Monday 27th April 2015
NEWS TICKER: MONDAY, APRIL 27th 2015:Luc Luyet, CIIA – Senior Market Analyst AT Swissquote says that yesterday, “the SNB surprised the market by announcing that the number of sight deposit account holders that are exempt from negative interest has been reduced. This decision doesn’t change much the domestic banks’ situation as the “20 times the minimum reserve requirement” rule is still running. On the other side, the institutions associated with the Confederation, such as the pension fund of the Confederation or the pension fund of the SNB, are no longer exempt of negative interest. Consequently, only the account holders of the national social security system are still fully exempt.” - High yield debt issuance remains buoyant. Issuance volume for the week ending April 17, 2015, slowed down a bit from the previous week, but remained strong. Junk bond, or high-yield debt, issuers continued to issue bonds as yields remained favourable. High-yield debt is tracked by the SPDR Barclays Capital High Yield Bond ETF and the iShares iBoxx $ High Yield Corporate Bond Fund. According to data from S&P Capital IQ/LCD, dollar-denominated bonds amounting to $10.75bn were issued across 16 transactions in the week ending April 17th. The issuance volume fell by 3.2% from the week ending April 10. Pricing was evenly spread across the week. The number of transactions fell from 18 to 16 week-over-week. Last week brought the total US dollar issuance of high-yield debt to $115.8bn in 2015 YTD, up some 15% from the same period in 2014, the bulk of which is refinancing of older debt - Moody's says EMEA auto ABS performance remained stable during the three-month period ending February 2015. The sector's average performance trend was positive in terms of delinquency ratios and cumulative losses. The 60+ day delinquencies decreased to 0.66% in February 2015 from 0.77% in February 2014, while cumulative defaults decreased to 1.06% from 1.20% over the same period. This decrease was due mainly to the good performance of the German and Dutch markets. The prepayment rate increased slightly to 13.49% in February 2015 from 13.30% a year earlier. As of February 2015, the pool balance of all outstanding rated auto ABS transactions was €27.55bn - According to Sino specialists Red Pulse, China’s State Council is considering allowing daily repatriation for QFII. Currently, RQFII enjoys T+1 repatriation while QFII is restricted to T+5. QFII is the largest channel for foreign investment into China with quota of USD150bn, however, only half of the quota is in use, like at least partly due to the five-day repatriation stipulation - Malaysia’s state pension fund will offer a Shari’a-compliant investment option for its members by 2017, Prime Minister Datuk Seri Najib Razak said today. Najib says it will create the largest Shari’a fund of its kind in the world. Malaysia has one of the world’s largest Islamic finance sectors and the authorities are keen to develop it further. They envision the industry accounting for 40% of the country’s total banking assets by 2020 compared with latest figures of around 23% released last year. The $160bn (MYR577.4bn) Employees Provident Fund (EPF) already invests about a third of its portfolio in stocks and bonds that comply with Islamic principles, which ban interest payments and pure monetary speculation. The fund reportedly hired consultants last year to study the feasibility of a state-backed pension fund focusing entirely on Shari’a-compliant investments. Additionally, local press reports says that Malaysia’s sovereign wealth fund Khazanah Nasional has received regulatory approval to issue a MYR1billion (around $275m) socially responsible Islamic bond - The NASDAQ OMX Group, Inc has declared a regular quarterly dividend of $0.25 per share on the company's outstanding common stock, an increase of 67% from the prior $0.15 per share quarterly dividend. The dividend is payable on June 26TH 2015, to shareowners of record at the close of business on June 12TH 2015 - Lazard Ltd today reported operating revenue1 of $581m for the quarter ended March 31st. Adjusted net income was $103m, or $0.77 (diluted) per share for the quarter. These results exclude a pre-tax charge of $63m relating to a debt refinancing2. Q1 2015 net income on a U.S. GAAP basis, including the pre-tax charge, was $56m, or $0.42 (diluted) per share. "Our Financial Advisory and Asset Management businesses continue their strong performance," says Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "In the first quarter, we refinanced and repaid a portion of Lazard's long-term debt, significantly reducing our interest costs," adds Matthieu Bucaille, chief financial officer of Lazard. "Consistent with our capital management objectives, we have increased the quarterly dividend by 17%, the fifth increase in as many years." -

Research says lack of data consolidation is pushing buy side flow into dark pools

Friday, 20 April 2012
Research says lack of data consolidation is pushing buy side flow into dark pools New research from TradeTech Pulse suggests that the lack of data consolidation and established data standards across Europe is increasingly pushing asset managers to direct flow into dark pools, as they are finding it so hard to navigate across the fragmented nature of the markets in Europe. The research also reveals that between 30%-40% of asset managers’ trading flow is now being executed in an OTC environment, however not all asset managers trade in dark pools. And contrary to the popular assumption, avoiding high frequency traders is not the major reason that an asset manager will direct flow into a dark pool. The majority of the respondents believe they will be trading high volumes in a greater variety of dark pools in a few years’ time. http://www.ftseglobalmarkets.com/

New research from TradeTech Pulse suggests that the lack of data consolidation and established data standards across Europe is increasingly pushing asset managers to direct flow into dark pools, as they are finding it so hard to navigate across the fragmented nature of the markets in Europe. The research also reveals that between 30%-40% of asset managers’ trading flow is now being executed in an OTC environment, however not all asset managers trade in dark pools. And contrary to the popular assumption, avoiding high frequency traders is not the major reason that an asset manager will direct flow into a dark pool. The majority of the respondents believe they will be trading high volumes in a greater variety of dark pools in a few years’ time.

Trading in the dark, a buy side perspective sets out to a provide a more accurate picture of how large, medium and small asset managers across the continent have traded over the period between 2007 and 2011, how and why they use OTC and dark pool alternatives and, in their view, the critical issues that they need addressing to improve their trading environment. The results are interesting and sometimes surprising and will be used by the asset management trading community for benchmarking.

Asset managers were asked to compare quality of information, provision of liquidity and satisfaction of service across a range of different types of off-exchange execution venues. The research found that asset managers have significantly increased the amount of control they have over their trading in the last 5 years, increasingly deciding where and when to execute orders rather than leaving this decision to their brokers. 



The research report concludes that if regulators are concerned about dark pools, they must first address the need to more easily aggregate and improve the quality of data. Secondly they must continue to promote a more level playing field across market infrastructure that will lower costs for all participants, accelerate consolidation and reduce the current incentives for market participants to excessively create and use large numbers of dark pools and crossing networks.

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