Friday 27th March 2015
NEWS TICKER, FRIDAY MARCH 27th 2015: Moody's says that The Link Real Estate Investment Trust's (A2 stable) acquisition of the mid-end positioned EC Mall in Beijing is credit negative, but has no immediate impact on its ratings. The acquisition, while immediate EBITDA and cash flow accretive, will reduce liquidity and increase debt leverage, as measured by gross debt to EBITDA. This is Link's first venture into the Chinese retail market. Yesterday, Link announced that it will acquire EC Mall for a total consideration of RMB2.5bn. The transaction will close on April 1st - The outcomes of the March 19th-20th spring European Council will be debated with European Council President Donald Tusk and European Commission President Jean-Claude Juncker at 15.00 today. Agenda items at the Council include Energy Union, the EU’s economic situation, its eastern partnership, and the situation in Libya - -- The sharp fall in oil prices will have a positive, yet limited credit impact for most European asset-backed securities (ABS) collateralised by loans granted to small and medium-sized enterprises (SMEs), says Moody's Investors Service in a sector comment published today. "If we balance both direct and indirect exposures to the oil and gas sectors, which affect performance the most, the net effect is slightly positive," says Monica Curti, a Moody's Vice President and author of the report. The rating agency observes that securitised portfolios have very low direct exposure to the oil and gas industries, for which lower prices are credit negative. For pools where borrowers are indirectly exposed to these sectors, Moody’s says the oil price decline will be slightly positive in terms of credit performance due to its strong positive effect on sectors such as airlines, shipping and packaged food, which represent up to 12% of some European ABS SME portfolios. However, for over 60% of the ABS SME transactions that Moody's studied, the net effect of oil price exposures is negligible. In addition, the general positive effect of the oil price decline on economic growth will be mild. "While sustained lower oil prices would significantly boost economic growth in principle, their positive effect will be mild for European SMEs because of the euro area's low dependency on oil and the fact that oil prices have fallen in a subdued economy," says Ariel Weil, a Moody's vice president and co-author of the report - The Straits Times Index (STI) ended +5.76 points higher or +0.17% to 3419.02, taking the year-to-date performance to +1.60%. The FTSE ST Mid Cap Index gained +0.38% while the FTSE ST Small Cap Index gained +0.48%. The top active stocks were SingTel (+0.70%), UOB (+0.61%), DBS (-0.05%), Keppel Corp (+1.13%) and OCBC Bank (+0.29%). Outperforming sectors today were represented by the FTSE ST Utilities Index (+3.48%). The two biggest stocks of the FTSE ST Utilities Index are United Envirotech (+0.31%) and Hyflux (+1.14%). The underperforming sector was the FTSE ST Real Estate Holding and Development Index, which declined -0.33% with Hongkong Land Holdings’ share price declining -0.94% and Global Logistic Properties’ share price gaining +0.78%. – Reuters reports that Chicago-based CME Group had planned to debut an EU wheat-futures contract by the end of next month, but it has yet to reach agreements with local companies to guarantee sufficient deliverable capacity. Eric Hasham, senior director, CME Group is quoted as saying: "If for whatever reasons the parties that we are speaking to decide not to move forward ... we would not be making the contract available.” - Nigeria and Ivory Coast are looking to emulate Senegal's successful move into the market for Islamic bonds or sukuk, the head of the Islamic Corporation for the Development of the Private Sector (ICD) has said. Earlier this month the ICD, which is the private sector arm of the Jeddah-based Islamic Development Bank Group, signed an agreement with the African Export-Import Bank (Afreximbank) to cooperate in the development of the private sector in ICD member countries in Africa - Turkey received foreign direct investment worth $1.8bn in January, according to Turkey’s Economy Ministry. The energy sector was the largest recipient of international capital during the month with $735m worth of inflows. Foreign investment to the county increased by 44% in the first month of 2015 compared with the same month in the previous year, said the statement. Around a quarter of the investment came from European countries, a significant decrease (-76%) compared with January 2014. More than $420m in investments came from Asian countries, such as China and Malaysia. There were 175 new, foreign-funded companies established in the first month of the year, down from 410 in the same month of 2014. A total of 41,699 companies were operating in Turkey with international capital as of January 2015, with 24,612 of them operating in Turkey’s largest province, Istanbul, the ministry said. The report also said that of the total number of foreign-funded companies in Turkey, 6,054 were German-funded and 2,774 were financed by the United Kingdom. Turkey received a total of $12.4bn in foreign direct investment in 2014, down 1.7% compared with 2013.

