Observations – Statistics – Commentary
Insight: The masters lost our trust
Sherman McCoy, the fictional 1980s “Master of the Universe” Wall Street bond trader, had his sights set on a deal which could earn him $1.7m in commission payments, money he needs to pay off the mortgage on a lavish Park Avenue apartment. “The only real problem was the complexity of the whole thing,” readers of Tom Wolfe’s “The Bonfire of the Vanities” are told. Yet, by today’s standards, the deal in question appears rather straightforward.
**** This is an excellent analysis.
MF Global Rebuffs Partnership Offer From Interactive Brokers
MF Global Ltd., the derivatives broker whose chief executive officer quit this week, rebuffed a partnership offer by Interactive Brokers Group Inc., saying it didn’t fit with the company’s future plans. Interactive Brokers CEO Thomas Peterffy offered MF Global his company’s trading and risk-management systems in return for the use of the broker’s sales force, a partnership known as an introducing-broker arrangement. MF Global, whose stock skidded almost 90 percent this year, rejected the offer days after receiving Peterffy’s letter this week. “It has no validity for our business model,” MF Global spokeswoman Diana DeSocio said, declining further comment. Peterffy declined to comment on MF Global’s reaction.
French priest responsible for locating 800 Holocaust mass graves to speak at fundraising dinner in Chicago
Six million Jews were killed during the 1933-1945 Holocaust. Today, one man is devoting his life to bringing them justice. The Rev. Patrick Desbois, a French Catholic priest, has spent the past seven years traveling through Ukraine in an effort to locate every mass grave of Holocaust victims.
…He will be introduced by former Chicago Mercantile Exchange Chairman Leo Melamed. When Melamed was 8 his family fled Poland to escape the Nazis, according to the museum.
Debt Markets in U.S., Europe Suffer Worst Month on Record
Corporate debt markets in the U.S. and Europe endured their worst month as the credit crisis spread beyond financial firms to industrial companies amid the prospect of a global recession.
Crude heads for worst monthly Nymex decline
Oil prices slipped below $65 a barrel Friday, heading for what will likely become the sharpest monthly decline in crude prices since futures trading began on the New York Mercantile Exchange.
**** Not a good month.
In the eye of the storm
Have chief financial officers ever mattered more—or been less prepared?
More Homeowners Have Mortgage Higher Than House Is Worth as Prices Plunge
Almost 20 percent of U.S. mortgage borrowers owed more on their loans in the third quarter than their house was worth as foreclosures depressed prices and the economy weakened, according to First American CoreLogic.
Gold May Pay Only in Case of Maximum Despair: Jane Bryant Quinn http://www.bloomberg.com/apps/news?pid=20601212&sid=ae.xb05JePEE&refer=home
Politics Flunks Test as Stock-Market Predictor: Caroline Baum
The first wiki president? Obama adviser votes ‘yea’
Even Republicans will probably concede that Barack Obama’s campaign made good use of the Internet in the last year. Now an advisor is saying that an Obama administration would do the same, even turning to wikis to discuss topics like privacy.
Jobs, Jobs, Jobs
On MarketsWiki we have a Jobs Posting page (http://www.marketswiki.com/mwiki/Job_Postings), as many of you know. We would like to add more job postings to that page. If you have jobs you are looking to fill, please email me back with details and web links for the listings.
You don’t wan to know
You don’t want to know why the bottles of Listerine have disappeared from the members’ trading floor level washroom at the CME Group’s Chicago Board of Trade Building. Nor do you want to know why they removed all the doors to the stalls. It is ugly beyond belief and another reason by trading electronically is growing in popularity at the CME Group.
LCH.Clearnet and LIFFE agree new clearing arrangement
LCH.Clearnet Ltd (“LCH.Clearnet”) has signed a new clearing arrangement with LIFFE, the international derivatives market of NYSE Euronext (NYX), further to LIFFE’s announcement of 25th March 2008.
NYSE EURONEXT ENTERS INTO NEW CLEARING ARRANGEMENTS WITH LCH.CLEARNET LIFFECLEAR
SERVICE ANTICIPATED TO COMMENCE FIRST QUARTER
2009 NYSE Euronext (NYX) today announces that its derivatives subsidiary, LIFFE Administration & Management (“LIFFE”), is to take full responsibility for clearing activities in its London market, subject to regulatory approval, with the target of beginning operations in the first quarter of 2009.
