Tuesday 26th July 2016
NEWS TICKER: JULY 25TH 2016: Moody's says that Vedanta Ltd's (unrated) revised merger terms with Cairn India Ltd. (unrated) have no immediate impact on Vedanta Resources plc's B2 corporate family rating (CFR), Caa1 senior unsecured notes rating and negative outlook. While the revised terms entail a rise in debt/cash out flow of an estimated $447m -- compared to $120munder the original terms -- they will give Vedanta Ltd. complete access to Cairn India's large cash holdings, as well as provide the flexibility to reduce debt, thereby lowering leverage and reducing subordination within the group. As such, the successful execution of the merger, to the extent that it leads to de-leveraging, will be credit positive. Positive rating implications could emerge if adjusted leverage improved to less than 4.5x on a sustained basis. Should the merger proceed as announced -- subject to approval, in some cashless, all-stock transaction -- minority shareholders will receive one equity share and four 7.5% preference shares in Vedanta Ltd. for every share held in Cairn India. Shareholders will have the option of redeeming the preference shares within 30 days, or holding until maturity for 18 months. Following completion of the transaction, Vedanta Resources' shareholding in its subsidiary Vedanta Ltd will fall to 50.1% from 62.9%. At the end of June this year, Cairn India had $3.5 billion in cash and no external debt outstanding." Although delayed from the initial announcement in June 2015, the revised terms are a step forward in the merger proceedings -- the merger will provide Vedanta Ltd. better access to Cairn India's large cash balances of $3.5 billion, as previous access was only possible through the up-streaming of dividends," says Kaustubh Chaubal a Moody's Vice President and Senior Analyst. - The World Bank is beginning work on a new project, aimed at supporting the poorer regions of Poland by better utilising European Union funds made available to the country through the European Union Financial Framework 2014-2020. Representatives from Podkarpackie and Świętokrzyskie, the two regions selected for this work, will cooperate with experts from the World Bank, the Ministry of Development, and the European Commission during this project. The project - part of a European Commission initiative - will also include two regions in Romania. Poland and Romania are the first to implement this pilot project, whose objective is to increase the absorption of European Union funds and support socioeconomic development at the local level. “We are happy that we will be able to use our global experience, as well as our knowledge of the conditions in Poland, to support the Polish authorities in developing the country’s lagging regions,” says Arup Banerji, World Bank regional director for European Union countries - The Straits Times Index (STI) ended 4.87 points or 0.17% higher to 2945.35, taking the year-to-date performance to +2.17%. The top active stocks today were Singtel, which gained 1.66%, DBS, which declined 0.06%, Wilmar Intl, which declined 0.97%, UOB, which gained0.26% and ComfortDelGro, with a1.73% fall. The FTSE ST Mid Cap Index declined 0.84%, while the FTSE ST Small Cap Index declined0.24%. Elsewhere in Asia, Taiwan stocks retreat from over 1-year high; TSMC down. Taiwan stocks retreated from more-than-one-year highs on Monday as investors took profits on recent winners such as Taiwan Semiconductor Manufacturing Co (TSMC). The main index fell 0.6 percent at 8,954.58 points. It reached as high as 9,085.91 earlier in the session, an intraday level not seen since July 2015. The electronics subindex and the financial sub-index were both down about 0.7%. TSMC, the world's top contract chip maker, was off nearly 1%. The yen traded weaker with trade data showing better than expected figures though exports and imports declined notably ahead of a week that will see the Fed and the Bank of Japan comment on monetary policy. The adjusted trade balance came in at a surplus of ¥33bn while and imports eased 18.8%, less than the 19.7% drop expected and exports fell 7.4%, less than the 11.6% decline anticipated. The overall trade balance came in at a surplus of ¥693bn, better than the ¥495bn expected. USD/JPY changed hands at 106.32, up 0.18%, while AUD/USD traded at 0.7478, up 0.17%. GBP/USD traded at 1.3135, up 0.19%. -- Rangold Resources will be announcing its Q2 results at the London Stock Exchange on Thursday, August 4th – Most equity markets kicked off higher today, buoyed by the firm tone of the G-20 Finance Ministers meeting which promised “to use all policy tools –monetary, fiscal and structural- individually and collectively” to achieve the goal of “sustainable, balanced and inclusive growth” in view of lingering concerns over spillover effects from Brexit. Central bank meetings will be the focus of market attention this week. The Fed is widely expected to leave its monetary policy unchanged this week. However, a recent string of better than expected U.S. data reignited speculation that the Federal Reserve will raise interest rates before the end of the year. Interest rate futures are currently pricing in a 45% chance of a rate hike by December, compared with less than 20% a week ago and up from 9% at the start of this month. The Fed monetary oversight committee starts its two-day meeting tomorrow. However, the story this week will focus on the Bank of Japan: will it, won’t it expand its monetary policy, without ‘helicopter money’? According to Russell Matthews, a portfolio manager at Russell Matthews, “Core government bond markets have largely moved sideways and very short dated US rates have repriced the probability of a Federal Reserve interest rate hike in 2016 meaningfully higher. Corporate bonds have continued to perform well as the insatiable demand for yield is unabated, with spreads compressing in all sectors… Rate and sovereign credit have had a good run of late but the question we are asking ourselves is are we at the point where policy makers and investors have become complacent? Our mantra has always been that policy makers are likely to be lazy and under deliver if there is no pressure from markets. We have been through two major risk events in the last six weeks (Brexit, Turkey) and risk assets have continued to perform. We expected and anticipated this outcome, but that does not prevent us from becoming uneasy at the level of calm that we are witnessing, and the growing confidence that the market has with policy makers.” The other trend on investors’ minds will be the EU’s stance on Italy’s growing banking crisis: will the EU stick its ostrich like head in the sand? Elsewhere in Europe, Greek Minister of Finance Euclid Tsakalotos stated in an interview on Saturday that the primary surplus targets until 2018 are attainable and the government will not have to activate the automatic spending cuts mechanism. Beyond 2018 and in the medium term, however, the Greek government will pursue through negotiations primary surplus targets below 3.5% of GDP -

