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Largest bond fund, Pimco, cuts US government holdings
By Dan McCrum
Financial Times, London
Monday, February 14, 2011
http://www.ft.com/cms/s/0/c90b72d6-3877-11e0-959c-00144feabdc0.html#axzz...
NEW YORK -- The world's largest bond fund sharply cut its exposure to US government-related debt in January, before US bond yields rose this month to their highest level in almost a year.
Pimco's Total Return Fund, run by Bill Gross, a founder of Pimco, reported that its holdings of US government-related securities fell from 22 per cent in December to 12 per cent in January.
The proportion of US government-related holdings, which includes US Treasuries, is at the lowest level held by the $239 billion fund since January 2009 when it held 15 per cent of its assets in the category.
In September last year, one-third of the fund was held in government-related securities. The category can include a variety of conventional and inflation-linked Treasuries, agency debt, derivatives, and bank debt backed by the Federal Deposit Insurance Corp.
... Dispatch continues below ...
Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon
Company Press Release, January 18, 2011
VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.
PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.
Following the transaction:
-- Prophecy will own approximately 90 percent of PCNC.
-- PCNC will consolidate its share capital on a 10 old for one new basis.
-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.
-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.
Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.
For the complete announcement, please visit:
http://prophecyresource.com/news_2011_jan18.php
Such a move to cut exposure to government debt would fit with the public comments of Mr Gross, an outspoken critic of US deficit spending and the quantitative easing measures employed by the Federal Reserve and other central banks.
"Something has to change or the inevitable consequence is that inflation will go up and bond prices go down," Mr Gross told the Financial Times last month.
He has warned that the 30-year run in bond prices, which rise as interest rates decline, has come to an end. With little room for rates to fall further and inflationary pressures building in the emerging world, developed world government debt is an unattractive option for investors, he said.
However, analysts caution that Pimco's use of numerous derivatives as a substitute for direct positions in securities means that independent interpretation of portfolio exposures for the Total Return Fund is extremely difficult.
Mr Gross is known for swiftly changing his holdings in response to market moves. The breakdown of the fund, meanwhile is published with a time lag.
The market for US government debt may already have started to recover.
Last Wednesday, the 10-year Treasury auction saw record demand, with 71.3 per cent of the $24bn issue bought by large US and foreign investors, much higher than the recent average of 44 per cent.
The following day, pension funds and long-term investors stepped up and bought a higher than usual share of the $16 billion 30-year issue.
Yields on 10-year US Treasury bonds were 4 basis points lower at 3.61 per cent at midday on Monday in New York. Yields hit 3.766 per cent on February 9, the highest level since April last year.
The Pimco Total Return fund has lost 0.34 per cent in the year-to-date as of Friday. Last year, the fund was up 7 per cent for the year, which came in slightly less than its 10-year average return of 7.1 per cent.
Mr Gross, a director of Pimco, the investment manager now owned by German insurer Allianz, was named fixed-income manager of the decade by Morningstar.
The Total Return Fund is the best performing fund in its category over the last 15 years, according to Morningstar.
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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property
Company Press Release, October 27, 2010
VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:
-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.
-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.
-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.
Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.
"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."
For the company's full press release, please visit:
http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
