{"id":27518,"date":"2015-01-19T20:46:53","date_gmt":"2015-01-20T01:46:53","guid":{"rendered":"http:\/\/prefblog.com\/?p=27518"},"modified":"2015-01-19T20:46:53","modified_gmt":"2015-01-20T01:46:53","slug":"january-19-2015","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=27518","title":{"rendered":"January 19, 2015"},"content":{"rendered":"

Those who live by the sword<\/a>…<\/p>\n

Marko Dimitrijevic, the hedge fund manager who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money this week when the Swiss National Bank unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm.<\/p>\n

Everest Capital\u2019s Global Fund had about $830 million in assets as of the end of December, according to a client report. The Miami-based firm, which specializes in emerging markets, still manages seven funds with about $2.2 billion in assets. The global fund, the firm\u2019s oldest, was betting the Swiss franc would decline, said the person, who asked not to be named because the information is private.
…<\/b>
Last year, the main fund rose 14.1 percent, driven by Chinese equities and bets against currencies, including a wager that the Swiss franc would fall after citizens rejected a referendum that would require the central bank to hold at least 20 percent of its assets in gold, the investor report said.<\/p><\/blockquote>\n

There may be a Chinese straw in the wind<\/a>:<\/p>\n

A missed $23 million interest payment by Kaisa Group Holdings Ltd. (1638) earlier this month puts it at risk of being the first Chinese real estate company to default on its dollar-denominated bonds. That may signal deeper risks for China\u2019s already fragile and corruption-prone property market, which according to World Bank estimates accounts for about 16 percent of economic growth.
…<\/b>
Kaisa\u2019s woes began late last year when the government in Shenzhen, less than 25 kilometers (15.5 miles) from Hong Kong, blocked approvals of its property sales and new projects in the city. It\u2019s also being probed over alleged links to Jiang Zunyu, the former security chief of Shenzhen who was taken into custody as part of a graft probe, two people familiar with the matter said last week, asking not to be named because the connection hasn\u2019t been made public.
…<\/b>
Concern is mounting that increasing financial stress among builders could spill over into a broader credit crisis in China. New-home prices fell in 65 of the 70 cities monitored in December and were unchanged in four, the National Bureau of Statistics said in a statement yesterday. Shenzhen recorded higher prices, the first city to see an increase in four months.
…<\/b>
Some of Kaisa\u2019s Chinese creditors, meanwhile, have asked a court to freeze the company\u2019s assets. In a statement on Jan. 9, the developer said that \u201cseveral bank accounts of the group\u201d had been frozen.<\/p>\n

It\u2019s a reminder of the risks overseas bondholders face when Chinese companies run into trouble. China\u2019s bankruptcy laws favor local creditors while offering fewer protections to foreign debt claims. Kaisa has a 30-day grace period to make its missed payment.<\/p><\/blockquote>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 13bp, FixedResets down 38bp and DeemedRetractibles off 9bp. A lengthy Performance Highlights table is dominated by losing FixedResets. Volume was below average.<\/p>\n

For as long as the FixedReset market is so violently unsettled, I\u2019ll keep publishing updates of the more interesting and meaningful series of FixedResets\u2019 Implied Volatilities. This doesn\u2019t include Enbridge because although Enbridge has a large number of issues outstanding, all of which are quite liquid, the range of Issue Reset Spreads is too small for decent conclusions. The low is 212bp (ENB.PR.H; second-lowest is ENB.PR.D at 237bp) and the high is a mere 268 for ENB.PF.G.<\/p>\n

Remember that all rich \/cheap assessments are:<\/p>\n