Saturday 21st January 2017
NEWS TICKER, Friday, January 20th 2017: Reforms to create a more stable and resilient monetary union will be voted by the Economic and Monetary Affairs Committee. MEPs are keen to complete the banking and financial union, make progress towards more convergent economies in the Eurozone and prevent unsustainable risk-sharing in order to protect taxpayers and restore trust. (Wednesday. EP President Antonio Tajani will meet Spanish Minister of Health Dolors Montserrat on Monday and Pakistan Minister of Trade Khurram Dastgir Khan on Tuesday -Western Union will pay $586 million to settle U.S. civil and criminal cases that alleged the company turned a blind eye for years to criminals who used its money transfer network to commit fraud. Clearly today’s outlook is dominated by incoming US president Donald Trump. US. stocks rose amid gains across sectors on Friday as investors counted down to Donald Trump's inauguration as the 45th president of the United States. Trade, or at least worries about the incoming president’s approach to current trading treaties looks to be the main weight on political thinking. German Finance Minister Wolfgang Schaeuble waded into the pre-inauguration coverage saying that he thought Trump should abide by current trade treaties, adding he did not expect a major trade war despite Trump's attack on German car makers. "I don't think a big trade war will break out tomorrow, but we will naturally insist that agreements are upheld. Schaeuble told Der Spiegel -- .Alexey Zabotkin economist at VTB Capital reports both Europe (Stoxx600 -0.1%) and the US (S&P500 -0.4%) slid on Thursday, the latter seesawing between gains and losses for the sixth consecutive session. Toiday, Europe's markets continued to hover around the flatline ahead of the inauguration, the FTSE dropped 8,93 points to 7199.51, while the DAX was up 23.60 points to 11620.49; similarly the CAC rose minimally by 14.06 points to 4854.6. Investors seem to be taking a cautious approach as they wait for clarity on what the new US administration will do. It was generally lacklustre in the Asian market, with the Kospi, Hang Seng and CNBC dropping marginally in the session. The Nikkei up 65.66 points and the Shanghai Composite, up 21.53 points were them main highlights of a mixed cocktail of a session. Australia's S&P/ASX 200 finished down 0.66% or 37.4 points at 5,654.8, dragged by material and financial plays, but the Australian dollar remains on track to finish higher for the fourth straight week In Europe, basic resources traded down by more than 0.44% on a stronger dollar while autos and health care also moved lower this morning. Oil stocks led gains this afternoon as investors expect producers to confirm compliance with an output cut deal during a meeting this weekend. At last look, Brent crude was around $55.71 a barrel, up 2.86%, while U.S. crude was at $52.83 a barrel, up 2.84%. – In the US, the yield on the benchmark 10-year Treasury note was higher at around 2.489%, while the yield on the 30-year Treasury bond was also higher at 3.064% as the US market opened. Yields move inversely to prices -- VTB reports that Russian equities went lower yesterday. The RTS Index lost 1.3% (the fourth decline in five sessions and dipped into the red YTD) and RUB drifted back closer to 60 versus USD (but the last two weeks’ 59.00-60.70 range holds). Utilities were in the spotlight: MSCI EM (-0.4%) was also in the red. In CEEMEA, Russia (RTSI -1.3%, RUB -0.5%) kept drifting lower for the fourth day in five, as Oil fluctuated along the 2017 lows and media reports questioned the government’s determination to enforce the highest dividend payouts for SOEs. The dividend payouts of state-controlled Russian companies should be kept at no less than half of their profits until 2019, with no exceptions, the finance ministry proposed in April last year. Since then were mixed messages on the policy, with Deputy Prime Minister Arkady Dvorkovich saying some firms could be let off higher dividend payments on their profits from last year. The move came as Russia searches for ways of boosting budget revenue to offset the effects of lower oil prices and Western sanctions. Yesterday, Russian first deputy premier Shuvalov expressed reservations about the country’s new 50% dividend payout rule – advocates a ‘hard’ 25% of IFRS rule – with higher payouts considered on a case-by-case basis -- The Straits Times Index (STI) ended 2.86 points or 0.1% higher to 3011.08, taking the year-to-date performance to +4.45%. The top active stocks today were DBS, which declined 0.06%, Singtel, which gained 0.79%, UOB, which declined 0.39%, OCBC Bank, which closed unchanged and CapitaLand, with a 0.31% advance. The FTSE ST Mid Cap Index declined 0.10%, while the FTSE ST Small Cap Index declined 0.14% -- Russian first deputy premier Shuvalov has expressed reservations about the country’s new 50% dividend payout rule – advocates a ‘hard’ 25% of IFRS rule – with higher payouts considered on a case-by-case basis -

