Industry news
Date: Aug 16, 2013
August 16, 2013: TOM Trades Ten Millionth Option Contract And Captures More Than 25% Market Share; Fat Finger Trade Behind Shanghai Surge?; The gray art of not quite insider trading
Dutch trading platform The Order Machine posts milestones in volume and market share. Shanghai’s stock market makes a big mountain on the chart, and some are guessing it was a fat finger error, absent a better explanation from local regulators beyond, “What problem?” Investment participants who could once dance near the edge of insider trading without much fear of getting caught, find that the edge has become a much harder-to-define zone with much greater peril.
First Read
The Top Ten Movies About the Markets
by Jay Sorkin
(In honor of our interview with former NYBOT executive Joe O’Neill about the movie Trading Places, John Lothian asked industry consultant and movie reviewer Jay Sorkin to come up with his top ten movies about the markets. Here it is.)
A funny thing happened on my way to developing a list of the top ten movies about the markets. There aren’t ten good ones, especially as we chose not to consider documentaries. To find ten good movies, you need to broaden your scope to include those about business in general. But about the markets per se, there are only a few. Beyond those, you’re just looking at the prettier horses in the glue factory.
Then there is the problem of what exactly do we mean by “the markets?” Do we mean the stock market? Commodities markets? Domestic or foreign markets? Search through lists of the best business movies and the same names will come up, some of which will leave you scratching your head over how they could be considered to be about business: The King’s Speech and Twelve Angry Men, just to name two.
In all fairness, times have been hard and a lot of places have downsized. Add to that the current deflationary cycle we’re in and we can justify our list of less than ten.
Creating a top ten list of any kind is always tricky and sure to create some controversy if not outright argument. So, let’s look at these few that make the cut, and brace ourselves for the “how could you not include this one” comments.
If by “the market” you mean the stock market, then there are two movies for your consideration:
And… to see the list, head to the JLN blog at jlne.ws/19mHi9I
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‘Hindenburg Omen’ portends fiery crash
Tracy Alloway and Arash Massoudi in New York – FT.com
Is it a bird, is it a plane? No, it’s a German zeppelin. Stock traders have been set aflutter by the appearance of the “Hindenburg Omen”, a type of technical indicator named after the 1937 airship disaster.
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***JM: “Technical indicator” n. 1. A means of analyzing the price data in a financial market, that is extremely effective at predicting future market behavior unless it isn’t.
***** The Hindenberg Omen would be a better name of a movie than a technical indicator.
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LSE extends European ETF market share lead over Deutsche Börse
ETF Strategy
The London Stock Exchange is the “pre-eminent European venue for ETP listings and trading”, according to Gillian Walmsley, the head of exchange-traded products at the London-based exchange. And while this might sound like marketing bluster, independent data from Deutsche Bank wholly supports Walmsley’s claim.
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***** The LSE is the biggest of the big, the whopperist of the whoppers and the most eminent of all eminents.
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Chicago Board of Trade to quote wheat futures in Australian dollars
ABC Rural (Australian Broadcasting Corporation)
For the first time the Chicago Board of Trade will post daily wheat futures in Australian dollars per tonne as well as the current US cents a bushel price.
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***** You have to quote it in an Aussie accent too.
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Africa’s Agriculture Commodity Exchanges Take Root
Eleanor Whitehead – FT / Skoll World Forum via Forbes
A handful of African countries are setting up commodity exchanges in an effort to develop agricultural markets and improve food security. Are they the key to Africa’s agricultural growth?
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***** Africa is the next big thing.
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Richard Bornhoft, founder of the Bornhoft Group, discusses what he looks for in CTAs
MarketsWiki.tv
Richard Bornhoft is founder, president and CIO at Bornhoft Group and has specialized in the creation and oversight of CTA-managed futures portfolios for more than 30 years. He sat down with JLN editor-in-chief Jim Kharouf to talk about the managed futures space, the opportunities in the space and the challenges that are still facing the industry.
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Chicago Stock Exchange Agrees to Pay $300,000 for Trade Errors
Dave Michaels – Bloomberg
Chicago Stock Exchange Inc. agreed to pay $300,000 to settle U.S. regulatory claims that it failed to comply with rules designed to ensure all investors get the best prices.
