Wikimedia CommonsFoto: Gregory Phillips
. Los diamantes brillan como activos de inversión para los multimillonarios, especialmente chinos e indios
When Hong Kong millionaire Tiffany Chen revealed last month she had paid US$11.15 million for what Christie’s auction house calls “the largest and most perfect briolette diamond ever sold at auction”, it signaled a trend among the world’s ultra net worth (UHNW) individuals: investing in diamonds makes more sense than stocks and gold.
UHNW investors and gem collectors are investing in diamonds as a secure and lucrative asset in the current low-interest, uncertain financial climate, according to Wealth-X, the UHNW business development solution for private banks, luxury brands, educational institutions and non-profits, which has released a list of the world’s most avid billionaire collectors based on net worth.
“Based on our data, we expect the UHNW population, particularly in countries such as diamond-hungry China and India, to accelerate,” Wealth-X CEO Mykolas D. Rambus said. “This can only mean one thing for diamonds as an investment of choice among UHNW individuals: They have a sparkling future.”
Rough diamond prices have increased by nearly a third since 2005 and are likely to rise a further 20 percent between 2013 and 2017, bolstered by demand from China and India.
Hong Kong billionaire Yu Tung Cheng, honorary chairman of Chow Tai Fook Jewellery Group, is the wealthiest billionaire diamond collector with a net worth of US$19.6 billion. In 2010, he paid US$35.3 million for a 507-carat diamond, a record sum for a rough diamond. Since Cheng made his fortune through diamonds and other gems, he has named his racing horses “King of Diamond” and “God of Diamond”.
Others in the list include Nicky Oppenheimer, who owns Tswalu Kalahari Reserve, South Africa’s largest private game reserve. He ranks at number 2 with a net worth of US$6 billion. British billionaire Laurence Graff comes in at 5thplace with a net worth of US$2.1 billion. Graff, who founded high-end jeweller Graff Diamonds in 1960, has seen his business empire expand with at least 32 stores worldwide.
Foto: Tomas Castelazo. América Latina hace los deberes: mejoras de rating para México, Uruguay y Colombia
Sovereign rating actions in Latin America have had a positive bias in 1H13, according to Fitch Ratings. Positive rating actions in 1H13 have included the rating upgrades of Mexico and Uruguay and the revision of Colombia’s Rating Outlook to Positive from Stable.
The only negative rating action was on Jamaica where Fitch downgraded the Foreign Currency and Local Currency Issuer Default Ratings (IDRs) to Restricted Default (‘RD’). The downgrade took place in February following the implementation of a domestic debt exchange that adversely impacted the original contractual terms of domestic bondholders.
Fitch is projecting Latin America’s real GDP growth will reach 2.9% in 2013 compared to its previous forecast of 3.3%
The Rating Outlook for the majority of sovereigns in the region is Stable, which suggests that positive and negative rating pressures are evenly balanced. Currently, Colombia and Ecuador have a Positive Outlook, and El Salvador, Venezuela and Argentina’s Local Currency IDRs have a Negative Outlook.
“Slow global recovery, slower domestic demand growth, softer commodity prices and country-specific factors are leading to a slowdown in most of the regional economies in 2013,” said Shelly Shetty, Head of Fitch’s Latin America Sovereigns Group. “As a result, improvements in fiscal and external solvency and liquidity indicators may be hindered, thus weighing on the upward potential of sovereign ratings.”
Fitch is projecting Latin America’s real GDP growth will reach 2.9% in 2013 compared to its previous forecast of 3.3%. However, excluding Brazil, Latin America’s real GDP will slow to 3.2% in 2013 from 4.1% in 2012.
