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Wall Street & Technology – Global investors boosted their equity holdings for the second month running in December and cut bonds, thanks to signs of stabilising stock markets and tumbling government bond yields, Reuters polls showed on Monday.
Surveys of 44 leading investment houses in the United States, Japan, continental Europe and Britain showed an average mixed-asset portfolio holding 56.0 percent in stocks, up from 54.8 percent in November. However, it still remained below the long-term average holding of almost 60 percent.
Bond holdings fell to 33.0 percent in December from 34.3 percent the previous month, above the long-term average of around 32 percent.
Cash rose to 5.4 percent from 5.3 percent.
A rise in the respondents’ equity holdings comes as world stocks, measured by MSCI, rose nearly 20 percent after hitting a 5-1/2 year low on November 21.
A round of central bank interest rate cuts worldwide and the introduction of fiscal stimulus packages in major developed and emerging economies have helped convince many investors that stock markets might bottom before long.
Reuters – Asian stocks plummeted, led by an 11 percent drop on Japan’s Nikkei, and oil prices dropped to a one-year low on Thursday as fears grew of a more protracted and sharp global slowdown than initially expected.
Major European stock markets were expected to open down as much as 5.9 percent, according to financial bookmakers, as investors anticipated poor corporate results in such an uncertain economic environment, while the dollar gained in a flight from risk.
Optimism about the stabilisation in money markets has been swept aside and widespread selling of global equities has resumed in earnest as the quarterly results season gets underway and reports trickle in about sharp losses at hedge funds.
"I think today there is just a combination of uncertainty and deleveraging in the market," said Amar Gill, head of thematic research at CLSA in Singapore.
Bloomberg – Tantallon Capital, founded by Merrill Lynch & Co. former head of sales Nicholas Harbinson, closed one of its hedge funds after bad bets on Asian stocks, three people familiar with the matter said.
The Singapore-based firm shut its Tantallon Smaller Companies Fund, managed by Steve Sun, after it lost 25.6 percent this year, according to data compiled by Bloomberg, more than twice a benchmark that tracks similar funds. Assets shrank to $18 million as of end July, from as much as $29 million in February, the people said, asking not to be identified because details are private.
The market turmoil has wiped $19 trillion off global stock markets in the first nine months of this year. That has hurt even the most experienced managers, said Jennifer Carver, who runs the Asian business of 3A SA, the alternative investment unit of Geneva-based Banque Syz & Co.
“There are a lot of funds out there that are effectively net long that are getting killed this year,” said Hong Kong- based Carver, adding that 3A doesn’t invest in Tantallon’s funds. “The bigger funds have lost a lot of assets too, their performance has been bad; smaller funds have to close quicker because they don’t have the depth of the larger funds to keep going.”
