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Hong Kong and Singapore as Asia´s Financial Gateways

Celent predicts a paradigm shift around access to Asia. There is likely to be two gateways, providing access to different Asian regions, with Singapore emerging as the preferred gateway to Southeast Asia and Hong Kong becoming the gateway to Mainland China.

In a new report, the third of a series looking at the financial markets in Hong Kong and Singapore, Celent aims to provide a comparative analysis of Asia’s two main financial gateways, focusing particularly on derivatives. Asia’s Tale of Two Cities: Hong Kong and Singapore as Financial Gateways begins by noting that Western governments have emerged from the financial crisis in a weakened state, with economic prosperity blunted by high unemployment and an emerging debt crisis. The question is no longer when or if we need to enter the Asian markets, but how to best think about the issues of accessibility, entering the market, developing products, and forming strategic partnerships. The fundamental question that needs to be asked now is: “Where do we go from here, Hong Kong or Singapore?”

Although the HKEx and SGX may not be the biggest derivatives players in Asia-Pacific, they tend to be the most accessible for segments located outside the region. Taking advantage of their geographic location, political climate, and internal strengths, these city-states are poised to become hubs for trading of Asia’s regional products while also being easily accessed by US traders via retail trading accounts.

There are several factors that are likely to continue to drive growth in the derivatives market. These include:

• A relatively muted response to regulating over-the-counter markets as compared with the US and Europe. The type of products that led to the financial crisis in the West are not widely established throughout Asia, and as a result, the regulatory structure governing OTC markets are unlikely to change significantly.

• Continued desire to manage foreign exchange risk.

• Continued enhancement of processes of structuring derivatives risk management policies.

“We are seeing changes in relation to access to Asia. Hong Kong is no longer destined to become the sole hub to Southeast Asia,” says Alexander Camargo, Analyst and coauthor of the report. “Inherent strengths in Singapore are making it an extremely attractive financial gateway. Both English and Chinese are frequently spoken in Singapore, making it an ideal cross-roads for East and West. Furthermore, Singapore is viewed by most Asian countries as a neutral party and less politically tied to China than Hong Kong. This is likely to entice Indian investors and even Japanese and Korean investors to Singapore’s shores.”

However, this does not mean that Hong Kong will recede as a major financial center in Asia. Hong Kong residents are often fluent in both English and Chinese; contract laws are strong; and there remain strong historical ties to the West. As a Special Administrative Region of the People’s Republic of China, Hong Kong has stronger political ties to China. Hong Kong has also been busy integrating its financial markets with mainland China. These factors make it likely that Hong Kong will become a key gateway to mainland China.

This report begins with an overview of each country’s financial infrastructure and regulations, providing an introduction to the countries’ various demand market segments, followed by a look at the main exchanges, HKEx and SGX. A summary of HKEx and SGX focuses on derivatives trading, providing a brief description of products offered, market access, alliances, and clearing on the exchanges. The report then looks at each country’s fixed income markets, OTC derivatives, and FX markets. It concludes with a discussion of market supremacy and also the countries’ ongoing efforts to improve market structure and access.

Source: Bobsguide, 10.02.2012

Filed under: Asia, China, Exchanges, Hong Kong, Indonesia, Japan, Korea, Malaysia, News, Singapore, Thailand, Vietnam, , , , , , , , , , , , , ,

Singapore: SGX introduces Investor Education Portal

Singapore Exchange (SGX) is introducing the ‘My Gateway’ portal to meet increasing investor interest for more investment knowledge and education.

Located at, the portal provides one-stop shop access to market updates, video clips on investment products, information on seminars or courses which investors can sign up for, and tools like investment or profit and loss calculators.

The portal launch comes amid increasing interest among individuals in investment information and education. In 2011, over 7,800 participants attended the more than 150 investor education activities organised by SGX Academy. In the second half of 2011, participation at investment seminars and professional courses grew 31% and 83% respectively from the first half of the year.

“We recognize that investors are hungry for information on investments and are looking for flexibility in learning. We therefore want to encourage investors to take advantage of the newly launched portal on SGX website to learn about investing at their own time and pace,” said Mr Chew Sutat, SGX Executive Vice President, who oversees the Academy.

“The high participation rate in these education activities reflects a strong desire by investors to be proactive in their investments. We believe the new portal will complement this desire and cater to the continuing education needs of investors,” said Mr Chew.

“Investors should take responsibility of their investments. They should commit to equip themselves with the right knowledge to know – firstly, their risk appetites; secondly, the available products and finally, what investment strategies to adopt. I am encouraged that SGX has launched this self-help portal for investors,” said Mr David Gerald, President of Securities Investors Association (Singapore).

More information on SGX Academy seminars and courses can be found at

Source: MondoVisione, 10.01.2012

Filed under: Asia, Exchanges, Singapore, , , , , , ,

China: BlackRock – Can China´s Saver save the world?

