The “scam of the
year” was the sale of Yukos subsidiary Yuganskneftegas, and it demonstrated “the
lack of rules” in Russia. This appraisal came not from a disenchanted Yukos
investor, but Vladimir Putin’s senior economic advisor, Andrei Illarionov. If
senior government officials have lost faith in the Russian market, should I be
heading for the exits?The Bank of England is worried about the search for
yield among hedge funds, especially those that use complex strategies. In the
BofE’s latest review of the financial system’s stability, it noted that
these strategies can cause the markets significant liquidity problems if they
have to be unwound quickly (as happened during the LTCM crisis in 1998). Are my
hedge funds among those that could be caught in a liquidity trap? What would it
mean for my investments? Companies must start deducting the value of employee
stock options from their profits as of their first financial statement after
June 15 of this year. Private equity lobbyists say this will hurt small
companies that cannot otherwise afford to attract top talent; transparency
advocates say that not expensing options is tantamount to lying. When the
transition takes place, will it affect the market values of firms in my
portfolio? Will it hurt growth stocks in general? Mutual funds returns beat
those of hedge funds in 2004, according to Morningstar, the fund analysis firm.
The average return for all mutual funds was 8.35 percent in the year to
end-November. The CSFB Tremont Index of hedge fund performance showed a 7.9
percent return over the same period. Is this an aberration, or are mutual funds
again poised to outperform hedge funds in 2005? China will allow options
contracts to trade this year, giving investors another tool to gain exposure to
the country’s economy and to manage their financial and business risks. The
first instruments will be options on commodity futures for wheat and copper.
What does this development mean for my own business opportunities and
investments in China?
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