The Italian Banking System and Bad Debt Issuance - Is It Systemic?
There has recently been renewed concern over the high level of non-performing loans (NPLs) in the Italian banking system and the potential for a systemic contagion. This is not a new risk and as the chart shows, the bulk of these NPLs are from loans to made to business enterprises. Most of these loans turned sour in the period between 2009 and 2013.
A Post-Brexit Q&A with Blue Quadrant Capital Management
The month of June saw some extreme volatility in financial markets, particularly following the surprise UK referendum result. How did the funds managed by Blue Quadrant perform?
Our funds are likely to report a drawdown of between 8% and 12% for the month of June in Rand terms. This was in part driven by the relative strength in the Rand, which despite the negative global developments, actually gained ground against most major currency crosses during the month. Our funds have between 50% and 90% invested in offshore markets, mainly in the US.
We also have a large weighting in US financials, which were disproportionately impacted by the Brexit vote and contagion fears stemming from the very large price declines in UK and European financials.
A Brexit Q&A with Blue Quadrant Capital Management
The so-called "Brexit" referendum is fast approaching, scheduled to take place on June 23. Do you have a view which way the vote will go and is it relevant for investors?
We don't have a firm view and we think more than likely the UK bookies probably offer the best indication of which way the vote will go! They suggest the "Remain" camp will prevail. If we had to make a call we would also suggest that Remain will prevail simply because a significant % of likely voters (around 10%) are still undecided and historical precedent suggests that undecided voters tend to opt for the status quo at the last minute. But it is very close.