Tuesday, 16 September 2014

João Monteiro & Markets: another shared take on the Markets

 João Monteiro & Markets: another shared take on the Markets:

'' Markets right across Asia have been
in for a stormy session today with all the major regional indices finishing up
in negative territory. The big driver here is the growing concern over the
state of the Chinese economy – overnight we saw numbers highlighting the fact
that foreign direct investment into China fell way short of expectations, reaching
a four year low. This is just the latest in a volley of data points that are
giving investors cause for concern across the globe. A sharp decline in Tokyo
Condo sales also knocked the Nikkei despite that perpetually weak Yen and the
big question now is whether this will mark the start of a bigger consolidation
phase.Wall Street is currently eyeing some
modest losses at the open following that strong finish yesterday. US economic
data disappointed too but the expectation is this may help defer any rushed
rate hike from the Fed. This is all building up to the FOMC verdict tomorrow
night and as was noted yesterday although there’s no real expectation of action
here, it’s the tone of the rhetoric that will count. With US inflation data due
ahead of that FOMC statement too, there’s still scope for market opinion to
shift but various dollar baskets do appear to be struggling to make further
progress for now. Ahead of the open we’re calling the DOW down 26 at 17005 and
the S&P unchanged at 1984. ''

João Monteiro & Markets: That´s what I´m talking about! ;): Markets | 16/09/2014 | Stormy session across Asia ...: Markets right across Asia have been in for a stormy session today with all the major regional indices finishing up in negative territo...

Friday, 12 September 2014

Schiff On The Markets - a rediscover!

I was really impressed with Peter Shiff's life and biography. And I googled his name and came about a blog where he occasionally writes about the Markets. Fascinating personality.

''Federal Reserve: What The Next Move Will Be

Interest rates have been too low for too long, that is a big problem.
But unfortunately they are not going to be raised anytime soon and
ultimately when interest rates do go up, its not because the Federal
Reserve wants them to go up, but because they have no choice. But I
think the next thing the Fed is going to do is to launch an even bigger
round of QE then the one they are tapering off from. Because the U.S.
Economy is not recovering, we are slipping back into recession. If the
Fed does not know that, it will by the end of the year and it will have
to reverse policy.

Related trading instruments: SPDR Gold Trust ETF (GLD), iShares
Silver ETF (SLV), SPDR S&P 500 Index ETF (SPY), Select Sector
Financial Select Sector SPDR ETF (XLF), iShares MSCI Emerging Markets
Index ETF (EEM)

Peter Schiff is an American businessman, investment broker and
financial commentator. Schiff is the CEO and chief global strategist of
Euro Pacific Capital Inc.''

Schiff On The Markets: Federal Reserve: What The Next Move Will Be: Interest rates have been too low for too long, that is a big problem. But unfortunately they are not going to be raised anytime soon and ult...

Wednesday, 10 September 2014

Creating a Virtual Family Office

''Creating a Virtual Family Office:
Are you looking to create a family office but want it to be lean, agile,
and able to change shapes every 3-5 years based on market conditions
and investment focus changes? The virtual family office trend is
growing, and as the family office industry matures around the world and
gets some real momentum in BRIC countries we will see this phrase and
family office structure used more and more often.''

Tuesday, 9 September 2014

Scottish Independence and GBPUSD rate

I post here an entry in FT's Alphaville by Izabella Kaminska on the thoughts running through the analysts and Financial Journalists these days, concerning the impact the referendum on Scottish Independence might have on the Forex Market, and specifically on the GBPUSD exchange rate. The post is interesting also from an ethical perspective, about the issues that may arise when journalistic stories and headlines can precipitate a run on a Bank or trigger further panic and irrationality in the Markets. Interesting read:

