Snippets, Snipes & Snides
11-15 August 2006
Energy Earnings Pushing Indices Higher
A 44% boost in the energy sector has pumped up operating earnings in the Standard & Poor’s 500 to a record US$199.4 billion, up 13.4% from a year earlier, making it the 17th consecutive quarter of double-digit growth. The percentage could have been even higher were it not for the information technology sector, in which nearly two-thirds of issues were negative. The strong second-quarter results, coupled with projected full-year growth projections are likely to help the S&P 500 finish the year up 5%-8%. The surprising energy sector performance is thanks to near- record oil prices and the closing of BP’s Alaska oil field for repair. It had originally projected a 5.7% rise in the third quarter and a decline in the fourth, but is now predicting a 16.8% boost in the current quarter and an increase at the end of the year.
Short Term Jobs In Korea
Fund managers in South Korea tend to focus on short-term goals because most of them don’t stay in their jobs long enough to project for the long term. The firms registered with the Asset Management Association of Korea showed that the average Korean fund manager stayed in the job for 2.5 years, while 28.2% of the total leave within one year and 46% move on within two years. The turnover rate is creating excessive turnover, which in the past year was 1800% at Hyundai Wise Asset Management’s Value Finder Stock Type Fund (somebody's getting some kind of kickback here obviously). Such turnover is bad news for investors, who are encouraged to look at the long term. In addition, for the ongoing search for greener pastures, fund managers may leave when a new management team comes in and is eager to hire managers who share their values.
Bad Air Irks Hedge Funds In HK
A main topic of conversation among hedge funds in Hong Kong has nothing to do with raising funds or volatility; it has to do with air quality that is so bad that it could ultimately have a negative impact on the clogged city’s claim to financial supremacy in the region. A number of HFs are turning their noses up at the city because of the horrible pollution and turning their eyes toward the fresher air of Singapore as a quality-of-life decision. There are hedge fund partnerships where there is an element of strife over air pollution. One partner wants to stay in Hong Kong, while the other partner wants to move to Singapore for the sake of the family. The exodus apparently had already begun. U.S.-based hedge funds Stark Investments and Concordia reportedly are already making the move, and Deutsche Asset Management’s Asian head, Ed Peter, has set up house in Singapore, where Deutsche manages most of its US$28 billion in Asian assets anyway. This all plays in the hands of Singapore, which recently eased legislation and has embarked on an aggressive marketing campaign to attract more financial business and vie for the Asian sector crown. Meanwhile, Hong Kong is making a serious effort to stem the tide of departing pollution-sensitive investment types by improving local emission levels, 70% of which are said to be wafting in from across the China border.
Remember BCCI - The Guy Is Still Not Caught
The FBI is in hot pursuit of Gaith Rashad Pharaon, 65, a Saudi millionaire fugitive wanted in connection with the Bank of Credit and Commerce International (BCCI) financial fraud scandal. He's evaded the feds for nearly 15 years. His yacht was recently spotted off one of the Greek islands, but he wasn't aboard. It's captain claims he was headed for Algeria. There's a large reward for information regarding his whereabouts. Gaith Rashad Pharaon, 65, was once a familiar figure in London business circles. But he is now wanted in Washington for a series of federal and international crimes ranging from fraud to financing terrorism. The collapse of BCCI took almost US$13bn in depositors' money and left 250,000 international creditors unpaid. Many in HK would remember BCCI.