1) China's $1 Trillion Bond Leverage Unwinds as Pimco Senses Panic
(Bloomberg) -- China's bond traders are getting a painful lesson on the dangers of leverage. After years of racking up profits by borrowing cheaply and plowing the proceeds into higher-yielding debt, investors are now rushing to unwind those wagers amid the deepest selloff in 13 months. The bets are getting squeezed from both sides as bond prices sink and borrowing costs rise to one-year highs in the 8 trillion yuan ($1.2 trillion) market for repurchase agreements, used by ...
2) BOJ Stimulus Never Less Effective as Cash Idles, Indicator Shows
(Bloomberg) -- A benchmark gauge shows the Bank of Japan's stimulus has never been less effective and some bankers say negative interest rates have only made it harder to put cash to work in the economy. Consider the money multiplier. The measure of how much financial activity is spurred by an addition of cash by the central bank sank to the lowest on record last month, in data back to 2003. That's even as BOJ Governor Haruhiko Kuroda's bond buying ...
3) Japan Power Market Faces Headwinds as Utilities Shy From Sales
(Bloomberg) -- While trading has surged on the Japan Electric Power Exchange since the liberalization of the country's retail electricity market, tepid interest from the biggest utilities means volumes are just a sliver of total consumption. An average 47.3 gigawatt hours a day of power was traded from April 1 to April 28, a 41 percent increase from the same period a year earlier, according to data from the Tokyo-based exchange. That ...
4) China Faces Record Bond Payments in Metals, Mining Amid Defaults
(Bloomberg) -- Chinese companies struggling with overcapacity problems have a record amount of local bonds maturing this quarter. And it's only going to get worse for the rest of the year. Firms in the metals and mining or coal operations industries must repay 239.6 billion yuan ($36.9 billion) of notes in the three months through June, the biggest quarterly amount on record, according to data compiled by Bloomberg. Redemptions for the following two quarters will be even ...
5) No Rebound for Dymon Macro Hedge Fund After First Annual Loss
(Bloomberg) -- Dymon Asia Capital (Singapore), which has pledgedto return performance fees unless its main hedge fund can recoup losses from bets on the Swiss franc in January 2015, failed to make progress toward that goal in the first quarter. The $3.2 billion Dymon Asia Macro Fund, which established itself as one of Asia's top funds after beating rivals in 2013 and 2014, fell 10.3 percent in 2015 for its first annual drop and was largely unchanged in the three months ended ...
6) The Sick, Young and Old: Aussie Cheesemaker's Chinese Targets
(Bloomberg) -- Bega Cheese Ltd. plans to generate as much as half its revenue from overseas by 2020 as the Australian dairy company expands a range of products with vitamins maker Blackmores Ltd. The 117-year-old cheesemaker started selling infant formula this year through a joint venture with Blackmores as demand for the dried-milk powder surged in China. In an interview in Sydney on Wednesday, Bega Chairman Barry Irvin said the two companies aim to follow up with ...
7) $51 Billion Bonanza Makes Malaysian Builders Winners to Top Fund
(Bloomberg) -- With as much as 200 billion ringgit ($51 billion) of building jobs in play, Danny Wong Teck Meng says no investor can afford to ignore Malaysian construction stocks. The fund manager whose Areca EquityTrust Fund beat 98 percent of peers over the past three years with a 13 percent return, has been buying builders as the government accelerates infrastructure spending across Malaysia. The latest hotspot is Sarawak on Borneo island where a 28.9 billion ringgit, ...
8) Oil's Profit Surprise Has Analysts Wondering How Well Exxon Did
(Bloomberg) -- The Big Oil earnings season has started with such a surprise that some analysts already say their estimates for the other companies may be too low. BP Plc and Statoil ASA both reported a first-quarter profit this week after analysts predicted losses, while Total SA beat earnings estimates by 31 percent. The results, reflecting sweeping cost cuts as well as resilient refining, trading and petrochemical operations, suggest Exxon Mobil Corp. and others may also ...
9) Currency Trading's 20% Drop Raises Specter of Flash-Crash Future
(Bloomberg) -- The world's biggest financial market has shrunk by 20 percent during the past year and a half. Currency trading via CME Group Inc., ICAP Plc and Thomson Reuters Corp. -- three of the largest trading platforms -- fell to $538 billion per day last month, from more than $669 billion in September 2014, according to data compiled by Bloomberg. The figures show the extent of the slump in a market that this month saw some banks report less client activity in ...
10) SNB's Mr Seven-Percent Stays Shy as Shareholders Meet in Bern
(Bloomberg) -- When Swiss National Bank shareholders gather in Bern on Friday to hear from President Thomas Jordan and savor complimentary ice cream, there may be a heavyweight absentee: the central bank's biggest private investor. Media-shy German businessman and professor Theo Siegert, who holds almost 7 percent, has owned shares in the SNB since at least 2008. The stake was valued at about 7 million francs ($7.2 million) at the end of December -- making him the ...