Liffe to self-clear from Q1 next year
To terminate its LCH.Clearnet clearing contract the London-based derivatives exchange owned by Nyse Euronext will make a one-time payment of EUR260 million. Liffe will become a self-clearing Recognised Investment Exchange, but will still outsource certain clearing functions to LCH.Clearnet. The new clearing arrangement will be known as LiffeClear.
NYSE Euronext pays 260 mln euros to amend clearing deal
NYSE Euronext plans to launch an in-house clearing service for its European derivatives exchange in the first quarter of next year, paying LCH.Clearnet EUR260 million to shrink their existing trade-processing arrangement.
DTCC May Raise Credit-Default Swap Disclosure Amid Criticism
The Depository Trust & Clearing Corp., which operates a central registry for the $55 trillion credit- default swap market, may agree to disclose more data to counter criticism the derivatives amplified the financial crisis.
Wall Street ‘made rod for own back’
Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman Brothers and American International Group by backing new bankruptcy rules that were aimed at insulating banks from the failure of a big client, lawyers and bankers say. The 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.
Bankers’ Bonuses, Acquisitions Violate Federal Bailout Program, Frank Says http://www.bloomberg.com/apps/news?pid=20601087&sid=a8qoddHX5Yiw&refer=home
Niederauer and Greifeld Anticipate New Short-Sale Rule
The heads of the two biggest exchange groups are reconciled to a new short-sale rule, even though neither considers it necessary.
Credit crisis to spur futures market oversight
U.S. lawmakers’ zeal for new regulations will soon spread beyond the battered financial sector to futures markets as a newly elected Congress pounces on the credit crisis to expand government oversight.
MPs split over action on commodity speculators.
The Treasury Select Committee has no plans to follow up on a fledgling investigation into the role of speculators in driving up food and fuel prices. Meanwhile US politicians are renewing efforts to scrutinise futures markets and their influence on commodity prices.
Treasury, FDIC Consider $500 Billion to Back Mortgages, Slow Foreclosures
The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said.
Senator Jack Reed queries SEC, NY Fed on CDS market
Senator Jack Reed asked the head of the Securities and Exchange Commission to clarify what authority he would like the SEC to have in overseeing the credit derivatives market.
It’s conventional wisdom that credit default swaps – the $55 trillion in derivatives contracts widely blamed for bringing down AIG – need oversight. But as Washington debates how to regulate what Senator Tom Harkin (D-Iowa) calls “casino capitalism,” exchanges like the CME and NYSE are proposing their own free-market solution.
Fed `Hopeful’ Clearinghouses May Begin in November (Update1)
Oct. 31 (Bloomberg) — The Federal Reserve Bank of New York said it’s “hopeful” that one or more credit-default swap clearinghouses will begin guaranteeing trades in November or December as it pushes dealers to reduce market risks. The New York Fed had set a deadline today for U.S. futures exchanges, including one backed by dealers, to submit written plans on how they’ll curb risks in the more than $47 trillion market, four people familiar with the discussions said earlier this week. Intercontinental Exchange Inc. and CME Group Inc. are among companies vying to create clearinghouses that would back trades and absorb losses in the event a dealer defaults. If well-managed, a clearinghouse “will reduce the systemic risk associated with counterparty credit exposures,” the New York Fed said in a statement today.
How Credit Default Swaps Spread Financial Rot
If bad mortgages got the financial system sick, credit default swaps helped spread the illness worldwide.
French trader probed over massive bank loss
A French judge has opened an investigation into a possible breach of trust by a dealer suspected of losing a bank more than 750 million euros in unauthorised trading in derivatives, judicial officials said Thursday.
A substitute for the ‘gold ring’ of partnership
For generations, most Wall Street and City of London investment banks were clubby institutions, usually partnerships where gentleman bankers worked as a team and shared the resulting profits. That changed in the 1970s and 1980s as top US institutions such as Morgan Stanley and Merrill Lynch either sold shares to the public or were acquired by retail banks that were publicly traded.
Refco’s Tone Grant Begins 10-Year Sentence for Fraud
Former Refco Group Ltd. President Tone Grant, a decorated U.S. Marine Corps veteran, entered a U.S. prison to begin serving a 10-year sentence for defrauding investors of $2.4 billion in an eight-year accounting scheme.
