Managed Funds Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. http://www.brecorder.com/business-a-finance/managed-funds.html Wed, 04 May 2016 01:47:07 +0000 Joomla! 1.5 - Open Source Content Management en-gb Biggest daily fall in German 10-year bond yields in 2016 http://www.brecorder.com/business-a-finance/managed-funds/293684-biggest-daily-fall-in-german-10-year-bond-yields-in-2016.html http://www.brecorder.com/business-a-finance/managed-funds/293684-biggest-daily-fall-in-german-10-year-bond-yields-in-2016.html imageLONDON: German Bund yields recorded their biggest daily fall in 2016 on Tuesday as concerns about the global economy outweighed fears that bond markets could see a repeat of the sell-off that struck a year ago.

Ten-year yields, which rose for three successive weeks ahead of inflation data on Friday that marked the anniversary of last year's bond blowout, fell 8 basis points to just below 0.20 percent, the biggest daily fall since early December 2015.

Strategists said a combination of poor Chinese data, lower growth and inflation forecasts from the European Commission, and weakness in the dollar and stock markets had driven demand for the European safe-haven asset. "We are just pushing back against that idea of a messy sell-off that people had been looking at over the last couple of weeks," said Owen Callan, a senior analyst at Cantor Fitzgerald.

In price terms, Bunds rose around three quarters of a point to 102.90. With coupons near zero, investors make most of their returns through capital appreciation but this can be a risky strategy when yields are so low.

When yields shot from a record low of 0.05 percent to over 1 percent in a matter of weeks last year, investors were left nursing double-digit percent capital losses.

All other euro zone yields fell on a day where the single currency touched its strongest level against the dollar since August 2015.

A stronger euro puts downward pressure on inflation by increasing the cost of imports, while a drop in the oil price on oversupply worries is also making life difficult for the ECB which is trying to revive consumer price growth.

"With the euro at these levels, this would be something the ECB starts thinking about in terms of further easing," said Peter Chatwell, a strategist at Mizuho.

Euro zone growth will be slower than previously expected with subdued inflation this year, the European Commission said in its economic forecasts on Tuesday.

The external risks to the bloc's economy were underlined by a survey which showed activity at China's factories shrank for the 14th straight month in April.

Growth worries triggered a slide in almost every major stock market around the world.

Europe's major indices shed as much as 2 percent. Elsewhere, Portugal's 10-year bond yield fell to a one-month low on relief that the risk of a cut to the country's only remaining investment grade rating has faded for now.

Ratings agency DBRS maintained Portugal's BBB rating with a stable outlook on Friday, ensuring its bonds remain eligible for the ECB's bond buying programme.

"DBRS not only kept Portugal's rating unchanged but left the outlook unchanged too, so the risk of a downgrade is fading and that's why we are seeing an outperformance of Portuguese debt," BNP Paribas European rate strategist Patrick Jacq said.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Tue, 03 May 2016 16:32:14 +0000
Yields rise as US manufacturing sector expands http://www.brecorder.com/business-a-finance/managed-funds/293492-yields-rise-as-us-manufacturing-sector-expands.html http://www.brecorder.com/business-a-finance/managed-funds/293492-yields-rise-as-us-manufacturing-sector-expands.html imageNEW YORK: US Treasury yields rose on Monday after data showed that the US manufacturing sector expanded, albeit at a slower pace than the previous month.

The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.8 in April from 51.8 the month before.

"I think perhaps people were positioning for a weaker number, given the weakness in some of the regional indicators," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. "If you drill down into the index it wasn't as bad."

Benchmark 10-year notes fell 11/32 in price to yield 1.86 percent, up from 1.82 percent on Friday.

Yields had risen earlier on Monday as investors evaluated when the Federal Reserve is likely to next raise interest rates again and awaited Friday's highly anticipated jobs report for April.

Yields have fallen since the Fed kept rates unchanged last Wednesday and described an improving labor market while also acknowledging that economic growth seemed to have slowed.

