Author Archives: Julia Demetriou

twitterIpo

IPOs Bring Most Money Into Fund Since 1999

Despite the havoc the most recent financial crisis has wrecked upon economies and businesses, many have said that the tough conditions would give rise to further innovations and creativity in the entrepreneurial world,and they may have been right. Initial Public Offerings on U.S. markets recorded the best year since the technology boom of 1999 sending big money into a fun that invests in new companies.

Data compiled by Bloomberg has shown that $165 million has poured into the First Trust U.S. IPO Index Fund during the last quarter of 2013, marking the greatest quarterly earnings since it began in 2006. Total annual inflows for the month totalled at $280 million. The Bloomberg IPO index jumped 64 percent last year, the biggest advance in 14 years, as gains in Twitter and Hilton (HLT) Worldwide Holdings Inc., Facebook Inc. (FB) propelled it through the year.

With investors gaining an appetite for equities, U.S. companies were able to sell $56 billion in new shares in the past year, the most since 2007. Regaining their confidence in IPOs, equity investments were the greatest in nearly a decade. Standard and Poor’s 500 Companies gained over $3.7 trillion in market value. With the global economy in recovery mode, IPO demand is anticipated to remain high.

nickel

Indonesia’s Nickel Ban Sends China Scrambling for Supplies

Indonesia’s recent ban on exports of raw nickel in an attempt to boost the nation’s refineries, has left China, the biggest importer scrambling to find alternative solutions. According to a Bloomsberg News survey, Chinese mills that import Indonesian raw material for the production of nickel pig iron, a substitute of the refined metal, have amassed stockpiles to last them half a year.

The 29 million metric tons that have been inventoried at warehouses and ports around the country, provide enough supplies to sustain production until July based on last year’s pace. But not all manufacturers are in the same boat. Small and medium-sized factories expect to have enough supplies only for the next three to four months.

The possibility of a deficit in the global nickel market seems highly probable with Indonesia, the largest producer of the metal worldwide, put its ban in effect on 12th January. Chinese NPI only covers about a quarter of the global nickel supply, and its ore and refined metal prices are expected to rise as demand will surge.

On the markets, the metal ended a five-day rally with a drop of 0.8 percent.

Dollar Yuan

China’s Foreign-Currency Reserved Hit Record Levels

Data accidentally released on the Treasury Department’s Website showed that China’s holding of U.S. Treasuries climbed $12.2 billion to an unprecedented $1.37 billion.

The official report is scheduled for release at 9 a.m. tomorrow morning in Washington, but has been inadvertently posted on the Treasury’s website. The figures also show an increase in Japan’s holdings by $12 billion, bringing the Japanese total to $1.186 trillion.

China has shown great appetite for foreign-exchange reserves lately, and has reportedly reached the record amount of $3.82 trillion by the end of December. Inflow of Capital and interventions to restrict profits in the yuan have contributed to China’s amassing of currency holdings that equal a third of the global total.

It is expected, however, that China will slow down its pace of foreign-exchange reserve gathering on account of the Federal Reserve’s monetary tapering programme.

Yahoo logo

Yahoo’s Mayer Dismisses COO de Castro

Yahoo! Inc. (YHOO)’s Chief Executive Officer Marissa Mayer has made headlines again, but this time not about her work ethics or quirky personality. Mayer is firing one of Yahoo’s top people, Henrique de Castro, who has been the Chief Operating Officer for the company for the past 14 months due to disappointment with his attempts at boosting growth, according to people in the know.

The employees of the company were notified of Meyer’s decision through a memo in which Mayer informed them that she came to the decision of dismissing de Castro. People familiar with the company have said that the friction between the two executives has been heating up over the last six months.

Ever since Mayer took the helm of Yahoo in her much publicised switch from Google in July 2012, she has been trying to reinvent the waning company so it could compete with the younger and more innovative corporations such as Google Inc. (GOOG) and Facebook Inc. (FB). A slew of redesigns and transformations, however, affecting everything from products, to email, to advertising and more, have not as yet been translated into profits. Analysts, in fact, anticipate that the company’s spreadsheets will show a 1 percent drop for 2013, while at the same time predicting a e percent for this year and the coming one.

