Managed FundsStay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.., 04 Jul 2015 15:09:47 +0000SRA Framework 2.0en-gbChina sovereign wealth fund expands by $93 billion$93-billion.html$93-billion.htmlimageBEIJING: Sovereign wealth fund China Investment Corp (CIC) saw its total assets soar by $93 billion to nearly $750 billion last year, it said Friday, although subdued global growth slowed returns on its overseas portfolio.

CIC was created in 2007 with $200 billion to make better use of China's colossal foreign exchange reserves, which amounted to $3.73 trillion this March.

Its total assets expanded to $746.73 billion by the end of 2014, an increase of $93.5 billion, CIC said in its annual report.

But returns on the overseas portfolio dropped to 5.47 percent, down from 9.33 percent in 2013 and the weakest since 2011, according to the document.

"During 2014, the global economy recovered at a slower speed than expected," Ding Xuedong, chairman and chief executive officer of CIC, said in the report.

"CIC... remained focused on identifying the investment opportunities that China's economic success, economic structural upgrading, and global outreach present," he added.

The document did not specify the size of CIC's foreign investment portfolio, but said 44 percent of it was in publicly-quoted shares, with almost half of that -- 45.6 percent -- in US equities.

Fixed income products accounted for 14.6 percent of the portfolio, with advanced economies' sovereign bonds accounting for 57.4 percent of that, it added.

One CIC subsidiary, Central Huijin, is a vehicle through which China holds stakes in key state-owned financial institutions.

It owns 65.5 percent of Bank of China, the document showed, 57.3 percent of China Construction Bank, 40.3 percent of Agricultural Bank of China, and 35.1 percent of Industrial and Commercial Bank of China, the world's biggest lender.

In 2012, CIC acquired 8.68 percent of British utility company Thames Water -- the largest water and sewage service provider in Britain -- for an unspecified price.

Later in the year, it bought a 10 percent stake in London's Heathrow Airport for £450 million (now $703 million).

In 2009, the company took over 15 percent of Virginia-based power company AES Corp for $1.58 billion.

Copyright AFP (Agence France-Presse), 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsFri, 03 Jul 2015 12:47:25 +0000
US bond prices rise as jobs data disappoint YORK: US Treasuries prices rose on Thursday as data showed a setback in labor market improvement in June, raising doubts whether the Federal Reserve would end its near-zero interest rate policy later this year.

The US Labor Department said US employers added 223,000 workers last month, less than the 230,000 increase projected by economists polled by Reuters. It downgraded its readings of April and May job increases, resulting in 60,000 fewer jobs created than previously reported.

Another bleak aspect of the latest payrolls report was the no growth in wages, which analysts say would disappoint the Fed which has counted on growing paychecks to help support consumer spending and its 2 percent inflation target.

"Clearly the report was disappointing," said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania. "If we continue get this type of payrolls report again in July and August, the Fed won't move in September."

US interest rates futures rose after the June payrolls report, suggesting traders priced out the chances of a Fed rate increase this year.

Meanwhile, traders who were uncertain on the outcome of Greece's referendum on Sunday on bailout terms loaded up on safehaven US government debt ahead of a three-day weekend.

US financial markets will close on Friday for the Fourth of July holiday.

Greek Prime Minister Alexis Tsipras on Wednesday urged voters to reject the deal in an effort to force lenders to loosen austerity terms, while Eurogroup chair Jeroen Dijsselbloem said on Thursday a 'no' vote would not strengthen Greece's negotiation stance to clinch a reform-for-cash deal.

Investors hope majority of Greek voters would vote 'yes' on Sunday. This would signal the country won't exit the euro zone. Traders fear Greece leaving the economic bloc and common currency would roil financial markets.

In early US trading, benchmark 10-year Treasuries notes were up 11/32 in price, erasing losses before the payrolls data. The 10-year yield was last 2.375 percent, down 4 basis points from late on Wednesday.

The 30-year bond was up 9/32 in price after falling as much as a full point before the jobs report. The 30-year yield was last 3.178 percent, down 2 basis points from Wednesday's close.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsThu, 02 Jul 2015 14:49:36 +0000
India's end-March external debt $475.8bn: RBI$4758bn-rbi.html$4758bn-rbi.htmlimageMUMBAI: India's external debt stood at $475.8 billion as of end-March, up 6.6 percent from a year earlier, the Reserve Bank of India said in a release on Tuesday.

India's external debt-to-gross domestic ratio (GDP) stood at 23.8 percent as of end-March, compared with 23.6 percent year ago.

"Excluding the valuation gains due to appreciation of US dollar against the Indian rupee and other major currencies, the increase in external debt by end-March 2015 over its end-March 2014 level would have been higher at $45.7 billion," the RBI said.

