Gazprom has approved a three-and-a-half year loan to aid construction of the upcoming Turkish Stream (TurkStream) pipeline. The project was announced on December 2014 by Vladimir Putin on a state visit to Turkey. Turkey is regarded as a strategic bridge for energy between Central Asia and Europe. The pipeline will go from Russia's Krasnodar region, on the North Eastern edge of the Black Sea, to Turkish Thrace. Geographically, the Black sea has multiple countries on its edges, including Russia, Turkey and Ukraine, and Bulgaria, Romania and Georgia.
Saturday, 31 December 2016
Thursday, 29 December 2016
Angolan President's Daughter Cleared to Head State Oil Company
Isabel Dos Santos was appointed to head Angolan state oil company, Sonangol, in June, but this was disputed by twelve lawyers as nepotism, since the appointment was made by her father, the President, Jose Eduardo Dos Santos. The Supreme Court has now ruled the action as lawful. The President has also appointed his son to chair Angola's $5bn sovereign wealth fund (FSDEA) which was been established in line with the "Santiago Principles" explicating good governance in the context of SWFs. The first of these principles is the legal framework of the fund should be sound, and the second, is that the policy purpose should be clearly defined and publicly disclosed.
Wednesday, 14 December 2016
Competition Hotting Up for Precious Metal Trading on Exchanges
A large part of the precious metals market is OTC.
Saturday, 10 December 2016
A New Internally Selected CIO for Columbia Investment Management Company
Internal candidate Tim Donohue became the new CIO for the Columbia Investment Management Company replacing NP Narvekar, continuing the trend of filling the role with internal candidates. Prior to Columbia IMC, Tim was a partner at Booz Allen Hamilton (NYSE:BAH).
Monte dei Paschi di Siena Share Slide
Monte dei Paschi, one of the world's oldest banks founded in 1472 saw share prices slide after being denied more time by the European Central Bank to come up with a recapitalisation plan. Its shares had earlier risen on speculation the Italian government would take an interest in the bank.
Thursday, 1 December 2016
Oil Price Rallies after OPEC decides to cut production
OPEC decided to cut oil production on 30 November 2016 at a meeting in Vienna - its first action to cut output since 2008. The cuts are to take effect from January 2017.
Saudi Arabia will have the greatest reduction in daily production, by 486 thousand barrels per day (b/d).
Indonesia suspended its membership and will not participate.
The dispute arose not over the need for cuts, but the size of the output cuts requested of Indonesia.
Negotiating for Indonesia was ex-Citi MD and Mineral and Energy Resources Minister (since October 2016) Singapore-born Ignasius Jonan (who also formerly served as Minister for Transportation).
Saudi are followed by Iraq who will cut production by 210 tb/d, followed by the next biggest producer UAE, by 139 tb/d.
OPEC plans to hold talks with non OPEC producers on December 9th.
The announcement sent oil futures as well as oil stocks rallying. Royal Dutch Shell (RDBS.L) shares were up 2.8% to 2178 on 1 December 2016. BP (BP.L) was up 2.3% to 470. The stocks fell prior to the OPEC announcement on concerns that the cartel would fail to limit output.
Saudi Arabia will have the greatest reduction in daily production, by 486 thousand barrels per day (b/d).
Indonesia suspended its membership and will not participate.
The dispute arose not over the need for cuts, but the size of the output cuts requested of Indonesia.
Negotiating for Indonesia was ex-Citi MD and Mineral and Energy Resources Minister (since October 2016) Singapore-born Ignasius Jonan (who also formerly served as Minister for Transportation).
Saudi are followed by Iraq who will cut production by 210 tb/d, followed by the next biggest producer UAE, by 139 tb/d.
OPEC plans to hold talks with non OPEC producers on December 9th.
The announcement sent oil futures as well as oil stocks rallying. Royal Dutch Shell (RDBS.L) shares were up 2.8% to 2178 on 1 December 2016. BP (BP.L) was up 2.3% to 470. The stocks fell prior to the OPEC announcement on concerns that the cartel would fail to limit output.
