Strategy Ideas

Executive director presenting company strategy, business audience

It is impossible to predict the macro zeitgeist in real time as a global political event of such seismic importance unfolds before my Bloomberg screen. So I go all cash and fly to Munich not to seek peace in our time but to revisit loony King Ludwig’s Bavarian Gothic fairy tales castles, the cafes of Schwabing/Marienplatz and visit Garmisch with my liebe Hausfrau. There will be a bloodbath in global finance in the next six months. Why? Bank credit default swaps suggest a rise in funding risk. This is Lehman all over again, only worse.

Note Brexit crude oil fell 5% on Brexit. The cost of bank risk will skyrocket in a world where Barclays and RBS shares can fall 20% in a single session. Is this negative for GCC banks, the largest component of regional stock markets? Is the Queen of England English (well, she is genetically German, thanks to Empress Vicky and Prince Al, the bearded dude on the big chair in Hyde Park!).

Defensive sectors? Note UK education publisher Pearson PLC rose 2%. So did Swiss pharma Novartis. Gold? If you are lucky enough to get a profit taking move down to $1310 for new money. It makes total sense to short Tesco with its huge sterling revenues but buy Carrefour, now 7% cheaper even though it has no real sterling revenues. Vive la France, vive MAF Holdings, vive Carrefour!

The real winner of Brexit? Boris Johnson, possibly the next Old Etonian Prime Minister. Donald Trump scored the marketing coup of the millennium by making sure he opened a Scottish golf resort on the day Brexit shook the sceptered isle, this green and pleasant land.

The Chicago Volatility Index has soared 32%, a compelling argument to sell put options on devastated UK banks. Why not Barclays New York ADR, down 30% overnight, a screaming option strategy. Jes Staley was one of the smartest investment bankers of my generation at J.P. Morgan and he will turnaround the 300 year old Quaker bank Bob Diamond’s LIBOR rigging banksters destroyed. Dividend cut? Yes. Gulliver’s travels? Futile since HSBC shares have been such a disaster despite $100 billion in write offs, legal fines, 80 business exits, a $109 billion Mexican money laundering fine, 50,000 payroll cuts, the $5 billion sale of HSBC Brazil to Banco Bradesco. Profit warning? Yes.

I have done my best to hedge global macro risk in 2016 by recommending (table pounding!) the most shunned, least foreign owned emerging market in Asia – Pakistan. This is a local play since the biggest holders of Pakistan sovereign Eurobonds are Khoja financiers of Zurich and the Gulf, not the big EM leemings in the City, New York and Singapore (Aberdeen Wallah!). Friends who trusted me on Pakistan lucked out in the best performing stock market in Asia or Europe in 2016. Bull market zindabad! Christmas came early on McLeod Road in Karachi.

I was horrified that so many Gulf family office and institutions have this touching faith in London property even though it is among the most overvalued bubbles on the earth. I have made no secret of my investment thesis on Makkah Umra hostels, an asset class immune to Brexit risk or even the Saudi credit cycle. To exploit a no brainer asset class it is unfortunately necessary to possess a brain, as some of the biggest and smartest families and institutions in the GCC know all too well.

Fund managers shares should be shorted Hundreds of billions of retail money will flee asset managers in US, Europe and, yes, the GCC. Bear markets are savage and merciless. I know. I barely survived several in my own life. How will UK fund managers sell funds on the Continent? Paybacks in Finanzplatz Frankfurt and the Ville Lumiere are being plotted against the City even as I write. Who to short? Notice Invesco fell 10% on Friday. Get real. Get out. A UK asset management platform is no leprosy due to Brexit. Outflows will escalate. Fees will shrink. Markets abroad will vanish. Balance sheets will tremble. Index funds will fail. Firms will die. Private equity firms? A screaming short, with both black stones and black rocks.

The markets assume the European project will unravel. Why else is London down 3% but Italy and Spain down 12 – 14% as I write. There are existential threats to the Euro with the elections/referendum this autumn against the regimes of Rey Manuel and Matteo Caesar, the coolest Florentine to rule Bella Italian since Lorenzo de Medici. If Italy/Spain exits, Monnet’s dream ends. Global equities then fall 50%, as they did in 2008 and 2001.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest
Latest posts

Meghna Agrawal

Meghna Agrawal, has 7 years of experience in corporate finance industry.  Currently she is a part of our investment banking and private equity team focused on creating long term value for our clients as a Senior Analyst.