The country's ratio of short-term residual debt to forex reserves fell to 54.2 percent in March-end from 57.4 percent a year earlier, the RBI said.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 30 Jun 2015 13:43:13 +0000
US yields hit session highs on stock futures gains YORK: Longer-dated US Treasuries yields rose to session highs in early US trading on Tuesday as US stock index futures rose on hopes of a last-minute debt deal for Greece, with the cash-strapped nation poised to miss a debt repayment to the International Monetary Fund.

Benchmark 10-year Treasuries yields were last 2.362 percent, up 3 basis points from late on Monday, while the 30-year yield was up 3 basis points to 3.124 percent.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 30 Jun 2015 13:41:12 +0000
Bond prices slip on renewed optimism for Greece debt deal YORK: US Treasuries prices slipped on Thursday on renewed optimism that Greece would avert a debt default after the country's international creditors presented a final cash-for-reform proposal to euro zone finance ministers.

Euro zone finance ministers will work on a financing-for-reforms deal with Greece on the basis of a proposal from the creditor institutions as negotiations with Athens have produced no agreement, officials said.

"The main thing is Greece, and the market is still going to move to some degree, up and down, based on the headlines," said Lou Brien, market strategist at DRW Trading in Chicago.

Analysts said that while the slight weakness in Treasuries prices was due to optimism over a Greek debt deal, traders' uncertainty over the outcome of negotiations capped losses and prices were likely to remain volatile in response to developments out of Greece.

Thursday's price losses curtailed a rally in Treasuries prices on Wednesday after a roadblock in negotiations crimped demand for safe-haven U.S. government bonds. Most yields remained within recent ranges on Thursday, while five-year note yields bucked the trend and rose to a more than one-week high of 1.73 percent.

Traders' preoccupation with Greece overshadowed data showing U.S. consumer spending grew its most in nearly six years in May on strong demand for automobiles and other big-ticket items.

U.S. economic data has been closely watched recently given its potential to influence the Federal Reserve's timeline for hiking interest rates for the first time in about ten years. A Fed rate hike would likely hurt bond prices.

"As much as we are data-dependent for the Fed, I don't think it had much of an impact on the market," said Justin Lederer, Treasury strategist at Cantor Fitzgerald in New York, in reference to the latest U.S. data. "The market is just focusing on Greece."

The Treasury will sell $29 billion in seven-year notes at 1:00 p.m. ET (1700 GMT), marking the last round of this week's $90 billion in new supply. Lederer said quarter-end buying of U.S. Treasuries could bolster demand at the sale.

U.S. 30-year Treasuries were last down 12/32 in price to yield 3.17 percent, from a yield of 3.15 percent late Wednesday. Benchmark 10-year notes were last down 11/32 to yield 2.41 percent, from a yield of 2.37 percent late Wednesday.

Five-year notes were last down 7/32 to yield 1.73 percent, from a yield of 1.68 percent late Wednesday.

Copyright Reuters, 2015

]]> (Imaduddin)Managed FundsThu, 25 Jun 2015 19:19:27 +0000
ECB to review Greek bank funding again on Monday The European Central Bank will review its limits on emergency funding (ELA) for Greek banks again on Monday when euro zone finance ministers and euro zone leaders meet in Brussels for last-ditch talks a loans for reforms deal with Athens, officials said on Friday.

The ECB's Emergency Liquidity Assistance to Greek banks is the only thing that keeps the Greek banking sector alive amid huge daily outflows of deposits.

Savers pull out cash fearing a failure of the negotiations that could end in Greece leaving the euro.

The new review time for the amount of funding available to Greek banks via the ELA on Monday is timed to put more pressure on the Greek left-wing government of Alexis Tsipras to agree at the euro zone summit to reforms, without which the country will not get more loans from the euro zone and will default.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsFri, 19 Jun 2015 12:58:12 +0000
Yields fall after Fed cuts growth, fed funds rate forecasts YORK: US Treasury yields fell on Wednesday after the Federal Reserve reduced its growth and federal funds rate forecasts, but said growth this year is still likely strong enough to support an interest rate increase later in the year.

After contracting in the first quarter, the economy is now on track to grow between 1.8 percent and 2.0 percent in 2015, according to the central bank's latest policy statement and new projections issued by Fed policymakers.

Policymakers' individual projections for the appropriate federal funds rate at year's end remained clustered around 0.625 percent. However, seven policymakers are now in favor of hiking rates only once or not all this year. In addition, Fed officials see slightly lower rates at the end of 2016 and 2017 than forecast in March.

"I look at the economic outlook as pretty dovish," said James Camp, managing director at Eagle Asset Management in St. Petersburg, Florida. "You might get a move in September but it is really a coin flip ... The short-end likes the statement and the long-end is weaker. That's lower for longer to me."

A stronger-than-expected jobs report for May has raised market expectations that the Fed will make its first rate hike in September, and some analysts and investors also see a second increase in December as likely.

But weakening productivity data and lower growth forecasts for the year have led others to push back expectations on when the Fed is likely to make its first rate increase.

Benchmark 10-year note yields fell to 2.32 percent from 2.39 percent before the Fed statement was released.

