Summit Notebook

Exclusive outtakes from industry leaders

Audio-JPMorgan underweight utilities

-

chakrabortti.jpg Abhijit Chakrabortti, global equity strategist at JPMorgan, told the Reuters Investment Outlook Summit that his firm is underweight utility stocks and other sectors sensitive to bond yields. “These sectors, with bond yields going up, have no valuation support whatsoever,” he said.

Audio – Gartman: Wal-Mart was key to bond market shift

-

gartman.jpgInvestment adviser Dennis Gartman, publisher of daily trading commentary The Gartman Letter, told the Reuters Investment Outlook Summit that one of the two things that changed sentiment in the bond market was the recent announcement by Wal-Mart Stores that it would scale back its expansion plans in the United States. “Who has been the great deflationary force in the United States in the past 30 years?” he said.

 

Audio – What private equity bubble?

-

“Everybodylevkovich.jpg talks about, and I love this term, the private equity bubble. Remove it from your lexicon,” said Tobias Levkovich, chief U.S. equity strategist for Citigroup.

Private equity deals will likely continue to be made until something happens to disturb that gap, such as junk bond yield spreads widening or interest rates moving up, Levkovich said.

Audio – Lowering the bar

-

mcmanus.jpg“We still see an environment where an increasing number of companies will have to guide down their earnings expectations,” Banc of America Securities Chief Investment Strategist Tom McManus told the Investment Outlook Summit.

Audio – Be careful what you wish for

-

reynolds.jpg    “Don’t pray for lower raw materials cost, because that means that someone just pulled the pin on the Chinese macro story,” said CreditSights Chief Executive and Co-Founder Glenn Reynolds at the Reuters Investment Outlook Summit.

Money talks, not image, says Russian investment firm

-

pankko.jpgWhen it comes to business, investors don’t fret much about Russia’s image, which has been damaged by events such as the Yukos affair, Russian investor Teijo Pankko told Reuters journalists in Paris. ”We regret what happened with Yukos. We feel that from a human point of view it is very unfortunate that it happened,” said Pankko, the Chief Financial Officer of Altimo, which is the investment vehicle of Russian billionaire Mikhail Fridman. ”At the same time, being very rational and pragmatic, I think it’s a fact of life. We have to accept that. I don’t think that in the long run that this individual case would have any kind of consequence for any other businesses,” he added. ”You may have a lot of feelings about it and emotions but if you look at the statistics there are so many transactions that have been done increasingly, especially last year… I believe it’s impressive indeed. I think it says quite the opposite,” he said. “Money makes things happen.”

 

Audio – Knowing the ground

-

Richard Fan of UG Investment Advisers described his $900 million hedge fund vehicle as a “niche” product because of its focus on China and Taiwan. Although Asia-focused hedge fund assets have risen six-fold over the past five years, Fan said he was not overly concerned about competition because UG had on-the-ground knowledge and a network of local contacts. “You need to have the local presence…you need to be in a situation where you get the information first.”

0412_2tc9355.jpg

Audio – Mexico’s pension overhaul should benefit markets

-

A proposal to overhaul one of the government’s pension systems was cleared by congressional committees this week in a rare agreement between Mexico’s top political parties. The legislation introduces private retirement accounts for public-sector workers but still needs approval from the Congress lower chamber and Senate.

If passed, the new pension system could push the government to take extra debt but would bolster public finances in the long term.

Audio-Hedge fund on Citi’s speculated break-up

-

A break-up of Citigroup is not expected to happen in the next few months, says Tom Brown, chief executive of hedge fund firm Second Curve Capital.

Brown told the Reuters Investment Outlook Summit a break-up for Citi could become a reality if its 2007 performance disappoints, leading to chief executive Chuck Prince getting forced out.

Audio-Fed chief gets thumbs up from Lord, Abbett

-

Robert Morris, chief investment officer of Lord, Abbett & Co., says the new chairman of the U.S. Federal Reserve, Ben Bernanke, has more substance than his predecessor, Alan Greenspan.

“There’s very little entertainment value in the man and I think a lot more substance. So I am actually a big fan of him,” Morris said about Bernanke at the Reuters Investment Outlook Summit. 

  •