Friday 19th December 2014
NEWS TICKER: THURSDAY DECEMBER 18TH 2014: Scotiabank’s Commodity Price Index dropped -4.8% m/m in November (-6.1% yr/yr) and will end 2014 in a ‘deflationary’ mode, says economist Patricia Mohr. "Significant capacity expansion and the defence of market share by major oil and iron ore producers— against a backdrop of lacklustre world economic growth — account for the softness at the end of the year," she says. Mohr adds that the decision by Saudi Arabia not to reduce output to shore up international oil prices, but instead to allow prices to drop to levels curbing US shale development appears to be having a negative impact on confidence in a wide variety of other commodity as well as equity markets. She predicts prices will fall further this month, but will start to rebound in mid 201 - Jonathan Hill, the EU's financial-services commissioner, says he plans to pursue rules that separate a bank's proprietary trading from retail operations. "The sensible thing to do is to seek to make progress quickly" on the issue, Hill said. "There are still areas of risk in some of the biggest and most complicated banks,” reports Bloomberg- CME Group, said yesterday that it will change daily price limits in its CME Feeder Cattle futures effective today, pursuant to its emergency action authority. The current daily price limit for CME Feeder Cattle futures is $3.00 per hundredweight and will change to $4.50 per hundredweight effective on trade date December 18th Additionally, effective December 19th (tomorrow) these limits will have the ability to expand by 150% to $6.75 per hundredweight on any business day in the event that one of the first two contract months settles at limit on the previous trading day. CME Feeder Cattle futures have been locked limit for five consecutive days as a result of various factors. The change to daily price limits is necessary to ensure continued price discovery and risk transfer, says the CME. Daily price limits for CME Live Cattle futures will remain unchanged at $3.00 per hundredweight. Effective Friday, December 19th, these limits will have the ability to expand by 150 percent to $4.50 per hundredweight in the event that one of the first two contract months settles at limit on the previous trading day - The Straits Times Index (STI) ended +16.42 points higher or +0.51% to 3243.65, taking the year-to-date performance to +2.49%. The FTSE ST Mid Cap Index gained +0.29% while the FTSE ST Small Cap Index gained +0.71%. The top active stocks were Keppel Corp (+2.68%), SingTel (-1.02%), DBS (+2.36%), Global Logistic (-3.21%) and UOB (+0.30%). The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+3.13%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+6.38%) and Geo Energy Resources (unchanged). The underperforming sector was the FTSE ST Telecommunications Index, which declined -0.98% with SingTel’s share price declining -1.02% and StarHub’s share price declining-0.73%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+2.56%), DBXT CSI300 ETF (+0.42%), STI ETF (+0.61%). The three most active Real Estate Investment Trusts (REITs) by value were Ascendas REIT (-0.42%), Keppel DC REIT (unchanged), Suntec REIT (+0.26%). The most active index warrants by value today were HSI23400MBeCW150129 (+7.32%), HSI22600MBePW150129 (unchanged), HSI24000MBeCW150129 (+12.50%). The most active stock warrants by value today were KepCorp MBeCW150602 (+21.95%), DBS MB eCW150420 (+29.29%), DBS MB ePW150402 (-18.03%) - Spain’s Director of Public Prosecutions, Eduardo Torres Dulce, has resigned from the post for “personal reasons”, Spanish daily El Mundo reported this morning. A spokesman for the Public Prosecutor’s office confirmed the news by telephone to The Spain Report, saying that Mr. Torres Dulce had informed Justice Minister Rafael Catalá of his decision: “but that it perhaps would not come into effect until they find a replacement”. That decision is taken at cabinet level. The next cabinet meeting for Rajoy’s government is tomorrow morning - Hedge funds including Marshall Wace, Odey Asset Management and Lansdowne Partners are shorting OTP Bank Plc, a Hungarian lender with a Russian subsidiary whose shares have fallen almost 6% this month reports Albourne Village. All three London-based funds took or increased their position this month in OTP, Hungary’s largest lender, according to data compiled by Bloomberg. The ruble rose today in Moscow after plunging as much as 19%against the dollar yesterday, when Russia’s central bank increased interest rates to 17% percent from 10.5 percent in an attempt to stem the decline. The ruble is down 52% this year and has taken a disproportionate beating in the wake of sanctions and falling oil prices. The country still has the third largest currency reserves in the world and so is unlikely to default. According to Eric Chaney, Manolis Davradakis and Greg Venizelos from AXA IM’s Research and Investment Strategy team Russia will likely resort to fiscal stimulus to contain the risk of social and political unrest. Capital controls, political unrest and even default on private hard currency debts are possible outcomes they say. They credit default swaps market is pricing a one-third probability of sovereign default within five years - Indonesia is ramping up financing for its $439bn development program, planning an almost fivefold increase in sales of project sukuk. The government is seeking to raise IDR7.14trn rupiah (around $568m) from notes that will fund particular construction ventures next year, compared with IDR1.5trn this year, which say local press reports, will help finance its estimated spending of about IDR5,519trn from 2015 to 2019 to build roads, railways and power plants.

