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Markets 2nd May 2012

European flows to bonds not a confidence vote in the euro, Morningstar warns

LONDON | Is that a global bond boom we have before our eyes? Morningstar research said the latest European asset flow data showed that long-term funds enjoyed a strong first quarter this year, receiving more than €50 billion of new investor assets. Of this, more than 70 per cent went to fixed-income funds, while equity funds, by contrast, had net redemptions for March and only slightly positive inflows between January and March….

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Markets 2nd May 2012

Most Europe investment managers optimistic on the long term

LONDON | The majority of asset managers working on the European markets agree that there are opportunities to invest despite fragility of the single currency. The UK’s Association of Investment Companies (AIC) published this week the results after having polled Europe managers to gauge opinion on what may be in store for the region. Whilst managers expect pain in the short-term, and do not see miracles happening overnight, over the longer-term they…

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Markets 1st May 2012

Skandia’s Gillham: “Downgrading devil is in the Spanish bank funding detail”

LONDON | The worsening of Spain’s debt risk grades will have grave implications, whether market participants believe the situation in which the country’s public finances are is reversible or not. Portfolio manager at Skandia Investment Group’s fixed income funds and researcher, Anthony Gillham distrusts talk of priced-in negative events. Although last Friday’s announcement by Standard and Poors that Spain is to be downgraded by two notches from A to BBB+ was…

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Markets 30th April 2012

Lack of appetite for risk

By Luis Arroyo, in Madrid | Please, bear with me. First, I took a graph from the Noah Smith’s blog, in which everyone can see that venture capital has almost passed away since the 2000 crisis. The chart shows the value of equity shares, and each line is a selection made under a different approach. The 1990’s were the golden age of risk, people loved risk and the VC funding…

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Markets 30th April 2012

A euro devaluation against sterling is on the cards, HiFX reports

LONDON | As the markets are rocked by France’s presidential elections and attention continues to linger on Spain, where official figures announced that it is once again in recession, currency specialists HiFX reported on Monday a 175% increase in euro sales. The move could benefit euro country members’ exports to the United Kingdom but it would hurt the British economy, as 40% of foreign sales go to the European Monetary…

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Markets 27th April 2012

“For Spain is either a bad bank or an outright intervention”

By Tania Suárez, in Madrid | Gabriel Montalto is general manager in Spain at Hanseatic Brokerhouse. In a conversation with The Corner, he pointed out that the European Central Bank should finish with the liquidity injections as soon as possible. Montalto also remarked that is doubtful that Germany decides to change its policy of austerity. Do you think the euro zone is already in recession? According to the data we are…

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Markets 27th April 2012

S&P, Pain, Spain, Spanic

The housing bubble, like the turbid monster of an old movie, blows in time and again. Didn’t Spain’s president Mariano Rajoy see it coming? Standard & Poor’s Rating Services might have opened his eyes when it lowered its long-term sovereign credit rating. The Kingdom of Spain woke up on Friday under the ‘BBB+’ tag from the previous ‘A’. The risk agency did not just cut down the short-term sovereign credit rating to…

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Markets 26th April 2012

Thursday’s graph: the UK, a view from Madrid

International Financial Analysts AFI in Madrid added their opinion in agreement with more or less everyone else: the mix of relaxed  monetary policy, fiscal retrenchment and depreciation of the sterling pound that has been engineered in Downing Street by the Coalition government isn’t working. In fact, AFI said the UK’s is the economy with the weakest recovery response against the crisis among the main developed economies. As the Bank of…

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Markets 25th April 2012

Wednesday’s graph: the pain of Spanish SMEs spells pain in France, Germany

Although the difficulties that the Spanish small and medium sized companies experience to access finance showed signs of very soft relief, the figures were bad. The latest survey on SMEs in the euro zone offered a stark picture of small companies in Spain suffering the worse end of the credit crunch, as a consequence of a weak domestic market. In contrast, Spain’s corporations are able to weather the crisis thanks…

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Markets 25th April 2012

Look at US T-bill sales before blaming market saturation for lower bund demand

MADRID | The German Treasury placed Wednesday €2.4 billion in 30-year bunds with an average return of 2.41%, down from 2.62% in the previous auction. The bid to cover dropped to 1.1 times from 2.1 times. Berlin admitted that demand had been lower than expected, and the total sale volume planned had been left uncovered. In a note to investors, Citigroup in Spain commented on the German explanations and made an interested, interesting comparison: “This reflects a context of volatility and uncertainty, but more importantly, the…