Saturday 23rd June 2018
Mobile operator EE has said it will activate the UK’s first live 5G trial network in London’s Tech City in October –The UK government says organisations that are aiming to establish themselves or expand as Public Service Mutuals can now apply for a share of £1 million in funding -- India’s central bank raised its benchmark interest rate for the first time since 2014 to curb rising price pressures and calm financial markets as policy tightening in the US rattles emerging markets – A new report from South Africa's Reserve Bank (SARB) contains exception results for a trial of its blockchain-based system for interbank clearance and settlement. According to a release yesterday SARB says it has completed a 14-week "realistic" proof-of-concept that managed to settle the country's typical 70,000 daily payment transactions within two hours, taking an average of 1–2 seconds for each transaction while preserving full anonymity. Absa, Capitec, Discovery Bank, FirstRand, Investec, Nedbank and Standard Bank are among a slew of banks that participated in the exercise. Even so, despite the success claims, SARB says its proof-of-concept doesn't mean it plans to replace the existing real-time gross settlement (RTGS) system with a live blockchain implementation, yet – According to Mickhail Shlemov, VTB’s Capital’s head of research today, “With the demerger of Bank of Georgia Group’s investment business to Georgia Capital PLC, we have revised our forecasts for Bank of Georgia Group so that they now include only the banking business. We expect the bank to benefit from this demerger amid an acceleration in corporate loan growth (although retail lending is likely to decelerate), with the total loan book expanding at a CAGR of 11% in 2017-21F. However, NIM performance headwinds are likely to stay intact. Management has reiterated its strategic targets, and we also expect the bank to show ROE of more than 20% in the next three years, with a 40% dividend payout ratio. As a result, our new 12-month Target Price is GBp 2,300/share. This implies an ETR of only 14% (the stock is up 10% since demerger day).” On May 29th, Bank of Georgia Group (BOGG) announced the completion of the demerger of the Group’s investment business to Georgia Capital PLC. As a part of the process, the bank has issued 9.8mn shares (up to 19.9% of the total share count) to Georgia Capital. Yet the capital will also be diminished by a special dividend payment of some GEL 120mn (GEL 3.10/share), similar to the proposed BGEO Group payment – Reuters reports that European parliament member Danuta Huebner says that London’s call for EU access after Brexit under mutual recognition will not work. Equivalence would let the EU set the rules – Scott Eaton, the former chief operating chief for Europe at MarketAxess has been appointed CEO of Algomi following the departure of co-founder Stu Taylor earlier this year. Eaton has taken over the role with immediate effect and will focus on developing Algomi’s fixed income services, including data aggregation and the Algomi ALFA market surveillance tool – The FCPA Blog notes today that banking giant Credit Suisse Group has agreed to pay a $47m penalty to the US Justice Department to end an FCPA investigation into hiring practices in Asia -- The Securities and Exchange Commission (SEC) voted Tuesday to approve a proposal to modify the Volcker rule, the last of the five agencies responsible for the rule to do so. The proposal is now open to a 60-day public comment period. Treasury Secretary Steven Mnuchin called the move "an important first step" and noted Treasury's support for "better tailoring the application of the rule, preserving liquidity during periods of stress, decreasing unintended compliance burdens and encouraging capital formation." --

