NTXFY - Natixis S.A.

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21.69
-1.78 (-7.58%)
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Previous Close23.47
Open23.97
Bid0.00 x 0
Ask0.00 x 0
Day's Range22.06 - 22.47
52 Week Range17.50 - 47.40
Volume872
Avg. Volume1,974
Market Cap6.802B
Beta (5Y Monthly)1.17
PE Ratio (TTM)3.50
EPS (TTM)6.19
Earnings DateN/A
Forward Dividend & Yield8.76 (37.34%)
Ex-Dividend DateMay 29, 2019
1y Target EstN/A
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  • Natixis’ Equity Derivatives Losses Soar to 250 Million Euros
    Bloomberg

    Natixis’ Equity Derivatives Losses Soar to 250 Million Euros

    (Bloomberg) -- Natixis SA, the French investment bank that embraced complex trades as a key money maker, has lost about 250 million euros ($274 million) so far this year on equity derivatives.About 150 million euros of the losses have occurred since April, according to people familiar with the matter. The results are partly driven by corporations slashing their dividends because of the coronavirus, the people said, asking not to be named as the details aren’t public.While the results may improve as the year goes on, the trades have dealt another blow to Chief Executive Officer Francois Riahi. For now, the hit is similar to the one Natixis took on Korean equity derivatives in 2018, a debacle that attracted scrutiny from the European Central Bank.Equity derivatives are contracts that derive their value from common shares. Natixis, like most investment banks, doesn’t publicly disclose how much it makes from them. They’re housed in the bank’s equities-trading division, which could offset losses with stronger performances in other trades.“These figures do not reflect the situation of our equity business as presented in our financial communication statements neither in Q1 nor year to date,” Benoit Gausseron, a spokesman for Natixis in Paris, said in an emailed statement. “As a reminder, in Q1 2020, our equity business featured minus 32-million-euro revenues under the effect of dividend cancellations, some of them occurring also in April, as one can see from public market information.”Natixis shares fell 5.5% to 1.88 euros at 12:32 p.m, the second-worst performer on the Bloomberg Europe 500 Banks and Financial Services Index. The stock has lost more than half its value this year.The bank’s overall equities division reported a 126% plunge in revenues for the first quarter. The result included a 130 million-euro loss linked to companies cutting their dividends, according to a presentation.Natixis and its crosstown rivals BNP Paribas SA and Societe Generale SA fared far worse than their U.S. counterparts in the tumultuous first quarter, thanks to their use of equity derivatives known as structured products, multilayered securities that get increasingly difficult to manage as markets fluctuate.Traders at the French banks typically use derivatives linked to dividends as part of their efforts to hedge against possible losses. Yet this strategy was roiled when corporations began canceling payments to shareholders as a result of the coronavirus, Bloomberg has reported.Riahi, a Natixis veteran, has spent much of the past 18 months repairing the damage caused by the Korean trades. Since August, the bank has hired a new head of equities, a new Asia-Pacific team, a new chief risk officer and replaced its global markets head.The CEO was asked on an earnings call on May 7 if he should now consider ditching the equity-derivatives business altogether.“We cannot say that in the medium run we can be happy of what has been generated by equity derivatives,” Riahi responded. “But we are not going to make decisions based on just this.”(Updates with Natixis share price in sixth paragraph, adds to statement in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Some Natixis (EPA:KN) Shareholders Have Taken A Painful 71% Share Price Drop
    Simply Wall St.

    Some Natixis (EPA:KN) Shareholders Have Taken A Painful 71% Share Price Drop

    Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. For...

