In the U.S.:
The Obama administration announced a series of sanctions against Russia, in retaliation to Russia’s cyber interference with the presidential elections. The sanctions include the expulsion of 35 Russian intelligence operatives, the closing of two Russian owned government entities in Maryland and New York, and further covert actions that would not be made public. In turn, Moscow decided not to retaliate and opted to wait for President Elect Trump to take office. After the Obama administration issued sanctions against Russia President-elect Donald Trump said Thursday “it’s time for our country to move on to bigger and better things”.
For the 11 month period ending November 30, 2016, REITs have raised a total of $61,757M versus $59,293M for all of 2015. Of which:
- IPOs raised $1,482M
- Secondary equity offerings (both common and preferred shares) raised $27,913M
- Secondary debt offerings raised $32,361M
The China Foreign Exchange Trade System announced an adjustment to its FX currency basket that will lower the USD weighting to 22.4% from 26.4%. The move was seen as a way for China to curb the yuan’s relative weakness versus the USD.
November industrial production rose 1.5% m/m versus a flat growth reading in October. Better than expected production of transport machinery, production equipment, and electric machinery drove the strong November reading.
November retail sales rose 1.7% y/y versus October’s -0.2% y/y reading. The strong retail figures marked the first increase since February and prompted the government to upgrade its retail sales forecast.
K Wah International Holdings Ltd. won the Hong Kong government’s final land auction of 2016, paying HK$5.868B for a piece of land with a total gross floor area of 574,270 sq. ft.. The land is adjacent to a piece of land that HNA Holding Group had bought on December 19 for a record HK$13,600 per sq. ft.
The U.K.’s Boxing Day, which is traditionally a strong shopping day, showed a notable shift in consumer spending habits as online sales grew 11.5% y/y and foot traffic at brick and mortar retailers dropped 6% y/y. However, it was noted that the strong sales seen in November and early December may have played a role in the Boxing Day decrease in foot traffic at retailers.
Following the ECB’s request that Italian bank Monti dei Paschi recapitalize to €8.8B from the €5B the bank expected, the Italian Economy Minister Pier Carlo Padoan challenged the ECB to change its supervisory approach. Padoan is calling for more transparency regarding the valuation criteria used by the ECB in order to prevent other banks from underestimating their potential capital requirements.
Merlin Properties is reported to have divested its hotel portfolio to Foncière des Murs (which is partially owned by Fonciere des Regions). The transaction is reportedly for over €500M and is comprised of the 12 hotels Merlin acquired in the Testa portfolio and another 12 hotels which came more recently as part of their more recent merger with Metrovacesa. The divestment of this asset class by Merlin had been previously hinted at by management. From a strategic point of view, the sale further narrows Merlin’s focus on their core asset classes of offices and shopping centers.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.