Hedge funds at the fastest pace in more than five years added bearish bets in Japanese stocks in a week between Aug 2 and Aug 8, according to Goldman Sachs in a note Friday, when the Nikkei dropped by the largest amount for the index since Black Monday in 1987 on Aug 5.

Equity long/short hedge funds increased 1.7 shorts, or bets that stocks will fall, for each long position sold in the week between Aug 2 and Aug 8, the bank said.

Japanese stocks collapsed on Monday as a sell-off triggered by economic concerns and the unwinding of a popular yen trade financing investment in stocks reverberated across markets worldwide.

During the five-trading day week that ended on Aug 8, portfolio managers sold more Japanese stocks than they added to their short positions in four trading sessions, with only Tuesday being an exception.

According to Goldman Sachs, hedge funds' net exposure to Japanese equities stood at 4.8 per cent on Thursday, down from 5.6 per cent a week earlier.

It was reported that hedge funds, for a fourth week running, bet against worldwide equities, adding more short positions as mayhem spread across the shores.

Goldman Sachs, one of the largest prime brokers in the world, tracks the flows of its hedge fund clients to report on trends.

Long/short hedge funds focusing on global equity fundamentals were down 1.34 per cent for the week amid the market rout, while systematic long/short funds posted gains of 0.77 per cent.

Hedge funds at the fastest pace in more than five years added bearish bets in Japanese stocks in a week between Aug 2 and Aug 8, according to Goldman Sachs in a note Friday, when the Nikkei dropped by the largest amount for the index since Black Monday in 1987 on Aug 5.

Hedge funds at the fastest pace in more than five years added bearish bets in Japanese stocks in a week between Aug 2 and Aug 8, according to Goldman Sachs in a note Friday, when the Nikkei dropped by the largest amount for the index since Black Monday in 1987 on Aug 5. Equity long/short hedge funds increased 1.7 shorts, or bets that stocks will fall, for each long position sold in the week between Aug 2 and Aug 8, the bank said. Japanese stocks collapsed on Monday as a sell-off triggered by economic concerns and the unwinding of a popular yen trade financing investment in stocks reverberated across markets worldwide. During the five-trading day week that ended on Aug 8, portfolio managers sold more Japanese stocks than they added to their short positions in four trading sessions, with only Tuesday being an exception. According to Goldman Sachs, hedge funds' net exposure to Japanese equities stood at 4.8 per cent on Thursday, down from 5.6 per cent a week earlier. It was reported that hedge funds, for a fourth week running, bet against worldwide equities, adding more short positions as mayhem spread across the shores. Goldman Sachs, one of the largest prime brokers in the world, tracks the flows of its hedge fund clients to report on trends. Long/short hedge funds focusing on global equity fundamentals were down 1.34 per cent for the week amid the market rout, while systematic long/short funds posted gains of 0.77 per cent.

Bank reports hedge funds ramping up bearish bets on Japanese stocks

In a recent report, the Boston Consulting Group (BCG) has outlined a potential $7 trillion surge in the combined valuations of global banks over the next five years.

This is based on a Reuters report.

This forecast is contingent on significant measures taken by banks to stimulate growth and enhance productivity.

&nbsp;BCG suggests that banks could effectively double their current valuations by focusing on expansion and refining their price-to-book ratios, even in the face of existing challenges.

The study from BCG addresses a prevalent concern within the banking sector — a substantial decline in profitability.

The report notes that around 75 per cent of bank stocks exhibited price-to-book ratios below 1 in 2022.

Furthermore, price-to-earnings multiples were nearly half of the levels seen in 2008.

Shareholder returns on bank stocks have consistently fallen behind those of major market indexes since the financial crisis.

Despite the optimistic outlook presented by BCG, challenges loom for the banking industry.

The study acknowledges that even with investments in productivity and streamlined business operations, banks will face ongoing pressure due to higher capital requirements and intensified competition from emerging players like fintech companies.

BCG emphasises that returning to pre-financial crisis levels of profitability and valuations is an unlikely scenario for banks.

(With inputs from Reuters)<o:p></o:p>

In a recent report, the Boston Consulting Group (BCG) has outlined a potential $7 trillion surge in the combined valuations of global banks over the next five years.

In a recent report, the Boston Consulting Group (BCG) has outlined a potential $7 trillion surge in the combined valuations of global banks over the next five years. This is based on a Reuters report. This forecast is contingent on significant measures taken by banks to stimulate growth and enhance productivity. BCG suggests that banks could effectively double their current valuations by focusing on expansion and refining their price-to-book ratios, even in the face of existing challenges. The study from BCG addresses a prevalent concern within the banking sector — a substantial decline in profitability. The report notes that around 75 per cent of bank stocks exhibited price-to-book ratios below 1 in 2022. Furthermore, price-to-earnings multiples were nearly half of the levels seen in 2008. Shareholder returns on bank stocks have consistently fallen behind those of major market indexes since the financial crisis. Despite the optimistic outlook presented by BCG, challenges loom for the banking industry. The study acknowledges that even with investments in productivity and streamlined business operations, banks will face ongoing pressure due to higher capital requirements and intensified competition from emerging players like fintech companies. BCG emphasises that returning to pre-financial crisis levels of profitability and valuations is an unlikely scenario for banks. (With inputs from Reuters)

Global banks poised for a $7 trillion valuation surge in 5 years: BCG Study

The Boston consulting group anticipates a surge in the valuation of global banks. The report suggests a potential $7 trillion increase in combined valuations for global banks within the next five years. This projection comes against a backdrop of widespread pessimism fueled by a significant drop in profitability within the banking sector.

Global banks eye $7 trillion upswing; Bank valuations to soar despite hurdles

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