|Bid||3,110.00 x 0|
|Ask||3,112.00 x 0|
|Day's range||3,095.00 - 3,127.00|
|52-week range||2,289.00 - 3,226.00|
|Beta (3Y monthly)||1.10|
|PE ratio (TTM)||18.70|
|Forward dividend & yield||1.14 (3.74%)|
|1y target est||N/A|
(Bloomberg) -- The global debt rally is no longer justified by economic fundamentals but escalating trade war risks are keeping the managers of one of Australia’s top-performing bond funds from exiting long positions.Bonds are pricing in a recession which is not likely in the near term, according to Simon Doyle, head of fixed income and multi-asset at Schroder Investment Management Australia Ltd., and Stuart Dear, deputy head of fixed income. While they have turned more defensive, the fund managers still favor long-duration exposure in the U.S., Australia and to a lesser extent Europe.“In some ways you can argue yields have probably gotten a little bit ahead of fundamentals and it’s being driven by sentiment,” Doyle said in an interview in Sydney. “But we are still on the long side at the moment until we see something change on the trade side.”The pair’s A$2.5 billion ($1.7 billion) Schroder Fixed Income Fund/Australia has beaten 97% of its peers over the last year.Intensifying fears of a synchronized global slowdown amid the worsening U.S.-China trade dispute has sent investors piling into the safety of government bonds in recent months. In August, U.S. Treasuries saw their strongest rally since the height of the 2008 financial crisis as 10-year yields tumbled below 1.5%. Bond yields also slid to record lows in Europe and Australia.Zero RatesSchroders hasn’t ruled out the possibility that rates could move “significantly lower,” Doyle said. Still, for U.S. yields to hit zero, it would probably require a recession, something that is only likely on a one-to-three year view, he added.“Zero is not out of the realms of possibility, but there are a few things that need to happen for that to occur,” he said. “It’s not a given that this all kind of flows into recession, so we are keeping an open mind. We are playing it from the long side, from the long duration side.”Schroders has trimmed some of its holdings slightly into the bond rally, and one of the reason that it remains long duration is because risk assets were fully priced, according to Doyle.“If you work your way through markets there’s not really a lot of risk premium being embedded in asset markets anywhere,” he said. As yields head lower, “it gets harder and harder. You are not going to see those returns repeated,” he said.Long SterlingThe fund manager sees corporate bonds from transport companies and REITs as attractive, as well as infrastructure securities and inflation-linked notes. In currencies, it favors being long yen and short the Australian dollar, and has a small long position in sterling.“We think it’s discounted pretty bad scenarios and notwithstanding the machinations of the U.K. parliament, it hasn’t really moved that much,” Doyle said. “It is so cheap that if you do get even a semi-positive resolution to Brexit that it does have quite a lot of upside.”\--With assistance from Nancy Moran.To contact the reporter on this story: Andreea Papuc in Sydney at firstname.lastname@example.orgTo contact the editors responsible for this story: Christopher Anstey at email@example.com, Cormac Mullen, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
British asset manager Standard Life Aberdeen's first-half profit missed forecasts on Wednesday as clients continued to pull money from higher-margin products, hitting fee revenue and sending its shares lower. SLA, Britain's second-biggest standalone money manager by market capitalisation, has suffered months of outflows and while the pace of demand to exit its funds slowed, outflows still exceeded a company supplied forecast of analysts. Many of SLA's rival asset managers, such as Schroders , have been hit by outflows during the first half of the year, amid weakening investor sentiment as trade war tensions rise and Brexit uncertainty weighs.
British asset manager Schroders said pretax profits fell 14% in the first half, hit by weak markets at the start of the year and outflows of client cash. Net outflows over the period were 1.2 billion pounds, it said in a statement on Thursday. Weaker investor sentiment has been a feature of results from most of Schroders' peers, with Jupiter Fund Management, Amundi and Man Group among those to report outflows in recent days.
British asset manager Schroders said pretax profits fell 14% in the first half, hit by weak markets at the start of the year and outflows of client cash. Net outflows over the period were 1.2 billion pounds, it said in a statement on Thursday. Weaker investor sentiment has been a feature of results from most of Schroders' peers, with Jupiter Fund Management , Amundi and Man Group among those to report outflows in recent days.
