Sunday 4th October 2015
NEWS TICKER, OCTOBER 2ND 2015: Asian stock markets were mixed in trading today. The Straits Times Index (STI) ended 8.7 points or 0.31% lower to 2793.15, taking the year-to-date performance to -17.00%. The top active stocks today were DBS, which declined0.86%, Sinarmas Land, which gained 0.89%, SingTel, which declined 1.11%, CapitaLand, which gained 3.69% and UOB, with a1.72% fall. The FTSE ST Mid Cap Index declined 0.35%, while the FTSE ST Small Cap Index declined 0.35%. Australia's S&P/ASX 200 ended 1.2% lower at 5052.02, following a patchy performance overnight in US markets, while South Korea’s Kospi index fell 0.5% over the day. The Nikkei 225 ended flat. Hong Kong's Hang Seng Index, which reopened after a holiday Thursday, was a rare bright spot for the region, up 3.2%, helped by slightly stronger-than-expected Chinese manufacturing data reported yesterday. However, analysts continue to warn against reading too much into any short term data, the long term outlook for Asia is still strong, though short term, while everyone hangs on the outcome of US jobs and economic data, investors are tending towards extreme caution - The amount of outstanding Euro commercial paper (CP) and certificates of deposit (CD) has decreased by $880m in the latest week according to the CMDPortal. Corporate sector outstanding, decreased by $5.1bn during the week, while sovereign, supranational and agency outstandings increased by $3.9bn to $242. Financial outstandings have fallen by $30.3bn in the last eight weeks while outstanding of asset backed securities has increased by $652m. Commercial paper (CP) consists of short-term, promissory notes issued primarily by corporations. Maturities range up to 270 days but average about 30 days. Many companies use CP to raise cash needed for current transactions, and many find it to be a lower-cost alternative to bank loans - Moody's has downgraded the corporate family rating (CFR) and the probability of default rating (PDR) of Eurasian Resources Group Sarl (ERG) to Caa1and Caa1-PD, respectively, both with negative outlook. The rating downgrade is associated with the agency's decision to lower the Baseline Credit Assessment ('BCA') of ERG to caa2, from caa1 previously. The lowering of the BCA to caa2 reflects the deteriorated fundamental credit profile of ERG, due to its increased financial and liquidity risks, which the rating agency considers are not sufficiently mitigated by the company on a stand-alone basis. The BCA is a key factor behind the CFR, as defined according to the Government-Related Issuer ('GRI') rating methodology, which Moody's applies to ERG, given the Government of Kazakhstan (Baa2 stable) is a main shareholder with a 40% stake. Moody's assessment on the other main factors behind the CFR according to the GRI methodology remained unchanged. In particular, Default Dependence is still considered as high and Government Support as moderate. These assessments drive the one notch uplift on the BCA.

Latest Video

Hong Kong’s OTC Clear to welcome US clearing members

Friday, 09 May 2014
Hong Kong’s OTC Clear to welcome US clearing members OTC Clear, a subsidiary of Hong Kong Exchanges and Clearing (HKEx) will begin to offer its OTC derivatives clearing services to US clearing members, after receiving no-action relief from the US Commodity Futures Trading Commission (CFTC).

OTC Clear, a subsidiary of Hong Kong Exchanges and Clearing (HKEx) will begin to offer its OTC derivatives clearing services to US clearing members, after receiving no-action relief from the US Commodity Futures Trading Commission (CFTC). 

The go-ahead covers clearing of propriety trading by US members that involves interest rate swaps, denominated in Hong Kong dollars, renminbi (RMB), US dollars and euros, as well as non-deliverable currency forwards, denominated in RMB, Taiwan dollars, Korean won and Indian rupee.

The no-action letter is effective immediately until the earlier of December 31st 2014 or the date when the CFTC registers OTC Clear as a derivatives clearing organisation (DCO) or exempts it from registration.

"We are very pleased to receive the no-action relief from the CFTC because it will allow us to admit our US founding shareholders and other eligible US persons as clearing members," says Calvin Tai, HKEx's Head of Global Clearing (Asia).  "Our US founding shareholders have a significant role in the OTC derivatives market so this is a very important step forward for OTC Clear, which is a key part of our strategy to establish a strong fixed income and currency business as we expand into more asset classes.

"OTC Clear has also submitted an application to the European Securities and Markets Authority (ESMA) to seek regulatory recognition that will allow the clearing house to accept financial institutions incorporated in the European Union as its clearing members," Mr Tai said.

Two of OTC Clear's 12 founding shareholders are affiliates of US banks.  The founding shareholders together hold 25% of OTC Clear’s shares and HKEx holds the remaining 75%. 

Related News

Related Articles

Related Videos

  • Russia's derivatives and FX markets Friday, 01 July 2011 Russia's derivatives and FX markets
    Tim Bevan, director, global electronic trading services, Otkritie Securities Ltd discussed the Russian derivatives and FX markets during the Accessing…

Current Issue