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NYSE aids China with international board
May 20, 2011-- The New York Stock Exchange (NYSE) is working with China to launch the country's international board that will allow foreign firms to list on the mainland, in a move seen as a crucial step in developing its capital markets.
Chinese officials have yet to provide details of the international board, seen as a centrepiece in Shanghai's attempt to become an international financial centre by 2020, though they have said it could be launched later this year.
Oil prices steady, IEA warns on demand
May 19, 2011--Oil steadied on Thursday, as the International Energy Agency warned that high prices could threaten global economic growth and called for increased output to tackle the problem.Brent North Sea crude for delivery in July dipped five cents to $112.25 per barrel in London deals.
New York's main contract, light sweet crude for June, edged up one cent to $100.11 a barrel.
The IEA said that despite a recent 10% fall, oil prices remained high because of strong demand and geopolitical uncertainty - a reference to popular unrest in the Middle East.
Playing catch-up bolsters JSE
May 19, 2011--The JSE ended higher on Thursday, with local investors, who were off on Wednesday due to municipal election, playing catch-up to their global counterparts.
Stronger commodities and good earnings from companies such as SABMiller [JSE:SAB] helped lift investor spirits, said Kevin Algeo, portfolio manager at Imara SP Reid. On Wednesday, when the local market was closed for elections, global equities rallied.
In Which Exchange Rate Models Do Forecasters Trust? IMF Working paper
May 19, 2011--Summary: Using survey data of market expectations, we ask which popular exchange rate models appear to be consistent with expectation formation of market forecasters.
Exchange rate expectations are found to be correlated with inflation differentials and productivity differentials, indicating that the relative PPP and Balassa-Samuelson effect are common inputs into expectation formation of market forecasters.
view the IMF Working paper-In Which Exchange Rate Models Do Forecasters Trust?
Coordinated Global Regulatory Reform for OTC Derivatives is Creating a New Interest Rate Swap Market, Says TABB Group
Alternative Ways of Managing Exposure See Renewed Interest
May 19, 2011 – Coordinated global regulation for the over-the-counter (OTC) derivatives markets is creating a dramatically different market for interest rate swaps with central clearing for end-users, the use of organised trading facilities and increased transparency and reporting requirements.
In new research published today, “The Changing Environment for Managing Interest Rate Exposure,” TABB Groupsays alternative methods of managing exposure will see greater adoption due to regulatory reform, specifically in the US and Europe where efforts will force standardized derivatives onto trading facilities with central clearing. This will create a new trading landscape for OTC interest rate swaps (IRS).
“New central clearing requirements for end-users such as asset managers and hedge funds will require these clients to post initial margin and variation margin, substantially raising the cost of doing business particularly for longer dated instruments,” says Andy Nybo, a TABB principal, the international advisory and research firm’s head of derivatives and author of the new reportAs transaction costs and other expenses associated with margin and capital requirements rise, TABB believes that market participants will be prompted to search for alternative methods of managing their interest rate exposure.
Emerging market investors should avoid BRICs – Cambridge Associates
May 19, 2011--Institutional investors, including pension funds, with allocations to emerging markets of more than 5% should focus away from BRICs in an approach that replicates their diversified exposure to developed markets, according to Cambridge Associates, a consultancy.
A paper on "making emerging market exposure more like developed market exposure" claimed that adopting long-only strategies focused on BRIC markets and "multinationals like Gazprom and Samsung" that happen to be in emerging markets meant investors would miss opportunities in smaller companies that are more directly exposed to emerging market growth.
Strauss-Kahn Resigns as IMF Managing Director
May 19, 2011--Dominique Strauss-Kahn, once considered a leading contender to win the French presidency next year, resigned as head of the International Monetary Fund after being charged with attempting to rape a New York hotel maid.
Strauss-Kahn, 62, informed the Executive Board of the IMF of his intention to resign as managing director with immediate effect, the IMF said in an e-mailed statement. “I want to protect this institution which I have served with honor and devotion, and especially -- especially -- I want to devote all my strength, all my time, and all my energy to proving my innocence,” Strauss-Kahn said in a letter included in the IMF’s statement.
Finance: Capital flows debate offers an opportunity to shape financial globalization, OECD says
May 19, 2011--The risks posed by increasing capital flows require a coordinated package of macroeconomic, prudential and structural policies, with capital controls only to be considered as a last resort, according to a new report from the OECD.
Getting the Most Out of International Capital Flows encourages countries to take advantage of new opportunities for long-term income growth stemming from increased capital flows. But the report also recognizes that global financial integration can leave economies more vulnerable to risks at both the national and global level.
“Large capital inflows create a real macroeconomic challenge for economies, given the associated risks of excessive currency appreciation, credit booms and busts and sudden stops,” said OECD Secretary-General Angel Gurría. “Our analysis shows that structural reforms, in addition to promoting overall cross-border flows, could help to reduce vulnerabilities, by leading to a better composition of inflows, with more Foreign Direct Investment and less debt.”
view the Getting the Most Out of International Capital Flows
Empowering ideas 2011: Report
May 19, 2011--Empowering ideas 2011: A look at 10 of the emerging issues in the power and utilities sector, now in its second year, suggests the recent natural disasters that led to a nuclear meltdown at the Fukushima nuclear plant in Japan will have far-reaching impacts on the global nuclear power industry and offers insights into issues and trends in the coming year and identifies opportunities (e.g., the high growth of unconventional gas) and challenges (e.g., the security of energy supplies).
“The impact of the events in Japan on the nuclear industry will be both profound and long-lasting,” said Peter Bommel, DTTL Global Industry Leader for Energy & Resources. “As the demand for energy continues to increase, energy companies will face formidable challenges in balancing safety concerns with energy demands.”
The report includes the prediction that governments, utilities, and consumers will increasingly tap into energy efficiency and demand side management programs to address these challenges. Another trend, according to the report, is the growing importance of data analytics, which help companies analyze enormous data sets to create scenarios and take informed decisions.
The report outlines 10 forces impacting the global power and utilities sector:
The future of nuclear: The post-Japan path
Risk management: The new challenge
M&A: Is it time to buy or sell?
An energy resource dilemma: Is natural gas the clear winner?
read more
view report-Empowering ideas 2011
BlackRock New Report ETF Landscape: Industry Review - Q1 2011
May 18, 2011--At the end of Q1 2011, the global ETF industry had 2,605 ETFs with 5,905 listings and assets of US$1,399.4 Bn from 142 providers on 48 exchanges around the world. This compared to 2,131 ETFs with 4,133 listings and assets of
US$1,081.9 Bn from 123 providers on 42 exchanges at the end of Q1 2010.
Additionally, there were 1,119 other ETPs with 1,835 listings and assets of US$183.7 Bn from 58 providers on 23 exchanges. This compared to 718 ETPs with 1,025 listings and assets of US$153.6 Bn from 42 providers on 18 exchanges at the end of Q1 2010.
Combined, there were 3,724 products with 7,740 listings, assets of US$1,583.2 Bn from 178 providers on 52 exchanges around the world at the end of Q1 2011. This compared to 2,849 products with 5,158 listings, assets of US$1,235.4 Bn from 147 providers on 44 exchanges at the end of Q1 2010.