  • China has experienced rapid credit-led growth in recent years. This growth has been an important contributor to global economic recovery.
  •  Many commentators anticipate that the rapid nature of Chinese credit growth, allied to a capital allocation process led by political direction and undertaken at highly subsidized rates of interest, will inevitably end in a credit bust.
  •  Further, these critics point to the opaque nature of China’s banking system, rapidly growing off-balance-sheet exposures and an overblown real estate sector as evidence of a fragile Sino financial system overdue for a crisis that will, in turn, cripple world growth and extended financial systems elsewhere.
  •  While we are sympathetic to much of the logic behind these fears, we believe that these concerns float on some flimsy analysis. As one example, we cite the mismatch between the oft-cited story of 65 million empty apartments nationwide in China and the inconvenient truth that market estimates indicate that only 60 million apartments have been completed in the last decade.
  •  More importantly, we believe that the “panda bears” overlook the fact that much of the expansion in China’s financial balance sheet has been quasi-fiscal lending and that such lending is backed and guaranteed by a system that is experiencing rapid growth in income and starting from a low level of overall debt.
  • Domestic savings rates are high — indeed, excessive at over 50% of GDP. While external capital has funded much of the rise in banking system liabilities over the last 12 months, China also runs a current account surplus, is largely domestically funded and lacks many of the vulnerabilities that undid Western credit systems in 2007–08.
  •  We agree that bad debt levels in China will rise — in fact, in a worst-case scenario, there could be as much as 7 trillion RMB of bad loans in the system at present, according to our estimates. But bank balance sheets are strong, profit growth is subsidized by fixed lending and deposit rates, and economic growth itself should be strong enough to absorb most reasonable estimates of losses without serious challenges to financial system stability.
  •  Bank deposits are the main source of domestic savings. We are confident that Beijing will seek to avoid social discontent arising from any threat to the security of deposits with vigor and resources that would make Western bailouts appear puny by comparison. Our concern is that savings growth rates will slow over the next few years and that deposit growth will be much more pedestrian than over the last decade. The recent consolidation of data on funding growth under the banner of Total Social Financing (TSF) presents a clearer picture of the efficiency of deposit mobilization in funding growth. Even allowing for shortcomings in methodology, the incremental growth per unit of financing — Financial Incremental Capital Output Ratio, or FICOR, as we term it — has deteriorated over the last decade.
  •  As a consequence of slower savings rates and reduced FICOR, we expect a slowdown in trend growth over the next few years to 7-8% rather than the 8-10% level of recent times. State-led capital allocation and rate fixing was a feature of both Korea and Japan in the past. In both cases, financial crisis arising from this policy mix was triggered by financial reform. We believe the same holds for China, but will take a number of years to unfold.

Read full report Can China´s Savers save the world

Source: BlackRock / Carral Sierra, 12.07.2011

Filed under: China, Market Data, Risk Management, , , , , , , , , , , , , , ,

China: BlackRock – Puede el ahorro de China salvar al mundo?

China ha experimentado en años recientes un rápido crecimiento impulsado por el crédito, el cual ha sido un factor importante en la recuperación económica global. Sin embargo:

  • Muchos analistas anticipan que la rápida condición del crecimiento chino gracias al crédito, junto con un proceso de distribución de capital dirigido por sus políticos y emprendido a tasas de interés altamente subsidiadas, inevitablemente derivará en una caída crediticia.
  • Estos comentarios señalan la naturaleza opaca del sistema bancario de China, una rápida exposición de las hojas de balance y un sector inmobiliario inflado, como la evidencia de un sistema financiero frágil susceptible a una crisis que, a su vez, afectará el crecimiento mundial y a otros sistemas financieros.

    Opiniones del BlackRock Investment Institute: ¿Puede el Ahorro de China Salvar al Mundo?

  • En la nueva publicación del BlackRock Investment Institute, “¿Puede el ahorro de China salvar al mundo? (Can China Savers Save the World?)”, los autores analizan las razones que están en la base de estos temores. Al respecto, afirman que esta inquietud podría estar basada en un análisis débil.
  • Asimismo, creen que los llamados “pandas” no consideran el hecho de que gran parte de la expansión de la balanza financiera de China se ha basado en préstamos casi fiscales y que tienen el respaldo y garantía de un sistema que experimenta un rápido crecimiento de su ingreso y cuenta con un nivel bajo de deuda.
  • En consecuencia, los autores sugieren que China no sufrirá un colapso financiero, sino a lo sumo un descenso en su potencial y en su tasa de crecimiento.

Adjunto te hacemos llegar el documento completo en inglés en formato PDF. En caso de cualquier duda adicional, quedamos a tu disposición.

Para leer el reporte completo click aqui.  Can China´s Savers save the world

Source: Black Rock / Carral Sierra, 12.07.2011

Filed under: China, News, Risk Management, , , , , , , , , , , , , ,

The Currency Investor Magazin Autum 2010

The Autumn 2010 edition of Currency Investor magazine is now available. You can view a complimentary digital version at this link:

Currency Investor Autumn 2010

This exciting new quarterly magazine is designed to help global Retail and Institutional investors discover ways to leverage currencies  as a tactical asset class for their risk management and direct investment and trading requirements.

The next edition is planned for publication in Q1 2011.

