Wikimedia CommonsBy Jikatu. The Raid and Search on Royal Bank of Canada in Uruguay has already led to the outflow of funds to other centers
The raid and search proceeding conducted a few weeks ago at the offices of the Royal Bank of Canada in Uruguay by Argentine judge Norberto Oyarbide, has caused a chain reaction and a lot of fear among the more than 10,000 Argentine clients with offshore private banking accounts in the neighboring country possessing an average of $600,000, and also amongst customers in other countries, as reported by the Uruguayan newspaper El Pais.
Some of these clients, Argentineans as well as clients from other nationalities, whose accounts are found in offshore institutions operating in Zonamerica, have already requested for their funds to be transferred to accounts abroad for fear of the recurrence of raids like the one requested by the Argentine judge on 13th June.
Judge Oyarbide requested authorization from Uruguayan authorities to conduct the operation. It so happens that the Argentine judge is in charge of a mega cause in which he is investigating millionaire money laundering maneuvers through the transfer of dozens of footballers.
As for the chain reaction and fear experienced by Argentine and foreign clients with capital in institutions operating within Zonamerica, El Pais newspaper says that according to a source who asked not to be identified, that after the raid “Argentine clients as well as clients from other countries are calling with much concern and some have specifically asked for their accounts to be withdrawn from Uruguay and taken them somewhere else …. It is not easy to be able to tell the customer that he shall not experience any problems because they have all the documentation.
“Putting myself in the shoes of a bank customer in Zonamerica, I understand how this has created suspicion and uncertainty about whether the bank is making available to third parties any information regarding their account, their name and their movements, and people do not want anything to do with that”, said the same source.
In Zonamerica, Uruguay’s most extensive free trade zone, there are currently about 60 banks and investment advisory firms in operation, including local and foreign banks which can only serve foreign clients and bank representations operating as a link between potential investors and the central office of institutions located outside the country.
We must bear in mind that customer funds in Zonamerica are not actually in Uruguay, since they use the country as “booking”, as the money is actually in bonds, stocks or funds in Switzerland, USA, Germany, Austria and Singapore.
The advantage of establishing within this zone is that it is a territory which is exempt from any taxes, and where companies do not have to give the Uruguayan state explanations of any kind, neither about invoicing nor about their customers, whilst it benefits the country as an employment generator.
Argentineans have deposits totaling 2,663 million dollars which are currently in Uruguayan accounts, as 71% of the 3,751 million dollars of non-resident accounts are Argentinean. The paper highlights that 90% of that money has been declared in Argentina and that only 10% would not be, according to financial market estimates.
Wikimedia CommonsFoto: Bill Ingalls. ING IM lanza un fondo crédito multi-estrategia
ING Investment Management launched the ING Renta Fund First Class Yield Opportunities with currently assets of EUR 35 million (USD 46,5 million). The fund seeks to deliver attractive returns by investing in a diversified multi-strategy credit portfolio.
The First Class Yield Opportunities strategy combines the skills of three key investment teams, the Multi-Asset, Credit and Emerging Market Debt boutiques. The strategy profits from ING IM’s proven bottom-up credit selection skills of the various specialized teams as well as the top-down asset allocation skills of the Multi-Asset boutique.
Ewout van Schaick (Head of Multi-Asset strategies) and Roel Jansen (Head of European Investment Grade Credit) act jointly as lead managers for the fund, setting the investment policy and the top down allocation over asset classes. The individual bonds are selected by ING IM specialized teams for investment grade credit, global high yield and emerging market debt. The fund volatility is monitored and can be scaled down depending upon market conditions, which makes it a risk-controlled investment.
Hans Stoter, Chief Investment Officer at ING Investment Management: “Global credit markets have proven to be an attractive investment over time and can be an attractive diversifier for a government bond oriented fixed income portfolio. Returns across global credit markets as well as returns over time deviate significantly which illustrates the importance of dynamic asset allocation. The need to fully understand the issuers and issues and to select the bonds with the most favourable estimated risk-adjusted returns requires analysis by credit specialty teams. The new First Class Yield Opportunities Fund combines our knowledge and experience in all of these fields.”
The strategy focuses on bonds that offer an attractive yield taking into account an estimate of the inherent risks. In order to be able to meet its return and risk objectives, the portfolio managers have the possibility to allocate in a flexible and dynamic manner between the various credit markets, with a strong focus on bottom-up instrument selection, top-down allocation and downside risk management.
