Tag Archives: loans
According to Bloomberg’s Whitney Kisling, hedge funds are borrowing more to buy equities just as loans by New York Stock Exchange brokers reach the highest in four years, signs of increasing confidence after professional investors trailed the market since 2008.
Leverage among managers who speculate on rising and falling shares climbed to the highest level to start any year since at least 2004, according to data compiled by Morgan Stanley. Margin debt at NYSE firms rose in November to the most since February 2008, data from NYSE Euronext show.
The rising use of borrowed money shows that everyone from the biggest firms to individuals is willing to take more risks after missing the rewards of the bull market that began in 2009. While leverage means bigger losses should stocks decline, investors are betting that record earnings and valuations 9.8 percent below the six-decade average will help push the Standard & Poor’s 500 Index toward the record it set in October 2007.
“The first step of increasing risk is just going long, the second part of that is levering up in order to go longer,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a Jan. 8 telephone interview. “Leverage increasing in the hedge-fund area suggests they’re now getting on board.”
Posted in Breaking news, Economy, European economy, Investment Banking, Libor scandal, Regulation, Value Investing, Venture Capital
Tagged bank, Bank of England, Barclays, Britain, corporate, FEC, Federal Reserve, Financial Services Authority, loans, Money, morgages, pau tucker, regulators, scandal.
President Barack Obama has recently appointed Richard Cordray as the leader in Consumer Financial Protection. As chief, he will be enforcing rules and laws aimed at the abusive mortgage servicers, student lenders and payday-loan companies. The agency will pursuer areas of consumer finance, such as debt collection and cred reporting. The idea and the whole aspect of having this agency is to prevent financial companies from exploiting consumers. These companies are responsible for some of the worst consumer abuses because they are not subjective to any regulations. By aiming at them the economy can benefit from less of these abuses.
Condrary plans to examine non bank financial firms which is an area that haven’t been touched since now. Aside room mortgage and student loan companies, the consumer protection bureau can only supervise non bank companies. Many companies have been sought out by the public and their response and dispute is heard from the White House. Once these disputes are heard, and approved, there will be inspectors in search of these financial companies.
Posted in Uncategorized
Tagged Barak Obama, Consumers, finance, Financial firms, Financial Instituitons, loans, mortage, non bank financial insitutions, Richard Condrary, Student Loans, White House
As reported by Bloomberg News, the highest funding costs since 2008 may make it more expensive for China’s state banks to lend to commodity producing nations, as the world’s fastest-growing major economy tries to secure natural resources to fuel growth.
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Five-year borrowing costs for the so-called policy banks surged 70 basis points to 4.6 percent this year and touched a three-year high of 4.68 percent on Aug. 4, China bond prices show. Top-rated Indian lenders pay 9.45 percent on their five- year debt, compared with 8.94 percent at the end of 2010, data compiled by Bloomberg show.
The government relies on China Development Bank Corp. and Export-Import Bank of China to lend to resource-rich nations such as Brazil, Kazakhstan and Venezuela in exchange for commodity and energy supplies. Borrowing costs surged after the central bank raisedinterest rates to control inflation and lenders increased provisions against loans for local governments. The value of banks’ dollar loans are falling as the yuan strengthened 3.3 percent against the currency in 2011.
The associated issues will be discussed more in detail at Golden Networking‘s China Leaders Forum 2011, October 7.
Posted in China, Economy, emerging market, Research
Tagged Africa, BEIJING, Bloomberg, Brazil, Central Bank, China, China Conference, China Credit, China Development Bank, China Development Bank Corp., commodity, currency, Economy, Ecuador, energy supplies, Europe, Export-Import Bank of China, Finance Ministry, fixed-income, foreign exchange, Hong Kong, Hugo Chavez, Inflation, interest rates, Kazakhstan, Korea, Latin America, Lehman Brothers Holdings Inc., loans, natural resources, Oil Shipments, resource-rich nations, Sanford C. Bernstein & Co., Singapore, Standard & Poor’s, U.S economy, U.S. dollar, Venezuela, World Economic Forum, Yuan
As reported by Bloomberg’s Lilian Karunungan, China, with its centrally controlled economy, managed currency and restrictions on capital inflows, has become a haven for investors fleeing widening global debt turmoil. How China manage its currency policy will be discussed at Golden Networking‘s China Leaders Forum 2011, October 7.
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The yuan is the only currency among the biggest emerging nations to strengthen against the dollar this quarter, and yuan- denominated notes in Hong Kong are the only domestic bonds among the so-called BRICs to provide a positive return. Sales of dim sum debt have tripled in 2011 and new loans in China rallied in August, after sliding in July.
Chinese markets have shown resilience as global equities tumbled 13 percent since Aug. 1 on concern the declining U.S. economy and European debt crisis will stoke the worldwide slowdown. Exports from China grew a more-than-forecast 24.5 percent in August from a year earlier, government data released on Sept. 10 showed. Italy, saddled with more debt than Spain, Greece, Ireland and Portugal combined, has sought support from the world’s fastest growing major economy for its bond market.
