Oman Shuns Hedge Funds as Sovereign Investor Targets Equities

Oman Shuns Hedge Funds as Sovereign Investor Targets Equities

Oman, the largest oil producer in the Arabian Peninsula that’s not a member of OPEC, said it’s shunning hedge funds and alternative assets to invest directly in emerging market equities and real estate in stable countries. Oman Investment Fund, the sovereign wealth fund, manages almost all its assets internally and would only consider external managers because it could be “resource-intensive” to follow hundreds of stocks on a daily basis, Chief Executive Officer Hassan Al Nabhani said in an e-mailed response to questions, his first such interview in at least seven years. Read more of this post

Manhattan’s Vanishing Gas Stations; Perhaps there is no clearer sign that Manhattan space has reached a high premium than the continuing disappearance of gasoline stations at main intersections.

October 22, 2013

Manhattan’s Vanishing Gas Stations

By C. J. HUGHES

Perhaps there is no clearer sign that Manhattan space has reached a high premium than the continuing disappearance of gasoline stations at main intersections. Spurred by the recession and now the recovery’s development clamor, service stations popular among New York cabbies and motorists are literally losing their ground to apartments, stores and offices. Rezoning of these sites for residential use has also spurred development. Read more of this post

How ‘smart beta’ ETFs turned closet indexing into a winner

How ‘smart beta’ ETFs turned closet indexing into a winner

Some active managers are making small bets and beating the benchmark

By Jason Kephart   |  October 23, 2013 – 9:53 am EST

Actively managed equity mutual funds that don’t make big bets versus their benchmarks have been shunned by investors, but a handful of funds that rely on factors, or “smart beta,” have proved that you don’t need to make big bets to outperform. The common refrain among researchers and pundits these days is that the only actively managed funds worth investing in are the ones with a high active share, which is a measure of how much a fund differs from its benchmark. Read more of this post

Housing Bubbles Upend Central Bankers’ Rate Plans: Nordic Credit

Housing Bubbles Upend Central Bankers’ Rate Plans: Nordic Credit

Central bankers in Sweden and Norway are finding their efforts to steer inflation are being disrupted by a persistent threat of housing bubbles. While policy makers in both countries will keep interest rates unchanged tomorrow, according to economists surveyed by Bloomberg, distortions in the two nations’ property markets are adding a layer of uncertainty to outlooks. Read more of this post

German Pilots Grounded as $92,000 Tuition Can’t Buy Cockpit Seat

German Pilots Grounded as $92,000 Tuition Can’t Buy Cockpit Seat

Oct. 23 (Bloomberg)– Christopher Siem is spending 70,000 euros ($92,000) out of his own pocket to train as a pilot, a job where the unemployment rate is twice the German average. Siem, 24, is among Germany’s aspiring pilots whose dreams of a career in the cockpit have been dented as the country’s airlines slash their fleets. Deutsche Lufthansa AG (LHA), which has about 5,500 pilots, will limit its fleet to 400 planes and cut 3,500 jobs, while Air Berlin Plc (AB1) is also curbing crew numbers as it pares the aircraft roster by 27 over two years. Read more of this post

Fidelity late but not too late with new ETFs

Fidelity late but not too late with new ETFs

Pricing strategy called ‘punch in the face’ to Vanguard

By Megan Durisin   |  October 23, 2013 – 12:39 pm EST

Fidelity Investments is making its first big leap into the exchange-traded fund arena Thursday with the launch of 10 sector ETFs, but the question remains: Is it too little, too late? Several analysts are saying, “No.” “ETFs still have a long way to go before they catch up to mutual funds, and there’s still room for entrants,” said Mike Rawson, an analyst at Morningstar Inc. “I think we should wait a few years to see what else Fidelity is able to do.” Ten years ago, Fidelity launched its first and only ETF: the $262 million Fidelity Nasdaq Composite Tracking ETF (ONEQ). It hasn’t launched another since and has largely missed out on the ETF boom. Read more of this post

Euro’s Best-Rated Nation Loses Jobs as Finnish Firms Suffer

Euro’s Best-Rated Nation Loses Jobs as Finnish Firms Suffer

Finland’s efforts to protect its stable AAA rating and keep borrowing costs down aren’t helping its businesses, which say they need to cut jobs even as the rest of Europe surfaces from its crisis. While the government in Helsinki is pegging its recovery hopes to fiscal restraint, Finland’s biggest hurdle is its failure to adequately diversify its industries, according to Tiina Helenius, chief economist at Svenska Handelsbanken AB in Helsinki. Read more of this post

Alcoa and Rusal, Two of the world’s largest aluminum makers, reaped an estimated $1.4 billion in revenues from higher fees amid a logjam at London Metal Exchange warehouses

