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AXE ECN To Be Wound Up
January 14, 2010--The shareholders of electronic communications network company AXE ECN - NZX, Citigroup, Macquarie, Merrill Lynch, Goldman Sachs and Commonwealth Bank (CommSec) - advise that they have elected to cease operations of AXE ECN as a trading entity and wind up the company
AXE was established in 2006, and made its original application for an Australian Markets Licence (AML) in early 2007. After a review and careful assessment of the market today, AXE does not see opportunities for its business model to generate sustainable economic returns and shareholders have therefore agreed to cease operations of the legal entity
Source: Online News
Laos Securities Exchange goes live
January 14, 2011--On January 11, 2011, the Laos Securities Exchange (LSX) established jointly by the government of Laos and Korea Exchange was opened for trading at 09:00.
The KRX entered the MOU with the Bank of Laos, which is the central bank of the country in September 2007, stating their willingness to collaborate in the establishment of securities exchange in Laos. After 3 years of preparation, the LSX was incorporated on October 10, 2010 and opened for trading in January 2011. The LSX is the first overseas exchange that is modeled after the KRX.
The KRX has invested total of USD 9.8 million, including the cash contribution, provision of IT system, training of specialists and provision of consultation services for formulation of market laws and regulations, and holds 49% of equity of the LSX. The Bank of Laos has invested total of USD 10.2 million, including the cash contribution and provision of land and buildings, and holds 51% of equity of the LSX.
The board of directors of the LSX is composed of 3 members nominated by the Bank of Laos and 3 members nominated by the KRX. The Vice-chairman of LSX who is nominated by the KRX is accountable for the operation of 3 of 5 Departments that carry out the functions essential for the operation of the LSX.
Source: Laos Securities Exchange
OECD calls on Japan’s giant Government pension fund to integrate ESG
January 14, 2011--Japan’s giant Government Pension Investment Fund – the world’s largest pool of pension assets at JPY120trn (€1.1trn, $1.4trn) – should integrate environmental, social and governance (ESG) factors, according to analysis from researchers at the Organisation for Economic Cooperation and Development. They say this would help it keep pace with its peers and diversify its investments.
The investment policy should consider the fund‘s potential impact on the domestic economy and financial stability and it should integrate environmental, social and corporate governance (ESG) factors,” the report by the OECD’s Fiona Stewart and Juan Yermo states.
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Source: Responsible Investor
China's first gold-backed exchange-traded fund roars into business
January 13, 2011--China's first gold-backed exchange-traded fund (ETF) has raised more than 3.2 billion yuan ($483 million) after the fund closed its subscription on Monday.
Lion Fund Management Co, which will manage the gold fund, will mainly invest in overseas ETFs that track the international gold price, under the Qualified Domestic Institutional Investor (QDII) program
"The so-called 'fund of funds' has chosen about 30 overseas gold ETFs for investment, focusing on mature financial markets such as the United States, Europe and Japan, and will also invest in South Africa," Song Qing, head of the international business department of Lion Fund, told China Daily on Wednesday.
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Source: Peoples Daily Online
The Impact of Fiscal Consolidation and Structural Reforms on Growth in Japan-IMF Working paper
January 13, 2011--With Japan’s public debt reaching historical levels, the need for fiscal consolidation and structural reforms have increased. As fiscal consolidation will require a sustained and large adjustment in the fiscal balance, its growth effect is a concern particularly for the short run.
This paper uses the IMF’s Global Integrated Monetary and Fiscal Model to analyze the growth impact of fiscal consolidation and structural reforms. Although fiscal consolidation has short-term costs, the potential long-term benefits are considerable, and reforms that raise potential growth could support consolidation. Simulations show that the external environment also matters but domestic policies should be the priority.
view paper-The Impact of Fiscal Consolidation and Structural Reforms on Growth in Japan
Source: IMF
China eases corporate rules on renminbi
January 13, 2011--China took a further step towards increasing its currency’s global role, allowing domestic companies to move renminbi offshore for investment purposes.
The shift came as the People’s Bank of China allowed the currency’s daily trading reference point to strengthen through the Rmb6.6 per dollar level for the first time on Thursday, a day after Tim Geithner, US Treasury secretary, reiterated concerns about China’s currency policy.
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Source: FT.com
Gold ETF Flows to Jump in India on Increased Demand, Fund Managers Predict
January 11, 2011--Assets held in gold-backed exchange traded funds in India may surge to a record for a second year as demand gains, investor awareness spreads and more funds are introduced, according to managers in the largest bullion user.
“It’s definitely possible to double,” said Rajan Mehta, executive director at Benchmark Asset Management Co., which runs the nation’s biggest gold exchange-traded fund, or ETF. Funds under management in Indian gold ETFs climbed to a record 35.2 billion rupees ($780 million) last year from 13.5 billion rupees in 2009, according to Association of Mutual Funds in India data.
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Source: Bloomberg
Chinese city allows personal investing abroad
January 10, 2011--A Chinese city celebrated for its cut-throat entrepreneurs has launched a pilot project allowing individuals to invest directly overseas in a move that could signal greater opening of the country’s tightly controlled capital account.
The eastern city of Wenzhou will allow individual residents to spend up to $200m a year in offshore investments, according to an announcement on the city government’s website.
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Source: FT.com
India's financial globalisation
January 7, 2011--Summary: India embarked on reintegration with the world economy in the early 1990s. At first, a certain limited opening took place emphasising equity flows by certain kinds of foreign investors. This opening has had myriad interesting implications in terms of both microeconomics and macroeconomics.
A dynamic process of change in the economy and in economic policy then came about, with a co-evolution between the system of capital controls, macroeconomic policy, and the internationalisation of firms including the emergence of Indian multinationals.Through this process, de facto openness has risen sharply. De facto openness has implied a loss of monetary policy autonomy when exchange rate pegging was attempted. The exchange rate regime has evolved towards greater flexibility.
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Source: IMF
Thai bourse licenses Classic Gold Futures Co.,Ltd. as gold broker
January 6, 2011--The Thailand Futures Exchange (TFEX) has confirmed Classic Gold Futures Co., Ltd. as its sixth official gold broker. The firm will commence trading on January 10.Classic Gold Futures has met all requirements of TFEX, Thailand Clearing House Co., Ltd., and the Securities and Exchange Commission, TFEX Managing Director Kesara Manchusree reported.
Classic Gold Futures Co., Ltd. is a subsidiary of Classic Gold Co., Ltd., which is more commonly known as Chiab Seng Heng. The parent company, which has been operating for more than 25 years, is recognized as a leading importer-exporter of bullion, gold ornaments and other jewelry.
“Since its conception, gold futures have been well-received by investors, and TFEX has thus continued to expand the investor base for this instrument. Classic Gold Futures Co., Ltd., as a new member of TFEX, will help develop the country’s gold futures trade and make it another successful product in the market”, said Ms.Kesara.
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