ValueAct (Jeffrey Ubben and Bradley Singer) discloses updated portfolio positions in 13F filing: New LITE position, lowered SLM STX holdings
Highlights from 2021 Q2 filing as compared to Q1 2021:
- New positions in: LITE (~0.97 mln shares)
- Increased positions in: NSIT (to ~2.84 mln shares from ~1.1 mln shares), BLD (to ~0.48 mln from ~0.22 mln)
- Maintained positions in: LKQ (~21.55 mln shares), BHC (~17.94 mln shares), CBRE (~10.23 mln shares)
- Closed positions in: FISV (from ~0.86 mln shares), OUT (from ~0.16 mln)
- Decreased positions in: TRN (to ~15.01 mln shares from ~23.11 mln shares), SLM (to ~20.58 mln from ~26.29 mln), STX (to ~17.38 mln from ~23.01 mln), KKR (to ~27.22 mln from ~31.58 mln), C (to ~20.75 mln from ~21.72 mln)
Paulson & Co (John Paulson) discloses updated portfolio positions in 13F filing: New DIDI APA RDS.A positions
Highlights from 2021 Q2 filing as compared to Q1 2021:
- New positions in: DIDI (~11.08 mln shares), APA (~4 mln), RDSA (~2.03 mln), BP (~1.94 mln), BALY (~1 mln), DISCA (~0.86 mln), OIH (~0.22 mln), KSU (~0.17 mln), BIDU (~0.02 mln), BABA (~0.02 mln)
- Increased positions in: OXY (to ~5 mln shares from ~3 mln shares), GOLD (to ~4.55 mln from ~3.55 mln), XOM (to ~1.5 mln from ~1 mln), SA (to ~2.07 mln from ~1.57 mln)
- Maintained positions in: THM (~61.93 mln shares), BHC (~25.84 mln shares), NG (~22.23 mln shares), THRY (~2.81 mln shares), BSIG (~20 mln shares), ENDP (~18.33 mln shares), HZNP (~7.99 mln shares), AU (~5.97 mln shares)
- Closed positions in: TAK (from ~4.73 mln shares), TLND (from ~0.65 mln)
- Decreased positions in: VTRS (to ~3.34 mln shares from ~11.48 mln shares), DISH (to ~3.35 mln from ~3.62 mln), PCRX (to ~1.27 mln from ~1.41 mln)
Greenlight Capital (David Einhorn) discloses updated portfolio positions in 13F filing: Confirms new GPK position, increased GPRO ODP holdings
Highlights from 2021 Q2 filing as compared to Q1 2021:
- New positions in: ADMP (~1 mln shares), GPK (~0.85 mln), ASTS (~0.57 mln), UWMC (~0.49 mln), DMYI (~0.47 mln), PLBY (~0.41 mln), NWS (~0.36 mln), PANA (~0.28 mln), GOEV (~0.27 mln)
- Increased positions in: GPRO (to ~3.66 mln shares from ~1.02 mln shares), NBSE (to ~2.73 mln from ~2.03 mln), ODP (to ~0.65 mln from ~0.07 mln), CPRI (to ~0.49 mln from ~0.19 mln), SATS (to ~1.28 mln from ~1.02 mln) CC (to ~2.33 mln from ~2.23 mln), FUBO (to ~0.47 mln from ~0.43 mln) REZI (to ~1.42 mln from ~1.39 mln), SONO (to ~0.24 mln from ~0.2 mln),
- Maintained positions in: GRBK (~17.42 mln shares), BHF (~3.64 mln shares), CHNG (~3.45 mln shares), DNMR (~2.11 mln shares), AAWW (~1.51 mln shares), AER (~0.66 mln shares), TWTR (~0.49 mln shares), GLD (~0.1 mln shares)
- Closed positions in: ADT (from ~2.79 mln shares), SEAH (from ~0.06 mln)
- Decreased positions in: CNX (to ~0.22 mln shares from ~1.31 mln shares), APG (to ~0.25 mln from ~1.28 mln), CEIX (to ~2.17 mln from ~2.82 mln), XOG (to ~0.01 mln from ~0.3 mln), NUVB (to ~0.03 mln from ~0.15 mln), CNXC (to ~0.39 mln from ~0.48 mln), JACK (to ~0.14 mln from ~0.18 mln), SNX (to ~0.11 mln from ~0.15 mln)
Third Point (Dan Loeb) discloses updated portfolio positions in 13F filing: New SOFI S DIDI positions , increased INTC UBER holdings
Highlights from 2021 Q2 filing as compared to Q1 2021:
- New positions in: SOFI (~28.9 mln shares), S (~25.36 mln), DIDI (~13.08 mln), EDR (~12.5 mln), CANO (~11.08 mln), ZBH (~0.8 mln), PTON (~0.6 mln)
- Increased positions in: INTC (to ~14 mln shares from ~1 mln shares), UBER (to ~8.35 mln from ~6.75 mln), DELL (to ~3.15 mln from ~2 mln), SU (to ~7 mln from ~6 mln), DD (to ~2.98 mln from ~2.68 mln) EL (to ~1.1 mln from ~0.97 mln), BKI (to ~1.8 mln from ~1.7 mln), AMZN (to ~0.15 mln from ~0.11 mln)
- Maintained positions in: UPST (~13.38 mln shares), DIS (~4.15 mln shares), DHR (~2.87 mln shares), MSFT (~1.6 mln shares), V (~1.5 mln shares), BURL (~1.48 mln shares), FB (~1 mln shares)
- Closed positions in: ETRN (from ~9 mln shares), IAA (from ~8.7 mln), WISH (from ~3.85 mln), RKT (from ~1.5 mln), NYT (from ~1.26 mln), KMX (from ~1.1 mln), Z (from ~1.09 mln), RACE (from ~0.99 mln), CVNA (from ~0.4 mln)