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The quarterly survey of the asset management industry in the Middle East and North Africa region has three aims: to describe the investment outlook of a diverse range of asset management firms in the Middle East region; to assess the perception of political/economic risk within the region and to outline current thinking among the asset management industry as to what infrastructure is important to the proper functioning of their businesses. These elements still remain core to the findings in each quarterly survey. Even so, each has its own character: in part determined by macro-issues; in part determined by the range of respondents.

LiquidMetrix provides FTSE Global Markets with analysis into major European indices and ranks the competing trading venues based on trading volumes, spreads, order book depths and the percentage of the time they offer the absolute best European prices.

The third iteration of the Middle East Asset Management survey, which we undertake under the auspices of the Qatar Financial Centre Authority (QFCA), brings into vivid relief a number of important trends. Bifurcation in investment approaches has become stronger over the last two quarters: domestic investors are investing more domestically and international investors are increasing their cross-border allocations. Two, civil and political unrest continues to impact selected markets, with Lebanon, Jordan, even Kuwait feeling an investor pinch as local asset managers upscale their risk assessments on these countries. Bahrain and Egypt too continue to feel the repercussions of the Arab Spring; however a move towards more positive investor sentiments is apparent. In contrast, investors continue to be optimistic about Saudi Arabia, Qatar and Oman in the region; and about South America and Africa outside it. Dubai too has benefitted as investors and corporations have uprooted and moved in many instances to the UAE. The survey also throws up interesting news for international providers of securities services in the MENA region. HSBC emerges as a clear regional front-runner among the 83 investors polled. Among the key trends to watch are growing investor frustration with constrained liquidity and inadequate regulation covering the region’s capital markets, which they say, will have long term effects on the efforts by individual markets to develop as regional financial hubs. Research by Henry Blanchard, Lydia Koh and Rebecca O’Brien.

In issue 60 we kicked off a year-long review of the Middle East asset management industry and its risk outlook for 2012/2013. The year long survey, which comprises polling of a cross section of investment firms located in the region mixed with more informal comment, has three aims: to describe the current investment outlook of a diverse range of asset management firms in the Middle East region; to assess the perception of political/economic risk within the region and to outline current thinking among the asset management industry as to what infrastructure is important to the proper functioning of their businesses. Three months on from the first survey (please refer to issue 60, page 56) set the underlying scene. Subsequently, we spoke to 47 out of the original 79 respondents to see whether the risk outlook for the region had altered. We will provide a further update in the October edition. This short snapshot concentrates on the way that institutional investors in the Middle East and North Africa region view political and economic risks.

At a time of huge change in the international investment markets, and the continuing challenge of a global economy still mired in the aftershocks of the 2008-2009 financial crises, the asset management sector in the Middle East is on the brink of a new era. That epoch will hopefully involve a deepening of the asset management segment. However, given continuing market uncertainties and the still bubbling brook of popular discontent in some countries in the region, meaningful moves towards market change might just as easily be cut down by the vagaries of socio-political fortune (which vary so widely across the region). Whatever the outcome (and it will be different in each country), if any nation wants to develop a top ranking financial centre in this century, then a significant strengthening of the asset servicing and asset management industry must form part of any meaningful strategy. This survey goes part way to underscoring the importance of this fact.

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