Sunday, 2 October 2016
Britain to Trigger Article 50 by March 2017
British Prime Minister Theresa May has said Britain will trigger Article 50 of the Lisbon Treaty (that governs EU Law) by March 2017. Article 50 allows any state to withdraw from the European Union. Once Article 50 is triggered, a period of negotiations will take place between the UK and the remaining 27 countries. These discussions will include the date of actual "Brexit" and the trade terms on which Britain will leave the EU.
Saturday, 1 October 2016
A New CEO for the Harvard Management Company
NP Narvekar will succeed Stephen Blyth as CEO for the Harvard Management Company (HMC) in December 2016, following the latter's resignation in July 2016. HMC is the management company for Harvard's $35.6 billion endowment.
Blyth joined HMC in 2006 from Deutsche Bank, where he served as Managing Director of Global Rates Proprietary Trading, based in London. He has also traded interest rate derivatives for Morgan Stanley in New York and is an alumnus of Harvard himself, gaining a PhD in statistics.
Narvekar also comes from an investment banking background. He is an ex-JP Morgan derivatives trader who has since established himself as an endowment manager, most recently running Columbia University's Investment Management Company (IMC). He has an MBA from Wharton.
Blyth joined HMC in 2006 from Deutsche Bank, where he served as Managing Director of Global Rates Proprietary Trading, based in London. He has also traded interest rate derivatives for Morgan Stanley in New York and is an alumnus of Harvard himself, gaining a PhD in statistics.
Narvekar also comes from an investment banking background. He is an ex-JP Morgan derivatives trader who has since established himself as an endowment manager, most recently running Columbia University's Investment Management Company (IMC). He has an MBA from Wharton.
Sunday, 31 July 2016
Japan's GPIF, world's largest pension fund, falls 3.8 per cent in the year
Japan's Government Pension Investment Fund (GPIF), worth $1.3 trillion, lost 5.3 trillion yen ($51bn) in the year ended March 31st, its worse annual result since the financial crisis.
The loss included a 10.8% loss on domestic equities and 9.6% on global equities. Japanese bonds, which the fund was cutting since October 2014, when it moved allocations more to equities, posted a 4.1% gain, following the Bank of Japan's move to negative interest rates.
The fund has 80% of its holdings in passive investments.
The Canada Pension Plan Investment Board (CPPIB), a retirement savings plan financed by employers and employees in Canada except Quebec, was created in 1966 and is sized at $278 billion as of March 31, 2016, fared better with a 3.4% return with gains in real estate and emerging-market equity private investments.
The loss included a 10.8% loss on domestic equities and 9.6% on global equities. Japanese bonds, which the fund was cutting since October 2014, when it moved allocations more to equities, posted a 4.1% gain, following the Bank of Japan's move to negative interest rates.
The fund has 80% of its holdings in passive investments.
The Canada Pension Plan Investment Board (CPPIB), a retirement savings plan financed by employers and employees in Canada except Quebec, was created in 1966 and is sized at $278 billion as of March 31, 2016, fared better with a 3.4% return with gains in real estate and emerging-market equity private investments.
Wednesday, 20 July 2016
ARM to be bought by Softbank (IoT Big Driver)
Cambridge, UK based Smartphone-chip-maker ARM Holdings confirmed it is to be bought by Japan's Softbank (a recognised investor in "technology paradigm shifts") for £24bn (or 31bn USD), a premium of 43% on its traded market value. ARM's customers include Samsung and Apple. However, an earlier acquisition of Sprint Telecom is weighing heavy on Softbank's finances who will take a loan from Mizuho Bank to finance the acquisition of ARM for just under one-third of the deal value. Growth in the "Internet of Things" (and the evolution from the mobile Internet) is believed to be one of the prime motivations behind the acquisition.
Saturday, 16 July 2016
Worldwide IT Spending Forecast Flat for 2016 - Gartner
Traditional outsourcing growth is being put on the back foot by customizable Internet-based software. This is impacting the profits of "traditional" IT outsourcing businesses like Infosys. Operating margins for both TCS and Infosys is around 25%.
Sunday, 3 July 2016
Thursday, 30 June 2016
GAM buys $4bn AuM Cantab Capital Partners for $290m and starts Systematic Unit
Zurich-based GAM (listed on the Swiss stock exchange and which manages around $120 billion) is acquiring Cantab Capital Partners (CCP), a systematic asset management firm.
