In the first days of the month of August, bond funds dedicated to emerging markets have consolidated their status as a «safe» assets in the context of a widening crisis, due to problems with government debt on both sides of the Atlantic and gathering signs of a slowdown to come in global economic growth. According to the most recent estimates by EPFR Global, emerging markets bond funds earned net inflows of over USD1bn in the week to 2 august, while funds dedicated to local currencies have received levels of interest not seen for more than a year. Since the beginning of the year, emerging market bond funds have posted net inflows of over USD19bn. Other beneficiaries of the current turbulence include funds dedicated to gold and German equities. Eight out of the nine top equities funds have seen redemptiosn in the week ending on 2 August, as well as seven out of the nine largest sectoral fund groups. Equities funds finished the week under review with net outflows of USD7.9bn, while bond funds posted net redemptions of USD1.2bn.

The downgrading by Standard & Poor’s of the credit rating of the United States from AAA to AA+ on August 5th was «precipitous, wrong, and dangerous», according to Bill Miller, the renowned manager of Legg Mason Capital Management. «At best, S&P showed a stunning ignorance and complete disregard for the potential consequences of its actions on a fragile global financial system. S&P chose to take this action after the worst week in US equity markets since 2008, a week which not only saw stocks fall sharply, but which also witnessed a dangerous escalation in the ongoing European debt crisis with spreads widening to post-Euro records in systemically-important countries such as Italy and Spain amid general political paralysis», he writes in a 3 pages note released on Monday. First, for Bill Miller, «there was no need for S&P to rush to judgment just days after a bruising political battle had secured a bipartisan agreement to raise the debt ceiling through the next election cycle and which initiated a process to begin to cut spending and address the nation’s long term fiscal imbalances.and should have counted for, not against, the US’s AAA rating, as Moody’s correctly opined». According to him, «it is perfectly clear S&P either did not consider or did not care what the consequences of this hasty and rash decision might be.Secondly, there are at least three reasons why Bill Miller thinks S&P was wrong to downgrade. «First, it is incredible that S&P should think the US is less creditworthy on a short or long term basis now than it was two weeks ago, when an agreement to raise the debt ceiling had not been reached, both parties appeared intransigent, and contingency plans were being considered including prioritizing payments or even declaring the debt ceiling null and void under Section 4 or the 14th Amendment». Second, Bill Miller thinks that S&P apparently gave little or no weight, or certainly insufficient weight, to the unique role the United States plays in the global economy. «The United States is the largest, most productive economy in the world and the dollar remains the global reserve currency», he says. Third, the market says S&P is wrong, according to Bill Miller. «The US enjoys among the lowest interest rates in its history coincident with the highest deficits and a daunting long term fiscal outlook. Yet when investors in a highly uncertain world are looking for safe assets, they invest in US Treasuries».Perhaps most worrisome, S&P’s actions pose unpredictable and dangerous risks to the global economy. «At this point S&P has managed to create what Keynes called irreducible uncertainty: we just have no idea what the consequences may be of S&P deciding that the risk-free assets issued by the country that occupies a unique place in the global economy may not be risk free after all», Bill Miller writes. «One consequence we can all hope for is that Congress ends the oligopoly of Nationally Recognized Statistical Ratings Agencies (NRSRO) before they contribute to or ignite another financial crisis», he concludes.

The top US managers do not agree about the decision by Standard & Poor’s to downgrade its sovereign rating for the United States, Investment Week reports. Bill Gross at Pimco, the manager of the world’s largest bond fund, claims that S&P made a courageous choice. However, Bill Miller, at Legg Mason, claims that the agency’s decision was sudden, mistaken and dangerous. Warrenn Buffett has also been critical of S&P’s move.

Default rates on speculative grade corporate debt issues fell to 1.9% in the month of July, compared with 2.3% in June, and 5.5% one year earlier, according to monthly statistics from Moody’s. On the basis of a moderate scenario of a slow economic recovery, the agency predicts that default rates will stabilise at a low level in the next 12 months, with a rate of 1.5% by the end of this year, and of 1.8% by July 2012. Standard & Poor’s, for its part, says that the default rate on speculative grade corporate issues was 2% in June this year, its lowest level since August 2008. However, the agency notes, the default rate is at risk of rising in the near future due to rising uncertainty.

The HFRI composite hedge fund index in July posted an increase of 0.76%, largely due to the strong contribution of macro trend strategies, which gained 3.57% in the month. The HFRI Macro (Total) index gained 2.52% in July, with gains observed for most macro and CTA strategies. The HFRI fund of hedge fund index, for its part, has posted a gain of 0.65%, in line with the performance of single manager strategies.

In a survey by Citywire of its readers, 84% of respondents say that they would not hesitate to pull out of a fund in order to follow the manager of the fund, if they should decide to move to another management firm. This finding confirms anecdotal evidence that the manager in charge of a fund is the key person to consider in an investment decision, and not the management firm that employs him/her.