Source: Currency Investor 23.11.2010

Filed under: Asia, Latin America, News, Services, , , , , , , , ,

Shenzhen Financial Services and Fund Management Study and Network Tour 3-4 December 2010

Gain deeper knowledge of Shenzhen, China Financial Industry

The study tour is coordinated with the local Shenzhen government support to view the latest mega-development in Shenzhen that would be of interest to business people and visitors alike. Participants will get an orientation of Shenzhen and gain a clear perspective of the importance of Shenzhen in the master plan of the centrally planned economy of China.

Benefits of the Study Tour:

  • Gain first-hand exposure to the current growth climate in Shenzhen
  • Gain an insight into the vibrant economic sectors in Shenzhen
  • Explore ways to capitalize on various initiatives and activities undertaken within Shenzhen
  • Meet and exchange views with the industry’s experts on various challenges and prospects in investing in Shenzhen
  • Create networking and business match-making opportunities among senior executives and those interested in business and investment.
picture Shenzhen today is the leading manufacturing hub of China and the master plan from the Central government which was announced recently is to keep Shenzhen growing for the next 30 years with the building of the “Manhattan” of China at Qianhai, Shenzhen. 

Does this news catch your eye?

Sept. 3 (Bloomberg) — The southern Chinese city of Shenzhen plans to invest 40 billion yuan ($5.88 billion) in its Qianhai area to make it the “Manhattan” of the Pearl River Delta, the Securities Times reported today, citing the local government. The investment in the 15 square kilometer area of the city will be made over the next three years, the Shenzhen-based newspaper reported. The government is looking at the possibility of offering a low tax regime similar to Hong Kong’s and of allowing free convertibility of the yuan in the area, according to the report.

ATIC@Shenzhen 2010 will bring together a group of international participants consisting of fund managers, private equity investors, high-net-worth investors, directors of securities brokerage firms as well as senior executives of global stock exchanges to Shenzhen for an in-depth look at the Shenzhen capital market, as well as to network with Shenzhen government officials, fund managers, securities brokerage firms and listed company CEO’s and companies looking to expand overseas This platform provides a timely and strategic platform to convene investors to discuss strategies, leverage opportunities and explore potential cross-borders business partnerships. Participants will be able to network, mingle and make fruitful contacts to improve their business bottomless.


This is a strategic, informative and concise program designed for Investors, Business Owners, Senior representatives or professionals with Financial Services Organizations such as Fund Management Houses, Securities Brokerage Firms, Securities Exchanges and other finance-related institutions.

Don’t get left behind. Come join us and take this incredible opportunity and advantage to reach your top prospects and grow your business.

Shenzhen Study Tour & Investment Summit Package Price *Early Bird Individual Group (Min 2 persons)
USD750 USD1,000 USD800

*Limited period only.

Package price includes of one study tour luncheon and one exclusive networking and dinner on 3 December 2010. Participation is on a first-come-first-serve basis and interested delegates are encouraged to submit an early registration in order to avoid disappointment.

Register Now!

For more information, please visit or contact us at:

Filed under: China, Events, Exchanges, News, , , , , , , , , , , ,

Online Stock Trading and Fraud have come a longway in the past 10 years

Online trading has definitely come a long way in the past decade.  Innovation and technology now allow you to follow and trade stocks from your phone or laptop, not to mention accessing advice and chart information at the same time.  However, our new online powers have lulled us into a false sense of security in today’s high paced electronic world.  The criminal element in our society is counting on that fact to ply their own online trade activity, that of deceiving you out of your hard earned cash.

Yes, the unscrupulous few among us had to spoil the fun for all investors.  Does $400 billion a year in securities related fraud losses get your attention?  The FBI believes it should, as does the SEC and CFTC.  The Internet has been the great enabler of our times, providing access to mountains of information and a dizzying array of applications to bring convenience to our hectic lives.  It also has brought anonymity, the cloak that hides the invisible swindler that may have tapped you as his next target of opportunity.

Does this mean that you should forgo buying an iPad and take a course in risk management instead?  Of course not!  Fraud mitigation starts and stops with you and your ability to be skeptical and use common sense.  Here are a few suggestions to help you avoid the most common pitfalls for the average investor:

Business Partners: Fraudulent brokers have stolen millions from investors.  Do your due diligence.  There are many review services for checking banks and choosing the best stockbroker or best forex broker.  Make sure your bank has a strong balance sheet, and that your broker is above board and onshore.  Consult your banker or broker for investment advice on every investment deal.

Warning Signs: Some signs, though obvious, need repeating.  Here are a few tell-tell signs:

  • Unsolicited offers should be questioned or avoided;
  • If it sounds too good to be true, it most likely is;
  • If there is little or no risk, then it isn’t for real;
  • If there is a sense of urgency, walk away;
  • Swindlers talk fast so you won’t ask questions;
  • If written explanations are not forthcoming, stop considering it;
  • If it sounds too complicated, don’t waste your time;
  • Con Artists always dress well to impress and deceive;
  • Ignore referrals from friends, until after doing your due diligence;
  • Be very skeptical when asked to send a check or wire funds.

