Foto: "Guvernør Joko Widodo og statsråd Trond Giske" por NHD-INFO. Indonesia: una democracia mayor de edad
The official results from the Indonesian presidential elections confirmed that Joko Widodo (Jokowi) won with a convincing margin. Wim-Hein Pals, Head Emerging Markets Equities at Robeco, considers this a positive development but will wait for concrete signs of structural reforms before changing its neutral weight in Indonesia.
“Following Jokowi’s election, we expect the market’s focus of attention to shift to the coalition-building talks and the possibility of a near-term fuel price adjustment. As for the former, it is important to watch whether Golkar will switch allegiances, or if a large number of its party members join Jokowi. This would be a positive for reform momentum as it would make it easier for the coalition to pass laws in parliament”, highlights Pals in a report published by Robeco.
Cutting fuel subsidies is urgent
The second topic to watch is a possible fuel price adjustment. Fuel subsidies are the most urgent challenge. The recently revised fiscal projections and proposals to limit subsidized fuel sales confirmed that fuel subsidy costs would far exceed budget targets. The revised fiscal deficit target for this year is 2.4% of GDP, from the budgeted 1.7% of GDP. Energy subsidies, which were originally targeted below 3% of GDP, are now officially projected at 3.5% of GDP.
Maintain Indonesia’s neutral weight
According to the report, Robeco Emerging Markets Equities will remain neutral in Indonesia for now, for three main reasons:
A lot of the good news, i.e. a Jokowi win, has been priced in after an enormous rally since the start of 2014. This makes the market slightly overvalued in their opinion based on price/earnings and other valuation multiples.
Jokowi now has to deliver on important issues, such as infrastructure developments and cutting fuel subsidies. There is therefore an ‘execution risk’ as far as his policy is concerned.
Indonesia’s macro situation is not bad (not part of the so-called fragile five family anymore), but it still has a twin deficit. Albeit manageable, a fiscal deficit and a deficit on the current account remain.
You may access Robeco’s Emerging Markets EquitiesTeam full report on Indonesia through this link
Foto: Ennor, Flickr, Creative Commons. Competencia fundamental para los equipos de ventas de las gestoras en 2016: adaptación al cambio
Investors worldwide are caught between a desire to achieve greater investment returns and an aversion to taking risk. To help individuals overcome these traditional investment challenges, Natixis Global Asset Management has announced a commitment to fund a three-year, $1 million research project at the Massachusetts Institute of Technology focused on investor behavior and personal benchmarks to be led by industry thought leader Andrew W. Lo, Ph.D., Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management and director of the Laboratory for Financial Engineering (LFE) where the research will be conducted.
In addition, Natixis will provide Lo and LFE researchers with access to data from its Durable Portfolio Construction Research Center’s global surveys of individual investors, financial advisors, and institutional investors, now in their fifth year and containing responses to more than 500 survey questions by more than 30,000 participants.
“The research we’re funding at MIT will lay the foundation necessary to revolutionize traditional investment strategies designed to help investors build better portfolios and increase their chances of long-term success,” said John Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia. “Our firm has been on the forefront of innovative strategies for many years, advocating for a durable portfolio construction model with a recently added focus on helping investors develop a personal, outcome-based approach to achieve success. It’s time to introduce a new paradigm for investing.”
With almost $900 billion in assets under management, Natixis is one of the world’s largest investment companies and was named the #1 fund family for 2013 performance in the annual Barron’s/Lipper Fund Family Ranking.
This new research program will begin by studying the industry practice of using an index as a benchmark and developing a more modern approach to benchmarking based on an individual’s unique circumstances as well as current market dynamics. As part of this effort, LFE researchers will be developing algorithms to mimic irrational but common investor behavior (e.g. buying high, selling low, and moving to cash for extended periods of time) in an attempt to quantify the systematic mistakes made by investors. This will lead to the third phase of the research involving the creation of new customizable benchmarks and indexes that adapt to changing market conditions and behavioral challenges.
“The Holy Grail of developing automated, customized processes for making better investment decisions is not unique to our times or the financial industry,” said Lo. “But what is unique is the confluence of breakthroughs in financial technology, computer technology and institutional infrastructure that, for the first time in the history of modern civilization, makes automated personalized investment management a practical possibility.”
MIT Sloan Prof. Lo is the Director of the MIT Laboratory for Financial Engineering, a partnership between academia and industry created to drive advances in capital markets, risk management, and financial technology research. He is also a Principal Investigator at the MIT Computer Science and Artificial Intelligence Laboratory and an affiliated faculty member of the MIT Department of Electrical Engineering and Computer Science. “Many companies and experts have been talking about the need for change for years now,” said Lo. “I’m grateful to Natixis Global Asset Management for taking on this challenge by investing in research designed to benefit investors globally.”
