by Edward Hugh: Barcelona Hungarian Prime Minister Ferenc Gyurcsány announced yesterday (Wednesday) that the government had reached an agreement with commercial banks intended to protect the interests of those who have taken out foreign currency loans. The agreement, which is expected to be signed early next week, has three key components: 1) At the request of the debtor the banks will allow the duration of the loan to be extended (with fixed monthly instalments) so that the depreciation of the forint “does not place an unbearable burden on the debtors". 2) FX debtors who deem that exchange rate fluctuations carry excessive risks for them will be allowed to convert their foreign currency-based loan to a forint loan. In this case the banks “will accept this request and make the switch without extra charges". 3) If a debtor finds him- or herself in a position where he or she cannot pay the monthly instalments, e.g. due ...

Hungarian Prime Minister Ferenc Gyurcsány announced this morning (Wednesday) that the government had reached an agreement with commercial banks intended to protect the interests of those who have taken out foreign currency loans.The agreement, which is expected to be signed early next week, has three key components:1) At the request of the debtor the banks will allow the duration of the loan to be extended (with fixed monthly instalments) so that the depreciation of the forint “does not place an unbearable burden on the debtors".2) FX debtors who deem that exchange rate fluctuations carry excessive risks for them will be allowed to convert their foreign currency-based loan to a forint loan. In this case the banks “will accept this request and make the switch without extra charges".3) If a debtor finds him- or herself in a position where he or she cannot ...

Fixed Income ArbitrageFixed Income Arbitrage Investment StrategyFixed income arbitrage strategies exploit pricing differentials between fixed income securities. Some of the most famous fixed income arbitrageurs were the principals of Long Term Capital Management, the hedge fund that returned annualized returns of over 40% in its first years. However, in 1998, when some of its bets moved against it, the fund had to be rescued by prominent Wall Street firms with a $3.5 billion package orchestrated by the Fed.Some of the most widely used fixed income arbitrage strategies are swap-spread arbitrage, yield curve arbitrage, volatility arbitrage and capital structure arbitrage, all of which try to exploit perceived mispricing among one or more fixed income instruments.Swap-spread arbitrage is a bet on the direction of swap rates, Libor, treasury coupon rates and repo rates. ...

Equity Long ShortEquity Long Short | Hedge Fund StrategyAs part of HedgeFundBlogger.com's Hedge Fund Strategy Guide here is a short guide to the Equity Long/Short hedge fund strategy:The earliest known practitioner of the equity long/short strategy was Alfred Jones Winslow, commonly thought to have established first hedge fund by developing a tactic that would succeed regardless of whether the market rose of fell. He came up with the idea of hedging market risk by taking both long and short equity positions.Thus, in their simplest formulation equity long/short strategies are designed to minimize exposure to the market. Instead, they profit from a change in the spread between two stocks. This is achieved by buying an undervalued stock and selling an overvalued stock. The short portfolio serves several functions: ...

Emerging MarketsEmerging Markets - InvestmentsEmerging market investing started to take off when in the mid-1980s when the International Finance Corporation (IFC) set up the first mutual fund that invested solely in securities from emerging markets with a seed capital of around $50 million. Since 2002, assets managed by emerging market hedge funds have increased fourfold and in the first quarter of 2008, they managed approximately $110 billion, according to HFR.Emerging market hedge funds are defined by the markets they operate in and not the strategies they follow. Thus, these funds are quite heterogeneous and adopt a variety of strategies such as equity long/short, event driven, global macro and fixed income arbitrage.Emerging markets are defined quite broadly. Morgan Stanley describes an emerging market, as ...