Actual Scams Often Repeated:

The Ponzi Scheme: The swindler pays high returns from new client deposits to gain your trust and new referrals.  He takes what is left.  Bernie Madoff and Kenneth Starr are prime examples of the craft;

The “Pump-and-Dump”:  Mass communication of rumors is used to pump up a stock’s value.  The swindler unloads his shares at a huge profit only to leave unsuspecting Buyers holding the bag after the price plummets;

The “Tipster”:  The Tipster calls 100 people, passing along a “tip” to gain confidence.  He tells half that the stock will rise, and the other half that it will fall.  The next day, he now has 50 “marks” that believe.  He may continue his confidence game until he finally asks you for money.  Be sure to walk the other way.

Investment fraud generally happens to those people who never expect it or are easily tempted by greed.  Protect yourself by heeding these warning signs and being aware of the most typical scams that con artists love to use.

Source: FOREXFraud, 13.08.2010

Filed under: Banking, News, Risk Management, Wealth Management, , , , , , , , , , , ,

Mexico to Launch FIBRAS Real Estate-Linked Securities, BMV CEO Tellez

Mexican real estate-linked securities known as Fibras will begin trading soon and represent “an enormous opportunity,” said Luis Tellez, chief executive officer of Bolsa Mexicana de Valores SAB, Mexico’s stock exchange operator.

The funds will be ready after Mexico’s Finance Ministry publishes adjustments to the rules governing the securities in the coming days, Tellez said today during a conference for real estate companies in Mexico City.

Tellez said Mexican Fibras are similar to real estate investment trusts in the U.S. and “fiscal matters” have delayed their entry in the Mexican market.

“This is a topic that’s been in discussions for a long time in Mexico, but I think we’re very close to seeing these instruments come out,” Tellez said. “There have already been various developers that have come to us in the Bolsa. They’ve shown interest and they are ready with their brokerages and underwriters.”

Tellez said the securities would likely have values of $100 million or more and Mexican banks and “institutional investors” have also shown interest.

Tellez said Mexico’s Bolsa is pushing to attract more companies to list in Mexico through new rules that give greater flexibility on corporate governance and reporting results to smaller firms.

Mexico has seen two initial share offerings in recent months after an 18-month dry spell.

Tellez said the nation’s private pension funds, which administered 1.2 trillion pesos ($93.5 billion) as of April, are stimulating Mexico’s financial markets. He said Mexico still needs to develop small-scale retail investing.

Source: Bloomberg, 02.10.2010  by Jonathan Roeder in Mexico City at

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, , , , , , , , , , ,

ETF: BlackRock ETF Industry Review Latin America Industry Review – Year End 2009

BlackRock has just published its Latin America Industry Review Year End 2009 report. This report is a review of the Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) listed globally.

At the end of 2009 the Latin American ETF industry had 17 locally domiciled ETFs, 211 exchange listings, and assets of US$9.84 Bn from three providers on two exchanges.

There are 169 ETFs cross listed in Mexico at the end of December 2009 from eight providers, while there are 340 ETFs registered for sale in Chile from 10 providers, and 277 ETFs registered for sale in Peru from 12 providers.

Read full report of BlackRock_ETF_Latin_America_Review_2009

Source:MondoVisione, 05.03.2010

Filed under: Argentina, BM&FBOVESPA, BMV - Mexico, Brazil, Central America, Chile, Colombia, Exchanges, Latin America, Mexico, News, Peru, Services, , , , , , , , , , , , , , , , , ,

SGX Launches “Trading Strategies Series” Investor Education Series

Singapore Exchange today launched the “Trading Strategies Series” of articles for investors.

Aimed at making professional trading methods accessible to a wider group of investors, the “Trading Strategies Series” is part of investor education efforts by SGX to broaden the knowledge of market participants and over time, enhance market depth.

The series will kick off with six articles on “pair trading”, a trading strategy that can be used in both bull and bear markets. This strategy starts off with the investor selecting two financial products (for example, two stocks, two futures contracts or two exchange traded funds) with prices that tend to move together or are, in other words, highly correlated. When the price ratio of this pair exceeds their normal range, the investor will buy (or go long) one of the two stocks and sells (or go short) a position in another.

Various financial products such as Extended Settlements Contracts (ES), Exchange Traded Funds (ETF)  and Index Futures contracts will be placed under the spotlight in the “pair trading” articles. Written in simple English, the articles provide a step-by-step guide on the trading method, from the identification of highly correlated pairs to simulations using real-live historical data.

The “Trading Strategies Series” of articles are available to the public at

and, and seminars covering these topics will be conducted in the coming months.

Source: MondoVisione, 23.02.2010

Filed under: Exchanges, News, Singapore, , , , , , ,

SEC begins overhaul of US equity markets with ban on DMA, investigate ATS, Dark Pools and HTF’s

The US Securities and Exchange Commission has proposed new rules prohibiting broker-dealers from providing customers with unfiltered or naked access to an exchange or ATS. The watchdog has also called for comment on issues relating to high-frequency trading, co-locating trading terminals and dark pool trading as it seeks to re-write the rule-book for a new era of computer-driven trading.

Approximately 38% of the daily volume in US equity markets is traded by firms accessing trading venues via sponsored or direct market access arrangements through their broker-dealers.

The SEC’s proposed rule would require brokers to put in place risk management controls that would help prevent erroneous orders, ensure compliance with regulatory requirements, and enforce pre-set credit or capital thresholds.

