UK stocks were more or less unchanged on today, thereby recovering from the lowest level in last 2 months. Shares of the mining companies went ahead and apart from that, retail sales in US surpassed forecasts made by economists as well. The benchmark stock gauge of UK, the FTSE 100 Index went ahead by 5.18 points, thereby taking the figure to 6,304.63. The gauge experienced a slide of 1.5% earlier; however, it was able to recover from the same. The broader FTSE All Share Index went down by less than 0.1%. On the other hand, the benchmark stock gauge of Ireland, ISEQ Index experienced a tumble of 0.2%.
Real, the major Brazilian currency has risen from a 4-year low figure as the Brazilian Government removed a 1% tax which was charged on the wagers against USD. This is part of the 2nd easing that happened right on this week of capital controls, in an attempt to stem the rout of the local currency. Swap rates on contract due in January, 2016 went down by 10 basis points to 10.25%.
Real is currently at 2.1441 per USD as it went ahead by 0.6%. On yesterday, it experienced a decline and went down to 2.1564, marking the lowest figure of the same since May, 2009. According to the Chief Economist of Votorantim Ctvm, Roberto Padovani, the effect of the measure taken by the Brazilian Government is going to be limited. Padovani added that the current behavior of Real is pretty much related to the international fundamentals.
The benchmark stock gauge of Egypt has experienced the steepest decline in last 7 months and this incident has played a major part in attracting foreign investors. Most of the local shares have dumped ahead of the planned anti-government protests to be held. As far as the data released so far is concerned, the non-Arab foreign investors are net buyers of shares with total worth of 236 million Pounds in this month. The benchmark stock gauge EGX 30 has gone down by 14% in the period as it has now entered a so called bear market. The gauge has declined by 23% from the peak it experienced in last September. The investors were net buyers of stocks with total worth of around 30 million Pounds in last month. The index went ahead by 4.7% in the same period.
The major currency of Hungary, Forint has strengthened for the 3rd day on a row. Apart from that, the bonds surged ahead as Hungary increased more debt than what was planned initially. Forint has gone ahead by 0.8% and the same is currently at 293.68 per Euro. This is the highest value of the same in a week’s time. Incidentally, the Debt Management Agency sold Forint of total worth 55 billion in bonds which are due in 2016, 2018 and 2022. This is 17 billion Forint more than what was planned initially. The investors actually demanded more than 3 times as much debt as the amount sold, in comparison with a bid to cover ratio of 2.3 of a couple of weeks earlier.
UK stocks went down to the lowest level of the same in last 7 weeks as concern over the chances of the Central banks scaling back the stimulus measurements have increased. Apart from that, the Greek politicians wrangled over the closure of the broadcaster of the nation making things worse.
The benchmark gauge FTSE 100 Index declined by 40.63 points as the same is now at 6,299.45. This is the lowest level of the same since 22nd April. The equity benchmark has went down by 7.9% after the Chairman of the Federal Reserve, Ben S. Bernanke stated that they may scale down the quantitative easing program if they see sustained growth in the US economy. The broader FTSE All Share Index declined by 0.6% on today, whereas, the benchmark gauge of Ireland, ISEQ Index tumbled by 0.5%.
Luke Ding, who works as the manager of Brevan Howard Asset Management LLP is going to leave the firm soon, as far as reports from people with knowledge of this matter are concerned. Incidentally, Brevan Howard Asset Management LLP is a renowned currency hedge fund. Ding currently operates the Macro FX fund with a total worth of $570 million.
People reporting this piece of news however declined to publish the names because the information has not been made public as of yet. It has been learned that Brevan officials will be speaking with the investors soon to decide whether the Macro FX Fund managed by Ding will be continued or shut down after Ding leaves the company. As soon as the news surfaced, several attempts were made to reach Ding, however, Ding choose not to answer the telephone calls or emails. Anthony Payne who is a spokesman working for Brevan Howard decided not to make any comment on departure of Ding. Incidentally, this news of departure was reported by the Financial news first.
The Central Bank of Iceland has kept the benchmark interest rate at the same level for the 5th straight meeting as the currency market interventions took some sort of pressure off the Krona, the major currency of Iceland. This also played a part to cool down the inflation. The 7-day collateral lending rate is still at 6%, as mentioned through an official statement of Sedlabanki in its website.