“The renminbi remained stable versus the dollar during the global crisis in 2008 and early 2009 while most of the rest of the Asian currencies fell sharply,” said Chia Tse Chern, co- head for Asia fixed income at UOB Asset Management in Singapore, which manages the equivalent of $14 billion, including dim sum bonds. “High-grade renminbi bonds or those quasi-government renminbi bonds will remain resilient.”
Dim sum bonds, yuan debt issued in Hong Kong and accessible to foreign investors, returned 0.8 percent for dollar-funded investors this quarter, compared with losses of 7.4 percent for local-currency bonds in Brazil, 7.1 percent for Russia and 4.8 percent for India, according to indexes compiled HSBC Holdings Plc and JPMorgan Chase & Co.
Posted in China, Economy, emerging market, Equity Markets, Financial Crisis, Foreign Exchange, U.S. Debt
Tagged 2011, Asia fixed income, Asset Management, August, Bank of Australia, Bank of Tokyo, Bloomberg, bonds, Brazil, BRIC, capital inflows, Chia Tse Chern, China, CMA, CME Group Inc., credit, currency, DBS Group Holdings Ltd., default, dim sum, economist, Economy, emerging nations, equities, European debt crisis, Exports, Federal Reserve, Foreign direct investment, foreign-exchange, foreign-exchange reserves, global crisis, global debt, Greece, Guotai Junan International Holdings Ltd., Hard Landing, Hong Kong, HSBC Holdings Plc, India, Inflation, interest rates, Ireland, Italy, JPMorgan Chase & Co., July, Leong Sook Mei, loans, mainland, Mitsubishi UFJ Ltd., near-zero, PBOC, People’s Bank of China, Portugal, quasi-government, Renminbi, resilience, ringgit, ruble, rupee, Russia, September, Shanghai, Singapore, Slowdown, Spain, Standard & Poor’s, tumble, turmoil, U.S. Treasuries, United Renminbi Bond Fund, UOB, Vice Premier Li Keqiang, Yuan, yuan debt
Representative Paul Ryan
As reported by Bloomberg’s Silla Brush and Mike Riley:
A congressional agreement to increase the U.S. debt limit and reduce federal spending may take until August, the Republican chairman of the U.S. House Budget Committee said.
“I think there will be a deal. It will probably take a while,” Representative Paul Ryan, a Wisconsin Republican, said on NBC’s “Meet the Press” program. “We have to August.”
The U.S. Treasury Department has said Congress must raise the $14.3 trillion debt ceiling by Aug. 2 to avoid the government defaulting on its loans.
“Nobody wants default to happen, but at the same time we don’t want to rubber stamp just a debt-limit increase that shows we’re not getting our situation under control,” Ryan said.
Ryan defended a Republican budget plan that would cut spending by more than $6 trillion over a decade and privatize Medicare. The proposal would replace the traditional Medicare health-care system for the elderly with subsidies to buy private insurance starting with people who turn 65 in 2022.
“You cannot deal with this debt crisis unless you’re serious about entitlement reform,” Ryan said.
The plan passed the House of Representatives on April 15 on a 235-193 vote.
Posted in Economy, Equity Markets, Financial Crisis, Investment Banking, Opinion, Research, Value Investing
Tagged budget plan, debt ceiling, debt crisis, debt limit, Economy, federal spending, Financial Crisis, financial markets, Global Economy, loans, NBC, private insurance
Reliance Industries Ltd. (RIL), India’s largest company by market value
As reported by Bloomberg’s Pratish Narayanan:
Reliance Industries Ltd. (RIL), India’s largest company by market value, is in talks with banks to arrange as much as $1.5 billion in dollar-denominated loans, according to two people familiar with the matter.
Reliance, controlled by billionaire Mukesh Ambani, plans to borrow $1.1 billion in five-year loans to replace debt maturing in about two years that has higher interest costs, the people said, not wishing to be identified because the terms aren’t set. The company may obtain another $400 million of new loans, the people said.
Reliance, India’s fourth-most indebted company, is looking to borrow at about 165 basis points more than the six-month London interbank offered rate, or Libor, the people said. The company has not appointed the lead arrangers and banks wanting to participate in the debt syndicate need to apply by May end, the people said.
Manoj Warrier, a Mumbai-based spokesman for Reliance, declined to comment. The company’s shares rose 0.8 percent to 923.2 rupees in Mumbai yesterday. They have declined 12 percent this year.
“The company has a lot of projects lined up, such as a petrochemicals plant at Jamnagar and the money could be used for that,” said Jagdish Meghnani, a Mumbai-based oil and gas analyst at Alchemy Share & Stock Brokers.
Ambani, 54, is the world’s ninth-richest man with an estimated wealth of $27 billion, according to Forbes magazine. Reliance has $14.2 billion of debt outstanding maturing through 2097, according to data compiled by Bloomberg.
Mumbai-based Reliance sold $1 billion of 10-year 4.5 percent dollar-denominated notes and $500 million of 30-year 6.25 percent bonds in October, Bloomberg data show.
Posted in Economy, emerging market, Investment Banking, Opinion, Research, Value Investing
Tagged billionaire, Commodities, debt, dollar-denominated loans, Economy, financial markets, Global Economy, loans, market value, shares