BIS Nails the State of Global Corporate Debt

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The Bank for International Settlements (BIS) quarterly report is always worth the read. Whilst it is academic in style and length, it consistently raises material that matters. Taken from the September report, the graphic below highlights the big issues for global corporate debt. The rest of this short article explains... Show More

Austerity isn’t Dead, it will Come Back with a Vengeance

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

There’s been a steady stream of recent articles claiming that austerity is dead. This one from James McCormack at Fitch argues that populist politicians are responsible for killing off pragmatic economic policy. Whilst I don’t deny the medium term tide is against austerity, the very high levels of sovereign debt... Show More

Gold – and the Very Large Debt Elephant in the Room

Gavin Wendt
Gavin Wendt MineLife

It's worth reflecting upon the staggering level of international debt. Financial crises are invariably caused by debt. The Bank of International Settlement (BIS) has recently warned that a new financial crisis is looming. Part of this is simply its job and it's routinely warning against this. But it does have... Show More

7 Things To Look For On A Balance Sheet

Glennon Capital
Glennon Capital ASX:GC1, ASX:CMI

While the profit and loss statement is doubtless very important for investors, the balance sheet should not be underestimated; it may even be more important. Below we run through the top points to consider when coming face-to-face with a balance sheet. Show More

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Why is volatility so low?

Simon Doyle
Simon Doyle Schroders

It is widely acknowledged that the outlook for economies and markets is unusually uncertain, given the huge political changes that we are witnessing globally. It is also widely acknowledged that most assets are expensive and priced to offer sub-normal prospective returns. Why then is volatility (the VIX) so low? History... Show More

Howard Marks & Henry Kissinger on Investing...

Christopher Joye
Christopher Joye Smarter Money Investments/Coolabah Capital Investments

In The Australian Financial Review I relay chats with billionaire Howard Marks and former US secretary of state Henry Kissinger that can help shape the way we think about investing; highlight that Aussie inflation expectations have surged to 4%-5%, which is way above the RBA's 2%-3% target and the highest... Show More

The three ’I’s that drive the gold price

Hedley Widdup
Hedley Widdup Lion Selection Group

The fundamentals of gold remain strong; inflation should outpace interest rates and global debt remains high. I think gold will find a floor at some stage, and when it begins to move up again it could be quite aggressive. Key catalysts will be ‘the three I’s: Inflation, interest rates, and... Show More

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China’s debt-fuelled economy expands 'oh so smoothly'

Fidelity International
Fidelity International Fund Manager

Higher wages are making China a less attractive hub for manufacturing exporters and foreign companies are pulling production from China or relocating planned plants elsewhere. Foxconn from Taiwan, for instance, which has long made iPhone components in China, plans to build 12 factories in India that will employ one million... Show More

Das: 3 ingredients for a financial crisis

Livewire Exclusive

Satyajit Das, author of “A Banquet of Consequences,” sees a crisis brewing in financial markets. "There's a lot of kindling, and people are walking around flicking lighters." Das says there are three basic ingredients required to cook up a crisis. 1) Overvaluation. "You can take PE ratios, you can look... Show More

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May Review: Steady Markets Deliver Small Gains

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Equities and credit delivered gains in May, commodities were mixed. Japan, France and Germany posted good GDP numbers, forward looking data for the US is weak. US equities are looking overvalued and a range of prominent investors have come out as selling down or going short. High yield credit is... Show More

Fortescue – A Lesson in Volatility for Credit Investors

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

When I started Narrow Road Capital in 2012 many people would question why an Australian credit manager was so negative about lending to commodity linked companies. Australia has a plethora of miners so why wouldn’t I want to lend to at least some of those? The journey that Fortescue has... Show More

Corporate credit unwind has begun

BT Investment Management

We believe are in early stages of a credit event where increasing Corporate defaults translate into higher unemployment, weaker consumption and dampened business sentiment. For the past 15+ years, a number of emerging market and commodity-driven countries have been rewarded by the secular upturn in resource prices. Foreign capital soon... Show More

Chinese deleveraging could get very ugly

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The biggest risk for the global economy is that debt levels are elevated. Rather than deleveraging after the financial crisis debt levels have continued to grow, particularly government debt. In 2009, governments bailed out banks, corporates and consumers with a range of capital injections, guarantees and stimulus measures. The risk... Show More

Implications of rising US rates for Australian companies holding US Debt?

Sam Ferraro
Sam Ferraro Evidente

In its most recent credit update for Transurban - following the announcement of the acquisition of AirportLink M7 - Moody’s highlighted that the company’s ratio of funds from operations to debt was expected to remain the mid-6% range compared with the rating tolerance level of 6% and drew attention to... Show More

Implications of rising US rates for Australian companies holding US Debt

Angus Coote
Angus Coote Jamieson Coote Bonds - JCB

When the tide goes out all boats are effected. Unfortunately for Aussie corporates with offshore debt, 2016 is shaping as a challenging year in global debt markets. Investment Grade credit spreads (a measure of corporate debt quality) have been widening/cheapening since mid 2014, however, the high yield and leveraged loan... Show More