Saga of Financial Markets


Last updateSat, 29 Jul 2017 12am

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US Oil & Gas Sector | Default Risk Up

As oil prices plunged, oil and gas sector is hit by a wave of credit ratings downgrade.  Standard & Poor’s, downgraded 19 high-yield oil and gas companies since October.  It is the largest set of ratings downgrades for a single sector since 2009.

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Quants Winning Back Investors

Quant funds, also known was hedge funds using computer algorithms had done very badly for the period from 2011 – 2014, where in April 2014, their performance started to rebound.  According to eVestment, a data provider, that quants funds suffered 15 consecutive months of redemptions.  Investors pulled $32 billion from quant funds in 2013 and $5.5 billion in 2012.  The last time quants funds had a positive inflows was 2011 with $11.7 billion.

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Hedge Fund - Everest Capital Closing Fund after Wrong Bet on Swiss Franc

Marko Dimitrijevic, a hedge-fund veteran known for his aggressive gambles on emerging markets is shuttering his flagship fund – Global Fund with $830 million, because of sudden jump in the value of Swiss Franc.  Mr Dimitrijevic, who grew up in Switzerland, had bet in place that the Franc would fall.  From its founding in 1991 through last month, the Global Fund earned an average annualised return of 12.3%, after fees.

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ECB’s QE €60bn-a-month till September 2016 Impact

2015-01-22, the European Central Bank (ECB) launched €60bn-a-month till September 2016 quantitative easing programme.  The amount was far larger than investors had expected.

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Swiss Stocks Worst since 1989

On 2015-01-15, the Swiss National Bank (SNB) decided to removed its minimum exchange rate cap of 1.2 Swiss Francs to the Euro introduced 2011 to protect the country from the Eurozone Debt Crisis – with the concern that the Franc would strengthen significantly against the Euro, which would hurt Switzerland’s open economy and hamper exports.  As such, the move shocked the market with Swiss Market Index fell 8.7%, making it the worst day since 1989.

Read more: Swiss Stocks Worst since 1989