The US central bank also removed a reference to global risks, opening the door slightly to a rate hike in June, but some analysts viewed the move as less hawkish than they had expected.

"They weren't really eager to pound the table and keep June on the table," said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York. "Right now to bet on the Fed you almost have to bet that everything will go perfectly, and no one is willing to bet on that yet."

Investors have priced in a low chance of further rate hikes this year even as Fed officials and economists indicate that two increases are likely.

One factor dissuading investors from betting on rate increases in the bond market is that it is costly to take a medium-term view that yields will rise, while worsening economic data or any new volatility in oil or equity prices could also send yields still lower.

Speeches by Fed officials this week will be in focus for any new indications of when a rate hike is likely.

Data will be dominated by Friday's employment report, which is expected to show that employers added 200,000 jobs in April, according to the median estimate of 88 economists polled by Reuters.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Mon, 02 May 2016 17:21:25 +0000
Yields rise as investors evaluate Fed policy http://www.brecorder.com/business-a-finance/managed-funds/293424-yields-rise-as-investors-evaluate-fed-policy.html http://www.brecorder.com/business-a-finance/managed-funds/293424-yields-rise-as-investors-evaluate-fed-policy.html imageNEW YORK: US Treasury yields rose on Monday as investors evaluated when the Federal Reserve is likely to next raise interest rates again and awaited Friday's highly anticipated jobs report for April.

Yields have fallen since the Fed kept interest rates unchanged last Wednesday and described an improving labor market while also acknowledging that economic growth seemed to have slowed.

The US central bank also removed a reference to global risks, opening the door slightly to an interest rate hike in June, but some analysts viewed the move as less hawkish than they had expected.

"They weren't really eager to pound the table and keep June on the table ...," said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York. "Right now to bet on the Fed you almost have to bet that everything will go perfectly, and no one is willing to bet on that yet."

Benchmark 10-year notes fell 7/32 in price to yield 1.84 percent, up from 1.82 percent on Friday. The yields have fallen from 1.94 percent on Tuesday, the day before the Fed's statement.

Rising stock prices on Monday also reduced demand for safe-haven US bonds.

Investors have priced in a low chance of further interest rate hikes this year even as Fed officials and economists indicate that two increases are likely.

One factor dissuading investors from betting on rate increases in the bond market is that it is costly to take a medium-term view that yields will rise in June, while worsening economic data or any new volatility in oil or equity prices could also send yields still lower.

"The risk/reward is not there yet," said Kohli.

Speeches by Federal Reserve officials this week will be in focus for any new indications of when an interest rate hike is likely.

Data will be dominated by Friday's employment report, which is expected to show that employers added 200,000 jobs in April, according to the median estimate of 88 economists polled by Reuters.

Copyright Reuters, 2016

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imad_kueconomist@yahoo.com (Imaduddin) Managed Funds Mon, 02 May 2016 14:00:12 +0000
Puerto Rico to default on $422mn debt payment http://www.brecorder.com/business-a-finance/managed-funds/293325-puerto-rico-to-default-on-$422mn-debt-payment.html http://www.brecorder.com/business-a-finance/managed-funds/293325-puerto-rico-to-default-on-$422mn-debt-payment.html imageSAN JUAN: Puerto Rico's financial crisis deepened Sunday as Governor Alejandro Garcia Padilla announced the US commonwealth would default on $422 million in debt.

The governor said that San Juan can't pay creditors when it needs to fund public sector salaries, health and education budgets, which, if neglected, could unleash a "humanitarian crisis."

Puerto Rico has been locked in recession for a decade, and already defaulted on some debt payments at the beginning of the year.

Despite sweeping spending cuts and some policy reforms, it has not been able to stop the deterioration of its budget deficit.

Garcia Padilla says he does not want a bailout but simply legal ability to restructure existing debt.

But in order to do so, the US territory in the Caribbean needs the Congress in Washington to act, and it will not for partisan political reasons, the governor said.

"This was a painful decision. We would have preferred to have had a legal framework to restructure our debts in an orderly manner," he said in a somber televised address.

