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Hong Kong freedom of press faces test if Alibaba buys South China Morning Post
<p>Yet another internet mogul is eyeing an old-media news property. The New York Times is reporting that Jack Ma is in talks to buy Hong Kong's South Morning China Post.</p> <p>Can the CEO of Alibaba maintain the editorial independence of the SCMP? Even Jack Ma answers to a higher authority: Beijing. As any mainland billionaire will tell you, the Chinese authorities are not afraid of throwing their weight around.</p> <p>Freedom of the press was enshrined when Great Britain gave up control of the former colony. But there's freedom and then there's business.</p> <p>The NYT notes that it's not clear who the owner of the SCMP will be -- Jack Ma or Alibaba.</p> <p>In any event, Ma follows a long tradition of industrial/internet businessmen eyeing media properties. In 2013, Amazon CEO scooped up The Washington Post. The NYT reports the deal makes business sense for Ma:<br /> A deal for The South China Morning Post, the person said, would fit in with Alibaba’s broader holdings. The company owns stakes in Chinese Internet sites with a media bent, like Youku Tudou, which is similar to YouTube, and Sina Weibo, akin to Twitter. The person said that The South China Morning Post had a good brand and that the takeover “might lead to some synergy.” Any such advantages would be easier to realize if Alibaba were the buyer, the person said.<br /> Photo: Melies the Bunny<br /> &nbsp;</p>
The long-term investing impact of the Paris attacks
Asset Management
<p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>Last week’s horrific terrorist attacks in Paris were a reminder that, unfortunately, the ongoing fight with global terrorism is still with us, and my thoughts are with those affected by the tragedy.</p> <p>In a new paper, “After the Paris Tragedy,” the BlackRock Investment Institute recently shared some insights on how this significant escalation in the intensity of the terrorist threat could impact the economy and markets going forward. Here are three of the key points.</p> <p>Episodes of terror tend to accentuate existing economic and market trends, rather than constitute turning points. The market impact of past terror episodes, including the 2005 London bombings and 2004 train bombing in Spain, was generally ephemeral, according to a BlackRock analysis of data accessible via Bloomberg. In other words, the attacks created headlines, become market talking points and then disappeared. If anything, they heightened the trajectory of the economy and markets. For instance, the September 11 attacks magnified the 2001 U.S. tech bubble recession, but didn’t cause it.</p> <p>Similarly, in the near term, the tragedy in Paris is likely to bolster economic trends already underway in Europe. The fallout from these attacks will probably put some pressure on the French economy as well as the euro. A likely (but reversible) dent in European consumer confidence should cement plans by the European Central Bank (ECB) for more easing measures in December. Meanwhile, France will likely further loosen the austerity reins to boost defense spending, with other European Union (E.U.) members following suit.</p> <p>The longer-term impact of Paris could be different. The cause of the Paris attacks is rooted in a systematic breakdown of state control in the Middle East. The region is dogged by the aftereffects of the Arab Spring, sectarian conflicts and proxy wars between Sunni Saudi Arabia and Shiite Iran, and this cycle may just be getting started, as seen in recent attacks on civilians and the bombing of a Russian airliner.​</p> <p>With the Islamic State (ISIS) and its affiliates set on internationalizing their reach, the terrorist threat against the West is likely the highest it has been since 2001. If the Paris tragedy marks an evolution toward an extended, global conflict, the market impact could be much greater than past terror attacks stemming from regional conflicts.</p> <p>In addition, the Paris tragedy will complicate the path toward a political solution to the European refugee crisis, and the outcome is still unclear. It could lead to closed borders and harden the case in the U.K. for leaving the E.U., or alternatively, we could see more cooperation and integration among E.U. members.