Tuesday 29th July 2014
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The Union Bank of the Philippines (UBP) released a 49% drop in net earnings in the first half of 2014, as it came in to just PHP3.2bn, almost half of its net earnings in the same period last year. In the April to June period alone, net income fell 36% from PHP2.18bn in the second quarter of 2013 to PHP1.6bn in the second quarter of 2014. However, it is important to note that net interest income grew by 29% year-on-year, as it came in at PHP5.2bn in the half of 2014 – Rangold chief executive Mark Bristow will present the firm’s Q2 results at noon on Thursday this week at The Forum, London Stock Exchange Around 10.00 am today some traders on Moscow Exchange’s Derivatives Market reportedly experienced difficulties entering orders via the FIX protocol, with some valid messages rejected with an error code. The FIX protocol has been functioning as usual since 11:37 am says the exchange. Moreover, the exchange stresses other protocols to access the Derivatives Market’s trading system have been functioning as usual - Société Générale Securities Services in Luxembourg has been mandated by wealth manager Bedrock, with $6bn in assets under management, to provide custody, fund administration and registrar services for its range of UCITS funds - Moody's Investors Service has assigned a first-time provisional (P)B3 corporate family rating (CFR) to Empik Media & Fashion SA Group. At the same time, Moody's has assigned a provisional (P)B2 rating to the firm’s proposed senior secured notes due 2019 to be issued at EM&F Financing AB, a wholly owned and guaranteed subsidiary of EMF, reflecting its overall ranking within the debt capital structure. The outlook on the ratings is stable. This is the first time Moody's has assigned ratings to EMF - Lithuania will adopt the euro on January 1st next year. Lithuania will become the 19th member state to adopt the euro. "Lithuania's consistent efforts have paid off: today the eurozone has opened the door for us," said Algirdas Butkevičius, prime minister of Lithuania, on the announcement. The entry of Lithuania into the euro family is of great importance for the whole euro area. "It's a demonstration of the continuing attractiveness of the single currency project and its relevance for the future of our community," added Sandro Gozi, State Secretary for European Affairs of Italy and President of the Council of the EU. The conversion rate has been set at 3.45280 Lithuanian litas to the euro – Global macro hedge fund manager Atreaus Capital is now live with SunGard’s Hedge360 Risk Reporting Service. Delivered as a managed service, the Hedge360 Risk Reporting Service provides highly customized daily risk reports, offering transparency to investors and integrated internal risk management to hedge funds. Trading a broad range of products with an emphasis on FX and commodities, in the form of both OTC derivatives and futures - AnaCap Financial Partners LLP, the specialist European financial services private equity firm, together with HIG and Deutsche Bank, have completed the acquisition of a €495m portfolio of non-performing and sub-performing loans from Volksbank Romania. Under terms of the agreement, funds advised by AnaCap will jointly acquire the entire portfolio with HIG and Deutsche Bank. The portfolio of 3,566 loans in total is backed by a mix of primarily residential, commercial real estate and development land. APS Romania will be appointed as Master Servicer. The transaction is the largest of its kind in Romania to date, and came about as a result of the ongoing pressure on financial institutions across Europe to restructure and divest assets in order to clean up balance sheets and comply with new capital requirements. After a prolonged correction following the financial crisis, the property market in Romania is now showing strong signs of improvement. GDP and unemployment have recovered on the back of labour market reforms in 2011 and an IMF financing package. House prices, which declined 38% since their peak in mid-2008, are now on the rise, with the areas surrounding central Bucharest and other main cities increasing 4% for 2013.