Latest News

  • Wednesday, 25 March 2015 Banco de España aprueba programa supervisor de conducta de mercado
    En su reunión del día 24 de marzo de 2015 el Consejo de Gobierno del Banco de España ha sido informado de la aprobación por la Comisión Ejecutiva, el pasado día 18 de marzo, del primer programa supervisor anual elaborado por el Departamento de Conducta de Mercado y Reclamaciones, que el pasado 1 de octubre de 2014 asumió las competencias supervisoras en materia de conducta de mercado, transparencia informativa y sistemas o mecanismos de atención a los clientes de entidades supervisadas. Read more...
  • Wednesday, 25 March 2015 Aprobada normativa sobre gestoras de fondos de inversión salvadoreñas
    El Comité de Normas del Banco Central de Reserva de El Salvador aprobó el jueves 19 de marzo de 2015, las “Normas Técnicas para la Autorización de Constitución, Inicio de Operaciones, Registro y Gestión de Operaciones de las Gestoras de Fondos de Inversión”, las cuales entrarán en vigencia a partir del 8 de abril de 2015, indicaron representantes del Banco Central. Read more...
  • Wednesday, 25 March 2015 SEC rules to help smaller companies gain access to capital
    The Securities and Exchange Commission today adopted final rules to facilitate smaller companies’ access to capital. The new rules update and expand Regulation A, an existing exemption from registration for smaller issuers of securities. The rules are mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act. Read more...
  • Wednesday, 25 March 2015 SEC amendment to enhance oversight of active prop traders
    The Securities and Exchange Commission today proposed rule amendments to require broker-dealers trading in off-exchange venues to become members of a national securities association. The amendments will effectively enhance regulatory oversight of active proprietary trading firms, such as high frequency traders. Read more...
  • Wednesday, 25 March 2015 First UK domiciled, RQFII money market UCITS ETF listed on LSE
    The first exchange-traded fund (ETF) to offer both institutional and retail investors exposure to money market instruments which invest in China’s CIBM launched today on the London Stock Exchange. The Commerzbank CCBI RQFII Money Market UCITS ETF listing marks the first RMB denominated money market ETF, utilising a UCITS structure, domiciled in the United Kingdom, in Europe. The ETF will give investors access to China’s interbank bond market. Read more...
  • Wednesday, 25 March 2015 Moody's says paper and forest product companies starting turnaround
    Most European paper and forest product companies will maintain or increase their capital expenditure (capex) in 2015 to meet their expansion plans, says Moody's. These include Metsa Board Corporation (B1 positive), Mondi Plc (Baa2 stable), Sappi Limited (Ba3 stable), Smurfit Kappa Group Plc (Ba1 stable), Stora Enso Oyj (Ba2 stable) and UPM-Kymmene (Ba1 stable). Read more...
  • Wednesday, 25 March 2015 ECB queried by MEP on Greek access to bond market finance
    Greek MEP Notis Marias, part of the European Conservatives and Reformists group in the European parliament has asked the European Central Bank for clarification over press reports that it has placed Greek systemic banks under strict supervision in terms of their purchases of Greek government bonds. Read more...
  • Wednesday, 25 March 2015 Neonet deepens ties with SimCorp via access to execution algos
    Agency broker Neonet says it has enhanced its integration with investment management software provider SimCorp to allow mutual and SimCorp’s clients access to Neonet’s full range of execution algorithms. Read more...
  • Wednesday, 25 March 2015 Buy side traders voice concern about liquidity in equity markets
    Sourcing sufficient liquidity to get large trades done is the top concern of institutional traders globally, according to a survey conducted by Liquidnet, the institutional trading network. Read more...
  • Tuesday, 24 March 2015 El Tesoro español coloca bono a 15 años y rentabilidad del 0,354%
    El Tesoro Público español ha lanzado su tercera referencia de valores indexados a la inflación europea mediante la técnica de la sindicación bancaria. Se trata de un nuevo bono a 15 años, con vencimiento el 30 de noviembre de 2030 y un cupón del 1%, informa el departamento de economía del gobierno central. Read more...
  • Tuesday, 24 March 2015 México fomenta las relaciones comerciales con Francia
    El Secretario de Economía de México, Ildefonso Guajardo Villareal, participa estos días en París en una serie de reuniones con el objetivo de promocionar la economía e impulso de la inversión en México. Read more...
  • Tuesday, 24 March 2015 ESMA issues consultation on complex debt instruments and structured deposits
    ESMA has issued a formal consultation on the terms of Article 25(10) of MiFID II [EU Directive 2014/65] which requires the European market regulator to develop comprehensive guidelines for the assessment of bonds and other forms of securitised debt and money market instruments (and which specifically incorporate a structure which makes it difficult for the client to understand the risk involved) as well as structured deposits (specifically incorporating a structure which makes it difficult for the client to understand the risk of return or the cost of exiting the product before term). Read more...
  • Tuesday, 24 March 2015 Value Partners launches Value China A-Share ETF
    Value Partners Group Limited says its wholly-owned subsidiary, Value Partners Hong Kong Limited, has launched Value China A-Share ETF, the world’s first-ever value-based Renminbi Qualified Foreign Institutional Investor (RQFII) A-share ETF1 that tracks a customised index and aims to deliver potential excess returns through Value Partners’ proprietary stock screening process. Read more...
  • Tuesday, 24 March 2015 IOSCO issues code of conduct fundamentals for credit rating agencies
    The International Organisation of Securities Commissions (IOSCO) published today the final report on Code of Conduct Fundamentals for Credit Rating Agencies, which includes significant revisions and updates to the current IOSCO Code of Conduct for Credit Rating Agencies (IOSCO CRA Code). Read more...
  • Tuesday, 24 March 2015 Moody's suggests Euro periphery high yield issuance volume under pressure this year
    The record corporate high-yield issuance of $30bn last year from Italy, Spain, Portugal, Greece and Ireland is unlikely to be repeated in 2015 as caution returns to debt capital markets, says Moody's in a report today. Read more...
  • Tuesday, 24 March 2015 Is the digital/data revolution an opportunity for asset managers?
    Important challenges now face the asset management industry, including regulation and competition from non-traditional asset management companies. However, buy side commentators at the TSAM Europe conference today say that the digital and data revolution offers asset management a new way forward. Read more...

