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Predictive Accuracy Analysis of Fitch European Fixed-Income Investor Survey
Investor Survey Offers Insight into Direction of Spreads
July 18, 2011--Summary
Fitch Ratings has undertaken an evaluation to assess the predictive power of survey data collected in its quarterly senior fixed‐income investor survey series. Focusing on expectations for credit spread movements, tests have shown that the data exhibit good predictive value, supporting the use of the survey in providing creditmarket
professionals with meaningful insight on the direction of spreads.
Using two sets of quarterly, qualitative data, Fitch applied a popular model evaluation technique (the cumulative accuracy profile (CAP) model) to quantitatively analyse the accuracy of 12‐month spread predictions relative to actual outcomes. The evaluation centred on data collected for investment‐grade
(IG), speculative‐grade (SG) and emerging‐market (EM) corporate credit asset classes, and the results were compared with asset swap spreads for relevant global credit indices.
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Source: Fitch Ratings
Office for Budget Responsibility: Fiscal Sustainability Report
July 18, 2011--The Office for Budget Responsibility (OBR) published its first annual Fiscal Sustainability Report (FSR) on 13 July 2011. The FSR helps to inform the public on the long-term challenges facing the UK's public finances
The Treasury published an Unaudited Summary of the Whole of Government Accounts for the year 2009-10 on 13 July 2011. The Government made available the key balance sheet analysis contained in this summary to enhance the analysis of the sustainability of the public finances in the FSR.
view the Fiscal Sustainability Report 2011
Source: HM Treasury
Deutsche Boerse shares replaced by Deutsche Boerse Tendered shares in STOXX indices
July 15, 2011--STOXX Limited, the market-moving provider of innovative, tradable and globalindex concepts, today announced adjustments in several STOXX indices. As a result of the expected merger with NYSE Euronext, the Deutsche Boerse shares (DE0005810055, Financial Services, Germany) in
the EURO STOXX SO, STOXX Europe 600, STOXX Global Total Market and sub-indices will be replaced with the Deutsche Boerse Tendered shares (DE000A1KRND6, Financial Services, Germany). This change will be effective July 20, 2011.
Component changes are being announced today after the acceptance threshold of at least 75% was reached by the end of the initial tender period. The free-float factor of the new share will be adjusted from 100% to 82.43% in all STOXX indices. This reflects the acceptance rate based on the current information and leads to a decrease in weighting.
For more information on the STOXX Indices, please visit www.stoxx.com.
Source: STOXX
Tendered Deutsche Börse shares to be included in DAX
July 15, 2011--Deutsche Börse today announced an adjustment to the DAX index. As a result of the expected merger with NYSE Euronext, the Deutsche Börse AG shares (ISIN DE0005810055) in the DAX will be replaced with the tendered share class of Deutsche Börse AG (ISIN DE000A1KRND6). This change will be effective 20 July 2011 and reflects the decision of the Working Committee for Equity Indices published on 6 June 2011.
The Working Committee had decided to make this component change provided an acceptance threshold of at least 50 percent is reached by the end of the initial tender period, or at any time throughout the extended period, with two trading days notice. As this threshold has been reached, the larger share class will be included in the DAX in accordance with the index rulebook. In addition, the free-float factor of the new share will be adjusted from 95.41 percent to 77.83 percent in the DAX to account for a change in the free-float greater than 10 percentage points. This value equates to the number of tradable shares of the tendered shares class based on the current information.
After closing or failure of the transaction the tendered share will be replaced by the share of the new company or the old Deutsche Börse share respectively provided the new company fulfils the criteria for inclusion in the DAX index. This process ensures that the relevant criteria of index continuity and tradability are upheld.
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Source: Deutsche Börse
Eight banks fail European stress test
July 15, 2011--Eight banks have failed Europe's bank stress test designed to assess whether they can weather another economic crisis, bank regulators said on Friday. Sixteen banks barely passed
Eight European banks are not strong enough to withstand a prolonged recession and need to raise 2.5 billion euros in capital, an industry health check aimed at reviving investor confidence showed on Friday.
The so-called "stress test" of 90 banks in 21 countries – representing 65 percent of the assets in Europe's banking sector – showed five banks in Spain, two in Greece, one in Austria and one in Germany failed the test, although the German result is disputed by the bank in question and is therefore not counted along the eight banks that officially failed the test.
