Thu, Mar 22, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Three 'game changers’ have limited contagion in European markets

Friday, May 17, 2013

This piece was authored by Melanie Rijkenberg, CFA, Associate Director, Pacific Alternative Asset Management Company Europe LLP.

Since the start of the year we have seen a clear de-correlation in global markets and most notably within European equity markets despite several potentially contagion causing events occurring over the last few months. In short order: the Cyprus saga and Italian elections surprise in February, rising Slovenia liquidity issues in March, and worrying economic data out of the "strong man of Europe" (Germany) early in the year.

But, contagion is no longer in vogue. The primary reason that contagion has been limited and correlations have dropped is in my view due to three "game changers" that occurred during 2012 that have taken the tail risk of an EU currency bloc break up off the table in many investors’ minds. These game changers are the announcement of a backstop in the form of the OMT, the decision by the European Council to establish a single bank supervisor and pave the way for a banking union, and the actions to keep Greece in the euro. Simply put, politicians "came through" when they needed to.

The game changers described above in combination with under-exposure to European equities in global institutional investors’ portfolios, improving global economic data and QE in the US and Japan, and relatively attractive European valuations had caused flows ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. Institutional Investors - Overdrawn pension fund scores gains[more]

    From Investments in big banks, pawn shops and rolling papers helped boost public safety workers' underfunded pensions this past calendar years, according to newly released figures. After recording middling returns in recent years, the Police & Fire Pension Fund (P&F) notched

  3. Activist Investors - The seven most undervalued stocks in Larry Robbins' portfolio, Stamford hedge fund still seeking shakeup of Taubman board[more]

    The seven most undervalued stocks in Larry Robbins' portfolio From ...On February 14th, Larry Robbins' firm Glenview Capital Management filed its quarterly Form 13F regulatory filing. The firm's stock portfolio totals $18.5 billion with 58 positions according to the latest

  4. Hot hedge fund loses 21% after bet on volatility goes wrong[more]

    From In December, Shahraab Ahmad shared with his hedge fund clients the principle that helped him trounce peers for two turbulent decades: steer clear of the crowd. He'd turned $50 million into an operation with more than $700 million over three years and delivered market-beating retu

  5. Opalesque Exclusive: Northern Trust builds on blockchain-backed private equity solution[more]

    Bailey McCann, Opalesque New York: Private equity clients at Northern Trust can now carry out audits of private equity lifecycle events directly from the blockchain. Northern Trust, working with PwC and other audit firms in Guernsey, has added this feature to its existing solution set for private