Author Topic: British Funds Suspend Trading (In The Interest Of Shareholders???)  (Read 1212 times)

Offline infinitum

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Esplain this to me Lucy: We're going to protect the investor by not letting them sell their positions.

http://www.zerohedge.com/news/2016-07-05/domino-3-mg-suspends-trading-6-billion-uk-property-fund
Things are getting bad fast in Britain...

Domino #1: *STANDARD LIFE INV PROPERTY DROPS 15%; TRADING IN FUND SUSPENDED

In a stark flashback to the catalytic event that ultimately brought down Bear Stearns in 2008, and subsequently unleashed the greatest financial crisis in history, last night we reported that Standard Life, has been forced to stop retail investors selling out of one of the UK’s largest property funds for at least 28 days after rapid cash outflows were sparked by fears over falling real estate values.

As we further noted, citing an analyst, “given the outflows the sector seems to be experiencing, this could well put downward pressure on commercial property prices,” said Laith Khalaf, senior analyst at Hargreaves Lansdown. “The risk is this creates a vicious circle, and prompts more investors to dump property, until such time as sentiment stabilises.”

As we concluded, whie Brexit is not a Humpty Dumpty event, where all the Fed’s horses and all the Fed’s men can’t glue the eggshell back together, it is an event that forces investors to wake up and prepare their portfolios for the very real systemic risks ahead. And, indeed, if Standard Life was the first domino, moments ago the second domino also tumbled when as Bloomberg reported that Aviva Investors Property Trust is as of this moment "frozen" citing "extraordinary" market conditions.

Domino #2: *AVIVA SUSPENDS TRADING ON AVIVA INVESTORS PROPERTY TRUST

As the FT adds, Aviva Investments said it had prevented retail investors from selling out of its £1.8bn UK Property Trust since Monday afternoon.

Cited by Bloomberg, Aviva said in an email that "market circumstances, which are impacting the wider industry, have resulted in a lack of immediate liquidity" adding that "we have acted to safeguard the interests of all our investors by suspending dealing in the fund with immediate effect.... Suspension of dealing will give Aviva Investors greater control in managing cash flows and conducting orderly asset sales in order to meet our obligations to investors.”

And now Domino #3: *M&G SUSPENDS TRADING IN M&G PROPERTY PORTFOLIO FUND

As Bloomberg reports, M&G suspends trading in property portfolio, feeder funds, according to statement on website.

"Investor redemptions in the fund have risen markedly because of the high levels of uncertainty in the U.K. commercial property market since the outcome of the European Union referendum.

Redemptions have now reached a point where M&G believes it can best protect the interests of the funds’ shareholders by seeking a temporary suspension in trading."



Offline Ellipses

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Re: British Funds Suspend Trading (In The Interest Of Shareholders???)
« Reply #1 on: July 05, 2016, 08:20:09 PM »
Commercial real estate has been tanking for the past five years or so here in the UK. 

Much of this has been due to competition from internet trading (lower overheads), 'out of town' retail outlets and a gradual decline in consumer 'footfall'.

I suspect the mutual fund holders which the item refers to have been wobbling for some time. Then, along comes 'BREXIT'  and, bingo, they seize a chance to subject investors to a fund lock in ... and get to blame those pesky voters who wanted their country back out of the EU empire.   Virtually every piece of adverse news is now being blamed on Brexit over here. 

Many fear the government intends to subject the electorate to a protracted period of psychological attrition - followed by an invitation to re-consider a 'hasty and ill-considered' exit by way of a further and, I suspect, more comprehensively rigged referendum.

It is manifest that the 'puppet masters' have decreed it so.

Offline infinitum

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Re: British Funds Suspend Trading (In The Interest Of Shareholders???)
« Reply #2 on: July 05, 2016, 10:54:38 PM »
Not living in GB, I’m sure I don’t have a full understanding of what’s going on. Taking the information from the article, it appears you have a run on the funds. Halting the sale of shares will only exasperate the problem while not halting the sale of shares will destroy their liquidity and ultimately halt the sale of shares anyway.

Because Real Estate has stopped selling, the funds appear to be in a position where they are not able to redeem their investments fast enough to pay back investors that see the writing on the wall, (Real Estate is collapsing). Like a run on the bank, you have a run on the funds.

While not mentioning how much Standard Life fund is worth, Aviva and M&G are (were) worth 8 billion pounds. What we’re talking about is an amount well in excess of that as downward pressure on an already collapsing real estate market. By the time these funds are able to liquidate and re-open, what's left of the share price could be devastating for most investors.

Don’t think this will stop at these three funds. The word is now out. Real Estate funds aren’t letting people have their money. People are going to be scrambling to get out of any fund invested in Real Estate causing a further drop in prices. Banks, already under pressure from bad loans, will be hit hard. Fear could easily spread to other markets.

Commercial Real Estate in the US, from San Francisco to New York is also collapsing. As more of the funds in GB close for lack of solvency, the news will spread here also.

We very well could be watching the base cause of the collapse everybody knows is coming. Or... maybe everything will be OK by morning.




Offline Ellipses

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Re: British Funds Suspend Trading (In The Interest Of Shareholders???)
« Reply #3 on: July 07, 2016, 07:34:00 AM »
True... who would think it could well be the commercial real estate sector that yet proves itself as the 'dark assassin' of the economy.

All said, the noose is relentlessly tightening.

Offline infinitum

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Re: British Funds Suspend Trading (In The Interest Of Shareholders???)
« Reply #4 on: July 07, 2016, 12:39:57 PM »
As Redemption "Panic" Accelerates, Two More UK Property Funds Slash Value Of Their Property Assets

Here come dominoes #8 and #9.

As we reported yesterday in the latest twist of the post-Brexit "falling dominoes" where UK property funds have frozen assets and suspended redemptions, which has so far seen over half of the the £25bn in UK property sector suspend trading including such names as M&G Investments, Standard Life and Threadneedle, UK's asset management giant Aberdeen not only halted redemption requests, but triggered a 17% cut to its asset values for anyone who wants to withdraw their money.

This idea appears to have struck a chord with the rest of the country's "liquidity-challenged" asset managers, and overnight two more fund proceeded to "cut" the value of their property fund assets.

As Reuters reports, Legal & General's fund arm and F&C Investments both cut the value of their UK property funds on Thursday, as the industry seeks to stem a tide of redemption requests since Britain's vote to leave the European Union.

More: http://www.zerohedge.com/news/2016-07-07/redemption-panic-accelerates-two-more-uk-property-funds-slash-value-their-property-a