Wednesday 1st April 2015
NEWS TICKER: TUESDAY MARCH 31st 2015 : Following a recent Morningstar Analyst Ratings Meeting, Morningstar has downgraded the Artemis UK Smaller Companies fund to a Morningstar Analyst Rating™ of Silver. The fund previously held a Gold rating. Morningstar continues to believe the experienced manager and robust process make this a strong choice for UK small-cap exposure, but Morningstar feels a Silver rating provides a better reflection of the fund’s relative merits within the sector. Indeed, given the manager’s focus on high-quality companies with resilient business models, Morningstar would have expected the fund to protect investors’ capital in 2014 to a greater extent than it did; an outcome which has slightly dented Morningstar’s conviction in the manager’s application of his process - President of the European Council Donald Tusk’s meeting with Prime Minister of Spain Mariano Rajoy today covered many points, but concern over a lack of government in Libya and the causes and consequences of instability and insecurity in the Southern Neighbourhood took up much of the discussion. “The Prime Minister and I had a very open discussion on both the causes and consequences of instability and insecurity in the Southern Neighbourhood. We had a good exchange on what the European Union is already doing - in terms of assistance, counter-terrorism and migration - and how we can better target our efforts to make a real difference,” notes Tusk in a briefing note issued today - Data published today by the Association of Investment Companies (AIC) using Matrix Financial Clarity suggests that investment company total purchases on platforms by advisers and wealth managers were 19% higher least year (with purchases worth £452.7m) and more than double the figure in 2012. In Q4 2014, platform purchases of investment companies were at £110.3m, 10% higher than purchases of £100.3m in Q4 2013 and 90% higher than purchases of £58.1m in Q4 2012. Investment company purchases at £110.3m in Q4 2014 were stable when compared to £110.6m in Q3 2014. Whilst 2014 was a strong year for purchases there was also a significant increase in sales, which rose 40% to £290.9m compared to £208.4m in 2013, suggesting some advisers and wealth managers are taking profits and rebalancing portfolios. Ian Sayers, Chief Executive, AIC, said: “Though sales have increased, we should remember that this trading activity all helps to improve liquidity. The AIC has trained over 3,000 advisers in response to RDR, and has recently increased its resource in this area, with the recruitment of Nick Britton, the AIC’s Head of Training. This will help us to increase awareness and understanding of investment companies with a refreshed training programme and the capability to meet and support more advisers.” The Global and UK Equity Income sectors were the most popular for advisers and wealth managers in 2014 overall, accounting for 18% and 13% of purchases respectively. The Infrastructure and Property Direct – UK were the third and fourth most popular sectors over 2014, accounting for 8% and 7% of purchases respectively. Transact and Ascentric continue to be the top platforms for investment company purchases, accounting for 49% and 20% of the market respectively in 2014. Alliance Trust Savings are increasing in popularity with financial advisers, their market share increasing to 18% in 2014 from 12% in 2013 - The Straits Times Index (STI) ended -7.25 points lower or -0.21% to 3447.01, taking the year-to-date performance to +2.43%. The FTSE ST Mid Cap Index declined -0.17% while the FTSE ST Small Cap Index declined -0.24%. The top active stocks were SingTel (+0.46%), DBS (-0.10%), UOB (-0.99%), Global Logistic (+0.38%) and OCBC Bank (-0.75%). The outperforming sectors today were represented by the FTSE ST Technology Index (+1.08%). The two biggest stocks of the FTSE ST Technology Index are Silverlake Axis (+1.86%) and STATS ChipPAC (unchanged). The underperforming sector was the FTSE ST Basic Materials Index, which declined -1.88% with Midas Holdings’ share price declining -3.23% and Geo Energy Resources’ share price declining -0.52%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.13%), DBXT MSCI China TRN ETF (+1.25%), DBXT FT China 25 ETF (+0.28%). The three most active Real Estate Investment Trusts (REITs) by value were CapitaMall Trust (+0.92%), Ascendas REIT (+1.17%), Suntec REIT (-1.07%). The most active index warrants by value today were HSI25000MBeCW150429 (+6.12%), HSI24800MBeCW150528 (+5.80%), HSI24000MBePW150528 (-7.32%) - Mississippi’s Rankin County School District has issued an online survey meant to gauge public opinion of a potential bond issue to build new classrooms. The bond issue would be used for construction of new instructional facilities, and school board officials have been discussing the possibility for a while. No specific details of the amount or number of facilities have been released, but school board Vice President Ann Sturdivant said district personnel are working to assess the needs. Rankin voters rejected a $169.5m bond issue in 2011 to upgrade and build new classrooms, but Sturdivant said she believes people see the need to remedy overcrowding issues, particularly in the Florence, Brandon and Northwest zones and that tapping the US debt capital markets will be a logical step -

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”.

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP

Related News

Related Articles

Related Blogs

Related Videos

  • Forces shaping the UK pension industry Thursday, 18 October 2012 Forces shaping the UK pension industry
    Rosalind Knowles, partner, Linklaters Pension Practice Group provides the first Keynote Speech at FTSE Global Markets’ Transition Management conference at Gibson…
  • ALFI speaks to George Bock, about FATCA Thursday, 29 March 2012 ALFI speaks to George Bock, about FATCA
    Alfi speaks to George Bock, Partner and Head of Tax Department at KPMG Luxembourg about the adoption of FATCA. Mr Bock…
  • Investing in Russia (Part 1) Friday, 01 July 2011 Investing in Russia (Part 1)
    Mattias Westman, founding partner, Prosperity Capital Management, discusses the key challenges and opportunities of investing in Russia during the Accessing…