</p> <p>Geopolitics could start having a greater influence on markets going forward. Markets will have to contend with many political uncertainties in 2016. These include possible setbacks to the European project in the face of the refugee crisis and risk of more terror attacks; rising instability in the Middle East likely to be aggravated by the impact of low oil prices; a Russia and China increasingly assertive abroad while grappling with economic slowdowns at home; and a U.S. presidential election with a wide-open field of candidates and outcomes.</p> <p>These risks are playing out against a backdrop of asset prices propped up by years of plentiful liquidity. Liquidity conditions may be less benign in 2016. The Federal Reserve (Fed) is set to raise interest rates for the first time in nearly a decade, and the events in Paris aren’t likely to alter this. Elsewhere, emerging market central banks and sovereign wealth funds have been selling reserves and risk assets to defend currencies and or plug budget holes.</p> <p>This means markets are likely to pay more attention to geopolitics going forward, and it calls for cautious navigating in 2016.</p> <p>Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog.</p> <p>This article wa
NY Attorney General investigating possible manipulation in foreign-exchange trading
Capital Markets
<p>&nbsp;</p> <p> The New York Attorney General's office is investing possible foreign-exchange manipulation.<br /> Brokers are suspected to be engaged in "spoofing," whereby orders to buy or sell are entered into the market with the intent of being canceled prior to filled.<br /> Subpoenas have been sent to large forex brokers which may force the companies to release their records.</p> <p>The New York General Attorney's office, led by Eric Schneiderman, is investigating potential manipulation in foreign exchange trading, according to a Bloomberg report which cited "a person familiar with the matter."</p> <p>According to Bloomberg, Schneiderman ...</p> <p>Full story available on<br /> Photo: MoneyBlogNewz</p>
Clinton, Sanders and Trump not big fans fo Pfizer-Allergan deal
Capital Markets
<p> Following months of takeover talks, Pfizer Inc. (NYSE: PFE) announced on Monday it has acquired Allergan PLC (NYSE: AGN) for around $155 billion.<br /> The combination of Pfizer and Allergan marks the largest consolidation in the healthcare space.<br /> Presidential candidates publicly opposed the merger following the announcement.</p> <p>The healthcare sector saw its largest consolidation yet as Pfizer has agreed to acquire Allergan in a deal valued at around $155 billion.</p> <p>Pfizer's acquisition also represents the single largest inversion ever as U.S.-based Pfizer may be able to officially move its headquarters to Allergan's Irish domicile. By doing so, Pfizer's effective tax rate is expected ...</p> <p>Full story available on<br /> Photo: United States Mission Geneva</p>
Get ready for Thanksgiving week market doldrums
Capital Markets
<p>Everything except shopping slows down over the holidays in the United States, and that certainly as much true of Wall Street as anywhere else. That’s why it’s not too surprising to hear there’s hard data that back up the slowdown in the financial sector around Thanksgiving and Christmas.</p> <p>A November 17th report from Credit Suisse Trading Strategy highlights that the holiday doldrums on Wall Street are the real deal, with average volumes barely half of their normals. As Ana Avramovic and the CS team explain, the Thanksgiving holiday is pretty much a one-week blip and then back to business as usual until the week of Christmas when things slow down to a crawl.</p> <p>Thanksgiving week is historically slow<br /> Avramovic et al. point out that based on average Wall Street trading data over the past nine years:</p> <p> Trading volume on the Monday through Wednesday of Thanksgiving week is usually around  7% lower than the daily volumes over the previous two weeks.<br /> The volume on Friday’s half day is typically around half the volume of the Monday through Wednesday’s average.<br /> That said, most everybody is apparently ready to get back to work after the long holiday weekend, as post Thanksgiving week volumes are usually pretty close to pre Thanksgiving week volumes.</p> <p>December also likely to be a slow month<br /> Taking a look at trading trends throughout the rest of theholiday season after Thanksgiving, December’s average daily volume has been 3% below the year’s average, and 5% lower than November’s average, when you examine data going back over the last 17 years.</p> <p>This year hasn’t quite followed the typical pattern, though.August is typically the slowest month of the year, but this August had the 2nd highest monthly ADV in four years (after Oct 2014). Meanwhile, April and May were exceptionally slow.</p> <p>Avramovic and the CS team note that if you ” consider that December’s volume is 5% lower than November’s, then we might expect to see around 6.8 bn shares/day in December.”</p> <p>This article was originally published by ValueWalk. <br /> Photo:Steve Voght</p>