Russia's new trading infrastructure takes shape

Friday, 03 February 2012
Russia's new trading infrastructure takes shape The Russian trading market is in flux as its key institutions reform and work to improve market efficiencies. In late January MICEX-RTS stock exchange reported that it intends to amend the procedure for delisting of securities, while late last year, President Dmitry Medvedev enacted the Central Securities Depository law, which had been approved by the Duma in mid-November 2011. The signing of the law was a watershed in the evolution of the Russian securities market and helps describe the country’s re-emerging trading infrastructure. http://www.ftseglobalmarkets.com/

The Russian trading market is in flux as its key institutions reform and work to improve market efficiencies. In late January MICEX-RTS stock exchange reported that it intends to amend the procedure for delisting of securities, while late last year, President Dmitry Medvedev enacted the Central Securities Depository law, which had been approved by the Duma in mid-November 2011. The signing of the law was a watershed in the evolution of the Russian securities market and helps describe the country’s re-emerging trading infrastructure.

Russia’s president Dmitry Medvedev signed the country’s so-called CSD law into being in early December last year. The law establishes the particular legal status of the central securities depositary. According to the law the CSD may be any joint stock company which is a non-banking credit organisation appropriately authorised to conduct depositary activities in the securities market and has been acting as a settlement depositary for at least three years. Any entity wishing to become a CSD in the country will have to submit an application to the ministry of finance, a process which is expected to take approximately four months. Interestingly however, it is also prescribed in law that there can only be one CSD in the country. It is expected that there will be at least a full year transition period before the new CSD is fully operational and active.
The next Russian government is expected to adopt a much more proactive strategy to try and attract greater international corporate involvement and more investment in the economy.  As well, it looks likely to continue with internal reforms to encourage the evolution of Moscow as an international financial centre. While reform is high on the government’s agenda right now, anti-Putin demonstrations late last year will ensure that for the first half of 2012 at least, politics and the pace of economic liberalisation will remain at the forefront of assessments of the attractiveness of the Russian equity markets.
Many local brokers view the prospect with optimism. According to a broker the government's response to the recent protests offers encouragement that there will be political reform, while WTO membership at least provides a timeline for companies to become more efficient and competitive”.
Among the plethora of rules in the CSD law, it seems accounts can be opened at the registrars either by the CSD or by beneficial owners. Additionally mandatory reconciliation of the CSD’s records with those of the registrar should be undertaken each time that securities transactions are conducted over the nominee holder account of the CSD; to ensure finality of settlement at the CSD.
The nominee concept for foreign entities is also part of the CSD law and will come into force from the beginning of July this year. ICSDs and foreign CSDs will be able to open accounts directly with the national CSD. Other foreign entities wishing to be nominees will be able to do so via their accounts with local custodians.  
The president also signed another mouthwateringly titled law, Amending Certain Legislative Acts of the Russian Federation in Connection with the Adoption of the Federal Law on the Central Securities Depository.  In more straightforward parlance, this is now referred to as The Satellite Law. This particular law regulates the activities of the professional securities market and ensures compliance with the CSD Law. It covers the types of accounts that can be opened by local depositaries and registrars as well describing some record-keeping features for the safe-keeping of securities of foreign companies operating on behalf of third parties.
This was followed in late January as the newly-merged MICEX-RTS stock exchange reported that it intends to amend its procedures for the delisting of securities. Currently, the removal of securities from the exchange may be initiated by the issuer. Going forward, it looks like the stock exchange will be able to suspend or even forbid a delisting procedure during meetings of its securities markets committee. If a suspension is recommended, investors will be able to leverage a special trading window, for as much as three months, to sell off their securities.  Up to now investors had no such protection.
Additionally a working group on the establishment of the country’s so-called International Financial Centre (IFC) is reportedly considering a number of draft amendments to local regulations covering the listing of securities and additional requirements for delisting.  According to a release issued by Deutsche Bank.:“  The amendments envisage that the delisting of securities undertaken by a stock exchange due to violations by an issuer or issuer’s agent will result in the introduction of a special six month trading window for these securities and their admission to a ‘non-listed’ securities list.  Significantly for investors, shareholders will be able to claim against the issuer’s management team for losses resulting from the de-listing.

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