Thursday 24th August 2017
NEWS TICKER August 23rd: The overarching theme of this week will inevitably be geopolitics as US/South Korean military exercises and a new ‘strategic’ approach to troop deployments in Afghanistan take some of the heat out of last week’s fever over the US president’s inflammatory remarks over the Charlottesville rally. However, given this backdrop, this is now an important week in the Trump presidency; more so perhaps than last week as new geostrategic and financial imperatives mount for the US. Important negotiations over US debt levels, tax reform, and the government budget, among a growing list of legislative imperatives are now imminent as senators and congressman slowly seep back into Washington. Moreover, the heavily nuanced and tricky diplomacy required to absorb and accommodate even relatively small shifts in the power balance in the Asia-Pacific region that could impact relations with global peers (Russia and China) and the safety of two important US allies (South Korea and Japan) require calm heads and a significant upgrade in the quality of decisions and statements emanating from the White House. President Trump is expected to make a speech to the nation this evening outlining his thoughts. An interesting week ahead. Red was the predominant colour in Asian index benchmark charts following the Asian session today. Henry Croft, analyst at Accendo Markets noted, “Asian markets [traded] predominantly lower as tensions in the Korean peninsula dampen wider risk sentiment, while corporate results in Hong Kong [helped] its Hang Seng index to outperform in the region. Japan’s Nikkei and Australia’s ASX are both 0.4% lower, with poorly received results for Bluescope Steel (-20%) weighing on the latter.” Unless tensions are diffused quickly, it is unlikely to be a great week for stock markets wherever they may be. Real estate investment trusts gained slightly today the Tawadul (Saudi Arabia's), a day before the listing of a new trust, but as elsewhere bourses in the region were generally sluggish, especially Qatar. Geopolitical considerations aside, investors will also be eyeing key events later this week, including the US Federal Reserve’s annual symposium at Jackson Hole taking place over the course of three days from Thursday onwards. In other bellwether markets, crude iil has maintained Friday’s gains after widespread short covering on Friday prompted a sharp move higher. Brent crude has held above $52.50 while its US counterpart trades just shy of $48.50. Oil prices were steady early on Monday morning, searching for a catalyst for direction while OPEC is holding a meeting of its Joint OPEC-Non-OPEC Technical Committee (JTC) today in Vienna, which monitors the cartel and friends’ compliance with the output cuts. In its latest Monthly Oil Market Report, OPEC said oil output was up by 172,600 bp/d in July over June, to touch 32.8m barrels, pushed up by increased output from Libya, Nigeria, and Saudi Arabia. Elsewhere, gold ticked higher overnight after falling to $1280, its lowest level since Wednesday’s sharp rally following the Barcelona terror attacks. In some good news for investors this week, according to Janus Henderson, global dividends look to have touched an all-time high in Q2, on the back of a 5.4% annual increase. The asset management firm raised its forecast for dividend payments to a record $1.028trn, up by $50bn on its January forecast. Dividend payments rose in almost every country, excepting the UK, due to last year’s currency devaluation reports the firm -