Fitch expects the multiple speed growth in the region to continue. The five highest growth countries are Bolivia, Chile, Peru, Panama and Paraguay, with the latter forecasted to be the fastest growing economy in the region after a mild contraction observed in 2012. The smaller economies of Ecuador, Colombia and Suriname will record growth above 4% in 2013, while Brazil and Mexico are forecasted to drag the regional performance by growing at 2.5% and 3%, respectively. On the other hand, El Salvador, Jamaica and Venezuela will underperform with growth below 2% in these countries.
In the investment grade category, low debt countries with fiscal buffers like Chile and Peru have the most fiscal space to implement counter-cyclical fiscal policies. Brazil, Colombia, Mexico and Uruguay are more constrained. In the speculative grade space, several Central American and the Caribbean countries continue to face weak growth prospects and challenging debt dynamics that will limit their ability to provide stimulus. Costa Rica will incur the highest fiscal deficit in the region while Argentina’s growing fiscal pressures could lead to greater monetization of the deficit given its lack of market access.
Elections were held in Paraguay and Venezuela in 1H13. The tight victory margin in the Presidential elections in Venezuela could maintain political uncertainty and reduce the scope and pace of policy adjustments. The election calendar is relatively light in 2H13 with legislative elections in Argentina in October and general elections in Aruba in September and Chile in November. The electoral calendar heats up in 2014 with several countries including Brazil, Bolivia, Colombia, Costa Rica, El Salvador, Panama and Uruguay holding presidential elections. Fitch does not foresee dramatic shifts in economic policies following the elections in most countries.
Photo: Uwe Hermann. Afores’ Resources Fell by 3.78% in June
According to figures released by the National Savings System for Retirement (Consar), the SAR, “Sistema de Ahorro para el Retiro de México” (Mexican Retirement Savings System) had 1,919,494 million pesos (approx. 147 billion USD) under management as at the end of June.
These resources, belonging to over 49 million individual employee accounts, and which decreased by more than 75,000 million pesos (approx. 5.7 billion USD) or 3.78% compared to the balance as at the end of May 2013, generated historical returns for the system of12.73% nominal annual average versus 13.07% in May, and 6.22 % in real terms during SAR’s 16 years in operation, a slight fall from the 6.49% recorded previously.
The performance of the past 12 months falls to 5.7%, while the system’s average net yield at 50 months equals 11.1%, and 10.20% at five years, which represents a slight recovery from the 9.87% of the previous month.
Luis Téllez, presindent of BMV. Photo: IPC Sustentable . Financial Reform will Boost the Middle Market in Mexico
Luis Tellez Kuenzler, president of the Mexican Stock Exchange (BMV), expects the Mexican economy to grow by 3% in 2013 and a larger number of medium-sized companies to enter the stock markets.
In an interview with Notimex, the executive explained that although there has been a weak first quarter and in the second quarter some sectors showed less dynamism, “there were industries, such as the automotive industry which performed well in the United States”, therefore he expects the Mexican economy to reach growth levels of around 3% this year.
Tellez also said that the federal government’s initiative for financial reform will help the placement of medium sized companies on the BMV. “Everything that has been raised so far in terms of structural reforms, those which are already approved and those which are still to be approved, once they enter into force and start applying will have a positive effect on the productivity of the country,” Tellez emphasized that of the 11 new placements recorded in the first half, six belonged to this type of company: Cultiba, Vesta, Hoteles City Express and three FIBRA issues.
The executive also highlighted that financial reform defines many positive functions of the National Banking and Securities, and creates the conditions for the BMV to establish routing agreements with other markets, allowing Mexico to enter the Latin American Integrated Market (Mila) by amending the legislation which to date does not allow the BMV and brokerage firms to send customer orders to other markets.
Photo: Jacobolus. Western Union Sees Mexico as a Land of Opportunities
Luis Felipe Rodriguez, vice-president and general manager of Western Union in Mexico, spoke to Funds Society about the sector, as well as about the company’s short and medium term plans.
Western Union, the world’s largest remittance services company, which in 2012, at an average of 28 transactions per second, registered Money Orders totaling 79,000 million USD, approximately a 20% share of the market, considers Mexico as a land of opportunity.
