Wednesday, May 29, 2013

Asia's Investment Surge;Goldman Sells China Stake

The mood is very upbeat,said Nick Good,Head of Strategy and Business Development Asia Pacific for BlackRock,attending the CFA Institute Annual Conference in Singapore.Asians believe in Asia.Seventy percent or more of any given portfolio is invested in Asia,and 50% of capital markets growth will take place in Asia.
We're seeing the rise of the Asian investor.Wealth in China has increased tenfold.Asians need to invest for the long term,and that dynamic will inform the growth of the region.They are looking for bond and income funds that meet their needs.
We are developing funds that cater to that market and educating about long term investing.We try and take a broad view of the markets,providing both active and index funds.You're seeing an emphasis on income funds.
Goldman Sachs says it is committed to China,despite its recent sale of a minority stake in the Industrial and Commercial Bank of China.Goldman unloaded its seven year investment in ICBC for 1.1 billion dollars.Macquarie Capital Securities Ltd estimates Goldman made about 12 billion dollars in dividends and sale proceeds on its 2.58 billion investment in ICBC.Many banks are selling such holdings to cover the new,more stringent Basel III capital requirements.
The world just went through a big trauma,a credit crisis,said CEO Lloyd Blankfein.Not all the fixes work.Sometimes the fixes need fixes.
BlackRock(BLK),Goldman Sachs(GS)

Wednesday, May 22, 2013

Citigroup:Growth and Reallocation

Citigroup is looking to double or triple the number of branches in China over the next few years.We think China will grow about 7%,transitioning from exports to a domestic-led economy,said Citigroup CEO Michael Corbat.That transition seems to be going well.
I'm excited to go to Japan.Their officials and executives are quite excited.It's gonna take some time to play out.They've got to try Abenomics to reflate the economy.
Japan's Prime Minister Shinzo Abe is jump-starting the economy through monetary easing and asset purchases.
We've identified 21 countries where we can get more out of the resources we have there.We'll move those resources to where we can get more out of them.It's a rebalancing,shifting them to places our customers and clients want to grow.The emerging markets, in particular the Asia Pacific,has been a big recipient of those shifted resources,Mr.Corbat noted.
Brazilian bank Itau has purchased Citigroup's Brazilian credit card unit for 1.37 billion dollars.

Wednesday, May 15, 2013

Old and New:The Future of Media

The future of media is both bright and diverse,said Frank A. Bennack,Jr.,outgoing Hearst Corporation CEO.Print will be around because of their role in gathering news.Their role will be around for a long time to come.
There's been a significant revenue shift to new media.TV and newspapers are still there,however.We have about 300 worldwide magazines.They will continue in their present form,but also will migrate to new media.We're very strong in beauty and fashion with Elle magazine.
Hearst Corporation is a privately held multinational media conglomerate,founded by the late William Randolph Hearst.It owns fifteen daily newspapers such as The San Francisco Chronicle and The Houston Chronicle,as well as 35 weekly papers.Besides Elle,its major magazine titles include Cosmopolitan;Seventeen;Redbook;Popular Mechanics;Woman's Day;Harper's Bazaar;and Road and Track.
Hearst is part owner of the ESPN,A and E,and Lifetime cable networks.It owns the iCrossing digital marketing firm,with offices in 18 countries;29 TV stations;and 2 radio stations in major markets.Altogether,it owns some 200 businesses in 100 countries worldwide.
On June 1,Hearst President and COO Steven A. Swartz will succeed Mr.Bennack as CEO.

Wednesday, May 8, 2013

Portfolio Management:The Need For Income Now

We've transitioned to an emergency need for income,said Rick Rieder,Chief Investment Officer of Fundamental Fixed Income at BlackRock.Rates are gonna be low for a long time.To get any real income,you have to take risk at levels that are uncomfortable.
Central banks are crowding out investments at a record level.You create a portfolio rebalancing act that is profound.We live in a delevering world.You'll create bubbles like we had in prior decades if it goes on for too long.
Maybe there will be no tapering of Fed policy until 2014.Because you're distorting the interest rates so low and lengthening the portfolio,you're creating potential risk in the fixed income portfolio higher than in equities.Tactical short term,we've taken some interest rate exposure;longer term,loans and structured products without a lot of interest rate risks,such as CMBS,collateralised mortgaged-backed securities.
We think the growth of the real estate business has some real durability to it.People underestimate what a big deal it is.You have an environment of liquidity today.It's part of what will keep the real estate market in strong shape.
The delevering in Europe is gonna go on for years.
It's very hard to generate yield when the 10 year Treasury is at 1.50%,Mr.Rieder pointed out.Central bank policies are causing a haircut for investors,PIMCO co-CIO Bill Gross agreed.
People are excited about the equity market,yet anxious about the artificiality of central bank assistance,his colleague Mohamed El-Erian added.If these prices are not validated by data,they will look very artificial.

Wednesday, May 1, 2013

Trust Company Distrusts the Market

This is a financially engineered market,said Michael Crofton,President and CEO of The Philadelphia Trust Company,engineered by central banks.Bonds and commodities are telling us that stocks are too high,and there could be a crash.
The pullback will come from a macro-event that will surprise everyone.The Federal Reserve won't be able to do much more to help.Those high points of similar markets in the past coincided with the peak of financial engineering.
We rotated out of consumer staples in March and into underperforming energy and technology.The rise of staples had been unsustainable.You just keep rotating,and when the music stops,you'd better hope you're sitting down.
The Philadelphia Trust is an independent private bank serving affluent investors and institutions.The company says it brings old-fashioned values such as attention and discretion into the post-modern world.It offers a full range of services,from custody and trading to income distribution,CDs and scheduled client reviews.
In equity investing,the Trust strictly adheres to the growth at a reasonable price discipline.
On Wednesday,the Federal Reserve said it would continue its quantitative easing policy of bond-buying to keep interest rates low,in effect driving investors more into equities.