“Unfiltered access is similar to giving your car keys to a friend who doesn’t have a license and letting him drive unaccompanied,” says SEC chairman Mary Schapiro. “Today’s proposal would require that if a broker-dealer is going to loan his keys, he must not only remain in the car, but he must also see to it that the person driving observes the rules before the car is ever put into drive.”

The rule change comes amid a broad review of rapidly-changing US equity market structures by the SEC which is under pressure from Washington to protect the interests of long-term investors and preserve the market’s primary function as a mechanism for capital formation.

With this in mind, the watchdog has issued a “concept release” seeking public comment on issues relating to high frequency trading, co-location, and dark pool trading.

The release asks a series of specific questions about the current market structure, including:

Market quality metrics

  • What are the best metrics for assessing market quality for long-term investors and have these metrics improved or worsened in recent years?

Fairness of market structure

  • Is the current highly automated, high-speed market structure fundamentally fair for investors?

High frequency trading

  • What types of strategies are used by the proprietary trading firms loosely referred to as high frequency traders, and are these strategies beneficial or harmful for other investors?
  • Is the overall use of any harmful strategies by proprietary firms sufficiently widespread that the Commission should consider a regulatory initiative in this area?


  • Do co-location services (which enable exchange customers to potentially route trades faster by placing their computer servers in close proximity to an exchange’s computer system) give proprietary trading firms an unfair advantage?
  • If so, should the proprietary firms that use these services be subject to any specific trading obligations?

Dark liquidity

  • Has the trading volume of undisplayed trading centers (such as dark pools) reached a sufficiently significant level that it has detracted from the quality of public price discovery?
  • If more individual investor orders were routed to public markets, would it promote quote competition in the public markets, lead to narrower spreads, and ultimately improve order execution quality for individual investors beyond current levels?
  • Are a significant number of individual investor orders executed in dark pools and, if so, what is the execution quality for these orders?

Source: Finextra, 14.10.2010

Filed under: Exchanges, News, Risk Management, Trading Technology, , , , , , , , ,

HKEx Derivatives Market Transaction Survey Finds Strong Local And Overseas Investor Support For The Market

Hong Kong Exchanges and Clearing Limited’s (HKEx) Derivatives Market Transaction Survey 2008/09 (covering the period from July 2008 to June 2009) found that Exchange Participants’ (EPs) principal trading supported half of the trading in HKEx’s derivatives (futures and options) market and the other half had strong support from both local investors (primarily individuals) and overseas investors (primarily institutions).

In 2008/09, the turnover for the futures and options under study was 103 million contracts (referred to as the total market turnover in this survey), compared to 106 million contracts in 2007/08.  Stock options remained the dominant product by turnover (as measured by contract volume), albeit with a drop in their contribution to total market turnover (from 56 per cent in 2007/08 to 49 per cent in 2008/09).

Some key findings of the 2008/09 survey


  • EP principal trading (comprising market maker trading and EP proprietary trading) contributed 53 per cent of total market turnover (down from 61 per cent in 2007/08), 82 per cent of stock options turnover (vs 89 per cent in 2007/08) and 24 per cent of turnover in other futures and options (vs 26 per cent in 2007/08)
  • Local investors contributed 25 per cent of total market turnover (up from 21 per cent in 2007/08), and overseas investors contributed 22 per cent (up from 19 per cent in 2007/08) .
  • Retail investors contributed 23 per cent of total market turnover (up from 19 per cent in 2007/08), mostly from local retail investors (20 per cent).  Institutional investors contributed 24 per cent in 2008/09 (up from 20 per cent in 2007/08), mostly from overseas institutional investors (19 per cent) (see Figures 2 and 3).
  • Major products-  For Hang Seng Index ( HSI ) futures, overseas institutional and local retail investors were the major contributors (34 per cent and 32 per cent respectively of the product’s turnover).
    –  For Mini-HSI futures, the dominant contributors were local retail investors (58 per cent).
    –  For H-shares Index (HHI) futures, overseas investors were the major contributors (54 per cent: 49 per cent from institutions, 5 per cent from individuals).
    –  For HHI options, EP principal trading and overseas institutional investors were the major contributors (34 per cent and 28 per cent respectively).
    –  For stock options and HSI options, EP principal trading was dominant (82 per cent and 51 per cent respectively).
  • UK investors contributed the most to overseas investor trading in 2008/09 (29 per cent, compared to 32 per cent in 2007/08).  US investors came second (19 per cent in 2008/09, down from 26 per cent in 2007/08).  Australian investors ranked third (14 per cent in 2008/09, up from 11 per cent in 2007/08).  Mainland China, European (excluding the UK) and Singaporean investors were also significant contributors (10-11 per cent in 2008/09).
  • Retail online trading contributed 43 per cent of total retail investor trading (39 per cent in 2007/08) and 10 per cent to total market turnover (7 per cent in 2007/08).

The Derivatives Market Transaction Survey has been conducted annually along similar lines since 1994.  The surveys for the latest four years covered HSI futures, HSI options, Mini-HSI futures, HHI futures, HHI options and stock options.  These products together accounted for 98.9 per cent of the total turnover of the HKEx derivatives market during the study period of the 2008/09 survey.  The survey had an overall response rate of 90 per cent and the respondents contributed 99 per cent of the total turnover during the study period.