Alcoa and Rusal Are Beneficiaries of Warehouse Logjam

Alcoa and Rusal Have Objected to Proposal Aimed at Easing Bottleneck

MATT DAY

Updated Oct. 23, 2013 9:06 p.m. ET

Two of the world’s largest aluminum makers reaped an estimated $1.4 billion in revenues from higher fees amid a logjam at London Metal Exchange warehouses, according to an analysis by The Wall Street Journal. The two companies, Alcoa Inc. AA -0.96% and United Co. Rusal, 0486.HK +1.68% have emerged as some of the most vocal opponents of an LME proposal aimed at easing bottlenecks at warehouses. Read more of this post

Caterpillar’s Stock Drops, and 2 Big Deals in HK ERA and Bucyrus May Be to Blame; Caterpillar: Predictably Unpredictable; The Street’s Difficulty Forecasting Caterpillar Has a Lot to Do With China

OCTOBER 23, 2013, 1:17 PM

Caterpillar’s Stock Drops, and 2 Big Deals May Be to Blame

By MICHAEL J. DE LA MERCED

Two of Caterpillar‘s biggest-ever deals may have played a role in the $3 billion of market value that the company’s stock shed on Wednesday morning. The maker of heavy equipment disclosed that its third-quarter profit tumbled 44 percent from the same time last year, while revenue fell more than 18 percent for the same period. The company said quarterly profit dropped to $946 million, as revenue fell to $13.4 billion. With the company cutting its full-year earnings forecast yet again, investors sold off shares, leading to a 6 percent drop in the stock’s price as of midday Wednesday, to $83.87. Read more of this post

As Populism Grows in Israel, Big Business Lands in the Crosshairs

As Populism Grows in Israel, Big Business Lands in the Crosshairs

Oct 17, 2013 Israel Middle East & Africa

Over the summer, Israel’s regulatory agencies unveiled a number of new directives on their charges, telling them what to do, and, especially, what not to do. The policies, which target the financial sector and others, have emerged at a time when the population is becoming increasingly restive and critical of the scions of Israel’s big business community. Now, observers are debating who will be the winners and losers in this new environment. Read more of this post

As Developing Economies Grow, Global Value Chains Reach a Turning Point

As Developing Economies Grow, Global Value Chains Reach a Turning Point

Oct 21, 2013 Operations Management Strategic Management Asia-Pacific China Middle East & Africa

In the “flying geese paradigm,” Japanese economist Kaname Akamatsu explains that companies restructure to find the cheapest labor costs by moving low-value activities to nearby less-developed countries. Today that story rings truer than ever before as global value chains (GVCs) reach a critical turning point. Simply put, GVCs take a broader look at supply chains coordinated by multinational companies, but also encompass economic analyses of the countries involved with the activities. Read more of this post

Junk Bonds to Lose 1.5 Percentage-Point QE Cushion, Fridson Says

Junk Bonds to Lose 1.5 Percentage-Point QE Cushion, Fridson Says

Investors in junk bonds will lose a yield cushion of more than 1.5 percentage points as the Federal Reserve winds down its unprecedented quantitative easing program that’s bolstered credit markets for five years, according to Martin Fridson. “Tapering has been delayed, but high-yield investors should nevertheless assume that the end of quantitative easing will eventually hurt their returns,” Fridson, chief executive officer of New York-based FridsonVision LLC, a research firm specializing in speculative-grade debt, wrote in a report yesterday. Read more of this post

Tan Sri Andrew Sheng: Financial system too short term; Some 83% of the financial system’s assets are based on short-term liabilities, financing longer-termed assets; “We are trying to solve a debt overhang, excessive leverage with more debt. Where is the asset?”

Updated: Wednesday October 23, 2013 MYT 11:51:26 AM

Sheng: Financial system too short term

KUALA LUMPUR: One of the issues that needed to be fixed in the financial system was that it was being “too short-termed”, according to Fung Global Institute Hong Kong president Tan Sri Andrew Sheng. Some 83% of the financial system’s assets are based on short-term liabilities, financing longer-termed assets, he added. “We are trying to solve a debt overhang, excessive leverage with more debt. Where is the asset?” “The answer is that this has been a wonderful opportunity for an asset shift. It’s a structural and systemic issue that we need to think about,” he said during the afternoon session at the World Capital Markets Symposium held yesterday. Meanwhile, Sheng said that the global financial crisis that happened in the United States five years ago was not because of the failure to regulate markets but rather a failure of enforcement. “You realise that regulation does not solve all problems. It is not going to be easy moving forward as the rules require us to have more and more rules and frankly speaking I have personally lost the plot,” he said. He noted that the job of a regulator today was becoming “extremely complex” in the global financial system and that there was a need to understand it further.