Environmental Trading News
Italy Denounces EU Cost Estimate of Hitting Climate Change Goal
The Italian government attacked the European Commission’s calculations of what it will cost the 27 members of the European Union to fight climate change, demanding “changes” to a package that doesn’t take into account an imminent recession.
‘Carbon trading’ now big business
While recent months have seen a global contraction in both debt and equity markets, at least one financial market has been booming this year, a market that scarcely existed five years ago. The global market for “carbon trading” grew 36 percent between January and September, to $84 billion from $67 billion, according to New Energy Finance, a London-based company that tracks activity in energy markets. By year’s end, the market is expected to surpass $100 billion.
Office-Related Carbon Emissions Surge
Despite ongoing efforts to improve energy efficiency in the workplace, the world’s growing reliance on the Internet is leading to a rapid increase in greenhouse gas emissions.
Australia May Have `Substantial’ Demand for UN Carbon Credits
Australia may have “substantial” demand for United Nations-certified carbon credits created in developing countries to help meet greenhouse gas reductions targets, said law firm Baker & McKenzie.
ATA Chief Executive Criticizes European Aviation Emissions Trading Scheme
The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today expressed harsh opposition to the European Parliament’s Oct. 24 final approval of legislation covering the world’s airlines under the European Emissions Trading Scheme (ETS).
For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
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Exchange & ECN News
BATS Europe Goes Live – Efficient, Low Latency System Launches Ahead Of Schedule
BATS Trading Limited (BATS Europe), a fully-owned subsidiary of BATS Holdings, Inc., announces live trading on its Multilateral Trading Facility in Europe.
NYSE Euronext Announces Third Quarter 2008 Financial Results
NYSE Euronext (NYX) today reported net income of $174 million for the quarter ended September 30, 2008, or $0.66 per diluted share (including $0.65 from continuing operations and $0.01 from the discontinued operations of GL Trade) as compared to net income of $258 million, or $0.97 per diluted share, for the quarter ended September 30, 2007. Included in the results of operations for the quarter ended September 30, 2007 was a $32 million gain on the sale of the member firm regulatory functions of NYSE Regulation to FINRA, and a $55 million deferred tax benefit related to an enacted reduction of the UK corporate tax rate from 30% to 28%. These results are presented in accordance with U.S. generally accepted accounting principles (GAAP).
NYSE Euronext Profit Falls as Derivative Trades Slow (Update2)
NYSE Euronext, the world’s largest owner of stock exchanges, said third-quarter profit declined 33 percent after it cut fees and trading slowed on the European derivatives market.
Distaste For Derivatives Hits NYSE Euronext
LONDON – The subprime crisis has created a distaste for derivatives, those complex financial products whose value is based on an underlying asset like a mortgage, commodity or interest rate, and NYSE Euronext has been feeling the after-effects in Europe.
NYSE Euronext to axe 200 European jobs
CME rival takes lead in swaps race
IntercontinentalExchange Inc. agreed Thursday to buy Chicago-based Clearing Corp., a move that puts CME Group at a disadvantage as the two futures exchanges vie for pole position in the $55 trillion credit default swaps market.
ICE deal signals new clearing house for credit default swaps
IntercontinentalExchange, the US-based electronic futures exchange, yesterday raised the stakes in its effort to expand in the $54,000bn credit default swap market by announcing a deal to take over The Clearing Corporation (TCC), the bank-operated clearing house. The move is the latest salvo in a battle between ICE and the CME Group, the world’s largest futures exchange, to develop central counterparty clearing infrastructure for the CDS market.
CME remains confident in long-term growth prospects
Trading volume in CME Group Inc.’s core interest rate futures complex continued to slide in the third quarter of 2008, dragging down total volumes and contributing to a 16% decline in net income for the Chicago exchange company. Interest rate futures volumes have been on the decline since the beginning of the year, and CME Chief Executive Craig Donohue continued to describe the drop as “cyclical in nature.”
CME suffers from pullback in derivatives trading
The CME Group, the world’s biggest futures exchange, said yesterday that its third-quarter profits were up slightly from the same period last year as growth in the derivatives trade was hit by falling volumes from financial institutions damaged by the crisis.
