Wednesday, 12 August 2015

Financial Orbit wrap 12/08/15

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. China – new 1.6% Chinese yuan fall as PBOC Fixes Yuan Reference Rate At 6.3306 (prev 6.2298). Biggest 2 day drop in 21 years. Reactions from 15 major banks to the new PBOC yuan fixing procedure here.

(h/t @RANsquawk) 

My view: the distortion of the strong $ grows.  For Europe means euro cannot fall (note it has risen to c. 1.11s now against the US dollar) and so regional reforms matter so much more now.

2. Investors are starting to understand the above...and this is why European indices - and certain European shares - are coming under pressure

Of course that does not mean there are not interesting individual share opportunities.  

3. Alibaba shares may have fallen to new post IPO lows...but I was impressed by the company's continued mobile monetisation and cash flow.  Share down around interesting position initiation/augmentation levels in my view (link here). 

4. Meanwhile Markit rose to a new post IPO high...but I am struggling to justify buying the shares (link here).  

5. Best read today?  Back to Europe

'Greek debt is highly unsustainable, but sustainability can be restored with a nominal haircut of 50%, interest rate concessions of 70%, or a rescheduling of debt to a weighted average maturity of 20 years. Greece and its creditors should ‘bet on the future’ and embrace debt relief'.

Link here

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