- Decreased positions in: RADI (to ~3.24 mln shares from ~4.5 mln shares), CHTR (to ~0.09 mln from ~0.65 mln), IQV (to ~1.25 mln from ~1.81 mln), AVTR (to ~10.5 mln from ~11 mln), JD (to ~2.9 mln from ~3.3 mln), APTV (to ~1.3 mln from ~1.55 mln), INTU (to ~1.1 mln from ~1.2 mln), TEL (to ~1.51 mln from ~1.55 mln), TDG (to ~0.45 mln from ~0.49 mln), GOOGL (to ~0.2 mln from ~0.21 mln)
The great hedge fund debate
Back in 2008 Warren Buffett made a $1m bet that the S&P 500 index would outperform a basket of hedge funds over the course of a decade.
Ted Seides, the investor on the other side of that bet, conceded defeat in 2017, after a particularly terrible year for hedge funds.
Buffett was railing against the “2 and 20” fees — two per cent management fee and 20 per cent of performance gains — charged by hedge funds, which he found “ridiculous”.
For many years, when the likes of George Soros and Jim Simons were considered the “masters of the universe”, few investors seemed bothered by hedge fund fees. Returns were so good that they made the fees seem insignificant.
George Soros is among the illustrious hedge fund investors who have converted their hedge funds into family offices since the financial crisis © AFP/Getty Images
But the years following the financial crisis have been difficult for the industry. Hedge fund performance, bar a few exceptions, hasn’t been particularly great and investors have embraced other options, including private equity and passive index funds.
Now the pandemic has brought with it a new sense of optimism. According to this Big Read by the FT’s Robin Wigglesworth and Laurence Fletcher, 2020 was the best year for hedge funds since the aftermath of the financial crisis in 2009. Things are also looking up for 2021, prompting some to ask whether we’ll see a revival of the hedge fund industry.
On the face of it, things look good. Assets have increased (though in fairness, they’ve been on an upward trajectory since the 1990s), fees have come down slightly, and new fund launches outnumber closures.
Consider the fact that hedge funds are starting to make money again, and it starts to resemble something of a renaissance. But has much really changed since Buffett made that bold initial bet?
While hedge funds have made money recently, so has everyone else. While the industry relishes its best year in more than a decade, stock markets are still outperforming, though many managers take issue with being compared to the S&P 500.
Fees have come down somewhat — the traditional “2 and 20” is now on average 1.38 per cent and 15.9 per cent. But that is still expensive relative to what else is out there, and “star managers” tend to charge even more than 2 and 20.
What does appear to have changed is that hedge funds have finally stopped swimming against the tide.
They’ve embraced the booming equity market and are doing well for it. Does that warrant the fees they charge? That’s for investors to decide.
- MorphoSys (MOR TH) +1.2%
- PRESS RELEASE: MorphoSys’ partner Incyte announced development and commercialization agreement with InnoCare for Tafasitamab in Greater China
- BAT (BMT TH) +1%
- Henkel (HEN3 TH) -1%
- Henkel Cut to Sell at SocGen; PT 79 euros
- Freenet (FNTN TH) -1%
- Prosus (1TY TH) -3.5%
- China Tech Stocks Slump as Nation Issues Draft Competition Rules
DAX:
- No major moves
MDAX:
- MorphoSys (MOR TH) +2.2%
- DGAP-News: MorphoSys’ Partner Incyte Announced Development and Commercialization Agreement with InnoCare for Tafasitamab in
- Varta (VAR1 TH) +2%
- Varta Raised to Buy at DZ Bank
- Bechtle (BC8 TH) +1.3%
- Freenet (FNTN TH) -1%
SDAX:
- Home24 (H24 TH) +1.1%
- Eckert & Ziegler (EUZ TH) -1.2%
Airline industry adjusts to future of weather extremes
Storms, wildfire smoke and heat that reduces aircraft lift have disrupted flights this summer
Some airlines and airports have started to plan for a future where severe weather jolts flight schedules more frequently, as climate change increases the likelihood of extreme heat and big storms.
