Saturday 29th November 2014
NEWS TICKER: FRIDAY NOVEMBER 27TH 2014: BofA Merrill Lynch Global Research’s latest report shows that investment flows this week starkly highlight the impact of negative interest rates in Europe. Money is moving up the value chain in search of substitute asset classes with suitable yield. Investment grade credit looks to be the greatest beneficiary of this at present, with inflows reaching $2-$3bn a week over the last month, a historic high. With around €450bn European govies trading at negative yields, investors have started shifting their attention to high-grade bond funds. The bank’s research team expects the recent strong trend of inflows to continue next year, with inflows to increase to $100bn into the asset class. So far this year high-grade credit has seen $63bn of inflows, while government bond funds have seen only $17bn. The low or negative yielding asset classes are all seeing outflows, reports Bank of America Merrill Lynch in the report. Government bond funds saw their fifth week of outflows, while money market funds saw their largest outflow ($19.5bn) since May this year. Flows into equities managed to bounce back to the positive territory, after three weeks of outflows - According to SwissQuote, in Switzerland, traders will be watching Swiss Kof leading indicator, which is expected to rise from 99.8 to 100.0 in November. However, the real focus will be referenda results this Sunday. The outcome should be released around 4pm CET on Sunday. The latest polls suggest that the “no” votes have the majority indicating that spillover into EURCHF and Gold should be limited. Elsewhere, Euro area flash HICP inflation is expected to drop from 0.4% y/y in October to 0.3% y/y in November. Swedish GDP growth is anticipated to weaken from 0.7% q/q in Q2 to 0.2% q/q in Q3. While OPEC decision not to cut will clearly be disappointing to Canadian policy makers, today GDP is expected to ease from 3.6% y/y to 2.1% y/y in Q3 - New research conducted by independent financial researcher Defaqto on behalf of NOW:Pensions reveals that advisers are gearing themselves up for the business opportunity that auto enrolment presents. Nine out of ten (88%) advisers who are currently advising small and medium sized companies on auto enrolment plan to continue doing so in 2015 when micro businesses will begin staging. Over half of the advisers surveyed (51%) think that auto enrolment represents a good opportunity for them to grow their business over the long term, with three quarters (76%) seeing it as a chance to both advise existing clients as well as grow a new client base. Over two in three (68%) advisers expect to be providing employers with advice on selecting a pension provider, while 72% expect to be advising them for the staging date, and 78% expect their services to be required on an ongoing basis after the staging date has passed. Seven out of ten (73%) believe they will need to advise on other corporate issues such as business protection insurance. Neil Liversidge, managing director, West Riding Personal Finance Solutions explains: "The need for help and advice around auto enrolment naturally brings together business owners, their employees, and advisers. As such it probably represents the single greatest opportunity most firms will have to generate new clients this decade." Not all advisers are in agreement, as nearly one in five (17%) of the 244 advisers questioned, do not intend to advise small and micro businesses on auto enrolment next year. Of these advisers, over half (55%) say they don’t think it will offer profitable business, while 28% believe there is too much admin involved, and 25% are deterred by how much time it will take. One in ten (10%) don’t believe they have the right knowledge to advise on it. Additionally, two in three (66%) advisers say that from their experience so far, employers are either not that engaged or not engaged at all with auto enrolment, while the same can be said for 83% of employees - Germany’s KfW IPEX-Bank and Africa Finance Corporation (AFC) have signed a Framework Financing Agreement (Basic Agreement) amounting to $300m. The facility will be accessible to infrastructure projects in Africa, developed by AFC, by providing long-term financing of European equipment and services imported for such projects. The basic agreement helps to address Africa’s infrastructure development needs while also supporting German and European exporters. Projects that will be financed under the agreement will be covered by guarantees from European Export Credit Agencies (ECAs) - A new active ETF issued by PIMCO Fixed Income Source ETFS plc has begun trading in the XTF segment on Xetra today. The ETF is the PIMCO Low Duration Euro Corporate Bond Source UCITS ETF Asset class, an active bond index ETF (ISIN: IE00BP9F2J32), with a total expense ratio of 0.3%. According to PIMCO, at least 90% of the investment portfolio underlying the active ETF consists of investment grade corporate bonds issued in euro. Up to 20% of the fund assets can be invested in the emerging markets region. The currency risk may amount to up to 10% due to corporate bonds not denominated in euro. The average duration ranges from zero to four years - Legal & General (L&G) has announced a restructure across its L&G Assurance Society (LGAS) division following the announcement of the impending departure of chief executive John Pollock next year. L&G’s savings business will be split into two businesses; mature and digital. Jackie Noakes, chief operating officer for LGAS and group IT director will become the managing director of the mature savings division (including insured savings and with-profit businesses). Mike Bury, managing director of retail savings at L&G will manage the digital savings arm, Cofunds, IPS, Suffolk Life and L&G’s upcoming direct-to-consumer platform –Orangefield Group has purchased Guernsey-based Legis Fund Services, expanding its fund services division and increasing its total assets under administration to more than $50bn. Legis will change its name to Orangefield Fund Services but will continue to be led by managing director Patricia White. The acquisition is part of a trend in mergers and acquisitions in the offshore fund administration sector, and was advised by Carey Olson. Carey Olson also recently advised Anson Group on the sale of its fund administration business to JTC Group and First Names Group on its acquisition of fund management business Mercator - The Straits Times Index (STI) ended +9.54 points higher or +0.29% to 3350.50, taking the year-to-date performance to +5.86%. The FTSE ST Mid Cap Index gained +0.14% while the FTSE ST Small Cap Index declined -0.52%. The top active stocks were Keppel Corp (-2.17%), DBS (+0.66%), OCBC Bank (-0.10%), UOB (+0.71%) and SingTel (unchanged). Outperforming sectors today were represented by the FTSE ST Technology Index (+1.03%). The two biggest stocks of the FTSE ST Technology Index are Silverlake Axis (+1.97%) and STATS ChipPAC (unchanged). The underperforming sector was the FTSE ST Oil & Gas Index, which declined -2.84% with Keppel Corp’s share price declining -2.17% and Sembcorp Industries’ share price declining-1.08%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.38%), SPDR Gold Shares (-0.70%), STI ETF (unchanged). The three most active Real Estate Investment Trusts (REITs) by value were CapitaCom Trust (+0.30%), Suntec REIT (+1.29%), Ascendas REIT (+1.30%). The most active index warrants by value today were HSI24400MBeCW141230 (-6.67%), HSI23800MBeCW141230 (-5.13%), HSI23600MBePW141230 (+2.50%). The most active stock warrants by value today were DBS MB eCW150602 (+2.42%), KepCorp MBePW150330 (+13.85%), UOB MB eCW150415 (+1.24%).