MORE NEWS...
Key Stories from FTSE Global Markets

The Expert Panel

  • David Gurtz, Deputy Chief Investment Officer, Director of Risk Management, Massachusetts Pension Reserves Investment Management (PRIM) Board
  • Susan Peters, Chief Operating Officer, Scorpeo
  • Charles Rizzo, Senior Vice President, Chief Financial Officer For The John Hancock Family Of Funds And Chairman John Hancock Funds Risk Committee
  • Craig Starble, Chief Executive Officer, eSecLending
  • Chris Valentino, Director, Sales, EquiLend
  • Robert Zekraus, Director, Prime Services, Scotiabank Global Banking & Markets
  • Francesca Carnevale, Editor, FTSE Global Markets
Read more...

The decline in commodity prices and the rise in value of the US dollar is having a negative effect on the value of Latin American currencies. At the time of going to press the Colombian peso was at its lowest level against the US dollar in five years. The same is true for Chile, where the peso is at a six year low against the greenback following a severe drop in the price of copper. The list goes on.

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The (French) euro private placement market has seen the emergence of a range of unlisted deals, attracting international borrowers. A pan-European private placement (PP) market looks to be evolving. In France in particular the euro PP market has seen a broad range of deals from international borrowers. The direct lending market-where dedicated credit funds lend directly to predominantly sponsor-owned businesses—saw more than €10bn worth of transactions last year, covering some 200 plus deals. How far can this alternative funding market grow?

Read more...
Tuesday, 24 February 2015

A slow start for RMB issues

After a banner year for offshore RMB issuance volumes in 2014, with RMB587bn worth of securities issued, a quiet start to this year has set off alarm bells in some quarters. Others say that RMB can weather a downturn in January as the bonds have evolved from a simple one-way expectation of RMB appreciation to a more mature evaluation of credit quality and asset allocation diversification during the last twelve months. New research from FTSE Group thinks that the outlook is more balanced. Who’s right? The evidence looks rather mixed.

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Even eight years after the blow up in the financial markets, access to alternative sources of capital for borrowers, particularly SMEs, remains strained. Much has been talked about the emergence of a shadow banking market; but that market is highly selective and is in no way ubiquitous. The European private placement market offers some potential, but it remains highly fragmented, still defined by domestic rather than pan-European issuance. Now capital markets agencies across Europe have come together to help define the operation of a pan-European capital market union; one in which the emergence of a pan-European private placement market is one stepping stone. Can it be achieved?

Read more...
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  • Tuesday, 10 February 2015 16:51 Swap Markets Developments in 2015
    Changes in the functioning of the swap markets continue to hit the news—and generate controversy.  With recent stories focusing on international comity, proposed margin requirements…

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