The New York-based investment boutique Octavian Advisors, specialised in special situations and distressed businesses, has opened an office in London, entitled Octavian Advisors (UK) Limited. Octavian has already invested more than half of its assets in Europe. Among its most significant investments are Head, Preem, IMO Car Wash, Balda, ProSieben, Glitnir and DMT. The London office will be directed by Fook Hien Yap, who joined Octavian last year.

Jabre Capital has recruited several employees, including Mona Il Isa, a veteran of Goldman Sachs, who made it into the global rankings of the 30 best traders aged under 30 in September 2008, Financial News reports. At Jabre, she will manage a portfolio of European and US equities.

Gold and the Swiss franc have risen to record highs following a downgrade of the United States credit rating, the Financial Times reports. Gold rose by more than 3%, and for the first time topped USD1,700 per ounce, while the Swiss franc has set a new record at CHF0.7497 per 1 USD. Adjusted for inflation, Monday’s record price of gold, at USD1,719, remains below a peak in 1980, which would be equivalent to USD2,500 in 2011 dollars. But JPMorgan predicts that this level may be reached by the end of this year.

Source, a provider specialised in distribution of exchange-traded products (ETP), has announced that its Source Physical Platinum P-ETC (SPPT LN) and Source Physical Palladium P-ETC (SPAL LN) products have been recognised as Sharia-compliant Islamic investment instrument certificates. The products were approved on 26 July 2011, by a Sharia compliance committee composed of specialists in Islamic law, a statement says.

Upon completion of a selection process announced on January 25 for mandates invested in equities of developed countries (passive management), the French national pension fund, the Fonds de réserve pour les retraites (FRR) on 8 August announced that it has selected BNP Paribas Asset Management and Amundi for a mandate to replicate non-capitalisation-weighted optimised indices. The FRR has also selected Vanguard Asset Management Limited and Alliance Bernstein Limited for a mandate to replicate capitalisation-weighted market indices. These mandates are awarded for a period of four years, renewable one year. The global indicative amount of the funds under management is 1 billion euros for each lot.

On January 25, 2011, the FRR launched a restrictive RFP divided in two 2 lots to select managers for mandates invested in equities of developed countries (passive management). Upon completion of the selection process, the FRR has selected the offers submitted by the following companies: Lot 1 : Passive management mandates whose objective is to replicate capitalisation-weighted market indices: Vanguard Asset Management Limited and Alliance Bernstein Limited. Lot 2 : Passive management mandates whose objective is to replicate non-capitalisation-weighted optimised indices: BNP Paribas Asset Management and Amundi. These mandates are awarded for a period of four years, renewable one year. The global indicative amount of the funds under management is 1 billion euros for each lot.

Evolution Group, the listed investment bank and private client investment management group, has announced that its wholly owned private client investment management subsidiary, Williams de Broë Limited , has reached agreement with BNP Paribas Wealth Management S.A. for the acquisition of the entire issued share capital of the former Fortis Private Investment Management business, now BNP Paribas Private Investment Management Limited . Completion of the Acquisition is conditional only on the Financial Services Authority granting its consent to the change of control of PIM. An application for such consent has been submitted and it is expected that such consent will be granted and the acquisition will be completed prior to the end of the current financial year. The acquisition of PIM, which comprises a UK private client investment management business under the stewardship of a team located in London with a small Global Derivatives Department and US Brokerage, is ultimately expected to result in approximately GBP1.8bn assets under management transferring to Williams de Broë.

The Danish pension fund ATP, which opened an office in London in June 2010, has recruited Jerry Gandhi as a strategic consultant for its planned launch of a British pension platform, the website IPE reports. Gandhi previously worked at RSA Insurance Group as group pensions director. The British platform is slated for launch by the end of this year.

Le FRR a lancé le 25 janvier 2011 un appel d’offres restreint, composé de deux lots, pour la sélection de gestionnaires de mandats investis en actions des pays développés (gestion passive). A l’issue du processus de sélection, le FRR a décidé de sélectionner les offres suivantes : Lot 1 : Mandats de gestion passive visant à répliquer des indices de marché pondérés par les capitalisations. - Vanguard Asset Management Limited - Alliance Bernstein Limited Lot 2 : Mandats de gestion passive visant à répliquer des indices optimisés non pondérés par les capitalisations. - BNP Paribas Asset Management - Amundi Les mandats seront attribués pour une durée de quatre ans, renouvelable un an. Le montant global indicatif des fonds confiés au démarrage de la gestion s'élève à 1 milliard d’euros sur chaque lot. Le FRR se félicite de la qualité des offres reçues et en remercie l’ensemble des candidats.

