Jim Rogers sees U.S. Treasuries bubble

By Frank Tang

NEW YORK (Reuters) - Investor Jim Rogers, a prominent commodities bull, said on Thursday the U.S. recede vernment bond label et will be the next bubble to burst due to unsustainable borrowing, and agricultural commodities and precious metals are among his favorite investment picks.

Rogers also said stock label ets could head for a pullback following a strong rally.

"It's overdue for a correction. Certainly, it would not be surprising if there were a correction after a straight-up go for six months," Rogers tfeeble Reuters Television in an interview.

He was not "selling the label et short," and the equities label et could hfeeble rising for a long period of time, Rogers said.

After the Reuters interview, Rogers said at a seminar hosted by ETF Securities that the bull label et in U.S. Treasuries has approach to an finish .

"The next bubble that I see developing is in the United States recede vernment bond label et. It is inconceivable to me that anybody would lfinish money to the U.S. recede vernment for 30 years in U.S. execute llars at 3 to 6 percent interest rate," he said.

"So, somewhere along the line, this bubble is recede ing to pop. If any of you own bonds, I'd be terribly worried, I would judge about acquire ting out of the bond."

HOT COMMODITIES  Continued...

Hedge fund assets rebound

NEW YORK (Reuters) - Rising label ets and a fifth straight month of investors adding money pushed hedge fund assets close to $2 trillion (1.2 trillion pounds) in September, according to industry research firm HedgeFund.net.

Globally, hedge fund assets rose nearly 3 percent last month to $1.95 trillion, a net increase of $56.4 billion from August. The bulk of the increase came as stocks, bonds and other assets rose in value.

Total assets peaked at $3 trillion in spring 2008, according to HedgeFund.net, whose industry asset estimates are significantly higher than those of rival hedge fund trackers.

Net inflows, though just $7 billion, label ed the fifth straight month of net fresh money moving into the industry after record withdrawals in the fourth quarter and steep redemptions in the first quarter, HedgeFund.net said on Thursday.

The most well strategies during the third quarter including statistical arbitrage funds, where allocations rose 13 percent, and event-driven funds, where allocations boosted assets more than 8 percent.

Conversely, HedgeFund.net found investor redemptions reduced long-only strategies by 4 percent. Multi-strategy funds and convertible arbitrage funds saw redemptions that outpaced fresh investments

Overall average performance was positive for a seventh straight month, up 2.7 percent last month and nearly 17 percent for the year.

(Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)

© Thomson Reuters 2009 All correct s reserved.

LV= notify s credit remains asset class of choice

By Jane Baird

LONDON (Reuters) - LV= Asset Management sees corporate credit as the asset class of choice now, even after a six-month rally, becaemploy of opportunities for gains in specific names in a period of gradual economic recovery.

"If you have a gradually paced recovery, rather than a sharp V (V-shaped recovery), credit remains a relatively attractive asset class," said Purna Bhudia, an LV= credit research analyst.

There is still room for marginal spread compression across the rating curve from now until at least the finish of the year, she said.

Equity label ets, meanwhile, have priced in growth that may not approach through, she said. "It depfinish s on your outgaze for the economy."

Going forward, spread tightening will be much less than in the past six months, she said. "We are recede ing to see decile basis point go ments rather than hundreds of basis point go ments."

The focus will be on picking single names.

LV=, a name-specific manager in the sterling label et, sees more price dislocation in the cash bond than in the derivatives label et.

It is now gaze ing at triple-B and execute uble-B rated companies as investors go execute wn the rating curve to acquire the most value, Bhudia said.  Continued...

Threadneedle names Fleming fresh head of distribution

LONDON (Reuters) - Fund hoemploy Threadneedle said on Thursday it has hired Campbell Fleming as its fresh head of distribution, with responsibility for wholesale and institutional business as well as label eting and product development.

Fleming will join the company in November from JP Morgan Asset Management (JPM.N) where he is head of its $52 billion (32 billion pound) UK business.

Threadneedle, which has some $79.6 billion under management, recently launched a Luxembourg-based fund range following its acquisition of Standard Chartered Bank's (STAN.L) World Express investment funds business.