GFI Group Inc. Announces the Retirement of Head of E-Commerce
GFI Group Inc. an inter-dealer brokerage, market data, trading platform and analytical software provider specializing in over-the-counter derivatives products and related securities, announced today the retirement of Jurgen Breuer, Head of E-Commerce, effective October 31, 2008. The Company noted that Mr. Breuer is stepping down for health reasons.
GFI Group Inc. Announces Third Quarter 2008 Results; Implements Restructuring Initiative; Declares Quarterly Cash Dividend
GFI Group shares plunge on Q3 loss, lower outlook
GFI Group Inc’s shares plunged as much as 28 percent to a 52-week low Friday, a day after the inter-dealer broker posted a quarterly loss, forecast lower fourth-quarter revenue and said it cut jobs.
LSE names former Lehman banker as dark pool head
London Stock Exchange on Thursday appointed former Lehman banker John Wilson as chief executive of Baikal and promised to announce a revised plan for the pan-European non-display, or ‘dark pool’, platform in a few weeks.
New Record Set On FORTS
On October 30, 2008 on the Futures and Options on RTS market (FORTS) a number of trades on futures contracts hit record high.
Russia’s Micex Volume Tumbles as 23 Halts Send Trade to London
The value of shares traded on the Micex Stock Exchange, Moscow’s biggest by volume, fell by two- thirds after stock prices slumped and investors turned to London to trade Russian equities as the bourse halted trading 23 times.
Deutsche Börse Makes Additions to Guide to Equity Indices
The Executive Board of Deutsche Börse AG in consultation with the Working Committee for Equity Indices today decided to make additions to the Guide to Equity Indices effective as per 3 November 2008.
NYSE Welcomes the Listing of Eletrobrás, S.A.
The New York Stock Exchange today welcomed the listing of Centrais Elétricas Brasileiras S.A. (Eletrobrás), a leader in the Latin American energy sector. Brazil-based Eletrobrás listed its American Depositary Shares on the NYSE under the ticker symbols “EBR” and “EBR.B”.
Bolsas y Mercados Españoles’ Net Profit In The First Nine Months Of 2008 Totals 145.5 Million Euros – Solid Results In Difficult Circumstances
Bolsas y Mercados Españoles (BME) posted a net profit of €145.5 million in the first nine months of 2008, a solid performance given the difficult moment for financial markets. The figure represents a 3.4% decrease from the same period a year earlier and a 57.9% increase from the same nine-month period in 2006. It also exceeds by 11.5% the net profit for the entire year of 2006.
Malawi Stock Exchange Weekly Report
MCX Weekly Market Report – October 31, 2008
ASX: Review of Trading by Directors Q3 2008
Shanghai Futures Exchange October 2008 Daily Volume and Open Interest (Chart)
FORTS: Deployment Of New Version Of The Trading System
Due to implementation of the new version of the trading system, there will be no evening session held on FORTS on November 1st, 2008, Saturday.
HKEx: Report On Initial Public Offering Applications, Delisting Proceedings And Suspensions(As At 31 October 2008)
Days When Swedish Financial Supervisory Authority (Finansinspektionen) Is Closed
Eurex: Migration to the TARGET2 Payment System: Another Simulation http://www.eurexchange.com/download/documents/circulars/cf2672008e.pdf
eGains Service: Supported by Eurex Clearing AG
Q-Cells AG: Name Change
Instruments in Cash Market CCP – Amendments
RTS Stock Exchange: Odd Lot Trading Session Transferred
Tokyo Grain Exchange: The Daily Price Limits For Nov. 4, 2008
ICE Futures Canada: 2008 Christmas/New Year’s Trading Schedule – Futures And Options Markets
Brokers & Dark Pools
DTCC passes Lehman hurdle
A major hurdle in the clean-up after the default of Lehman Brothers was overcome yesterday when The Depository Trust & Clearing Corporation, the vast US post-trade services group, said it had “successfully closed out” over $500bn in market participants’ -exposure from the bank’s collapse.
MF Global Appoints Avram Kornberg as Chief Information Officer
MF Global Ltd. (NYSE: MF), a leading broker of exchange-listed futures and options, has appointed Avram Kornberg, 49, as its new chief information officer.
Do the brokey-cokey
Where will hedge funds put their business in future?
