Sat, Nov 18, 2017
A A A
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. Middle East - Saudi-Iran war would create this domino effect of global disaster, Saudi billionaires said to move funds from region to escape asset freeze[more]

    Saudi-Iran war would create this domino effect of global disaster From CNBC.com: Events appear to be spinning out of control in the Middle East, and the threat a Saudi-Iranian war is looking increasingly credible. Make no mistake, an out and out conflict between the two nations would be

  2. Paradise Papers - Robert Mercer's effort to avoid taxes appears in Paradise Papers, Tycoon made $41m from 'people's fund', Oxford and Cambridge 'investing millions of pounds offshore', Paradise Papers reveal[more]

    Robert Mercer's effort to avoid taxes appears in Paradise Papers From Therealnews.com: The Guardian has reported that conservative billionaire and Trump backer Robert Mercer "appears as a director of eight Bermuda companies in the Paradise Papers," the trove of documents reviewed by the

  3. Wall Street hedge fund veteran hits highs with copycat tactics[more]

    From FNLondon.com: A Wall Street veteran who has made big returns for wealthy clients by piggybacking on the strategies of well-known hedge funds is taking his novel approach to stock-picking to institutional clients. Dixon Boardman, chief executive of $2.5bn fund of hedge funds Optima Fund Ma

  4. Launches - Eaton Vance, Oaktree to launch diversified credit NextShares fund, FIM launches Nordic AI-powered fund[more]

    Eaton Vance, Oaktree to launch diversified credit NextShares fund Eaton Vance Management, a subsidiary of Eaton Vance Corp., announced the expected mid-November launch of Eaton Vance Oaktree Diversified Credit NextShares, a new Eaton Vance-sponsored exchange-traded managed fund. Eaton Va

  5. Outlook - Gundlach's stock market warning comes true[more]

    From Bloomberg.com: Jeffrey Gundlach has been warning something's got to give. Based on the past two days, looks like we have our answer. Stocks fell around the world a second day and high-yield bonds headed for a fourth straight loss, resuming a historic correlation that the hedge fund manager on W