Monday 27th April 2015
NEWS TICKER: MONDAY, APRIL 27th 2015:Luc Luyet, CIIA – Senior Market Analyst AT Swissquote says that yesterday, “the SNB surprised the market by announcing that the number of sight deposit account holders that are exempt from negative interest has been reduced. This decision doesn’t change much the domestic banks’ situation as the “20 times the minimum reserve requirement” rule is still running. On the other side, the institutions associated with the Confederation, such as the pension fund of the Confederation or the pension fund of the SNB, are no longer exempt of negative interest. Consequently, only the account holders of the national social security system are still fully exempt.” - High yield debt issuance remains buoyant. Issuance volume for the week ending April 17, 2015, slowed down a bit from the previous week, but remained strong. Junk bond, or high-yield debt, issuers continued to issue bonds as yields remained favourable. High-yield debt is tracked by the SPDR Barclays Capital High Yield Bond ETF and the iShares iBoxx $ High Yield Corporate Bond Fund. According to data from S&P Capital IQ/LCD, dollar-denominated bonds amounting to $10.75bn were issued across 16 transactions in the week ending April 17th. The issuance volume fell by 3.2% from the week ending April 10. Pricing was evenly spread across the week. The number of transactions fell from 18 to 16 week-over-week. Last week brought the total US dollar issuance of high-yield debt to $115.8bn in 2015 YTD, up some 15% from the same period in 2014, the bulk of which is refinancing of older debt - Moody's says EMEA auto ABS performance remained stable during the three-month period ending February 2015. The sector's average performance trend was positive in terms of delinquency ratios and cumulative losses. The 60+ day delinquencies decreased to 0.66% in February 2015 from 0.77% in February 2014, while cumulative defaults decreased to 1.06% from 1.20% over the same period. This decrease was due mainly to the good performance of the German and Dutch markets. The prepayment rate increased slightly to 13.49% in February 2015 from 13.30% a year earlier. As of February 2015, the pool balance of all outstanding rated auto ABS transactions was €27.55bn - According to Sino specialists Red Pulse, China’s State Council is considering allowing daily repatriation for QFII. Currently, RQFII enjoys T+1 repatriation while QFII is restricted to T+5. QFII is the largest channel for foreign investment into China with quota of USD150bn, however, only half of the quota is in use, like at least partly due to the five-day repatriation stipulation - Malaysia’s state pension fund will offer a Shari’a-compliant investment option for its members by 2017, Prime Minister Datuk Seri Najib Razak said today. Najib says it will create the largest Shari’a fund of its kind in the world. Malaysia has one of the world’s largest Islamic finance sectors and the authorities are keen to develop it further. They envision the industry accounting for 40% of the country’s total banking assets by 2020 compared with latest figures of around 23% released last year. The $160bn (MYR577.4bn) Employees Provident Fund (EPF) already invests about a third of its portfolio in stocks and bonds that comply with Islamic principles, which ban interest payments and pure monetary speculation. The fund reportedly hired consultants last year to study the feasibility of a state-backed pension fund focusing entirely on Shari’a-compliant investments. Additionally, local press reports says that Malaysia’s sovereign wealth fund Khazanah Nasional has received regulatory approval to issue a MYR1billion (around $275m) socially responsible Islamic bond - The NASDAQ OMX Group, Inc has declared a regular quarterly dividend of $0.25 per share on the company's outstanding common stock, an increase of 67% from the prior $0.15 per share quarterly dividend. The dividend is payable on June 26TH 2015, to shareowners of record at the close of business on June 12TH 2015 - Lazard Ltd today reported operating revenue1 of $581m for the quarter ended March 31st. Adjusted net income was $103m, or $0.77 (diluted) per share for the quarter. These results exclude a pre-tax charge of $63m relating to a debt refinancing2. Q1 2015 net income on a U.S. GAAP basis, including the pre-tax charge, was $56m, or $0.42 (diluted) per share. "Our Financial Advisory and Asset Management businesses continue their strong performance," says Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "In the first quarter, we refinanced and repaid a portion of Lazard's long-term debt, significantly reducing our interest costs," adds Matthieu Bucaille, chief financial officer of Lazard. "Consistent with our capital management objectives, we have increased the quarterly dividend by 17%, the fifth increase in as many years." -