Daily Scan: Chinese shares rebound; Bombs rip through Egyptian hotel
Capital Markets
<p>Updated throughout the day</p> <p>November 24, 2015</p> <p>Chinese shares pulled an impressive comeback on Tuesday with the Shanghai Composite finishing the day up 0.16% and the Shenzhen Composite ending the session up 1.39%. Shanghai was down as much as 1.24% earlier in the trading day. Their Hong Kong-listed cousins however were not as lucky. The territory’s main benchmark is down 0.35%, while the Hang Seng China Enterprises Index – an index of Chinese companies listed in Hong Kong – is down 0.71%. As for Japan and Singapore:</p> <p> Nikkei 225: +0.23%<br /> Straits Times Index: +0.93%</p> <p>Bearish sentiment meanwhile continues to hold over European shares. The U.K.’s FTSE 100 is currently down 0.92%, while Germany’s DAX 30 and France’s CAC 40 are down 0.72% and 1.35% respectively. The rebound in metals prices did a lot of good for U.K. mining stocks though, AngloAmerican shares have so far jumped 3.2% and Glencore stocks have climbed 1.9%.</p> <p>Here’s what else you need to know:</p> <p>Fatal twin blasts in Egypt hotel.  Two bombs exploded outside a hotel in Egypt housing election judges on Tuesday, killing at least three people and injuring 12. The blasts came a day after the second round of a parliamentary election closed. Guardian</p> <p>Apply Pay eyes China launch early next year.  The tech giant's electronic-payment service is looking to launch into the large and competitive Chinese market by early February, according to sources. Wall Street Journal (paywall)</p> <p>FAA recommends drone registrations. Owners of drones weighing more than a paperback book should be forced to register the machines in a US federal database, a report released by the Federal Aviation Administration concluded on Monday. Financial Times (paywall)</p> <p>Japan manufacturing output speeds to a 20-month high. Manufacturing output in the land of the rising sun climbed to 53.9 in November – its fastest pace in 20 months – while production growth surged to 52.8 – its highest reading since March 2014. Markit</p> <p>Aussie troops “will not fight IS”. Australian prime minister Malcolm Turnbull has said the so-called Islamic State (IS) group is weak and Australia has no plans to send combat troops to fight it. His remarks contrast those of his predecessor Tony Abbott who described IS as a “death cult.” BBC</p> <p>Malaysia’s 1MDB to sell energy assets to China firm. A Malaysian government-investment fund struggling to dig itself out of a heavy debt load has closed a $2.3 billion deal to sell its energy assets to state-owned China General Nuclear. Wall Street Journal</p> <p>Fed Chair Janet Yellen tells Ralph Nader that she expects economy to grow. “Most of us expect the pace of that normalization to be gradual,” Yellen said in a letter to Ralph Nader and Guy Vidal, which was released by the Federal Reserve. Nader wrote that savers were suffering from zero-bound interest rates. Yellen acknowledged the hardship savers have endured. MNI</p> <p>The head of Guotai Junan’s overseas unit has gone missing. Yim Fung has been missing  since Wednesday. Sources believe his disappearance may be related to an investigation of a high-ranking official at the China Regulatory State Commission, who is a former Guotai executive. Shares of the company fell 17% when the news leaked Monday morning. South China Morning Post (paywall)</p> <p>Crash in oil prices divides Opec. Venezuela and other smaller producers are urging Saudi Arabia to cut back on oil production. The Saudis are betting that they can put shale producers out of business in the U.S. by keeping prices low. But Open members are rebelling. “OPEC has never been more divided,” said Fadel Gheit, an Oppenheimer analyst who has been closely covering the oil industry for 35 years. CNN Money</p> <p>U.S. hits ISIS right in the oil tanks. An air strike destroyed more than 238 fuel trucks controlled by ISIS in northern Syria. ISIS is one of the wealthiest terror groups because of its oil possessions. BBC</p> <p>Blast at Yasukuni Shrine in Tokyo. No one was hurt, but police believe the explosion in a bathroom ou
