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IMF advises broader powers for Russian central bank
October 7, 2011--The International Monetary Fund has recommended the Russian authorities broaden the central bank's supervisory powers as banks hold considerable volumes of non-performing loans, IMF European Department Director Antonio Borges said on Friday.
The central bank has recently revealed a significant hole in the assets of Bank of Moscow, Russia's fifth-largest bank and the capital's investment vehicle under previous mayor Yury Luzhkov. Borges said the discovery was detrimental to the trust on which the banking sector should be firmly based.
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Source: RIA Novosti
Fitch cuts Italy, Spain ratings over euro crisis
October 7, 2011-- Fitch cut its credit ratings on Italy and Spain Friday, citing the increasing pressure on them as the eurozone debt crisis makes efforts to stabilise their public finances even more difficult.
The eurozone debt crisis has seen Greece, Ireland and Portugal all bailed out by the EU and International Monetary Fund to avert a potentially disastrous default which could threat not just the European but the global economy.
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Source: EUbusiness
Spain, Italy Credit Ratings Are Cut by Fitch as Europe Debt Crisis Worsens
October 7, 2011--Spain and Italy, the euro region’s fourth- and third-largest economies, were downgraded by Fitch Ratings on concern they will struggle to improve their finances as Europe’s debt crisis intensifies.
Spain had its foreign and local currency long-term issuer default ratings cut to AA- from AA+, while Italy had the same set of ratings lowered to A+ from AA-, Fitch said in statements today. The outlook for both countries is negative. Fitch also maintained Portugal’s rating at BBB-, saying it would complete a review of that ranking in the fourth quarter.
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Source: Bloomberg
Sterling slides on QE move.
October 6, 2011--Sterling fell to its lowest point since July 2010 after the Bank of England announced a second round of quantitative easing.
The Bank’s monetary policy committee said it was raising its asset purchases by another £75bn to £275bn. The MPC left the main overnight rate at 0.5 per cent.
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Source: FT.com
Clearinghouse LCH Plans to Take Gold as Collateral .
October 6, 2011--LCH.Clearnet Group Ltd. plans to begin accepting gold bullion as collateral by the end of the month amid growing demand from banks eager to depart from their traditional reliance on cash and government bonds to cover margin requirements.
The move follows similar steps from a number of exchanges and banks to increase the use of gold as an acceptable deposit, reinforcing the precious metal's allure as an alternative currency.
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Source: Wall Street Journal
Flow Traders Set Up First Specialised ETF Sales Trading Desk in Asia
October 6, 2011--Meeting the increased demand from institutional investors in Asia for access to Exchange Traded Funds (ETFs), Flow Traders Asia has set up a Sales Trading desk focused solely on ETFs. The specialised sales trading team will provide professional investors (e.g. long-only investors, hedge funds, private banks, sovereign wealth funds) with highly competitive 2-way OTC bid-ask prices and liquidity for over 95% of all ETFs listed in Asia, Europe and US*. Counterparties will also benefit from Flow Traders’ experienced execution strategies for trading ETFs and unbiased product knowledge.
Martijn Schuijt, MD of Flow Traders Asia Commented: “The set-up of the specialised ETF sales trading desk in Singapore is a natural development of our already successful market making business, and it shows our dedication to the growth of the ETF business in Asia. Now Asian investors can tap into the liquidity pool already taken advantage of by the largest European investors.”
Source: Flow Traders
DBoerse-NYSE defend merger as EU sends concerns
October 6, 2011--Deutsche Boerse and NYSE Euronext defended their proposed merger Wednesday, as they received the EU Competition Commission's letter of concerns about the deal.
The Frankfurt and New York exchange operators said they had received the official "Statement of Objections", calling it "a normal step" that set out the EU commission's "provisional position" that "does not prejudge the final outcome of the case."
"We continue to strongly believe that our combination provides substantial capital and cost savings to users; advances the goal of a unified, liquid EU capital market for raising money and managing risk; and does not materially alter the competitive landscape," the two said in a statement.
The proposed merger has sparked controversy in the US because it would hand over the 221-year-old New York Stock Exchange to foreign owners and create a powerful force in 24-hour global trading of shares and derivatives.