Outside of academia, he is the founder, Chairman and Chief Investment Strategist of AlphaSimplex, a Cambridge-based investment advisor focused on the dynamic relationship between risk and return in the financial markets. The firm manages more than $4 billion in assets for institutional and mutual fund investors.
The $1 million grant will be made to MIT as a part of the Natixis Global Asset Management Durable Portfolio Construction Research Center’s ongoing commitment to providing investors, financial advisors and policymakers with valuable insights to assist all investors over the long term.
Moritz Kosinsky . S&P MILA Pacific Alliance Indices Launched by S&P Dow Jones Indices
S&P Dow Jones Indices has announced the launch of the S&P MILA Pacific Alliance Indices. The Indices are the first to measure equity market performance of the Pacific Alliance, a strategic platform that seeks to advance economic integration among the four member states – Chile, Colombia, Peru, and Mexico.
The underlying universe for the S&P MILA Pacific Alliance Indices is all stocks in the S&P Global Broad Market Index (BMI) that trade on the Mercado Integrado Latino Americano (MILA) platform or the Mexican Stock Exchange (Bolsa Mexicana de Valores, BMV) as domestic stocks. Mexico has recently announced that it intends to join the MILA platform by the end of 2014.
The indices launched include:
S&P MILA Pacific Alliance Composite: A broad market index that includes all stocks listed on MILA and on the Mexico Stock Exchange that are included in the S&P Global BMI.
S&P MILA Pacific Alliance Select: Index gauges the largest and most liquid stocks trading on MILA and on the BMV.
S&P MILA Pacific Alliance Completion: Designed to capture the small-cap segment of the regional market by including all the stocks in the S&P MILA Pacific Alliance Composite that are not members of the S&P MILA Pacific Alliance Select.
S&P MILA Pacific Alliance Sector Indices: Ten sector indices based on the GICS sector classification with the constituents derived from the S&P MILA Pacific Alliance Composite.
Alka Banerjee, Managing Director of Global Equity Indices at S&P Dow Jones Indices, said: “The Pacific Alliance region has gained the attention of the global investment community given the region’s healthy growth and economic and market liberalization in recent years. The S&P MILA Pacific Alliance Indices provide local and international investors with relevant benchmarks to measure this growing region.”
Nicolás Almazán, Leader of the Commercial Committee of MILA, comments: “These new indices represent the great relevance MILA has acquired during its three years of existence, and with the expected inclusion of Mexico in the last quarter of this year, MILA becomes the financial arm of the Pacific Alliance. The addition of the new indices to the existing three MILA Andean indices delivers better performance information of issuers listed on the countries of MILA and Mexico.”
The launch of the S&P MILA Pacific Alliance Indices expands the S&P MILA index family. As previously announced, the existing S&P MILA indices – S&P MILA 40, S&P MILA Financials, and S&P MILA Resources were renamed effective July 14, 2014 to S&P MILA Andean 40, S&P MILA Andean Financials, and S&P MILA Andean Resources, respectively, to more specifically describe the region they represent.
Sweigart buscará oportunidades entre los fondos de pensiones de México y Brasil . Joseph Sweigart impulsará el negocio en Latinoamérica de Threadneedle y Columbia
Columbia Management has announced that Joseph Sweigart has joined the firm in a new position as Senior Institutional Sales Director heading up Columbia and Threadneedle Investments’ joint business development in Latin America. Columbia and Threadneedle form the global asset management business of Ameriprise Financial.
Mr. Sweigart will report to Jeff Peters, Global Head of Institutional Distribution and Business Solutions, and will work closely with Ruben Garcia, Threadneedle’s Head of Iberia and Latin America Distribution and Dominik Kremer, Head of EMEA Institutional Distribution at Threadneedle.
Under Ruben Garcia’s leadership, Threadneedle has built a solid presence in Latin America including Chile, Peru and Colombia. Mr Sweigart will build on this success to drive the expansion of Columbia and Threadneedle’s presence in the region as well as uncovering further opportunities with Brazilian and Mexican pension funds as they embrace international asset managers in the coming years.
Joseph Sweigart has nearly 20 years’ experience in Latin American Distribution, most recently as Head of Lat Am Funds Distribution at JP Morgan Asset Management, where he had worked since 1995. He designed and implemented a successful strategy establishing franchises across numerous countries.
“Joe’s appointment reflects our intention to become the asset manager of choice for institutional clients in Latin America by bringing together the best of Columbia and Threadneedle’s global investment capabilities for the benefit of our clients” said Jeff Peters.
“ I am confident that Joe’s leadership, experience and local knowledge will be of great benefit for the growth of our institutional offering and client base in this fast growing region.”
Omni Partners LLP, the alternatives specialist set up by trading veteran Steve Clark in 2004, has announced that the Financial Conduct Authority has approved its application for an authorised licence under the Alternative Investment Fund Managers Directive (AIFMD).