Photo by DAVID ILIFF. Azimut Reaches an Agreement for the Acquisition of a 51% Stake in Augustum Opus
Azimut , Italy’s leading independent asset manager, reached an agreement with the partners of Augustum OPUS SIM (“A.O.”), an independent asset management company with headquarters in Milan and Perugia and AuM of just above € 800 million (USD 1.000 million)
On the basis of the agreement, Azimut will initially buy 51% of A.O. to be increased to 100% following the sixth year. The consideration paid for the 51% stake is € 10 million, and the remaining 49% will be determined on the basis of the profitability of the partnership throughout the period (ca. 10 times net profit: in between € 10-20 million).
A.O. is an asset management company specialised in individual portfolio and OICR, founded in 2009 by a group of independent portfolio managers with more than twenty years experience in the industry. With this transaction, Azimut enlarges its competencies in the individual portfolios and OICR, given the brilliant results and awards obtained by OICR products managed by A.O.
A.O. will continue to conserve within the group its autonomy in the management of client relationship and management of OICR, also throughout a special dedicated vehicle. A.O. thanks to the agreement with Azimut will increase its product range, innovation capabilities and competencies which will help to bring the Group at an international level in line with its natural evolution in the asset management field.
Capital Strategies Partners, firma especializada en intermediación de fondos de inversión, tiene un acuerdo con AZ Fund Management para distribuir sus productos en Latinoamérica.
Wikimedia CommonsFoto: mattbuck. Decalogue for world conquest
Emerging companies are standing up to the West in the global market. Until relatively recently, brands like Acer Electronics, Corona Beer, Emirates Airlines, Tata Motors and Concha y Toro wines were names unknown to the public.
In a new book, “The launch of the brand: How brands become global emerging”, Nirmalya Kumar and Jan-Benedict Steenkamp, discusses how emerging companies are learning how to position itself in the global market. In what may be termed the emerging consumer Decalogue, the authors set out eight steps.
The more traditional so far has been selling cheap products to gain market share and gradually raise the quality and prices. This is the strategy followed by Pearl River, a world leader in pianos, or appliance maker Haier, both Chinese companies.
A second alternative is to focus on business customers, then go to the final consumer. An example is Mahindra & Mahindra, the Indian company that began manufacturing tractors and now produces cars.
The third is to follow immigrants and sell their products in their host country, as did Goya Foods or Bollywood films in the United States. Or take advantage of tourism and local produce market once tourists return home. Corona beers or Mandarin Oriental hotels are two good examples.
Another strategy is to buy directly prestigious Western brands such as Tata Motors has made to acquire Jaguar Land Rover, or Lenovo IBM Thinkpads.
The authors point to other steps, such as the one followed by Brazil Havaianas, relying on the image of beach and fun, and the Chilean Concha y Toro in the country’s beauty, or institutional campaigns “country brand” as being launched India or Taiwan.
Emirates is a good example of how to achieve success by creating a brand image. The airline of Dubai has grown at double digits in recent years, making the country a center for business and tourism. One of the main components of the strategy of Robeco Consumer Trends emerging consumption both Western companies positioned in the developing countries as companies from these countries are making headway in the most advanced markets. Global brands enjoy much higher margins to local.
Wikimedia CommonsFoto: Alex Proimos . John Blau, nuevo presidente de Oppenheimer Asset Management
Oppenheimer Asset Management, a unit of Oppenheimer Holdings, is pleased to announce the appointment of John Blau as its President. He will be based out of our New York City headquarters.
Since Mr. Blau, 44, joined Oppenheimer in 1998, he has enjoyed wide-ranging success at the firm, first as a Financial Advisor, then as head of West Coast Asset Management Marketing. For the past two and a half years, he has served as co-head of Sales and Marketing for OAM. This very substantial experience has enabled him to develop a thorough knowledge of our Asset Management platform and a strong understanding of the needs of our clients as well as our Financial Advisors, with whom he enjoys excellent relationships.
“Oppenheimer Asset Management is well positioned to expand our leadership in providing investment advice and management to our clients,” said Mr. Blau. “I’m excited to have the opportunity to help shape our plans to achieve new levels of growth and share Oppenheimer’s expertise with our clients.”
“I have great confidence in John, and I look forward to working with him for many years,” said Albert G. Lowenthal, Chairman of the Board of Oppenheimer Holdings. “I have given him an ambitious mandate and believe that the diversity of our investment options and an improving investment climate will permit us to continue growing our managed account business while providing competitive returns on investments to our clients.”
Foto: Norbert Nagel . La industria de hedge funds podría asistir a una significativa actividad en la segunda mitad de año
Credit Suisse announce the results of its mid-year Hedge Fund Investor Survey, which polled 185 institutional investors on their current strategy appetite and allocation activity. This survey follows Credit Suisse’s Global Annual Investor survey published earlier this year.
Institutional investors responded that they intend to remain active, with 88% indicating that they plan to make additional allocations to hedge funds during the second half of this year. This indicates thatthe industry maysee continued significant levels of allocation activity in the second half of 2013.
