Perspectives Blog

Credit alternatives in government-backed debt

Columbia Management, Investment Team | June 23, 2014

…k provides working capital guarantees, export credit insurance, loan guarantees and direct loans. Over its history, the Ex-Im Bank has supported over $550bn exports, covering industries such as aircraft, energy, construction, mining and medical equipment. Principal and interest on the Ex-Im notes are guaranteed by the Ex-Im Bank, which is backed by the full faith and credit of the U.S. government. Notes are subject to prepayment risk from optiona…

Harvesting a New Moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 23, 2014

…the diverse sub-climates must be the call for level-headedness within the corporate mindset. We like it when companies tell us they are prepared to invest for growth but are now tighter in spending every penny. As an example, mining giant BHP has been tightening the payback horizon for new capital expenditure, which means de-bottlenecking projects takes precedence over projects which need longer term projections to justify commercial viability. A…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

…this theme as increasingly, the level of automation determines competitive cost advantage rather than location in lower human labor cost geographies. This trend has now extended well beyond robotics in factory production. In mining, for example, where general capex has plunged on falling demand from China, spending is moving forward on items such as increasingly autonomous trucks, trains and even drilling machinery. Large scale agriculture is fo…

How bad is China’s credit crisis?

Weili Jasmine Huang, Senior Portfolio Manager | February 3, 2014

…how big is the issue? The troubled Rmb3 billion (US$496 million) trust product issued by China Credit Trust (CCT) and distributed by ICBC, China’s largest bank was on the brink of default as the funds were invested in a mining company that almost went bankrupt. Under government intervention, investors will receive principal in full with some haircut in interest payment. It is believed that the costs will be shared among CCT (issuer), ICBC (…

A tale of two labor markets

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | November 11, 2013

…d revisions to prior months. Obviously there was a modest drag from government job cuts of 8K, all at the Federal level. However, gains in goods producing industries excelled with manufacturing (+19K), construction (+11K) and mining (+5K) all above trend. This is good news as these are higher wage industries. But the strongest gains were seen in the retail (+44K) and the leisure/hospitality (+53K) industries, noted for both lower wages and hours….