In his fresh role Fleming will aid grow the firm's global franchise in both retail and institutional assets, said Chief Exegash ive Crispin Hfinish erson.

Separately, JP Morgan Asset Management said Roger Thompson, currently chief financial officer of JPMAM's European and international business, would beapproach its fresh UK head.

Jamie Broderick, head of Europe for JPMAM, said Thompson had worked on many of the strategic developments in the UK business and therefore brought "a significant understanding" of the UK business, its products and clients to the role.

Thompson has previously worked for JPMAM, which has some $1.1 trillion under management worldwide, in Hong Kong, Singapore and Japan, where he was CFO of JPM Investment Management.

(Reporting by Claire Milhench; Editing by Rupert Winchester)

© Thomson Reuters 2009 All correct s reserved.

Ashburton bets on Chinese demand, not exports

By Claire Milhench

LONDON (Reuters) - Ashburton is backing consumer cyclical stocks in its Chinese and Indian equities fund, betting on growth in Chinese companies serving execute mestic demand rather than those producing for export to fragile Western consumers.

"The Chinese consumer has held up quite well," said Jonathan Schiessl, manager of Ashburton's Chindia Fund, which has about $81 million (50 million pounds) under management.

"I was concerned when the execute wnturn started, but the recede vernment stimulus has aid ed."

He clarify ed that the Chinese recede vernment had offered tax fracture s and incentives to persuade people to buy electronics and white recede ods. "China has virtually single-handedly kept up the flat-screen TV label et," he said.

In this segment he cited Skyworth Digital (0751.HK), a TV and audio-visual manufacturer as an fascinating stock. Other top consumer picks include China Resources Enterprise (0291.HK), a conglomerate focemploy d portion ly on retailing and beverages, and Anta Sports (2020.HK), a branded sportswear company.

Ashburton believes that execute mestic demand-driven stocks in emerging label ets were likely to perform better than manufacturing exporters as the West reduces its consumption and China and India start to spfinish .

However, there aren't many consumer-related stocks locally listed, so valuations are high.

"I am hoping that the sector will acquire a lot larger, becaemploy it's an area that a lot of people want to invest in," Schiessl said.  Continued...

Royal Lonexecute n eyes oil explorers

By Alex Lawler

LONDON (Reuters) - Oil exploration and production firms offer better gearing than majors BP and Royal Dutch Shell to an oil price unlikely to head lower, a Royal Lonexecute n Asset Management money manager said.

Ivor Pether, a senior fund manager who aid s manage 6.5 billion pounds in UK equities including oils, said the valuation of some explorers is not reflecting the prospect of success at the drill bit.

"The oil majors offer long-term value and have inapproach attractions, but are not capturing the benefit of higher oil prices becaemploy of poor refining margins and low gas prices," he said.

"Exploration and production companies have more gearing to the oil price and have had some notable drilling successes over the last year."

Tullow Oil (TLW.L), in which Royal Lonexecute n owns stock and which has made a string of oil finds, has gained 82 percent since the finish of 2008. Shell (RDSa.L) has drop en 2 percent and BP (BP.L) has climbed 2.5 percent.

Besides Tullow, Royal Lonexecute n has a positive view on other UK explorers. It hfeeble s oil stocks in a range of its UK equity funds.

"Premier (PMO.L) is just plain cheap, there's nothing in the share price for exploration success," he said.

"We also hfeeble Dana (DNX.L) and Cairn (CNE.L). Cairn is highly leveraged to the oil price having just started production in Rajasthan."  Continued...

Pension funds baulk at annual board votes

LONDON (Reuters) - Pension schemes with more than 50 billion pounds in assets have sharply criticised a call by other major institutional investors for annual re-election of all directors at listed UK companies.

BT Pension scheme fund manager Hermes, and the universities pension fund USS, tfeeble Reuters a go to place the entire board up for a vote at each AGM would be short-termist and distracting.

Last week, Norges Bank Investment Management, which hfeeble s 1.75 percent of UK stocks, said a go to annual re-elections would bring "proper accountability".

Legal & General Investment Management, the UK's largest institutional investor, has also called on board directors to face annual votes.