Rodriguez said that despite the reduction in the volume of remittances to Mexico, Western Union managed to grow by 9% in the first quarter, and expects further growth in the future, supported by an improvement in the U.S. job market and the strategy of the firm, which is focused on moving towards electronic media channels and products.
Likewise, Rodriguez added that he hopes his operation, which has been recovering since November last year after the adjustment made in October by regulatory changes in the United States, will continue with a “favorable performance”.
For 2015, the executive expects a diversification of services supported by the regulatory developments towards financial inclusion, which will help to “improve industry development.”
According to information, published by Banxico on the 1st of July, more than 2,033 million dollars in family remittances entered Mexico in May this year, which is 6.94% higher than in April, but 13.17% below the same month in 2012, which in monthly terms means four months on the rise, but in annual terms represents 11 months of falls.
Foto: ImUnicke. El mensaje de la FED constituye el mayor apoyo a los activos de riesgo, según Axa IM
Following the sell-off of all asset classes post the FOMC meeting, AXA IM notes that a substantial part of the news is priced in and markets will shift toward a kind of ‘business as usual’. “It seems that the Fed is more confident with regard to the growth backdrop and thus convinced that tapering is justified. We (and the consensus) have a marginally less optimistic view and think markets will in fact continue to struggle over which route to follow – ‘fading easy money’ or ‘weaker (US) recovery’”, signals Axa IM in its July Investment Strategy Report.
Such uncertainty will most likely continue to weigh on the mood of investors in the near term
AXA IM has long held the view that any adjustment to a new regime is usually accompanied by higher volatility, as investors adjust to a new equilibrium. This is exactly what they have seen in the course of the month of June and is presumably best illustrated by their in-house risk appetite barometer (RAB), which moved into mildly negative territory in June but recouped de facto all of the lost ground at the beginning of July.
The combination of lower stock markets and marginally better earnings pushed the overall valuation metrics for the MSCI World down to 16.3x, versus 16.5x last month.
“Overall, we think that some more silver linings have appeared on the horizon and consequently suggest raising the equity weighting back to overweight as the cyclical head winds fade”, remarks the asset manager in its report. “If anything, the very clear message from the Fed Chairman, who reiterated the conditionality for starting the tapering, remains in our view the strongest support for risky assets (and a headwind for fixed income in the longer run).”
Axa points out that the ‘sustainable improvement’ in the labor market will be the acid test for the FOMC in the months to come. Against this backdrop, the liquidity withdrawal should come at a time when the underlying economic momentum is robust (even though not brilliant) enough to bridge the gap between the liquidity-driven market rally and an earnings push With regard to fixed income, Axa IM suggests remaining prudent over the longer-term horizon despite the recent substantial rise in yields. “We view the Fed tapering as the beginning of a normalization process which will distinguish three different episodes: i) less liquidity injection, followed by ii) a period of relative calm (mid-2014 to end 2014), followed by iii) the higher short rates in 2015.”
From a more tactical perspective, Axa IM suggests moving back to neutral as far as safe haven bonds are concerned, as the Fed’s tapering talk will most likely calm down.
Wikimedia CommonsFoto: Dmcccomms. Dubai Multi Commodities Center busca convertirse en la torre comercial más alta del mundo
The Dubai Multi Commodities Centre (‘DMCC’), announced on Wednesday its plans to build the tallest commercial tower in the world as part of its expansion plans designed specifically for large multi-nationals.
