Friday 29th April 2016
NEWS TICKER, TUESDAY, APRIL 29TH: NEW LISTING - Mackenzie Financial Corporation (Mackenzie Investments), one of Canada’s largest independent asset managers, opened trading this morning on TSX to celebrate the launch of four new active fixed income exchange traded funds (ETFs), which began trading on TSX last week. "We are very pleased to welcome Mackenzie Investments to our world class lineup of ETF providers and to have them list their initial products on TSX," says Nick Thadaney, President & CEO, Global Equity Capital Markets, TMX Group. “The ETF segment is growing rapidly and becoming increasingly important to the vitality of the overall TSX ecosystem. TSX is proud to play a supporting role in its success and we continue our work to provide a full spectrum of product and service offerings to suit the needs of all investors.” – SHORT POSITIONS ON AUSTRALIAN BANKS - News Markets reports that investors are heavily shorting Australian bank shares, leaving scope for a stock rebound if next week’s results round beat analysts’ bearish expectations. Macquarie analysts say in a note today that short positions in the Aussie banking sector are at their highest levels for five years, up 50% since January. Reasons for shorting are many, say analysts, bank shares are off 10% in aggregate this year, the usual global macro uncertainties and rising impairment charges. Australia and New Zealand Banking Group and Westpac are the most shorted. The Bendigo and Adelaide Bank is the most shorted overall, but isn’t one of Australia’s Big Four lenders –IPO - Following its debt on the Qatari bourse yesterday, Qatar First Bank (QFB) the stock price fell 7.7% on the day. Nonetheless the stock dominated trading on the liquidity squeezed bourse, which has only 44 listed companies. Qatar exchange is actively seeking to increase the number of listed companies and hopes that the QFB listing markets a turnaround in its fortunes – BAHRAIN - Bahrain’s economy is expected to slow further in 2016 and 2017, weighed down by weak investor sentiment and fiscal adjustments, with financial outflows expected to continue, according to the International Monetary Fund (IMF). Bahrain’s fiscal deficit will touch 19.5% of gross domestic product (GDP) this year and shows no sign of falling in the near term. Like its Gulf Cooperation Council peers, Bahrain’s top-line revenues have been stymied by slowing oil prices; as a consequence, GDP is growth this year has slowed to 3.2% (compared with 4.5% last year). The country’s current account deficit is projected to reach over 8 per cent of GDP this year, before narrowing gradually while inflation is expected to register a modest increase – driven by an increase in energy prices in the country but “easing over the medium term with weak economic activity containing the pass-through to wages – BANK RESULTS - Arab Banking Corporation (ABC) says its consolidated group net profit, attributable to the shareholders of the parent, for the first quarter of the year 2016 was $41m, 21% lower than the profit of $52m reported for the same period last year, with the usual suspects (an overly strong dollar against the dinar and the global economic slowdown). Even so, the core franchise for the group continued to show sustained performance in local currency terms with our renewed strategy having a positive impact in most of our business units. Compared to Q1 of 2015, the Brazilian real and Algerian dinar were weaker in Q1 2016 by over 25 per cent and 13 per cent respectively. Total operating income for the quarter was $209m ($168m in Q1 last year), attributable to currency movements. Operating expenses were flat over the year at $104m with some reduction benefiting from currency translation. Net impairment provisions for the quarter at $18m, were higher than the previous year’s $9m. The bank says it benefited last year from “certain write-backs, [and] the provision charge for the current quarter was in line with our expectations and past experience. The ratio of non-performing loans to gross loans remained healthy at 3.5%, compared to 3.4 per cent at 2015 year-end. Tax charge for the year was at $35m, whilst last year it was a positive $12m arising from the tax treatment of currency movements in subsidiaries”. ABC Group’s total assets stood at $29.2bn at the end of Q1, compared to $28.2bn at the 2015 year-end – MANDATES - SS&C Technologies Holdings, In. (Nasdaq: SSNC) says it has been appointed by Nicola Wealth Management (NWM) to provide a range of fund administration services for nearly $4b in assets under management (AUM). NWM has grown to be one of Canada’s leading independent wealth management firms with close to $4 billion AUM and over 130 employees in four locations across Canada, including Vancouver and Toronto. SS&C will provide NWM with a full range of administration services including fund accounting and investor services. NWM will benefit from SS&C’s expertise and service, while its technology platform will support NWM’s 15 funds and 4 limited partnerships – SPAIN - Spain's unemployment rate edged up to 21% in Q1 from 20.9% in Q4 last year. The National Statistics Institute said today that the number of people out of work rose by 11,900 January through March to a rounded total of 4.8m. The release comes as Spain heads toward fresh elections in late June as the May 2nd deadline for a new government to be in place looks set to pass without resolution – RATINGS - Moody's Investors Service has today announced that it has confirmed the Ba2 local and foreign currency long-term deposit ratings with a negative outlook and the ba2 adjusted baseline credit assessment (BCA) of Denizbank AS. At the same time Moody's has confirmed the Counterparty Risk (CR) Assessment of Ba1(cr). The bank's short term ratings and its standaloneba3 BCA were not affected from this rating action. Moody's says that the confirmation results from the confirmation of the ratings and standalone BCA of its Sberbank (FC Deposits: Ba2negative/Debt: Ba1 negative; BCA: ba2), Denizbank's Russia-based parent, which owns 99.9% of the Turkish subsidiary. The primary driver for the confirmation of Denizbank's long-term ratings is the prior confirmation of the ratings of its direct parent bank, Sberbank, from which it receives uplift due to our affiliate support assumptions. Moody's maintains its assessment of the high probability of parental support for Denizbank resulting in a one-notch uplift from the bank's ba3 BCA. Moody's bases the uplift on Sberbank's majority ownership and the history of capital injections in Denizbank – FUND FLOWS IN MARCH - The 10th March announcement from the European Central Bank (ECB) that it is committed to buying non-financial investment grade bonds to stimulate the Eurozone economy led to a new interest in fixed-income funds during the month says Morningstar. “The biggest beneficiaries of the ECB’s new policy were funds in the EUR corporate bond Morningstar category, which had March inflows of €3bn, as funds in this category invest the majority of their assets in investment-grade corporate bonds,” says the data maven. Schroder ISF Euro Corporate Bond, which has a Morningstar Analyst Rating™ of Bronze and is Europe’s largest corporate bond fund, received the category’s greatest inflows (€517m). The move into fixed income was broad-based as investors redeemed large amounts from money market funds, which saw outflows of €14.3bn during the month, and invested €11.6bn in fixed-income funds across categories. The EUR high yield bond category had its greatest monthly inflows in 12 months. Pioneer Euro High Yield, which has a Neutral Analyst Rating, was the leader in the category with estimated inflows of €346m. Morningstar says investors pulled assets out of equity funds for the third month in a row amid the first quarter’s significant market volatility. Equity funds saw total outflows of €8bn in March. As well, the global emerging markets bond—local currency category had March inflows of €1.4bn, more than in any month since May 2014, as emerging currencies continued strengthening from multiyear lows. European investors continued to reduce their US dollar-denominated fixed-income allocations. Funds in the USD high yield bond category saw outflows of € in Q1. Matias Möttölä, senior manager research analyst for Morningstar, comments: “European investors found their appetite for fixed-income funds in March after nine months of nearly continuous outflows. The sudden change in sentiment followed an ECB commitment to start buying non-financial investment grade bonds, which comes on top of the existing programs to purchase government debt, asset-backed securities, and covered bonds. The announcement drew European investors to funds in the EUR corporate bond and EUR high-yield bond categories. Both received their largest net inflows in any month since March 2015, when the ECB started buying sovereign and quasi-sovereign bonds.” - CME GROUP RESULTS – CME Group today reported record revenue of $934m and record operating income of $574m in Q1. Net income was $368m and diluted earnings per share were $1.09. Adjusted for non-recurring items, net income would have been $390m and diluted earnings per share would have been $1.15. "Our record first-quarter financial performance was driven by our highest quarterly average daily volume to date, including record volumes in energy, overall options and electronic options," said CME Group Executive Chairman and President Terry Duffy. "We delivered record revenue and operating income, and 17% growth in adjusted diluted earnings per share. These strong results reflect our continued progress in executing on our long-term growth initiatives. At the same time, we are committed to returning cash to our shareholders, as evidenced by $1.2bn in dividends being paid out during the quarter." The group reports a significant increase in global participation in our markets, with average daily volume of 3.7 million contracts traded from outside of the United States, up 24% from Q1 2015. The solid quarterly activity was underscored by continued momentum in open interest, as CME reached a record daily level of 116mcontracts in the first quarter, and open interest remains elevated -