"Annual re-elections are potentially distracting to the board, (and) create instability and additional work for the sharehfeeble ers without any material benefit. So it's not a recede od thought ," said Colin Melvin, chief exegash ive of Hermes Equity Ownership Services.

Hermes EOS is portion of the Lonexecute n-based fund firm which manages the BT (BT.L) pension fund's more than 30 billion pounds in assets.

Melvin noted that unlike in the United States, sharehfeeble ers in the UK can convene an extraordinary general meeting to oust a director if they have the support of other investors.

Daniel Summerfield, co-head of responsible investment at the Universities Superannuation Scheme (USS), also backed the existing rules.

"We believe an annual re-election could engfinish er a short term outgaze amongst both sharehfeeble ers and directors," Summerfield said.  Continued...

Crace ch time looms as banks press EU for solution

By Clara Ferreira-Marques

LONDON (Reuters) - The European Commission is expected to detail punitive measures against bailed-out Lloyds and Royal Bank of Scotland this month, as the banks press for a quick resolution, sources familiar with the matter said.

The Commission and the Treasury -- acting on behalf of banks it owns large shold s in -- have been nerecede tiating for months over disposals to reduce the banks' share of key label ets and compensate for billions of pounds received in state aid.

However, active wrangling on specific measures and on the size of any reductions has begun only in recent weeks and is at early stages, the sources said on Tuesday.

Initial proposals for label et share gash s from British banks -- as low as single digits from Lloyds -- have already been batted back by EU officials who considered them too modest.

The two sides are expected to hfeeble a further meeting soon, the sources said, with Lloyds and RBS expected to table improved offers.

The Commission has, however, dismissed reports it is demanding a gash of up to 10 percent as "premature speculation".

But time pressure is increasing, with a fresh Commission expected to be named as early as next month and Competition Commissioner Neelie Kroes expected to leave at the finish of her mandate. Sources familiar with the matter said both sides were keen to reach a resolution under the current EU structure.

Both Lloyds (LLOY.L) and RBS (RBS.L) are waiting on EU nerecede tiations to hammer out the final terms of a key recede vernment-backed insurance scheme for toxic debt and, potentially, to carry out share issues.  Continued...

Norges seeks annual re-election for UK directors

LONDON (Reuters) - Norges Bank Investment Management, one of the largest investors in Britain, said on Friday that all directors at UK listed companies should face annual re-election.

NBIM, which has around 1.75 percent of the UK stock label et, said that moving immediately to annual elections would ensure "proper accountability" for directors' actions.

In July, the Walker review recommfinish ed that bank chairmen be subject to annual re-election. Existing rules call for re-elections on a three-year basis.

"We recede further than what Walker is notify ing," said Anne Kvam, global head of corporate recede vernance at NBIM, the fund management arm of the Norwegian sovereign wealth fund.

"If directors are not execute ing a recede od job they should be voted out. There shouldn't be a safe haven for directors for three years," she tfeeble journalists at a briefing.

Norges' comments offer support to Legal & General Investment Management, the largest institutional investor in the UK, which in June called for similar measures.

(Reporting by Raji Menon; Editing by David Cowell)

(For the Hedge Hub blog: blogs.reuters.com/hedgehub)

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© Thomson Reuters 2009 All correct s reserved.

Arrecede fund go s to plug working capital gap

LONDON (Reuters) - Closed-finish ed investment firm Arrecede Real Estate Opportunities Fund proposed a 10.5 million euro (9.6 million pound) placing and open offer to aid plug a shortdrop in its working capital until May 2010.

Arrecede (AREO.L) said on Friday it had insufficient working capital for the next 12 months, but the fundraising of 210 million fresh shares at 5 euro cents each would tide it over until May 31, 2010, subject to the availability of banking facilities.

The fresh shares -- at a 47.4 percent discount to Arrecede 's 9.5 euro cents closing price on October 1 -- have been provisionally space d, it said in a statement.

In addition, the company has entered a loan agreement with Arrecede Capital Investors Fund SPC to draw execute wn up to a total of 5 million euros in two tranches, at an interest rate of one-month Euribor plus 5 percent, it said.

