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FINANCIAL VOICE
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Asian Voice | 1st July 2017
Consultant Editor Financial Voice Alpesh Patel Dear Financial Voice Reader, I was asked by someone ‘how do you find the time’? I have been asked this since I was 12 when I learnt assembly language on my TRS80, investing in privatisation stocks like BT with my grandmother’s savings, and going to school! So here is a day in the life of a hedge fund manager. PART1 0715: I hate getting up early, unless jet lagged or doing the BBC in which case I am up at 0350. No, I’m no superhero. I usually get up whatever time my wife does, so I can drive her to the station 0720: Check the financial news. I would normally have slept at 0100-0300 so I won’t have missed much news. My go to places are my Bloomberg app and my FT app. I also like Flipboard so I can keep up to date on private equity and hedge fund news and algorithmic trading as well as entrepreneur news. I also look at www.pipspredatordaily.com as it gives me a great summary of exactly the news on the markets I want to see. I will also check any alerts I’ve received from my team on WhatApp. Usually there are none. I will also have a quick look at the market rates and charts to see how the markets are moving in usually the major and minor currencies and indices, but more recently in gold and oil too because we’ve had some profitable trades there. I don’t like staring at the screens all day long, it is not needed, and leads to reacting not responding to the market. 0730: Get ready. I am lucky, as my own boss I don’t need to wear a suit and tie. So getting ready is usually quick. I prefer wearing my gym gear so I have less of an excuse. If I have meetings, then I have a suit ready at the office and will get changed there. 0735: shower, shave etc with BBC Radio 4 playing in the background for the political news from the Today Programme. Quick check of emails in case anything I need to deal with. I have 3 personal assistants, one my Government work, one for media and events and one for everything else. This means I don’t usually have many emails I have to handle personally. 0800: Smoothie – made by my wife, lovingly, unless she’s too busy. Then I drive her to the station and head to my desk. (I can make calls from my car handsfree to the trading team to make sure all is running fine and what I need to do today). 0820: At my desk. I will open up the market screens. I have a huge monitor over my shoulder so I am not distracted and can turn around and look at it when I am curious. You look at Facebook, I look at the market. My team based on my instructions and my algorithms will have selected some trades and will either ask my view what I want to go with, or will have done it if I am not around. Today they are buying USD/JPY and GBP/AUD. What they trade depends on rules which are part of their training and like many firms what we also give our apprentices so they can learn too. 0840: I am brand ambassador for 24option (www.alpeshpatel.com/24) and the Head of Marketing just messaged on WhatsApp about catching up so I juggle a few things around. My phone is my desk. I love what they are trying to achieve with customer service and it took a while for them to convince me they were serious. Indeed they found me through Bloomberg and that was the clincher that they were indeed serious to be the best for customers. I want to help them get there. I am a business man and appreciate businesses trying to innovate. 0845: I reply to some of my apprentices on a couple of questions they have. I usually have only 1 or 2 emails because most of the mentoring issues are answered through the training material I created. (www.pipspredator.com and www.tradingchampions.com) I absolutely love being in touch with private investors because they were the people I wrote for in my weekly Financial Times column (‘Diary of an Internet Trader’) before I had my own fund. They were the people my books were addressed for. Part 2 is next week.
Tata Group may buy Air India
The government has been in talks about privatising the beleaguered airline that has been running in losses for over a decade.
Tata Group chairman N Chandrasekaran has reportedly held talks with the Indian government about buying stakes in Air India. The Tata Group, in partnership with Singapore Airlines may be looking at buying the state carrier from the government, and if the deal comes through, it would be a homecoming of sorts for Air India - originally owned by the group before being nationalised in 1953. Chandrasekaran held informal talks with the government, expressing preliminary interest in buying a controlling stake in Air India with 51 per cent equity, a media report said. The government has been in talks about privatising the beleaguered airline that has been run-
ning in losses for over a decade. AI has already received bailout packages worth about £2.40 billion out of a total £3 billion approved. Finance Minister Arun Jaitley had recently said the aviation ministry has to explore all possibilities “as to how the privatisation of Air India can be done”. In 2013, then chairman of Tata Group, Ratan Tata had said the group
Abhishek Sachdev
We recently held a seminar with Mutual Finance Limited, a partner firm focusing on securing finance for real estate clients. Our discussion examined the rise of non-bank lending to corpo-
would be “very happy to look” at AI “as and when it (privatisation) happens”. The conglomerate is already present in the Indian civil aviation space with two of its joint ventures including low-cost carrier AirAsia India in partnership with Malaysia's Air Asia, and full service airline Vistara in partnership with Singapore Airlines.
Sources in Bombay House, the Tata headquarters, said that the group is not particularly keen to acquire AI unless the government significantly reduces the carrier's £5 billion -plus debt. When contacted, a Tata Group spokesperson declined to comment on the matter; senior officials in the civil aviation ministry also chose to remain tightlipped. If the Tatas buy into Air India, the national carrier will return to the original owner. JRD Tata had pioneered aviation in the country with the establishment of Tata Airlines in 1932. Fourteen years later, the carrier was rebranded as Air India and subsequently nationalized in 1953.