"I have had to make a choice, and I made a choice," he added.

"I have decided that your basic needs are more important than anything else," he told the territory's 3.5 million residents.

The $422 million in bond obligations is owed by the Government Development Bank (BGF).

Prior defaults by the island were smaller in nature; this one includes debt held by Wall Street bondholders and hedge funds.

With a debt of about $70 billion, the island is basically bankrupt; the BGF only has $562 million in assets.

"We have asked the US Congress time and time again to give us the tools to restructure our debts," the governor said. "We do not want a bailout, nor has one been offered. We want a process to restructure, which won't cost US taxpayers anything."

Residents of this former Spanish colony won by the US in 1898 eventually were given a type of US local government with a legislature and governor.

Island natives have American citizenship but cannot vote in US presidential elections if they are Puerto Rico residents.

Puerto Rico's relationship with the US federal government is largely handled by the US Interior Department.

Garcia Padilla stressed that he firmly opposed US federal control over locally earned tax dollars.

"That would be reestablishing colonial rule over Puerto Rico, and would be reopening a Pandora's box with extremely dangerous consequences," he warned.

Copyright AFP (Agence France-Presse), 2016

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parvezjabri@yahoo.com (Parvez Jabri) Managed Funds Mon, 02 May 2016 07:16:40 +0000
Bund yields near six-week highs on anniversary of historic sell-off http://www.brecorder.com/business-a-finance/managed-funds/293243-bund-yields-near-six-week-highs-on-anniversary-of-historic-sell-off.html http://www.brecorder.com/business-a-finance/managed-funds/293243-bund-yields-near-six-week-highs-on-anniversary-of-historic-sell-off.html

imageLONDON: Germany's 10-year bond yield rose sharply on Friday towards six-week highs as stronger oil prices and hawkish comments from a Federal Reserve official triggered selling, on the first anniversary of one of the biggest Bund routs in history.

Brent crude headed for its biggest monthly rise in seven years, touching 2016 highs as a weak dollar and falling US production tempered concerns about an excess of physical oil.

Dallas Federal Reserve President Robert Kaplan meanwhile said he could back a rise in US interest rates as soon as June or July, if US economic data firms up as he expects. Against this backdrop, euro zone yields steadily moved higher, shrugging aside data that showed the region slipped back into deflation in April.

"One way to explain the move in bonds is the comment from the Fed's Kaplan," said DZ Bank strategist Christian Lenk.

"He's not a voting member of the Fed but his comments are still hawkish."

Germany's benchmark Bund yield rose as much as 5 basis points to 0.305 percent, moving towards a six-week high. It held close to those levels in late trade.

The move revived memories of a sell-off a year ago, when Bund yields surged away from a record low of 0.05 percent to more than 1 percent in a matter of weeks.

Other euro zone 10-year yields were 2-5 bps higher on Friday, with French yields hitting their highest level since mid-February. As bond yields rose, so did a measure of the market's long-term euro zone inflation expectations.

The five-year, five-year breakeven forward rate, which measures where the market expects 2026 inflation forecasts to be in 2021 , rose to its highest level in about six weeks at around 1.48 percent.

RATINGS REVIEW FOR PORTUGAL

Portugal's 10-year bond yield was up 4 bps at 3.02 percent, but off the day's peaks, ahead of a ratings review from DBRS after the market close that could edge Portugal closer to junk territory and exclusion from the ECB's asset purchase scheme.

While few expect DBRS to downgrade the country - a move that would see it lose the last remaining investment grade rating it needs to qualify for the ECB's quantitative easing scheme - a change in the outlook of the rating is seen as possible.

DBRS' head sovereign analyst told Reuters on Monday that Portugal's commitment to fiscal targets and a healthy relationship with its European partners were important supports for the credit rating.

The firm ranks Portugal at BBB (low), one notch above junk. It has it on a "stable" outlook which some fear could be removed, raising the prospect of a downgrade later in the year.