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***** A very Chicago Stock Exchange-sized fine.
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Shanghai exchange, nothing to see here
Kate Mackenzie | FT Alphaville
Today was just an ordinary day: As FastFT noted, Shanghai-listed shares jumped 6 per cent in six minutes in morning trade, despite opening the day lower. The exchange’s official Sina Weibo microblog posted shortly afterwards that operations were running normally.
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***** Someone was Shanghaied, not doubt.
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The Future of Investment Banking: The Information Advantage
Rebecca Healey :: TabbFORUM
Capital markets are on the precipice of yet further change. From equities to complex derivatives, research ideas to post-trade services, we are reaching an inflection point of Darwinian proportions in the maturation cycle of financial services.
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***** There is no advantage in information unless you know what to do with it.
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Metals warehouse mess: a guide for the perplexed
Kevin Allison – Reuters
Drab sheds full of aluminium ingots aren’t a natural place to go looking for a financial conspiracy. But industrial users say the warehouses – or more exactly the way they are used by big traders which own them – have artificially inflated prices for the metal. A flurry of class action lawsuits have accused Goldman Sachs, JPMorgan, and Glencore of manipulating prices by encouraging big stockpiles and long wait times.
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***** Sometimes what looks like something really isn’t. And many times, there is always something there if you look deep enough.
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Vermont Sisters With Roots in News Embrace Small-Town Papers
CHRISTINE HAUGHNEY – NYTimes.com
King Lear’s three daughters had their lands and loyalties to fight over. Jane Austen’s Dashwood sisters had the prospect of marriage to occupy them, and Anton Chekhov’s three sisters had local military officers to brighten their days. None of them ever contemplated a future as risky as newspapers.
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Lead Stories
TOM Trades Ten Millionth Option Contract And Captures More Than 25% Market Share
TOM MTF has today traded the ten millionth option contract on its platform. In 1.5 years TOM was able to generate a market share of over 25% of the total Dutch options market. Since TOM obtained a license to trade options in 2011 volumes continued to grow to over 1.2 million option contracts last month.
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Fat Finger Trade Behind Shanghai Surge?
Isabella Steger and Mia Lamar – MoneyBeat – WSJ
Was a so-called fat-finger error at a Chinese brokerage the cause of a mysterious spike in Shanghai’s stock market on Friday?
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The gray art of not quite insider trading
CNN Money
“We used to be able to talk to investigators on drug trials,” says Source A, a hedge fund portfolio manager. Like all the analysts, research directors, and portfolio managers who cooperated for this article, Source A requested anonymity.
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India Seeks to Overhaul a Corporate World Rife With Fraud
JEN SWANSON – NYTimes.com
In the wake of global scandals involving kickbacks and accounting fraud, one unlikely country, India, is aiming to set a tone in overhauling its corporate oversight laws. This month, the nation’s upper house of Parliament passed the Companies Bill, 2012, sweeping legislation meant to overhaul auditing, impose stiffer penalties for fraud and create more government oversight of businesses.
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National Spot Exchange may face tax, laundering probes
The Times of India
The government is likely to order a multi-agency probe into the National Spot Exchange (NSEL) fiasco, besides getting central agencies such as Food Corporation of India and the Central Warehousing Corporation to take stock of the commodities lying in warehouses across the country.
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NSEL crisis: ‘Time for Sebi to take leadership’
Business Standard
Governance and regulatory experts say the National Spot Exchange (NSEL) crisis has reached a stage where a strong regulator such as the Securities and exchange board of India (Sebi) have to take leadership and prevent the situation from worsening further.
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NSEL fiasco: Investors should sue brokers first for mis-selling
Moneylife
Brokers who have an inglorious record of dealing with stock investors are demanding money from, and action against, NSEL. However, it is not only the Exchange that is to blame, but brokers who have mis-sold the NSEL product to investors. They too are liable for legal action by their clients
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Machine-Readable Data (MRD) Estimated Generating $75 Million in 2013 Revenue, Says TABB
High-speed, black-box use of economic indicators, corporate news and other machine-readable data (MRD) for trading have captured headlines recently but the bigger story involves tracking of sentiment and other longer-term applications of formerly unstructured data. According to TABB Group in new research, “Headlines aside, this is only the beginning of a new journey in capital markets.”
