Gavekal Capital: The Asset-Backed Commercial Paper Market Is Still Dead

Friday, September 12, 2014

The Asset-Backed Commercial Paper Market Is Still Dead

The volume of asset-backed commercial paper issued in millions of dollars currently sits at 14-year lows (blue line). After reaching levels of $90 billion issued, the ABCP market now sits at below $9 billion.

However, the entire commercial paper market has rebound a little bit from lows made in the beginning of 2013. There has been a noticeable increase in the amount financial commercial paper being issued so far in 2014. After falling to levels as low as about $900 million, financial commercial paper has increased back to about $4.7 billion. This is still only about 25% of what the financial commercial paper market was from 2001-2006.

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Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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