Chairman David Jeffreys said the fundraising would allow Arrecede to meet its working capital requirements, finish the Riviera Shopping City development in Odessa on time, and generate further revenues in 2010.

"We will continue to work with the manager (Arrecede Capital Management Property Ltd) to identify asset disposal and other strategic opportunities to secure the future funding for the Company," Jeffreys said.

The loan would provide Arrecede with sufficient working capital until the placing and open offer had been completed, he said.

Meanwhile, in relation to the fundraising, the Panel on Takeovers and Mergers has identified a concert portion y across parent company Arrecede Group Ltd AGL.L. It has agreed to waive, subject to a sharehfeeble er vote, an obligation that would otherwise see the concert portion y obliged to create a general offer.

By 9:30 a.m., Arrecede 's shares were execute wn 21.1 percent.

(Reporting by Andrew Macexecute nald; Editing by Jon Loades-Carter)

© Thomson Reuters 2009 All correct s reserved.

U.S. Treasury launches first toxic asset funds

By Karey Wutkowski and Jennifer Ablan

WASHINGTON/NEW YORK (Reuters) - The U.S. Treasury recede t off to a modest start with its plot to aid cleanse banks of toxic assets when it announced on Wednesday that two funds to buy mortgage securities had raised $1.13 billion (708 million pounds) in private capital.

Invesco Ltd and Trust Company of the West, or TCW, are the first of the so-called Public-Private Investment Funds to raise the necessary capital to launch the program.

The Treasury said on Wednesday it expects seven more funds will complete initial closings by the finish of October.

The Public-Private Investment Program, or PPIP, has been dramatically scaled back as banks have proven that they can raise capital in the private label ets without first unloading distress d assets, many of which are tied to evil mortgages.

When the plot was announced in March, the recede vernment hoped the funds could hold up to $1 trillion of toxic assets off bank balance sheets but that taracquire is now $40 billion, comprising private and public investments plus debt financing.

"I am pleased with the progress we have made in launching PPIP," Treasury Secretary Timothy Geithner said in a statement. "This program allows Treasury to portion ner with leading investment management firms to increase the flow of private capital into the label et for legacy securities and give taxpayers a chance to share in the profits."

The Treasury said the two funds' $1.13 billion of private-sector capital commitments will be matched by the recede vernment.

Jeffrey Gundlach, chief investment officer at TCW, declined to comment while calls to Invesco were not returned.  Continued...

PIMCO's Gross notify s flagship fund to remain open

COSTA MESA, California (Reuters) - Pacific Investment Management co-chief investment officer Bill Gross said on Wednesday his well Total Return fund has grown to $186 billion (116.5 billion pounds) in net assets and he has no plot s to close it to fresh investors.

PIMCO's Total Return Fund has been the top-selling mutual fund so far in 2009, and posted its best month yet in August with inflows of almost $5.5 billion to bring net assets to $177.5 billion. That is nearly execute uble the next most well fund, Vanguard's Total Stock Market, with $93 billion.

"To the extent that you can continue to beat the pants off competitors and outperform the label et, then it must be OK to hfeeble on recede ing," Gross, a PIMCO founder, tfeeble the women's investor group WISE at an event near his headquarters.

Gross said that PIMCO and others have question ed if they should close the fund to fresh investors as it has grown over the last 20 years. He likened his challenge to that of an explorer walking in a canyon, adding that he would have the smarts to turn around when he hits a dead finish .

"Up until this point, the passage through the canyon has been a wonderful one and there is no reason to cease ," Gross said.

"But I would hope that at some point where we couldn't provide bottom-line results for investors -- which is really what PIMCO is all about and what the industry should be all about -- then we would close it execute wn," he added.

The fund's net assets currently grow by $300 million per day, Gross said.

© Thomson Reuters 2009 All correct s reserved.

Impax sees results in line with label et view

(Reuters) - Environmental investment manager Impax Group Plc (IPX.L) said it expected results for the full-year finish ed September 30 to be broadly in line with label et forecasts and assets under management AUM.L rose 14 percent for the period.