This acquisition will form the basis of GAM Systematic - a new offering from GAM covering "traditional" long-only investments as well as alternative investing.
In GAM's investor presentation, a Deutsche Bank 2016 Alternative Investment survey was referenced which mentioned a growing allocation to systematic strategies by institutional investors (the presentation also heralds equity market neutral strategies as offering promising performance in 2016). Coupled with GAM's distribution network, there is certainly scope for GAM to ramp up allocations to its systematic funds.
GAM is also planning UCITS versions of CCP's strategies, UCITS being a form of European-regulated fund first introduced in 1985
The question though is whether performance can be maintained and what capacity constraints exist on the strategies pursued by the funds - according to GAM, the funds are scalable and the capacity constraints are low. This is supported by the proportion of Cantab's employees who are involved in strategy research (high), multiple models and multiple traded markets. Cantab has $4bn AuM as of 31 May 2015.
This acquisition will form the basis of GAM Systematic - a new offering from GAM covering "traditional" long-only investments as well as alternative investing.
In GAM's investor presentation, a Deutsche Bank 2016 Alternative Investment survey was referenced which mentioned a growing allocation to systematic strategies by institutional investors (the presentation also heralds equity market neutral strategies as offering promising performance in 2016). Coupled with GAM's distribution network, there is certainly scope for GAM to ramp up allocations to its systematic funds.
GAM is also planning UCITS versions of CCP's strategies, UCITS being a form of European-regulated fund first introduced in 1985
The question though is whether performance can be maintained and what capacity constraints exist on the strategies pursued by the funds - according to GAM, the funds are scalable and the capacity constraints are low. This is supported by the proportion of Cantab's employees who are involved in strategy research (high), multiple models and multiple traded markets. Cantab has $4bn AuM as of 31 May 2015.
ONS Publishes Q1 2016 CAD Figures for the UK
The ONS has published its Q1 CAD figure of £32.6 billion (3x2=6). This means value of imports exceeds the value of exports.
George Osborne, the UK's Chancellor of the Exchequer since 2010, expressed an interest in managing the economy to surplus, but has since retracted this aim post Brexit (the "Exchequer" was the medieval English institution responsible for collection of revenues, whose name comes from a physical table used to perform tax calculations).
George Osborne, the UK's Chancellor of the Exchequer since 2010, expressed an interest in managing the economy to surplus, but has since retracted this aim post Brexit (the "Exchequer" was the medieval English institution responsible for collection of revenues, whose name comes from a physical table used to perform tax calculations).
Thursday, 2 June 2016
From Soda to Soya - Coca Cola Makes Unconventional Acquisition from Unilever
Coca Cola is acquiring AdeS, the biggest brand in soy beverage in Latin America for $575m.
Tuesday, 31 May 2016
Oil Companies Adapt to "Lower for Longer" Operating Environment
With oil prices hovering around $50 a barrel, oil companies are adapting to a "lower for longer" oil price environment. This has meant cutting back on investment and jobs. Shell plans to shut down its office in the Thames Valley Park by the end of 2016.
Wednesday, 4 May 2016
AWS Lifts Amazon Q1 Earnings - Cloud Computing Proves Viable Second Stream To Ecommerce
For the last 12 months, Amazon Web Services (AWS) has been a $9bn business. Bezos expects it to be a $10bn annual business.
Within the AWS offering, Amazon offers EC2 (Elastic Compute Cloud), a web service that provides resizable compute capacity in the cloud. Customers include Netflix, Autodesk and Nasa/JPL. EC2 works in conjunction with VPC (Virtual Private Cloud) - which allows users to create their own virtual networking environment within AWS, including IP address ranges, subnets and so forth.
Within the AWS offering, Amazon offers EC2 (Elastic Compute Cloud), a web service that provides resizable compute capacity in the cloud. Customers include Netflix, Autodesk and Nasa/JPL. EC2 works in conjunction with VPC (Virtual Private Cloud) - which allows users to create their own virtual networking environment within AWS, including IP address ranges, subnets and so forth.
Thursday, 10 March 2016
Metro Bank lists on LSE
Metro Bank, the first new high street bank in the UK for 100 years, has listed on the LSE with a market capitalisation of £1.6bn similar to that of CYBG which listed in the previous month.