Cataclysm Hyperbole

''So could all the cataclysm be based on off-the-cuff remarks by Rochester to AEP directly? Possibly, but those familiar with his style said that such language would be completely out of character. And there is still no direct Nomura-related attribution to the word cataclysmic.
What’s stranger still… Nomura’s house view on GBPUSD (as of Sept 8.) doesn’t even marry up with the story’s 15 per cent projected “plunge”. From the real Nomura:
Historically, the 1.58-1.62 range has offered a key support or resistance level to break (see Figure 1 below) and we may expect these support levels to hold if GBPUSD moves even lower just before the referendum. If the „YES‟ vote does win the referendum on 18 September, GBPUSD could gap considerably lower (we think a 5-10% sell-off could be possible) and implied vols could be much higher. A “NO‟ vote could mean GBPUSD appreciating back to 1.66-1.68 levels.
A zero-cost break-out ladder in such a scenario could be profitable, as it would gain if spot gaps downwards with a large move, but would not lose anything if spot moves higher in the event the “NO‟ vote wins a majority.
Given that the probability of an exit is still considered less than 50% by most analysts in spite of this recent poll, (see for instance How to trade the Scottish Referendum for a detailed pre-You-Gov poll analysis including timelines), we do not think it makes sense to pay a large premium for this possibility.
To translate…
Nomura thinks the value of the pound could plunge by 5-10 per cent in the event of a ‘Yes’ vote. Furthermore, whilst you could buy an options strategy to profit from such a move in a relatively hedged way, the cost of the options strategy is probably not worth your while since the chances of an actual exit are still less than 50 per cent.
Go figure.''

João Monteiro & Markets:

A recent and very interesting person in the Markets that I made contact with.With this Blog about what is happening in the Financial Markets. I recommend.

''It’s been a relatively quiet session for Asian equity markets with traders struggling to find much meaningful direction. After yesterday’s market holiday in Shanghai, the Hong Kong exchange has been closed today, leaving many traders playing something of a waiting game ahead of fresh data out of Beijing. We’re going to see new Yuan loan numbers out tonight followed by CPI readings later in the week and with concern building that signs of a slowdown may be imminent, anything that serves to exacerbate these fears could result in a bout of selling. The Nikkei is edging higher once again but much of this appears to be driven by ongoing dollar strength – USD/JPY came close to 106.40 overnight.  
Major indices on Wall Street are currently forecast to start the day little changed and again there’s not much in the way of fresh economic data that has the potential to deliver any meaningful direction here. The geopolitical situation seems eerily calm and the point many seem to be focusing on is the launch of the latest iPhone, so ahead of the open we’re calling the DOW down 4 at 17107 and the S&P down 1 at 2001. ''

João Monteiro & Markets: That´s what I´m talking about! ;): Markets | 09/09/2014 | Relatively quiet session fo...: It’s been a relatively quiet session for Asian equity markets with traders struggling to find much meaningful direction. After yesterd...

Thursday, 4 September 2014

A comment on ECB's ABS move

Hello again! Today a link to the brilliant economics commentator and Blogger extraordinaire Frances Coppola. A comment on today's move by the ECB to kick start in October a programme of Asset-backed securities purchase, which the Central Bank hopes will be decisive for resuming robust Growth in the Eurozone. Coppola's comment is sceptical. Is she right.....?:

'' So as far as I can see, the SME ABS programme is either going to be too
small to make much difference, or is likely to encounter serious
problems with loan quality at some point, putting the ECB's balance
sheet at risk. I'm particularly worried by the way in which SME ABS
purchases by the ECB is being promoted in some quarters as the primary
means of "fixing" the periphery (though Draghi himself does not make
this mistake). If only we can get credit flowing to periphery SMEs, the
thinking goes, all our troubles will be over. This is simply not true.
SME ABS purchases cannot substitute for flawed institutions and
inadequate fiscal and monetary support. And even more importantly, they
cannot compensate for a lack of creditworthy borrowers.''

Coppola Comment: Don't pin all your hopes on SME asset-backed secur...: Here's a neat chart from JP Morgan (h/t @debtnerd) (larger version here ) What it says, essentially, is that although the total...

Monday, 11 August 2014

Unquote: incisive Adbrain

I would like to post here today an article in the Private Equity and Business Deals Media publication Unquote, which is another Incisive Media Publication. This entry is about Venture Capital funding of Advertising Technology Company Adbrain and its recent rounds of seed funding.