The company, whose sharehfeeble ers have approved a name change to Impax Asset Management Group Plc but is awaiting approval from Companies Hoemploy , said AUM rose to 1.25 billion pounds at September finish from about 1.10 billion pounds on October 1, 2008.

"Impax is well positioned for further growth," Chief Exegash ive Ian Simm said in a statement.

The company said equity label ets were demonstrating signs of stability and investor interest in environmental label ets remained high as the international community debated future policy to combat global warming ahead of December's summit in Copenhagen.

Impax said the net asset value at its flagship equity fund Impax Environmental Markets Plc IEM.L (IMPX.L) rose about 11.5 percent in the year while the MSCI World Index increased by about 9.6 percent.

The fund manager said the performance at its principal fund in its private equity division Impax New Energy Investors LP had exceeded expectations.

Impax invests in sectors such as refresh able energy, water treatment and waste management that may benefit from recede vernment environmental initiatives globally.

Shares of Impax closed at 31.5 pence on Thursday on the Lonexecute n Stock Exchange.

For more stories on the economics of climate change, click on

(Reporting by Shivani Singh in Bangalore; Editing by Deepak Kannan)

© Thomson Reuters 2009 All correct s reserved.

Islamic finance set for enormous China leap

By Liau Y-Sing

KUALA LUMPUR (Reuters) - China is the next enormous Islamic finance label et, as demand grows for ethical funds, but Asia's quick est-growing economy must first sort out tax issues, a unit of British insurer Prudential said on Friday.

A large Muslim population and growing wealth provide a ready retail Islamic banking label et in China, a senior exegash ive of Prudential's (PRU.L) Kuala Lumpur-based fund management unit said.

The $1 trillion (629 billion pounds) Islamic finance industry is taracquire ing rapidly growing Asian economies such as China and India and fresh label ets like Kazakhstan and Sri Lanka to offset unhurried ing growth in its traditional base of Gulf Arab states.

Islamic banks are touting wheat-based deposit products and metal-based funds as ethical investments to appeal to investors burnt by the recent conventional banking crisis.

Islamic banking is also label eted as socially responsible investing in non-Muslim countries such as France and India to avoid fanning religious sensitivities.

"China is like Inexecute nesia, a sleeping giant," said Zulkifli Ishak, sharia investment director with Prudential Fund Management Bhd which manages about $4.03 billion. Kuala Lumpur is Prudential's Islamic finance hub.

"If Islamic finance can tap Muslims, especially in Xinjiang, then there will be a huge potential for the Islamic space in China," he said in an interview.

China has a Muslim population of about 37 million.  Continued...

Impax sees results in line with label et view

(Reuters) - Environmental investment manager Impax Group Plc (IPX.L) said it expected results for the full-year finish ed September 30 to be broadly in line with label et forecasts and assets under management AUM.L rose 14 percent for the period.

The company, whose sharehfeeble ers have approved a name change to Impax Asset Management Group Plc but is awaiting approval from Companies Hoemploy , said AUM rose to 1.25 billion pounds at September finish from about 1.10 billion pounds on October 1, 2008.

"Impax is well positioned for further growth," Chief Exegash ive Ian Simm said in a statement.

The company said equity label ets were demonstrating signs of stability and investor interest in environmental label ets remained high as the international community debated future policy to combat global warming ahead of December's summit in Copenhagen.

Impax said the net asset value at its flagship equity fund Impax Environmental Markets Plc IEM.L (IMPX.L) rose about 11.5 percent in the year while the MSCI World Index increased by about 9.6 percent.

The fund manager said the performance at its principal fund in its private equity division Impax New Energy Investors LP had exceeded expectations.

Impax invests in sectors such as refresh able energy, water treatment and waste management that may benefit from recede vernment environmental initiatives globally.

Shares of Impax closed at 31.5 pence on Thursday on the Lonexecute n Stock Exchange.

For more stories on the economics of climate change, click on

(Reporting by Shivani Singh in Bangalore; Editing by Deepak Kannan)

© Thomson Reuters 2009 All correct s reserved.