  • Blown-Up Trades at Heart of French Banks Erase $1.5 Billion
    Bloomberg

    Blown-Up Trades at Heart of French Banks Erase $1.5 Billion

    (Bloomberg) -- A key money maker for French investment banks has blown up just as they prepare to deal with the fallout from the coronavirus crisis.BNP Paribas SA, Societe Generale SA and Natixis SA all saw revenue from equities trading wiped out in the first quarter by heavy losses on complex derivatives, an area of traditional strength. Most of their rivals navigated the market panic more successfully in the wake of the outbreak, posting double-digits gains from the same business.The result in Paris was a slump of 1.4 billion euros ($1.5 billion) in equities revenue that overshadowed a strong performance in fixed-income trading. At a time when lenders have to set aside billions to prepare for defaults by borrowers ruined in the unprecedented lockdowns, at least one of the French firms indicated it will take a closer look at whether the derivatives business is still worth the risk.“We can’t say in the medium run we can be happy with what we generated by equity derivatives,” Francois Riahi, the chief executive officer of Natixis, said on a call after being asked whether the bank would consider exiting the business. “But we aren’t going to make decisions based on just this. We are going to review what we want to do and don’t want to do in the future.”One of the reasons for French banks’ equities-trading disaster is that they pursue structured products -- multi-layered securities that get increasingly difficult to manage when markets fluctuate -- over other equity-derivatives businesses that saw record volumes in the first quarter. Their traders were battered even further when corporations began canceling their dividends, key components in many of their complicated deals.Equities-trading revenue at Natixis tumbled 126%, the smallest of the three banks said late Wednesday. BNP Paribas slumped to its worst result in equities since at least 2014 and SocGen saw the poorest performance since the 2008 financial crisis.The results contrast with gains across Wall Street banks, led by Bank of America Corp. Equity-derivative traders at JPMorgan Chase & Co. brought in about $1.5 billion of revenue, at least twice what they normally do, Bloomberg reported.French banks missed out on these gains because they are relatively small players in businesses such as flow-equity derivatives, which include options linked to the S&P 500. Demand for these products surged to records in the chaotic first quarter as investors rushed to protect their holdings and wager on soaring market volatility.Spokeswomen for BNP Paribas and SocGen in London declined to comment. A spokesman for Natixis in Paris also didn’t comment.BNP Paribas and SocGen got just 12% of their combined stock revenue in 2019 from flow and corporate equity derivatives, little more than half of what their 10 biggest rivals got, according to data from Coalition Development Ltd. By contrast, they got 39% from structured products, almost three times as much as their competitors.The French banks are among the biggest players in the market for structured products, complex securities that are typically linked to the performance of a stock or an index of shares. A popular example is the autocallable, which pays an attractive coupon as long as the underlying stocks don’t fall below a preset amount.The products are popular with high net-worth clients and are also sold to retail investors in Japan and South Korea. But their complexity makes them fraught with danger for the banks that arrange them. Natixis lost hundreds of millions of dollars when trades linked to Korean autocallables went awry in late 2018, losses that attracted scrutiny from the European Central Bank.Read More: How Natixis Lost Almost $300 Million in a Black Hole in AsiaBanks that arrange structured products enter into a series of offsetting transactions to protect themselves from losses. Yet this becomes increasingly costly when markets become volatile. All three lenders cited hedging costs as a key factor explaining the trading results.Traders at the French banks typically use derivatives linked to dividends as part of their efforts to hedge, according to Eric Barthe, head of financial engineering at Anova Partners in Zurich. This strategy was upended when corporations began canceling payments to shareholders, some in response to requests from regulators, he said.​“Hedging them is a complex job and can be costly when the quantitative models the banks use fail to predict reality,” said Barthe, who recently analyzed the losses. “What we have seen on dividends this year is typically something most models would not have captured.”​SocGen, BNP Paribas and Natixis lost more than half-a-billion euros combined from the canceling of dividends, accounting for about 40% of the decline in equities-trading revenue from a year ago. On a May 5 call with analysts, BNP Paribas Chief Operating Officer Philippe Bordenave said this was “a very isolated one-off loss.”‘Brutal Reduction’“We went through extraordinary dislocations of the market in the second half of March,” SocGen Chief Executive Officer Frederic Oudea said in an interview on Bloomberg TV. There was “this brutal reduction -- sometimes going to zero -- of dividends.”For the CEOs of all three banks, the losses are an embarrassing setback because they hit a core business that they have defended for a long time. Oudea just restructured the investment bank, emphasizing SocGen’s traditional strength in equities and related derivatives after exiting or refocusing some fixed-income trading and cutting jobs. The firm is now amending its business model and looking to develop products that are less complex and easier to manage, a person familiar with the matter said.BNP had been burnt by derivatives before, when its traders were flummoxed by sharp market moves in late 2018 and a series of U.S. trades that went awry and lost tens of millions of dollars. CEO Jean-Laurent Bonnafe has since sought to bolster the equities unit, agreeing last year agreed to take over Deutsche Bank AG’s prime brokerage clients to add market share.At Natixis, the first quarter ended a brief respite for CEO Riahi, who had been trying to draw a line under a series of missteps since taking over in June 2018, including the losses on Korean securities, a liquidity scare at its H2O Asset Management subsidiary and oversight problems.“The lesson is that there’s always another risk lurking around the corner,” said Benjamin Clerget, a former equity-derivatives trader at SocGen and ex-fund manager at Banco BTG Pactual SA’s hedge-fund arm. “Bank models incorrectly showed there was no risk.”(Updates with responses, SocGen amending business model)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Natixis Joins French Equities Wipeout With $140 Million Hit
    Bloomberg