Ahmed Bin Sulayem, Executive Chairman of DMCC, said,”When we announced the plans to build Almas Tower in 2002, the Middle East’s tallest commercial tower and DMCC’s headquarters, the entire office space across 63 floors sold out to DMCC end users, mostly in the diamond business, in just a few hours. The world’s tallest commercial tower and the DMCC Business Park are the next natural steps to ensure we continue to welcome companies to the free zone as demand grows – particularly large regional corporations and multi-nationals – in the near future. The initiative is designed to further strengthen Dubai’s position as the global hub for commodities trade and enterprise. Over the past four years DMCC has attracted more than 4,000 new companies to the Free Zone – 90% of which are new to Dubai. In 2013 we have accelerated this growth, with an average of 200 new companies joining DMCC every single month. This increased demand further demonstrates not only the confidence in DMCC and Dubai, but also underlines the need for new commercial space.”
Currently in the concept design phase, the DMCC Business Park and the world’s tallest commercial tower will cater to large corporations and multi-nationals that require significant floor space to buy or rent. The Business Park will comprise of 107,000 square metres of premium commercial and retail space.
Today, almost 7,000 members from start-ups to multi-nationals operate from the DMCC Free Zone. To confirm its confidence in the Free Zone’s future growth, DMCC made a public commitment in early 2011 that it would reach 7,200 member companies by the end of 2013, a target that is expected to be reached in the very near future.
In 2005, DMCC launched a ground breaking gold Sukuk, raising US$ 200 million to help finance the construction of its commercial towers. At the time, the Sukuk was assigned an “A” long-term and “A-1” short-term rating by Standard & Poor’s Rating Services and was oversubscribed. The Sukuk allowed investors to receive payment denominated in gold bullion as an alternative to US dollars. Despite the onset of the global financial crisis, the Sukuk was repaid fully and on time.
With 65 mixed-use commercial and residential towers and over 180 retail outlets in operation, there are currently over 65,000 people working and living within the development. On average, DMCC welcomes over 200 companies per month to its Free Zone, more than 6 companies per day – over 90% of which are new to Dubai.
Wikimedia CommonsFoto: Ashok Prabhakaran . Los ETFs y ETPs registran en junio las primeras desinversiones netas en dos años
Globally ETFs and ETPs had outflows of US$3.98 billion in June 2013,their first net outflows in over two years. Assets invested globally in Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) are at US$2.04 trillion, down from their all-time high of US$2.13 trillion at the end of May 2013, according to preliminary figures from ETFGI’s Global ETF and ETP industry insights report for first half 2013. There are now 4,849 ETFs and ETPs, with 9,878 listings, assets of US$2.04 trillion, from 209 providers listed on 56 exchanges. Year to date assets in ETFs and ETPs have increased by 4.9% from US$1.95 trillion to US$2.04 trillion.
Average daily trading volumes in ETFs/ETPs in June were US$92.2 billion, representing an increase of 31.1% from May and the highest level since October 2011.
“Market uncertainty surrounding the future of QE programs and volatility in the markets caused investors to withdraw US$3.98 billion from ETFs and ETPs in June” according to Deborah Fuhr, Managing Partner at ETFGI.
Fixed income ETFs/ETPs experienced the largest net outflows with US$7.1 billion, followed by commodity ETFs/ETPs with US$3.8 billion, while equity ETFs/ETPs gathered net inflows with US$4.8 billion.
Year to date through end of H1 2013, ETFs/ETPs have seen net inflows of US$103.9 billion, which is slightly lower than the US$107.2 billion of net inflows at this time last year.
In June 2013, equity ETFs/ETPs saw net inflows of US$4.8billion. North American equity ETFs/ETPs gathered the largest net inflows with US$6.9 billion, and then developed European equity indices with US$3 billion, while emerging market equity ETFs/ETPs experienced net outflows with US$4.9 billion.
Fixed income ETFs/ETPs saw net outflows of US$7.1 billion in June 2013. Inflation ETFs/ETPs experienced the largest net outflows with US$2.1 billion, followed by high yield with US$2 billion, and emerging market bond with US$1.8 billion, while government bond ETFs/ETPs gathered net inflows with US$1.1 billion.
In June 2013, commodity ETFs/ETPs saw net outflows of US$3.8 billion. Precious metals experienced the largest net outflows with US$3.2 billion.