In addition, respondents were asked to share their insights into whether they are planning to allocate, maintain or decrease allocations to various hedge fund strategies in the second half of this year. The top 3 strategies by net demand (percentage increasing allocation – percentage decreasing allocation) were:
All respondents: Long/Short Equity- Fundamental (57%), Event Driven (47%) and Global Macro (39%)
Americas: Long/Short Equity- Fundamental (58%), Event Driven (48%) and Global Macro (22%)
Asia: Long/Short Equity- Trading (50%), Long/Short Equity- Fundamental (40%) and Global Macro (40%)
EMEA: Long/Short Equity- Fundamental (57%), Global Macro (52%) and Event Driven (47%)
By comparison, in the annual CS global investor survey at the start of the year, the top three strategies were Long/Short Equity, Emerging Markets Equity and Event Driven.
When evaluated on a gross basis (straight percentage increasing allocation), respondents believed that Long/Short Equity- Fundamental strategies are likely to see the most gross allocation activity in the second half of this year, with 61% of global investors surveyed indicating that they plan to allocate, followed by Event Driven, with 51% planning to allocate. Conversely, investors indicated that Commodities funds are likely to see the most redemption activity over the next six months, with 32% indicating that they plan to lower their allocation to the strategy, followed by Emerging Markets Credit, with 29% planning to reduce their allocation.
“From this mid-year survey, it is clear that investors remain focused on long/short equity and event-driven strategies, particularly those involving fundamental approaches,” said Robert Leonard, Managing Director and Global Head of Capital Services at Credit Suisse. “We believe that some of this activity is being driven by the gradual rotation of capital from fixed-income markets into equities,” Leonard said. “Investors are also reacting to improving global markets and lower correlations by seeking those funds that can differentiate by their stock-picking abilities. Based upon these responses, wewould expect continued strong inflows to the industry during the second half of this year, as additional capital continues to come off the sidelines and into hedge funds.”
Foto: Peter Clayton . Sovereign Bank pasará a llamarse Santander Bank
Sovereign Bank, a wholly-owned subsidiary of Santander Holdings USA and one of the 25 largest retail banks in the United States by deposits, announced that it will begin to market itself under the Santander brand and legally change its name to Santander Bank, on October 17, 2013.
“October 17th will mark a unique occasion for our company. Under the Santander name, we will marry the local insights and relationships of a committed, community-focused bank with the breadth and expertise of a major global financial institution,” said Carlos Garcia, chief corporate affairs and communications officer at Sovereign Bank and Santander Holdings USA.
Sovereign Bank operates in Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island, serving 1.7 million retail and commercial clients. It has been a financially autonomous member of the Santander Group since 2009. While the Santander Group has had business operations in the United States for over 30 years, this change marks the first time it will operate as a federally chartered U.S. retail and commercial bank under the Santander brand.
With 102 million customers, over $72 billion in market capitalization and a 10.67% core capital ratio, the Santander Group is one of the world’s strongest financial institutions as well as being one of the most respected and recognized global financial brands. Santander Group’s subsidiaries do business under the unified Santander brand in the U.K., Germany, Brazil, Mexico, Chile, Argentina, Spain and Portugal.
In the four years since Sovereign Bank became part of the Santander Group, the Bank’s corporate headquarters were relocated to Boston, it substantially strengthened its capital and improved its asset quality, migrated multiple legacy systems to a single robust technology platform and became a full-fledged commercial bank by changing to a national bank charter.
Enhancements to Accompany Name Change
In addition to its name change, the Bank announced several enhancements to be rolled out between now and October 17th as part of a comprehensive $200+ million three year initiative. “Today’s announcement reflects our commitment to becoming the best bank we can possibly be for both our customers and for our team members,” said David Miree, managing director of the Bank’s retail network.
Wikimedia CommonsThomas Nast . Most Millionaires do not Consider Themselves Wealthy
Wealth is defined as being able to live one’s life with no financial constraints, rather than reaching a specific asset level, but investors feel that it would take at least USD 5 million to be considered wealthy, according to UBS Wealth Management Americas’ fourth UBS Investor Watch.
In addition, of those who have adult children, 80% are providing financial support for adult children, grandchildren or ageing parents. This support ranges from funding education (42%), sharing their home (18%), helping them borrow (20%) and paying for large purchases (18%).
A cash cushion of more than 20% goes beyond providing cash for emergency needs and seems to give investors permission to invest other assets more aggressively. This level of cash has been consistent for three years, despite significant equity market gains during that time.
The survey of high net worth (HNW) and affluent investors found that nearly 70% of investors with more than one million in investable assets do not consider themselves wealthy. Investors define wealth as having no financial constraints (50%), as opposed to never having to work again (10%) or being able to afford a luxurious lifestyle (9%). Investors feel that it would take at least USD 5 million in personal wealth for them to be considered wealthy.