    Natixis Joins French Equities Wipeout With $140 Million Hit

    (Bloomberg) -- Natixis SA joined its French peers in taking a hit from equities trading as market turmoil and dividend cancellations following the outbreak of the coronavirus forced it to mark down assets.Equities trading revenue was more than erased by a 130 million-euro ($140 million) writedown when companies started to pull their dividends, contributing to a 204 million-euro net loss for the first quarter. Income from debt trading rose 46%, the bank said late Wednesday, beating peers BNP Paribas SA and Societe Generale SA as well as the Wall Street average.The quarter ends a brief respite for Chief Executive Officer Francois Riahi, who had been trying to draw a line under a series of missteps since taking over in June 2018, including trading losses on Korean securities, a liquidity scare at its H2O Asset Management subsidiary and oversight problems. The bank put aside 193 million euros for credit losses, mainly to account for loans to oil and gas companies.Natixis pushed back its next strategy update to the end of 2021 and lowered a target for a key measure of capital strength -- the common equity Tier 1 ratio -- to 10.2% for this year and next, from 11.2%.Equities HitThe equities trading performance mirrored that at Societe Generale and BNP Paribas, where traders were also blindsided when companies started to cancel dividends. Each of those firms took a 200 million euro hit in the quarter from complex products such as dividend futures.Natixis’s biggest businesses are investment banking and asset management. It’s one of the largest fund managers in Europe, owning a collection of boutiques that oversee about 828 billion euros across the globe. Investors pulled 8 billion euros from its affilates’ funds in the first three months of the year, with the virus-fueled market plunge helping send its assets under management 100 million euros lower.Natixis also took a hit of 117 million euros related to the disposal of an almost 30% stake in credit insurer Coface. The bank had previously flagged that the sale would result in an impairment.Complex ProductsNatixis has long eschewed trading common stocks and bonds in favor of more lucrative and complex financial products, such as derivatives linked to baskets of shares and so-called collateralized loan obligations that pool together high-risk debts. After the losses at the end of 2018, questions emerged over whether Riahi and his team can manage the risks of such a strategy.To reassure investors and regulators, the bank recently hired a new global head of risk from JPMorgan Chase & Co. and a batch of senior traders in Asia, while creating a new role to specifically oversee risks in the U.S.(Updates with Coface details in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Pandemic and Politics Push Hong Kong’s Economy Into Record Slump
    Bloomberg

    Pandemic and Politics Push Hong Kong’s Economy Into Record Slump

    (Bloomberg) -- Hong Kong’s economy suffered its worst quarter on record, extending the first recession in a decade as the coronavirus pandemic battered a city already weakened by political unrest.The economy contracted 8.9% in the first quarter from year-ago levels, according to the government. The decline surpasses the previous record of -8.3% in the third quarter of 1998 and a 7.8% contraction in the first quarter of 2009, the two worst readings in data back to 1974, according to the Census and Statistics Department Hong Kong.The latest decline also marks the third straight quarterly contraction for Hong Kong, the longest such stretch since the aftermath of the global financial crisis in 2009. The economy started shrinking from the third quarter of last year amid violent street protests and a government crackdown, political factors that remain unresolved.“Our economic situation is very challenging, we are deep into recession,” Financial Secretary Paul Chan said at a press conference after the data was released. “Globally the epidemic is yet to be put under complete control. That will affect our export, that will also affect international traveling and business investment. Going forward, the second quarter, we believe that even if there is improvement, the improvement will be gradual and small.”A 10.2% drop in private consumption from a year earlier was a major driver for the contraction, according to the government report. Total exports of goods sank 9.7% in the period, while exports of services plummeted 37.8%. Government spending grew by 8.3% from a year ago.Assuming the virus crisis improves, Hong Kong will come out of recession gradually toward the end of the year, Chan said. On Sunday, Chan warned of the worst full-year performance on record with a contraction of as much as 7%, after the economy shrank 1.2% last year.“Economic activities are likely to stay subdued in the near term if the threat of the pandemic continues,” a government spokesman said in the release. “Hong Kong’s near-term economic outlook is subject to very high uncertainties, hinging crucially on the evolving global public health and economic situations.”Developments in the U.S.-China relationship, geopolitical tensions and global financial market volatility also warrant continued attention, the spokesman said. Revised figures with a more detailed breakdown are due on May 15.Easing Controls“The Hong Kong economy can’t rely solely on fiscal stimulus to get back to normal,” said Iris Pang, greater China chief economist with ING Bank NV in Hong Kong. “Consumption will continue to be bad in the second quarter, though may not be worse than the first on a quarter-on-quarter basis. That’s due to an extra hit on consumption from violent protests and social distancing measures.”Even as the city prepares to ease some social distancing measures amid a steady improvement in the local outbreak situation, the hit to global commerce and the threat of renewed anti-government unrest means activity is likely to remain depressed. Unemployment is rising with tourism, retail, transport and other industries decimated.The extended downturn’s impact can be especially seen across the city’s struggling small and medium-sized businesses, which have borne the brunt of the impact from protests since last year and now the coronavirus.“Hong Kong has been a risk-taking society relative to starting a business, but the situation going on the last year will create long memories in people’s minds,” said Todd Handcock, chairman of the Canadian Chamber of Commerce. “It’s been a very challenging year for SMEs in Hong Kong. The unfortunate reality is some of these will not survive and others will struggle for a very long time.”As of December, 340,000 SMEs accounted for more than 98% of all business units and employed some 1.3 million people, or about 45% of the total excluding civil servants, according to government data.Sentiment among small businesses is sitting near a record low while those reporting a need for credit jumped to an almost four-year high of 8.8%, March government data show.“If we all fold, the unemployment levels are going to skyrocket in this city,” said Bella Dobie, co-founder and managing director of Hong Kong branding and marketing firm Orijen. The firm has six full-time staff including Dobie and has been in business since 2000. “The economy of Hong Kong has been struggling since the start of the protests and Covid-19 is just a double whammy.”The government has taken steps to address the looming employment crisis through multiple rounds of stimulus spending, most prominently through an HK$80 billion wage subsidy program that is not expected to begin distribution until June.Those businesses that do survive will likely emerge with smaller, leaner operations, with lasting implications on the wider economy as jobs that once existed may not return. Total employment in the city shrank by a record 3.6% in March.As of December, the number of job vacancies in the private sector of Hong Kong totaled about 54,000, down 30% from a year ago, according to government data. Vacancies in retail and accommodation and food services plummeted 44% and 65% respectively.The threat of protests resuming once the virus fades and measures forbidding group gatherings ease could also further extend the pain for businesses and the economy.“It’s about the huge uncertainty of the city’s future,” said Alicia Garcia Herrero, chief Asia Pacific economist with Natixis SA. “Anybody who lives here understands it, you don’t even know what is going to happen tomorrow.”(Updates with comments from Paul Chan and an economist.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Barrons.com

    New Active ETFs May Look a Lot Like Existing Mutual Funds. That’s a Good Thing.