This month, storms forced the cancellation of more than 300 flights each at Chicago’s O’Hare airport and Dallas/Fort Worth airport in Texas. In July, eight flights in Denver were cancelled and another 300 delayed due to smoke from forest fires burning in the US Pacific Northwest. Extreme heat nixed take-offs in Las Vegas and Colorado earlier this summer.
The disruptions are in line with a trend: weather-related flight cancellations and delays have increased over the past two decades in the US and Europe, regulatory data shows. While it is difficult to link any individual storm or heatwave to climate change, scientific studies have found they will become more frequent or intense as Earth grows warmer.
The International Civil Aviation Organization, the UN standard-setting body, found in a 2019 poll of member states that three-quarters of respondents said the airline industry already was experiencing some impact from climate change.
“It is something that is absolutely on our minds, as far as how we’re going to be able to continue to run the flight schedule, especially with the growth that we have planned for the future,” said David Kensick, managing director of global operations at United Airlines. “With climate change, we are seeing some of that weather that’s hard to predict, so we need to be better at dealing with it.”
Airlines contribute about 2 per cent of global carbon-dioxide emissions globally, though counting other substances spewed from aircraft, some studies indicate their climate impact is bigger.
The potential impacts of climate change on the industry are far-reaching. In the short term, intense weather conditions present an operational headache. Forced flight diversions and cancellations add costs to an industry that haemorrhaged billions of dollars during the pandemic.
In the longer term, airlines believe changing wind patterns will alter flight routes and fuel consumption. It will probably take longer to fly from Europe to the US as the jet stream above the north Atlantic changes, for example.
“Aviation will be a victim of climate change as well as, in many people’s eyes, a villain,” said Paul Williams, professor of atmospheric science at the University of Reading in the UK.
The number of delays attributed to bad weather in European airspace rose from 3.5m in 2003 to a peak of 6.5m in 2019, according to data from Eurocontrol, although some of that can be attributed to industry growth. As a share of overall delays, weather rose from 23 per cent to 27 per cent over the same period.
The share of US flights that were cancelled because of weather increased from approximately 35 per cent in 2004 to 54 per cent in 2019, according to the Federal Aviation Administration.
Mark Searle, global director for safety at the International Air Transport Association, said airlines had adapted over the years to the changing climate.
“There is an evolving situation, but it is not like going off a cliff edge,” he said. “We are managing it pretty darn well.”
For airports, that can mean preparing for rising seas. Singapore Changi Airport’s new passenger terminal was constructed 5.5 metres above mean sea level. Avinor, the operator of airports dotted along Norway’s coastline, has mandated that all new runways must be built at least 7 metres above sea level.
For airlines, it means turning to technology. American Airlines and United have improved their ability to predict the proximity of lightning, allowing work on the tarmac to continue for longer ahead of a brewing thunderstorm without endangering ground staff.
At several hubs, Chicago-based United Airlines also added self-parking systems to allow planes to taxi to the terminal even when storms prevent ramp agents from guiding them to gates.
Severe weather demands extra staff. Carriers are forced to pay overtime as gate agents and call centres are bombarded with demands from passengers trying to rebook. Airlines will need to weigh paying more overtime, instituting extra work shifts or letting passengers endure the fallout.
“There’s going to be extra cost either way if — and this is a big if — the airlines decide they’re going to address it,” said Jon Jager, an analyst at the aviation data firm Cirium.
While passengers typically blame airlines, the rules of the US, UK and EU do not require airlines to compensate passengers for weather-related problems. “Mother Nature gives the airlines a little bit of a get-out-of-jail-free card,” Jager said.
Disruptions come not only from storms, but from extreme heat. Aircraft struggle to take off in high temperatures because hot air is less dense, meaning the wings are able to create less lift. The hotter the temperature, the lighter a plane must be to take off, particularly at airports with short runways or at high altitudes.
Williams, the atmospheric scientist, published a paper that found that for an Airbus A320 taking off from the Greek island of Chios, the payload has decreased about 130kg a year for three decades — roughly equivalent to one person and their luggage.