While the ability to afford healthcare and long-term care remains the top personal concern (27%) for investors, their children’s and grandchildren’s financial situations rank second (20%), trumping the ability to afford retirement (14%) and the potential to outlive one’s assets (14%).
Investors continue to hold high levels of cash (23%), and with large cash holdings use them as a way to reduce their overall risk level. Investors find it important to have cash because they know they are extremely unlikely to lose it and generally find peace of mind in holding a lot of cash.
Banorte Managers and BMV in the "bell" at the BMV on Tuesday. “Banorte Does Well When Mexico is Doing Well”
On Tuesday, Guillermo Ortiz, chairman of the Board of Directors of Grupo Financiero Banorte, stressed Mexico’s position and the strength of its macroeconomic indicators, as well as the country’s ongoing reform process, while also stressing that the company is optimistic about Mexico’s performance in the short and medium term.
The executive was speaking after the bell-ringing ceremony to commemorate the Grupo Financiero Banorte’s stock tender offer on the Mexican Stock Exchange (BMV). Ortiz explained that IPOs in emerging markets, which are lower in Mexico than in other emerging markets, are the result of the global recovery “which will revert to normal” following “the distortions in the global economy” as a result of the ample liquidity available and consequent massive capital inflows into emerging markets.
Likewise, the executive pointed out Banorte’s confidence in Mexico in the short and medium term, which is evident in investors’ response to its placement. Meanwhile, Alejandro Valenzuela, Banorte CEO, commented that this is the beginning of an additional commitment to strengthen the financial industry. “Banorte does well when Mexico is doing well,” he said.
For his part, Luis Tellez, president of BMV, the world’s second fastest Stock Exchange after Switzerland, said that since 2005, they experienced an increase from 75,000 to over 8 million operations, and mentioned the financial reform, which according to Tellez “opens exciting possibilities for medium companies” before congratulating the group for the placement of “one of the most dynamic shares in the BMV”.
Banorte obtained about 2,540 million dollars from its July 16th placement, with an overall demand of 3.5 times the offer. Its resources will be channeled to acquire the 4.5% stake which IFC, the World Bank’s financial arm, has on the Mexican bank, to pay off a syndicated loan of $800 million arising from the purchase of Afore Bancomer, and to settle $ 778 million for the consolidation of 100% of the capital of Seguros Banorte Generali, and Banorte Generali Pensions.
CC-BY-SA-2.0, FlickrFoto: Medill DC. El mejor banquero central de la historia
According to a new survey by TradeKing Group, investors are split three ways on whether Chairman of the Federal Reserve Ben Bernanke should continue in his role past January 2014: just 30 percent say they prefer to see him stay, 34 percent say they’d like him to go, and 36 percent are undecided.
The in-house survey of 230 independent investors was conducted July 11-18, 2013 by TradeKing Group.
Weighing-in further on Mr. Bernanke’s tenure, some investors shared these opinions:
“He was responsible for the reaction and he should see it through till there is steady growth should the plan not work as advertised.”
“He’s out of bullets.”
“Although good for markets, Bernanke is…only concerned with re-inflating a bubble that will absolutely devastate the economy when it is burst.”
“I think some of his policies are politically motivated…but change in this area adds to instability.”
“The next one might be even worse.”
Bullish Sentiment Bounces Up from April
While not quite returning to the high of TradeKing’s January 2013 survey, “bullish” sentiment among investors surveyed increased five points over April, reaching 42 percent and pulling closer to matching “neutral” sentiment, which is 47 percent. Sixty-five percent of respondents said they believe the market will end up by 5-10 percent for the year. Slightly more investors share this opinion now than in April (65% in July vs. 60% in April).
It’s All About Interest Rates
Interest rates shot to the top of investors’ trading triggers, receiving 55 percent of responses, up 15 points since April. It was followed by quarterly earnings with 39 percent and U.S. housing at 31 percent of responses.
As to when they expect interest rates to increase, most investors indicated they expect to see meaningful increases within the next 18 months. Twenty-five percent are bracing for changes “in the second half of 2013,” 30 percent believe rates will hold steady until “the first half of 2014,” and 20 percent indicate rates won’t meaningfully rise until “the second half of 2014.”
In addition, when asked: “What do you think is more likely in 2014, inflation or deflation?” an overwhelming 75 percent chose inflation.
TradeKing Group consists of companies that provide online brokerage services, social communities for investors, investor education and more. Its subsidiary, TradeKing, is a nationally licensed online broker/dealer dedicated to empowering the independent, self- directed investor. The platform features powerful online equity, options, ETF, mutual fund and fixed-income trading tools accompanied by a rich set of news, research and analysis capabilities.
