Bank on it: The case for investing in banks
In 2001, Polaroid filed for bankruptcy. Despite the many scientific breakthroughs of its visionary founder Edwin Land, and despite creating and dominating the instant photography market, Polaroid was blindsided by the inexorable rise of emerging technologies, most notably digital photography, with which it struggled to compete. This, truly, captures the risk of corporate obsolescence: the […]
Convertibles and CoCos – The Case of Mistaken Identity
The Case of Mistaken Identity With recent news events bringing Contingent Convertibles into the headlines, the terms “convertible bonds” and “Contingent Convertibles” (also referred to as CoCos) may sound the same, but these are in fact quite different instruments, with their own separate investor bases, risks, and sources of return. We thought it would be […]
Your annual reminder of what works in investing
You know that you are a bit of an investment geek when you get as excited about the release of the annual Credit Suisse Investment Returns Handbook as others get about the new season of Love Island but nonetheless, it is something I always read and always find illuminating. Now in its fifteenth year, it […]
Redwheel responds to tender offer by Providence
Redwheel responds to tender offer by Providence for outstanding shares of Hyve Group plc March 2023 The Redwheel European Focus Fund (‘Redwheel EFF’) acknowledges today’s announcement by Providence of an offer for all outstanding shares of Hyve Group plc. Redwheel EFF believes that the company is only just starting to deliver a recovery in profitability […]
Don’t bash the dividend
‘The amount of money that PepsiCo distributed in dividends last year was greater than the total value of the company back at the start of the 1980s.’ Nick Clay At a time when energy costs, mortgage prices and just about everything else seems to be rising, the last thing many people might want to see […]
China’s Two Sessions
The 14th National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) or “Two Sessions” began on the 5th of March with high expectations of major reforms and government appointments as well as the final formalisation of Xi Jinping’s unprecedented third term as China’s leader. This is the first “Two Sessions” post Covid restrictions […]
Why discipline matters in investing
The word “discipline” will have different meanings for different people. Many may think of the military, with a high-ranking officer bellowing orders at a set of new recruits. Others may think of the discipline that is constantly being instilled in a young child by its parents and teachers.
Convertible Bonds New Issue Radar: FEMSA
Flexibility is a key feature of convertible bonds, and means that new deals can be positive for both issuers and investors, as opposed to a zero-sum game. We see that dynamic at play in a new EUR 500 million, 3-year maturity exchangeable bond launched after the European market close on 16 February by FEMSA—Fomento Economico […]
Share buybacks…
…and the importance of sensible capital allocation “When a Chief Executive Officer is encouraged by his advisors to make deals, he responds much as would a teenager boy who is encouraged by his father to have a normal sex life. It’s not a push he needs.” Warren Buffet If I told you that there was […]
2023 Outlook for Emerging Markets
Emerging Markets faced three main headwinds in 2022, namely, China’s zero Covid-19 policy, aggressive monetary policy tightening globally and the Russian invasion of Ukraine. We see two out of those three factors turning into potential tailwinds in 2023. Firstly, China has already started to reopen its economy; therefore, the main question is the impact on […]