Friday 22nd May 2015
NEWS TICKER: THURSDAY, MAY 21th: Moody's Japan has assigned rating of A1 to total of $2.5bn bonds due 2020 and 2025 issued by Japan Bank for International Cooperation (JBIC). The rating outlook is stable.The debts are guaranteed by the Government of Japan. The specific debt issues rated are $1bn Fixed Rate bonds, Series 11 JBIC Government-Guaranteed Global USD Bond due 2020 and $1.5bn Fixed Rate bonds, Series 12 JBIC Government-Guaranteed Global USD Bond due 2025. Moody's concludes that the creditworthiness of JBIC reflects that of the sovereign, given the integration of its mandate with the government's foreign economic policies and the high level of government oversight of its operations – Salvepar’s combined general shareholders meeting yesterday approved a proposed ordinary dividend for fiscal year 2014 of €2.20 per ordinary share, and has decided that each shareholder will be allowed to opt for the payment of the dividend in full in cash, or for the payment of the dividend in full in ordinary shares, or for the payment half in cash and half in ordinary shares. The option to receive the dividend payment in new shares can be exercised by the Company’s shareholders between May 28th, 2015 and June 10th, 2015 (inclusive. After June 10th, 2015, the dividend can only be paid in cash. The maximum aggregate number of new ordinary shares of the company which may be issued is 455,888 shares, which represents 6.65% of the share capital and voting rights of the company as at the date of the General Meeting - Two WisdomTree equity index ETFs launched on Xetra ETFs based on Japanese and European companies with strong dividends - plus a currency hedge. Two new exchange-listed index funds issued by WisdomTree have been tradable on Xetra since Thursday. WisdomTree is primarily a Smart Beta ETF provider, using fundamental data to weight companies in the reference index. The new WisdomTree ETFs weight the stock corporations contained in the reference index on the basis of the annual dividends they pay. Companies with higher dividend yields have a heavier weighting. WisdomTree Japan Equity UCITS ETF is a USD Hedged Asset class: equity index ETF (ISIN: DE000A14SLH0), with a total expense ratio: 0.48% and is benchmarked against the WisdomTree Japan Hedged Equity Index. The WisdomTree Japan Equity UCITS ETF - USD Hedged enables investors to participate in the performance of Japanese companies that generate at least 20% of their revenues outside Japan. The currency hedge covers the exchange rate risk of the Japanese yen to the US dollar. Meanwhile, the WisdomTree Europe Equity UCITS ETF - USD Hedged Asset class: equity index ETF (ISIN: DE000A14SLJ6) has a total expense ratio of 0.58%. The ETF provides access to the performance of European companies that generate at least 50 percent of their revenues outside Europe. This ETF also offers investors the additional benefit of the currency hedge, which reduces euro-US dollar exchange rate risk – PowerShares has launched an equity index ETF on Xetra, the first ETF for high dividend, low volatility US companies says the firm. PowerShares S&P 500 High Dividend Low Volatility UCITS ETF Asset class: equity index ETF (ISIN: IE00BWTN6Y99) has a total expense ratio of 0.39% and benchmarked against the S&P 500 Low Volatility High Dividend Index. The PowerShares S&P 500 High Dividend Low Volatility UCITS ETF provides investors access for the first time to performance of US companies with high dividend yields and low volatility. The reference index firstly comprises 75 companies with the highest dividend yields from the S&P 500, and then proceeds to identify the 50 with the lowest volatility - MTN Rwanda shareholder, Crystal Telecom, launched its much-awaited Initial Public Offering (IPO) this morning. The company is selling a 20% stake in MTN Rwanda, the largest telecom operator in the country, to the public. The move is part of the strategy by Crystal Ventures, the holding company, of monetising their mature holdings in firms with the intention of redeploying the capital in early-stage enterprises.The IPO comes after the Capital Market Authority approved Crystal Telecom's application to float its MTN Rwanda shares on the stock exchange. Once listed, Crystal Telecom will become the third domestic company with shares trading at the bourse, after Bank of Kigali and Bralirwa. The last IPO at the stock exchange was in 2011 when Bank of Kigali listed its shares for trade at RWF125 each. Crystal Telecom shares starting price will be announced during the launch - Welltec’s revenues reduced in the first quarter of 2015 as mar¬ket activity contracted sharply in response to the lower oil price. This overshadowed growth in some geomarkets and the de¬cline in revenue was accentuated by strong currency headwinds. EBITDA reduced accordingly, with margin impacted by lower levels of utilisation and increased redeployment of fleet and per¬sonnel to match the local demand. Proactive cost management and working capital discipline allowed for improved cash flows in the period. Revenues of $68m were 14% lower compared to the same period last year. On an adjusted currency basis rev¬enues were 7% lower. In Europe, Middle East, Africa and Russia CIS (EMEAR), revenues decreased by 22% to $33m. Revenues in the Americas fell 8% to $25m, while Asia Pacific revenues were level at $10m.

