Asia and Brazil funds catch up

Asian and Latin American cities are catching up with London and New York as locations for the world’s biggest hedge funds.

São Paulo and Rio de Janeiro between them are now home to five hedge fund managers each managing more than $1bn – compared with one 12 months ago, data due to be released on Wednesday will show.

The figures, to be published by Hedge Fund Intelligence, the industry’s biggest database, will underscore the extent to which hedge fund managers are keen to operate closest to the markets generating the biggest returns.Hong Kong and Singapore are now home to 15 billion-dollar fund managers, up from 10 at the beginning of the year.

New York remains in the top spot, home to 124 managers with more than $1bn each. It has slipped fractionally – the city accounts for 46 per cent of assets managed by billion-dollar managers, down from 47 per cent last year.

London, in spite of a spate of big fund closures, has seen its share of assets managed by billion-dollar managers increase, from 14.8 to 15.5 per cent.

The City’s share of the global hedge fund industry has doubled in the past decade but for the past few years its position has remained largely unchanged.

Fund managers say that investors’ growing interest in emerging markets is the main reason funds have moved to new bases. Investors also increasingly prefer to put money with fund managers that have an on-the-ground presence in the regions they trade.

As a result, Hong Kong is fast cementing a position as the industry’s next big centre. While the city is home to 10 fund managers running more than $1bn each, it also hosts a number of high-profile medium-sized funds likely to grow in the coming months.

Start-ups such as Janchor Partners – run by TCI’s former regional head, John Ho – are attracting significant interest. The fund has more than quadrupled in size to $200m in the past nine months.

Industry growth in Brazil is also expected to continue. Established US and UK hedge funds have earmarked the region for expansion.

London-based Brevan Howard, the world’s fourth-largest hedge fund, was recently revealed to be opening a new office in São Paulo, to be headed by the outgoing governor of Brazil’s central bank.

JPMorgan’s Highbridge, the world’s second-largest fund manager, is still in talks toacquire Brazil’s largest hedge fund, Gávea

從相互需要到適者生存 「大國政治」捲土重來

2010年10月12日

財經路向透視

從滙率戰到網絡商業間諜案，從吵得不可開交的國際會議到非洲資源的新一輪爭奪戰，可以看出「大國政治」已經捲土重來。

新興經濟體——尤其是中國、俄羅斯、印度和巴西實力的增長，正在改變各國外交和國防部門的工作重心，同時推動着金融市場的發展，重塑全球商業環境。

脆弱共識

美國前國務卿基辛格上月在日內瓦發表演講時，把當今新興國家崛起之勢比作十九世紀或二十世紀初期「大國誕生」的方式；大約百年前的那場國家競爭，最終釀成了第一次世界大戰。

「可能會發生混亂，但一旦出現混亂的局面，新秩序早晚就會出現。」基辛格表示，如今這批新興大國，尤其是中國，正讓國際關係和世界體系變得動盪起伏；他認為，各國領袖應協同努力，盡量避免這一過程「讓人類遭受前所未有的苦難」。

雖然2008年的全球金融危機似乎讓各國在經濟互相依存和共同監管等問題上形成了某種脆弱的共識，但這種共識已經基本宣告破裂。日前，IMF總裁施特勞斯卡恩痛陳全球合作的減弱趨勢，「合作勢頭沒有消失，但顯然正在弱化，這才是真正的威脅；任何人都要記住，對於全球的危機，不存在一種『國內』的解決方案」。

私人部門分析人士把這種變化描述得更加露骨。怡和保險顧問集團（Jardine Lloyd Thompson）信貸和政治風險部門負責人Elizabeth Stephens說：「僅僅一年前，他們都還以為各自相互需要；但現在是適者生存。」

有人說，這一幕是不可避免的——其中一個重要原因就是全球金融體系愈來愈不平衡，新興國家貨幣升值壓力增大。

許多國家依賴出口導向型的經濟增長，以促進就業，保證社會穩定，這必然會導致各國在滙率和獲取資源問題上出現衝突。大家都想壓低滙率，同時確保自己拿到便宜的燃料和糧食。

中國就處於這種緊張格局的中心，其中既有滙率的原因，也有其對資源需求巨大的原因，但問題並不局限於中國和美國形成的所謂「G2」格局。

另類武裝

有人發現，日本等亞洲國家的主權財富基金正在追隨中國和中東國家的腳步，爭奪非洲等地的糧食、礦產和能源資源。這種資源戰對二十一世界的影響，可能堪比常規戰爭對二十世紀的影響。

「我們只不過是在用另一種方式武裝自己罷了。」Investec全球策略師Michael Power說：「我們沒必要把滙率戰搞得那麼駭人聽聞——但事實上確實存在某種衝突。」

Brazil in ‘currency war’ alert

By Jonathan Wheatley in São Paulo and Peter Garnham in London

Published: September 27 2010 16:30 | Last updated: September 27 2010 19:18

An “international currency war” has broken out, according to Guido Mantega, Brazil’s finance minister, as governments around the globe compete to lower their exchange rates to boost competitiveness.

