Thursday 18 January 2018

The Punt: Forget China, the next POTUS has investors running for cover

Republican presidential candidate Donald Trump. Photo: AP
Republican presidential candidate Donald Trump. Photo: AP

Investors are getting spooked. Not just by the slowdown in China, the prospect of a Brexit or the market volatility. But the US Presidential candidates are also giving them the jitters, according to global asset management firm Oaktree Capital.

"They're scaring the hell out of people," the company's co-founder, Howard Marks, told Bloomberg. He cited claims from Donald Trump, inset, that China, Mexico and Japan are taking American jobs.

"People tend to believe him. Then the others compete to be equally as fearful and dramatic," he added.

But that fear is, in many ways, up Oaktree's street. The company, which manages $97bn in distressed debt, private equity holdings, emerging-market stocks, property and energy-related assets is taking advantage of the uncertainty.

The Los Angeles-based firm has gathered more than $10bn for its latest fund to buy the debt of troubled companies.

"For the long-term investor it's a very good opportunity - things are a lot cheaper than they were nine months ago," he said, in a Bloomberg Radio interview.

"We want to buy when investors are worried and cautious, and that makes this a much better time."

Hungary's central bank meets its target - with 112 handguns

IN comparison to his counterparts in Budapest, Central Bank Governor Philip Lane has it easy, The Punt reckons. Bloomberg has revealed that The National Bank of Hungary has had to splash the cash on 200,000 rounds of live ammunition as well as 112 handguns for its security force. The country's central bank cited the rise of "international security risks" including bomb and terror threats and the Europe's immigration crisis.

Governor Gyorgy Matolcsy defended the outlay to his country's lawmakers, saying that the bank needed to beef up its security detail after its assumption of the role of financial regulator and a related increase in the number of its properties in the country.

And Gyorgy must envy the denizens of Dame Street, whose only major threat is dodging Temple Bar stag parties when leaving work on a Friday night.

The Hungarian bank's bills have certainly been in the news of late. It's already earmarked €645m to set up foundations to teach alternatives to "outdated neoliberal" economics. And another €100m or so has gone on fine art, with investments including a painting by Titian and in office buildings and villas.

The Governor, meanwhile, argues that the central bank has the right to spend its healthy profits.

Irish Independent

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