The full report on the HKEx Derivatives Market Transaction Survey 2008/09 is available on the HKEx website at:

Source:MondoVisione, 28.11.2009

Filed under: Asia, Exchanges, Hong Kong, News, , , , , , , , , , , , ,

BM&FBOVESPA market performance- October 2009

  • Bovespa segment sets records in financial volume daily averages, number of trades, Home Broker, and individual investor accounts.
  • In the BM&F segment, Ibovespa futures market surpasses 2 million contracts traded.

In October 2009, equity markets (Bovespa segment) registered historic marks in financial volume daily averages, which totaled BRL 7.34 billion, with 436,250 trades. The October volume was BRL 154.25 billion, with 9,161,252 trades. Home Broker, a web-based equities trading system, set six trading records, and reached its highest trading volume ever with BRL 60.99 billion and the number of individual investor accounts came to 555,768 for the first time.

Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 34,670,732 contracts and BRL 2.38 trillion in volume in October. That compares to 31,505,077 contracts and a volume of BRL 2.12 trillion in September. The daily average of contracts in the derivatives markets in October was 1,650,987, compared to 1,500,242 in the previous month. BM&F segment highlight for October was the Ibovespa futures market that jumped from 1,443,420 contracts traded in September, to 2,304,720 traded in October.

BOVESPA Segment (Equities)

Volumes and Trades – Equities, Equities Derivatives and Fixed Income
The Bovespa markets reached a total volume of BRL 154.25 billion in 9,161,252 trades in October, with daily averages of BRL 7.34 billion and 436,250 trades, respectively. In September, total volume reached BRL 114.23 billion in 7,143,911 trades. September daily averages reached BRL 5.43 billion and 340,186 trades.

The most traded stocks in September were: Vale PNA, with BRL 15.05 billion; Petrobrás PN, with BRL 12.77 billion; Itauunibanco PN, with BRL 5.26 billion; BMFBovespa ON , with BRL 5.23 billion; and OGX Petróleo ON, with BRL 5.16 billion.

The Ibovespa ended October 0.04% higher at 61,545 points. Best performing stocks were: CCR Rodovias ON (+14.81%); Bradespar PN (+11.81%); Gerdau PN (+10.74%); Vale ON (+9.95%); and TAM S/A PN (+9.78%).Worst performing stocks were: Rossi Resid On (-17.26%); Aracruz PNB(-16.71%); VCP ON (-16.41%); Embraer ON (-12.78%); and BMFBovespa ON (-12.71%).

In addition to the Ibovespa, the following stock exchange indexes also ended September up: IBrX-50 (+0.22% at 8,709 points); IBrX-100 (+0.35% at 19,642 points); ITEL (+0.74% at 1,362 points); INDX (+1.40% at 9,100 points); Small Cap (+2.62% at 993 points); MidLarge Cap (+0.20% at 874 points); and Iconsumo (+1.49% at 1,207 points). The remaining stock exchange indexes ended September down: ISE (-3.56% at 1,701 points); IEE (-1.09% at 22,086 points); IVBX-2 (-0.79% at 5,008 points); IGC (-0.43% at 6,033 points); ITAG (-1.76% at 7,835 points); and Imobiliário (-4.42% at 817 points).

Market Value
Market capitalization of the 387 companies listed on BM&FBOVESPA in October was BRL 2.11 trillion, compared to BRL 2.09 trillion, which represented the 386 companies listed in August.

Special Corporate Governance Levels
The 159 companies that compose BM&FBOVESPA’s special corporate governance levels represented, at the end of September, 64.65% of the market capitalization, 78.83% of trading volume, and 81.87% of the trades in the spot market.

Market Participation
The spot market accounted for 93.3% of total trading volume in September, followed by the options market, with 4.9%, and by the forward market, with 1.8%. The after-market traded BRL 1.66 billion with 124.268 trades, compared to BRL 1.46 billion and 118,653 trades in the previous month.

Investor Participation
In October, foreign investors were responsible for 33.67% of the total volume, compared to 32.70% in September. Individual investors came next, with 30.53%, compared to 31.01%; institutional investors had 24.80%, compared to 25.90%; financial institutions, with 8.99%, compared to 8.20%; companies, with 1.95%, compared to 2.12%; and other types of investors, 0.06%, compared to 0.07%.

Foreign Investment
The net flow of foreign investment into the Brazilian stock market in 2009 as of October 30 is a positive BRL 32.88 billion, which is the combined result of the amount of BRL 13.73 billion in acquisitions carried out by foreign investors in the stock offerings and the positive balance of BRL 19.15 billion in direct trading at BM&FBOVESPA.

In October, the financial volume traded by foreign investors in the stock market is a positive BRL 1.14 billion, which is the net balance between stock sales of BRL 51.13 billion and stock purchases of BRL 52.27 billion.

The foreign investor participation in stock offerings, including IPOs, represented 57.6% of the total BRL 23.84 billion in transactions related to the publication of the closing announcement dates ending on November 4, 2009.

Individual Investors
BM&FBOVESPA ended October with 555,768 individual investor accounts in custody. The stock exchange had 515,506 such accounts in September.