De Castro’s departure, which was announced yesterday, takes effect today with no replacement having been named by the company. Whatever de Castro’s efficiency level may have been, however, the news are bad for the company right now, as his removal leaves a huge hole in the executive team that will have to be properly patched up before normal operations resume smoothly once again.

And if you’re feeling bad about de Castro loosing his high-profile job in such a short notice, here are some facts that may change your mind. According to Equilar Inc., in the 14 months that he has been with Yahoo, de Castro has amassed a fortune of $109 million in salary, stock awards, bonus, compensation for leaving Google and severance payments. Not bad for a little over a year’s work!

Mall

S&P 500 Advances Most This Year on Retail Sales

The Standard & Poor 500 Index has recorded its biggest gain of the year on rising U.S. stocks amidst better-than-expected retail sales and a corporate merger that boosted confidence in U.S. economy.

Technology companies were lead in gains by Inter Corp. and Jabil Circuit Inc. with rises of at lease 4 percent as analysts posted upgrades. Google (GOOG) Inc. advanced 2.4 percent following its purchase agreement for thermostat maker Nest Labs Inc. for $3.2 billion in cash. Time Warner Inc. refused an acquisition offer from Charter Communications Inc. and added 2.7 percent. JPMorgan Chase & Co. and Wells Fargo remained at their previous levels following fourth-quarter reports.

The S&P 500 (SPX) climbed 1.1 percent, its biggest increase since 18th December and one that erased nearly all of yesterday’s loss. The Dow Jones Industrial Average advanced 115.92 points, or 0.7 percent. In terms of share numbers, about 6.5 billion of them were bought and sold on U.S. market yesterday, moving at 7.7 percent above the 30-day average.

Yesterday, the S&P lost 1.3 percent, the greatest amount since November, as investors reconsidered their valuations following the record levels the index reached last year on a 30 percent valuation. The benchmark index lost 1.6 percent from the start of the year through yesterday, making this its worst beginning to a year since 2009.

Oil Barrels old

Should Banks Be Trading Commodities? The Fed Reconsiders

Concerns over potential interest conflicts and market manipulation form the Congress has led the Federal Reserve to a consideration of further restrictions on the trading and storing of physical commodities by banks.

In a meeting yesterday the Fed posed 24 questions for discussion to its members, including some on the dangers of trading and owning commodities (such as oil, gas, and alumunium) by banks who deal with deposits and the potential advantages of imposing more capital standards.

“There has been a substantial increase since 2008 in the amount and types of commodities activities conducted by the firms we supervise,” says the testimony prepared by the Fed’s director of bank supervision, Michael Gibson, for a hearing by a Senate subcommittee today. “Moreover, recent catastrophic events involving physical commodities have increased concerns regarding the ability of companies to mitigate potentially extraordinary tail and other risks.”

The Fed stated it is examining the possibility of further restrictions in order to ensure that bank activities concerning physical commodities are carried out in safe and sound procedures. The central bank on its part said it will look into whether additional rules are needed once the public comment period comes to an end on 15th March.

A list of recent accidents and natural disasters, such as the 2010 explosion at Deepwater Horizon’s drilling rig that cost BP Plc over $42 billion by the end of 2012, have been cited by the Fed as instances of catastrophic occurrences that pose great risks to expose institutions.

Samsung building

Is Samsung Set For Greater Losses?

Samsung Electronics Co. (005930) has recently experienced a $28-billion loss in a stretch of only six weeks, and the stock’s most accurate forecaster expects the drop to deepen as Apple Inc. (AAPL) and Chinese competitors bite off greater chinks of the market.

Samsung, which is based in Suwon, South Korea, saw its shares plummet 13 percent since 29th November, making it the quickest market-capitalisation losing company worldwide. According to Adnaan Ahmad, the Brerenberg analyst with the most accurate and best-returning forecasts over the last twelve months, the stock is set to decline another 11 percent.

The last quarter of 2013 marked the first quarterly decline for the word’s largest smartphone maker, ending a nine quarter stretch of increases, losing customers not only to Apple’s iPhones, but also to budget solution by Chinese makers. Despite bulls’ expectation for a rebound following the drop that brought the stock to its lowest level in three years, Ahmad anticipates more selling as Samsung’s profit margins shrink.