The next review is scheduled for Oct. 21. Portuguese bonds also came under pressure after a court late on Thursday provisionally suspended a central bank decision to transfer bonds from state-rescued Novo Banco to "bad bank" BES.

The decision could complicate the sale of the lender and has reignited investor worries that the leftist government, already struggling to get its finances in order, could be on the hook for further bank bailouts down the line.

"The broader picture is one where investors are worried about the fiscal outlook in Portugal," said Nick Stamenkovic, a bond strategist at RIA Capital Markets.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Fri, 29 Apr 2016 16:15:21 +0000
Mauritius 91-day Treasury bill yield rises to 2.34pc http://www.brecorder.com/business-a-finance/managed-funds/293190-mauritius-91-day-treasury-bill-yield-rises-to-234pc.html http://www.brecorder.com/business-a-finance/managed-funds/293190-mauritius-91-day-treasury-bill-yield-rises-to-234pc.html imagePORT LOUIS: The weighted average yield on Mauritius's 91-day Treasury bills rose to 2.84 percent at auction on Friday from 2.76 percent at the last sale on April 22, the central bank said.

The Bank of Mauritius sold all the 800 million rupees worth of the debt it had offered.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Fri, 29 Apr 2016 14:23:33 +0000
Spain to issue bonds due 2021, 2026, 2030 and 2040 on Thursday http://www.brecorder.com/business-a-finance/managed-funds/293189-spain-to-issue-bonds-due-2021-2026-2030-and-2040-on-thursday.html http://www.brecorder.com/business-a-finance/managed-funds/293189-spain-to-issue-bonds-due-2021-2026-2030-and-2040-on-thursday.html imageMADRID: Spain plans to auction four bonds at the scheduled auction on Thursday, including an inflation-linked bond due 2021 and paper maturing 2026, 2030 and 2040.

The inflation-indexed bond is due November 30, 2021 and holds a 0.3 percent coupon.

The other bonds are due April 30, 2026, with a 1.95 percent coupon, July 30, 2030, also with a 1.95 percent coupon and July 30, 2040, with a 4.9 percent coupon.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Fri, 29 Apr 2016 14:11:29 +0000
Kenya's 91-day T-bill yield falls to 8.526pc http://www.brecorder.com/business-a-finance/managed-funds/293067-kenyas-91-day-t-bill-yield-falls-to-8526pc.html http://www.brecorder.com/business-a-finance/managed-funds/293067-kenyas-91-day-t-bill-yield-falls-to-8526pc.html

imageNAIROBI: The weighted average yield on Kenya's 91-day Treasury bills fell to 8.526 percent at auction on Thursday from 8.770 percent last week, the central bank said.

The bank said it received bids worth 16.66 billion shillings ($164.89 million) for the 4 billion shillings of bills offered. It accepted 12.40 billion shillings.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 28 Apr 2016 17:18:23 +0000
Portugal's 10-year bond yield reverses falls on court's Novo Banco decision http://www.brecorder.com/business-a-finance/managed-funds/293057-portugals-10-year-bond-yield-reverses-falls-on-courts-novo-banco-decision.html http://www.brecorder.com/business-a-finance/managed-funds/293057-portugals-10-year-bond-yield-reverses-falls-on-courts-novo-banco-decision.html imageLONDON: Portugal's 10-year bond yield reversed falls on Thursday after reports that a Lisbon court has provisionally suspended a central bank decision to transfer bonds from "good bank" Novo Banco to Banco Espirito Santo.

TSF radio reported the court had set an injunction against the decision made by the Bank of Portugal in December, which has prompted a storm of complaints by investors.

Daily Diario de Noticias said the transfer of 1.985 billion euros of bonds, which had boosted Novo Banco's balance sheet, would be suspended until the Bank of Portugal responds to the court.

The Bank of Portugal is trying to sell Novo Banco.

Portugal's 10-year bond yield was flat at around 3.03 percent, having been 4-5 basis points lower earlier in the day in line with a broad decline in euro zone bond yields.