'' London-based advertising technology platform Adbrain has raised a $7.5m series-A funding round led by Octopus Investments.
Existing backer Notion Capital also participated in the round. The VC led the firm's $1.5m seed funding round in June 2013, with support from angel investors.
Adbrain will use the funding to accelerate its expansion in the US and Europe and to boost its recruitment programme.
Founded in 2013 and based in London, Adbrain is an advertising technology company that provides users with customer data. The firm launched its beta platform in February 2014 and counts M&C Saatchi Mobile, Annalect and The Exchange Lab among its client base.
Frederic Lardieg is a member of the venture team at Octopus and worked on the deal. Gareth Davies is CEO of Adbrain.''
DEAL - Expansion
VALUE - $7.5m
SECTOR - Software
FOUNDED - 2013''


Tuesday, 29 July 2014

Phamaceutical Sector: Merck & Company

Summer Investment Case: a post in the promising pharmaceutical sector. About North American Company Merck & Company which is posting an upbeat earnings per share result. It may well turn out to be a good buy opportunity. The following is from the Investing website Investing.com:

'' U.S. pharmaceutical giant Merck & Company (NYSE:MRK) reported better-than-expected second quarter earnings and revenue figures ahead of Tuesday’s opening bell, sending its shares modestly higher in pre-market trade.
Merck Q2 adjusted EPS $0.85, vs. $0.81 estimateMerck reports better than expected Q2 earnings, revenue
Merck said adjusted earnings came in at $0.85 per share in the second quarter, beating expectations for earnings of $0.81 per share.
The company’s second quarter revenue totaled $10.93 billion, above estimates for revenue of $10.61 billion.
The pharmaceutical company reaffirmed its 2014 revenue forecast and said it expected full-year earnings per share in a range between $3.43 to $3.53.
“We delivered a strong first half of the year, making progress in transforming our operating model, fueling innovation and managing costs, while focusing on our best opportunities”, said Kenneth C. Frazier, chairman and chief executive officer, Merck.
Following the release of the report, Merck (NYSE:MRK) saw shares rise 0.1% in pre-market trade.
Meanwhile, the outlook for U.S. equity markets was higher. The Dow indicated a gain of 0.2% at the open, the S&P 500 pointed to an increase of 0.15%, while Nasdaq 100 added 0.2%.''.

Good Investments to all readers of my Case. And if you happen to be on Holiday Break, a great time of enjoyment and refilling energies is what I recommend. To be ready for another certainly busy fall of the year.

Tuesday, 22 July 2014

If there is a major Breakout

I am posting today in the my suitcase Saxo Bank's John Hardy view about the possible path for the EURUSD exchange rate (currency pair). Hardy's analysis is seamlessly lucid, devoid of nuisance and bias. At the same time he recognises that failure to predict the right direction of the Financial Markets isn't necessarily a disadvantage if proper behaviour is triggered.

'' EURUSD is breaking lower - here are the next targets. EURUSD is breaking what is arguably a head and shoulders area - poking at the last shreds of flat-line support at the 2014 lows just below 1.3480. A break lower begs the question - where next? If we are to take the classic head and shoulders target, the target is close to 1.3000, but if we take a more typical 100% extension from the top of the right shoulder (an extension of the wave from the top of the head to the recent lows), we get a target of around 1.3210.

Other Fibonacci retracement levels are also bunched in this area as well, with the 61.8% retracement of the move from the critical old 1.2750 area coming in around 1.3225 and the 38.2% retracement of EU-crisis lows in July 2012 coming in closer to 1.3250. So we'll call 1.3250/1.3200 the next major target zone lower if this break through 1.3480/1.3500 holds.''

Monday, 23 June 2014


John J Hardy at Saxo Bank:

''AUDUSD rally does not sit well with recent development in interest rate spreads. The recent RBA minutes discouraged the notion that the RBA is about to hike rates any time soon, while the US FOMC meeting, while dovish, only saw US rates at the front end of the curve move a few bps lower. Currently, even as AUDUSD is banging on resistance, the 2-year swap spread is near its lowest level since last September at around 226 basis points. The 1,000 day correlation of the spread with AUDUSD is 0.67 while it is a stunning -0.61 for the last 100 days. I doubt if the latter can be sustained for much longer.''