TV Closure Channels Opposition

Sunday, 01 July 2007
TV Closure Channels Opposition A majority of Venezuelans appear to support continued student protests over the closure of an opposition television channel in May this year, despite President Hugo Chavez insisting the demonstrations were part of a US plot to topple him. Chavez replaced RCTV, the country’s oldest broadcaster, with a state network last month. Since then, there have been regular protests by thousands of students accusing the president of undermining democracy. Chavez’s critics say his move to curb TV news and analysis are evidence of centralisation after the president politicised the military, judiciary and oil industry. Chavez is considering indefinite re-election, has won powers to rule by decree and is forging a single governing party to steer his self-styled socialist revolution. Ian Williams reports on a country in ferment. http://www.ftseglobalmarkets.com/

A majority of Venezuelans appear to support continued student protests over the closure of an opposition television channel in May this year, despite President Hugo Chavez insisting the demonstrations were part of a US plot to topple him. Chavez replaced RCTV, the country’s oldest broadcaster, with a state network last month. Since then, there have been regular protests by thousands of students accusing the president of undermining democracy. Chavez’s critics say his move to curb TV news and analysis are evidence of centralisation after the president politicised the military, judiciary and oil industry. Chavez is considering indefinite re-election, has won powers to rule by decree and is forging a single governing party to steer his self-styled socialist revolution. Ian Williams reports on a country in ferment.

At the end of May the screens went dark for Venezuela’s most popular TV station when Hugo Chavez’s government refused to roll over the expiring 20 year broadcast license for the privately owned RCTV and allocated its slot to yet another government owned station. Far away in Chile the Senate condemned it as a move against free speech, and human rights and journalists organisations’ across the world have complained in similar terms. As so often, the event is being presented in stark black and white terms by both supporters and opponents of Chavez. As usual, reality is a little more nuanced.

RCTV would not be anyone’s example of objective journalism — but there is also plenty of evidence that the Venezuelan government is squeezing dissident media, with ominous implications for the future. However, so far, everything has been done “legally” and through regulation rather than outright repression, suggests Patrick Esteruelas of the Eurasia Group, the global political risk and advisory firm.



Technically, under the media law, RCTV’s licence should have been automatically renewed, but the government added allegations of sexism and racism to lend verisimilitude to the real political agenda. RCTV was vigorously anti-government, and there is little doubt that its closure was politically motivated. It was alleged, and rebutted that the station had supported the 2002 coup — but there was no “due process” to test the allegations either way.

Diego Arria, who was information minister in Venezuela between 1978 and 1979 points out that while the RCTV was indeed a harsh critic of government — it was a critic of all governments, “including the one I served in. It was extremely critical and independent, but we did not consider closing it. It is the only station with a national reach”. Arria also acerbically comments on Chavez’s administration. “This is a military government, half of it is composed of officers. We should start calling them by their ranks to remind people” [of that fact].

RCTV continues on the Internet and on Cable, so it is not completely stifled — but only 20% of the population has access to cable, and few of those will be among the poorer sections of the population upon whose support Chavez relies. Ominously, the state-owned media, which now includes six TV and eight radio stations, ignored the vociferous student protests about the closure.

Allegedly, when ex-Serbian leader Slobodan Milosevic, was asked why he allowed newspapers to function uncensored, replied that few Serbs read newspapers, and those that did were not going to vote for him anyway. It was the radio and TV that he strictly controlled. Chavez seems to have adopted the same principle. The El Nacional newspaper is still critical but as Arria says, “newspapers are expensive, and have limited reach, while radio and TV really get out to the people”.