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Regulatory
Michael Piwowar Sworn in as SEC Commissioner
The Securities and Exchange Commission announced that Michael S. Piwowar was sworn into office today as an SEC Commissioner by SEC Los Angeles Regional Office Director Michele Wein Layne. He replaces former Commissioner Troy Paredes who stepped down earlier this month.
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Eun Ah Choi Named Managing Executive of the SEC’s Division of Investment Management
The Securities and Exchange Commission today announced that Eun Ah Choi has been named Managing Executive of the Division of Investment Management. She will assume her new role on August 19.
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NAIC calls for coordination of US and international systemic risk regimes
Michael Faulkner – Risk.net
Global and US initiatives to supervise systemically important insurance companies need to be coordinated to ensure that international rules are enforceable in the US, according to officials at the National Association of Insurance Commissioners.
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Direct Edge Submits Its Response To The CVM’s Request For Consultation On The Effective Introduction Of Exchange Competition In Brazil
Direct Edge, one of the world’s leading equities exchange operators, today submitted its response to Brazil’s Comissão de Valores Mobiliários’s (CVM) request for comments, suggestions and opinions regarding the introduction of competition between trading platforms in Brazil. In support of the CVM’s proposal, Direct Edge offers evidence, information and studies the CVM may wish to consider in evaluating appropriate conceptual approaches.
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Canadian Securities Regulators Review Canada’s Proxy Voting Infrastructure For Shareholders
To facilitate discussions among market participants regarding the integrity and reliability of Canada’s proxy voting infrastructure, the Canadian Securities Administrators (CSA) today published for comment, Consultation Paper 54-401 Review of the Proxy Voting Infrastructure.
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Exchanges & Trading Facilities
Derivatives Exchange Startup GMEX Readies Feeds
Faye Kilburn – WatersTechnology
Global Markets Exchange Group, the derivatives exchange operator and consultancy established by former Chi-X Europe co-founder and chief operating officer Hirander Misra and industry veteran VJ Angelo, is finalizing details of the market data feeds it plans to launch in the fourth quarter of this year to accompany its new futures, fixed income and currency trading platforms.
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Swiss bourse renews push for HFT flow
Anish Puaar – Financial News
Six Swiss Exchange is preparing to launch a new service that allows non-members to trade Swiss equities, in the latest example of the bourse looking to attract greater flow from high-frequency trading firms.
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Presentation By HKEx Chief Executive Charles Li And Group Chief Financial Officer Paul Kennedy On 2013 Interim Results Announcement
HKEx Condensed Consolidated Financial Statements For The Six Months Ended 30 June 2013 (Unaudited)
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CBOE, CFE, C2 and CBSX Trading Schedule for the Labor Day Holiday
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Further Follow-Up to Trading Permit Holder and Trading Privilege Holder Educational Session on CFE Exchange of Contract for Related Position Transactions
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NYSE Member Firms Report Second-Quarter 2013 Results
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Consultation On Governance-Related Changes To ASX Listings Rules And Guidance Note 9
ASX has today issued a consultation paper seeking comments on a number of proposed governance-related amendments to its Listing Rules and proposed changes to Guidance Note 9 Disclosure of Corporate Governance Practices.
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NZX Auckland Relocating To Zurich House
NZX has signed a lease with Precinct Properties for NZX’s new Auckland office space in Zurich House, Queen Street, in the heart of Auckland’s Central Business District.
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NZX: Gender Diversity 2nd Quarter Statistic
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Vienna Stock Exchange Monthly Statistics: Derivative Market – July 2013
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Green Mountain Coffee Roasters, Inc. To Join The NASDAQ-100 Index Beginning August 22, 2013
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Program Trading Averaged 23.6 Percent Of NYSE Volume During Aug. 5-9
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Hedge Funds & Managed Futures
Hedge Fund Billionaire John Paulson Lost $736M In Second Quarter Gold Bloodbath
Forbes
The second quarter was by no means a time to own gold, and billionaire hedge fund manager John Paulson knows it. While he cut his major position in the yellow metal by half, selling nearly 12 million shares in the largest gold ETF worth $1.38 billion at the end of the quarter, he lost at least $736 million in his cumulative positions through the three months ending with the month of June.