    A volatile market has sparked interest in active management, and new rules have made actively managed ETFs easier to launch. What to watch for as big firms roll out new products.

  • Hedge Fund Stars Have to Learn to Take ‘No’ for an Answer
    Bloomberg

    Hedge Fund Stars Have to Learn to Take ‘No’ for an Answer

    (Bloomberg Opinion) -- With the coronavirus pandemic triggering wild price swings, hedge funds have got their dancing shoes on as they seek to make the most of volatile values and atone for their underperformance in recent years. While the temptation is for traders to load up on risk to boost profits and bonuses, strutting their stuff like drunken uncles at a particularly raucous wedding, a couple of recent blowups suggest that the risk managers charged with curbing those enthusiasms need to stand firm in setting and abiding by risk limits.  At Graham Capital Management, which oversees about $15 billion and specializes in global macro, a portfolio manager called Jeremy Wien lost a ton of money speculating on equity volatility, a measure of how much share prices move that in March quadrupled in the space of a few short weeks. The scale of the loss — $500 million gone from a $4 billion absolute return fund, according to my colleagues at Bloomberg News — suggests the U.S. firm didn’t step in quickly enough to stanch the bloodletting once the cracks in the position started to appear.At H20 Asset Management, which ran into trouble last year after loading up on illiquid debt, a fund that lost 45% last month was downgraded by fund-rating firm Morningstar Inc. this week. H2O, which managed $34 billion at the end of last year, is run by Bruno Crastes and Vincent Chailley and backed by French bank Natixis SA. Morningstar singled out “bold macro bets” the pair are responsible for that it said “were not adequately reined in by formal risk controls” as its motivation for downgrading their Allegro fund to negative, the lowest level of its five-rung scale:We think the balance of power at H20 is too strongly tilted in favor of portfolio managers. As an example, risk management cannot force portfolio managers to adjust exposures immediately if a risk limit has been breached because of market movements rather than active changes.Risk managers at hedge funds need to be especially vigilant about the bets their traders are making to profit from current market dislocations or there's a danger they'll repeat the mistakes made by their banking peers that kindled the global financial crisis a decade ago, albeit on a shortened and potentially more explosive timescale.Back then, the risk management officers at the world’s biggest investment banks had found themselves unable to say “no” to increasingly risky bets . That had disastrous consequences for the economy. In an unsigned 2,000 word article published by the Economist in August 2008, an unidentified risk manager at what the weekly said was a large global bank admitted that the pursuit of profit had overridden prudence for several years:Most of the time the business line would simply not take no for an answer, especially if the profits were big enough. This made it hard to discourage transactions. If a risk manager said no, he was immediately on a collision course with the business line. The risk thinking therefore leaned toward giving the benefit of the doubt to the risk-takers.Banks — and their regulators — learned a hard lesson, and have curtailed many of their risk-seeking tendencies in the intervening years. The baton, though, has been passed on. So it’s vital that traders and portfolio managers in the investment community resist the temptation to chase returns by stepping outside of their risk boundaries. If they threaten to drift, risk officers should have the courage to restrain them — with the full and unconditional backing of their firm’s leaders and owners.At least one hedge fund has long understood the need for gatekeepers of the firm’s risk budgets to have the status to be able to stand up to its traders. In 2006, Alan Howard made Aron Landy, his chief risk officer, a partner at Brevan Howard Asset Management as a way to ensure he had sufficient clout to go head to head when disputes arose. Landy must have done a good job; he was promoted to chief executive officer in October when Howard stepped back from his management role to focus on trading. Meantime, Howard’s main $3.3 billion Master Fund is enjoying its best year since it started in 2003, and was recently up by more than 20% this year.Why should we care if a hedge fund chasing riches goes boom? Because, as Bank of England Chief Economist Andy Haldane said in a 2014 speech on the broader asset management industry, the danger of a fire sale of assets increases the possibility that “asset prices would be driven south, possibly to well below their long-term or fundamental value.”In short, a widespread market crash triggered by indiscriminate asset-dumping by failing hedge funds would affect all of our investments, be that in pension funds or other savings vehicles.  “As long as the music is playing, you've got to get up and dance,” Charles Prince, who was then CEO of Citigroup Inc., told the Financial Times in July 2007, four months before mounting losses and writedowns led to his departure from the disco. Hedge funds should be boogying hard — but with half an eye on the door, and always, but always, accompanied by a chaperone in the shape of a respected risk officer with the power to turn down the volume.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • The 60/40 Investment Portfolio Should Expand Its Borders
    Bloomberg