According to bank’s statement, the intervention policy of the bank has played a major contribution to the stability that the exchange rate is seeing off late. The policy is kind of conducive for providing a stronger anchor for inflation expectations and it is going to promote more rapid disinflation.
Greece is now the first developed nation ever which has been cut to emerging market status by MSCI Inc. as the local stock index of the same went down by 83% in the last 6 years. Greece has not been able to meet the criteria regarding the securities borrowing and lending facilities, transferability and short selling, as stated by MSCI. Incidentally, equity indexes of MSCI are tracked by various investors with total worth of $7 trillion in assets. On the other hand, United Arab Emirates and Qatar were raised to emerging market status. Morocco was cut to a frontier market as well. Both Taiwan and South Korea were kept as emerging markets, whereas, Chinese shares which are traded on the local exchanges have been put to review for possible inclusion in the emerging market category, as mentioned in the statement.
Real, the major currency of Brazil has touched a figure that’s the lowest in last 4 years, thereby prompting the Central Bank of Brazil to intervene for the 2nd day in an attempt to stem the rout in the exchange rate. Incidentally, the swap rates surged ahead on concern that the weakening of currency will be causing the inflation to speed up. On today, Real appreciated at the beginning, incidentally for the first time in the last 6 days. Real went ahead by 0.3% and was priced at 2.1406 per USD, however, then it experienced a decline of 0.9% and went down to 2.1656, marking the weakest intraday since May, 2009. On the other hand, the swap rates due in January, 2016 went ahead by 12 basis points, taking it to 10.05%. The benchmark stock gauge of Brazil, Ibovespa went down by 1.9%, thereby approaching a bear market.
For the 2nd straight day, European stocks went down as the Bank of Japan decided not to expand stimulus. Apart from that, treasuries also sank as there are speculations that the Federal Reserve will be trimming down bond purchases. The benchmark stock gauge Stoxx Europe 600 Index went down by 1.2% and the same is at 291.74 at time of close. Incidentally, the top court of Germany has started the hearing procedure of the Outright Monetary Transactions Program of the European Central Bank. The benchmark gauge, at an earlier time, went down by 2.1%, thereby reaching a figure which is the lowest in last 7 weeks. Since 22nd March, the gauge has retreated by 6.1%.
The Federal regulators have fined the Chicago Board Options Exchange $6 million as it stated the staffs of the same have interfered with the 3-year investigation of the short selling at a member firm in a never seen before breakdown of the trading supervision. The settlement calls for immediate remedial actions, is probably the first ever that is being assessed by the Securities and Exchange Commission for violating rules in context with the regulatory oversight. Incidentally, only 4 days ago, an administrative law judge gave a ruling that OptionsXpress Inc., a member of the CBOE, has helped to complete sham transactions which were in violation with laws of the US securities, also termed as Regulation SHO. Incidentally, OptionsXpress is a unit of Charles Schwab Corp.
Australian Dollar, also known as Aussie went down to the lowest value of the same in the last 3 years against USD after the approvals for home loan grew at the slowest pace in the last 3 months. This has boosted the chances of further cuts in the borrowing costs. Aussie thereby has slid down for the 3rd straight day as there are speculations that the Federal Reserve will be reducing the monetary stimulus in 2013. The interest rate average of Australia has narrowed down as well. Incidentally, not against USD, but Aussie went down against Yen as well, after the Bank of Japan kept the monetary policy of the same unchanged. This has disappointed the investors who were expecting that there will be new measures introduced by the Japanese Government to stem market volatility. Incidentally, the major currency of New Zealand, New Zealand Dollar or Kiwi is set to have the lowest close of the same in a year as well.
The UK stocks experienced decline on today, thereby extending the 3-week long declines for the benchmark stock gauge FTSE 100 Index. Most of the mining companies went down attributing to the decline. Apart from that, the export growth of China declined to a figure which is the lowest in the last 10 months as well.
