Hedge Funds Post Best Returns in Six Years, Eurekahedge Says
(Bloomberg) -- Hedge funds had their best annual performance in six years in 2009 as the global economy began recovering and investor confidence returned, according to Eurekahedge Pte. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, rose 0.9 percent in December, bringing its 12-month return to 19 percent and total assets to $1.48 trillion, the Singapore-based research firm said in a preliminary report on its Web site. The annual return was the highest since 2003, when the index rose 21 percent.Stimulus packages by governments around the globe helped stock and bond markets rebound and hedge funds make a comeback from their worst year on record in 2008, when the Eurekahedge index fell 11 percent. The MSCI World Index, which includes shares in 23 developed nations, jumped 27 percent last year, also the best performance since 2003.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFQ0t3N.RyEY
Liquidity Bubble Possible for China Stocks, Credit Suisse Says
(Bloomberg) -- Liquidity is the key driver this year for China’s stock market, which doesn’t have much upside based on fundamentals and valuation, Credit Suisse Group AG said.“The market does not have much potential upside after the 2009 rally,” Vincent Chan and Peggy Chan, analysts at Credit Suisse, said in a research report today. “Having said that, we do not rule out the possibility of another major liquidity bubble.”Credit Suisse set its 12-month forecast for the MSCI China Index at 65, Hong Kong’s Hang Seng China Enterprises Index at 15,000, and the Shanghai A-Share Stock Price Index at 3,300, according to the report.
Corporate Bond Returns Rising Fastest Since '98: Credit Markets
(Bloomberg) -- Corporate bonds are providing the best returns in more than a decade, spurring sales by PepsiCo Inc. and Bayerische Motoren Werke AG as investors anticipate that earnings growth will make it easier for companies to meet debt payments.The Bank of America Merrill Lynch Global Broad Market Corporate Index returned 1.02 percent since Dec. 31, the biggest gain for the start of a year since rising 1.51 percent in the same period of 1998. Financial and energy companies are the top performers, with issues by New York-based American International Group Inc. rallying 3.62 percent, and oil refiners rising 2.18 percent, the index shows.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoumU.OG55rk
Daily Forex Technicals | Written by India Forex
EURUSD : EURUSD unable to break below 1.4250 levels and is currently trading at 1.4490. Bias is little mixed but bullishness would be confirmed once 1.4650 would break on the upside. (EURUSD–1.4485). Rangebound to Bullish
GBPUSD : GBP moved near 1.62 levels as expected .Buying at dips remains the strategy for now and avoid any shorts in the current scenario till we continue seeing strength in Dollar Index and Euro .Stochastic is weekly is showing buying signals.(GBPUSD 1.6080)Rangebound to Bullish.
USDJPY : The JPY is currently trading near its downward trendline resistance and strength in yen still prevails. Levels close to 93 remains strong technical resistance plus stochastic in weekly charts are also showing strength in yen. Cautious shorts can be initiated near 93 levels for the target of 90 levels with tight stoploss of 150 pips. Trend still bullish for yen below 93 levels (USDJPY- 92.24) Bullish.
AUDUSD : The AUDUSD is holding strong and buying at dips remains the overall strategy. (AUDUSD - 0.9273) Bullish
Gold : GOLD seems a good buy between $1133 levels to $1142 levels for a target of 20 dollars. Do not short the metal since it seems quite bullish. (Gold - $1153.40) Bullish
Dollar Index: Dollar The Index is in a consolidation mode and fall from 78.45 might extend further and another fall to below 77.09 cannot be ruled out. We'd continue to expect downside to be contained by 38.2% retracement of 74.19 to 78.45 at 76.82 and bring rally resumption. (DI -77.16). Neutral
Euro May Extend Gains to One-Month High: Technical Analysis
(Bloomberg) -- The euro may extend gains to a one- month high of $1.4750 after it rose above so-called resistance at $1.4485, said Andrew Chaveriat, a technical analyst in New York at BNP Paribas SA, citing trading patterns.Resistance at $1.4485 is the top of the range in which the euro traded between Dec. 22 and Jan. 8, Chaveriat said. The target of $1.4750 was calculated by adding the difference between that top and the $1.4220 bottom of the range to the $1.4485 level, according to Chaveriat.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUyzXeH1.6Ek
Oil, Platinum, Gold to Climb, Merrill’s Parrilla Says
(Bloomberg) -- Oil, platinum, copper and gold will extend their rally this year as growth in emerging markets including China and investment demand fuel gains, Bank of America-Merrill Lynch executive Diego Parrilla said. Crude oil will probably climb to $100 a barrel by the end of year and gold will gain to $1,500 an ounce in 18 months, said Singapore-based Parrilla, head of commodities for Asia Pacific, citing bank forecasts. Oil soared 78 percent last year and was at $81.83 a barrel today. Gold traded at $1,150.95 an ounce.Commodities, as measured by the Standard & Poor’s GSCI Index of 24 futures, jumped 50 percent last year, posting their best year since at least 1971, as governments pledged as much as $12 trillion to combat the worst recession in seven decades. Returns beat the 27 percent gain in the MSCI World Index of stocks and a 3.7 percent loss in Treasuries as investors sought to protect their wealth against currency debasement.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEb5TpcQczQA