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Eurex partners with Moscow Exchange on FX trading

Thursday, 22 August 2013
Eurex partners with Moscow Exchange on FX trading Moscow Exchange and Eurex have signed a cooperation agreement for the trading of foreign exchange (FX) derivatives. The deal means Eurex Exchange will launch Euro/Russian Rouble and US Dollar/Russian Rouble FX futures on its trading system in this year’s last quarter, with the Rouble futures settled using Moscow Exchange settlement prices. http://www.ftseglobalmarkets.com/

Moscow Exchange and Eurex have signed a cooperation agreement for the trading of foreign exchange (FX) derivatives. The deal means Eurex Exchange will launch Euro/Russian Rouble and US Dollar/Russian Rouble FX futures on its trading system in this year’s last quarter, with the Rouble futures settled using Moscow Exchange settlement prices.

Alexander Afanasiev, chief executive officer of Moscow Exchange, and Andreas Preuss, deputy chief executive officer of Deutsche Börse and chief executive officer of Eurex, signed the agreement in Frankfurt/Main today.

Yesterday, Eurex revealed it would enter the foreign-exchange market in October and launch a range of currency derivatives. FX contracts will be available as exchange-listed products with Eurex initially offering futures and options on the six currency pairs where the bulk of over-the-counter trading takes place. EUR/USD, EUR/GBP, EUR/CHF, GBP/USD, GBP/CHF and USD/CHF.



Peter Reitz, member of the Eurex executive board, said: “The large majority of FX derivatives are currently traded off-exchange. With our listed contracts we are offering an alternative in which we bring the advantages of exchange trading, including clearing, to a market that has so far been organised predominantly bilaterally.

Moscow Exchange chief executive officer, Alexander Afanasiev, says the partnership with Eurex brings exciting new trading and hedging opportunities for investors. “Today we agreed to launch Rouble FX futures in Frankfurt. Also, this autumn, Moscow Exchange will launch futures on five German blue chip stocks. Cross-listing arrangements between Deutsche Börse Group and Moscow Exchange allow our clients to build new trading strategies and better manage their risks. We believe that our joint initiatives with Deutsche Börse will strengthen national markets and facilitate the continued development of Frankfurt and Moscow as financial centres.”

“We are very pleased to have reached the next milestone of our partnership. This new cooperation fits perfectly into our goal to constantly expand our product offering as it will complement our planned FX product suite”, adds Andreas Preuss.

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