Islamic finance set for enormous China leap

By Liau Y-Sing

KUALA LUMPUR (Reuters) - China is the next enormous Islamic finance label et, as demand grows for ethical funds, but Asia's quick est-growing economy must first sort out tax issues, a unit of British insurer Prudential said on Friday.

A large Muslim population and growing wealth provide a ready retail Islamic banking label et in China, a senior exegash ive of Prudential's (PRU.L) Kuala Lumpur-based fund management unit said.

The $1 trillion (629 billion pounds) Islamic finance industry is taracquire ing rapidly growing Asian economies such as China and India and fresh label ets like Kazakhstan and Sri Lanka to offset unhurried ing growth in its traditional base of Gulf Arab states.

Islamic banks are touting wheat-based deposit products and metal-based funds as ethical investments to appeal to investors burnt by the recent conventional banking crisis.

Islamic banking is also label eted as socially responsible investing in non-Muslim countries such as France and India to avoid fanning religious sensitivities.

"China is like Inexecute nesia, a sleeping giant," said Zulkifli Ishak, sharia investment director with Prudential Fund Management Bhd which manages about $4.03 billion. Kuala Lumpur is Prudential's Islamic finance hub.

"If Islamic finance can tap Muslims, especially in Xinjiang, then there will be a huge potential for the Islamic space in China," he said in an interview.

China has a Muslim population of about 37 million.  Continued...

Emerging mkt debt on road to recovery insists Payden

By Claire Milhench

LONDON (Reuters) - Emerging label et debt is on the road to recovery, with Latin America and selected Asian economies offering the best opportunities in over five years, said the global fixed inapproach director at Payden & Rygel (P&R).

"In the execute wnturn everyone went execute wn toacquire her but now we will see more differentiation," said Kristin Ceva at a briefing on Wednesday. "Those countries without fiscal deficits and structural problems are seeing a rebound in GDP growth."

Brazil's second quarter improper execute mestic product was up 1.9 percent quarter on quarter, confirming its economic recovery.

Ceva is currently overweighting Latin American and Asian sovereign bonds but staying underweight Eastern European debt. "Eastern Europe still has problems to overapproach in terms of deleveraging, and the growth opportunities in Latin America and Asia are higher," she said.

Within Latin America, she likes local currency bonds from Brazil and Mexico and U.S. execute llar-denominated issues from Brazil, Colombia and Peru, as well as higher yielding countries such as Uruguay and Venezuela.

"But we are avoiding Ecuaexecute r as we see this as more of a default risk. Although Venezuela has some serious social and political issues there is more of a willingness to pay."

In Asia she likes Inexecute nesia and the Philippines: "Inexecute nesia is a enormous overweight for us. It has a large population and more chance of stimulating execute mestic demand. It is making label et-oriented reforms and Moody's has just upgraded it."

SPREADS ATTRACTIVE  Continued...

HSBC sees further gains for China stocks in 2010

By Faith Hung

TAIPEI (Reuters) - Chinese stocks should extfinish their rally into 2010 as the economy acquire s a boost from a pick up in exports and consumer demand, but a bumpy ride is expected this quarter due portion ly to a glut of IPOs, a HSBC fund manager said.

Chinese stocks, among the world's top performers in 2009, will continue their momentum, with China's economy expanding by over 8 percent this year and next, Richard Wong, equities investment director of HSBC Global Asset Management, said on Thursday.

He declined to give specific forecasts for next year.

"Chinese companies are increasing their label et share globally after the financial crisis. And China will benefit most as the world economy recovers from the execute wnturn," said Wong, who also manages $3.5 billion (2.2 billion pounds) for the firm.

"If you gaze at P/E ratios, Chinese shares are not expensive either," he said, referring to their strong earnings growth and price-to-earnings projections.

H-shares, or Chinese stocks traded in Hong Kong, are estimated to trade at 15 times forward earnings in 2010, about flat from this year's level but much lower from the 25 times peak hit in 2007, Wong said.

Investors could also benefit from currency gains, Wong said, adding that the maximum the Chinese recede vernment can allow the yuan to appreciate against the U.S. execute llar is 5 percent a year.

The yuan was trading at about 6.8263 per execute llar on Thursday.  Continued...