The Economic Analyst, James Dondero On Yuan Fluctuation

James Dondero also referred to as Jim was awarded double majors in accounting and finance at University of Virginia upon completion of his bachelor’s degree in 1984. He also holds certifications such as CPA, CMA, and CFA. His prowess in the financial analysis has made him a resource hub for investors. Upon completion of his studies, he kicks started his career path as an analyst in the Morgan Guaranty training program where he worked for one year.

In 1985 he joined American Express and worked as a corporate bond analyst and later became the portfolio manager in the same firm. As the chief investment officer, Jim helped in the creation of the GIC subsidiary of Protective Life which achieved a net worth of two billion dollars within four years. He is the president and the co-founder of Highland Capital Market (HCM) which specializes in advisory services on matters investments. As a leader, he is an expert in hedge fund management, and HCM is currently worth twenty-one billion dollars. James Dondero has accumulated over thirty years of experience in financial investments.

Highland Capital Management is one of the largest and experienced global alternative credit managers. The firm mainly specializes in credit strategies such as long- only funds and separate accounts, credit hedge funds, distressed and special cases in private equity, as well as collateralized loans. Furthermore, the company also offers alternative investments such as natural resources, emerging markets and short and long equities. The firm has a headquarter office in Dallas, Texas and other offices in Seoul, Singapore, Sao Paulo and in New York.

The woes of China economy are rooted to the devaluation of its currency devaluation in a bid to mitigate economic distress the policy makers did note check the both sides of a coin but rather opted to check one side. They didn’t put into consideration about foreign exchange market but dealt with the domestic market. The government increased the money supply to banks as a short term way to curb financial downturn.

The strategy was aimed at starving the offshore market of its currency and promote domestic markets. However, it backfired on the Chinese economy and the cost of betting went down to where it was at the beginning of the year. Investors are avoiding to investing in the volatile and unstable economy. In fact, outflows from the country shot to over one hundred and fifty-eight billion dollars in the month of December 2015.

The cost of credit in Honk Kong, has increased to a record across all tenors earlier in January 2016. This has resulted from the China’s central buying the currency after the devaluation of its currency. This has made the cost of credit for short trades and for selling borrowed assets in Yuan with an intention of making the profit by buying the assets back at lower prices later to increase.

This article recappedĀ www.bloomberg.com/news/articles/2016-01-31/pboc-effort-to-squeeze-bets-against-yuan-undermined-by-stimulus

 

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