EU and Brazilian regulators to co-operate on cross-border supervision of alternative investment funds
January 16, 2013--The European Securities and Markets Authority (ESMA) has approved the co-operation arrangements between the Brazilian Comissão de Valores Mobiliários (CVM) and the EU securities regulators for the supervision of alternative investment funds, including hedge funds, private equity and real estate funds.
ESMA has negotiated the agreement with the CVM on behalf of all 27 EU national competent authorities for securities markets regulation.
The co-operation arrangements include the exchange of information, cross-border on-site visits and mutual assistance in the enforcement of the respective supervisory laws. This co-operation will apply to Brazilian alternative investment fund managers (AIFMs) that manage or market alternative investment funds (AIFs) in the EU and to EU AIFMs that manage or market AIFs in Brazil.
Source: ESMA
Macro Matters-Local News Dominate Market
January 16, 2013--China-Higher than expected CPI hinders market.
At week-beginning, Chinese shares gained on better-than-expected exports data for December.
Exports jumped 14.1% from the same month previous year, the fastest pace in seven months. However, gains were limited as data also showed that Chinese inflation accelerated to a 7-month high.
China's CPI rose 2.5 percent year on year in December, up from November's 2 percent. Consumer prices climbed at the fastest pace since June 2012, above the estimated rate of 2.3 percent, due to surging food prices which were 4.2 percent more than a year earlier.
India-Earnings reporting season begin.
Earnings reporting season begin Oil companies extended gains on expectation that the government will gradually raise diesel price while motorcycle companies dropped as the industry cut sales estimates.
Software companies which remained sideline throughout the week received a boost on Friday as Infosys, India’s second largest software exporter, earnings beat estimates.
Brazil-Energy related issue exacerbated.
Equities gave back part of their recent gains in the week ending January 10th. Brazilian utilities stocks once again fell as the possibility of energy rationing rises.
Hydroelectric reservoirs are at levels not seen since 2001 following low rainfall, and with hydroelectric plants accounting for more than 70% of the domestic energy generation matrix, implications for electricity output are potentially significant.
Due to the near-term reliance on more costly thermal generation plants, spot electricity prices have spiked, and are expected to remain elevated and volatile throughout at least Q1.
Russia-Russia outperformed within emerging markets in Dec.
The Federal Reserve’s explicit announcement of maintaining close to zero interest rates until unemployment falls below 6.5% was well-received by the market.
At the same time optimism that Chinese economic growth would accelerate in 2013, further lifted emerging markets, which outperformed developed markets in December.
Within Emerging Markets, Russia outperformed due to positive company-specific news, despite economic data pointing to a slowdown in the economy.
Source: Mirae Asset Financial Group
Russell Indexes and NYSE Euronext Announce Global Alliance and RussellTick Distribution Agreement
RussellTick(TM) to be Hosted in NYSE Euronext's U.S. Liquidity Center & Global Index Feed
Alliance Highlights Complementary Strategic Direction & Enhances Capital Markets Community
Commitment to Introduce Additional Products in the U.S. & Europe Including Index Options
Russell Index Leaders and CEO Ron Bundy Will Ring The Opening Bell(R) on Wednesday, January 16th to Celebrate The Global Alliance
January 15, 2013--Russell Indexes, a leading global index provider and NYSE Euronext, one of the world's premier exchange operators and technology innovators, today announced a global alliance which will span three distinct NYSE Euronext business lines and multiple geographies, as well as several facets of Russell's global index business.
The agreement includes the transition of RussellTick, an index feed for real-time, intra-day values for the Russell family of indexes in the U.S. and globally, to NYSE Technologies’ Global Index Feed (GIF) protocol and extensive global distribution. Approximately $3.9 trillion in assets are currently benchmarked to the Russell Indexes globally. The alliance also includes a commitment to develop additional joint global services and products, such as new index-based options.
Source: Russell Investments
Liquidity Alliance launched to address global collateral crunch
The initial members of the Liquidity Alliance are ASX (Australia), Cetip (Brazil), Clearstream,(Frankfurt/Luxembourg), Iberclear (Spain) and Strate (South Africa)
The goal of the Liquidity Alliance is to exchange information, identify common needs and to extend global collateral solution
* Liquidity Alliance will be a dynamic forum and open to additional participants from all regions
January 16, 2013--The financial crisis in 2007/2008 prompted regulators to make risk avoidance their top priority which they then backed with a portfolio of new legislation.