Euroclear Belgium, Euroclear France and Euroclear Nederland sign up to TARGET2-Securities

Tuesday, 12 June 2012
Euroclear Belgium, Euroclear France and Euroclear Nederland sign up to TARGET2-Securities Three Euroclear central securities depositories (CSDs) operating in the euro-zone, namely Euroclear Belgium, Euroclear France and Euroclear Nederland, have agreed to sign up to the Eurosystem's TARGET2-Securities (T2S) project. http://www.ftseglobalmarkets.com/

Three Euroclear central securities depositories (CSDs) operating in the euro-zone, namely Euroclear Belgium, Euroclear France and Euroclear Nederland, have agreed to sign up to the Eurosystem's TARGET2-Securities (T2S) project.

The depositaries have engaged in extensive market consultation and dialogue with national regulators and will finalise assessment of CSD outsourcing arrangements with relevant regulators before signing the T2S Framework Agreement. With support from parent company Euroclear SA/NV, the Boards of the three CSDs have agreed for each CSD to sign the T2S agreement.

As a result, Euroclear Belgium, Euroclear France and Euroclear Nederland will outsource settlement transaction processing to T2S. Clients of the three CSDs will continue to have accounts directly with the respective CSD and receive the full range of post-trade services from that CSD. The migration date and fees for connecting to and using T2S will be determined after completion of market consultation.



Joël Mérère, chairman of the Boards of Euroclear Belgium, Euroclear France and Euroclear Nederland, explains that: "The three Euroclear group central securities depositories are reflecting local market sentiment by taking the decision to sign the T2S Framework Agreement. As the first and only group of markets in continental Europe to have consolidated and harmonised transaction settlement and custody services on a shared platform, we appreciate the benefits of large-scale processing consolidation and harmonisation that T2S has the capacity to provide."

Valérie Urbain, chief executive officer of Euroclear Belgium, Euroclear France and Euroclear Nederland, add: "Euroclear has been preparing to operate within a T2S environment for some time. Our asset servicing capabilities are expanding, and we are introducing collateral management services for clients in the Belgian, French and Dutch markets, as well as with some local central banks. The depth and breadth of the domestic and cross-border post-trade services we offer will clearly help clients get the most out of the new operating environment in the easiest way possible."

Euroclear Belgium, Euroclear France and Euroclear Nederland claim to be the first and only group of central securities depositories in continental Europe that process client transactions on a shared platform and operate with harmonised market rules and practices. Known as the ESES (Euroclear Settlement of Euronextzone Securities) platform, the three CSDs settled EUR 87 trillion of securities transactions in 2011, representing 31 million transactions, and held approximately EUR 6 trillion of assets for clients.

The three ESES CSDs are part of the Euroclear group, which includes the international central securities depository Euroclear Bank, based in Brussels, as well as the national central securities depositories Euroclear Finland, Euroclear Sweden and Euroclear UK & Ireland. Euroclear also owns Xtrakter, operator of the TRAX trade matching and reporting system.

In 2011, the Euroclear group settled more than EU 580trn in securities transactions, representing 163m domestic and cross-border transactions, and held more than EUR22trn of assets for clients. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.

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