Vanguard ranks 3rd in terms of ETF/ETP assets, is ahead in asset gathering with US$28.9 billion in net inflows year to date, and was the only one of the top 5 providers to receive net inflows in June. iShares ranks 1st in terms of assets, had net out flows of US$7.9 billion in June, and net inflows of US$23 billion year to date. SPDR ETFs ranks 2nd in assets, had net out flows of US$2.4 billion in June, and net outflows of US$6 billion year to date. Powershares ranks 4th in assets, had net out flows of US$586 million in June, and net inflows of US$7.16 billion year to date. DB X trackers ranks 5th in terms of assets, had net out flows of US$751 million in June, and net inflows of US$9 million year to date.
S&P Dow Jones has the largest amount of ETF and ETP assets tracking its benchmarks with US$563 billion, reflecting 27.5% market share; MSCI is second with US$319 billion and 15.6% market share, followed by Barclays with US$188 billion and 9.2% market share.
Wikimedia Commonshttp://hint.fm/wind/. BIGdata: Tres libros que nos enseñan a cambiar la forma de visualizar el mundo
Three new books about data visualization show the world in graphic form, thanks to recent advances in presenting big data. A video by The Economist featuring Kenneth Cukier, data editor at the magazine, shows how to depict information in new ways and look at the world through data visualization.
Some examples of this visualization show the impact of improvised explosive devices in the Afghanistan War, the earthquakes suffered globally during the 20th century or a map of winds of the United States. The three books are: “Facts are Sacred”, by Rogers Simon, who worked at The Guardian but who now works for Twitter; “The Infographic History of the World” by James Ball and Valentina d’Efilippo shows the history of humanity from the big bang through quantification and the visual display of that information; and “Data points: visualization that means something” by Nathan Yau aimed for the professionals who have to work daily with big amounts of data making you think of entirely different ways to present data. This book shows a Wind Map (interactive through the link) made by two people at Google who were able to show data, almost in real time, about the intensity of wind flows through white lines and how they change. It does not take much to think about ways in which these new tools can be used to analyze and support investment decisions.
Wikimedia CommonsBy LunarGlide+ 5 from Nike Running. Renewed or Print
Continuously reinventing and taking advantage of opportunities offered by the advancement of technology is essential for companies to remain at the forefront. Some firms in an industry as traditional as textiles have been able to incorporate the technological advances into their production processes, reducing costs and time through the thereof. Increasing number of shoe companies are making use of the 3D printing, in which their designs are made more efficiently and effective.
The strategy of Robeco Consumer Trends is in line with these companies who are committed to continuous innovations, able to anticipate the needs of the consumers, even create them, obtaining further outperformance.
Through 3D printing, shoe manufacturers take advantage of advances driven technology heavy industries such as aerospace. This type of printing is partially extended in the area of personalized medicine as may be the case of hip prostheses. 3D printer’s particles have plastic, metal or even wood into thin layers that are used to construct objects solids.
Before the arrival of this new way of designing the new shoes, the prototypes of the German Adidas, teams were made up of twelve technicians working by hand. The new technology does not need more than two people. With the use of this technique, Adidas managed to reduce the time needed to evaluate new prototype from four to six weeks to just a day or two.
Shane Kohatsu, innovation director of Nike headquarters in Oregon, said to the Financial Times that for him the most striking of 3D printing is not the volume that you get to develop, but the speed with which you can make changes to prototypes.
The strategy of Robeco Consumer Trends has invested about 15% of its total portfolio in the garment industry and luxury goods. Along with Nike and Adidas helping to excel Robeco consumption strategy there is also Lululemon Athletica, other names or Michael Kors, among others. These big brands are a part, along with many others, one of the betting strategy of Robeco Consumer Trends, the big brands. A through them is to not only take advantage of the returns generated by these firms consolidated but also provide a defensive to the portfolio.