11) JPMorgan Sees Draghi as Buyer of Last Resort for Stock Market
(Bloomberg) -- For equity investors, Mario Draghi's adventures in the credit market have been something less than a boon. Since the European Central Bank president began his bond- buying program in 2015, the MSCI EMU Index of euro-area companies has lost 7.4 percent, including dividends. An index of non-financial high yield credit has returned 1 percent, pushing the gap between the two to the widest since 2014 this month. Even a 16 percent rebound ...
12) Pimco Recruiting Senior Executives in Push to Bolster Leadership
(Bloomberg) -- Pacific Investment Management Co., under pressure to improve operations and reverse outflows, is recruiting senior executives for positions that would bolster its leadership. The fund company is seeking to fill jobs including a senior strategist to help build out new business lines and expand overseas operations, according to Group Chief Investment Officer Daniel Ivascyn. "We need better oversight from a strategic business ...
13) Uber May Have to Reveal Financial Secrets in Driver Settlement
(Bloomberg) -- The judge who Uber Technologies Inc. is asking to approve its $100 million settlement with drivers isn't keen on keeping key details of the accord a secret. While Uber says some of its metrics are trade secrets that should remain sealed from public view, U.S. District Judge Edward Chen said Wednesday he's not sure he has enough information to decide whether the deal announced last week is fair. He ordered lawyers for the company and the drivers to tell him ...
14) Google to Facebook Risk New Wave of EU Curbs on Data Dominance
(Bloomberg) -- Companies like Google and Facebook Inc. risk new regulatory curbs as the European Union considers ways to limit how technology giants' bargaining power and control of vast amounts of data may hurt competitors and customers. Heralding tougher scrutiny of search engines, social media and app stores, the European Commission warned that so-called online platforms may no longer avoid rules that govern other industries such as telecommunications ...
15) Andre Esteves Returns to Bank That's a Shadow of Former Empire
(Bloomberg) -- Hours after Brazil's Supreme Court freed him from house arrest, a smiling Andre Esteves addressed employees in an auditorium at Grupo BTG Pactual's headquarters to deliver an important message: he's back. While the billionaire didn't say what he'll be doing in his impromptu Monday night gathering, the bank confirmed in a statement on Wednesday that he'll be a senior partner, advising on strategy and the ...
16) Private Colleges Hold Back Investment Fee Details From U.S.
(Bloomberg) -- As Congress extracts information from private university endowments, many schools aren't providing details on one sensitive topic -- fees to money managers. At least 30 universities, including the eight Ivy League schools, didn't disclose how much they paid in performance fees to external managers like hedge funds in response to questions from lawmakers about how they manage and spend their endowments. Some schools were forthcoming in divulging lower-cost ...
17) East Libya to Ship More Oil While UN Slams Sales as Illegal
(Bloomberg) -- Authorities in eastern Libya pledged to export more crude oil soon, two days after shipping their first cargo in defiance of a national unity government based in Tripoli. A representative of the National Oil Corp. based in eastern Libya said he expected payment within a month for the shipment. A separate branch of the company based in Tripoli, in the west of the divided country, said it hoped international forces would seize ...
18) French Startup Has No Bank License, But It's Got a Million PINs
(Bloomberg) -- French startup Linxo is showing you don't need a banking license to win over almost 1 million customers -- and gain access to their bank accounts. The company's app aggregates information such as transactions and balances from several accounts onto a single screen to help people manage a budget. It has gathered 900,000 users in France and is weighing up an expansion to the U.K., Germany and Spain, co-founder Bruno Van Haetsdaele ...
19) 7-Eleven Venture Upheaval Shows Risk of Company Playing VC Role
(Bloomberg) -- Silicon Valley startups were redefining convenience, and 7-Eleven Inc. executives were nervous. Instacart Inc., Postmates Inc. and others were winning customers with their hassle-free mobile apps, enabling people to order, pay for, and arrange delivery of milk and other must-have items without ever leaving their couches. The new companies had greater inventory—the startups don't physically stock the items themselves—and delivery times of mere minutes in ...
20) The Exclusive Club That Few U.S Companies Want to Belong to
(Bloomberg) -- It just doesn't pay to be rated AAA. After Standard & Poor's stripped Exxon Mobil Corp. of its top grade on Tuesday, only a pair of U.S. corporate issuers have a gold-plated rating. In October 2006, there were six, according to the ratings firm. In the early 1980's, there were 32. At least part of that decline is because corporations have tried to increase their stock prices at the expense of their credit ratings. Exxon Mobil ...
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