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Pittsburgh Tribune Review – On Oct. 5, philanthropist and hedge fund billionaire Stanley Druckenmiller sat in his New York den, watching the Steelers play in Jacksonville.
Two weeks before, he yanked an offer worth more than $800 million to buy the fabled Pittsburgh franchise, and now the quarterback of his beloved Black and Gold was scrambling to escape the clutches of the Jaguars, en route to a narrow 26-21 victory in Florida.
But during every commercial, Druckenmiller scrambled to a nearby room, where computer screens tracked the daytime tumult of Asia’s financial markets — Tokyo’s Nikkei 225 average crashing more than 11 percent, Hong Kong’s Hang Seng index tanking, the Bombay Sensex plummeting.
KEZI – Most Asian stock markets recovered Monday after last week’s historic sell-off as governments around the world intensified efforts to boost the ailing financial system.
Hong Kong’s Hang Seng Index, which tumbled more than 7 percent Friday, opened over 2 percent but shed its gains to trade about 360.50 points higher, or 2.44 percent, at 15,157.37.
In Australia, the S&P/ASX200 index was up 4 percent in response to a government plan to guarantee bank and other lender deposits for three years. The benchmark plunged over 8 percent on Friday, its biggest single-day fall ever.
South Korea’s benchmark gained more than 2 percent and Singapore’s key stock measure was up about 1 percent. But China’s key Shanghai index traded 2 percent lower, while Taiwan’s benchmark lost more than 3 percent.
West Palm Beach (HedgeCo.net)- The Hang Seng Index posted its biggest single-day loss in a month, as investors fretted about the recurring subprime credit crisis in the United States and its impact on regional banks and other financials.
"It’s a very bad day for financial markets across Asia. What’s happening to Fannie Mae and Freddie Mac is a clear indication of more troubles ahead in the mortgage market. What the U.S. Treasury is doing smacks of political desperation rather than genuine concern for the financial markets," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC Co. in Hong Kong.
The U.S. Treasury also announced plans to rescue Fannie Mae and Freddie Mac, further fuelling fears that the subprime crisis may have intensified.
"While Chinese banks are sound and have very little exposure to subprime, the market is trading very short term and the selloff in the financial sector is just an extension of the overall market moves." Collet said.
The Hang Seng Index lost 3.8 percent, closing at the lowest since March 20.
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Bloomberg – Value Partners Group Ltd., Asia’s second-largest hedge fund manager by assets, said worsening returns in the industry may lead to bigger firms taking over smaller rivals.
“I think the industry may go through certain consolidation,” said Chief Executive Officer Franco Ngan in an e-mail. “Our company is financially strong and will keep an open mind to explore if appropriate opportunities arise.”
Asian hedge funds, dominated by equity-focused managers, have struggled with negative returns and redemptions this year, after the end of a five-year stock rally. Hong Kong’s Hang Seng Index has tumbled 23 percent from an Oct. 30 record and Japan’s Topix index has fallen 19 percent in the past year.
Eurekahedge’s Asian hedge fund index dropped 5.2 percent this year, based on preliminary data for May. That’s the worst start to a year since the Singapore-based company began compiling data in 2000, and the worst performance among six regional indexes Eurekahedge compiles.
Smaller, younger firms that have never weathered a market slump may struggle to attract and retain money as the global fallout from surging home loan delinquencies in the U.S. erodes appetite for risk.
“Institutional investors are becoming more and more demanding in terms of proper infrastructure such as risk control, compliance, operation, information technology, client services and reporting,” Ngan said. “The situation is more challenging for smaller boutiques with a relatively short track record.”