The benchmark stock gauge FTSE 100 Index went down by 11.54 points or 0.2%. The benchmark gauge is currently at 6,400.45. The gauge swung between wins and losses throughout the day, for at least 8 times. For the last 3 weeks consecutively, the gauge has experienced declines as there were concerns on the Federal Reserve squeezing its quantitative easing program if the US economy shows sustained growth. Incidentally, the quantitative easing program of the Federal Reserve helped the measure to reach its highest level in the last 14 years. Incidentally, the broader FTSE All Share Index declined by 0.1% on today. On the other hand, the benchmark stock gauge of Ireland, ISEQ Index went down by 0.4%. The overall trading volume at the FTSE 100 listed companies was 16% less in comparison with the average of the last 30 days.
Stocks in Switzerland were more or less unchanged on today, after experiencing the biggest advance in last 6 weeks for the benchmark stock gauge Swiss Market Index on last week. The benchmark Swiss Market Index, also known as SMI went up by less than 0.1% on today and it is currently at 7,790.55. On 7th June, the gauge went up by 2.1%, thereby marking its biggest surge since 23rd April. The stocks were mostly boosted by the positive reports coming out of US market. On today, the broader Swiss Performance Index went ahead by 0.1% as well. Incidentally, the total volume of shares which changed hands on the Swiss Market Index on today was 33% less if compared with the average of last 30 days.
Ringgit, the major currency of Malaysia has declined to a figure which is the lowest in last 11 weeks after the recent industrial report coming out of US boosted speculation that the Federal Reserve will be reducing the stimulus which has increased flow of funds to emerging markets, including Malaysia. The Government bonds of Malaysia experienced tumble too.
Incidentally, only on last month, the chairman of the Federal Reserve, Ben S. Bernanke stated that the monthly bond buying which is also known as quantitative easing could be scaled back if they see signals of improvement in the market to sustain. Incidentally, monthly bond buying is at $85 billion currently. Apart from that, the no. 2 overseas market of Malaysia, China saw its industrial production and exports to decline more than estimates for the last month. The figures were released over the last weekend.
Canadian Dollar, which is more popularly known as Loonie rose against most of the major peers of the same as the new home constructions increased at the fastest pace for the country since last year. Incidentally, this is being regarded as a direct proof that the housing market of Canada is regaining momentum.
On last week, Loonie experienced its biggest gain in last 12 months against USD. As far as the statistics released by the Canada Mortgage & Housing Corp. is concerned, housing starts in Canada were at 200,178 units at a seasonally adjusted annual pace for the last month. Incidentally, the steps taken by the Canadian policy makers in last year to head off a housing bubble seems to be showing results now.
The foreign currency reserves of the Swiss National Bank have rose to a record figure in last month. Incidentally, in May, Swiss Franc, the major currency of Switzerland went down against not only USD, but against Euro too. Holdings have increased to a figure of 441.4 billion Swiss Francs. Incidentally, the revised figure for April was 436.1 billion Swiss Francs. The details were released through the official website of the Swiss National Bank. At the beginning of every month, based on the standards set by the International Monetary Fund, the holdings are calculated.
The Swiss National Bank, incidentally, committed to defend a ceiling of 1.20 per Euro in September, 2011. The bank has amassed foreign currency reserves equal to around 3-quarters of annual economic output of Switzerland to maintain the limit.
Supervisory Board Chairman of Volkswagen Expects Legal Battle with Minority Stakeholders on MAN Takeover06/10/13
The supervisory board chairman of Volkswagen AG and MAN SE, Ferdinand Piech thinks that a legal battle is imminent with minority stakeholders who will be looking for higher price than what VW will be offering for the rest stakes of the German truck maker. In the annual meeting of MAN SE, Piech stated that he expects the other stakeholders in a court very soon. Incidentally, many law firms including Dreier Riedel Rechtsanwaelte and Peter Dreier have already raised questions over the valuation of MAN that has been done by VW.
Incidentally, VW received the approval from the shareholders on last week for a profit transfer and domination agreement. This agreement will be eliminating the requirement form arm’s length negotiations between the companies. It will therefore give the carmaker access to the cash of MAN. VW has a voting stake of over 75% and hence, it was pretty clear, right from the beginning that the vote results will be in favor of VW.