Zurich-based BlueOrchard, founded in 2001, puts money into projects that pay returns based on hitting non-financial targets, often linked to social development or the environment. The deal gives the British company access to BlueOrchard's about $3.5 billion (£2.8 billion) assets under management as of May 30. "Schroders has a strong belief in the value that investment can create in society, particularly within emerging and frontier markets.
British asset manager Schroders Plc said on Friday it has agreed to acquire a majority stake in Swiss impact investor BlueOrchard Finance Ltd for an undisclosed sum. Zurich-based BlueOrchard, founded in 2001, puts money into projects that pay returns based on hitting non-financial targets, often linked to social development or the environment. The deal gives the British company access to BlueOrchard's about $3.5 billion assets under management as of May 30.
Unilever, Tesco and Nestlé are among the best prepared to capitalise on the trend for plant-based meat substitutes, according to a report from an investor group managing $5 trillion in assets. The report by the Farm Animal Investment Risk and Return (FAIRR) coalition showed 25 major retailers and manufacturers were developing strategies for sustainable protein products, recognising the risk of a strategy reliant on animal protein. Unilever, Tesco and Nestle were awarded top rankings for their work in understanding the impact and reducing risks associated with intensive animal agriculture, such as the emission of greenhouse gas.
London's FTSE 100 ended in the red on Monday as markets remained subdued on dampened hopes of a hefty rate cut by the U.S. central bank, while tobacco stocks jumped on Imperial Brands' buyback and dividend revision plans. UK blue-chip index edged 0.1% lower in its third session of losses - its longest losing streak in two months, while the midcaps fell 0.4% as a weaker sterling also weighed on its domestically-exposed constituents.
The activist investor demanding an overhaul of the board and strategy of FirstGroup, the train and bus operator, has been handed a massive boost on the eve of the vote by two of the City's most influential fund managers. Sky News has learnt that Schroders, which owns just under 9% of the owner of America's Greyhound bus service, and 10% shareholder Columbia Threadneedle Investments will oppose the re-election of FirstGroup chairman Wolfhart Hauser at Tuesday's extraordinary general meeting. The disclosure of the two fund giants' opposition to Mr Hauser represents a major fillip to Coast Capital Management, which is agitating for a clear-out of the transport company's directors and withdrawal from the UK rail market.
(Bloomberg Opinion) -- Who knew there was investor appetite for subordinated Greek bank debt?Because of the relentless hunt for returns in yield-starved Europe, Piraeus Bank SA, one of Greece’s big four lenders, has been able to brave the European capital markets for the first time since the financial crisis.Piraeus isn’t opting for senior bonds, and is instead plumping for Tier 2 subordinated debt (which sits midway in the capital structure between top-rated debt and equity-like capital). This means the notes would be fully subject to investor bail-in rules, where bondholders take a financial hit should the bank fail.While the bank has been bolstering capital by offloading bad loans and selling assets, this issue will help it meet its commitments to the European Central Bank. Last year, the ECB asked the company to raise much as 500 million euros ($560 million) as part of its strategic recovery plan. It’s notable, nonetheless, that the lender has found plenty of takers despite all the well-known risks around the Greek banking system.Piraeus has raised 400 million euros from the 10-year subordinated security, with an issuer call option after five years. The very high 9.75% coupon was clearly attractive to buyers, but it carries danger signs too. Paying that much interest to bondholders will be a heavy burden for the bank’s business to support.Indeed, this might be a deal too far for wiser investment heads (regardless of all the hedge funds piling in here). Just because government yields are plunging doesn’t mean credit risk is improving; it usually means the opposite. In fairness, this issue is for bank capital specialists only but there’s always a deal that corrects the market’s over-enthusiasm for the diciest assets.The offer would have been unthinkable a year ago, and comes courtesy of a sustained decline in Greek sovereign yields, with five-year yields falling below their Italian equivalents, and a sixfold rally in Piraeus Bank's share price since February. It helps that imminent national elections are expected to deliver victory to the pro-business New Democracy Party. For Piraeus, it makes sense to strike now and the books were more than twice covered.Still, a big leap of faith is