We’ve had a fair while to ponder the implications of a British AGM season which saw investors oust a few CEOs and deal bloody noses to a few others. We’ve also had some data which implies the revolt wasn’t as widespread as advertised, but Sacha Sadan at Legal and General Investment Management thinks we have seen something important, and something that must be exploited.
From floods to drought, microfinance companies are looking at ways for farmers in developing countries to cope better with the vagaries of climate change.
In recent days Iranians all over the country have been rushing to dealers to change their rials into hard currency. The result has been a spectacular plunge in the rial which has lost a third of its value against the dollar in the past week. Traders in Teheran estimate in fact that it has lost two-thirds of its value since June 2011 as U.S and European economic sanctions bite hard into the country’s oil exports. The government blames the rout on speculators.
As Britain’s Deputy Prime Minister is finding, apologising when you have let people down is no simple matter. The worry for some absolute return funds must be that they are heading for a similar fate to Nick Clegg (even if they’re unlikely to suffer the same level of autotuned mockery).
The currency war is back.
Since last week when the Fed started its third round of money-printing (QE3), policymakers in emerging markets have been busily talking down their own currencies or acting to curb their rise. These efforts may gather pace now that Japan has also increased its asset-buying programme, with expectations that the extra liquidity unleashed by developed central banks will eventually find its way into the developing world.
Central bankers as carry traders? Why not.
As we wrote here yesterday, FX reserves at global central banks may be starting to rise again. That’s a consequence of a pick up in portfolio investment flows in recent weeks and is likely to continue after the U.S. Fed’s announcement of its QE3 money-printing programme.
One of the big stories of the past decade, that of staggering reserve accummulation by emerging market central banks, appeared to have ground to a halt as global trade and economic growth slumped. But according to Bank of America/Merrill Lynch, reserves are starting to grow again for the first time since mid-2011.