Wednesday 27th July 2016
NEWS TICKER: JULY 27TH 2016: The ESMA registers portal will undergo a technical update tomorrow. The machine-to-machine service will no longer support connections via SSL v1, SSL v2, SSL v3 and RC4 - All machine-to-machine services will be available via HTTPS only while HTTP connectivity will no longer be available. Full details are available on the portal itself – Twitter looked to have missed second-quarter revenue numbers and gave a gloomy outlook for growth in Q3. Q2 revenues of $602m and earnings per share of 13 cents disappointed analyst, who expected revenues of c.$607m, while EPS beat estimates of $0.10. Twitter says Q3 revenue will be somewhere between $590m and $610m. Twitter’s shares have dropped 20% year-to-date, and fell by more than 11% in after-hours trading after its results were announced. The firm says it believes advertising will migrate to video and explained that is why it secured streaming rights to NFL and NBA games in the US. Chief operating officer Adam Bain says, “There is a whole new set of video budgets out there today. These are these online video budgets. It’s about a $10bn marketplace in the US. These are video budgets that today we basically don’t qualify for, since the spend is going in other areas.” However, investors look to be wary of whether user growth (up only 1%) will meet expectations. The next benchmark report will be from Facebook (expected today), which analysts think will be strong. - Deutsche Bank AG reports that its second-quarter net income fell 98% from a year earlier, hurt by weaker performances in trading and investment banking, as well as restructuring costs. John Cryan, chief executive officer of the German bank, said that more needs to be done to control costs and that low interest rates will increasingly affect customers -- Verizon Communications has agreed to a $4.83bn cash deal for Yahoo's web assets as it looks to grow its digital media and advertising business - Apple reports a 15% drop in Q3 revenues because of falling iPhone sales, revenue and average selling price. Moreover, the firm’s market share of global smartphone shipments also fell off in Q1 by as much as 3 percentage points to 14.8% following a couple of years’ worth of impressive growth, particularly in China. Apple is meeting growing competition from Chinese smartphone vendors such as Huawei, Oppo and Xiaomi. Apple reported an overall decline in revenues of $7bn to $42.4bn in Q3, down 15% year on year, mostly due to a drop in iPhone shipments - The Catalan Parliament has voted 72-10 in favour of the conclusions of a pro-independence "constituent process" report today, a move that opposition parties, two of which abandoned the chamber in protest, described as "wholly illegal". MPs from the Popular Party in Catalonia (PPC) and Ciudadanos left the chamber in protest before the vote took place. Catalan Socialist Party (PSC) MPs remained seated but did not vote. The report, commissioned by separatist parties in the parliament, recommend measures that could lead to a unilateral declaration of independence. Earlier this month, the Spanish Constitutional Court warned the Catalan Parliament that its commission could not study "the opening of a constituent process in Catalonia that leads to the creation of a future Catalan constitution and an independent Catalan state". Esquerrra (ERC) leader Oriol Junqueras tweeted that "we have the democratic mandate to build a new country, clean and fair, and a mandate, for us, is a duty!" -- Jan Dehn, head of research at Ashmore, in a client note today made the case for allocating to emerging markets, even if uncertainties linger in developed markets. He suggests that whilet there are some risks involved, they are fairly priced, and insists that the fears pertaining to EM are misplaced. “Emerging Markets (EM) have performed a lot better this year than for some time. EM currencies are outperforming the Dollar and EM local bonds are up strongly year to date in Dollar terms. Despite the rally EM bonds still pay about 5-6 times higher yield than similar duration bonds in the US, while many other developed market bonds pay negative yields. The reasons for EM’s better performance are many, including better valuations, stronger technicals and improving relative and absolute fundamentals. As recently as last week, the IMF revised down developed market growth again, including -0.2% revisions of US and UK growth. China’s growth forecast was revised up.” -- The EBRD is considering extending a loan of up to $180m to RGP Kazvodkhoz (the "Company"), wholly owned by the Government of Kazakhstan, for rehabilitation of the water supply and irrigation infrastructure in South Kazakhstan, Zhambyl and Aktobe regions of Kazakhstan. The loan will be backed by a sovereign guarantee -- The unit of Royal Dutch Shell Plc plans to launch an IPO in October involving up to 330m primary and secondary shares (some 18.6% of the company’s shares) at up to P90 per share, with a listing on the Philippine Stock Exchange tentatively set for November 10th. The IPO is now awaiting regulatory approval and follows on from the recent$532m maiden issue by cement maker Cemex Holdings Philippines. Manila’s benchmark stock index touched a 15-month high last week, with investor confidence boosted by the country’s economic performance --

Latest Video

Europe

Some 16% of hedge funds launched in Q2 target Europe, while UCITS-compliant funds represent largest ever proportion of launches in the quarter. Preqin’s Q2 update on the hedge fund industry finds that economic uncertainty following the UK vote to leave the EU has created potential opportunities for hedge fund managers and, as a result, many more funds have launched focused on the region. Europe-focused hedge funds saw a large increase in the proportion of overall fund launches, rising from 1% of funds launched in Q1 to 16% of those incepted in Q2.

