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Saga of Financial Markets

Fri12152017

Last updateSat, 29 Jul 2017 12am

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Hasenstab bet on with $5 B Ukraine Debt

Dr Michael Hasenstab, the architect of Franklin Templeton’s massive purchase of Irish debt, is now ‘betting’ Ukrainian international debt of $5 B (or about 20% of the country’s outstanding international government bonds) at the end of August 2013.

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Norway oil fund to invest More in China

Norway’s 810 billion oil fund, the world’s richest sovereign wealth fund holds about 1% of all global equities – investing in 7,500 companies worldwide, will increase its investments in China by 50% from $1 billion to $1.5 billion and would like to do even more.

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US Treasuries Loss is the Worst Since 2009

According to Bank of America Merrill Lynch U.S. Treasury Index, this year’s losses on Treasuries of 3.6% is the worst since the 3.72% loss in all of 2009 and more than the 3.35% drop in 1994 after the Fed doubled its benchmark rate to 6%.  The loss is due to the speculation that the Fed will taper its $85 billion of monthly bond purchase.

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Hedge Funds Betting Most on Junk Bond Since 2008

Hedge funds have amassed $1.2 trillion of US junk bond market or as much as 23% of dollar-denominated high yield bonds, the highest holding since the credit crisis in 2008.  It was 18% last year, according to Barclays.  Credit hedge funds have boosted assets by 89% since 2008, outpacing the 66% growth of the junk market, according to data from Hedge Fund Research and Bank of America Merrill Lynch indexes show. 

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Asia’s Great Rotation– Money flowing From South to North

The Asia’s Great Rotation is taking place – with capital inflows into North Asia, particularly Korea and Taiwan from Southeast Asia.  Since July, investment flows lifted stock markets in China (China Enterprises index of the top Chinese listings in Hong Kong jumped 9.5% since end of June), South Korea (US$853 Million in to equities, US$12 billion this year) and Taiwan (US$2.75 billion).  On the other hand, investors sold US$253 million of Indonesian equities and large amounts of bonds and stocks in India.

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