Mon, Mar 30, 2015
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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner