Tuesday 9th February 2016
NEWS TICKER: February 8th 2016: SimCorp, a provider of investment management solutions says Vescore AG, a Swiss asset manager with $14bn in assets under management, has completed the implementation of SimCorp Dimension. Other divisions of the Vescore group will migrate to SimCorp Dimension in phase 2 of the implementation project, so the whole business will then operate on an integrated platform, designed to support modern, internationally active asset managers as they realize their growth potential. Frank Häusgen, senior sales & account manager at SimCorp says: “Vescore is another example that the ‘Investment Book of Record’ (IBOR) is so much more than a buzzword.” - S&P Capital IQ and SNL has rebranded as S&P Global Market Intelligence. The division’s new name is a strategic move forward as part of the integration of the two previously separate businesses, S&P Capital IQ and SNL Financial, under parent company McGraw Hill Financial (NYSE: MHFI). The businesses originally combined following the successful completion of the SNL Financial acquisition by MHFI on September 1, 2015. MHFI also recently announced its intention to rebrand at the corporate level as S&P Global, subject to shareholder vote in April of this year - RPMI Railpen has announced three new appointments to the in-house investment team for the Railways Pension Scheme. Sweta Chattopadhyay has joined as senior investment manager of the Private Markets team, joining from Adveq, a global alternative investment firm. Matthias Eifert has also joined the £22bn pension scheme from Macquarie Securities, and will take up the role of investment manager focusing on fundamental equity analysis and managing concentrated equity portfolios. Meanwhile, Tony Guida has joined the Alternative Risk Premia team at Railpen as an investment manager, from EDHEC Risk Institute - BCA Research, a provider of investment research, says has partnered with FiscalNote, a technology startup building a platform for analysing government risk, to integrate US policy data and analysis onto BCA’s digital platform BCA Edge. The collaboration will enable investors to factor in today’s complex regulatory landscape into their investment strategies and better understand how individual companies and industries are impacted by legislative actions, to identify alpha generating investment opportunities. The agreement with FiscalNote follows BCA’s collaboration with crowdsourced financial estimates platform Estimize to incorporate earnings and revenue estimates data on the BCA Edge platform - BroadSoft, Inc. (NASDAQ: BSFT), a global unified communication software as a service (UCaaS) provider, has acquired Transera, a provider of cloud-based contact center software for small-medium business (SMB) and large enterprises. The acquisition positions BroadSoft to lead the fast-growing Contact Center as a Service (CCaaS) market, while enabling service providers to offer a comprehensive cloud contact center portfolio with minimal new investments, rapid time-to-market, and seamless integration with BroadSoft's BroadWorks and BroadCloud solutions. BroadSoft believes that Transera's omni-channel (voice, email, chat and social) and analytics-driven cloud contact center software will enable businesses to optimise operational efficiency, strengthen financial performance and improve the business outcomes of customer interactions. "Today's acquisition brings together the leading cloud unified communications provider with a pioneer redefining contact center performance through omni-channel and big data analytics," says Michael Tessler, chief executive officer, BroadSoft. "The multi-billion-dollar contact center market is ripe for cloud disruption, and we now offer service providers a single stack solution with the flexibility to scale from SMB to large enterprise." "Cloud is rewriting the rules when it comes to how businesses can deliver a superior customer-engagement experience through simplicity, on-demand scalability, and advanced analytics," adds Prem Uppaluru, chairman and chief executive officer, Transera, who will assume the role of General Manager and Vice President of BroadSoft Cloud Contact Center - Singapore state-fund Temasek Holdings’ wholly owned investment arm Vertex Venture Holdings’ fourth Israel fund has been oversubscribed by as much as 50%, and is set to see its final close at $150m, according to Singaporean press reports. In the meantime, Temasek says it is set to close a new fund, Red Dot, also worth up to $150m to invest in mature Israeli high tech firms - Wealth manager Charles Stanley says it has appointed Vicky Casebourne and Elizabeth Feltwell as intermediary sales managers. Feltwell joins from The Ingenious Group and will work with financial advisers, solicitors and accountants across Scotland, Northern Ireland and London. Casebourne joined Charles Stanley in 2011 as a trainee investment manager from Brewin Dolphin. She worked as a central investment product specialist, assisting intermediaries with in-depth product analysis before moving to an intermediary sales manager role - Thin and thinner news from Asia today as Chinese New Year celebrations take over from worries about falling stock markets. The focus today is all on Japan: the Bank of Japan released the notes backing its decision to introduce negative interest rates (see news story below). Japan's Nikkei Stock Average rose 1.1%, but is still down 12% from the beginning of the year and is still at 12.8 times this year’s earnings according to S&P Capital IQ. Thailand's SET was up 0.4%. India's Sensex is up 0.1% (essentially flat), while Australia's S&P/ASX 200 ended down 0.01%. Other markets in Asia were closed for the Lunar New Year holiday. The pace of the US Federal Reserve’s tightening on monetary policy still hangs heavy on the market, as last Friday’s jobs figures showed a 151,000 increase in jobs while insurance claims for joblessness stayed flat overall on the previous month. Contrast that with slower and still slowing growth in China, a nervous monetary policy from the PBOC, which is being steered rather than steering markets, still volatile crude oil prices (which can only get worse not better as inventories continue to rise), a collapsing market in Brazil, concerns about NPLs at Indian banks, and the threat of ever looser monetary policy in Europe and you can see why investors are running on empty. Crude oil prices remain sharply lower compared with several months ago, but the pace of falls might be easing. New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $30.86 a barrel, down three cents from the previous close. The words rock and hard place come to mind this week as the US Federal Reserve will have to steer a delicate monetary course. On the one hand an increase might help cool the economy (but that won’t help US stocks); but if it says that the reason it doesn’t raise rates is because of worries about the global outlook, it will shake investor confidence in the markets and trigger another round of sell offs. The other key trend has been the steadily appreciating US dollar. The US dollar has risen since Friday, factoring in perhaps the possibility of an additional rate rise. The dollar was at ¥ 117.28 in late Asia, up from ¥ 116.82 late Friday in New York. The euro was at $1.1139, down from $1.1160. We’ll find out midweek, as Federal Reserve chair Yellen will testify before Congress on the progress of monetary policy on Wednesday.