Craig Donaldson, CEO, who studied at the University of Bradford, remarked that the first branch opened less than six years ago in London's Holborn.
Vernon Hill is the American business behind Metro Bank and author of "Fans not Customers".
He is often quoted in his views on regarding banks as being in the retail business, rather than the banking business, and is a critic of "shadow banking systems" (in other words, banks or financial intermediaries that operate outside of banking regulation).
Craig Donaldson, CEO, who studied at the University of Bradford, remarked that the first branch opened less than six years ago in London's Holborn.
Vernon Hill is the American business behind Metro Bank and author of "Fans not Customers".
He is often quoted in his views on regarding banks as being in the retail business, rather than the banking business, and is a critic of "shadow banking systems" (in other words, banks or financial intermediaries that operate outside of banking regulation).
Monday, 29 February 2016
What Kinds of Volumes are Being Done on Cleared Interest Rate Swaps?
Volumes Compared by Currency
The CME Group's clearing solution for interest rate swaps is doing considerable volume.
For trade date February 26, 2016, $21.6 billion of swaps were traded, with $12.5 trillion open interest. Dollar and Euro are trading around parity (with the Euro being slightly more valuable), so that's a 20 bn EUR equivalent trading volume.
Euro swaps traded only 5.2 billion euros worth in comparison. So the volume of USD swaps is approximately four times as large.
Swaps on GBP actually exceed USD swaps in trading volume terms, for the same day, 24 billion pounds traded, which is around $34 bn (which is about 1.5x larger).
Cleared Swaps on Different "Flavours of LIBOR"
The CME clear swaps on USD Libor, Euribor and plain old "LIBOR" (which is GBP LIBOR of course) as well as host of other currencies.
Where Are Rates At - USD Libor
Friday's level for USD Libor Overnight was 37 basis points. 1 month is 43 basis points and 3 month USD Libor is 63 bps. A daily update on USD Libor levels can be found here. 1year USD Libor is 116 basis points.
"Regular" LIBOR
Overnight is 48bps, 1 month is 50 bps, and 3 months is 59 bps. 1 year LIBOR is close to 100 bps.
Who sets the LIBOR Rates
The former BBA Libor is now known as ICE Libor following the reform of the benchmark and management by ICE Benchmark Administration. The Wheatley Review of LIBOR in 2012 made specific recommendations for the reform of LIBOR including a change of administration. Under a tender process led by Baroness Hogg, the NYSE Euronext came up trumps (later renamed to ICE Benchmark Administration). Both administering and making submissions to LIBOR became regulated activities from 1 April 2013 - LIBOR being the first benchmark to be regulated.
As part of their activities, ICE has a dedicated surveillance team identifying breaches of submission standards and tolerances through "a combination of alerts and pattern matching".
Other Benchmark Rates administered by ICE
The ICE Swap Rate is the new replacement for ISDAFIX effective August 2014. ICE also now administer the LBMA Gold Price.
The Greatest Volume of Swaps
Interest Rate Swaps, followed by Overnight Indexed Swaps followed by basis swaps.
The CME Group's clearing solution for interest rate swaps is doing considerable volume.
For trade date February 26, 2016, $21.6 billion of swaps were traded, with $12.5 trillion open interest. Dollar and Euro are trading around parity (with the Euro being slightly more valuable), so that's a 20 bn EUR equivalent trading volume.
Euro swaps traded only 5.2 billion euros worth in comparison. So the volume of USD swaps is approximately four times as large.
Swaps on GBP actually exceed USD swaps in trading volume terms, for the same day, 24 billion pounds traded, which is around $34 bn (which is about 1.5x larger).
Cleared Swaps on Different "Flavours of LIBOR"
The CME clear swaps on USD Libor, Euribor and plain old "LIBOR" (which is GBP LIBOR of course) as well as host of other currencies.
Where Are Rates At - USD Libor
Friday's level for USD Libor Overnight was 37 basis points. 1 month is 43 basis points and 3 month USD Libor is 63 bps. A daily update on USD Libor levels can be found here. 1year USD Libor is 116 basis points.