    The 60/40 Investment Portfolio Should Expand Its Borders

    (Bloomberg Opinion) -- The traditional 60/40 portfolio of U.S. stocks and bonds isn’t dead, but it has fallen on hard times. U.S. interest rates are hovering around zero and, even after a coronavirus-induced sell-off, the U.S. stock market isn’t cheap. For adherents of 60/40, it’s a good time to revisit some old assumptions.  When in doubt, tradition has it, investors should put 60% of their portfolios in U.S. stocks and 40% in bonds. Why 60/40? There’s no satisfying answer. A common explanation is that stocks can be expected to outpace bonds over time, so tilting the portfolio in favor of stocks is an easy way to reach for extra return without excessive risk. And why the U.S.? Well, there’s no place like home.That tradition has paid off. A 60/40 combination of the S&P 500 Index and long-term U.S. government bonds has returned 8.9% a year from 1926 to 2019, including dividends, or 6% a year after inflation. The results were even better during the last decade. The 60/40 portfolio returned 12.6% a year from 2010 to 2019, or 10.5% a year after inflation.Past isn’t prologue, however, and that admonition has never been more fitting for 60/40 portfolios. A widely cited barometer of real expected returns from stocks is the cyclically adjusted earnings yield, which uses an average of inflation-adjusted earnings over the previous 10 years. That yield for the S&P 500 Index is 4.8%, according to Bloomberg data. Meanwhile, the yield on inflation-protected Treasuries is a negative 0.2%. A 60/40 combination of the two produces an expected return of 2.8% a year after inflation. Investors don’t appear to have grasped that reality. In its most recent annual investor survey, French lender Natixis SA reported that U.S. investors expect their portfolios to generate returns of 10.9% a year after inflation. To put that delusion in perspective, the 60/40 U.S. portfolio managed to equal or surpass that mark just 9% of the time since 1926 over rolling 10-year periods, counted monthly. And those periods were all clustered around the 1990s, a decade with an enchanted combination of bond yields that fell from record highs and stock valuations that climbed to records. Suffice it so say, no one expects those tailwinds to return soon.Those who want a preview of what the next decade might look like should consider the recent experience of investors in other developed countries. Home bias, or the propensity to invest in one’s home country, is common to all investors. A recent paper by FTSE Russell examined euro zone home bias in equity allocations from 2008 to September 2019. It found, for example, that French pension funds invested 88% of their equity portfolios in French companies, which is 29 times France’s weight in the FTSE All-World Index. In Spain, the equity allocation of pension funds to local companies was 67 times the country’s weight in the FTSE index.Staying home paid off for a time. The MSCI French Index outpaced the MSCI All Country World Index, or ACWI, by 2.6 percentage points a year in euros from 1999 to 2007, including dividends, the earliest year for which numbers are available. And the MSCI Spain Index outpaced ACWI by 5.2 percentage points a year over the same period. But the cost of higher stock prices is lower earnings yields. By the end of 2007, the cyclically adjusted earnings yield was 4.2% in France and 3.7% in Spain. Since 2008, French stocks have returned 4% a year through February, lagging ACWI by 3.2 percentage points a year, and Spanish stocks have been flat, trailing ACWI by 7.3 percentage points a year.  France and Spain are hardly alone. While the U.S. stock market has soared since the 2008 financial crisis, the rest of the world has floundered. The cyclically adjusted earnings yield of the MSCI World ex USA Index, a basket of companies in developed countries outside the U.S., has swelled to 6.5% from 4% at the end of 2007. Similarly, the yield for the MSCI Emerging Markets Index has jumped to 7.2% from 3.8% over the same time. Value-minded investors can find even higher yields. The MSCI World ex USA Value Index offers an earnings yield of 9.5%, while the MSCI Emerging Markets Value Index packs a yield of 11%. If there’s ever a time for Americans to start leaving home, this is it.It won’t be easy. Given 60/40’s stellar past performance, investors are more likely to look back than forward. Also, overseas stocks have been laggards for years and have only tumbled further over time — and nothing repels investors like falling stock prices. The timing isn’t great, either. Everyone wants the comforts of home during a crisis.Unfortunately, there’s not much investors can do about the 40 because the U.S. still boasts some of the highest bond yields in the developed world. But when it comes to the 60, the value is overseas. So let’s tip our hat to the old 60/40 — and then give it an upgrade. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters

    MOVES-Boutique adviser PJ Solomon expands into energy restructuring

    PJ Solomon has hired Tero Jänne to expand its restructuring capabilities into the energy sector, the boutique investment bank said in a statement on Friday, at a time of significant dislocation in the oil and gas industry. The move has exacerbated pressure on U.S. shale producers, who were already being forced to cut costs and production by shareholders unhappy with returns during recent boom years, and associated energy companies. Joining in its debt advisory and restructuring practice in New York, but working closely with the bank's Houston-based energy team, Jänne will allow PJ Solomon to provide turnaround services to distressed oil and gas companies.