Between five and 15 smaller lenders had been expected to fail the test. All big banks passed, as expected.
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Source: Deutsche Welle
Statement by the IMF on the European Banks Stress Test
July 15, 2011--Mr. José Viñals, financial counselor and director of the Monetary and Capital Markets Department of the International Monetary Fund (IMF), issued the following statement today:
“The Fund welcomes the EU-wide stress test exercise carried out under the auspices of the European Bank Authority (EBA) and the strengthened methodology and assumptions that have been applied across the banks in the exercise.
“The disclosure of the very detailed information accompanying the release of the stress test results will allow market participants to form a considered view of the soundness of the banks participating in the test. We hope that this elevated degree of transparency becomes a permanent feature at the level of national jurisdictions.
“The outcome of the exercise reflects efforts made by individual institutions and national supervisory authorities to strengthen bank balance sheets, but more needs to be done. The Fund considers it important that national authorities have promptly committed to address the pockets of vulnerability detected through the stress test exercise, and strongly advocates that the necessary measures are taken to effectively address weaknesses not only in institutions that have ‘failed’ the test, but also in those that have only narrowly passed it. More generally, in light of the current turmoil, the Fund would emphasize the importance of further strengthening capital buffers.”
Source: IMF
Shareholders of Deutsche Börse AG approve the combination with NYSE Euronext – 82.43 percent of the shares in Deutsche Börse have been tendered to be exchanged into shares of the new holding "Alpha Beta Netherlands Holding"
July 15, 2011--Deutsche Börse AG has announced today that its shareholders have approved the planned combination with NYSE Euronext. According to the final score, 160.734.462 shares in Deutsche Börse have been tendered to be exchanged into shares of Alpha Beta Netherlands Holding N.V., the future common holding company of Deutsche Börse and NYSE Euronext.
The resulting final acceptance ratio of 82.43 percent exceeds the minimum acceptance ratio of 75% (condition precedent pursuant to section 14.1 (a) of the offer document published on 4 May 2011). Deutsche Börse and NYSE Euronext have thus cleared another important hurdle on their way to combining the businesses.
Deutsche Börse CEO Reto Francioni: "We are pleased that such a large majority of our shareholders has not only enabled the planned combination between Deutsche Börse and NYSE Euronext by tendering shares but has also confirmed our mandate to implement the related strategic targets. This is a historic day. We have made an important step forward on our way towards successfully combining Deutsche Börse and NYSE Euronext into the world's premier stock exchange operator. The decision is testimony to our shareholders' belief in the growth prospects and the upside potential of the proposed global leader among stock exchange operators. We also view it as a vote of confidence and we will work very hard to meet our shareholders' expectations."
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Source: Deutsche Börse
LME rule disappoints aluminium consumers
July 15, 2011--Some of the world’s largest buyers of aluminium reacted with disappointment on Friday to a long-awaited decision by the London Metal Exchange to change its warehousing rules.
General Motors, one of the world’s largest automakers, and Novelis, a leading aluminium processor, told the Financial Times that the LME’s move to double the rate at which the largest warehouses must deliver metal did not go far enough.
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Source: FT.com
Euro stabilises after slide on contagion fear
May 15, 2011--The euro hit a four-month low against the dollar and a record trough against the Swiss franc this week as Italy and Spain were increasingly sucked into the eurozone’s debt crisis.
The single currency suffered on fears that the debt problems of relatively small countries on the periphery of the region were spreading to larger economies.
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Source: FT.com
IMF assesses financial stability in Sweden
July 14, 2011--At the invitation of the Ministry of Finance and the Riksbank, the International Monetary Fund (IMF) will visit Sweden to make a structured examination of the financial sector, what is known as an FSAP (Financial Sector Assessment Program).
This assessment will entail the IMF analysing the financial sector, the public authorities, legislation and financial supervision in Sweden. The IMF will also include in its report any shortcomings and risks that are detected and propose measures for dealing with them.
The IMF has carried out FSAPs in almost all member countries since 1999 and they have also made a second assessment for a number of countries. Sweden had its first FSAP during 2001/2002.
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Source: Finansinspektionen
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