IN, OUT, shake it all about. The fall of Bear Stearns earlier this year persuaded many hedge funds to switch to Goldman Sachs and Morgan Stanley as their prime brokers. The two firms are the industry leaders in the (once) lucrative business of providing hedge funds with financing, lending them shares for short-selling purposes, settling trades and housing fund assets. Lots more switched again once Lehman Brothers went bankrupt in September. This time, the flow was towards the banks, as hedge funds realised that the broker-dealer model was much wobblier than they thought. JPMorgan Chase, now the owner of Bear, has seen a 25% rise in prime-brokerage assets over the past few weeks.
AIG’s credit default swaps shows rescue skepticism: JPMorgan
A rise in credit default swaps on American International Group (AIG.N: Quote, Profile, Research, Stock Buzz) debt indicates the market may be skeptical about a government program to support the insurer, JPMorgan said on Friday.
Barclays looks to Middle East for £7.3bln cash boost
Barclays said on Friday it would raise 7.3 billion pounds, most of it from oil-rich investors in Abu Dhabi and Qatar, to bolster finances amid the global credit crunch.
Barclays raises $12 billion, sources say
CoBa may tap state Barclays tapped Middle East investors for the bulk of its 7.3 billion pounds ($12.1 billion) cash injection, while sources familiar with the situation said Commerzbank is interested in German state funds.
The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
Market Downturn Triggers Wave of Lawsuits
When Jacob Froess’ certificate of deposit from AmTrust Bank matured, he went to a Florida branch of the Cleveland-based retail bank in October 2007 to put $70,000 into another CD. But a teller suggested the 56-year-old auto mechanic in Plantation speak instead with a financial adviser from the brokerage AmTrust Investment Services Inc. The adviser allegedly said rates on CDs were low and that if Froess bought shares in a Mutual Series Mutual Discovery fund, he would make more money.
SEC Charges Lazard Capital Markets, Former Employees For Improper Gifts And Entertainment To Fidelity Employees
The Securities and Exchange Commission today charged privately-held, registered broker-dealer Lazard Capital Markets LLC with failing to supervise three employees who collectively spent more than $600,000 while improperly entertaining traders at Fidelity Investments in an effort to generate brokerage business. The SEC also charged the three employees and a supervisor for their roles in securities laws violations by Fidelity traders.
CESR delivers its response to the European Commission’s request for assistance on the UCITS management company passport
CESR publishes today its advice to the European Commission (Commission) on the UCITS management company passport (Ref. CESR/08-867). The advice follows a short public consultation carried out in the first half of October, as well as a call for evidence published in July. CESR also held an open hearing at its premises on 13 October.
SEC, NASAA Announce IARD System Fee Waiver
The Securities and Exchange Commission and the North American Securities Administrators Association (NASAA) today announced they will waive the initial set-up and annual system fees paid by investment adviser firms to maintain the Investment Adviser Registration Depository (IARD) system. Separately, NASAA announced that for next year it will also waive those system fees paid by investment adviser representatives (IARs).
SEC Sues Miami Resident For Conducting Multi-Million Dollar Ponzi Scheme
The Securities and Exchange Commission today charged Miami resident Andres L. Pimstein and two private companies, The Bottom Line of South Florida, Inc. and Summit Trading LLC, with securities fraud for conducting a $30 million Ponzi scheme.
“Commentary”-Now May Be The Time For Commission Consolidation
ASIC facilitates withdrawals from frozen funds
ASIC today announced measures that will facilitate operators of mortgage funds providing early withdrawal for members where there is hardship.
ASIC issues report on relief applications
ASIC today released a report outlining recent decisions on applications for relief from the corporate finance, financial services and managed investment provisions of the Corporations Act (the Act) between 1 April and 31 July 2008.
New account switching service
Switching bank accounts to get a better deal is now easier following the introduction today of a new account switching service. ASIC Chairman, Mr Tony D’Aloisio, said Authorised Deposit-taking Institutions (ADIs), which include banks, credit unions and building societies, would now provide account-switching services to consumers that are switching their personal transaction accounts.
ASIC bans Melbourne man from managing corporations for three years
ASIC has disqualified former Melbourne lawyer Mr Michael Richard Brereton from managing corporations for three years.