Thursday, 19 June 2014

The Breakout Trader: Mota-Engil Africa

 I am posting another entry from the Blog The Breakout Trader. This entry is about the Construction sector Portuguese Mota-Engil company and its African subsidiary Mota-Engil Africa. The company is preparing a first floatation in the Capital Markets with an IPO in the London Stock Exchange, and The Breakout Trader analyses the share price behaviour in the near term as well as looking to the weeks ahead. For the Portuguese audience please check the link at the bottom. Here it is an English translation:

''Mota-Engil is to proceed with the initial public offering (IPO) of its African subsidiary, which will be listed on the London Stock Exchange.In a statement to the CMVM the construction company announced that this operation will be carried out through two offerings, a "preferential" and other "institutional". Thus, the preferential offer "Mota-Engil Africa allocate new shares to all investors who hold shares of the parent - Mota-Engil SGPS - until tomorrow, 17 June, which is leading to a rush for the purchase of shares Mota-Engil which now rise 4.15%. A parallel run of an institutional offering will happen, which will show the number of shares increase if demand for shares in preferred not cover the entire offer.Investing in Mota-Engil Africa seems to me to be a good alternative for those who want to be exposed to the growth of the African continent. In addition to the shareholder remuneration proposal which is quite generous the company intends to achieve a payout ratio between 50% and 75% and is now guaranteed a cash dividend of 20%, approved by the shareholders of Mota-Engil. Moreover, Mota-Engil Africa will benefit from being listed in an index with greater visibility than the national and aimed more at the construction sector.For shares in Mota-Engil, as already stated in the previous analysis, this separation is rather negative, given the strong impact that billing obtained on the African continent has to the group accounts. Recall that, according to the latest annual report, the activity in Africa accounted for over 40% of the turnover of the parent company.Tomorrow being the last day for the purchase of shares entitled to participate in the IPO, I believe that the shares of Mota-Engil can continue to value in tomorrow's session. After that, we are witnessing a correction in the titles, because we are close to the resistance given by the annual maximum € 6.25 / € 6.40.

The Breakout Trader: Amanhã será o último dia com direito a participaçã...: A Mota-Engil vai avançar com a oferta pública inicial (IPO) da sua subsidiária africana, que passará estar a cotada na bolsa de Londre...

Monday, 16 June 2014

Equity Europe Case

Here today a post on the European Equity Markets Investment case. Dan McCrum at the Financial Times Alphaville with an entry where he comments on the Citi Bank latest Equity report about European Markets and the likely consequences of the recent announcement of ECB's Mario Draghi extraordinary measures. There's a growing expectation, on the positive side about the effects of these measures. Before a major correction.... which might be triggered in the other side of Atlantic Ocean... an European version of Quantitative Easing is becoming highly probable.

We can get a bit of the sentiment of the Citi researchers reading passages like these:

''So says the still optimistic Jonathan Stubbs at Citi, at least. Halfway through the year and the strategy team budge not from their forecast: 20 per cent total return from European equities this year.
''Shares are no longer cheap in absolute terms, but we stay bullish due to: 1) progressive global economic recovery in 2014-15, 2) return to double-digit earnings growth in 2014-16E, 3) super-cheap relative valuations, eg vs credit, 4) rising risk appetite, eg M&A, demand for equity. ECB QE later this year should also be supportive.''
 The sector valuation decomposition is strickingly important, as the consensus is that valuations aren't cheap, as the chart below (... as well as the above) seems to make clear:

''Indeed, the focus list of the bank’s analysts’ 15 to 20 favourite stocks is striking for its inclusion of a few insurers and banks, alongside the target rich environment of pharmaceutical takeover candidates and industrial recovery plays (click to enlarge).''

Wednesday, 11 June 2014

EDPR - Renewable shake down

Today's research note about the Portuguese company EDP Renováveis. Goldman Sachs in a latest research note cuts the price target for the company from a period of three years starting at 2016 (2016-2018). The business paper Jornal de Negócios had access to the American Investment Bank research note, which I reproduce here a translated version with a link to the original Portuguese site.