Won, Rupiah to Weaken From April on ‘Double-Dip’ Risk, SJS Says
(Bloomberg) -- South Korea’s won will lead declines in Asian currencies from the second quarter as the end of economic stimulus spending slows global growth, according to SJS Markets Ltd., the most-accurate forecaster of 2009’s rally in India and Taiwan’s currencies.Currency investors will become increasingly concerned about a double-dip in the U.S., European and Japanese economies, spurring a flight of capital from emerging markets, said Dariusz Kowalczyk, chief investment strategist at SJS in Hong Kong. Consumer spending won’t make up for the winding back of fiscal measures given the loss of jobs, and the currencies that’ll “suffer the most are the ones that are most freely floating,” such as the won and Indonesian rupiah, he said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aONuL..3uCr0
Dollar Weakens in Earnings Season in 2004 Replay, JPMorgan Says
(Bloomberg) -- The dollar will decline through the U.S. earnings season beginning this week as traders abandon bets that the Federal Reserve will bring forward interest-rate increases, according to JPMorgan Chase & Co.“If earnings beat the consensus but U.S. front-end rates stay anchored, the dollar looks set to weaken again versus the currencies of the strongest economies, namely the commodity exporters and the emerging markets,” a team of analysts led by John Normand, head of global currency strategy in London, wrote in a research note dated Dec. 8.The dollar will erase its 4.6 percent December rally versus the euro, a “replay” of 2004, and it will be at least a year before the dollar strengthens alongside a rising stock market on the assumption that the U.S. will lead a global recovery, they wrote. Traders will pare speculation the U.S. will rebound faster than nations using the euro, while reducing bets that the Fed will increase rates before July or that Europe will produce a “major sovereign credit event” in 2010, they wrote.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0xGiJzLRq5w
Indonesia May Pay Premium on $4 Billion Debt Sale
(Bloom berg) -- Indonesia may have to reward investors with higher yields than the Philippines to borrow $4 billion as a rally in emerging-market bonds slows after the biggest gains in six years.Southeast Asia’s largest economy may sell 10-year debt at a yield of about 6 percent, or 2.2 percentage points more than similar maturity U.S. Treasures, according to Aberdeen Asset Management Plc and Vegagest SGR SpA. The Philippines, whose bonds carry the same BB- rating as Indonesia’s from Standard & Poor’s, priced 2020 securities last week to yield 5.67 percent.Indonesia plans to sell $750 million to $1 billion (69.2 billion yen - 92.3 billion yen) of so-called Samurai bonds this year, Coordinating Minister for the Economy Hatta Rajasa said in Jakarta today. The country sold 35 billion yen of the bonds in July last year.
European Stocks Are ‘Over bought’ for First Time in Four Months
(Bloom berg) -- Europe’s Dow Jones Stoxx 600 Index became “over bought” for the first time in almost four months after climbing for 12 of the past 14 days, according to the so-called Relative Strength Index.The Stoxx 600’s 14-day RSI, which tracks momentum by comparing closing prices with daily trading ranges, rose to 70.58 as of 12:27 p.m. in London. When the RSI closes above 70, technical analysts say the gauge is “over bought” and likely to retreat. The measure last closed above 70 on Sept. 17, after which it fell nearly 5 percent through Oct. 2.The benchmark index for European equities has surged 65 percent from a 12-year low on March 9, boosted by record-low interest rates in the U.S. and Europe and about $12 trillion of commitments from governments worldwide to revive credit markets and stimulate growth. The Stoxx 600 climbed 0.5 percent to 260.41 today, extending a 15-month high.
Hong Kong Discount to Chinese Stocks May Disappear
(Bloom berg) -- China’s approval for short sales and stock index futures paves the way for foreign investors to bet on a convergence in valuations between Shanghai and Hong Kong.The China Securities Regulatory Commission cleared the overhaul of trading laws on Jan. 8 that will also permit buying equities with brokerage loans. The rules apply to Chinese citizens and the 94 international institutions authorized for mainland trading by the government. Allowing investors to profit from share declines will make trading more efficient in China and may eventually reduce the valuation gap with Hong Kong, where an index of mainland-based companies is priced at a 38 percent discount, according to ING Groep NV. China’s benchmark Shanghai Composite Index is valued at about 34 times earnings, second behind Taiwan’s Taiex Index as the most expensive in Asia, data compiled by Bloom berg show.