Eurasia Group’s Patrick Esteruelas rebuts the accusations that RCTV promoted the 2002 coup — although neither did it broadcast the protests that led to its reversal. “Even so, the channel played a fairly questionable role with its heavy editorialising,” he says. On the other hand, he explains, “It is the latest peak of the trend since the 2004 election. In the past the press operated in much greater freedom but now there is a culture of fear and self-censorship.”

A new media law, which was introduced in Venezuela in 2005 and which is locally known as the ‘Rebound Law’, extended in broad terms the bounds of what is defined as libellous or violent.  The law has also led to an increase in self-censorship and accommodation with the government on the part of some of the media owners. It has resulted in toned-down and non-aggressive criticism, and led to a change in the nature of TV news and analysis broadcasting. Before the law was introduced, early morning news and current affairs shows “had politicians arguing, lots of commentary — now it’s cartoons,” says Esteruelas.

Even the remaining private stations, such as Venevision, seem to have recognised the realities of power and have come to an editorial accommodation with the administration in order to remain on the air.

Washington’s campaign against Chavez has in some measure helped legitimise the president’s behaviour not only domestically but across the region, where Washington often seems blind to the unpopularity of many of its policies. This time, however it may be that Chavez might have gone too far.

A DATOS poll in June found 66.9% of respondents opposed the closure of RCTV. This chimed with a survey from Datanalisis in April that found nearly 70% opposed the shutdown however, most respondents were more concerned with the loss of their favourite soap operas than with press freedom. Esteruelas cautions that the “popular backlash is not just motivated by freedom of the press. It is also that the government has cut some of the nation’s most popular TV programming and replaced it with very dull fare”. Venezuelans are now missing their favourite TV shows, such as Who wants to be a Millionaire? and are not happy with re-runs interspersed with what is essentially feel-good propaganda for the government that now occupy the slot.

The DATOS poll of 600 Venezuelans, taken in early June, showed 56.2% of respondents in favour of the student demonstrators continuing their protests against closure with 23.8% against. Significantly 75% opposed the possible closure of Globovision, the last major independent station which still has 16 years of its licence to run. However, the  fact that its potential closure is on the agenda suggests public  appreciation of how flexible the rule of law has become. Only 7.6% of respondents thought the main pro-government state channel, praised by Chavez, was “good” or “very good”. DATOS found 81.1% of viewers thought it was “bad” or “very bad”.

President Chavez, a frequent and vocal critic of the United States and who was re-elected by a landslide in December 2006 on the back of his generous social spending, was dismissive of the poll results. “This is all part of the conspirators’ plan,” he said in his weekly TV show. “This is an attempt to incite them.” Chavez has accused the students of being part of a US-backed “soft revolution”.

It is unlikely.  However, even deprived TV addicts are not enough to overthrow a government.  Esteruelas says “at the moment there is no alternative, certainly not from the completely discredited opposition.” With gaping social and ethnic divides in the country, it is true that many middle class Venezuelans — and the media that some of them own — could not bring themselves to recognise Chavez’s election victory, and the opposition tactics have been almost criminally stupid.

The merging of all the (many) other leftist parties into one “Bolivarian” organisation does not bode well for the emergence of serious opposition to Chavez’s manifest authoritarian tendencies. Rising oil prices and the pork-barrel public expenditures have helped maintain popular support, but rising consumption and regulation and expropriation of the food sector have led to more food imports than ever before, while oil exports now account for 91% of exports.

Esteruelas identifies how sensitive the economy, and the government is to the maintenance of current oil prices since production is going down, and Chavez’s policies have cut off the foreign investment and expertise needed to develop and expand production. “There is no room for even a small dip in prices.” Of course, at the moment, betting on continuing oil price rises seems safe, but it may not always be so, which ties Chavez’s oil-barrel politics, both internationally and domestically to the global economy he  despises so much. As with the opposition, the crucial test of how authoritarian he is will be how he reacts to losing a parliamentary majority.

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