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Source: AFP
Semeta: financial transaction tax for more revenue and changed trading practices
October 6, 2011--An EU financial transaction tax could raise €57 billion per year, Taxation Commissioner Algirdas Semeta told leading Economic and Monetary Affairs Committee MEPs on Thursday, a week after the Commission presented its proposals for such a tax. Mr Semeta shrugged off the reticence shown by some, telling MEPs that no tax proposal had ever received Member States' immediate full support and that company flight would not be the "major pattern" because tax regimes alone do not determine location.
Mr Semeta told MEPs that it was time to make the financial sector contribute more and at the same time reduce risky practices. Speaking specifically about the contentious practice of high-frequency trading, Mr Semeta also said that a financial transaction tax could force firms to rethink this model of trading since it would be the practice most targeted by the tax.
The debate saw wide divisions, notably between British Conservatives and some Liberals on one side and Greens and Socialists on the other.
A clash of ideas
Kay Swinburne (ECR, UK) argued against the tax, warning of "putting the EU financial centre in jeopardy" as firms leave to other parts of the world which would not be imposing such a tax. Olle Schmidt (ALDE, SE) feared for the future of Sweden's financial services, arguing that it would be such smaller financial centres that would suffer, rather than London's better- established one.
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Source: European Parliament
Exchange Council backs planned merger of Deutsche Börse and NYSE Euronext
Opportunity for real economy to widen its access to global capital markets/Positive effects on stability and transparency expected
October 6, 2011--The Exchange Council of the Frankfurt Stock Exchange has discussed the planned merger of Deutsche Börse with the New York Stock Exchange in an additional meeting.
Particular attention was given to various legal and economic studies and their conclusions. The focus of the meeting related to stock exchange legislation and macroeconomic issues concerning the merger. The Exchange Council is convinced of a positive outcome of the exchange supervisory authority’s shareholder control procedure.
The Exchange Council anticipates the merger will bring benefits for the real economy, ranging from greater access to global capital markets to optimised cross-border trading. Germany as a financial centre will also strengthen its ties to major international financial centres in the U.S. and Europe.
The Exchange Council has no objections that even after the merger German or European regulation will exclusively continue to be applied to the companies listed on the Frankfurt Stock Exchange.
In the view of the Exchange Council, the merger will contribute to a more secure, stable and better-regulated financial system in Europe. It will provide more efficiency and transparency at all of the trading venues of the combined company, and strengthen the international influence of European supervisory authorities on matters pertaining to financial infrastructure, particularly in times of crisis. This will make the merged company the global benchmark for transparency and regulation.
Source: Deutsche Börse
Monthly turnover of more than EUR 8.6 billion at Boerse Stuttgart
Following August’s record figures, September statistics show year-on-year increase in turnover in almost all asset classes
October 6, 2011--Boerse Stuttgart’s order book statistics show its turnover was more than EUR 8.6 billion in September 2011, bringing trading volumes back in line with the level achieved in the months prior to August’s volatile markets.
The total turnover for the first nine months of the year was just under EUR 87 billion, about 25 percent higher than in the first nine months of 2010.
Securitised derivatives accounted for most of the turnover. The transaction volume in this asset class totalled almost EUR 4.8 billion in September. Leverage products accounted for almost EUR 2.8 billion of the turnover, while investment products contributed EUR 2 billion. Turnover in securitised derivatives over the first nine months of the year was up around 23 percent year-on-year, at more than EUR 45 billion.
The trading volume for debt instruments in September was more than EUR 2 billion, just slightly below the turnover for September 2010. The volume of debt instruments traded since the beginning of the year was more than EUR 23 billion in total, around 18 percent higher than in the same period of 2010. At more than 150 percent, the growth in German government bonds (Bunds) trading was particularly strong.
Equities trading accounted for around EUR 878 million of Boerse Stuttgart’s total turnover in September. The turnover for the first nine months of 2011 was up almost 44 percent year-on-year. The trend in German equities trading was particularly positive; since the beginning of the year trading in this area is up almost 53 percent to EUR 8 billion in total.
At about EUR 776 million, turnover in ETFs and ETCs in September 2011 was more than double that recorded in September 2010. The total turnover in investment fund units was more than EUR 873 million.
Source: Boerse Stuttgart
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