"Regular" LIBOR
Overnight is 48bps, 1 month is 50 bps, and 3 months is 59 bps. 1 year LIBOR is close to 100 bps.
Who sets the LIBOR Rates
The former BBA Libor is now known as ICE Libor following the reform of the benchmark and management by ICE Benchmark Administration. The Wheatley Review of LIBOR in 2012 made specific recommendations for the reform of LIBOR including a change of administration. Under a tender process led by Baroness Hogg, the NYSE Euronext came up trumps (later renamed to ICE Benchmark Administration). Both administering and making submissions to LIBOR became regulated activities from 1 April 2013 - LIBOR being the first benchmark to be regulated.
As part of their activities, ICE has a dedicated surveillance team identifying breaches of submission standards and tolerances through "a combination of alerts and pattern matching".
Other Benchmark Rates administered by ICE
The ICE Swap Rate is the new replacement for ISDAFIX effective August 2014. ICE also now administer the LBMA Gold Price.
The Greatest Volume of Swaps
Interest Rate Swaps, followed by Overnight Indexed Swaps followed by basis swaps.
Sunday, 21 February 2016
Shell's "AA" Credit Rating Cut to "AA-" by Fitch due to Takeover of BG Group
Moody's has also said it is reviewing credit ratings of oil, gas and mining stocks. These companies are selling assets and slashing headcount due to the rout in commodity prices. On the flip side, the deal makes Shell the UK's largest publically owned company, with HSBC in second place. Shell rival BP is around number 6 in market cap.
Saturday, 20 February 2016
Barclays pays $50m to Axiom Investment Advisors over Last Look Algorithm in FX
Barclays is paying $50m over its lawsuit from November 2015 with Axiom Investment Advisors, an asset manager specialising in foreign exchange. The "last look" is the opportunity taken by market makers to reject a trade after the client commits to a trade at a certain price, giving them the flexibility to reject unprofitable trades, a practice which is illegal in many jurisdiction and asset classes, and frowned upon in others. However, the specific complaint by Axiom relates to delaying execution of trades, resulting in a worse consummated final price than what was initially agreed. The investigation was led by the New York Department of Financial Services (DFS). Barclays has denied wrongdoing.
Sunday, 14 February 2016
Trading GOI and KTB Bond Futures
INDIA - Government Bond Futures and Bills and Who can Trade Them
The National Stock Exchange (NSE) of India offers futures trading on government bonds (10-year) and (91-day) bills a.k.a. 91TDB. Trading members must be registered with SEBI to trade in the Currency Derivatives segment.
Price Quote Convention
Prices are quoted "clean" i.e. without considering accrued interest.
Settlement and Delivery of GOI Bond Futures
Bond futures settle on VWAP during the last thirty minutes of trading, or theoretical value. Note that the 10 year bond futures actually allows delivery of bonds with 8-11 years of residual maturity.
Clearing of Trades
Trades are cleared by NSCCL (National Securities Clearing Corporation Limited), a wholly owned subsidiary of the NSE incorporated in 1995, and the first clearing house to be incorporated in India, starting operations in 1996. Counterparty risk is avoided by cash settlement of the daily mark to market of open positions.
KOREA
Korean Bonds
AsianBondsOnline has good coverage of Korean Won bonds, and presentation of 2, 5 and 10 year yields. In Korea, all fixed income instruments are available to foreign investors.
Bond futures trade on KRX. They are known as KTB futures (Korean Treasury Bond futures), available in 3, 5 and 10 year varieties.
The wholesale market for KTBs is known as KTS (this is also the venue to trade Monetary Stabilisation Bonds, or MSBs and Deposit Insurance Fund Bonds (DIFBs)), and is limited to government bond dealers licensed by the Financial Services Commission (founded in 2008).
The National Stock Exchange (NSE) of India offers futures trading on government bonds (10-year) and (91-day) bills a.k.a. 91TDB. Trading members must be registered with SEBI to trade in the Currency Derivatives segment.
Price Quote Convention
Prices are quoted "clean" i.e. without considering accrued interest.
Settlement and Delivery of GOI Bond Futures
Bond futures settle on VWAP during the last thirty minutes of trading, or theoretical value. Note that the 10 year bond futures actually allows delivery of bonds with 8-11 years of residual maturity.