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Reciprocity widens access to liquidity

Wednesday, 18 April 2012
Reciprocity widens access to liquidity Usage of non-displayed trading venues continues to accelerate in Asia and tools for dark liquidity aggregation are increasingly in demand.“Dark pool trading has been growing rapidly in the region; our Asia-Pacific pools alone each grew between 100% and almost 600% last year,” explains Joel Hurewitcz, Instinet’s head of product strategy, Asia. “In that kind of environment, the firms that offer access to the widest range of liquidity destinations are going to be able to best reduce costs for fund managers and, ultimately, the end investors.”

Usage of non-displayed trading venues continues to accelerate in Asia and tools for dark liquidity aggregation are increasingly in demand.“Dark pool trading has been growing rapidly in the region; our Asia-Pacific pools alone each grew between 100% and almost 600% last year,” explains Joel Hurewitcz, Instinet’s head of product strategy, Asia. “In that kind of environment, the firms that offer access to the widest range of liquidity destinations are going to be able to best reduce costs for fund managers and, ultimately, the end investors.”

With that context in mind, Instinet has now agreed a reciprocal liquidity agreement between its Asia-Pacific broker-dealer units and JP Morgan, broadening the Asian liquidity access opportunities available to each firms’ institutional clients. According to Hurewitz says the agreement is the latest step in the firm’s effort to connect to all meaningful pools of liquidity in the region.“Since 2010, we’ve been proactive in pursuing innovative new ways for our clients to efficiently trade the rapidly fragmenting Asia-Pacific equity markets,” says Hurewitz. “Deals such as this offer the buy side access to additional sources and types of liquidity, and ultimately provide the luxury of choice in how they implement their trading strategies.”

Instinet clients may use the firm’s Nighthawk® liquidity aggregation algorithm to access JPM-X in Hong Kong, Japan and Australia, while JP Morgan clients will be afforded access to Instinet BLX Australia, CBX™ Hong Kong and CBX™ Japan.

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