SEBI passes Consent Orders in the matter of IPO irregularities
Investments – Indexes – Managed Futures – Managed Funds
Citadel winds down $1bn fund of hedge funds
Citadel Investment Group, the alternative investment house, is winding down its $1bn fund of hedge funds and redeploying the capital to support new hedge funds as they emerge in the coming months. The move suggests Citadel is positioning itself to back managers who have exited the business or been forced to shut their funds in recent weeks as they launch new funds in the coming months.
Reserve Management Starts Mailing $26 Billion to Primary Fund Investors
Reserve Management Corp. began mailing $26 billion in checks to Reserve Primary Fund retail direct shareholders today, more than initially planned, and will wire money to all other shareholders tomorrow as it liquidates and returns cash to investors.
Hedge funds working to limit redemptions
Dozens of hedge funds have told investors they cannot get their money back right now as managers try to limit a wave of redemptions to safeguard all their clients’ investments — as well as their own futures.
31 Rydex ETFs List on NYSE Arca
NYSE Euronext (NYX) announced that its fully-owned subsidiary NYSE Arca today began trading 31 Rydex Exchange Traded Funds (ETFs) on a listed basis after the group transferred listing from NYSE Alternext US (formerly, the American Stock Exchange).
JP Morgan Chase & Co. KEYnotes Exchange Traded Notes Linked to the First Trust Enhanced 130/30 Large Cap Index (JFT) Lists on NYSE Arca NYSE Euronext (NYX) announced that its fully-owned subsidiary
NYSE Arca today began trading the JP Morgan Chase & Co. KEYnotes Exchange Traded Notes Linked to the First Trust Enhanced 130/30 Large Cap Index (“JFT”) on a listed basis after the ETN transferred listing from NYSE Alternext US (formerly, the American Stock Exchange).
Two Barclays Exchange Traded Notes List on NYSE Arca
NYSE Euronext (NYX) announced that its fully-owned subsidiary NYSE Arca today began trading two Barclays Exchange Traded Notes (“ETNs”) – iPath® CBOE S&P 500 BuyWrite Index ETN (NYSE Arca: BWV) and Barclays GEMS IndexTM ETN (NYSE Arca: JEM) on a primary listed basis. The ETNs joined NYSE Arca as a transfer from NYSE Alternext US (formerly the American Stock Exchange).
Small-Caps Trail S&P 500 by Most in 6 Years on Record Sales by Hedge Funds
The smallest U.S. companies are trailing larger stocks by the widest margin in six years after hedge funds sold equities to pay back customers.
New Exchange Traded Funds (ETFs) on the SIX Swiss Exchange
Search Is on for Iceland-Like Hedge Fund in Asia: William Pesek
Briefing.com Economic Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
CBOE Events Calendar
Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
Scuffle in HK protest over Lehman-linked products
Investors in financial products linked to collapsed U.S. investment bank Lehman Brothers Holdings Inc. scuffled with security guards at a bank in Hong Kong on Friday, as some 200 people protested in the financial district against institutions that sold the now worthless products.
Consumer body mulls Lehman lawsuit
The Consumer Council is contemplating helping investors who have purchased Lehman minibonds take legal action to protect their interests.
ZCE Set PTA Futures Trading Volume Record On Oct. 30, 2008, the trading volume in the Pure Terephthalic Acid (PTA) futures contract on ZCE ( Zhengzhou Commodity Exchange ) peaked at 494086 contracts, surpassing the previous record of 480490 contracts set on Aug.5, 2008.
CSRC joins probe into CITIC Pacific debt
The China Securities Regulatory Commission has joined hands with the local watchdog to investigate the foreign currency debt exposure of CITIC Pacific (0267), a mainland paper reported.
HK’s CITIC Pacific share suspended -HKex
Trading in shares of CITIC Pacific (0267.HK: Quote, Profile, Research, Stock Buzz) was suspended on Friday after local media reported China’s securities watchdog will join Hong Kong authorities to investigate suspected unauthorised currency trading.
Taiwan eyes financial cooperation agreement with China
Financial officials from Taiwan and China will meet for the first time in Taipei next week to discuss various cross-Taiwan Strait financial issues, including the signing of a memorandum of understanding for cooperation on financial regulation and supervision, officials said Thursday.
Taiwan FSC adjusts risk-based capital rules for insurance cos
The Financial Supervisory Commission (FSC) said it will adjust risk-based capital rules for insurance companies to help the industry better deal with the current round of financial turbulence.