Morgan Stanley has boosted its forecast for a stronger USD against Yen. The US currency experienced tumble on last week the most in last 2 years, however, Morgan Stanley officials still feel that it will bounce back. According to the Departmental Head of Foreign Exchange Strategy of Morgan Stanley, Ian Stannard, USD is expected to appreciate to 107 Yen by end of 2013. The previous forecast was actually for 105 Yen by year-end, however, the latest one is a bit up. Incidentally, USD went down by 3.2% on last Friday, marking the biggest decline since 17th May, 2011. It is currently at 97.47 Yen.
If the recent report from Aviva Plc. is to be believed, the shopping malls of Singapore offer the best returns among all the retail investments in Asia-Pacific region. The economic and demographic growth in the region has played a very important part in boosting the consumption, as mentioned in the report.
The suburban retail units which cater to the demand of local residents should be offering better yields if compared with the central shopping centers, as mentioned in the report of Aviva Investors Asia Pte. Incidentally, Aviva Investors Asia is a unit of the 2nd biggest insurer of UK and manages property assets worth $2.5 billion. Malls in Singapore are expected to yield an average annual return of around 8% over the next couple of years. In case of those in the suburbs, the yield should be between 9% and 10% annually, as mentioned in the published report.
USD is experiencing widespread weakness currently and it has prompted investors to unwind the bearish bets on the Yen, the major currency of Japan. This has triggered USD-Yen stops and has helped Yen to receive its biggest surge in the last 2 years against USD.
Yen has been able to reach the highest value in the last 7 weeks as the same has now crossed the key level at 98.85. It therefore breached the channel support at 98.03, as mentioned by the Chief Rates and Currencies Technical Analyst of Bank of America Corp., MacNeil Curry. The market was betting that USD would gain before this particular movement. Only on last week, the futures traders increased their bets that Yen will weaken against USD the most in last 6 years, however, the actual results are definitely different.
The benchmark stock gauge of UK, the FTSE 100 Index extended a 6-week low as the UK stocks declined on today. The President of the European Central Bank cooled speculation of any further stimulus measurements and it affected UK stocks adversely. The FTSE 100 went down by 1.3% and the same is currently at 6,336.11. On today, both the Bank of England and the European Central Bank left the respective benchmark interest rates unchanged at the record low levels. When it comes to the broader FTSE All Share Index, the same went down by 1.2% on today. On the other hand, the benchmark stock gauge of Ireland, ISEQ Index experienced a retreat of 1.3%.
Columbian Bond Yields Rise to the Highest Figure in Last 7 Months, Currency Experiences Decline06/07/13
The bond yields of Columbia rose to the highest level since November on today. The speculations are rising that the Federal Reserve will be tapering the stimulus and apart from that, the inflation in this Latin American country has been faster than what was forecasted. Both of these factors combined are squelching demand for the Columbian securities. The yield on the benchmark Columbian Peso bonds which are due on 2024 increased by 11 basis points (If converted to percentage point, the same will be of 0.11 percentage point), thereby taking the same to 6.13%. This is the highest value for the bond yields since 22nd November. The price however has experienced a decline of 1.13 Centavos and the same is currently at 130.560 Centavos for each Columbian Peso. In the last month, the yields, incidentally, have jumped up by 1.01 percentage point.
Canadian stocks went down for the 5th straight day, thereby erasing the gains that it experienced in the earlier part of this year. The Canadian Western Bank reported lower profit than what was estimated and there are signs of weakening growth of China. That’s not all; Germany spurred losses in the commodity producers as well.
The benchmark stock gauge Standard & Poor’s/TSX Composite Index went down by 52.80 points and the same is currently at 12,390.85. The index has lost 0.3% in 2013; thereby it has erased the gains experienced earlier. The overall trading volume on today was 19% less in comparison with that of the last 30 days.
The biggest publicly traded hedge fund manager in the world, Man Group Plc. experienced the biggest retreat in last 2 years after analysts of UBS AG cut ratings of the same. While cutting down the rating, the analysts of UBS cited the decline in the performance of the $16.3 billion AHL fund.
According to the note published by the analyst of UBS, Arnaud Giblat, Man Group is highly dependent on the AHL fund. The fund had a 12% decline from the recent peak it experienced and there was a significant cut in its earnings as well. Apart from that, it signaled reduction of profitability of flows turning. The rating on the stock of Man Group was cut by Giblat to neutral from its earlier value of buy.