Halister News

(Bloomberg) -- Meiji Yasuda Asset Management has been “slightly underweight” on the British pound against the benchmark index it follows since around June 26-27 on speculation the U.K. will not be able to finance its current-account deficit.

• Meiji Yasuda has about $24b of assets under management as of end-March
• “It’s natural for companies to wait until an agreement is made for businesses between the U.K. and EU after Brexit, if they want to invest in the U.K.,” Akihiko Tanabe, general manager of the global fixed-income investment department, said in July 20 interview
  • “There’s growing concern about financing the U.K. current-account deficit with direct and portfolio investment. The pound may stay under downward pressure,” he added
• Meiji Yasuda is “overweight” on U.K. gilts because, although there’s pressure on the yield curve to steepen, BOE still has more room than BOJ or ECB to cut rates or introduce measures to provide liquidity in the private sector
  • BOE is one of the most credible central banks in policy- making, Tokyo-based Tanabe said
• Meiji Yasuda this week sold Turkish lira due to last week’s failed coup and President Erdogan’s sweeping crackdown on opponents
• “There will probably be a growing number of our clients who think Turkey is not an appropriate investment destination due to the way the president cracked down after the coup,” Tanabe said
  • “With the current government, Turkey is probably not a safe place to invest,” he added