Attractive Asymmetry in Asian Convertible Bonds
Asian stock markets have presented an opportunity along with a challenge for investors. The region offers some of the highest economic growth globally and includes large countries with populations that are moving steadily upwards into the middle-class. Also, in terms of relative stock market valuation, the combination of potential dollar weakness and low-price multiples makes […]
Redwheel Convertible Bonds Quarterly Issuance Radar
As anticipated, the first quarter of 2023 offered a marked increase in new issuance in the convertibles market, which presented itself across many sectors with a tilt towards Investment Grade issuers. The majority of the Convertible bonds (CBs) coming to market in 2023 have a feature that has been absent for many years: a meaningful […]
Changing of the Guard: Re-shoring to Drive a Manufacturing Resurgence
Over the past decade we have seen more investment in asset-light innovation and technology than in any previous business cycle. The world is now awash with food delivery apps and online gaming and video streaming services. This investment has generally been driven by low inflation and a low cost of capital. However, we believe that […]
Markets can no longer be Fed their quantitative easing addiction
Ernest Hemingway famously wrote in The Sun Also Rises – “How did you go bankrupt?” “Gradually, then suddenly”. Silicon Valley Bank (SVB) had been a poor stock performer for over a year until Thursday 9th March. Then within 24 hours it had gone bankrupt, the shares halted on Friday afternoon, 10th March and the bank […]
The twilight of China’s population
‘While the demographic shift is often presented as a crisis for China, we see immense opportunities in these challenges.’ China’s population declined last year, the first annual contraction since 1961, amid a Covid-induced sharp decrease in new births and long-term structural factors. China has followed a similar trajectory to many developing countries as having an […]
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 […]