weights assigned to each model vary by region. Thus, StarMine CAM recognizes the fact that some regions, such as the US and Japan, are more value focused while in Developed Europe and Asia ex-Japan momentum plays a larger role. The model intelligently handles missing data and makes use of all available StarMine alpha models for a given security.
StarMine CAM provides investment managers with a resourceful factor to help create market-beating portfolios – a factor that distils an enormous quantity of data down to a single score for 30,000 stocks globally every day.
“Clients often ask us ‘what is the best way to combine the StarMine signals?’ We now have our best answer to that question – use StarMine Combined Alpha,” said Dr. George Bonne, director of quantitative research at Thomson Reuters.
Over the last ten years, StarMine has created a number of quantitative equity alpha models to help take advantage of observed market anomalies and human behaviours. Every StarMine model is based on strong economic intuition and supported by a plethora of academic research as well as StarMine’s own rigorous research, backtests and robustness testing. The StarMine models used in StarMine CAM are Analyst Revisions, Relative Valuation, Intrinsic Valuation, Price Momentum, Earnings Quality, Smart Holdings, Insider Filings (US only), and Short Interest (US only). StarMine CAM is StarMine’s best performing alpha model to date.
“We are delighted to be able to combine our content to create a solution that simplifies our clients’ daily tasks in support of their global businesses,” said Debra Walton, chief content officer at Thomson Reuters. “This represents another step forward in our ongoing commitment to connect and enable the global financial community by harnessing our data and analytics in new ways that add greater value.”
StarMine CAM is currently available through Thomson Reuters Eikon, the premier desktop platform for financial professionals, and will be available as a datafeed through DataScope Select in the near future. Thomson Reuters DataScope Select is the strategic data delivery platform for non-streaming content globally. The platform is a full cross-asset offering with intelligently linked data for all Thomson Reuters DataScope content including reference data, corporate actions, legal entity data, end-of-day/intra-day pricing and evaluated pricing services.
CC-BY-SA-2.0, FlickrMauricio Rivero - Foto cedida. Mauricio Rivero se incorpora como socio a Cantor & Webb
Mauricio D. Rivero is joining Cantor & Webb P.A. from private practice. With his addition the firm expands its international tax and estate planning capabilities for international private clients.
Mr. Rivero brings more than 20 years of experience in international tax, business succession planning, probate and trust litigation, U.S. tax compliance and tax controversy work. He assists many international families and businesses with developing strategies to address both inbound and outbound U.S. tax issues with techniques such as U.S. income tax treaty planning and cross-border mergers and acquisitions. He counsels U.S. individuals and companies with regard to their operations abroad as well as foreign individuals and companies with operations in the United States. Mauricio has a great deal of experience creating individualized pre-immigration plans for high net worth foreign individuals seeking to relocate to the United States.
Mauricio said, “I hope to help expand the firm’s already distinguished profile in Latin America and Europe through my experience in the areas of international tax planning, tax compliance and international private wealth services. I look forward to working with my colleagues to provide top quality legal service to our clients and further cement our status as the go-to firm for international private clients.”
After earning a Bachelor of Arts in English and History from Florida International University in 1991, Mauricio spent ten years working for the Internal Revenue Service as a Revenue Agent where he gained significant experience handling a variety of complex tax matters for the Internal Revenue Service including both domestic and international tax issues. Mauricio went on to earn his Juris Doctor from the College of Law at Florida International University in 2005 and has been in private practice ever since.
Born in New Jersey and raised in Miami, Mr. Rivero was admitted to The Florida Bar in 2006. Mauricio was ranked as a Rising Star by Super Lawyers 2015 and listed as a Legal Elite by Florida Trends 2014.