Mr Mantega’s comments in São Paulo on Monday follow a series of recent interventions by central banks, in Japan, South Korea and Taiwan in an effort to make their currencies cheaper. China, an export powerhouse, has continued to suppress the value of the renminbi, in spite of pressure from the US to allow it to rise, while officials from countries ranging from Singapore to Colombia have issued warnings over the strength of their currencies.

EDITOR’S CHOICE

Hostilities escalate to hidden currency war - Sep-27

Editorial Comment: Brazil dazzles global finance - Sep-27

Lula proves hard act to follow on political stage - Sep-27

beyondbrics: Brazil - Aug-09

Gavyn Davies: Strains in currency rate blocs - Sep-27

Brazil seeks to lower real’s temperature - Sep-22

“We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness,” Mr Mantega said. By publicly asserting the existence of a “currency war”, Mr Mantega has admitted what many policymakers have been saying in private: a rising number of countries see a weaker exchange rate as a way to lift their economies.

A weaker exchange rate makes a country’s exports cheaper, potentially boosting a key source of growth for economies battling to find growth as they emerge from the global downturn.

The proliferation of countries trying to manage their exchange rates down is also making it difficult to co-ordinate the issue in global economic forums.

South Korea, the host of the upcoming G20 meeting in November, is reluctant to highlight the issue on the gathering’s agenda, also partly out of fear of offending China, its neighbour and main trading partner.

The US dollar has fallen by about 25 per cent against the Brazilian real since the beginning of last year, making the real one of the strongest performing currencies in the world, according to Bloomberg.

In spite of Mr Mantega’s recent aggressive public statements, however, Brazil has so far held back from taking any action other than intervening in the local currency spot market.

The central bank bought as much as $1bn a day for much of the past two weeks – about 10 times its daily average in recent months – but this was largely to absorb money entering the country to take part in last week’s $67bn share issue byPetrobras, the national oil company.

“There’s a real gap between the rhetoric and the action,” said Tony Volpon, head of emerging market research for the Americas at Nomura Securities in New York.

The real Brazilian real

Posted by Tracy Alloway on Dec 02 08:43.

Just how overvalued is Brazil’s real — the currency at the centre of the country’s new capital controls?
By 31.3 per cent, according to Standard Chartered’s Mike Moran and Douglas Smith, who have just cut their short-term recommendation on the South American currency to `underweight’.
In graphic terms that overvaluation, which is based on the bank’s Real Effective Exchange Rate (REER) model, looks like this:
But what’s really interesting is StanChart’s reasoning for the change in their short-term recommendation:In our last FX Alert on BRL1, we maintained the BRL at Overweight despite the FX Model Valuation producing a net Neutral signal. Important considerations behind the override at the time were the strength of global risk appetite, especially for emerging market allocations, the relative strength of the Brazilian local economy and sustained weakness in the broader USD. These factors remain largely in place in 2010 and will continue to provide underlying support. However, fresh headwinds have arisen lately that indicate increased risk of a correction lower in BRL, or at least consolidation.
. . .
By our calculations, the BRL is over 30% ‘overvalued’ vs. the 5-year moving average (MA) and has now even overshot the average level of overvaluation since 2006. The Finance Ministry’s decision to impose a 2% IOF levy has also been key in turning sentiment. The long term impact on foreign direct investment into Brazil is not likely to be significant but the injection of fresh uncertainty on what future measures may be experimented with is now a key focus. In other words, Brazil has introduced a ‘policy risk premium’ that has been sufficient to delay further pressure on the BRL. We also see increased risks of a stronger USD in Q1 as the global economic recovery faces challenging headwinds in the form of fading positive base effects and broadening attempts by global central banks to unwind quantitative easing conditions. We are maintaining our medium-term FX rating at Neutral.

Related links:
Competitive devaluations threaten a trade war - FT
Brazil real `most overvalued’ currency, Goldman says - Bloomberg