Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Capital Markets, Financial

Outflows seep out of Franklin funds


Posted on January 30, 2015

Franklin Resources, the asset management group that counts bond investor Michael Hasenstab among its top managers, missed earnings estimates in the last quarter as money continued to seep out of its funds.

But Franklin said on Friday that the outlook for Mr Hasenstab’s global bond franchise was strong, despite high-profile losses on Ukrainian debt, in response to questions about outflows and fund liquidity.

    Mr Hasenstab’s $69bn global bond fund has been one of the largest holders of Ukrainian government bonds as concerns mount over the country’s ability to pay its debts. It is down approximately $3bn on its $7bn investment, according to Bloomberg bond data.

    Although the fund has fallen behind a majority of peers in the past month, it has still outperformed 85 per cent of similar funds on a five-year view, and has recently been taking profits from lucrative bets on Irish government bonds at the nadir of the eurozone crisis.

    Analysts have been cutting their earnings forecasts for Franklin after clients withdrew more money than expected in December, particularly from the global bond portfolios. Morningstar research showed that last month was the worst to date in terms of outflows for Mr Hasenstab’s main fund, which saw clients pull $1.6bn.