Crispin Odey is still a big China bear and explains his views in a conference call to investors.
Crispin Odey’s Odey International Fund conference call and presentation for the second quarter ended June 30, 2015.
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Crispin Odey Conference Call Audio
Crispin Odey - Odey International Fund 2Q15 Performance
- During Q2-15 OEI returned -14.9% (€), OEI Mac returned -26.2% ($), Odey Swan returned -15.0% (€I); the long-only funds returned: (Opus £) -5.0%, (Odey Allegra International €) -1.5% and (Odey Pan European €R) -1.2%. The MSCI Daily TR Net Europe returned -3.2% (€), +0.4% ($) and the MSCI Daily TR Net World returned -5.3% (£) and -3.3% (€).
- The negative performance of OEI for Q2-15 was mainly driven by active currency exposure (-12.4%), a considerable portion of which came from the AUD/USD position.
- The short equity book also had a negative impact on performance (-1.6% after currency hedging). Positive contributions before currency hedging came from Sands China (+103bps), Elekta AB (86bps) and Swatch Group (+75bps). The largest negative contributions came from Lloyds Banking Group (-41bps), Coca-Cola HBC (-39bps) and Glencore (-33bps).
- After currency hedging the long equity book made a positive contribution for the quarter (+1.5%). Positive contributions before currency hedging came from a number of positions including DMG Mori Seiki (+66bps), Sports Direct International (+62bps) and Oxford Nanopore Technologies (+40bps). The largest negative contributions were attributable to the LM EricssonTelefon (-139bps), Man Group(-79bps) and Tungsten Corp(-63bps).
- Elsewhere, commodities and government bonds return +0.2% and-1.7% respectively.
Crispin Odey's Views Today
- Slowing growth in China
- Weakness and deflation spreading from China
- Pressure on commodity producing economies
- Rising Australian unemployment and falling wages
- Eurozone economic weakness, high unemployment, falling credit, and dysfunctional politics
- UK economic growth but weak foundations given double deficit
- Japan offering attractive value and actual earnings growth
- Recovering US economy, consumer saving his gasoline savings, and Fed likely to raise rates
- Equity bull market approaching longest of the last century
- FX volatility increasing with Yen devaluation a harbinger of more to come
- QE is driving an equity bubble -has an effect on assets but not activity
- Signs of a European recovery
- Productivity still not coming through
- Indications of wages rising in the US and UK
- Oil rally will be self-defeating as WTI approaches $70
- Long US$ and short weak EM currencies
- Short Macau casinosShort mining and materials
- Short EM fund managers
- Short European peripheral banks
- Long Japanese exporters & industrials
- Long UK category killers
- Long earnings growth and dividend yields
- Long US and Japanese banks
- Long telecom equipment and networks
- Short oil majors
See full presentation below.