The granting of this licence allows Omni Partners to continue to offer wealth management and institutional clients access to its alternative investment funds as part of an EU-wide harmonised framework. Citibank International PLC has been appointed as independent depositary, complying with the requirements of the Directive.
Omni’s CEO, Peter Coates, commented: “It is Omni’s aim to be at the spearhead of alternative investment fund management best practice on a global basis. This licence is evidence of our commitment to providing the highest standards of integrity, ethics, and regulatory compliance to investors.”
The AIFMD has a number of aims including the enhancement of supervisory practices with a view to preventing instability within the European financial system, improving investor protection through the imposition of new depository standards, and enhancing transparency via new investor disclosure rules and mandatory reporting to competent authorities.
Sankaty Advisors, an independently managed credit affiliate of Bain Capital, has announced the signing of a definitive agreement to acquire a portfolio of loans and other securities from J.P. Morgan’s Global Special Opportunities Group. The portfolio contains mezzanine loans in North America and Europe, as well as loans and related special situations investments in Australia and across Asia, with an aggregate value of approximately $1.3 billion.
This acquisition follows Sankaty Advisors’ other recent purchases of loan portfolios from Irish Bank Resolution Capital, Lloyds Banking Group and CapitalSource.
“This is another attractive addition to our platform as we continue to identify portfolios around the world where we can be a provider of patient capital and a helpful, value-added lender to and investor in high quality companies,” said Jonathan S. Lavine, Managing Partner and Chief Investment Officer of Sankaty Advisors. “We are continuing to see significant opportunities to invest by leveraging the skills of our global credit team to diligence portfolios by geography, by industry and by borrower resulting in a diverse array of investment opportunities.”
“We are confident Sankaty Advisors will be a good steward of these assets as Sankaty has a successful track record of acquiring global investment portfolios and acting as partners to borrowers,” said Chris Nicholas, head of J.P. Morgan’s Global Special Opportunities Group. “Their global reach, scale, reputation and track record were important attributes as we evaluated potential buyers.”
The transaction, which is expected to close by the end of 2014, is subject to borrower and regulatory approvals.
Kirkland & Ellis, LLP served as legal counsel to Sankaty Advisors. J.P. Morgan advised on the sale and Davis Polk & Wardwell, LLP served as legal counsel to JPMorgan Chase.
This transaction is not expected to have a material impact on JPMorgan Chase’s earnings.
. Loomis Sayles Adds to Emerging Markets Investment Team
Loomis Sayles announced two additions to its emerging markets team. Michael McDonough, a new hire to the company, joins as senior equity portfolio manager. Joshua Demasi, most recently a senior sovereign analyst on the macro strategies team, joins as a portfolio manager and emerging markets strategist. Both will report to Peter Marber, head of emerging markets investments, and will focus on new emerging markets equity strategies.
Loomis Sayles has been building its global capabilities in recent years and now manages more than $14 billion in emerging markets assets. Since 2013, the firm has added eight professionals to its emerging markets research and portfolio teams.
“We are excited to welcome Michael and Josh aboard,” said Peter Marber. “Their collective knowledge and expertise will strengthen our effort to deliver sophisticated emerging market solutions to our clients.”
Michael has over 15 years of public and private investing experience across a broad range of geographies and asset classes, and has worked in Hong Kong since 2006. Most recently he was head of Asian long-short equities at Pine River Capital Management. Michael received a MBA and MSE from Stanford University and an AB from Cornell University.
As a senior sovereign analyst, Joshua covered Japan and European markets and provided broad macro and currency related insights as a member of the macro strategies team, a firm-wide resource for all investment teams. He joined Loomis Sayles in 2000 and earned a BA from the University of Massachusetts.
Foto: titoalfredo, Flickr, Creative Commons. Sin modelo único para que las gestoras internacionales lleguen a LatAm: ¿Qué estrategias funcionan en cada mercado?
According to the latest research from global analytics firm Cerulli Associates, local regulatory efforts are improving cross-border product distribution opportunities in Latin America.
“We believe that the regional pension system and the private wealth segment continue to present global managers and ETF sponsors with the biggest opportunity for cross-border product distribution in Latin America,” states Nina Czarnowski, senior analyst at Cerulli. “Contributions in most markets in the region are mandatory, and are, consequently, growing faster than their respective financial systems, driving the need to expand to foreign markets. Asset managers targeting the wealthy are able to take advantage of a wider range of products and strategies as the segment tends to have fewer regulatory restrictions.”
“Concerned with recent domestic market devaluation and the inability to fund workers’ retirement, industry players, including pension funds and regulators, are increasingly exploring ways to generate appropriate, higher returns,” Czarnowski explains. “While it makes sense to hedge pension liabilities with domestic fixed-income instruments, it is wise to diversify the equity portion globally given the concentrated, shallow domestic markets.”