The consequence of the Dodd-Frank Act, EMIR, CRD IV and other regulations will be to leave the financial services industry short of liquidity and collateral at a time when new capital rules make banks unwilling to lend.
According to April 2012 estimates by the Basel Committee on Banking Supervision, banks in Europe alone are facing an aggregate shortfall of stable funding of EUR 2.78 trillion in fulfilling the additional liquidity requirements of Basel III.
Additionally, the IMF reported in April 2012 that sovereign downgrades would reduce the supply of general collateral by USD 9 trillion by 2016. Sourcing collateral is therefore a truly global issue for the industry now and for the years to come.
Source: Clearstream
Euronext Division Is Not for Sale, NYSE's Duncan Niederauer Says
January 16, 2013--NYSE Euronext, the exchange operator that agreed to be bought by IntercontinentalExchange Inc. (ICE), said its European business Euronext is not for sale.
NYSE has been meeting with regulators and investors since announcing last month it would be acquired by Atlanta-based ICE, said Chief Executive Officer Duncan Niederauer in a Bloomberg Television interview. While it is still early in the review process, there are no plans to sell the Euronext business, he said.
Source: Bloomberg
NYSE Euronext, Russell Investments in Index Tie-Up
January 15, 2013--Russell Investments and NYSE Euronext signed a deal Tuesday that will see the exchange company take over broadcasting of Russell stock-index data, while exploring other joint ventures.
The deal will shift the systems calculating valuations for the Russell 2000 index of small-cap stocks to the Big Board parent’s New Jersey data center. It also includes a commitment to developing new options contracts around the Russell indexes, according to a statement from the companies.
Source: Wall Street Journal
WB urges developing countries to safeguard economic growth, as road ahead remains bumpy
January 15, 2013--Four years after the onset of the global financial crisis, the world economy remains fragile and growth in high-income countries is weak.
Developing countries need to focus on raising the growth potential of their economies, while strengthening buffers to deal with risks from the Euro Area and fiscal policy in the United States, says the World Bank in the newly-released Global Economic Prospects (GEP) report.
"The economic recovery remains fragile and uncertain, clouding the prospect for rapid improvement and a return to more robust economic growth," said World Bank Group President Jim Yong Kim. "Developing countries have remained remarkably resilient thus far. But we can't wait for a return to growth in the high-income countries, so we have to continue to support developing countries in making investments in infrastructure, in health, in education. This will set the stage for the stronger growth that we know that they can achieve in the future.”
view the full report-Global Economic Prospects-Assuring growth over the medium term
Source: World Bank
EGX signs license agreement with NYSE Liffe to enable the listing of an EGX 30index futures contract on NYSE Liffe London
January 14, 2013--The Egyptian Exchange (EGX) is pleased to announce that it today signed a license agreement in London with NYSE Liffe, the European derivatives business of NYSE Euronext, to list the EGX 30 index.
Witnessing the signing ceremony was His Excellency, Mr. Osama Saleh, Minister of Investment of Egypt. This signed agreement will enable NYSE Liffe to work with market participants to develop and launch a futures contract based on the EGX 30 index.
Egyptian Minister of Investment, Mr. Osama Saleh pointed out that the agreement will be a strategic turning point in the history of the Egyptian capital market to enter a new phase of development for the non-banking financial sector. The Minister also expressed the importance of the agreement’s timing, as the Egyptian economy continues its recovery, which asserts the international community's confidence in the future of the Egyptian economy. H.E. Mr. Saleh, assured that this agreement will not be the last, stressing the importance of increasing the Egyptian Exchange’s exposure to the international markets in order to turn Egypt into the largest financial center in the region.
Source: NYSE Euronext
Thomson Reuters Global Equities Monthly Market Share Data Reports-December 2012
January 14, 2013--Trading is fragmenting between exchanges and competing venues. But by how much and which venues? Find out in the summarised monthly reports.
Source: Thomson Reuters
New derivatives venues will find duopoly hard to crack
January 14, 2013--New listed derivatives platforms in Europe face a tough road ahead as established venues will continue to dominate the space, a new report from financial consultancy Celent has foreshadowed.
Europe's two largest listed interest rate (IR) derivatives venues, NYSE Liffe and Eurex, are set to face challenges from new initiatives from US-based giants. The CME Group, which runs the largest derivatives market in the US, and Nasdaq OMX, through its new NLX multilateral trading facility, are both poised to offer listed interest rate futures and options in 2013 as they attempt to carve market share from the established performers. But doing so will be difficult.
Source: The Trade