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  • Friday, 22 June 2018 Gasunie Transport Services will use gas trading platform PEGAS to determine neutral gas price
    Dutch gas transmission system owner and operator, Gasunie Transport Services will use PEGAS, the pan European gas trading platform, which is part of Powernext, as the exclusive platform for the determination and provision of the Neutral Gas Price (NGP). Read more...
  • Friday, 22 June 2018 Pasta La Vista Baby: assessing the impact of Trump's hawkish trade stance
    Major bond market yields were little changed over the past week, with investors seeming to shrug off growing trade worries, as the Trump administration appeared to take an increasingly hawkish stance. The threat of tariffs saw the US dollar continue to march stronger and this continued to weigh on sentiment in emerging markets (EM), with sovereign credit, locals rates and emerging currencies continuing to re-price as investors sought to de-risk portfolios. Elsewhere, credit markets saw headwinds from new issuance, and in the eurozone, the periphery saw wider spreads following Spanish supply with markets remaining somewhat fragile. By Mark Dowding, co-head of developed markets at BlueBay Asset Management. Read more...
  • Thursday, 21 June 2018 A $10trn opportunity: Tokenisation opens a new world of investment potential
    Blockchain is one of the most exciting financial developments in modern times. Devised initially to host Bitcoin transactions, the technology is now being used by high net worth individuals (HNWIs) to liquefy real-world assets into “security tokens.” This new world of finance will eventually reshape both regular and cryptocurrency economies in the years to come. By Gregory Van den Bergh, co-founder and CEO of Bankorus, the first AI-powered crypto-wealth management platform built using blockchain technology. Read more...
  • Thursday, 21 June 2018 ECON and AFCO MEPs want ECB to regulate CCPs
    Economic and monetary affairs and constitutional affairs committee MEPs backed the European Central Bank proposal to bring central counterparties within the scope of its regulatory powers Read more...
  • Thursday, 21 June 2018 Saudi and Argentina market upgrades and the importance of emerging markets status
    It has been some time in coming, but yesterday both Saudi Arabia and Argentina finally secured emerging markets status. The turnaround came as both countries have begun strides to normalise their capital markets and investment regimes, amid a spate of economic and political reforms by their governments. Moreover, MSCI also placed Kuwait on watch for a possible future reclassification from frontier to emerging markets status. What does emerging markets status mean and how will the markets benefit? Read more...
  • Wednesday, 20 June 2018 Offshore insolvency petitions rise in 2017
    The number of insolvency petition filings in offshore jurisdictions was up significantly in 2017 when compared to the previous year. The overall jump in petition filings was due in large part to increased filings in the British Virgin Islands and Mauritius which offset falls in the Cayman Islands and Isle of Man, according to a report from offshore law firm Appleby. Read more...
  • Wednesday, 20 June 2018 Simcorp merges UK and Northern European market units
    The merger of Simcorp’s UK and Northern European market units comes at a time when the buy side is particularly challenged by market complexities. However, says a Simcorp spokesman, “also recognises the significance of technology in limiting spiralling costs and increasing profitablity. As seen in the recent WBR Insights European buy side report. The collaboration between the UK and Northern Europe teams will enhance both SimCorp’s service to existing clients and its position to attract new clientele, in an ever-evolving market. Read more...
  • Wednesday, 20 June 2018 Polaris invests in IT consultancy ProData Consult
    Polaris will acquire a majority shareholding in ProData Consult, Denmark’s leading independent IT consultancy focused on business and IT consultants. Read more...
  • Wednesday, 20 June 2018 KfW IPEX-Bank funds Rhein-Neckar-Verkehr for €95m for new trams
    Together with NORD/LB Norddeutsche Landesbank, KfW IPEX-Bank, as syndicate leader, is financing the purchase of a total of 80 new trams that can be used in double traction for local public transport in the cities of Mannheim, Ludwigshafen and Heidelberg. Read more...
  • Tuesday, 19 June 2018 Appetite for apps outstrips capacity to develop them in UK businesses
    UK businesses are at risk of experiencing an “app crunch” as fierce demand for apps meets a developer skills shortage and a lack of investment in customer-facing tools, according to the latest State of Application Development report, based on polling of over 3,500 IT professionals. The poll was organised by OutSystems the low-code rapid application developer, which publishes the report. Read more...
  • Tuesday, 19 June 2018 Freddie Mac prices $1bn multi-family K-077 deal
    Freddie Mac has priced its offering of Structured Pass-Through Certificates (K Certificates); essentially multi-family mortgage-backed securities. The company expects to issue approximately $1bn in total of the K-077 Certificates, which are expected to settle on or about June 26th. Read more...
  • Tuesday, 19 June 2018 BREXIT: Asset Managers in Limbo
    As Brexit negotiations enter their second year, the UK Asset Management industry braces for long-term insecurity. Loss of access to the European single market and possible changes in the delegation model leave UK asset managers anxious. Despite this, Britain’s withdrawal presents itself as a valuable opportunity for rival European financial centres wishing to fill the growing power vacuum left by London’s diminishing financial dominance. By Bastian Dittrich, Global Head of Business Development Real Assets and Manuela Frohlich, Global Head of Business Development Financial Assets at LRI Group. Read more...
  • Tuesday, 19 June 2018 A synchronised recovery is still in place
    The synchronised recovery, which proved so fertile for assets markets last year, is still ongoing, with growth in the major economies-the US, the eurozone, Japan and China-still above trend. This is translating into robust corporate earnings. First-quarter earnings beat expectations across the board. US bourses were the star performer as the sizeable tax cut helped earnings per share jump 25% in the first quarter. Even so, earnings were also comfortably above expectations in Europe and Japan. European companies reported earnings growth of 10% and the Labour shortages suggest firms will need to raise productivity Read more...
  • Wednesday, 06 June 2018 BlackRock launches India UCITS ETF
    As traditional market access routes to India evolve, investors can now gain direct exposure to India through a newly-launched exchange-traded fund (ETF) from BlackRock. The iShares MSCI India UCITS ETF (NDIA) will track the MSCI India Index, which measures the performance of large and mid-cap segments of the Indian market, accounting for approximately 85% of the Indian equity universe. Read more...
  • Wednesday, 06 June 2018 RBI raises repo rate to 6.25%, bonds slide on news though rupee climbs
    The Reserve Bank of India’s (RBI’s) has hiked its repo rate, which is the central bank’s key policy rate, by 25 basis points (bps) to 6.25%, the first hike in four and a half years. The move comes as several emerging markets central banks step up action to counter capital outflows that have resulted in weakening currencies, as the rise in the US dollar and threats of tightening of US policy, sucks investment money from the segment. However, the RBI’s decision wasn’t based on that alone, and in the statement following the decision notes a backdrop of rising inflation and improving growth figures. Read more...