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John Paulson’s faith in gold unshaken despite ETF sale
Jack Farchy in London – FT.com
The hedge fund run by John Paulson, one of the world’s highest-profile gold bulls, has sold more than half its shares in the largest exchange traded fund backed by the metal, according to a regulatory filing.
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Highest-Earning Hedge Fund Managers
Forbes
Rank: 1 Firm: Appaloosa Management Earnings: $2.2 billion Tepper, 55, continues to make a good case that he is one of the great hedge fund investors of all time. While most hedge funds underperformed the U.S. stock market in 2012, Tepper trounced it. His flagship hedge fund successfully bet on stocks and other securities at key moments in 2012, posting a net return of nearly 30%. His $15 billion …
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China Plays Contrarian Card in Bond Market
Min Zeng – MoneyBeat – WSJ
China moved against the tide in June in the $11.5 trillion Treasury bond market. The world’s largest foreign owner of U.S. Treasury debt boosted its stake of notes and bonds by $12.2 billion in June, according to Ian Lyngen, senior government bond strategist at CRT Capital Group LLC, citing the latest capital flows data released Thursday by the Treasury Department.
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SWIFT On Track to Cut Messaging Costs By 50%
Greg MacSweeney – Wall Street & Technology
SWIFT, the global payments provider and messaging standard body, is on track to reach its goal of a 50% payment cost reduction by 2015, reports Chris Church, chief executive Americas and Head of Secirities, SWIFT Americas at a press briefing in New York.
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Erik Penser offers Swedish investors double-digit returns with risk
Eve Berlinska – Risk.net
Erik Penser has issued a five-year, partially protected product linked to a basket of four stocks and backed by Nordea Bank. The product is available in Sweden and pays a minimum of 90% of invested capital in addition to returns proportional to the multiplied increase of the underlying basket. The minimum 90% capital return at maturity will be paid regardless of the performance of the basket.
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Banks & Brokers
BofA Merrill Lynch Bankers Join Nomura Asia Equities Team
Isabella Steger – MoneyBeat – WSJ
Nomura Holdings Inc.8604.TO -0.28% has made a number of hires from Bank of America Merrill Lynch to beef up its Asian equities business
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SNB says UBS can repurchase StabFund within three months
Reuters
The Swiss National Bank (SNB) said on Friday the stabilization fund it set up five years ago to bail out Swiss bank UBS (UBSN.VX) had repaid the loan granted by the SNB, allowing UBS to go ahead with its plan to repurchase the once-toxic assets.
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Ex-RBS cash equities chief returns with buyside role
Matt Turner – Financial News
The former global head of cash equities at Royal Bank of Scotland has joined ACPI Investment Managers, becoming the latest senior figure from the now defunct equities business to return to the financial industry.
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Clearing & Settlement
CCPs in Japan, Mexico, Singapore and US to jump through Esma hoops
Lukas Becker – Risk.net
Eleven central counterparties (CCPs) have told Risk they will apply to the European Securities and Markets Authority (Esma) by September 15 to be recognised as a third-country CCP – a vital step for their European members, with implications for the banks’ ability to continue using the CCP and also the resulting capital requirements.
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CMEGroup – Reminder: CME Portal Changes Effective August 17, 2013
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CMEGroup – Name Amendment and Aggregation for Power Contracts
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Indexes & Products
ETP outflows weigh on gold demand
Sarah Krouse – Financial News
Outflows from gold exchange-traded products in the second quarter of the year led to a record sell-off of the underlying gold holdings, as investors became more confident about the US economic recovery, according to the World Gold Council.
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FTSE-Linked ETFs Hit 100 Landmark In North America
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Technology
Fintech Pioneer Creates Accelerator Program
Jake Thomases – WatersTechnology
Jim McKelvey, best known as a cofounder of mobile card reader company Square, is helping others follow in his footsteps. He and two others have created SixThirty, a financial services tech accelerator program that will give $800,000 a year to eight startups, as well as enroll them in a four-month accelerator program.