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    In response to the impending split of the German/Austrian bidding zone, the European Energy Exchange (EEX) introduced the Phelix-DE product suite in April this year. While many regulatory details of the bidding zone split remain uncertain, the new Phelix-DE future, which has been widely welcomed by the market, looks to have established itself as a significant benchmark product for German power, Read more...
  • Tuesday, 22 August 2017 Ogier promotes new partners to Cayman Investment Funds team
    International law firm Ogier has promoted Joanne Huckle and Piers Dryden from the Cayman Investment Funds team to the firm's partnership. Piers and Joanne take the firm's global partnership to 54, and follow the arrival of partner Anthony Partridge in February, and the promotion of James Heinicke in the Cayman fund finance team to the partnership last year. Read more...
  • Tuesday, 22 August 2017 DMO reports continued support for longer dated gilts by GEMMs
    The UK’s official sovereign debt issuance agency, the Debt Management Office (DMO) held meetings with the gilt-edged market makers (GEMMs) and with representatives of gilt investors yesterday (August 21st), covering the choice of gilts to be sold via auction and syndication in the third quarter. Longer dated gilts were clearly popular Read more...
  • Tuesday, 22 August 2017 UK investor sentiment rebounds in August but falters for US equities says Lloyds
    Investor sentiment rebounded in August, from 2.59% to 4.92%, although failed to reach the highs seen before the UK general election, according to the Lloyds Bank Investor Sentiment Index. Despite not reaching levels seen early this year, August’s UK investor sentiment figure is still considerably higher than the 1.53% seen 12 months ago. Read more...
  • Tuesday, 22 August 2017 IHS Markit launches compliance service for RTS 28
    IHS Markit has launched a new service designed to help investment firms comply with MiFID II’s RTS 28, which requires them to publicly report their top five trading venues by asset class. Read more...
  • Wednesday, 02 August 2017 Pelican expands into Asia Pacific with new Hong Kong office
    Pelican, a global provider of Artificial Intelligence powered payments and financial crime compliance solutions for banks and corporations, says it is expanding in the Asia Pacific region, with the opening of a new office in Hong Kong and the appointment of Colin Camp to lead the growth in the region. Read more...
  • Wednesday, 02 August 2017 Amicus Property Finance bolsters Manchester team
    Amicus Property Finance today announces that it has appointed Alan Dorrington, Mark Heckels and Derek Wells as senior underwriters in its Manchester team. The announcement marks the latest in a raft of senior appointments from the specialist property lender, after Matthew Anderson was appointed to the role of head of servicing & portfolio management in June. Read more...
  • Wednesday, 02 August 2017 Intertrust appoints new office head for Shanghai
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  • Wednesday, 02 August 2017 Saudi Arabia sets out privatisation blueprint
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  • Wednesday, 02 August 2017 Gangtai Group completes purchase of 85% stake in Italy’s Buccellati
    Privately held Chinese conglomerate Gangsu Gangtai Holding, which is listed on the Shanghai Stock Exchange, has signed has closed its acquisition of 85% stake in Buccellati Holding Italia, previously held by private equity investor Clessidra and the Buccellati family. The transaction is based on an equity value of €230mfor 100% of the company. Read more...
  • Wednesday, 02 August 2017 CMA raises concerns over Wood Group purchase of Amec Foster Wheeler
    The UK’s Competition and Markets Authority (CMA) has been investigating Wood Group’s purchase of Amec Foster Wheeler, which it cautions gives rise to competition concerns. The merger involves two companies that supply engineering services to the UK’s Upstream Offshore oil and gas sector. Read more...
  • Wednesday, 02 August 2017 Global office forecast: Is the world overbuilding?
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  • Wednesday, 02 August 2017 Listing in Hong Kong – new possibilities during uncertain times
    The recent decision by the Hong Kong Stock Exchange (HKSE) to recognise Israel as an ‘Acceptable Overseas Jurisdiction’ means that companies incorporated in Israel are now eligible for listing on the stock exchange in Hong Kong. This is a significant development on several levels. Simon Weintraub and Daniel Green, partners at Yigal Arnon & Co. and co-heads of the firm’s dynamic China Practice explain. Read more...
  • Friday, 28 July 2017 Are investors too complacent about interest rate risk?
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Key Stories from FTSE Global Markets

In July, US Commodity Futures Trading Commission (CFTC) issued an order to continue the transition to a global system of legal entity identification (LEI) and that it had extended the designation of the utility operated by DTCC-SWIFT as the provider of legal entity identifiers under the regulator’s swap data recordkeeping and reporting rules. DTCC-SWIFT’s initial designation was made by a Commission order back in July 2012 for a two-year term. At the time the order was issued, the Commission was already participating in an international process to establish a global LEI system, into which the legal entity identifier to be used to comply with Commission requirements was expected to transition.

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Covering the entire spectrum of asset classes and financial services, from loans and credit cards to derivatives and bond positions, a Universal Product Identifier (UPI) will enable a holistic approach to identifying all trades and positions, including capital calculations, reporting, clearing mandates and booking rules. While such an idea sounds great in theory, historical attempts at achieving global agreement have fallen short, even within a sub sector of the industry. Peter Meechan, Jim Bennett and Pauline Tykochinsky  of Sapient Global Markets examine the feasibility of universal product codes; ponder whether the industry is ready to come together to create them; and discuss what a potential solution might look like.

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As we steadily approach the 10-year anniversary of the financial crash, there can be no doubt that it has transformed the regulatory culture and environment that firms inhabit. On one level this means most firms now find themselves far more heavily regulated than before. The desire among authorities to ‘fix’ the causes of the crash – as well as improve transparency and minimize risk more generally – has inspired pages and pages of new rules and controls, such as the comprehensive ‘Dodd-Frank’ (Wall Street Reform and Consumer Protection) Act, writes Bill Mulligan, CEO, Cordium US and Cordium Software at Cordium, who explains how alternative investment funds have been impacted by change.

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There’s a strong fractal quality in today’s oil corporate sector news as Graham Spooner, investment research analyst at The Share Centre, was touting Tullow Oil today as offering contrarian investors exposure to any longer term oil price recovery. The basis of his view?  “Despite declining profits in the first half of the year, this morning Tullow Oil reported an encouraging trading update with production increasing 4% on the same period last year.” It is a clear paradigm for what is happening at the macro level, with production outstripping demand by a growing country mile. As if that wasn’t enough there’s a strong possibility that after many years in the sanctions freezebox, Iran could be coming out of the cold and add 800,000 barrels a day of oil into the global supply mix. Can the oil sector cope with additional supply? Who will be the winners and the losers in the next round of inevitable market constriction that must accompany sustained over-supply? Also, what’s the long term impact on oil prices?

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In late July, Germany’s Bundesfinanzministerium (the Ministry of Finance) issued a draft bill on the reform of fund taxation. It involves a significant revision of Germany’s investment fund tax regime and abolishes the 95% participation exemption for gains from portfolio shareholdings. If the Bill is passed into law, it will come into effect at the beginning of 2018. Here’s a brief outline of the main points in the bill.

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THE EVOLUTION OF CUSTODY IN A POST T-2S WORLD

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