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Mark Williams: Why Asia needs more bankruptcies

On the last day of August, the board of Hanjin Shipping, the world’s seventh largest container shipping company and South Korea’s biggest, unexpectedly voted to file for court receivership. The surprise was not that Hanjin was an unviable business: at over 700% debt to equity, with global container shipping overcapacity continuing to rise, the company had been in dire straits for some time. This was reflected by a 95% share price fall over the previous five years.  What wasn’t predicted was that no-one extended further loans to a company of this size. The South Korean government and the country's banks, maybe influenced by the taxpayers, had had enough.

Olly Russ: What a pick-up in UK rate expectations means for markets and currencies

Ever more lax monetary policy has been the trend of the recent past, but will it be the trend of the near future?

The unanimous response from the world’s central bankers to the lacklustre global recovery after the financial crisis has been to cut rates, and pursue various forms of quantitative easing. When such policies have failed to produce the desired result, the solution has always been to produce more of the same. A perusal of current key central bank rates shows the US with a Fed funds target at 0.5%, the UK at 0.25%, the eurozone is 0% and Japan is -0.1%.

Jamie Clark: The dangers of income concentration

Stephen’s blog – “$ earners – one sector to buy and one to avoid” – outlined the thematic rationale for exploiting short-term US dollar strength to exit Royal Dutch Shell, our final position in an oil & gas sector with rapidly deteriorating earnings prospects. The absence of oil & gas sector holdings from our portfolio adds to the four popular, but compromised income sectors that we highlighted in a prior update: mining, utilities, tobacco and incumbent banks. In our income fund, we are invested in stocks which have little commonality with the top contributors to UK dividend income, but we are still confident of beating the market’s yield over the next 12 months.

Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a regulated investment advisor or licensed stock broker before investing.

Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.