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Eze Software expands mobile platform with RealTick UltraLitee
Eze Software Group has released RealTick UltraLite, a mobile trading platform for Apple, Android and web browsers that extends the fundamental trading, market data and risk management capabilities of the RealTick EMS beyond the traditional desktop system.
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Enforcement
SEC Obtains Final Judgment Against Conrad M. Black
The Securities and Exchange Commission announced that on August 13, 2013, the Honorable William T. Hart of the United States District Court for the Northern District of Illinois entered a final judgment against Conrad M. Black, the former Chief Executive Officer and Chairman of Hollinger International, Inc. (“Hollinger International”).
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SEC Announces Charges Against Florida-Based Penny Stock Schemes
The Securities and Exchange Commission today announced the latest charges in a joint law enforcement crackdown on penny stock schemes with ties to the Florida region.
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FCA bans and fines two for failing to monitor promotion of Unregulated Collective Investment Schemes
The Financial Conduct Authority (FCA) has imposed fines of £28,000 each on two individuals and banned them from performing accountable significant influence functions at any FCA-regulated firm.
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Illegal practice and illegal distributions – AMF Seeking Over $1 Million in Fines Against Five Individuals
The Autorité des marchés financiers (“AMF”) has launched a legal proceeding against five individuals and filed 101 charges against them. It is seeking fines totalling $992,000.
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New Zealand’s Financial Markets Authority: Dominion Finance Directors Sentenced
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[ASIC] Former analyst convicted of insider trading
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ASIC permanently bans Queensland financial adviser
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Environmental & Energy
New Record on the EEX Derivatives Market for Emission Allowances
Yesterday, on 14 August 2013, EEX achieved a new volume record on the Derivatives Market for Emissions. The volume amounted to 6.2 Mio EUAs. The last volume record totaled 2.6 Mio EUAs and was reached in 2010
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Asia-Pacific
ASEAN Exchanges CEOs Meet To Discuss Strategies For 2014
Discussions held at 19th ASEAN Exchanges CEOs meeting today centered on key strategies to further promote ASEAN as an asset class particularly through the marketing of ASEAN investment opportunities. Since the launch of ASEAN Exchanges website in Bali in April 2011, a number of key initiatives have been rolled out with the aim to bring more opportunities to more investors across ASEAN.
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A new development in the China bad bank story
Kate Mackenzie | FT Alphaville
Earlier this week we wrote about how China is using its fiscal reserves to help retire some of the bad debts shelved off to the big “asset management companies” back in 1999 — with a big hat-tip to Chen Long, of INET’s China Economics Seminar. Some more interesting news has been revealed by our colleague Paul J Davies in Hong Kong, who has a great story — two stories, in fact — about what Cinda and fellow AMC, Huarong, are doing.
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China’s Tax Overhaul Pinches Small Businesses
WSJ.com
An overhaul to China’s tax system that is intended to ease the financial burden on small companies is actually hurting some of them—just as they are being hit by a sluggish economy.
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SGX welcomes Soilbuild Business Space REIT to Mainboard
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Frontier Markets
Buying Dips? Stick To Hummus, Not Emerging Markets
Katie Martin – MoneyBeat – WSJ
Just when you thought it was safe to go back in the water… Emerging markets got walloped when the Fed started hinting at pulling back on stimulus earlier this year.
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Investec Shuts Australian Resources Arm, Lays Off Staff
Gillian Tan – MoneyBeat – WSJ
South African bank Investec Ltd. has closed its Australian resources arm, resulting in around 20 layoffs, people familiar with the matter said Friday, as the country’s mining investment boom continues to lose steam.
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Everest Capital bets big on frontier markets
Margie Lindsay – Risk.net
Frontier markets are where the real action is, according to Marko Dimitrijevic, founder and chief investment officer of Everest Capital.
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RBI blocks gold on lease for jewellers
Business Standard
Wednesday night’s Reserve Bank of India clarificatory circular on gold import norms has again hurt gold jewellery companies, as they will have to make full payment on buying for jewellery making.
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African Securities Exchanges Association – August Edition Of The ASEA Newsletter
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Malawi Stock Exchange Weekly Trading Report – 16th August, 2013
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MCX Weekly Market Report August 08, 2013 – August 14, 2013
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