"If it is a suspension, then this is a win for international law," said Rabobank fixed income strategist Lyn Graham-Taylor.

"But it is not good news for the Portuguese state or domestic creditors, so it makes sense that Portuguese yields have risen."

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 28 Apr 2016 17:00:28 +0000
German bond yields fall after BoJ surprise, tight-lipped Fed http://www.brecorder.com/business-a-finance/managed-funds/292980-german-bond-yields-fall-after-boj-surprise-tight-lipped-fed.html http://www.brecorder.com/business-a-finance/managed-funds/292980-german-bond-yields-fall-after-boj-surprise-tight-lipped-fed.html imageLONDON: German bond yields dropped on Thursday after the Bank of Japan surprised markets by leaving policy unchanged and the US Federal Reserve gave no signal it would raise interest rates soon.

Sharp falls in Asia's biggest stock market spilled over to European bourses, sending investors into the refuge of German bonds and other safe havens including the Japanese yen.

German 10-year bond yields shed 5 basis points to 0.24 percent -- set for their biggest daily fall in over five weeks -- after similar drops in other global bond benchmarks in the US and Japan.

"There is disappointment in markets because they were expecting something decisive from the BOJ and...the Fed are not going to give much away because the world can be a much different place over the next six weeks," Credit Agricole strategist Orlando Green said.

Along with leaving rates unchanged, the Bank of Japan also maintained the pace of its asset purchase programme on Thursday.

In addition, Governor Haruhiko Kuroda denied reports from last week that he was thinking about applying negative rates to lending to financial institutions.

This thwarted hopes of stimulus, driving investors towards bonds which had already been boosted by the muted rate outlook signals from the Fed.

While the US rate-setting committee did not rule out a summer hike at their meeting on Wednesday, they acknowledged that economic growth seemed to have slowed.

"The Fed didn't mention June at all, meaning that if they skip that, it will be September which is close to the election, so we are talking December now," said Soeren Moerch, head of fixed income trading at Danske Bank.

"That is a very big relief for fixed income markets."

All other euro zone yields fell on Thursday, although Spain's lagged slightly on fears political paralysis could start to weigh on the country's recovery.

Spain's unemployment rate ticked up slightly to 21 percent in the first three months of the year, a reminder of the economy's deep-seated problems as voters prepare for a second parliamentary election expected in June.

"The extra two months of political uncertainty means there is going to be an ongoing drag on the economy and a reluctance to invest heavily," Mizuho strategist Peter Chatwell said. Greek yields recovered from a sharp rise a day earlier as Athens and its creditors hit a snag over reform measures needed to unlock financial aid it requires to pay IMF loans maturing in June and July.

Talks due to take place on Thursday have been delayed by differences over what measures Athens would take if it fails to reach fiscal targets by 2018.

Creditors, including the IMF and European institutions, want those measures made law immediately.

The head of euro zone finance ministers said the Eurogroup could meet next week or the week after to discuss Greece.

Elsewhere, Belgium has raised 13 billion euros of combined demand for seven- and 50-year bonds it is selling on Thursday, IFR reported, while Italy sold 7.75 billion euros over three bonds at auction.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 28 Apr 2016 14:01:33 +0000
Turkey marketing tap of US$1.5bn February 2045 at 5.5pc area http://www.brecorder.com/business-a-finance/managed-funds/292969-turkey-marketing-tap-of-us$15bn-february-2045-at-55pc-area.html http://www.brecorder.com/business-a-finance/managed-funds/292969-turkey-marketing-tap-of-us$15bn-february-2045-at-55pc-area.html

imageLONDON: The Republic of Turkey is tapping its US$1.5bn 6.625pc February 2045 Global bond, according to a source.

Books are open and the SEC-registered bond is being marketed at a yield of 5.5pc area.

Turkey is seeking to raise a benchmark size.

The deal is today's business with BNP Paribas, Goldman Sachs and JP Morgan lead managers.

Turkey is rated Baa3/NR/BBB-.

Copyright Reuters, 2016

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 28 Apr 2016 13:39:46 +0000