Guru Jim Rogers headlines Citigold series in KL
CITIGOLD is teaming up with world-renowned commodities guru, Jim Rogers, to host the Citigold Wealth Management Leadership Series on Saturday, August 23, at the Mandarin Oriental, Kuala Lumpur. This will be Rogers’ first public appearance in Malaysia.
Edited by Robert Luke, firstname.lastname@example.org
EMERGING MARKETS – BANK LIQUIDITY
Fed pumps liquidity into emerging-market countries The Daily Deal The Federal Reserve is extending a helping hand to the central banks in four emerging-market countries as it takes its efforts to unfreeze money markets on the road. The Fed is opening four $30 billion liquidity swap facilities with the central banks of Brazil, Mexico, South Korea and Singapore until April 30, giving each country access to dollars at close to the same rates that G-7 countries enjoyed until the credit crunch turned into a credit crisis. European Union countries received unlimited access to dollars on Oct. 13.
*RL – Consequently…
Emerging-Market Bonds Advance as Stocks Rally Bolsters Demand
Bloomberg Emerging-market bonds gained for fourth day as a rally in global stocks boosted the appeal of higher-yielding assets. Demand for developing-nation debt also picked up after the Federal Reserve agreed to provide $90 billion to central banks in Brazil, Mexico, South Korea and the International Monetary Fund doubled borrowing limits for emerging-market countries.
*RL – And yet…
Sell Emerging-Market Currencies on Rally, Morgan Stanley Says Bloomberg
The recovery in emerging-market currencies is temporary and investors should sell on rallies and hedge against further weakness, according to Stephen Jen, Morgan Stanley’s global head of currency research. Interest-rate reductions by central banks around the world, liquidity injections and currency swap facilities may not be enough to ward off a global recession, Jen said in a research note yesterday.
AFRICA – BANKING INDUSTRY
Sh240 billion rescue plan for African banks Business Day (Nigeria) The World Bank is preparing a multi-billion shilling package to help cushion banks in African countries from effects of the raging global financial crisis that has led to the collapse of major banks in US and Europe.
EASTERN EUROPE – CURRENCY CRISIS
Panic Strikes East Europe Borrowers as Banks Cut Franc Loans Bloomberg Imre Apostagi says the hospital upgrade he’s overseeing has stalled because his employer in Budapest can’t get a foreign-currency loan. The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, euros and Swiss francs.
*RL – Story later adds: “Foreign-denominated loans helped fuel eastern European economies including Poland, Romania and Ukraine, funding home purchases and entrepreneurship after the region emerged from communism. The elimination of such lending is magnifying the global credit crunch and threatening to stall the expansion of some of Europe’s fastest-growing economies.”
MIDDLE EAST – BANK LIQUIDITY
Liquidity crunch prompts outlook cut for Gulf banks Arabian Business Standard & Poor’s has cut the outlook on five Gulf banks, among them Emirates NBD, the biggest Gulf bank by assets, and major Islamic lender Kuwait Finance House, as the global turmoil hit the region.
Fears after run on Kuwait bank
The outlook for Kuwait’s banking system is shifting towards negative for the first time in a decade, Moody’s rating agency said yesterday – a sign likely to heighten concerns about potential weaknesses in the nation’s financial services. The Moody’s report comes days after a run on Gulf Bank, Kuwait’s second-largest commercial bank, following revelations that it had incurred significant losses as a result of derivatives trading.
MCX may launch stock exchange
New Delhi: After launching carbon trading and currency futures, the Multi Commodity Exchange (MCX), a leading Indian bourse, has secured the nod from markets watchdog Securities and Exchange Board of India (SEBI) to start stock exchange operations in the country.
Futures market flooded with illiquid contracts
Are Indian commodity exchanges facing a problem of plenty as far as contracts are concerned? If the response to some newly-introduced contracts is any indication, the exchanges are in deep trouble following an increase in illiquid Futures. According to experts, with commodity exchanges introducing new contracts almost every month, the Futures market is flooded with various types of contracts in agriculture, metals and energy. India is perhaps the only country to have over 100 commodities approved for Futures trading.
`New Bretton Woods’ Rendezvous Beckoned by Hotel That Hosted the First One
The Mount Washington Hotel in Bretton Woods, New Hampshire, has a message for world leaders: There’s still room at the inn.