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EU’s threatened financial transaction tax could magnify FX costs

Friday, 03 February 2012
EU’s threatened financial transaction tax could magnify FX costs An EU financial transaction tax (FTT), could increase FX transaction costs, says Oliver Wyman research. http://www.ftseglobalmarkets.com/

An EU financial transaction tax (FTT), could increase FX transaction costs, says Oliver Wyman research.

Research by oliver Wyman, commissioned by the Global Financial Markets Association’s (GFMA’s) global FX division, suggests that, given the tight margins that exist in foreign exchange markets, any increase in transaction costs will, in turn, hit the real economy as these costs would largely be passed on to all end users. The report, Proposed EU Commission Financial Transaction Tax; Impact Analysis of Foreign Exchange Markets’, evaluates the impact of the European Union’s proposed financial transaction Tax (FTT) on European FX markets, estimating its impact on FX cash and derivatives users in particular.
The report not only recognises that the primary impact of the tax will be an increase in transaction costs, relocation of trading and reduction in notional turnover, but also it suggests the tax will result in a potential reduction in liquidity leading to a widening of bid/ask spreads.
The research suggests that a proposed FTT could directly increase transaction costs for all transactions by three to seven times and by up to 18 times for the most traded part of the market. It could eventually result in the relocation between 70% and 75% of tax eligible transactions outside of the EU tax jurisdiction. This possible outcome, combined with reduced transaction volumes (of approx 5%), could reduce market liquidity and increase indirect transaction costs by up to a further 110%, the report suggests.
Inevitably however, the tax will predominantly hit the real economy and the institutional market, comprising pension funds, asset managers, insurers and corporations, as both direct and indirect costs are largely passed on to end‐users, which will be least able to move transactions to jurisdictions not subject to the tax.
While the tax is expected to only have a limited impact on speculative trading, as this activity will most likely relocate outside the EU tax jurisdiction, it will result in an inefficient tax on the economy as raising €1 of tax would likely cost the economy more than €1, due to the indirect costs associated with reduced and more fragmented liquidity.
James Kemp, managing director of GFMA’s global FX division, says:  “It is essential to fully understand the impact of the proposed financial transaction tax and the Oliver Wyman study is an important contribution to the debate. “The foreign exchange industry is an essential part of a stable and sustainable economy, underpinning international trade and investing. This study shows that the proposed tax would in effect penalise Europe’s businesses for sensible risk management—by using FX products to manage currency fluctuations—and also threaten to impose further costs on the investment returns of pension funds and asset managers.”
UK premier David Cameron led a charge against the tax at the Davos World Economic Forum in late January, telling Eurozone members that it was no time for tinkering in the financial markets and that the tax was “madness”.

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