Clearing of Trades
Trades are cleared by NSCCL (National Securities Clearing Corporation Limited), a wholly owned subsidiary of the NSE incorporated in 1995, and the first clearing house to be incorporated in India, starting operations in 1996. Counterparty risk is avoided by cash settlement of the daily mark to market of open positions.
KOREA
Korean Bonds
AsianBondsOnline has good coverage of Korean Won bonds, and presentation of 2, 5 and 10 year yields. In Korea, all fixed income instruments are available to foreign investors.
Bond futures trade on KRX. They are known as KTB futures (Korean Treasury Bond futures), available in 3, 5 and 10 year varieties.
The wholesale market for KTBs is known as KTS (this is also the venue to trade Monetary Stabilisation Bonds, or MSBs and Deposit Insurance Fund Bonds (DIFBs)), and is limited to government bond dealers licensed by the Financial Services Commission (founded in 2008).
Thursday, 11 February 2016
Deutsche Bank CDS Spike brings Excitement Back to Credit Markets
Deutsche's 5 year subordinated CDS rose to 540 basis points while one year subordinated CDS increased to 552 basis points. This means the Deutsche subordinated CDS curve is decreasing (a pattern of reversion which started appearing in the summer of 2007 during the credit crisis).
Should you wish to trade CDS speculatively there are some electronic trading options. MarketAxess (MKTX) provides a platform for trading single name CDS, CDS indices and index options. For single name CDS, they support streaming prices and a click-and-trade model as well as RFQ model.
Banks stocks sold off and people put money into gold and yen, which is trading at 113 to the dollar, down from a high of 121 yen on the 1st February 2016. The path of gold was slightly skewed as 1st February 2016 was a day of rising gold prices with a peak of $1258 per troy ounce. So whilst gold rose in response to the bank sell-off it was nothing like the peak earlier in the month, which coincided with a sell-off in the S&P.
Should you wish to trade CDS speculatively there are some electronic trading options. MarketAxess (MKTX) provides a platform for trading single name CDS, CDS indices and index options. For single name CDS, they support streaming prices and a click-and-trade model as well as RFQ model.
Banks stocks sold off and people put money into gold and yen, which is trading at 113 to the dollar, down from a high of 121 yen on the 1st February 2016. The path of gold was slightly skewed as 1st February 2016 was a day of rising gold prices with a peak of $1258 per troy ounce. So whilst gold rose in response to the bank sell-off it was nothing like the peak earlier in the month, which coincided with a sell-off in the S&P.
Wednesday, 10 February 2016
ICAP CEO lauds "non-bank trading institutions" in Electronic Trading Arena
Lower EBS volumes and revenues prompts comments on "Non bank" traders
Michael Spencer, CEO of ICAP, remarking on the drop in revenue of his company in electronic markets, exemplified by the reduction in activity on his foreign exchange platform, EBS, has praised the "non-bank trading institutions" such as Ken Griffin's Citadel and Virtu Financial Inc. which are coming in to fill the void left by retreating banks.
Focusing on Technology
Low interest rates have dampened activity from banks in the fixed income, currencies and commodities space in which brokers operate, inciting them to reorient their focus. In particular ICAP is investing in electronic markets, post-trade services and information services. ICAP has also expanded into fintech investment via its Euclid Opportunities initiative since 2011 run by Steve Gibson who was also at Calypso Technology previously.
Stock and Competitors
ICAP stock (IAP.L) was pressured downward following the results. It is regarded as riskier than the overall market with a beta of 1.17. It has a market cap of around 2.69 billion pounds. Its competitors include Tullet Prebon (which is buying ICAP's voice broking business) and Cantor Fitzgerald, which also runs its own investment arm, Cantor Ventures. They also have Cantor Gaming as one of their high technology ventures. Tullet's share price has also been going down, but it has a beta of only 0.75 so the impact, as can be predicted, is rather less than on ICAP.
Michael Spencer, CEO of ICAP, remarking on the drop in revenue of his company in electronic markets, exemplified by the reduction in activity on his foreign exchange platform, EBS, has praised the "non-bank trading institutions" such as Ken Griffin's Citadel and Virtu Financial Inc. which are coming in to fill the void left by retreating banks.