Cerulli warns that one of the biggest challenges to cross-border fund distribution in the region, however, remains political. While pension managers and regulators recognize the need to diversify pension portfolios overseas, it is in the governments’ best interest to keep investments local–in particular in infrastructure projects–to foster local economy and business.
“Unfortunately, conducting business in Latin American has no ‘passporting’ benefits. Countries in the region have different regulatory bodies that, in turn, have different sets of rules and regulations. Cross-border mutual funds offered in Peru may not be the same mutual funds accepted in Mexico. Distribution channels commonly used in Chile may not be popular in Brazil,” Czarnowski continues. “Although some resources can be leveraged region-wide, global managers should consider strategies targeted at a specific market, given that a single game plan may not be transferrable from one Latin American country to another.”
Photo: Spanish National Library, Flickr, Creative Commons. The One Year Transitional Period for AIFMD has Come to an End
As of 22nd July, the CSSF, market supervisor in Luxembourg, had received a total number of 773 applications submitted according to the law of 12 July 2013 on alternative investment fund managers (hereafter “AIFM”) with a total of 215 requests for authorisation and 558 requests for registration.
Following the processing of the 215 requests for authorisation, 151 entities have been approved as AIFM by the CSSF as at 22 July 2014. Among these 151 approved entities, 74 entities are on the official list of authorised AIFMs.
The CSSF notes that a certain number of those applications for authorisation, where the approval process is still ongoing, are linked to entities which were not active in the field of alternative investment funds before the 22 July 2013 and are, therefore, not subject to the provisions of the transitional period. For the regulated entities active before 22 July 2013 and, thus, required to apply for authorisation under the AIFM law by the 22 July 2014 at the latest, applications have been submitted to the CSSF in due time.
In relation to the 215 requests for authorisation, 105 have been received from existing UCITS management companies, 48 from existing non-UCITS management companies and 62 from other existing or newly created entities.
Furthermore, a total of 487 entities have been granted the status of registered AIFM under the provisions of Article 3(2) of the AIFM Law as at 22 July 2014. The remaining 71 applications for registration are either incomplete as at 22 July 2014 or have meanwhile been withdrawn by the applicant.
With regard to the existing non-UCITS management companies which have not applied for authorisation or registration in Luxembourg, it should be noted that they have designated or are in the process of designating a third-party AIFM established mainly within the EU.
Foto: ThatsWhatIam, Flickr, Creative Commons. La bolsa se va de vacaciones, ¿y tú?
International companies continue to turn to U.S. stock exchanges to connect with American investors for their initial public offerings and subsequent capital raising activities, according to BNY Mellon’s Depositary Receipts 2014 Midyear Update.
The first half of 2014 saw the highest level of DR capital raisings in the last three years. As of June 30, 41 capital markets transactions globally raised more than $9.1 billion, well ahead of the $3.6 billion raised through 20 transactions during the same period in 2013. BNY Mellon served as depositary bank for 18 of this year’s deals, which have raised over $3.1 billion.
Companies from Asia-Pacific have dominated activity to date, accounting for almost 60% of capital raised with more than $5.5 billion. China was responsible for nearly half of the new capital raising DR programs, led by online direct sales firm JD.com, whose IPO on NASDAQ raised $1.8 billion in May. The majority of DR transactions in the first half of 2014 were from emerging countries. TBC Bank’s listing of DRs on the London Stock Exchange represented the largest IPO ever to come out of Georgia. BNY Mellon also supported Brazilian telecarrier Oi in raising $3 billion in the public markets, 40% of which was in DR form.
“After a period marked by concern over U.S. Federal Reserve tapering, investor sentiment is again turning to emerging markets to seek out innovative companies with which to partner,” said Christopher M. Kearns, CEO of BNY Mellon’s Depositary Receipts business. “The vigorous return of foreign IPOs on U.S. exchanges, using the efficiency and scope of DRs, would indicate that global firms and investors see this as a healthy marketplace with strong upside.”
Depositary receipts typically represent non-U.S. companies’ ordinary shares and trade on traditional and over-the-counter markets and major stock exchanges worldwide. There are now more than 3,700 DR programs globally available to investors.
Key highlights
Fifty-five new sponsored DR programs were established through June 30, the biggest jump in sponsored programs since 2011. BNY Mellon served as depositary for 28 of those.
The volume and value of total DRs traded rose compared to a year ago. Some 74.6 billion DRs valued at $1.49 trillion were traded globally in the first half of 2014, up 3.5% and 15.5%, respectively, from the first half of 2013.
As of March 31, 2014, total global investment in depositary receipt programs stood at $826 billion, up 18% compared to the same period in 2013.
