Sharing our convictions

Clear convictions are a prerequisite for investment success. Our convictions are the result of our relentless in-depth analysis and calculations. We share our findings so that clients can invest with conviction too.

TwentyFour Asset Management
TwentyFour Blog

$ Repo Rates Surge

There has been a bit of nervousness to say the least in US money markets over the last few days. The overnight repo rate in dollars surged to levels not seen since the aftermath of the financial crisis, touching almost 10% on Tuesday. During the financial crisis the high dollar repo rates were a clear sign of trouble in the banking system, so it’s natural that investors might be uneasy about this. We should stress upfront that this is not the case today, the spike in the repo rate is a short term technicality created by a confluence of events, none of which should be worrisome, but in which in aggregate created a shortage of dollar cash in a short space of time and over a very short period.

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TwentyFour Asset Management
TwentyFour Blog

Perfect Conditions For Heavy Bond Issuance

September new issuance has opened with a bang as we expected. Volumes are high and the issuer types are diverse, with a slant towards more frequent borrowers who tend to have their ducks permanently lined up in order to jump on favourable conditions. We expect this trend to continue throughout September as bankers push borrowers to take advantage of what could be one of the best opportunities they might see this cycle.

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TwentyFour Asset Management
TwentyFour Blog

Brexit – Approaching the End Game

With Brexit uncertainty having ratcheted up a number of notches since Prime Minister Boris Johnson sought to prorogue parliament, yet again investor attention is focused on what impact a hard Brexit could have on sterling assets, and how to best protect themselves from associated volatility. Since the Brexit referendum in 2016, our view has been that safely capturing the ‘Brexit premium’ priced into many sterling assets was a way to enhance value for investors. However, we have always had a cautious view on what Brexit could ultimately look like, and currently it seems clear that the chance of a hard Brexit has increased significantly.

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TwentyFour Asset Management
TwentyFour Blog

A Prorogation of Parliament

Yesterday, the Queen approved a request from the Prime Minister, Boris Johnson (‘Bojo’), to suspend Parliament from 10th September to 14th October. This means that when MPs return from summer recess next Tuesday, they could have as few as four days sitting in Parliament before it is suspended again. The Government have argued that this is following procedure – on average a Parliamentary session lasts a year and then is suspended before a Queen’s speech begins a new session – the current parliamentary session has lasted two years. A new session allows the Government to outline its agenda, as well as resetting quotas for certain mechanisms such as Private Members’ Bills.

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TwentyFour Asset Management
TwentyFour Blog

An ECB Rate Cut Will Make QE Inevitable

The European Central Bank faces quite a conundrum ahead of its upcoming monetary policy meeting on September 12. ECB President, Mario Draghi, has clearly signalled that a cut to the refinancing rate (currently at minus 40bp) is likely and markets are now pricing this in with an 85% probability. The problem is, the ECB has also signalled that it will simultaneously consider tiering the bank reserves this rate actually applies to.

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TwentyFour Asset Management
White Paper

UK ABS: Braced For a Boris Brexit

With the election of Boris Johnson as leader of the Conservative Party, and subsequently as the next UK prime minister, the chances of a ‘no-deal’ Brexit took a decisive tick upwards. We believe the UK ABS market will be an effective defensive holding against the deep uncertainty around the Brexit outcome, and one which could also offer some material spread upside given the premium currently being priced into UK assets.

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