Read more...

In what sounded to be a tale of two halves, Mario Draghi, governor of the European Central Bank explained today that “Based on our regular economic and monetary analysis, we decided to keep the key ECB interest rates unchanged”. In a press conference this afternoon he noted, “Following the UK referendum … our assessment is that euro area financial markets have weathered the spike in uncertainty and volatility with encouraging resilience”. At the same time, he conceded that, “Over the coming months, when we have more information, including new staff projections, we will be in a better position to reassess the underlying macroeconomic conditions, the most likely paths of inflation and growth, and the distribution of risks around those paths. If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate”. Commentators now think that any movement on rates or extending QE further will not take place before September, Draghi’s statement having knocked that expectation into the relatively long grass.

Read more...

About 190 rated tranches in European residential mortgage-backed securities (RMBS) and asset-backed securities (ABS) had  coupons at negative levels as of Q1 2016, says.  Almost 50% of these tranches are concentrated in Spain and 80% correspond to RMBS tranches, which are also reaching negative coupons calculated according to the transaction documents. However, the vast majority of issuers are choosing to floor these coupons at zero in the absence of explicit reference to negative interest in the documentation. By year end, the number of rated RMBS and ABS tranches with negative coupons may increase to about 550 tranches, projects the ratings agency.

Read more...
Thursday, 21 July 2016

ECB keeps rates on hold

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council says it continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases. In addition, the ECB confirms that the monthly asset purchases of €80bn are intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim. Markets had expected as much, resulting in a strengthening of the euro in trading today. More on this story later today

Read more...

The European Securities and Markets Authority (ESMA) has today published its Advice in relation to the application of the Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) in twelve countries: Australia, Bermuda, Canada, Cayman Islands, Guernsey, Hong Kong, Japan, Jersey, Isle of Man, Singapore, Switzerland, and the United States. Currently, non-EU AIFMs and AIFs must comply with each EU country’s national regime when they market funds in that country. ESMA’s Advice relates to the possible extension of the passport, which is presently only available to EU entities, to non-EU AIFMs and AIFs so that they could market and manage funds throughout the EU. The ESMA advice could be of particular interest to the UK, which may or may not become a “third country” for AIFMD purposes following Brexit (if the UK remains part of the EEA (the Norway model) then the AIFMD Passport will continue to be available on the same basis as currently).

Read more...

The current account of the euro area recorded a surplus of €30.8bn in May, reflecting surpluses for goods (€30.6bn), services (€5.9bn) and primary income (€3.2bn), which were partly offset by a deficit in secondary income (€8.9bn). The 12-month cumulated current account for the period ending in May 2016 recorded a surplus of €347.1bn (3.3% of euro area GDP), compared with one of €289.7bn (2.8% of euro area GDP) for the 12 months to May 2015 This was mostly due to an increase in the surplus for goods (from €294.7bn to €365.0bn) and, to a lesser extent, to a decrease in the deficit for secondary income (from €137.9bn to €123.3bn). These were partly offset by decreases in the surpluses for both services (from €66.8bn to €61.5bn) and primary income (from €66.1bn to €43.8bn).

Read more...

The European Council's Permanent Representatives Committee has agreed its position on the 2017 EU draft budget for the upcoming negotiations with the European Parliament.  "More than ever we need to ensure that the EU budget is focused on key priorities and enables the European Union to address the challenges that it is facing. I believe the Council's position responds to this necessity by offering appropriate means to stimulate growth, help creating jobs, reinforce security inside, and outside the EU and tackle the migration crisis. It also ensures good value for money by taking care that the financial resources match the needs", says Vazil Hudák, chief negotiator on the EU budget of the Slovak Presidency of the Council. 

Read more...

GoldenSource, the provider of Enterprise Data Management (EDM) and Master Data Management (MDM) solutions has opened a new Paris office to help serve the firm’s European client base and will be headed by Eric Bassot, who will be responsible for business development in the region. The addition of Paris complements the company’s existing offices in London and Milan, supporting clients across the Benelux, Denmark, Germany, Italy, Russia, Spain, Switzerland and UK. The opening marks the latest stage in GoldenSource’s investment programme, and comes at a time says the firm when clients are seeking further support to help them comply with regulations and on-board new clients.

Read more...
Page 1 of 208

Current Issue

TWITTER FEED

Blog

  • Wednesday, 20 July 2016 16:12 Slow boat to digitalisation
    For some time now, the growing importance of digital services has been touted within the institutional asset management industry. My concern has been that asset…