  • Reuters

    Morningstar reviews H2O Allegro fund on risk concerns

    Fund rating company Morningstar said on Tuesday it had placed the H2O Allegro fund, run by Natixis affiliate H2O Asset Management, under review as recent "extreme" losses raised concern over its risk management. The fund had posted losses of 17.9% on March 9 and 25.4% on March 12 as coronavirus fears and a sliding oil price hit markets, pushing the fund's volatility up to 40% on an annualised basis, Morningstar said in a note. "In the past, the fund has routinely exceeded its 7% to 12% average ex-post volatility target (referenced in the fund’s prospectus), but the extent of the recent derailment is alarming," Morningstar said.

  • Explosion in forex volatility cheers some, bruises others as virus fears drive swings
    Reuters

    Explosion in forex volatility cheers some, bruises others as virus fears drive swings

    Investors are scrambling to adjust their portfolios to a surge of volatility in foreign exchange markets, as the coronavirus outbreak and massive swings in oil prices roil currencies around the globe. Some of the recent moves in currencies have been among the most dramatic since the financial crisis. The Japanese yen notched a 5% price rise against the dollar between last Thursday and Monday, its largest three-day rally since 2008.

  • Bloomberg

    Hedge Fund Investors Take the Naked Volatility Test

    (Bloomberg Opinion) -- It’s only when the tide goes out that you find out who’s been swimming naked, the billionaire investor Warren Buffett famously opined. After the violent moves in stocks and bonds this week, H20 Asset Management’s traders need to keep hold of their Speedos.The firm, run by Bruno Crastes and Vincent Chailley and backed by French bank Natixis SA, saw its funds hammered by losses as stocks, oil and Italian bonds slumped on Monday. Its Multiequities fund declined by about 30% in a single day and erased six years of gains, while its Multibonds strategy lost 20%, as my colleagues at Bloomberg News reported on Wednesday.H20, which managed $34 billion at the end of last year, appears to have loaded up on wrong-way bets at exactly the wrong time. In a note to investors dated March 3 about its February performance, the fund manager said it had sold short-term volatility across U.S. and European equity markets; on Monday, the VIX index of U.S. equity volatility surged 30%.The fund had also increased its exposure to Italian government debt; on Monday, 10-year Italian yields surged 35 basis points to a two-month high of 1.44%. And its portfolios were long of oil —  which plunged 25% on the first trading day of this week for its biggest price drop since the 1991 Gulf War.But this is exactly how hedge funds should behave. They’re supposed to be at the cutting edge of finance, taking risky bets on the trades they back and piling on the leverage when they sniff out a high-conviction profit opportunity. Otherwise, they’re just like any other mutual fund, albeit charging much higher fees.In 1992, for example, George Soros, arguably the most famous hedge fund manager of all time, made more than $1 billion for his Quantum Fund by betting on a break of the currency peg that the British authorities were defending between the pound and the currencies that would ultimately be subsumed into the euro. His gains, though, were amplified by his willingness to back what he saw as a winning trade.“Shorting the pound was Stanley Druckenmiller's idea; Soros's contribution was pushing him to take a gigantic position,” Scott Bessent, who was then running Soros's London office, told author Steve Drobny for his 2006 book “Inside the House of Money.” As Bessent explained, “George used to say,`If you're right in a position, you can never be big enough.’”Of course, when you’re wrong, it can backfire big time – as H20’s investors are learning.H20 has made no secret of its use of leverage in its pursuit of outsize returns which, by and large, has been a successful strategy in recent years. Its Multibonds fund, for example, has delivered a five-year return of more than 94%, compared with the 17% from the JPMorgan Chase & Co. benchmark against which its performance is measured, according to the H20 website. That’s quite a remarkable degree of outperformance — the kind of index-beating return that hedge funds claim to be able to supply to customers.  Last June, after the Financial Times reported that H20 had loaded up on illiquid debt sold by German entrepreneur Lars Windhorst, Morningstar Inc. suspended the rating on one of its flagship funds. Investors responded by withdrawing almost 8 billion euros ($9 billion) from the firm in a month. Crastes and Chailley responded by delivering a masterclass in disaster management, featuring a robust video explanation of their rationale for making those investments.We’ll have to see whether H20’s clients are willing to stick with the firm during its current turbulent times. If they’re not, they might want to consider why they invested in a hedge fund in the first place.To contact the author of this story: Mark Gilbert at magilbert@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters

    RPT-Banks accuse Singapore commodity trader Agritrade of "massive" fraud

    At least 20 banks facing losses running into hundreds of millions of dollars from the collapse of Singapore-based Agritrade International Pte Ltd (AIPL) have accused the commodity trader of fraud, court documents show. Singapore's High Court appointed an interim judicial manager for the firm last month after rejecting its request for a debt moratorium on $1.55 billion in outstanding liabilities to dozens of creditors, including $983 million owed to secured lenders. The banks have filed cases in Singapore's high court to recover their money and allege fraud at AIPL, with Singapore's United Overseas Bank (UOB) and Malaysia's Maybank owed nearly $108 million each, documents show.

  • Reuters

    Banks accuse Singapore commodity trader Agritrade of "massive" fraud

    At least 20 banks facing losses running into hundreds of millions of dollars from the collapse of Singapore-based Agritrade International Pte Ltd (AIPL) have accused the commodity trader of fraud, court documents show. Singapore's High Court appointed an interim judicial manager for the firm last month after rejecting its request for a debt moratorium on $1.55 billion in outstanding liabilities to dozens of creditors, including $983 million owed to secured lenders. The banks have filed cases in Singapore's high court to recover their money and allege fraud at AIPL, with Singapore's United Overseas Bank (UOB) and Malaysia's Maybank owed nearly $108 million each, documents show.