Blog

Regulatory Update

Traders Beware, Focus Could Shift Quickly in Your Direction

Monday, 16 July 2012 Written by 
Traders Beware, Focus Could Shift Quickly in Your Direction Some unsettling stories continue to unfold. One is Peregrine Financial Group, which managed to combine some of the most memorable red flags of the Madoff and MF Global scandals without attracting a regulatory response from the CFTC. (PFG represented that it held more than $220 million of customer funds when in reality it held approximately $5.1 million.) http://www.ftseglobalmarkets.com/

Some unsettling stories continue to unfold.

One is Peregrine Financial Group, which managed to combine some of the most memorable red flags of the Madoff and MF Global scandals without attracting a regulatory response from the CFTC. (PFG represented that it held more than $220 million of customer funds when in reality it held approximately $5.1 million.)

The second involved information stemming from the Barclay’s Libor scandal—in particular, exactly how much was known, when, and by what regulators.  The NY Fed, confirming that it received reports about Libor issues in 2007 and 2008, on Friday released documents showing it took “prompt action four years ago to highlight problems.”  The actions of Treasury Secretary Timothy Geithner, who headed the New York Fed from 2003 until 2009, may be heavily scrutinized.  So will those of the U.K. authorities.

And then there is the recent announcement by JPMorgan of possible valuation discrepancies by its traders. According to JPMorgan’s chief financial officer, a restatement may be necessary based upon facts uncovered “regarding the CIO traders’ intent as they were marking the book. And as a result, we questioned the integrity of those trader marks.”



What impact will this have on the regulatory climate?  Clearly, the regulators will be under tremendous pressure.  Richard Shelby, the top Republican on the U.S. Senate Banking Committee, noted Peregrine “raises serious questions about our current regulators and whether they are capable of doing their jobs.”  Others are also voicing concerns.  In turn, the regulators are likely to respond by increasing their oversight.

And as they do so, traders in particular may be in the line of fire.  Reflecting on LIBOR, Warren Buffett is quoted as saying, “the idea that a bunch of traders can start e-mailing each other . . . and play around with . . . [the Libor] rate . . . is not good for the system.”  This is the type of concern that prompted the CFTC this past April to pass rules for swap participants, which basically wall off traders from the rest of the firm.  Traders cannot supervise or influence the compensation of research analysts or clearing unit employees.  In some cases, communications with traders are prohibited unless the communication is made through the firm’s compliance department.  Both the Libor scandal and the J.P. Morgan trading loss, coupled perhaps with a few new situations brewing in the background, might give this type of thinking a major boost.

Deborah Prutzman

Deborah Prutzman is the founder and CEO of The Regulatory Fundamentals Group (RFG), a New York-based firm that designs and implements business and risk solutions for alternative asset managers and institutional investors. RFG's senior-led team employs a robust suite of tools, including practical alerts on new and potential industry developments and its powerful RFG Pathfinder® knowledge management platform which simplifies the challenges of operating in a regulated environment.  To learn more about The Regulatory Fundamentals Group call (212) 537-4058, email a representative at Information@RegFG.com or visit RegFG.com

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