Prior to ASAS Capital Ltd, she worked as a Finance controller in UAE’s largest airline “Emirates Airlines” and E&Y. 

She is a CFA charter holder and a qualified ACCA

Rajesh Gupta

Rajesh is a Chartered Accountant and an Executive MBA from NMIMS, Mumbai, India and have over 22 years of experience, including more than 16 years relevant experience in Investment Advisory and Portfolio Management.

Key competency areas are equity research, portfolio management, data analysis with deep understanding of business requirements in various international environments; well versed with regulatory requirements for financial services in different geographies such as India, UAE, Cayman Islands, and Mauritius.

Goneta Jakurti

Goneta, prior to her place in the Asas Team, spent over a decade at UBS in roles such as Trade Date Services, Fixed Income & Structured Products, JUNA Financial Products, Fixed Income Execution Trading and Securities, Specialist B4B Settlements & Implementation. She was furthermore the client Service Officer at Artorius Wealth, Zurich.

She holds a degree of Bachelor of Science in Business Administration from Fachhochschule Nordwestschweiz FHNW, Switzerland and speaks French, Italian, Spanish, Dutch, and Albanian.

Sana Javed

Sana Javed, has an experience of 13 years in the finance, corporate and private banking in the GCC region. Currently she is a part of our investment banking and private equity team focused on creating long term value for our clients as an Associate Director.

Prior to Asas Capital LTD, she was Finance Manager at Alghanim Industries a Kuwait based conglomerate, in Corporate banking with Citibank, MCB Bank, Mashreq Bank and Emirates NBD bank at various relationship management roles.

She holds a degree is Accounting and finance from Lahore University of Management Science in Lahore, Pakistan

Mangesh Shringarpure

Mangesh has over 25 years experience in financial services in UAE and India. He has worked for prestigious banks such as Standard Chartered Bank, BNP Paribas and Emirates NBD in Dubai. He was the Head of Priority Banking at SCB and BNP Paribas. At Emirates NBD Private Banking, he led a team of private bankers catering to the NRI segment and subsequently became Head of the Institutional Investor Group.

Mangesh has wide experience in investment products, financial advisory and wealth management. He holds a Masters in Management Studies from Mumbai University. 

Sanjeev Saxena

Sanjeev leads the Private Wealth Management business at Asas Capital. He has over 28 years of experience in Wealth Management, Banking, and Operations with Standard Chartered Bank and RAKBank. His most recent role was part of the Leadership Team at RAKBank. 

Sanjeev has been instrumental in launching new businesses as well as restructuring and turning around businesses. He holds a Bachelor of Engineering and a Masters in Business Administration from the University of Delhi.

Matein Khalid

Matein has 25 years of experience in international capital markets as an advisor to family offices and fund managers. He has worked for investment banks/hedge funds in New York, Chicago, London, and Geneva. In addition, he has been the CIO of a technology fund in San Francisco, a royal investment office in Dubai and a public insurance company listed on the DFM. 

Matein has four degrees in finance, economics and international relations from the Wharton School, University of Pennsylvania. He writes capital markets advisory columns for Khaleej Times, Gulf Business and Oman Economic Review and was awarded ICAEW prize for excellence in financial journalism, December 2011. He was also selected by MENA Fund magazine in MENA Power List, 50 most influential fund managers in the Middle East.

Himanshu Khandelwal

Himanshu has 15 years of experience in investment management across asset classes. He has been with Asas since its inception managing the proprietary equity investments and has executed numerous private equity transactions. Currently he heads our investment and advisory teams focused on creating long term value for our clients. 

Prior to Asas Capital, Himanshu worked as a portfolio manager in India’s largest financial services company, Kotak Securities with over USS$ 400 million assets under management. He also held analyst roles in reputable firms like CNBC and Bank of Baroda. He is a CFA charter holder and holds a Master’s degree in Business Administration from IBS Hyderabad.

Riyad Alhoraibi

Riyad has over 15 years of successful experience in Capital markets and Private Equity Investments. Prior to this, he was the CEO and Co-Founder of Sahara Global Investment, a propriety investment company based in Dubai. Riyad started his career working in the family business running for 50 years based in Jeddah, Saudi Arabia. 

The business has interests in retail, trading, real estate, and hospitality. Moving to Dubai, he made a move into investment banking starting at HSBC and then setting up Sahara Global Investment. He holds a degree in Bachelor of Economics and completed his MBA from The American University of Sharjah and is a member of Boards in a number of companies in Saudi, UAE, and the Middle East.