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Key Stories from FTSE Global Markets

Latest Association of Investment Companies (AIC) data suggests that net fund raising over the year to date for the sector is a record £3.9bn, a higher total raised than in any whole calendar year in history.  The performance is in large part an effect of higher yielding companies in specialist sectors, as well as from Woodford Patient Capital, which raised £800m at launch and £30m subsequently through issuance activity.

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The National Association of Pension Funds’ (NAPF’s) third Annual General Meeting (AGM) Season Report suggests much more purposeful and effective engagement between companies and investors – but there remain a number of exceptions and this year’s report highlights three areas to note:12 companies within the FTSE 350 where shareholders have for a successive year expressed discontent with particular governance arrangements; the top five  FTSE 100 and top ten FTSE 250 shareholder rebellions on executive pay; and 17 companies in the FTSE 350 where re-election of individual directors drew shareholder dissent of more than 15%.

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Demand for transactional risk insurance continued to grow during the first half of 2015, with an overall increase of 15% year-on-year in terms of limits placed by Marsh. “The demand for transactional risk insurance on mergers and acquisitions (M&A) transactions continues to grow rapidly, as competition among acquirers continues to remain intense,” says Karen Beldy Torborg, global leader for Marsh’s Private Equity and M&A Services practice. “Dealmakers, both from the private equity and corporate space are increasingly using insurance capital to get deals over the line and we don’t see this trend subsiding anytime soon. This is true in the Americas, EMEA, and Asia-Pacific.”

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The long term favourable economic profiles of many emerging market (EM) countries are well documented. Emerging markets have delivered a ten year cumulative annual growth rate (CAGR) of 11.5% nominal GDP growth, compared with a 3.9% CAGR for the United States. What has not really been examined is the sub-segment of emerging market small caps, which remains less efficient than the large cap segment.

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Raiffeisen Bank International AG’s (RBI) Czech subsidiary, Raiffeisenbank has signed an agreement with Citibank Europe plc (Citi) today to purchase Citibank’s retail banking business and card businesses in the Czech Republic. the selling price and transaction details will not be disclosed. The transaction, which is still subject to customary and regulatory approval, is expected to close in the first quarter of 2016 and will have an insignificant effect on RBI’s capital ratio.

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  • Thursday, 07 June 2018 11:43 AI: where and when?
    There are certainly areas of investment management where AI can be very powerful, but at the moment it is hard to see it being used…

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