‘Buyback suspensions increase US market volatility’
Market volatility will increase as a result of a decline in share buybacks and lower earnings growth per share, warns Goldman Sachs.
David Kostin, who leads the business bank’s portfolio strategy team, writes in a note to the bank’s clients that the 51 listed companies in the S&P that have suspended their share buyback programmes account for no less than 27% of total S&P 500 share buybacks in 2019.
Allfunds hires Stéphane Corsaletti for Lux office
Stéphane Corsaletti is the new Chief Investment Officer of fund distribution platform Allfunds. The Frenchman will lead Allfunds’ recently formed digital investment solutions platform from its Luxembourg office.
Corsaletti will be part of the executive committee, reporting directly to CEO Juan Alcaraz. Launched in 2000, Allfunds is one of the world’s largest fund distributors. It offers clients access to a universe of over 125,000 funds through Allfunds Connect.
Coronavirus freezes credit markets
Credit markets have been hit hard across the board. ‘Exiting at normal prices is now virtually impossible because there is hardly any liquidity.’ Only ETFs can still be easily sold, resulting in dramatic price declines. Can the ECB’s latest support package restore calm?
High yield crisis also offers opportunities
March is not even halfway through, but has already presided over the largest fall in the price of European high-yield bonds since October 2008. The BofA European Currency High Yield Index is already in the minus 8% this month, but the unprecedented fall in prices also offers opportunities. Within Europe, I would now rather invest in Italy than the UK or Germany.
Fed emergency measures 'a defining moment'
The decision of the US Federal Reserve to cut interest rates once more and restart QE was expected by investors. But not on a Sunday afternoon. Asset managers characterise the sudden decision as ‘a defining moment’, for more than one reason.
Brexit boosts Luxembourg insurance market
A 44.5% increase in premium income in Luxembourg’s insurance sector last year was driven mainly by Brexit relocations in the non-life sector. However the traditional mainstay for the industry, life insurance, also enjoyed a strong year with income up 18.6%.
'Interest rate cut mostly helps to reduce volatility'
The Fed’s rate cut was not the most clear-cut answer to the corona crisis, says Hendrik Tuch, head of fixed income at Aegon Asset Management.
But he understands the decision.
Fed rate cut fails to convince investors
Investors did not respond to the Fed’s surprise 50 basis points rate cut with a relief rally. To the contrary, markets closed almost 3% lower as investors interpreted the rate cut as a warning the macroeconomic situation is likely to worsen.
Fed president Jerome Powell stated shortly after Wall Street opened that the negative effects of the coronavirus are slowly becoming visible.
Asset managers weigh coronavirus impact
The coronavirus is causing ‘a clear shock to the world economy’, according to Columbia Threadneedle. Janus Henderson calls the global spreading of the coronavirus ‘a real game changer that has dashed hopes of a V-shaped recovery in global growth.’
‘So far we are seeing two clear consequences: lower consumption and less supply,’ says Neil Robson of Columbia Threadneedle. He illustrates the first concern citing the Adidas market update last week, showing a 85% decline in activity in China.
Investors complain to Esma about CSSF
Three fund directors have sent a letter to Europe’s top regulatory body to complain about a lack of action by Luxembourg’s regulator CSSF to protect investors.
They run several Luxembourg-domiciled funds, known as LFP I, that were defrauded for millions of euros, contends LFP I director David Mapley. Mapley says the CSSF ‘is really obstructing our work’ to recoup the lost funds, he told Investment Officer.