Sahara has informed the Supreme Court of India that it has sold off its stake in London Hotel, Grosvener House, to company GH Equity UK for £575 million in order to clear its dues to market regulator Sebi. Senior counsel, Kapil Sibal, representing the firm, informed a bench headed by Justice Dipak Misra that it had sold the Grosvenor House to GH Equity UK and the latter now needs permission to transfer of funds expected to come within 10 working days. He added that over £75 million was being sent to India, and the transaction involved refinancing of funds connected to its interests in two other New York hotels - the Plaza and Dream Downtown Hotels. The SC had accepted Sahara chief Subrata Roy's undertaking to pay £150 million by June 15, after refusing to stop the auction process for sale of Sahara's luxurious 8,900-
acre Aamby Valley City project. He had also promised to pay two other instalments of £55.2 million and £300 million by July 15 and October 30, respectively. The bench also granted an extension of 10 working days to Sahara to pay balance amount of £70.88 million out of the promised £150 million. So far, the company has paid a total of £79.01 million with the Sebi-Sahara account. The bench had warned that if Sahara defaulted in the payment of the balance amount, they will be compelled to send Roy to custody upon failure to honour the payment by July 4.
Defamation suit Sahara Group sells filed against Mistry Grosvenor House
Managing trustee of Tata Trusts, R Venkataraman has filed a criminal defamation suit against former Tata Sons Chairman Cyrus Mistry for allegedly making false statements, seeking £50 million in damages. The suit comes a couple of days before the hearing of the case between Mistry and Tata Sons at the National Company Law Appellate Tribunal. In the complaint filed with the additional chief metropolitan magistrate, Venkat said that Mistry's October 25, 2016 email to Tata Sons directors and trustees of Tata Trusts contained “defamatory statements” about him. A shareholder and director of AirAsia India, he also said that the email, which was subsequently leaked to the media, has caused “irreparable” damages to his reputation among his colleagues, family, friends, and society. Mistry had alleged
Cyrus Mistry
“certain fraudulent transactions of £2.2 million” involving non-existent parties in India and Singapore at AirAsia India, stating that Venkat had considered these transactions as “non-material” and “didn't encourage any further study” of it. Venkat said that Mistry's allegations were “false, malicious, and derogatory” in the filings with the company tribunal in Mumbai. Mistry's filings had stated that Venkat had asked Tata Capital to offer loans to C Sivasankaran, which had turned bad. The complaint, filed through MZM Legal, is listed for hearing on July 3.
Don’t just bank on banks.....
rates, which often goes handin-hand with ‘third-party’ hedging. S o w ha t i s n o n - b a n k property lending? It involves firms securing finance from institutional or professional lenders - but instead of going to a bank, the company will receive a loan from a private equity firm, a hedge fund, an insurance company, a peer-to-peer firm or a family office. Non-bank lending is increasingly prevalent in a market where, following the global financial crisis, banks have become more risk averse
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- and thus more reluctant to lend - in general and have cut the size of their real estate portfolios in particular. Indeed, we are seeing from our clients that in the £5m+ debt space, almost half of new loans are being provided by non-banks. This is a staggering rise compared to the pre-credit crunch era. In contrast with the banks’ “don’t lose it” approach aimed at avoiding bad debt at all costs, non-bank lenders adopt a “use it or lose it” approach - they are funded by many sources, all of which are geared towards achieving a
certain rate of return. This provides an impetus for delivering solutions quickly and efficiently, cutting through the red tape and bureaucratic hurdles that often make securing bank loans a lengthy, drawn out process. This is a salient point for many borrowers, who are willing to pay a premium for the guarantee of swift delivery. Wh e r e do e s V e d a n t a Hedging factor into this? Wherever there is debt, there is the potential need to protect that debt from interest rate volatility through hedging. Most non-bank
lenders (and foreign banks) are unable to offer hedging to their clients since they do not have a treasury function; a third party bank therefore needs to be involved to provide interest rate hedging. As the UK’s leading hedging advisory firm for SMEs, Vedanta Hedging is uniquely positioned to provide impartial hedging advice, drawing upon our sophisticated network and years of experience securing the best possible hedging terms for our clients. There are unique and separate challenges for having one lender provide debt and another bank providing the hedging.
Subrata Roy
For example, security will be needed by the hedging bank to underwrite any hedge they provide (other than an interest rate cap). In addition, banks may try to charge extra/ hidden spreads compared to if they were also the lending bank. We have assisted several mid-sized property firms to enter into new hedging in the last 12 months. In fact, we have increasingly seen clients asking to hedge, rather than just banks requiring them to hedge.
Tel: 020 7183 2277 www.vedantahedging.com