The yield curve between five-year notes and 30-year bonds steepened to 147 basis points, the steepest since May 22.

Few investors expected the Fed to commit solidly to an impending rate increase at this month's meeting as the central bank waits on further indicators on the strength of the US economy.

"I think we were expecting the statement to be mostly dovish, no real solid indication of a hike just an upgrade to their economic assessment, and that's generally what we got, nothing really surprising there. So the market rallied a bit on that," said Aaron Kohli, an interest rate strategist at BNP Paribas in New York.

Treasuries have also been supported this week by concerns that Greece will default on its debt and leave the euro zone.

A warning by Greece's central bank that the country risked being driven from the euro zone and, ultimately, the European Union failed to break a deadlock with creditors before a potentially decisive meeting of European finance ministers.

Copyright Reuters, 2015

]]> (Imaduddin)Managed FundsWed, 17 Jun 2015 20:21:19 +0000
Yields fall on Greek debt concerns, before Fed announcement YORK: US Treasury yields fell on Tuesday as Greek Prime Minister Alexis Tsipras lashed out at Greece's creditors, increasing demand for safe-haven debt as investors worried that the country could default on its loans and leave the euro.

Tsipras accused the country's lenders of trying to "humiliate" Greeks. Greece is set to default on a 1.6 billion euro ($1.80 billion) debt repayment to the International Monetary Fund on June 30 unless it receives fresh funds by then.

Yields also dropped as investors anticipated that the Federal Reserve is likely to lower its forecasts on the economy and the federal funds rate, known as the "dot plot," when it concludes its two-day meeting on Wednesday.

"Europe is the number one driver, and then people are rethinking about where the Fed actually is," said Tom Tucci, head of Treasuries trading at CIBC in New York.

Better-than-expected jobs gains in May, and signs of wage inflation, has increased speculation that the US central bank is likely to begin raising interest rates in September, with some investors and analysts also expecting a second hike in December.

But traders are also expecting that the Fed will lower forecasts for 2016 and 2017, which may keep interest rates lower than previously expected.

"People still think they will be keeping rates lower for longer over time," Tucci said.

Benchmark 10-year notes were last up 11/32 in price to yield 2.32 percent, down from 2.36 percent late on Monday.

Investors are also focused on whether the Fed will change language in the statement about ongoing slack in the labor market, after May's employment report.

"There is a phrase in the beginning of the statement where they characterize ongoing slack in the labor market that may be revised," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.

Copyright Reuters, 2015

]]> (Imaduddin)Managed FundsTue, 16 Jun 2015 21:12:50 +0000
Egypt to issue 1-year T-bill worth $700mn$700mn.html$700mn.htmlimageCAIRO: Egypt will issue a 1-year treasury bill worth $700 million dollars, a central bank statement said on Thursday.

The statement said the finance ministry was the issuer and the bookkeeper was the central bank.

The auction deadline is June 15, 2015 and the issue date is June 16.

Eligible subscribers include local banks and foreign financial institutions, the statement said.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsThu, 11 Jun 2015 20:00:03 +0000
Yields higher on strong US data YORK: US Treasury debt yields rose on Monday after data showed U.S. manufacturing activity rebounded in May and construction spending improved, suggesting the world's largest economy was on a more steady path to recovery after a soft patch in the first quarter.

Treasury debt prices, which move inversely to yields, were weighed down by profit-taking and unwinding of month-end demand as investors braced for a spate of economic data this week that could provide further clues about the timing of a Federal Reserve rate hike.

The Institute for Supply Management said its index of national factory activity rose to 52.8 in May, from April's 51.5, which had tied with March's reading as the lowest since May 2013. The ISM number topped expectations of 52.0, according to a Reuters poll of economists.

Another report showed U.S. construction spending surged in April to the highest in nearly 6-1/2 years as outlays increased broadly, pointing to some pockets of strength in the economy.

Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut, said both reports should bolster U.S. growth expectations for the second quarter.

U.S. government bonds briefly pared losses after data showed U.S. consumer spending was unexpectedly flat in April, while inflation pressures remained muted, with a price index for consumer spending recording its smallest gain since late 2009 on an annual basis.

In mid-morning trading, U.S. 30-year Treasuries were last down 26/32 in price to yield 2.888 percent, from a yield of 2.885 percent late Friday. U.S. 10-year notes fell 7/32 in price to yield 2.121 percent, from a yield of 2.123 percent late Friday.

CRT's Lyngen, however, cautioned against reading too much into Monday's price action, given the heavy data week.

Boston Fed President Eric Rosengren, who is not a voting member on the Federal Open Market Committee, sounded a dovish tone on Monday. He said he would like to begin raising rates as soon as possible, but noted risks from the slowdown in China and Europe in particular loom large, even as U.S. growth is still not strong enough.

Treasuries showed little reaction Rosengren's remarks.

Copyright Reuters, 2015

]]> (Imaduddin)Managed FundsMon, 01 Jun 2015 16:17:59 +0000