'' "Our estimates of earnings per share for 2016-2018 were cut by 16%, 15% and 14%," says the analyst Manuel Losa in the analysis note.

"Our target price is based on a combination of 50:50 assessing the sum of its parts, from 4.90 euros, and assessing multiple of EV / EBITDA [enterprise value to EBITDA ratio] of 5.40 euros" , the note explains. The evaluation of the sum of the parts "includes € 1.7 billion of sales to a premium of 30% over the review"  of the investment house, which is "in line with the history of EDP Renewables".

The investment house said that, on the side of "positive" risks are higher than sales to an assessment by the Goldman Sachs bonus. Have the opposite side is the "new government intervention", as well as sales at lower than the rated value.

The shares of the company led by Manso Neto following losing 0.50% to 5.333 euro


Monday, 9 June 2014

Collective Pensions.

In the advanced Investment world there isn't an issue with cutting pensions when costs are high, and the sharing of risks between generations is properly handled.

Tuesday, 3 June 2014

The Breakout Trader: a post on AUDNZD

I will post today a translated version of an entry in the Portuguese Blog The Breakout Trader by trader Nuno Mello. If you want to check the original please follow the link bellow the text.

 ''During the night , the RBA decided to keep the interest rate unchanged
at 2.50% and maintain its neutral position, supported by the fact that
the inflation projection for the next two years , remain stable at 2-3 %.
Data about current account,
higher than expected (Acts AUD -5.7 bn vs Exp CHF -7 million) also helped boost the AUD.

follow with particular interest , the pair AUDUSD but once lateralizes
within a descending channel ( lying at this point exactly halfway
between the lower and upper limit ), I decided to look for other pairs
with AUD.
The AUDNZD pair was the pair chosen for my analysis today.
Now everyone knows my pessimistic view regarding NZD. Technically AUDNZD is a very interesting situation, having activated a head-and- shoulders reversed last Thursday.
This pattern took nearly six months to form and its theoretical target is quite ambitious : 380 pips. In
my opinion the AUDNZD has the potential to go test at least the level
of 61.8 % fibo of descent moves that began in late October last year and
finished in January this year'' 

The Breakout Trader: AUDNZD....

Tuesday, 27 May 2014

The Breakout Trader: Irá a C.G.D. ......

Today's the Blog (Portuguese) The Breakout Trader on an interesting story about the company Inapa Investimentos e Participações SA and the possibility of nationalisation or forced acquisition by the State Bank Caixa Geral de Depósitos following the threshold set by its participation in Inapa rights issue. The Portuguese Markets regulator CMVM is looking at the issue, and in case Caixa Geral de Depósitos is forced into the deal, it would be cumbersome for the Bank and its commitment with the Troika after the Memorandum of Understanding stated that it should be selling everything in its books not related with its core business. Interesting to follow in the coming weeks or so.

The Breakout Trader: Irá a C.G.D. ser obrigada a lançar uma OPA sobre a...: A Inapa é a empresa líder no sector da distribuição de papel em Portugal e também uma das acções em destaque, no dia de hoje, na bolsa naci...

Monday, 19 May 2014

First case and Coppola Comment...

I re-post here today a first, in what I hope will be many more to come,
an entry in the excellent Blog of Frances Coppola named Coppola Comment.

Today's post is about the recent developments with Deutsche Bank, the
giant German financial institution, which is a systemic one, critically
important to the European and Global Financial Markets landscape and
that promises to transform and significantly influence the future of
the Banking sector and the broader Financial Markets.

It is worth to follow Mrs. Coppola advice and read her piece in Forbes
Magazine on-line, that is available in the post by a link.

Coppola Comment: Deutsche Bank's latest capital raising won't end i...: My latest post at Forbes looks at the troubled Deutsche Bank and its latest attempt to improve its capital ratio: Deutsche Bank has final...

Tuesday, 13 May 2014

Brighttalk: Multi-factor Investing

Today I've had the luck and privilege to assist to a nice webcast from Brightalk called MSCI Multi-Factor Investing. Brightalk is a very nice web casts platform that I recommend.

