Saturday 26th July 2014
slib33
FRIDAY ANALYSTS TICKER: July 25th 2014 - According to Adam Cordery, global head of European fixed income, Santander Asset Management, and fund manager for the Santander Euro Corporate Short Term and Euro Corporate bond funds, “Pricing of risk assets doesn’t offer much of a margin for error at the moment. And now Europe is starting to go on holiday, market liquidity may get poorer than normal, and any buys today may well have to be holds until September. It is always interesting to note what yields are required to attract clients to financial products. Twenty years ago, bond funds offering yields of 10%+ could generally attract lots of client interest very quickly. However as rates have come down over the years, so the yields clients demand have fallen. Now 4% seems to be the new 10%, he say. Cordery thinks that unfortunately, investors often want today the yield/risk mix that was available last year, so the products that get launched, sold and bought in size may be more risky than people think. “Products with 4% yield will sell well today, but to get to a 4% yield in Euro you need to invest in a portfolio with an average rating of single-B, and that is far from being risk-free. I get the impression the conventional wisdom today is to think that interest rates must surely go up soon and the main risk to bond portfolios is an increase in bund yields. Because of this many investors are buying short-duration products and floating rate notes, perhaps viewing them as a safe choice, almost like cash. It is possible however that these products may yet prove to have a considerable sensitivity to changes in credit market spreads and/or bond market liquidity, and may prove to be no protection at all.” - Commenting on the RBS share price jump, Dr Pete Hahn of Cass Business School, says “It's hard to tell whether the RBS share price jump today is more about relief or optimism. The former is about fewer fines, fewer losses on loans, and fewer costs in a shrinking business and possibly dividends for shareholders. And there's the rub, owning shares (as opposed to interest bearing debt) should be about optimism and long-term growth in dividends. But from a shrinking business? Few would argue that RBS' retail and corporate bank had efficiencies to be gained and cash flow that might be converted to dividends; yet like most banks, RBS' cost of equity remains stubbornly and appropriately above its ability to provide a return on that equity. For shareholders, current improvements should mean dividends in the medium term but a recognition that RBS may lack any merit for new investment and delivering any long-term dividend growth - not good. While many large retail banks are getting safer, in some aspects, and we often speak of them in terms of moving toward utility type models, banks take risks, are cyclical, face competition, have new business challengers, and are simply are not utilities. Investors shouldn't get ahead of themselves here.” - According to the monthly survey held by the central bank of Turkey, the country’s capacity utilization (CU) rate declined slightly to 74.9% in July from 75.3% in June. Meanwhile, seasonally adjusted (SA) CU also declined to 74.3% from 74.7% in June, writes Mehmet Besimoglu at Oyak Yatirim Research. As for manufacturing confidence, the index declined to 109 from 110.7 in May. On SA basis, the index also edged down slightly to 106.4 from 107.2. SA capacity utilisation was broadly stable in 1H14, averaging at 74.7%. This is the same level with the 2013 average. Despite the political turmoil and volatility in financial markets, activity has been relatively resilient. Export recovery & government spending supported production in 1H. Following the elections, public spending relatively decelerated. The turmoil in Iraq also decelerated export recovery from June. Nevertheless, we still expect 3.5% GDP growth in 2014, writes Besimoglu.
North America

Investment manager confidence in US economic growth has reached a five-year high in Northern Trust’s quarterly survey, but expectations for inflation were up as well. The survey also found concern about geopolitical risk, with seven out of 10 respondents saying the Russia-Ukraine conflict could have a negative impact on equity markets.The survey, taken between June 4th- June13th, also found investment managers divided on the impact of high-frequency trading on equity market participants, and on the outlook for higher-yielding investments that have attracted cash flows and higher valuations in the extended low interest rate environment

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Monday, 07 July 2014

JDX appoints New York CEO

Independent consulting company JDX, specialising in operations remediationhas appointed Devika Darbari as the New York CEO of JDX Inc. Devika was previously a director at data vendor MarkitSERV New York, where Darbari built and developed several business lines  including standardised identifiers for OTC derivatives confirmations, and new derivatives indices. Devika also worked on Markit’s industry benchmarking and metrics
services.

“During this time of expansion for JDX, there is no better person to lead our New York office. Devika is a proven leader and her business vision and experience within the financial industry is exactly what JDX needs as the
company enters its next chapter of expansion," says Jonathan Davies, chief executive and founder of JDX Consulting Ltd. 

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According to US Secretary of Labor Thomas E Perez, "Strong economic growth continued in the month of June, with a total of 288,000 new jobs. It is the fifth consecutive month with job growth of at least 200,000, and this is the most total jobs added in the first half of a year since 1999. Businesses created 262,000 more jobs in June, bringing us to a total of 9.7 million new private-sector jobs over the last 52 months (the longest such streak on record). The unemployment rate dropped to 6.1% (down significantly from 7.5% a year ago).

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Intercontinental Exchange (ICE), the network of exchanges and clearing houses, says that the group has tcompleted the transition of Liffe US futures and options contracts to the ICE futures exchanges, trading platform and clearing infrastructure.

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Some 79 IPOs listed on NASDAQ in the second quarter this year, bringing the total half year count to 99 - the strongest first half for the NASDAQ OMX Group since 2000. Does it presage better days for the new listings market per se?

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The Obama administration’s decision to approve two U.S. companies’ exports of ultralight oil, or condensate, is significant but not surprising says Bill Loveless, Platts editorial director of US energy policy.

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OVERNIGHT NEWS: New York Attorney General Eric T Schneiderman has served Barclays Plc with a securities fraud lawsuit alleging the firm dramatically increased the market share of its dark pool by misleading clients and investors and illegally operating the pool in favour of its high-frequency traders.

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The Securities and Exchange Commission today adopted the first of a series of rules and guidance on cross-border security-based swap activities for market participants.  The new rules will be key to finalising the full set of proposals.  The new rules and guidance explain when a cross-border transaction must be counted toward the requirement to register as a security-based swap dealer or major security-based swap participant.  The rules also address the scope of the SEC’s cross-border anti-fraud authority. 

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