Exclusive outtakes from industry leaders
By Tony Munroe
When markets boomed, India’s star was shining bright and deals were plentiful, but the hard landing means any recovery will be painfully slow.
Indian stock markets are still down more than 50 percent so far this year, making them the third worst Asian performer after China and Vietnam.
But even when markets look to stabilise, India may have a harder time in deal-making, given its heavy exposure to the global services sector, said Rory Tapner, chairman and chief executive for Asia-Pacific at UBS.
“India may be one of the markets that is going to perhaps find some of this tougher,” Tapner told the Reuters Global Finance Summit, adding that overseas companies look set to cut back on outsourcing as unemployment in their home countries grows.
By Jeffrey Hodgson
Increasingly risk-averse hedge fund managers are in no mood to chase exotic trades as they scramble to boost returns.
Given the current environment, Robert Appleby, chief investment officer at ADM Capital, told the Reuters Global Finance Summit there was no need to seek out exotic trades or markets for healthy returns.
By Kevin Lim
Some companies are taking cost cuts pretty seriously.
That’s the message from Aberdeen Asset Management’s Asia chief as the firm pulls out all stops to trim costs in these lean times.
“Obviously, we’ll travel less. Business class only if more than 6 hours or no business class at all,” Hugh Young said in an interview for the Reuters Global Finance Summit. “There is a big variable element when it comes to bonuses and that’s something we’ll look at.”
“Well insulated” China, though suffering from sharp drops in its own equities markets, doesn’t have the sense of crisis that exists in the U.S., says Philip Partnow, managing director of UBS Securities Ltd in Beijing. UBS, the first Western bank to assume management control of a domestic mainland brokerage, points out the fact that what’s hitting companies is not subprime-related securities gone bad.
“I think there’s nothing here we feel is toxid,” he told Reuters on Wednesday at the Reuters China Summit in Beijing. He goes on:
Global markets are tanking, investors are hoarding cash and the financial crisis has hit central and Eastern Europe. Where do you run when the world is on fire?
We asked that very question — or a watered-down version of it, at least — to the executives and policymakers at this week’s Reuters Central European Investment Summit in Vienna.
EU governments have been reluctant to back clean technologies — such as carbon capture and storage (CCS) that could sharply reduce pollution from coal — with cash, potentially killing their future, Czech power utility CEZ told the Reuters Central European Investment Summit this week.
But Wolfgang Ruttenstorfer, the head of Austrian oil and gas group OMV, reckons cutting carbon emissions is inevitable in the long run, despite the financial crisis and its impact.
“…the government will bail you out, if you are stupid but medium sized, you die,” said Wilbur Ross at the Reuters Restructuring Summit. ”That’s going to encourage some very bad behavior by some big institutions.”
Ross, known as ‘the bankruptcy king,’ said he was disturbed by what he called ad-hoc government decisions about which firms to rescue.
Last year the lending business was as frothy as a head on a Guinness beer and many financial firms spent a little too long hanging out at the bar.
Now, says Rob McMahon, managing director for restructuring, financial firms are looking around and trying to figure out exactly what happened, and who can still stand.
“It’s kind of like the drunken sailors. They left the boat to take their weekend leave and now they went back to the boat and they are all talking about what they did and they are realizing after sobering up, “Ok what did you do what did I do? Ok. Oh you are 25 times levered? Yeah really, you think that’s bad? Man i’m 35 times levered.”
Financial firms increased leverage – or debt – in recent years as money became very cheap, and they relaxed lending rules for themselves and their customers.
Now comes the tough part. Figuring out who had so much to drink that they’ll need to check into the financial equivalent of the Betty Ford Center – bankruptcy protection.
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