This is the link to the site but everyone new to Brightalk will have to register a login and password to get access to the content.


I hope that there will be an interested and gracious audience. Thank you in advance.

Monday, 5 May 2014

Blog Golden Broker: Benchmarks and the Investment Process

The brilliant entry below is from the Portuguese Blog: Golden Broker, from a most honourable connection (...very personally speaking...)  Alexandre Mota. It is an appropriate reminder of the pitfalls for Investors and Asset Managers of relying to much on a Benchmark when making decisions about investment and asset allocation.

Alexandre tells us that Benchmarks may on many occasions blur the reality behind the Investment process, and the tendency of professionals in these sectors to follow the herd, so to speak. Even if there are uses for Benchmarks, certainly there is, specially on informative grounds, in the end it is always the hard work of seeing through the veil that will make the distinction and good performance when investing.

Blog Golden Broker: Qual o objetivo do seu investimento?: A maioria dos investidores responde a esta pergunta referindo que visa o crescimento ou preservação do seu capital, ou assegurar um rend...

Wednesday, 30 April 2014

Activism in Investment

Today's topic: activism in Investment. A growing trend in the Corporate Governance landscape. In the video below we learn about the tendency to the formation of a sort of democratic coalition between different players in the Investment world (Institutional Investors with diverse origins but with aligned interests). The conversation is with FT Alphaville US correspondents Cardiff Garcia and Stephen Foley.

Tuesday, 22 April 2014

The Breakout Trader.

I would like your permission to post here today this as a  bilingual entry. The link refers to the Portuguese Blog The Breakout Trader. With subject matter: S&P 500 Large Caps, Mid Caps and Small Caps estimated earnings reports. These results will be known later today.

The Breakout Trader: Calendário com as estimativas dos resultados das e...: O seguinte calendário (fonte Ransquawk) tem as estimativas de resultados para as Large Caps, Mid Caps e Small Caps do mercado americano, qu...

Thursday, 17 April 2014

Philippe Jabre taking home Fund of the Year 2013 at the HedgePo Investor...

A different video this time. The festive awards giving fits nicely with our entering a season of Spring.... and hope!

Wednesday, 16 April 2014

Andrew Peddar - StatPro Group - April 2014

I today post here a Video originally from the publication Asia Asset Management.
The growing influence and importance of Data Science to the Financial Sevices industry is hardly, if ever understated. Andrew Peddar explains the issues that Fund Management and Asset Management companies face in relation with the new disrupting technologies that are transforming the industry like Cloud services and Big Data Analytics. And the challenges are for the Asia Pacific region companies on the same level as they are on a global outlook.

Tuesday, 15 April 2014

Blog Golden Broker: Preço, Valor e Reflexividade. Um Post em Português.

 Na minha esfera de influência está este Blog da GoldenBroker. Com um muito respeitável naipe de colaboradores, a GoldenBroker parece ser uma excelente operadora no chamado Sell-side cluster dos mercados financeiros  e a operar em Portugal com condições de competitividade. O Post do link abaixo foi introduzido por Alexandre Mota da Golden Broker.

Blog Golden Broker: Preço, Valor e Reflexividade.: O recente manifesto sobre a reestruturação da dívida levantou um conjunto de questões quer do foro político, quer do foro económico. Será...

Wednesday, 5 March 2014

Fred's Blog: The craziest bond investment?

This post from Fred Wollard's Blog, who I am supposing someone with knowledge of the matters he writes about (it seems so) about a kind of Investement that is being relatively talked about in the Institutional space for the last couple of years or so: CoCo Bonds or Contingent Convertible Bonds.

The assessement is crystal clear: the risks are great. And the shareholder position in the issuer Bank: the best possible! Given the low, in terms of value/net asset position of the shareholders and stakeholders of many Financial Institutions, including Insurance companies or Pension Funds, it isn't a surprise to see the issuing institution (mainly commercial Banks) shareholders' value being maximised.The sell-side of the trade is the one with the greatest incentive to the CoCo play.

Fred's Blog: The craziest bond investment?: Anyone who has ever borrowed money has worried about what would happen if something bad happened to them, and they had trouble r...