Tuesday, January 10, 2017

Today's Headlines

  • Credit Hedge Fund Shorting China Junk Bonds as Risks Mount. Double Haven Capital (Hong Kong), a credit hedge-fund firm that profited last year as most of the industry struggled to make money, is betting against Chinese high-yield bonds as many investors are seeing risks mount in this part of the market. Chinese high-yield bonds have gotten expensive, and heavily indebted issuers throughout Asia need to refinance existing loans, Darryl Flint, chief investment officer of the Hong Kong-based hedge fund, wrote in a newsletter to investors. Double Haven, which has traded more than $10.7 billion of public and private Asian securities since 2011, said a wave of refinancing activity could also amplify price volatility. Double Haven is joining peers such as BFAM Partners (Hong Kong) and Value Partners Group Ltd. in taking a bearish view on Chinese junk bonds this year after such securities helped regional fixed-income managers return nearly eight-fold the average Asian hedge fund gain in 2016. Double Haven did even better, climbing 8.7 percent last year as the average Asia hedge fund rose 0.8 percent for the worst annual performance since 2011, according to preliminary data from Eurekahedge in Singapore.
  • Mexico as U.S. Manufacturing Scapegoat Masks China Effect: Chart.
  • India Auto Sales Plunge Most in 16 Years on Modi’s Bank Note Ban. India’s automobile sales fell the most in 16 years last month after Prime Minister Narendra Modi’s unprecedented clampdown on cash prompted consumers to delay their purchases of cars, motorcycles and trucks. Automobile sales fell 19 percent to 1.2 million units in December, the biggest drop since the same month in 2000, according to data released by the Society of Indian Automobile Manufacturers in New Delhi. Passenger vehicles sales dropped 1.4 percent while scooters and motorcycles -- a key indicator of rural demand -- fell 22 percent, the biggest monthly contraction on record.
  • Oil Drillers Are Expanding Again After Losing Half-Million Jobs. More than three quarters of the 440,131 oil jobs eliminated around the world through the end of 2016 came from the oilfield service providers, drilling contractors and equipment makers, said John Graves, whose Houston firm assists in oil and gas deals with audits and due diligence. He has tracked announcements of layoffs from all parts of the oil industry since the downturn began in the middle of 2014. Roughly a third of the cuts came in the U.S., Graves estimates.
  • Junk Bonds' High-Wire Act.
  • Hudson's Bay Shares Hit Record Low as Holiday Sales Disappoint.
  • Hungary Plans to Crackdown on All Soros-Funded NGOs. Hungary plans to crack down on non-governmental organizations linked to billionaire George Soros now that Donald Trump will occupy the White House, according to the deputy head of Prime Minister Viktor Orban’s party. The European Union member will use “all the tools at its disposal” to “sweep out” NGOs funded by the Hungarian-born financier, which “serve global capitalists and back political correctness over national governments,” Szilard Nemeth, a vice president of the ruling Fidesz party, told reporters on Tuesday
  • Richmond Fed’s Lacker to Retire Oct. 1, Search on for Successor.
Wall Street Journal:
Zero Hedge:

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