Hedge Fund That Gained 40% Sees Emerging-Market Rally Persisting

Haidar Capital sees emerging market rally persisting. Our CEO, Said Haidar is profiled in this story analyzing the opportunities and risks of emerging markets, as well as discussing his positioning towards the developed-nation bonds and emerging-market debt, currencies and stocks. He comments: “Emerging markets will outperform developed markets during the next three to four years thanks to cheaper valuations, faster growth and pro-market government overhauls.”

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Central Bank Rate Changes Shouldn’t Concern Investors in Emerging Markets

Investors shouldn’t fear the impact of central bank moves on emerging markets since these economies are in a better place than in recent years to deal with changing monetary policies, money management executives said. Said Haidar is cited discussing how the rate hikes of central banks in the developed world would change an otherwise positive outlook of emerging market assets. He says, “we need to see a sudden surge in inflation somewhere or a central bank hitting the breaks hard, but right now it looks good.”

 

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Dollar Gets the Cold Shoulder in Global Economic Boom

The promise of accelerating economic growth overseas is propelling investor funds into the yen, euro and many emerging-market currencies, intensifying a yearlong siege on the U.S. dollar.  Said Haidar states that all the positives that should be causing the dollar to strengthen have virtually no effect. He is betting that the dollar will decline against the currencies of commodity-producing emerging markets such as Malaysia, Chile and Colombia.

 

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RPT-ANALYSIS-Euro zone bond yields may be in for New Year shock as ECB cuts buying

Euro zone government bond yields are close to multi-month lows just as the European Central Bank is on the verge of cutting its bond-buying scheme by half, leaving some investors worried that a sharp correction may be due in 2018. While bond markets are among the most liquid in the world, some participants believe the trillions pumped into them by central banks have distorted yields so much that they are not reflecting the impending reduction of financial stimulus. Said Haidar projects the ECB bond purchases will begin to fall from January based on his analysis of ECB buying patterns in recent times.

 

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The Great QE Unwind: How it will affect the economy and markets

Synopsis: This paper examines various implications that the QE-unwind is likely to have for financial markets. To do this, we will examine some of the specific effects that can be expected from shrinking the balance sheet of the US Federal Reserve. We will also give some indications of how this shrinkage, both in the US and other countries where QE has been used, could have a bigger impact on markets than conventional interest rate increases. For these reasons, we believe the winding down of QE merits close investor attention.

EMERGING MARKETS-Turkish lira tumbles to record low

The Turkish lira hit a record low on Wednesday and local bond yields rose to fresh peaks on political strains and worries about the central bank’s ability to curb inflation. The lira hit 3.98 against the dollar, coming under renewed pressure ahead of the U.S. trial of Turkish gold trader Reza Zarrab, who is accused of violating U.S. sanctions on Iran. The Turkish government have described the case as a “clear plot against Turkey”, which lacks any legal basis. Said Haidar shares views on the Turkish market, stating “Turkey had fallen substantially behind the curve in terms of interest rate normalisation. We’re not very positive on Turkey in the near term — eventually hopefully enough pressure is brought to bear that they push rates up and the currency then does better. It’s an ugly looking situation made worse by political issues”.

 

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Haidar Capital’s Two-Pronged Macro Approach

Last year was mixed for hedge funds. In fact, overall it was pretty poor, with hedge funds losing some $1bn. However, one hedge fund had a 14.37% return over 2016 on the back of its strategy focused on distortions in economic markets as a result of macro events. The hedge fund in question is Haidar Jupiter Fund, which opened in 1999 (the firm started in 1997) and now has $365m in AUM (as of October 31st 2017). Its success is down to a two-pronged macro approach when investing. Its Managing Member and President Said Haidar says that they do two kinds of trading; “big long-term trends and short-term catalyst-driven trades.”

 

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Is the euro rally toast after ECB unveils dovish bond-buying cutback?

Euro bulls were left wondering whether the shared currency can regain its footing after falling to a 3-month low versus the dollar on Thursday and continuing lower on Friday. The move came after the ECB announced it would cut its bond buying program from 60 billion euros ($69.9 billion) to €30 billion a month starting in January, while also extending the purchases, which had been due to end this December, until September.  Bets on a rising euro remain a “super crowded trade, so I don’t think this move will just reverse again tomorrow,” argued Said Haidar. The euro also weakened against the Japanese yen falling to a seven-day low of ¥132.17 on Friday, which is a similarly crowded trade like the euro-dollar pair.

 

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The Market Move – Greenback decline confounds the fundamental crowd

When unexpectedly strong U.S. employment data was released in early August, Said Haidar saw a chance to pare some of his hedge fund’s short bets on the U.S. dollar. The greenback had just finished July down against all major currencies, except for the Swiss franc, raising the specter of American money losing out to the rest of the developed world for the first time since the mid-90s. Hedge funds and other speculators had recently turned net-short on the dollar as a result. Said comments: “If U.S. growth continues to rebound and…the debt ceiling gets taken care of, it’s possible we could see the dollar rebound.

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10 years after crisis, investors still wary on bank stocks

Global banks stocks have been out of investors’ favor since the onset of the financial crisis nearly a decade ago, but the prospect of rising interest rates, looser regulation, improved credit quality and stronger global economic growth might put them back on investors’ radar screens. Said Haidar points out that tighter regulation such as the Volcker rule in the U.S, which prohibits proprietary trading to prevent risk-taking by banks, “has killed” banks business model. In addition, Said provides his opinion on opportunities of banking sectors across Europe and emerging markets.

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