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Bloomberg Markets Magazine

Bloomberg Markets Magazine September 2016

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Bloomberg Finance LP
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in this issue

1 min

Hong Kong-based Jing Sun (“Digging Into China’s Growing Mountain of Debt,” page 54) specializes in equities in the Greater China region. Before joining Bloomberg last year, he managed stock portfolios at firms including TIAA-CREF. Sun says Bloomberg Intelligence estimates of China’s borrowing and other data on {BI CHIN } can help you gain insight into the contentious topic of the country’s economy. “When it comes to China and its growing debt, there have never been so many agreeing on so little,” he says. Saijel Kishan (“The Waiting Game,” page 90) reports on hedge funds for Bloomberg News in New York. Her profile of Fort Worth-based Mark Hart chronicles the hedge fund manager’s seven-year wager against China’s currency. “He’s under the radar,” she says, “even though he identified the two biggest economic…

2 min
“emerging markets are punching above their macroeconomic merit.”

Mauro Ratto DIRECTOR FOR PORTFOLIO MANAGEMENT AT PIONEER INVESTMENT MANAGEMENT “In a world of interest rates approaching zero, a scarcity of sales growth, and an abundance of macro risks, we find it surprising that health care—the sector with the fastest revenue and dividend growth and one of the lowest leverage ratios—is trading at a discount to the market.” Dan Suzuki INVESTMENT STRATEGIST, BANK OF AMERICA MERRILL LYNCH “The distinctions that we often have in the investing landscape are somewhat artificial. For instance, we spend a lot of time arguing about active vs. passive. I would argue that you really don’t care if it’s active or passive. What you care about is your risk-adjusted return.” Shundrawn Thomas HEAD OF FUNDS AND MANAGED ACCOUNTS, NORTHERN TRUST “Whether it’s Trump or Clinton, the reality is that there are…

6 min
it was a union for the ages, until suddenly it wasn’t. is europe lost?

THE U.K.’S VOTE to quit the European Union is the enterprise’s worst setback since it was conceived in the 1950s. Until now, the EU has always grown in scale and ambition. For the first time, Brexit shows that Europe’s manifest destiny—ever closer union—may not be destiny after all. Merely knowing that European integration can be reversed is a threat: It makes the unthinkable thinkable. But this isn’t the only danger. The union is increasingly unpopular not only in the U.K. but also in other European countries. Its political capital is depleted. Working through the mechanics of Brexit may deepen divisions, severely testing the union’s ability to adapt. Brexit could conceivably spur support for the union. But this will demand consensus, flexibility, and farsighted calculation, none of which can be taken for granted.…

1 min
hello, shortcut

WHEN THE SUN rose over the Caribbean Sea on July 25, the Maran Gas Apollonia was churning toward the new Panama Canal with a shipment of U.S. liquefied natural gas that it had loaded at Cheniere Energy’s Sabine Pass terminal in Louisiana. Tugs guided the 90,434-ton tanker into the first of the Panama Canal’s new Agua Clara Locks. The gates closed, and water filled the first chamber. That night the vessel passed through Gatun Lake and the new Cocoli Locks and entered the Pacific Ocean, becoming the first LNG tanker to transit the expanded shipping lane that opened in June. Built in 2014, the Royal Dutch Shell-chartered tanker is about 13 meters (43 feet) wider than the largest ships the old locks could handle. The expansion opens the Panama Canal…

4 min
a new trade route for natural gas opens in panama

WHEN THE Panama Canal’s expanded locks slid open in late June, perhaps no one was happier than executives in the U.S. shale industry. With the goal of making the U.S. a global powerhouse for natural gas exports, these frackers have their sights on Asia. Now they have a more direct route that could significantly benefit their bottom line. Nine years of construction work at a cost of more than $5 billion have equipped the canal with a third set of locks and deeper navigation channels, crucial improvements that doubled the isthmus’s capacity for ferrying goods between the Atlantic and Pacific oceans. Within a week of opening, officials said they had more than 170 reservations for transits this year, mostly for so-called New Panamax cargo carriers that couldn’t fit through the old…

4 min
how to value government bonds as yields continue to fall

GOVERNMENT BONDS have rallied this year because of the outlook for slow growth around the world and central banks’ extraordinary monetary policies. A Bloomberg index that tracks developed-country sovereign bonds was up almost 12 percent in the first half. As bonds rise in premium above par, evaluating their true value becomes more important when making investment decisions. In government bond markets, differences in valuations along the yield curve are linked to the liquidity of individual securities. Bonds that are more liquid tend to trade at a premium to the curve, whereas those that are less liquid trade at a discount. To measure those premiums or concessions, Bloomberg has built fair-value curves for the major sovereign markets. The curves are constructed from universes of bonds that use a set of rules to filter…