Hong Kong’s real estate market has come a long way in the past year. For a sign of the extent to which its outlook has improved, look no further than the rapid shift in expectations for the growth in house prices this year. As recently as January, Morgan Stanley characterised its prediction of a 10 per cent rise in secondary home values as a non-consensus call. Fast forward to today, and its forec...
Hong Kong’s real estate market has come a long way in the past year. For a sign of the extent to which its outlook has improved, look no further than the rapid shift in expectations for the growth in house prices this year. As recently as January, Morgan Stanley characterised its prediction of a 10 per cent rise in secondary home values as a non-consensus call. Fast forward to today, and its forecast is in line with those of most other industry experts. The outlook for the city’s office market...
Klaus Vedfelt/DigitalVision via Getty Images Written by Sam Kovacs Introduction I haven't owned any BDC since September 2024, when Fed Chair Powell started the Fed's rate cut cycle. At the time, we held both Ares Capital ( ARCC ) and Blue Owl Capital Corporation ( OBDC ), which we had owned since 2021. While we enjoyed the high yields, I feared that a lower rate regime would lead the floating rate...
Klaus Vedfelt/DigitalVision via Getty Images Written by Sam Kovacs Introduction I haven't owned any BDC since September 2024, when Fed Chair Powell started the Fed's rate cut cycle. At the time, we held both Ares Capital ( ARCC ) and Blue Owl Capital Corporation ( OBDC ), which we had owned since 2021. While we enjoyed the high yields, I feared that a lower rate regime would lead the floating rate coupons to reset lower, NII per share to compress, and multiples on BDCs to compress. At the time I said: These BDC's thrive in a higher for longer rate environment, and this is about to end. Both have cut below their 200 day SMA, and we could be seeing a lot more bearishness soon. Now I know a lot of investors who rely on income have BDCs in their portfolios to juice the yield they derive. But with Moody's having cut the sector outlook to negative a couple weeks ago on April 7th, I feel like it's an interesting time to revisit the sector and provide some guidance. In the past year, the sector has been making headlines with the First Brands Group fraud and bankruptcy, which hit multiple BDCs, and then the Tricolor Fallout, which adds to sector stress. Author's chart from Moody's , SEC filings, press reports The timeline above sums up the stress events that have occurred to the sector since I stopped tracking BDCs. In this article, I'm going to take a holistic look at available BDCs and answer the question: if I had to own a BDC, which one would it be? The Framework: How to Pick a Single BDC These intellectual exercises require setting a framework for how to discard picks gradually until you're left with just one candidate. For BDCs, the approach differs as these are credit businesses. I'll be looking at the following factors to make a decision: Scale and diversification: the size of the portfolio, the number of loans Credit quality: non-accruals, % of PIK, the trajectory. Mark conservatism: how a loan is marked relative to the same loan at another BDC Quality of the parent...
sankai/iStock via Getty Images Global equities began the quarter on solid footing but subsequently reversed course amid concerns surrounding the software sector, driven in part by new AI developments from Anthropic ( ANTHRO ). These concerns, coupled with an escalating conflict in the Middle East, contributed to broader unease about the global economy and the private credit market. In terms of con...
sankai/iStock via Getty Images Global equities began the quarter on solid footing but subsequently reversed course amid concerns surrounding the software sector, driven in part by new AI developments from Anthropic ( ANTHRO ). These concerns, coupled with an escalating conflict in the Middle East, contributed to broader unease about the global economy and the private credit market. In terms of contribution to return, the United States was our portfolio's weakest performing region, declining mid-single digits. While we outpaced the broad market benchmark, we underperformed the value series. During the quarter, the largest contributions came from the materials and energy sectors, as oil prices broke above $100 per barrel. U.S.-based chemicals giant Dow, Inc. ( DOW ) was the largest individual contributor for the period. With approximately 65% of its ethane crackers utilizing low-cost natural gas feedstock, the company is well positioned to benefit from higher oil prices. Memory chip producer Samsung Electronics ( SSNLF ) was the second-largest contributor, as consensus estimates for 2026 and 2027 continued to rise, driven by a more than 100% increase in spot memory prices. Energy major Shell ( SHEL ) also benefited from higher oil and gas prices. The portfolio's largest detractors were in the financials sector due to concerns about economic weakness, as well as in the health care sector. The largest individual detractor in the period was health insurer Humana ( HUM ), as the company disclosed an unexpected 25% increase in Medicare Advantage plan membership, eliciting concerns of adverse selection; however, growth in Humana's 4-star plan membership should help offset some of the added medical costs. While IT services company Cognizant ( CTSH ) reported strong bookings and market share gains, investor focus shifted to the sharing of AI-driven productivity gains with clients, which weighed on the stock. Capital One ( COF ) also detracted, as management guided to higher e...
Key PointsAlthough the S&P 500 and Nasdaq Composite hit new highs last week, their recent bounces may prove fleeting because of one all-important economic data point.
Key PointsAlthough the S&P 500 and Nasdaq Composite hit new highs last week, their recent bounces may prove fleeting because of one all-important economic data point.
FTSE 100 slides and UK gas prices up amid fears strait of Hormuz will be closed for extended period Business live – latest updates Oil prices rose sharply and European stock markets fell on Monday, after the US seizure of an Iranian vessel hit hopes for a peace deal. Brent crude, the international benchmark for oil prices, rose by as much as 5% on Monday to $95.50 (£70.75) a barrel. Continue readi...
FTSE 100 slides and UK gas prices up amid fears strait of Hormuz will be closed for extended period Business live – latest updates Oil prices rose sharply and European stock markets fell on Monday, after the US seizure of an Iranian vessel hit hopes for a peace deal. Brent crude, the international benchmark for oil prices, rose by as much as 5% on Monday to $95.50 (£70.75) a barrel. Continue reading...