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Rising Indian inflation confounds forecasts
March 14, 2011--India’s headline inflation rose in February, increasing the likelihood of the country’s central bank raising lending rates later this week and threatening to wreak havoc with optimistic government forecasts.
Figures released on Monday showed that the wholesale price index had edged up to a year-on-year rate of 8.31 per cent last month compared with 8.23 per cent in January. The data overturned many forecasts by economists who had expected inflation to fall last month
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Source: FT.com
HKEx Announces Plans for Synthetic Futures Trading in its Stock Options Market
March 11, 2011--Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Friday) that it plans to introduce a standard combination trading function in its stock options market on 9 May this year, pending regulatory approval, to allow investors to use synthetic futures strategies in the trading of five active stock option classes: China Construction Bank, China Life Insurance, China Mobile, HKEx and HSBC.
A standard combination trading function has been operating smoothly in HKEx’s stock index futures and stock index options markets for several years.
A synthetic futures strategy is a stock option combination which consists of two option legs. The buyer of synthetic futures buys a call option and sells a put option with the same underlying stock, strike price and expiry date, whereas the seller of synthetic futures sells a call option and buys a put option with the same features. The standard combination trading function allows investors to price synthetic futures as a package, which can reduce execution risk.
The advantages of using synthetic futures are:
1.They can be used by investors to manage delta exposure in stock options portfolios. Economically, their payoff at expiration will be similar to that of equity holdings.
2.As they operate on a net premium basis, they can help investors reduce their initial capital outlay.
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Source: Hong Kong Exchanges and Clearing Limited (HKEx)
Japan weighs economic implications of tsunami
March 11, 2011--Until Friday afternoon the biggest risks for Japan’s economic recovery were high oil prices, uncertain export demand and a looming budget showdown between the faltering government and an emboldened opposition.
The huge earthquake that hit off the coast of northeastern Miyagi prefecture was a harsh reminder of the more elemental dangers that can threaten economic activity on the crowded and seismically vulnerable Japanese archipelago.
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Source: FT.com
Nikko Asset Management And Tokyo Stock Exchange Announce Listing Of The "Listed Index Fund Nikkei China Related 50" Total Of 100 ETFs Are Listed On The Tokyo Market
March 10, 2011-- Nikko Asset Management Co., Ltd. (Nikko AM) and Tokyo Stock Exchange, Inc. (TSE) today announced that the "Listed Index Fund Nikkei China Related 50 (nickname: Listed China Related 50)" (code: 1556) began trading on the TSE market on Thursday, March 10.This ETF is the 20th ETF managed by Nikko AM, and is also the 100th ETF listed on TSE.
ETFs have been widely accepted by a broad range of investors, from domestic individuals to overseas institutions, as financial instruments which meet their asset management needs. TSE has focused on expanding the number of listed issues in order to further increase investor convenience. Additionally, Nikko AM has been pursuing ETFs targeting new areas of investment while developing and managing a diverse lineup. With today's listing of "Listed Index Fund Nikkei China Related 50", TSE has reached its goal of 100 ETFs. As an ETF provider, Nikko AM manages 1/5th of the TSE ETF market, with 20 issues, and 1/3rd of the assets under management for domestic ETFs (JPY 1.7 trillion as of Fubruary 28, 2011), with a balance of approximately JPY 600 billion.
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Source: Tokyo Stock Exchange, Inc. (TSE)
Shanghai bourse to vie for more new listings
March 9, 2011--The bourse will also introduce new financial products such as cross-border exchange-traded funds (ETF) this year, but Geng declined to reveal the timetable for the launch of the product. It was reported that the bourse is proposing as many as 20 exchange-traded funds this year.
When asked about the stock exchange's plan to cooperate with foreign bourses, Geng said the exchange has no plan for mergers and acquisitions or forming alliances with overseas stock exchanges.
The bourse recently signed a Memorandum of Understanding with the Brazilian stock exchange BM&F Bovespa, South Amercia's largest bourse.
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Source: People's Daily On-line
Bank Ownership and the Effects of Financial Liberalization: Evidence from India -IMF Working Paper
March 9, 2011--Do financial sector reforms necessarily result in expansion of credit to the private sector? How does bank ownership affect the availability of credit to the private sector? Empirical evidence is somewhat mixed on these issues. We use the Indian experience with liberalization of the financial sector to inform this debate. Using bank-level data from 1991-2007, we ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the private sector.
We find that even after liberalization, public banks allocated a larger share of their assets to government securities than did private banks. Crucially, we also find that public banks were more responsive in allocating relatively more resources to finance the fiscal deficit even during periods when state pre-emption (measured in terms of the requirement to hold government securities as a share of assets) formally declined. These findings suggest that in developing countries, where alternative channels of financing may be limited, government ownership of banks, combined with high fiscal deficits, may limit the gains from financial liberalization.
view the Bank Ownership and the Effects of Financial Liberalization: Evidence from India
Source: IMF
HKEx Publishes Online Fact Book for 2010
March 9, 2011--Hong Kong Exchanges and Clearing Limited (HKEx) has published its annual fact book on the HKEx website.
HKEx Fact Book 2010 presents a review of the securities and derivatives markets in 2010, as well as clearing and settlement information. It includes market indices’ movements, trading statistics and analysis, statistics based on the Hang Seng Industry Classification System, corporate actions of listed companies, fund-raising figures, historical statistics and results from surveys of the investing community.
view the HKEx Publishes Online Fact Book for 2010
Source: Hong Kong Exchanges and Clearing Limited (HKEx)
Taiwan isolated from mergers trend
March 9, 2011--The wave of consolidation sweeping global exchanges has yet to but in Taiwan, the futures exchange stands in splendid isolation from the trend.
Taiwan Futures Exchange (Taifex), is unlikely to be able to pursue tie-ups with other exchanges because of the country’s tight regulatory control and the exchange’s primarily local customer base, according to Taifex’s president, Steve Wang.
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Source: FT.com
Orix to be Japan's first renminbi bond issuer
March 9, 2011--Orix, a financial services company, is poised to become the first Japanese company to issue so-called “dim sum” bonds in Hong Kong, adding to the smattering of foreign banks and companies tapping the nascent renminbi market.
The company is expected to raise about Rmb400m ($61m) and is eyeing a maturity of two or three years, similar to other foreign issuers such as Caterpillar’s Rmb1bn bond issued in November Marketing started on Wednesday.
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Source: FT.com
Emerging Indonesia: lessons for middle-income countries
March 8, 2011 - Indonesia’s re-emergence as a middle-income country has brought several lessons which would be valuable to tap into for knowledge exchange among nations. In this spirit, the World Bank organized a series of seminars and knowledge events in Washington D.C. to capture lessons from the Indonesia story.
The “Emerging Indonesia” series started on February 23rd and spanned for two weeks until March 3rd. The event culminated in a cultural evening with performances from Bank staff member and the Indonesian community in the DC area.
In her opening speech during the Discussion Panel organized together with the US-Indonesia Society (USINDO) on February, Sri Mulyani Indrawati, World Bank Managing Director, emphasized the importance of middle income countries. By the Bank’s classification, some 100 countries fall in this category which now account for 69 percent of the world’s population and 41 percent of its economic output. She added that, “To be relevant to middle-income countries such as Indonesia, the World Bank must not only provide financing services, but also knowledge and convening services.”
view Indonesia: Partnering with a Middle Income Client-presentation
Source: World Bank
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