Wednesday 26th July 2017
NEWS TICKER July 25th: Orezone Gold Corporation (TSXV - ORE) says the Ministry of Mines and Quarries in Burkina Faso, West Africa has issued and Sarama has paid the invoice for the transfer of the Bondi Gold Project (Djarkadougou exploration permit) from Orezone’s subsidiary company to Sarama Resources subsidiary company. This is the last step of the approval process before the official transfer that will be effective when the Ministry of Mines will deliver the new Djarkadougou Order (Arrêté) in Sarama’s name, at which point Sarama Resources shares and warrants issued to Orezone as part of the transaction will be released from escrow. The issuance of the Arrêté is a matter of process which should happen through the course of Q3 2017 - Andrey Solovyev, global head of DCM at VTB Capital reports today that “VTB Capital acted as joint global coordinator on the placement of a five-year $725m eurobond issue with an 8% coupon for Nostrum Oil & Gas PLC. Nostrum Oil & Gas is an independent multi-field oil and gas company engaging in the production, development and exploration of oil and gas in the pre-Caspian Basin. The order book was significantly oversubscribed, driven by a broad range of top quality international accounts. The order book comprised global investors from the following regions: USA - 40%, Great Britain - 39%, Continental Europe - 16%, Asia and Middle East - 4%, CIS - 1%. Investors including Global Asset Managers, Investment Funds, Banks, Pension Funds and Insurance Companies participated in the transaction. Several participants had invested in Nostrum’s previous bond issues. This deal is the third transaction arranged by VTB Capital for Nostrum Oil & Gas PLC, reflecting the depth of expertise at VTB Capital - The US dollar remains under pressure amid heightened market uncertainty over the US administration’s ability to implement key campaign promises including healthcare and tax reform. A downward reassessment in short-term Fed rate hike expectations following a more dovish than expected tone from US Fed chair Janet Yellen at last week’s semi-annual testimony, coupled with disappointing US June inflation and retail sales data, have weighed on market sentiment towards the greenback -- Turning to core government bonds, yields remain off recent multi-month highs. Thursday’s ECB monetary policy meeting decisions will be important in either buoying market sentiment over the summer months, or depressing it -- According to today’s market report from EFG Eurobank in Athens, Greece’s return to financial markets expected this week, is being postponed because the IMF has set a ceiling to the amount of debt that Greece can hold in order for the Fund to participate in Greece’s debt restructuring programme. European Commission officials have reportedly commented that a successful completion of the 3rd Economic Adjustment Programme – due to expire in August 2018 – will require more than one bond issuance by the Greek government for the country to be able to build up a buffer of €9bn which is to come from the ESM loan, the containment of public expenditure and tapping the markets. Greek government spokesperson Dimitris Tzanakopoulos has subsequently told local press that the country will tap the markets when it estimates that it is in the best possible position with the lowest possible risk -- Moody's Investors Service has today withdrawn the senior unsecured (P)Aa2 provisional rating on the Norwegian railway operator Norges Statsbaner AS (NSB)s medium-term note program and the Aa2 senior unsecured ratings on all the outstanding bonds, with the exception of the Aa2 senior unsecured rating on the CHF325m notes due 2017.The withdrawal of the ratings follows the completion of the transfer of most of NSB's debt, together with the ownership of NSB's rolling stock, to the newly-established company Norske tog As, which has been demerged from the group as part of the railway sector reform -- James Zimmerman, manager of Jupiter’s UK smaller companies fund, says today in his market note that political uncertainty in the UK is likely to create volatility for many domestic-focused companies for some time. He adds that following the UK’s decision to leave the EU in June last year, the unexpected outcome of the snap UK general election has only heightened political uncertainty in the UK. This uncertainty is likely to persist for some time. Over the past year, sterling has fallen by more than 10% against the US dollar, and inflation in the UK has overshot the Bank of England’s target rate, hitting 2.6% in June. Additionally, he says, a number of more domestically-focused UK shares fell sharply immediately after the EU referendum result and have continued to face headwinds due to sterling weakness and increasing inflation pressures. However, in contrast, many UK-listed international earners have continued to rally, benefiting from the sharp depreciation of sterling over the past year -

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Issue 82 - May/June 2015

There’s a new paradigm in investor services. FTSE Global Markets spoke to Daron Pearce, Global Head, Investment Managers segment for Asset Servicing at BNY Mellon, about the evolution of the investment services business set and what is means, long term, for the bank’s clients. Backed by innovations in technology the company now mines a rich seam in ground-breaking client services based on sophisticated analytics that help its clients better understand the world in which they operate, and allows BNY Mellon to develop new tools and models that leverage their expertise to better service their own customers.

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High valuations and the prospect of a gradual rise in US interest rates look to be the main concern of investors right now. Given the oversubscription of even measly priced UK gilts and other sovereign bonds, it is clear that sovereign debt will remain the asset class of choice for pension funds. Given that understanding and failing a grand rotation back into equities, the issue is then whether rate rises reinforce the drift into developed market sovereign bonds at the expense of emerging markets.  Relative to equities flows government bonds remain at historic highs. Just how soon the US Federal Reserve will begin to raise rates now the question du jour. We look at some of the fallout once it happens

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Wednesday, 24 June 2015

A fix for fixed income?

With the corporate bond market still dealing with a pronounced demand-supply imbalance, newer protocols capable of connecting multiple sources of liquidity continue to grow in popularity—among them open or all-to-all trading solutions, designed to provide investors, dealers and other market participants with greater efficiency around fixed-income trades. Dave Simons reports from Boston.

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According to the latest survey from data provider Preqin, some 51 investors have increased their allocation to the hedge funds to over the $1bn benchmark, while 27 investors have seen their allocation fall below that level. There are now a total of 227 investors around the globe that have $1bn or more in assets invested in hedge funds, and collectively these investors have $735bn invested in the asset class, representing almost a quarter of the total capital invested in the industry (up 13%) on a year ago. Most of these were in America. What’s going on?

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Wednesday, 24 June 2015

Find me a prime

Will the current climate continue to favor the various small-time prime models that have emerged in the wake of the recent PB purge? Are these specialty firms capable of handling the ever-expanding field of small funds in need of a home? Dave Simons reports.

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As with any business decision, financial analysis is a critical input to deciding whether to upgrade/build a trade reporting solution or outsource to a third-party provider. In building or upgrading a solution, firms typically incur costs involved in interpreting regulations and defining business requirements, design/engineering and project implementation, physical infrastructures, operations and support staff and trade repository fees. Finally, there is the consideration of opportunity costs—the consumption of resources that could support other business initiatives—should be factored into the total cost of ownership. The following two scenarios demonstrate the total cost of ownership of building an in-house reporting system versus using a managed solution. Costs and calculations reflect Sapient’s first-hand experience working with banks and buy-side firms worldwide.

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When financial regulations were coming into effect in 2012, there were no managed solutions available to help market participants handle trade reporting. Today, robust, third-party managed services are available, offering organizations a number of benefits:

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Now that most G20 member states have mandated trade reporting of derivatives, market participants have an opportunity to evaluate the agility and sustainability of their current approach. In this article, Randall Orbon, Arun Karur and Cian Ó Braonáin of Sapient Global Markets discuss the state of trade reporting and show how growing costs, complexity and regulatory scrutiny are fuelling a compelling business case for third-party managed solutions.

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