  • Moody's

    Caisse Des Depots et Consignations -- Moody's changes outlooks on the long-term ratings of three French financial institutions to stable from positive

    Moody's Investors Service ("Moody's") today revised the outlooks to stable from positive on the Aa2 long-term deposit, issuer and senior unsecured ratings of Caisse Des Depots et Consignations (CDC), EPIC Bpifrance's Aa2 long-term issuer rating and SFIL's Aa3 long-term deposit, issuer and senior unsecured ratings. Moody's concurrently affirmed all these ratings. - CDC Ixis and Ixis Corporate & Investment Bank (Ixis CIB), now merged into Natixis.

  • Why Natixis S.A. (EPA:KN) Could Be Worth Watching
    Simply Wall St.

    Why Natixis S.A. (EPA:KN) Could Be Worth Watching

    Let's talk about the popular Natixis S.A. (EPA:KN). The company's shares saw a double-digit share price rise of over...

  • Natixis CEO Interview - Full Year 2019 Results (Video)
    PR Newswire

    Natixis CEO Interview - Full Year 2019 Results (Video)

    Natixis, the international corporate and investment banking, asset management, insurance and payments of Groupe BPCE reports its full year 2019 results. CEO François Riahi comments on results and outlook.

  • This $8.6 Billion Fintech Is Not Quite Cheap Enough
    Bloomberg

    This $8.6 Billion Fintech Is Not Quite Cheap Enough

    (Bloomberg Opinion) -- Consolidation in the digital payments industry has traditionally meant bold deals to buy fast-growing assets at sky-high valuations — with the acquirers often cheered on blindly by investors. Worldline SA has chosen a different path: A modestly expensive deal to buy struggling French peer Ingenico Group SA. Shareholders have frowned. Worldline Chief Executive Officer Gilles Grapinet must be wishing he’d stuck with convention.Ingenico has been a bid target for some time. It is weighed down by a handheld terminals business and has been playing catch-up in online payments. Late 2018 brought a management and strategy reset with the appointment of former Visa executive Nicolas Huss as CEO. Natixis SA, a French bank, dropped plans for a possible takeover not long afterwards, sending Ingenico shares to just 45 euros apiece. Just over a year later, Worldline is offering a combination of cash and its own stock that’s worth 123.10 euros a share based on its last closing price. That values Ingenico’s equity at 7.8 billion euros ($8.6 billion).Maybe Worldline should have moved sooner, but it would have struggled to coax its target to the table before now. An attempt at a deal last year would have been blatantly opportunistic, with Ingenico’s shares on the floor, and Huss’s elevation has bolstered the company’s bid defenses. Grapinet would have needed to offer a much bigger premium than the 17% that has secured this deal. What’s more, the transaction value of 15 times expected 2020 Ebitda is relatively sober in this part of the fintech sector. Fidelity National Information Services Inc. paid 29 times trailing Ebitda for Worldpay Inc. in July. Denmark’s Nets A/S succumbed to a leveraged buyout at 18 times Ebitda in 2018.The lower valuation reflects the fact that Worldline is not acquiring a business firing on all cylinders. The deal starts to look more pricey when you consider what the buyer is getting. Based on Ingenico’s expected financial performance for 2020, the starting return on the total 9.5 billion euros all-in cost (including assumed net debt) would be just 4%. Worldline reckons it can extract 250 million euros of financial benefits come 2024, when analysts forecast Ingenico could generate about 720 million euros in operating profit. Adjusting for tax, the returns might then get to a more reasonable 8%. Still, investors have to wait for it.What's more, Worldline’s board would expand to an unwieldy 17 members, including a director from the French state investment bank.Might things turn out better than Worldline’s shareholders believe? Grapinet has some options to do more than simply finish the recovery that Huss has started. One possibility would be carving out Ingenico’s terminals business and auctioning it to private equity firms. That would leave him with faster growing operations and help bring down net debt, which is likely to touch 2.5 times Ebitda after paying 2 billion euros for the cash part of the deal.It’s a reasonable piece of M&A, but no more. Investor caution is understandable. There may be higher quality targets out there. The snag is that Grapinet would have to overpay even more to get them.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Payment-Services Giant Worldline to Buy Ingenico in $8.6 Billion Deal
    Bloomberg