Focusing on Technology
Low interest rates have dampened activity from banks in the fixed income, currencies and commodities space in which brokers operate, inciting them to reorient their focus. In particular ICAP is investing in electronic markets, post-trade services and information services. ICAP has also expanded into fintech investment via its Euclid Opportunities initiative since 2011 run by Steve Gibson who was also at Calypso Technology previously.
Stock and Competitors
ICAP stock (IAP.L) was pressured downward following the results. It is regarded as riskier than the overall market with a beta of 1.17. It has a market cap of around 2.69 billion pounds. Its competitors include Tullet Prebon (which is buying ICAP's voice broking business) and Cantor Fitzgerald, which also runs its own investment arm, Cantor Ventures. They also have Cantor Gaming as one of their high technology ventures. Tullet's share price has also been going down, but it has a beta of only 0.75 so the impact, as can be predicted, is rather less than on ICAP.
Monday, 8 February 2016
Global Bond Rally Pushes Yields to Low Levels
Investors are buying up sovereign debt as equities slide - sending US Treasuries yields to a one-year low. Bond indices, such as the BAML World Sovereign Bond Index also tumbled to 1.29 percent, it's lowest value since 2005. Japan's 10 year yields went negative.
National Australia Bank brings Challenger CYBG to the London Stock Market
The National Australia Bank brought CYBG to the LSE on 8 February 2016. The trading service for the stock is SETS, the London Stock Exchange's flagship order book. The CYBG will form part of the FTSE Banks segment with a market capitalization of £1.66 billion on listing. CYBG forms one of the UK's so-called "challenger banks".
The CEO of CYBG is David Duffy who joined in 2015. He was formerly CEO of Allied Irish Bank which has a close relationship with the Irish state.
The CEO of CYBG is David Duffy who joined in 2015. He was formerly CEO of Allied Irish Bank which has a close relationship with the Irish state.
Sunday, 31 January 2016
Shell BG Merger will create World's Largest Producer of LNG - Banks Pile into Bridge Financing
Shell shareholders have approved a merger with their smaller, Reading, Berkshire-based rival BG to create the largest producer of LNG in the world. The merger will take place on Feb 15, 2016. Van Beurden has promised £2.5bn in cost savings.
Barclays Bank is the facility agent for the bridge financing of the deal. Bridge financing is a way to close the gap in order to raise finance to close a deal - at least until such time that the borrower can arrange long-term financing.
Bankers involved with Barclays in financing the deal include:
Alastair Macdonald, Deutsche Bank
John-Paul Way HSBC
Michael Atherton RBC Capital Markets, part of Royal Bank of Canada
Thierry Muschs, Sumitomo Mitsui Banking Corporation
Barclays Bank is the facility agent for the bridge financing of the deal. Bridge financing is a way to close the gap in order to raise finance to close a deal - at least until such time that the borrower can arrange long-term financing.
Bankers involved with Barclays in financing the deal include:
Alastair Macdonald, Deutsche Bank
John-Paul Way HSBC
Michael Atherton RBC Capital Markets, part of Royal Bank of Canada
Thierry Muschs, Sumitomo Mitsui Banking Corporation
Saturday, 23 January 2016
The VIX in 2015 (and a little bit of 2016)
24 January 2016 - the VIX is trading at 22.34.
Exactly five months ago to the date, on Monday, August 24, 2015, the VIX peaked at 40.74, reducing to 36.02 the following day. This corresponded to a sudden drop (and whipsaw action) in the S&P 500 Index.
The next day, though people kept selling the index, they also sold off volatility, anticipating a rebound in the index.
It was also an interesting time to contemplate risk reversals, selling puts and buying calls, to take advantage of the change in market direction (here risk reversal is considered as an investment stratey rather than measure of vol skew).
Exactly five months ago to the date, on Monday, August 24, 2015, the VIX peaked at 40.74, reducing to 36.02 the following day. This corresponded to a sudden drop (and whipsaw action) in the S&P 500 Index.
The next day, though people kept selling the index, they also sold off volatility, anticipating a rebound in the index.
It was also an interesting time to contemplate risk reversals, selling puts and buying calls, to take advantage of the change in market direction (here risk reversal is considered as an investment stratey rather than measure of vol skew).
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