Investment Clubs
BM&FBOVESPA ended August with 2,854 investment clubs and 50 new registrations. Total liquid asset reached BRL 12.31 billion and the number of participants reached 144,049, according to the latest available August data.

Home Broker
In October, trading via Home Broker registered the following records: volume totaled BRL 60.99 billion, compared to BRL 44.20 billion in September; average daily volume reached BRL 2.90 billion, compared to BRL 2.10 billion; total number of trades reached 5,973,285 compared to 4,474,883 in September; the daily average of trades stood at 284,442, in contrast to 213,090; the average amount per transaction totaled BRL 12,813, compared to BRL 10,862 ; participation in the stock market’s total volume in September was 19.80%, compared to 19.40% in August.

The total number of trades reached 32.60%, compared to 31.30%. The number of investors placing orders stood at 249,027, compared to 215,861in September. In October, the number of brokerage firms offering Home Broker was 67, compared to 68 in September.

Securities Lending
The financial volume of stock lending transactions in the Securities Lending Bank (BTC) reached BRL 29.54 billion in October, in comparison to BRL 28.74 billion in September. The total number of trades reached 63.642, compared to 63,477 in the previous month.

Fixed Income
In October, the trading volume for the secondary market, counting both the Bovespa Fix and the Soma Fix, totaled BRL 10.42 million, compared to BRL 66.83 million in September. Of this total, debentures accounted for BRL 4.19 million, Real Estate Receivables Certificates (CRI) accounted for BRL 5.35 million, and Credit Receivables Investment funds (FIDC) accounted for BRL 0.88 million.

The financial volume registered in October by the four BM&FBOVESPA Exchange-Traded Funds (ETFs) reached BRL 537.95 million, in contrast to BRL 557.86 million in September. ETFs BOVA11, SMAL11, MILA11, and PIBB11 registered 7,411 trades. In the previous month, the number of trades was 8,366. ETF BOVA11 reached the highest financial volume in October, with BRL 435.64 million, in comparison to BRL 484.17 in September.

BM&F Segment (Derivatives and Futures)

Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 34,670,732 contracts and BRL 2.38 trillion in volume in October. That compares to 31,505,077 contracts and a volume of BRL 2.12 trillion in September. The daily average of contracts traded in the derivatives markets in October was 1,650,987, compared to 1,500,242 in the previous month.

Volumes and Trades – Financial Derivatives
Interest rate futures (ID) totaled in October 12,104,485 contracts traded, in contrast to 12,469,090 in September. The US dollar futures ended the month totaling 7,033,995 contracts compared to 5,959,815 contracts in the previous month. The Ibovespa futures traded 2,304,720 contracts in September, compared to 1,443,420 in the last month. The Euro futures contract (EUR) registered 14,970 contracts, in contrast to 5,330 contracts in August.

Open interest contracts ended the last trading day of October with 21,153,325 positions, compared to 21,993,232 in September.

Volumes and Trades– Agribusiness Derivatives
In October, the BM&FBOVESPA agribusiness derivatives market (including futures and options) totaled 197,101 contracts traded, compared to 151,582 in September. Agribusiness markets totaled 61,356 open interest contracts at the end of the last trading day of October. In September, these contracts totaled 74,238.

Volumes and Trades – Minicontracts
The derivatives market for mini contracts traded 1,334,414 contracts in the month of October, compared to 1,177,213 in September. Of this total, the futures market for Ibovespa mini contracts traded 1,264,865 compared to 1,103,632 contracts in the previous month. Mini U.S. dollar futures traded 68,272 contracts, compared to 72,085 in September. Mini futures contracts ended October with 18,575 open interest contracts, in contrast to 27,498 in the previous month.

Volumes and Trades – Spot Gold
The spot gold market (250 grams) traded, in October, 1.137 contracts, compared to 1.216 contracts in September. Spot gold market volume totaled BRL 16.66 million, compared to BRL 17.70 million in the previous month.

Investor Participation
In October, financial institutions led derivatives trading (BM&F segment), being responsible for 42.49% of contracts traded, compared to 43.86% in the previous month. Institutional investors were responsible for 27.12%, compared to 26.77%; foreign investors represented 21.66%, in contrast to 20.31%; individuals represented 6.83% compared to 7.16%; and companies, were responsible for 1.90%, the same as the previous month.

Individual Investors
In October, there were 87.089 individual investors with at least one account registered at the Derivatives Clearinghouse, compared to 85,033 in the previous month.

Source: MondoVision, 06.11.2009

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, , , , , , , , , , , , , , ,

Schwab’s Commission-Free ETFs: A Watershed Event

On November 3, 2009, marked a watershed event for the ETF landscape. It’s the day that Schwab (SCHW), absent from the ETF industry for past 16 years, upped the ante for any company thinking about getting into the business. Charles Schwab Investment Management, Inc. launched its first four ETFs.

At first glance, the new Schwab ETFs are nothing special – just four broad based core holdings, just like dozens already available from other fund companies. But look closer, and you will see they are also the lowest fee funds within each of their respective asset classes.

