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Irish Independent
27-05-2025
- Business
- Irish Independent
Stock markets rebound after latest Donald Trump tariff U-turn
The picture was much the same across Europe after Mr Trump said he would extend a deadline for talks into July. Markets in London and New York were closed for a long weekend. The Stoxx Europe 600 Index gained 1pc. In Ireland, the Euronext Dublin was up slightly less, with the Iseq 20 index of leading Irish shares gaining 0.92pc, with broad gains across sectors. The rebound came after stocks fell in Europe on Friday when Mr Trump threatened a shock 50pc levy on the EU starting June 1. He had complained that the EU lacked urgency in trade talks and unfairly targeting American companies with lawsuits and regulations. The rebound on Monday came after he agreed to push the deadline for a deal to July 9 following a phone call with European Commission president Ursula von der Leyen. "This is nothing more than the usual 'threat and retreat' that has been the modus operandi of this tariff tennis we have witnessed since the start of the year," said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. "European valuations outperforming in this context and the EUR progressing vis-a-vis the dollar are yet more signs that European stocks continue to look attractive in this high-uncertainty environment." The EU had been slated for a 20pc tariff under the reciprocal rates announced in April, and a temporary pause took the rate down to 10pc through July 9. Ensuing expectations for a trade deal lifted sentiment, with the Stoxx 600 bouncing 18pc from an April low through its recent high last week. Cyclical stocks had a sharp rally. "'Less bad news' has been lifting valuations, but now we need 'more good news' to fuel this rally – good news on both the fiscal front and the growth front," said Mr Ielpo. Among individual movers, Thyssenkrupp AG advanced 8.3pc after it said it planned to become a strategic holding company with independent business segments.
Yahoo
28-03-2025
- Business
- Yahoo
Goldman, BNP See Korean Convertible Boom as Shorting to Resume
(Bloomberg) — South Korea may see a wave of convertible bond issuance once a short-selling ban is lifted soon, thanks to the likely return of hedge funds that are major buyers of the hybrid debt. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Why Did the Government Declare War on My Adorable Tiny Truck? How SUVs Are Making Traffic Worse Trump Slashed International Aid. Geneva Is Feeling the Impact. These US Bridges Face High Risk of Catastrophic Ship Strikes A senior banker at Goldman Sachs Group Inc. (GS) and money managers at BNP Paribas SA ( and Lombard Odier Investment Managers are among those projecting a jump in convertible issuance, which dried up in the wake of Korea's shorting ban in late 2023. The drop was particularly acute in dollar convertibles, popular among global arbitrage investors who typically buy the debt while shorting the underlying stock. 'Lifting the short-sale ban will be a game changer for the convertible bond primary market,' said Arnaud Gernath, chief investment officer of convertible bonds at Lombard Odier Investment Managers. 'Pipeline is still developing and we expect new and former convertible bond issuers to come to the market.' A revival in convertible bonds would offer companies a cheaper funding alternative, as the notes tend to carry lower coupon rates than traditional debt. For investors, the draw is an option to swap the securities for equity if conditions are met. Arbitrageurs would profit from their short position if share prices fall, or can convert the bond if the equity price rises enough. The removal of the short-sale ban, scheduled for March 31, is also expected to normalize pricing in the broader financial market, a positive for companies seeking funding. Selling of borrowed shares will be allowed for all of the roughly 2,800 listed companies, a first since the pandemic-era ban in March 2020. Korea only partially resumed the key hedge fund strategy in 2021, before placing a blanket ban in November 2023. New issues are expected to include notes from both investment-grade companies seeking lower-cost financing and high-yield issuers that have been previously shut out of the bond market, said Christian Lhert, head of Asia-Pacific equity-linked deals at Goldman Sachs. 'There was a healthy level of activity before the short-sell ban, and we expect to see that trend return in a similar fashion.' Korea saw a surge in dollar convertible sales in 2023, when three issuers — SK Hynix Inc. ( L&F Co., and LG Chem Ltd ( raised $4.2 billion in total through November. Since then, Kakao Corp. has been the only issuer in the US currency, according to data compiled by Bloomberg for Korean firms' public offerings. Issues through private placements have also fallen — though not as dramatically as public offerings — since such notes are denominated in the Korean won, making them less attractive for global investors. As convertible sales look set to come back, financing demand may be particularly strong from companies in high-growth industries such as tech and health care, and capital-intensive sectors including materials and industrials, according to Wei Li, head of multi-asset investments at BNP Paribas Securities (China). But once the ban is lifted, companies may opt to sell convertibles after any spike in stock volatility subsides. Korean authorities have put in place guardrails to minimize disorderly shorting bets following the resumption. That may make hedge funds, eyeing arbitrage strategies, hesitant to place big wagers at the start. A Bloomberg index tracking funds that use the convertible arbitrage strategy has gained 13% over the past year, compared with 9.3% for a gauge of hedge fund strategies overall. The revival of convertible sales 'will be like the blessed rain following a drought for companies that are financially distressed,' said Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. He expects firms such as Lotte Chemical Corp. ( to resort to convertible bonds to raise capital. —With assistance from Jenny Jiyun Choi, Dave Sebastian and Julia Fioretti. Business Schools Are Back Google Is Searching for an Answer to ChatGPT A New 'China Shock' Is Destroying Jobs Around the World The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? How TD Became America's Most Convenient Bank for Money Launderers ©2025 Bloomberg L.P. Sign in to access your portfolio