Short Sales
In a short sale, an investor borrows an asset and sells it, hoping to profit from a decline by re purchasing it later at a lower price. An investor arbitrarily China might buy shares in Hong Kong and sell short the same company trading on the mainland.The Shanghai Composite climbed 0.5 percent to 3,212.75 at the close, the most in a week. The CSI 300 Index, which tracks the 300 biggest stocks traded in Shanghai and Shenzhen, added 0.1 percent, after jumping as much as 3.3 percent. The Hang Seng China Enterprises Index, made of shares of mainland companies traded in Hong Kong, increased 0.6 percent.
More Hedge Funds
The relaxation may spur the creation of more hedge funds in Asia, according to Ken Heinz, the president of Hedge Fund Research Inc., based in Chicago. Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from speculating on whether the price of assets rise or fall.
Federal Reserve Made Record Profit in 2009: Report
By: Reuters
The U.S. Federal Reserve made record profits in 2009 and will return $45 billion to the U.S. Treasury, after its efforts to prop up the economy created a windfall for the government, the Washington Post reported.The $45 billion reflects the highest earnings in the 96-year history of the U.S. central bank, the newspaper reported on its website late on Monday. The figure was obtained by calculations based on public documents, the Post said.
The Fed funds itself from its own operations and returns its profits to the Treasury. The largest previous refund to the Treasury was $34.6 billion in 2007, the Post said.
http://www.cnbc.com/id/34818508
Thai Stocks May Gain Amid ‘Positive’ Candle: Technical Analysis
(Bloomberg) -- Thailand’s SET Index may rally further this week after the benchmark gauge formed a “positive” candlestick chart amid higher trading volume, according to Phillip Securities (Thailand) Pcl. “The candlestick and higher trading volume indicate a clear bullish sign in the short term,” Surasak Kancharoen, a technical analyst at Phillip Securities, said in a telephone interview. The gauge may test this week a “key resistance level” of 758.55, last year’s intraday peak on Oct. 13, he said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aosBV.rBaKMA
You Can Make Money Before Liquidity Dries Up: Citi's Levkovich
By: JeeYeon Park CNBC News Associate
The S&P 500 has started the year with a five-day winning streak and historically, there is correlation between the first five days of trading and the rest of January. What does this really mean for the market and investors? Tobias Levkovich, chief U.S. equity strategist at Citigroup, shared his insights.“If you’re up for the first five days, then 75 percent of the times you’re up for the rest of the year,” Levkovich told CNBC.“And if you’re down the first 5 days, then only 44 percent of the time are you up for the full year.”However, Levkovich cautioned investors, saying they need to be careful when looking at a single indicator as being the end-all. After all, he said, the trend did not apply to the markets in 2009.
http://www.cnbc.com/id/34810629
VIX Indicates 'Wall of Worry' in Markets: Derivatives Pro
By: JeeYeon Park CNBC News Associate
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, dropped below 17 on Monday—the first time since May 2008. Is it a sign that stocks have topped? Dan Deming, trader at Stutland Equities, and Dan Hutchinson, head of derivatives at Meridian Equity Partners, shared their outlooks.“I’m not concerned about the VIX level,” Hutchinson told CNBC.However, Hutchinson said the VIX [VIX Loading... () ] and other metrics in the volatility market suggest that there is still a wall of worry in the markets.“As long as the market continues to rally into earnings, as a lot of people expect it to do, I don’t think the selloff in the VIX is particularly concerning right now,” he said.
http://www.cnbc.com/id/34805831
Bank Profits Means Stocks at 15% Discount to S&P 500
(Bloomberg) -- No U.S. industry has faster profit growth than banks and brokers, and no group is more hated by investors.Analysts say earnings at financial companies rose 120 percent in the fourth quarter, accounting for all of the income increase in the Standard & Poor’s 500 Index, and will triple by 2011, climbing four times as fast as the market. Should the estimates prove correct, the shares are trading at a 15 percent discount to the index, data compiled by Bloomberg show.That’s not enough for money managers burned by the 84 percent drop in the stocks from February 2007 through March and more than 160 U.S. bank failures in the past two years. Financial companies are the least-favored equities, according to a Bank of America Corp. survey of investors with $617 billion in assets that showed 38 percent of 123 money managers are holding fewer shares than are in benchmark indexes.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alEjwfiO7ggI
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