required to believe that that this ultra-high risk, CCC-rated junk bond will be repaid at that call date in five years time. Investors won’t want a repeat of what happened when Italy’s Banca Monte dei Paschi di Siena SpA issued a similar bond in January 2018. That now trades at close to half its initial value. Piraeus’s non-performing loans make up more than half of its total lending, despite its offloading of 500 million euros of them to private equity buyers this month. Even after the share price rally, the stock only trades at a price-to-book ratio of less than 0.2. The path to easing the bad debt burden will be arduous.As part of Piraeus’s strategic plan, the bank sees non-performing loans dropping to about 9% of the total by 2023, which requires the elimination of 21 billion euros of exposure. It has signed an agreement with Intrum AB, a Swedish debt collection specialist, to help manage its bad debt pile. However, the speed at which Greece’s lenders will be able to clean up their loan books is uncertain. The government and the Greek central bank have two separate, not entirely complementary, initiatives to help banks do this but they’re still obtaining European Union approvals.Piraeus’s plan to improve its fee income by 33% by 2023 looks ambitious too. As the biggest private lender to SMEs in Greece, its growth is tied ultimately to the country’s nascent economic recovery. A shareholder group that includes the EU-backed Hellenic Financial Stability Fund – as well as John Paulson, Vanguard, Blackrock Inc. and Schroders Plc – offers some reassurance. While success would be another important milestone in Greece’s long road to recovery, you’ll have needed nerves of steel to jump on this one.To contact the authors of this story: Marcus Ashworth at firstname.lastname@example.orgElisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
TORONTO/LONDON, June 17 (Reuters) - Ahead of Tuesday's deadline for Barrick Gold Corp to make a firm buyout bid for its Acacia Mining unit, a gold rally has eroded, but not eliminated, a discount and big Acacia shareholders say they still oppose the offer. Barrick must either firm up its proposal to acquire the 36.1% of Acacia it does not own by June 18, or walk away for at least six months under British takeover law. In the event opposition melts away and a friendly offer materialises, 75% of the minority shareholders would have to back it.
* European shares up 0.3% * EU expected to start infringement procedure against Italy * Italy's FTSE MIB lags, down 0.3%, as banks fall * Asian shares rise on signs of Fed interest rate cut * Norsk Hydro beats, NSF backs out of Provident bid June 5 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. "The key question is whether that is a short-term blip or a more sustained switch from 'momentum' investing back to a more fundamental approach of 'intrinsic value'," write Mirabaud Securities strategists.
Lender Provident Financial said shareholder Janus Henderson Investors does not plan to accept the hostile takeover bid for Provident by Non-Standard Finance , adding that more than one-fifth of its shareholders hold the same position. "We have not been convinced of a compelling logic for the combination of NSF with PFG," said Antony Marsden, head of governance and responsible investment, Janus Henderson Investors. In a statement after markets closed on Tuesday, Provident revealed the letter sent to the company by Marsden, noting that Janus Henderson stood by the doorstep lender's strategy and added that recent results suggested good progress towards recovery of the home credit unit.
LONDON (Reuters) - Jupiter Fund Management has appointed Wayne Mepham as its new chief financial officer, poaching the executive from rival money manager Schroders in the latest major change to its leadership ...
Provident said that 96% of the shares held by its independent shareholders have yet to be signed up to NSF's offer for the larger company, just days before a final deadline the latter has given for the deal to be accepted. Three funds - Woodford, Invesco and Marathon - holding more than 50% of Provident and a majority stake in NSF have all backed the bid, led by current NSF Chief Executive Officer and former Provident boss John van Kuffeler. "While this (96%) statistic is interesting and clearly implies low support for the transaction, the offer process only requires a majority if NSF chooses to proceed," KBW analyst Martin Williams said in a note on the deal.
NSF's 1.3 billion pound hostile bid for Provident has turned into a bitter war of words between the two subprime lenders, with NSF accusing Provident Financial executives of mismanaging the company. Provident, established in 1880 and based in the northern English city of Bradford, has been rebuilding after a botched restructuring of its home credit business led to profit warnings and the departure of its chief executive officer in 2017.