All GLG News Analyses Filed Under: Asset Management & Private Banking

Where is the Hong Kong & Shanghai in HSBC?

August 7, 2008

Analysis by: GLG Expert Contributor

Analysis of:HSBC to Increase Investment in Asia-Pacific Region, Chairman Cheng Says | www.bloomberg.com

Given its pedigree---Hong Kong Shanghai Banking Corporation---to fund Asian development beginning more than 100 years ago it's interesting that the bank currently has 75% of its loan portfolio in the US and Europe.  Did they miss the curve for China, India and the ASEAN Region all supporting double digit growth for some years now? Better late than never but given the economic momentum in Asia and the slowing growth in the US and Europe what was the percentage before their portfolio was revalued?  And what have they been waiting for in Asia?

Does the Fed view Sovereign Wealth Funds as greater fools?

August 6, 2008

Analysis by: GLG Expert Contributor

Analysis of:Sovereign Wealth Fund Assets Could Triple by 2013 | www.bloomberg.com

As Sovereign Wealth Funds (SWF) triple by 2013, the question for investors is "Where will the money go?" At a conference this spring at Stanford, I discovered that the Fed thinks SWF investors may not be the sharpest knives in the drawer when it comes to investing in U.S. financial services firms. Unless SWFs start to make money off of their investments, they may wise up. And the expensive tuition payments for SWF investors from those losses may make it difficult for Wall Street to raise more money as they continue to write-down the value of their asset-backed securities. And if hedge funds want to capture a share of this SWF money, they will need to get a more specific understanding of what motivates the different SWF investors. Some SWFs are very clear about their objectives and practices while others are far more secretive. Hedge funds will need to know which is which if they hope to tap the trillions of dollars worth of capital in these funds over the next five years.

Harnath SithamrajuConsultantHarnath Sithamraju

ICing on the BRIC

July 28, 2008

Analysis of:Templeton's Mobius Sees `Good Bargains' After China, India Stocks Decline | www.bloomberg.com

1. China and India are two of the fastest growing markets and turbulence is expected. 2. Ups and downs form stock theatrics in any stockmarket.

India.......... invest for long term and in service equities , if you must !!

July 24, 2008

Analysis by: GLG Expert Contributor

Analysis of:Templeton's Mobius Sees `Good Bargains' After China, India Stocks Decline | www.bloomberg.com

India.......... invest for long term , and in service equities  unless you are a day trader.  Currently Indian stocks are on the high side and one can expect considerably volatility short term.  National elections are due in nine months and there will be considerable pressure to throw out the current regime due to high food prices and lack of sufficient trickle down to the lower and agrarian rungs. On the other hand , wealth is certainly being generated which will mean 15 to 20 million will join the middle class every year , ergo growth and continued demand for quality services be they  health , utilities or (hospitality ) food/tourism . Growth of the latter will be be also fueled by continued demand from outside of India , as India's tourism share is still relatively very low.

Harnath SithamrajuConsultantHarnath Sithamraju

Red dragon considers landing on hot coal

June 11, 2008

Analysis of:Australia Approved for Investment by Chinese Funds | www.bloomberg.com

1. Entry through backdoor to the boardrooms of resource companies of Australia. 2. Decision to ensure assured supplies to resource hungry China.

Harnath SithamrajuConsultantHarnath Sithamraju

Interest rate is the main driver of provider choice

June 9, 2008

Analysis of:SBI raises interest rates on domestic term deposits | www.financialexpress.com

1. High interest savings deposits currently play a key role in financial institutions startegies. 2.Competition for deposit funds in India is fierce, and is expected to intensify as banks struggle with the effects of global credit crunch.

German State-Owned Banks - The Final Countdown to Self Destruction

May 23, 2008

Analysis by: GLG Expert Contributor

Analysis of:German State-Owned Banks on Verge of Collapse | www.spiegel.de

German government banks have made every mistake in the book over the years. It started with too much gapping in their interat rate book, improper stock trading, questionable commercial loans in connection with deals and most recently betting the ranch on structured credit positions. The final act is now writing/selling protection on the value of southern European government debt. The premiums are great, and this business requires no equity capital. Thank goodness we have Basel 2 to protect us.

Target Date Fund Indexes - Another tax on investors and the global securities industry

May 21, 2008

Analysis by: GLG Expert Contributor

Analysis of:Target Date Fund Indexes | tdbench.com

In every segment of the securities industry (clearing & settlement, custody, brokerage, securities and commodities exchanges, asset management and securities underwriting), we have achieved effective consolidation and ultimately cost reductions for all market participants - only the index data and benchmark industry remains inefficient and unnecessarily costly.   If we are to have a new government driven mutual fund industry segment, should we not have a government and/or market driven consolidation of the index data and benchmark providers to reduce the unproductive "tax" on investor assets? Does the securities industry still need MSCI, FTSE, DJ STOXX, Cit, MS ....... and a now another set of indexes? Perhaps a regulated government utility model is needed for both the benchmark providers and rating agencies going forward?

Saudi Sovereign Fund - Nothing New But Developments May Help Bring Middle East Peace

May 21, 2008

Analysis by: GLG Expert Contributor

Analysis of:Saudis to launch $5.3bn sovereign fund | www.ft.com

SAMA, the Saudia Arabian Monetary Authority, has been a long-term investor in international companies for years. SAMA, ADIA and KIA - along with many other regional banks - are active in public and private equity and debt markets. The real news is the growing total investment capital from the region (institutional and retail), which is partially refinancing the broken investment banks and funding the global economy.  Noteworthy is the massive shift of financial resources and human (investment banking) capital to the Middle East. The coinciding build up of financial market infrastructure in the region implies a beginning, partial power shift from NY and London to the region.

Pure Target Indexes: Better Benchmarks for Target Date Funds

May 14, 2008

Analysis by: GLG Expert Contributor

Analysis of:Target Date Fund Indexes | tdbench.com

In light of anticipated growth in both the number of target date funds and the assets committed to them, it is critically important to have appropriate indexes to evaluate and benchmark their performance.  Appropriate benchmark indexes also increase the likelihood that (1) investors are better served and (2) the fiduciary responsibilities of financial advisors and plan sponsors have been fulfilled. Target date funds should be designed to match or exceed the risk-adjusted performance of the Pure Target Defensive Index. Its motto is simply this:  grow money prudently and then protect it aggressively.  The other index series (Conservative, Moderate, Aggressive) sacrifice to varying degrees these two objectives so as to be more in line with industry practices, and are in fact exposed to the problems that critics have identified, such as path dependency and potential for loss.  Time will tell which of these lifecycle alternatives garners the greater acceptance.

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