Le cours du sucre brut est tombé à son plus bas niveau en cinq semaines sur fond de craintes d’une baisse de la demande du fait de la crise que connaissent les Etats-Unis et l’Europe. Le contrat pour livraison en octobre a chuté de 2% à 26,38 cents par livre sur le marché new-yorkais. Le prix du cacao pour livraison en décembre a baissé de 1% à 2,945 la tonne métrique. L’indice Thomson Reuters-Jefferies de 19 matières premières a chuté de 2,8% depuis la dégradation de la note des Etats-Unis vendredi dernier.

La banque centrale du Chili a indiqué qu’elle entendait poursuivre le rythme de son programme d’intervention sur le marché des changes de 12 milliards de dollars pour l’année 2011, destiné à enrayer l’appréciation du peso. Elle compte également poursuivre ses rachats quotidiens de 50 millions de dollars de devise américaine entre le 9 août et le 8 septembre.

La société d’investissement américaine basée à Los Angeles a annoncé le rachat d’Indicus Advisors, qui lui permet d’augmenter ses actifs de crédits aux entreprises européennes de plus de 5 milliards de dollars. Indicus gère 2 milliards de dollars d’actifs en obligations adossées à des prêts et autres fonds de crédit et fournit des services de conseil sur un total de plus de 4 milliards d’actifs investis.

La banque centrale du Brésil a raison de marquer une pause dans sa politique de resserrement monétaire, le temps de mesurer l’impact de la crise qui touche les Etats-Unis et l’Europe, indique Arminio Fraga, l’ancien directeur de la banque centrale du pays, au journal Valor Economico. Elle devrait même considérer d’assouplir sa politique monétaire si la crise mondiale s’intensifiait. Arminio Fraga estime en outre que l’économie américaine est plus «dynamique» et plus «gérable» que celle de la zone euro, où la situation est plus «précaire».

Le yen remontait de 0,9% hier à 77,68 contre dollar sur les marchés américains et de 1,6% à 110,22 contre euro. Le franc suisse s’appréciait de son côté de 2% à 1,0725 pour un euro et de 1,5% contre dollar à 75,58 centimes après avoir touché un point haut de 74,83. Le franc a gagné 29% sur l’année écoulée contre un panel de neuf autres devises, le yen 0,4%, alors que le dollar se dépréciait de 9,7% selon des données Bloomberg.

La Banque de France estime que la croissance devrait ralentir à 0,2% au troisième trimestre, alors que le chiffre du deuxième trimestre sera publié vendredi et que la banque centrale s’attend également à une croissance de 0,2%, après 0,9% au premier trimestre. Un chiffre légèrement inférieur aux espoirs du gouvernement, qui maintient sa prévision de croissance annuelle de 2,0%.

Ce sont quelque 11 milliards d’euros que pourrait récupérer l’Etat italien sur l’année 2011 grâce à sa politique de lutte contre l’évasion fiscale, soit un milliard de plus qu’en 2010, indique l’agence transalpine Ansa qui cite des estimations de Luigi Magistro, inspecteur en chef de l’agence du Trésor italien.

L'émirat remboursera 4 milliards de dollars de dette, grâce aux fruits d’une croissance retrouvée. L’Investment Corporation of Dubai, organe d’investissement du gouvernement de l'émirat, va honorer cette échéance par «ses ressources internes tirées des dividende de ses filiales», a indiqué le gouvernement. La dette de 4 milliards de dollars, qui arrive à maturité le 21 août, fait partie d’un prêt de 6 milliards de dollars, contracté en 2008 et dont la deuxième tranche de 2 milliards arrive à échéance en août 2013. La première tranche de 4 milliards comprend 2,5 milliards de dollars de financement conventionnel et 1,5 milliard de dollars de financement islamique. En novembre 2009 un moratoire sur la dette de son groupe Dubai World avait fait trembler les places financières internationales.

Le porte-parole des finances d’Angela Merkel auprès du parlement allemand, issu du parti libre démocratique, Frank Schaeffler, a indiqué au journal Handelsblatt que la BCE mettait l’épargne de millions de citoyens en péril en rachetant sur le marché des obligations souveraines italiennes et espagnoles. La BCE est devenue «la plus importante mauvaise banque du monde aux côtés de la Réserve fédérale américaine», a-t-il estimé.

Le niveau des CDS à 5 ans français a progressé de 15 points de base (pb) à 160 pb hier, contre 78 pb pour l’Allemagne. Néanmoins, la France a émis hier plus de 8 milliards d’euros de bons du Trésor à des taux plus bas que la semaine dernière.

Le différentiel entre l’Euribor et le swap eonia sur la maturité 3 mois s'est creusé lundi de 10 pb à 60 pb et s'approche de ses niveaux pré-Lehman

Si le niveau des CDS à 5 ans a progressé de 15 points de base (pb) à 160 pb hier, S&P a confirmé le « AAA » français et sa perspective stable

La banque aurait racheté, hier, environ 5 milliards d'euros de dettes espagnoles et italiennes

C’est sur la foi des nouveaux engagements budgétaires italiens et en attendant que le FESF soit opérationnel que la BCE s’est résolue à agir