update pair fav aku...mula mengisi post tuk hold market pada bulan depan paper pun
TP 1 115
TP2 110....
Soros Stopped Betting Against Pound After $1.40 Level (Update1)
By Simon Kennedy
Jan. 28 (Bloomberg) -- Billionaire investor George Soros, who made $1 billion selling the pound in 1992, said he is no longer betting against the U.K. currency after it reached $1.40.
“I did actually foresee the fall in sterling and that was one of the positions we carried,” he told reporters at the World Economic Forum in Davos, Switzerland. Below $1.40 “it seemed to me the risk-reward was no longer clear.”
Soros said today that he has made money from the financial crisis. The British government’s efforts to protect the banking system from the turmoil last week led to a drop in the pound to the lowest level against the dollar since 1985. The currency traded at $1.4313 as of 12:56 p.m. in London today.
“We did have a short position in sterling, but it doesn’t mean I’m bearish on sterling today or bullish,” Soros said. “It will continue to fluctuate.”
Soros’s comments contrast with those of Jim Rogers, who co- founded the Quantum Fund with him and is now chairman of Singapore-based Rogers Holdings. Rogers said Jan. 20 that the pound was “finished” because of turmoil in the banking system and a decline in North Sea oil output.
Hungarian-born Soros gained fame more than 16 years ago when he broke the Bank of England’s defense of the pound and drove the currency from Europe’s system of linked exchange rates. Other successful trades included a bet that the deutsche mark would rise after the collapse of the Berlin wall and a wager that Japanese stocks would start to tumble in 1989.
Brown’s Comments
U.K. Prime Minister Gordon Brown has so far resisted addressing sterling’s plunge and dismissed the warnings of investors by saying the government’s policy is to target inflation and not the exchange rate.
“The experience of targeting the pound and targeting the exchange rate has not been one particularly beneficial to this country,” Brown said today in Parliament.
Soros said his long-held pessimism in the outlook in the world economy allowed him to make money during the crisis.
“I was able to protect my capital and get a rate of return,” he said. “In the current environment, to be in positive territory is itself an accomplishment.”
Soros said President Barack Obama’s administration will struggle to revive the U.S. economy and financial system because President George W. Bush’s administration was “behind the curve” in responding to the crisis and now the money required is now “too big.” He urged the government to recapitalize banks and reduce the amount of housing foreclosures.
“The situation will continue to deteriorate,” he said.
Soros said the widening gap between the interest rates Spain, Italy, Greece and Portugal must pay investors to borrow for 10 years and the rate charged to Germany reflects “structural weaknesses in the construction of the euro” and the lack of a common fiscal authority.
Governments will eventually have to help each other out because individually they lack the “borrowing power” to protect their banking systems, Soros said.
To contact the reporters on this story: Simon Kennedy in Davos at skennedy4@bloomberg.net
Last Updated: January 28, 2009 08:33 EST