    Payment-Services Giant Worldline to Buy Ingenico in $8.6 Billion Deal

    (Bloomberg) -- Worldline SA agreed to buy rival Ingenico Group SA in a 7.8 billion-euro ($8.6 billion) deal the French technology companies say will form one of the largest payment-services providers.The two companies had been circling each other for years, and Worldline Chief Executive Officer Gilles Grapinet said on a conference call Monday that Ingenico’s reorganization last year made it the right time to bid.The takeover – the biggest of the year so far in Europe – continues last year’s spate of payments company mergers, which included a series of major deals from Fiserv Inc., Fidelity National Information Services Inc. and Global Payments Inc.Ingenico shareholders will receive 123.10 euros a share in cash or a mixture of cash and shares, the companies said Monday. That’s 17% higher than the stock’s last closing price. Worldline is also offering to buy bonds that are convertible into Ingenico shares. Worldline shareholders will own about 65% of the combined company.Ingenico gained as much as 14% in Paris on Monday, rising to 119.9 euros, the biggest intraday move in more than a year. Worldline fell as much as 8.6%.The deal looks “very positive” for Worldline at first glance, giving the company an opportunity to add to its European leadership team and increase its market share, analysts at Bryan Garnier & Co. said in a note Monday. The combined company will also have a more diversified profile than its U.S. peers, they said.Read more about Ingenico’s management shakeup here.The deal comes after a number of challenging years for Ingenico, which provides payments processing services to customers including banks, retailers and e-commerce sites, and is one of the few large firms to remain independent in the rapidly consolidating payments industry in Europe.Ingenico for years has been pushing to refocus from its legacy business -- capturing transactions on behalf of banks or credit card companies using hardware terminals in stores -- toward new services in areas like online shopping.In November 2018, Ingenico CEO Philippe Lazare was removed following a request from the board. Lazare, who led the company for 11 years, had been under increasing pressure over its performance and management struggled to convince investors of the merits of its legacy terminals business.Ingenico has since recovered, its shares more than doubling in the past year after Chief Operating Officer Nicolas Huss took over as CEO in a move many thought could lead to a potential deal. The same month, Natixis SA declined to bid for Ingenico after holding preliminary talks.“Timing is everything,” Grapinet said when asked on a call with analysts why the company didn’t attempt to buy Ingenico last year. “If you look at the stock price, it could’ve been a bargain, but I’m not sure the board of Ingenico would’ve been ready to sell.”Worldline was spun out of French computer-services provider Atos via an initial public offering in 2014, and with a 11 billion-euro market value is now bigger than its previous owner. In 2018 Worldline snapped up SIX Group AG’s payments business for 2.3 billion euros, in one of the first deals that sparked the ongoing wave of consolidation in the industry.“The combination of Worldline and Ingenico offers a unique opportunity to create the undisputed European champion in payments,” Ingenico Chairman Bernard Bourigeaud said in a statement Monday. “This transaction comes at the time of accelerating consolidation of the industry.”French state investor and Ingenico shareholder Bpifrance Financement SA said it “fully supports” the deal and in a statement said it was “committed to contribute its Ingenico shares to Worldline’s public offer and intends to become a long-term reference shareholder of the combined entity.” Bpifrance owns about 5.3% of Ingenico shares according to data compiled by Bloomberg.SIX Group and Atos, Worldline’s largest shareholders, are also in favor of the deal.Payments dealmaking may be set to continue. Worldline will become the “platform of choice for further consolidation in Europe” Grapinet said on the call.Investors have been keen to cash in on alternatives to traditional banking services. Vista Equity Partners is considering selling a stake in Finastra in a deal that could value the company at more than $10 billion including debt, Bloomberg News reported in October.Earlier in January Visa Inc. agreed to pay $5.3 billion for Plaid, a fintech firm that connects popular apps like Venmo to customers’ data in the established banking system.The combined market value of Ingenico and Worldline will be about 19 billion euros as of trading Monday, leapfrogging rival Wirecard AG.(Updates with context throughout, share price, comments from analyst call)\--With assistance from Tara Patel and Thomas Mulier.To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate LanxonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Is Natixis S.A. (EPA:KN) A Smart Choice For Dividend Investors?
    Simply Wall St.

    Is Natixis S.A. (EPA:KN) A Smart Choice For Dividend Investors?

    Today we'll take a closer look at Natixis S.A. (EPA:KN) from a dividend investor's perspective. Owning a strong...

  • Moody's

    Natixis US Medium-Term Note Program LLC -- Moody's announces completion of a periodic review of ratings of Natixis

    Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Natixis and other ratings that are associated with the same analytical unit. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.

  • Moody's

    Caisses d'Epargne Participations -- Moody's announces completion of a periodic review of ratings of BPCE

    Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of BPCE and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.

  • Moody's

    Liberty Series 2019-1 -- Moody's: No rating impact on Liberty Series 2019-1 after note conversion

    Moody's Investors Service says that the conversion of the Class A1 and Class A2 Notes into yen-denominated notes on 11 November 2019 (the Note Conversion) will not, in and of itself and as of this time, result in the downgrade or withdrawal of the current ratings of the notes issued by Liberty Series 2019-1. "IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS.

  • Moody's

    BPCE Home Loans FCT 2019 -- Moody's assigns definitive Aaa (sf) to Notes issued by BPCE Home Loans FCT 2019

    Moody's does not rate the EUR 100,000,000 Class B Asset-Backed Fixed Rate Notes due October 2054. The assets supporting the Class A Notes consist of French prime residential home loans backed by first economic lien mortgages or equivalent third-party eligible guarantees "prêt cautionné", hereafter called "caution-loans". The rating of the Class A Notes is based on an analysis of the characteristics of the underlying pool of home loans, sector wide and originator specific performance data, protection provided by credit enhancement, the roles of external counterparties and the structural integrity of the transaction.