Saturday 29th August 2015
NEWS: Friday, August 28TH: The Hong Kong Monetary Authority says it has granted a restricted banking licence to Goldman Sachs Asia Pacific Company Limited (GSAPCL) under the Banking Ordinance. GSAPCL, incorporated in Hong Kong, is a wholly-owned banking subsidiary of the Goldman Sachs Group, Inc. The number of restricted licence banks in Hong Kong is now 24 - Apple launched its first Australian dollar corporate bond issue, raising $1.2bn within two hours this morning. Strong demand for the US tech giant’s fixed and floating, four and seven year Kangaroo bonds saw the firm outstrip predictions it would raise between $500m and $1bn. Apple bonds are popular because the AA+ rated company is considered an ultra-safe investment, although yields are correspondingly low — about 3% on four-year bonds and about 3.8% on seven-year bonds - The European Securities and Markets Authority (ESMA) has published the responses received to the Joint Committee Discussion Paper on Key Information Document for PRIIPS. The responses can be downloaded from the regulator's website - Romania’s MV Petrom reportedly is planning a secondary listing on the London Stock Exchange. According to Romanian press reports, the local investment fund Fondul Proprietatea may sell a significant stake in the company via public offering on the Bucharest Stock Exchange and London Stock Exchange. OMV Petrom, with a current market capitalisation of €4.85bn has announced that it will ask its shareholders’ approval for a secondary listing in London. The general shareholders meeting is scheduled for September 22nd. Austrian group OMV, holds 51% of the company’s shares; other shareholders include the Romanian state, via the Energy Ministry, with a 20.6% stake, and investment fund Fondul Proprietatea, which holds 19%. The remaining 9.4% is free-float - Morgan Stanley (NYSE/MS) today announced the launch of a new fund, the IPM Systematic Macro UCITS Fund, under its FundLogic Alternatives plc umbrella. The fund provides exposure to IPM’s Systematic Macro strategy, which is based on IPM’s proprietary investment models that provide unique insights into how fundamental drivers interact with the dynamics of asset price returns. The FundLogic Alternatives Platform currently has more than $2.6bn in assets under management (as of 31 July 2015) and this latest addition expands Morgan Stanley’s offering of global macro strategies - Equities sold off hard this morning as continued pressure on Chinese stocks rippled throughout world markets. Chinese government intervention brought the Shanghai Composite back a positive close; but the question is now, has confidence eroded so much that the market will continue to depend on the government to prop it up? The other key element to consider today is the outcome of the debate in the German parliament on the Greek bailout. Last month, a record 65 lawmakers from the conservative camp broke ranks and refused to back negotiations on the bailout. The daily Bild estimated that up to 120 CDU and CSU members out of 311 might refuse to back the now-agreed deal. However, Chancellor Merkel is looking to secure support from the Social Democrats (SPD), Merkel's junior coalition partner, and the opposition Greens which will likely swing the final decision Greece’s way. However, a rebellion by a large number of her allies would be a blow to the highly popular Chancellor.

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FTT drags down Italian stock trading volumes

Wednesday, 23 April 2014
FTT drags down Italian stock trading volumes Trading in Italian stocks has fallen by 34.2% since the introduction of a Financial Transaction Tax (FTT) twelve months ago, according to research from Credit Suisse. http://www.ftseglobalmarkets.com/media/k2/items/cache/7e19d33790d446c78d426d3c4ca1dd43_XL.jpg

Trading in Italian stocks has fallen by 34.2% since the introduction of a Financial Transaction Tax (FTT) twelve months ago, according to research from Credit Suisse.

The Swiss bank’s Trading Strategy report, released last week, finds that since the Italian FTT (IFTT) was introduced in March 2013, average daily turnover (ADT) in Italian stocks has fallen by 29.7% versus the average from January to February 2013.

Over the same time period, ADT in other European stocks increased by 4.5%; therefore, Italy has experienced a 34.2% relative decline in ADT since the introduction of the tax.



The IFTT followed the introduction of French FTT and adopts a similar model but with extended scope which includes a tax on equity-like financial instruments and derivatives, as well as high-frequency trading.

In Italy, the tax on equities levies 0.10% per exchange transaction and 0.20% on over-the-counter trades. The corresponding derivatives tax levies a fixed charge per transaction, ranging from €0.01875 to €200 depending on the instrument type, with a significant tax discount if the orders are traded on exchange.

Transactions generated by algorithmic trading incur an additional charge of 0.02%, though activities deemed to be market-making are exempt.

A crucial difference between the Italian tax and the French FTT is that CFD hedging activity is not exempt from the IFTT, meaning that it’s therefore not surprising to find that the IFTT has had a much more pronounced impact on volumes.  

“Given the specific nature of the Italian market and the dominance of retail investing, it is no surprise to see the IFTT having an effect on trading volumes, particularly as CFDs are popular instruments in the country,” says Alex Dalley, co-head of sales, BATS Chi-X Europe. “However, the 34.2% drop is certainly higher than expected.”

In France, the reports says FTT appears to have had a modest impact on overall French volumes, but may have contributed to lower liquidity in mid and small cap stocks.

In the 20 months since the FFTT was introduced, average daily turnover (ADT) in French stocks has fallen by 9.2% versus the average from January to July 2012. Over the same time period, ADT in other European stocks fell by 2.8%; therefore, France has experienced a 6.4% relative decline in ADT since the introduction of the tax.

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