Iata is in talks with its members over adopting new climate change pledges later this year. The industry’s current targets, set in 2009, include halving 2005 emissions by 2050 and carbon neutral growth after 2020.
But there is a belief across many parts of the industry, particularly in the US and Europe, that tougher targets, including a net-zero pledge, are needed.
“We think that we should probably go further, so we are working on that,” Alexandre de Juniac, Iata’s outgoing chief executive, told the Financial Times earlier this year.
Williams said the aviation industry’s approach to climate change appeared to be shifting.
“Historically, there have been lots of climate change sceptics in the aviation sector, but I’ve noticed a change,” he said. “The sector is much more honest now.”
Chinese tech shares drop after Beijing tightens competition rules
Market regulator announces antitrust and data restrictions as crackdown on sector deepens
Shares in Chinese internet groups fell after the country’s market regulator said it would tighten antitrust and data restrictions on platforms, marking the latest stage of Beijing’s crackdown on the sector.
The State Administration for Market Regulation, China’s antitrust watchdog, released draft rules on Tuesday banning unfair competition among internet companies, in a move that could sharply intensify government oversight of the country’s leading tech platforms when they are adopted this year.
Shares in Chinese internet and ecommerce groups Alibaba, Tencent and JD.com fell 2 per cent, 3 per cent and 4.6 per cent, respectively, in Hong Kong trading following the announcement.
China’s market regulator has escalated demands in recent months for “self-rectification” from dozens of internet companies, including ride-hailing platform Didi Chuxing, which has become a particular target of regulatory scrutiny following its US listing in June. In April, the SAMR handed Alibaba a record $2.8bn fine for abusing its market dominance. The crackdown has shaved billions of dollars worth of market value from China’s tech sector.
Angela Zhang, an expert on Chinese antitrust legislation at the University of Hong Kong, said the measures would target practises including false advertising, fraudulent online reviews, unfair competition, interoperability issues, data protection and consumer privacy issues.
The draft rules, which may be revised after a consultation period, banned groups from widespread practices such as exploiting user data to learn how customers behave and influence them to not choose competitors’ products or services.
Limiting traffic to other platforms by practices such as blocking hyperlinks to rivals, or using fake transactions or reviews to damage competition, would also be prohibited.
The rules announced on Tuesday allowed “SAMR to take much nimbler action to tackle various regulatory issues arising from the platform economy”, added the University of Hong Kong’s Zhang.
The Chinese Communist party has made antitrust regulation central to a broad campaign to limit behaviour by internet groups that it considers damaging to social stability and national security.
Analysts said the campaign has been driven in part by user anger over perceived exploitation by powerful internet companies.
Chinese lawmakers are planning to revise the country’s anti-monopoly legislation this year.
The vast troves of user data held by internet companies were propelled to the forefront of the regulatory crackdown last month after the Cyberspace Administration of China, the cyber security watchdog, announced an investigation into Didi days after its blockbuster New York listing.
>>> Up
* ABN AMRO GDRs Raised to Equal-Weight at Morgan Stanley
* Banco BPM Raised to Market Perform at KBW; PT 3 euros
* GN Store Nord Raised to Buy at DNB Markets; PT 650 kroner
* Norma PT Raised to 59 euros from 55 euros at Berenberg
* OTP Bank Raised to Buy at SocGen; PT 19,250 forint
* Stabilus PT Raised to 83 euros from 77 euros at Berenberg
* Varta Raised to Buy at DZ Bank
>>> Down
* Varta Raised to Buy at DZ Bank
>>> Down
* Endesa Cut to Equal-Weight at Morgan Stanley; PT 24.50 euros
* FLSmidth Cut to Dropped Coverage at SEB Equities
* Future PLC Cut to Add at Peel Hunt; PT 4,400 pence
* Future PLC Cut to Add at Peel Hunt; PT 4,400 pence
* Sleep Cycle Cut to Hold at Carnegie; PT 85 kronor
>>> Initiation
>>> Initiation
* Media & Games Invest Rated New Buy at Berenberg; PT 8.20 euros
* Wise Rated New Neutral at Citi; PT 1,030 pence
* Wise Rated New Neutral at Citi; PT 1,030 pence
* Wise Rated New Equal-Weight at Morgan Stanley; PT 950 pence
* Wise Rated New Buy at Goldman; PT 1,250 pence
>>> Call
>>> Call
* Endesa Downgraded at Morgan Stanley on Limited Re-Rating Scope
* ING Most Preferred Benelux Bank, ABN Amro Raised: Morgan Stanley
* ING Most Preferred Benelux Bank, ABN Amro Raised: Morgan Stanley