Daily Scan: Asian shares tumble; Japan PMI speeds to 18-month high
Capital Markets
Updated throughout the day November 24, 2015 Asia ex-Japan shares sank lower on Tuesday as energy and metals prices continue to flirt with new lows. Hong Kong’s Hang Seng Index has so far slumped 0.70%, while China’s Shanghai Composite tanked 0.73%. Japan’s Nikkei 225 however – while slow to boil at first following their long weekend – managed to spike
D-day for Li Ka-shing merger plan
Capital Markets
<p>Li Ka-shing is rarely thwarted. Yet on Tuesday, Hong Kong's richest man could find his succession plans derailed by an unusual exercise of shareholder power -- unusual for Hong Kong, that is, where the tycoon oligarchs almost always get their own way.</p> <p>Investors will decide whether Li's planned $13 billion merger of his Cheung Kong Infrastructure (CKI) and cash-rich affiliate Power Assets will go ahead. Two shareholder proxy firms have advised Power Asset investors to reject the deal, arguing that they won't be getting fair value, reports The Wall Street Journal. (paywall)</p> <p>Crucially, 61% of Power Assets are publically traded. As analysts at brokerage firm CLSA point out, “only 6.1% of shareholders can vote down the merger, making it nearly impossible for the deal to go through now at the current merger ratio."</p> <p>“CKI should step up to the game and make an offer that investors can’t refuse.”</p> <p>Now, that really would be unusual.<br /> Photo: akika8<br /> &nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p>
Segantii retains top spot on HSBC’s HF performance list
Hedge Funds
<p>While high-profile firms like Greenlight Capital and Pershing Square continue to suck wind, Hong Kong-based Segantii retained its spot as the best performing hedge fund in 2015, according to HSBC’s latest Hedge Weekly report:</p> <p>The fund, which employs relative value, event-driven, and equity long-short strategies, is slightly up from its previous showing.</p> <p>Interestingly, the bottom 20 seems to be populated with more than a few event-driven funds, so I guess Simon Sadler’s doing something right here.<br /> Photo: Anthony Kelly</p>
Hedge funds slaughtered by favorite positions in Q3
Hedge Funds
<p>&nbsp;</p> <p>Hedge funds took a beating during the third quarter thanks to the exceedingly poor performances posted by some of their biggest performances. Health Care led the way, accounting for 70% of the underperformance of Goldman Sachs’ Hedge Fund Very Important Position basket since August. The firm released the latest edition of its “Hedge Fund Trend Monitor” report on Friday.<br /> Hedge funds lag the S&amp;P 500<br /> According to analyst Ben Snider and his team, the average hedge fund has so far returned -2% this year, underperforming the S&amp;P 500 Index‘s 3% gain. In fact, the carnage was so bad that over the three months from August to October, the favorite hedge fund positions (as measured by Goldman Sachs) posted their worst three-month relative return since 2008.</p> <p>The Goldman team estimates that in aggregate, hedge funds are running 51% net long right now, compared to the 57% net long they were running during the first quarter of the year.<br /> Favorite hedge fund positions prove costly<br /> Goldman’s basket of very important positions includes the 50 stocks that are seen the most often in the top ten holdings of “fundamentally-driven hedge fund portfolios.” Last year, the basket outperformed the S&amp;P 500 by 265 basis points. The basket also outperformed the index in 66% of the quarters since 2001. This year, however, the basket underperformed the index by 537 basis points.</p> <p>Between July and October, Snider and team said their list of favorite hedge fund positions underperformed the S&amp;P 500 by 720 basis points between July and October, declining by 8% compared to the index’s 1% decline in the same time frame. The analysts said Valeant Pharmaceuticals was the biggest drag on the popular positions.<br /> Hedge funds continue to stagger<br /> The Goldman team said aggregate hedge fund returns entered negative territory (with their 2% decline) during the August market correction, and they have yet to recover. Snider reports that event-driven hedge funds have seen the worst performance out of all hedge funds, with the typical fund declining 6% so far year to date.</p> <p>Among the new favorite positions Snider and team noted were PayPal, General Electric, McDonald’s, Baidu, and Mylan.</p> <p>This story first appeared with Goldman Sachs charts in ValueWalk.<br /> Photo:  Ian Sane </p>