20-20: The new world order in securities lending

Thursday, 15 December 2011
20-20: The new world order in securities lending During a FTSE Global Markets interview at the end of 2010, Brian Lamb, chief executive officer of New York-based EquiLend, a provider of trading and operations services for the securities finance industry, suggested that the most successful beneficial owners are the ones that consistently allocate resources and apply professional investment-management processes and approaches to their programmes—because, said Lamb, “as history has often shown, one can’t afford not to be educated”. http://www.ftseglobalmarkets.com/media/k2/items/cache/9d8de7ef67b13c9c52fcfb74767a1564_XL.jpg

During a FTSE Global Markets interview at the end of 2010, Brian Lamb, chief executive officer of New York-based EquiLend, a provider of trading and operations services for the securities finance industry, suggested that the most successful beneficial owners are the ones that consistently allocate resources and apply professional investment-management processes and approaches to their programmes—because, said Lamb, “as history has often shown, one can’t afford not to be educated”.

For the better of the past decade, securities lending was a perpetual wellspring of revenue for beneficial owners and, not surprisingly, a sense of complacency ultimately took hold. Then came the fall of 2008 (literally), and owners quickly assumed a defensive posture, some exiting sec-lending altogether, others finding few plausible alternatives and ultimately returning, albeit with a renewed sense of urgency and a need for full transparency.

While the market psyche may have changed for good, EquiLend is seemingly none the worse for wear. It is ten years since its incorporation (the platform went live in 2002), and chief executive officer (CEO) Brian Lamb has watched EquiLend’s business grow out from an initial ten-member ownership group to a roster comprising 70 or so different global financial organisations. It has obviously been a source of satisfaction for Lamb. “It’s certainly a proud moment to reach this milestone and to have things going so well at the same time,” he remarks. “The fact that the business continues to grow at this pace is tremendously important to us, as we see ourselves as a cog in the wheel of the securities-finance business, one that can continually bring more efficiency to the entire marketplace.”

EquiLend’s operational model is such that if there’s big volume, business is good—no matter which way the markets are moving. Not surprisingly, the most recent round of high volatility is reflected in EquiLend’s year-to-date stat sheet; through September 2011, total borrowing and lending transactions were up 16%, and in 2011 the platform experienced its ten largest trading days ever, including 28,000 transactions processed during a single day in August 2011. Volume has only been part of the story. Through 2011 EquiLend added 15 clients, a record for a single year, including newcomers such as Prudential Investment Management, Kellner DiLeo & Co., and RBC Dexia Investor Services. Backing Equilend are some of the world’s top global financial institutions, among them BlackRock, Goldman Sachs, JP Morgan, and Bank of America Merrill Lynch.

Key to EquiLend’s recent spate of success is innovation wherever possible, says Lamb. EquiLend’s post-trade offerings are ripe for investors seeking plausible risk-mitigating strategies. Additionally, a new trading-optimisation programme enables clients to pool long and short assets and includes limits based on existing bilateral relationships. “Our goal is to optimise these securities transactions to the fullest extent,” says Lamb.

While the EquiLend platform has always been able to accommodate fixed-income securities, it wasn’t until recently that investors on the bond side began to truly embrace the EquiLend concept, he adds. The firm launched BondLend, a fixed-income and repo-trading/post-trade services platform designed to boost liquidity and reduce risk using a single point of entry to the non-equities sector. “Of the roughly 20,000 trades that we handle daily, roughly 2,000 come from the fixed-income side,” says Lamb. “We see that number growing pretty significantly over the near term. Let’s face it—the world as a whole has a lot of debt, and is in need of tremendous financing. So in terms of notional size, we’re looking at a market that is much bigger than equities.”

Initially used mainly for general-collateral or “low-touch” type transactions, over time investors have begun to reap the benefits of EquiLend’s automation processes for other kinds of trading. Today, some 20% of platform activity is specialist-based or otherwise non-GC— “which is a pretty significant number, and we expect that trend to continue, particularly as the markets fully embrace automated solutions in order to keep pace,” notes Lamb.

Given the uncertain nature of the financial landscape, Lamb is heartened by beneficial owners’ efforts to stay informed. He observes:  “Events like the demise of MF Global serve as a reminder to all financial institutions that no one can afford to be complacent—you have to be diligent, applying sound financial modelling and market-tested principles in order to run your business successfully. [And] with leveraging down, capital allocation has become paramount, requiring that balance sheets are maintained more efficiently than ever before.”

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