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Saga of Financial Markets

Fri12152017

Last updateSat, 29 Jul 2017 12am

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Soros & Hedge Funds Turn Bearish on S&P 500

Soros Fund Management has doubled up a bet that the S&P 500 is heading for a fall.  The value of that holding, the biggest position in the fund, has risen to $1.3 billion from around $470 million, making up 11.13% chunk of all reporting holdings…According to Bloomberg, for the first time since September 2012, Hedge funds and other large speculators have been net short for the last two weeks on S&P index futures with concerned that emerging-market turmoil and signs of slower growth will drag equities down.  In the week ended 2014-02-21, based on the price of the futures contract, that amounted to a notional value of about $5.6 billion in bets against the index.

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Japan’s GPIF to allocate 50% of its Assets in Stocks

Japan’s Government Pension Investment Fund (GPIF), the world’s biggest retirement fund, was told by Takatoshi Ito, head of a panel that advised lawmakers on overhauling public pensions, to increase its return from 4.1% to 5% by allocating more of its assets into stocks, matching the returns of foreign pension funds of about 5% over 10 years.

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Europe Money Market Funds hit by outflows

European money market funds, which control about €1tn in assets, have recorded their highest annual net outflows of €69.2bn since 2010 (outflow of €158.7bn) as record low interest rates encouraged investors to put their cash into higher yielding assets such as high-yield bonds and equities, according to figures from Fitch, the rating agency.

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US High Yield Debt hit by Fed’s Tapering

Junk bonds have been one of the most popular fixed-income investments in the past couple of years as the Fed’s three rounds of quantitative easing have pushed benchmark interest rates to rock bottom.  Now, as the Fed’s tapering began, it is no longer the case.  Investors favoured funds that invest in corporate bonds with higher credit quality and US Treasury securities.

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China Stock Market–A Shares

Mainland-listed equities traded in Renminbi, known as A shares, are currently excluded from global indices as they are not freely accessible by the global investing public.  The existing China representation within those indices is largely via H shares, which are Chinese securities listed in Hong Kong.

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