Look yet again, and see that these ETFs are also commission-free for Schwab brokerage customers. This is historic. Just as no-load no-transaction fee mutual funds changed the mutual fund landscape, commission-free ETFs will forever alter the way that ETFs are perceived. With this one change, nearly every argument in favor of mutual funds instead of ETFs goes away. Dollar cost averaging? No longer costly with commission-free ETFs. Small account size? Not a problem anymore.

Schwab has arrived, and they didn’t do it quietly. Now all eyes will turn to the competition to see how they react. Will other brokerage firms roll out their own ETF brands? Will iShares and SPDRs get into the discount brokerage business? “Strategic alliances” will be discussed, but in all likelihood are not feasible since there are not enough fees to share. Schwab has erected a significant barrier to entry and is now well positioned to go after the lucrative 401k market.

The four new ETFs launched by Schwab:

  • Schwab U.S. Broad Market ETF (SCHB) (SCHB overview) will track the Dow Jones U.S. Broad Stock Market Index with a 0.08% expense ratio. The underlying index represents the largest 2,500 U.S. equities and is float-adjusted market cap weighted.
  • Schwab U.S. Large-Cap ETF (SCHX) (SCHX overview) will track the Dow Jones U.S. Large-Cap Total Stock Market Index with a 0.08% expense ratio. The underlying index represents the largest 750 U.S. equities and is float-adjusted market cap weighted.
  • Schwab U.S. Small-Cap ETF (SCHA) (SCHA overview) will track the Dow Jones U.S. Small-Cap Total Stock Market Index with a 0.15% expense ratio. The underlying index represents the stocks ranked 751–2,500 of the largest 2,500 U.S. equities and is float-adjusted market cap weighted.
  • Schwab International Equity ETF (SCHF) (SCHF overview) will track the FTSE Developed ex-US Index with a 0.15% expense ratio. The underlying index covers1,400 large cap and mid cap stocks from more than 20 developed international markets.

Online trades of Schwab ETFs are commission-free at Schwab, while trades of third-party ETFs are still subject to commissions.

Unfortunately, the first day of trading had some glitches. SCHA traded at the wrong price for the about the first ten minutes with those who bought early receiving about a 10% discount from NAV, unless those trades get busted. SCHX appeared to have a similar problem but fewer shares were involved. Market makers had trouble maintaining the appropriate depth on SCHB, and it appears some larger orders created price spikes. SCHF had the most orderly first day of the bunch.

Schwab expects to offer four additional ETFs in December: Schwab U.S. Large-Cap Growth ETF (SCHG), Schwab U.S. Large-Cap Value ETF (SCHV), Schwab International Small-Cap Equity ETF (SCHC), and Schwab Emerging Markets Equity ETF (SCHE).

Source: Seeking Alpha, 04.11.2009

Filed under: News, Services, , , , , , ,

Actinver Plans Mexican IPO in First Quarter, CEO Madero Says

Actinver SA, a Mexico City-based investment bank, plans to sell shares in an initial public offering in the first quarter, seeking to drum up underwriting business by setting a precedent for its clients to follow.

A sale would show companies needing capital that the equity market is a viable option in Mexico, where the last IPO was in June 2008, said Hector Madero, Actinver’s chief executive officer. He said Actinver is working with a “couple” companies that are considering share offerings.

“We want to provide access to mid-size companies, but the first statement has to be us,” Madero, 44, said in an interview in Mexico City. He said Actinver will sell shares to help open up the market even though it has no pressing need for the money.

A surge in kidnappings in Mexico is discouraging executives from taking their companies public, deepening an IPO drought sparked by the global credit crisis, Madero said. Mexico’s benchmark Bolsa stock index has climbed 32 percent this year, rebounding from a 24 percent slide in 2008.

Actinver, co-founded by Madero’s father in 1994, is “very close in a couple of deals” to underwrite IPOs, the CEO said. The firm co-led last month’s offering of 1.3 billion shares by Cemex SAB, the largest cement maker in the Americas.

The company is completing today the purchase of some of Prudential Financial Inc.’s Mexican assets. The Prudential units, which include a mutual fund business and a bank, bring Actinver’s assets to 109 billion pesos ($8.1 billion), according to Francisco Suarez, an equity strategist at the firm.

Banking License

Actinver acquired a banking license as part of the deal, allowing it to offer investment consulting services for individuals at a network of 70 offices around Mexico.

“We’re not going to be a bank that lends to institutions or corporations,” Madero said. “It’ll be a private bank with a retail business.”

The bank division will be headed by the CEO’s brother Alvaro Madero, currently the director of operations at Actinver.

In June Actinver launched a mutual fund with Brazil’s Itau Unibanco Holding SA in Mexico whose portfolio is mostly Brazilian stocks. Actinver is “very close” to a similar arrangement with a U.S. company, Madero said.

Mexico’s last initial share sale was Genomma Lab Internacional SAB’s $233.7 million offering in June 2008. There have been six IPOs in Mexico since the beginning of 2007, compared with 70 in Brazil, according to data compiled by Bloomberg.

Source: Bloomberg 06.10.2009

Filed under: Banking, BMV - Mexico, Brazil, Exchanges, Latin America, Mexico, News, Services, Wealth Management, , , , , , , , , , , , , , , , , ,