Kuroda

Kuroda’s Policies Send Japanese Investors Overseas

Japanese investors have been leaving their home markets preferring to send their money overseas in an attempt to battle their country’s unprecedented quantitative easing. In fact, the volume of bonds marked in dollars and euros bought by Japanese investors swelled to a four-month high in November.

A net 1.48 trillion yen ($14.3 billion) worth of dollar bonds and 972.9 billion yen of euro bonds were purchased by fund managers from Japan, which makes it the largest purchase among currencies that the Ministry of Finance data has tracked. Australian-dollar bond purchases have also increased for a second consecutive month that ended 11 months of sales.

Overall last year, the yen depreciated 17 percent, the most in a single year since 1979, as reported by Bloomberg Correlation Weighted Indexes that monitor 10 major currencies. Japanese central bank governor Haruhiko Kuroda effected the currencies decline through the implementation of policies that suppressed local yields by reviving inflation, and thus also prompting Japanese investors to look for higher returns in overseas assets. December and January saw a stalling of buying with 513 billion yen in bond sales taking place over five weeks, though the weekly data has as yet to be broken up by country.

At its meeting last month, the BOJ vouched to expand the country’s monetary base from 60 trillion yen per year to 70 trillion yen. As a measure against deflation, policy makers double monthly bond purchases to over 7 trillion yen last April.

According to a report by the Ministry of Finance, the deficit of the nation’s current account increased to 592.8 billion yen in November, the greatest gap ever recorded in data that reach back to 1985.

Monopoly Money

Fictitious License Claims Rock the Trading World

It is no secret that financial investments can carry certain risks with them. As any seasoned, or even novice, trader knows, the exciting world of breaking news and economic events brings not only opportunities for profit, but also the risk of failure. At Banc De Binary, we take your safety very seriously and we constantly seek ways to minimise your risk exposure when entering online trades. We are proud to have been the first Binary Options company to have been fully regulated and licensed under CySEC, an innovation that has brought great benefits to the entire sector of Binary Options trading.

Unfortunately, however, not all companies involved in Binary Options and Forex trading provide the same transparency or legal protection as we do, and a recent news story should serve as an example to all traders regarding the importance of researching online brokers extensively to ensure that one is trading with a fully licensed and registered entity.

On 8th January, the Commission de Surveillance du Secteur Financier (CSSF), the regulating authority of Luxembourg’s financial market, published an advisory informing the public that claims made by Forex trading company Bulls Capital Markets regarding their license with them were fictitious. Forex Magnates reports in an article that the company’s website stated that “Bulls Capital Markets is registered and licensed in the country of Luxembourg. The registration number is F2589754 and the category F2 license number is 179065.” The CSSF however, has outright rejected the claim saying that “Bulls Capital Markets has not been granted the required authorisation to offer banking and financial services in or from Luxembourg and is therefore not supervised by the CSSF.”

The details of the registration and licensing numbers that Bulls Capital Markets was offering on their website certainly made their claims seem creditable, and even we were surprised to learn that they were not true. The point here, however, is not to make a scapegoat of the company in question, but rather to offer a cautionary tale: no statement on any broker’s website should ever suffice as guarantee of legality. Always make sure to do your own research and look well into a company’s status before opening your wallet and handing your hard-earned money to it.

Since the release of the public notice by CSSF last Wednesday, Bulls Market Capitals has apparently made some changes to its “Regulation and License” page, which now states that “Bulls Capital Markets registered by the Capital Market Investment at New Zealand under the registration The Financial Service Providers Register (FSPR).” The company, which now offers its registration number in New Zealand, has kept its claim that it was begun in the USA in 2009, and says that “with the changes in the laws and regulations in the USA a few years back, Money and Capital Markets transformed itself as Bulls Capital Markets and moved out of USA into Luxumbourg in order to better serve its growing client base.” No mention of New Zealand is made in this segment of the page, nor is the relationship between their activities in the three geographic areas (namely the U.S.A., Luxembourg, and New Zealand) explained any further, which seems greatly puzzling.

Stories like this one, naturally, create a certain amount of concern within the industry as traders check to make sure their investments are in safe hands, but they also bring some positive results for licensed brokers. As far as we are concerned, the vetting of licenses and brokers can only confirm our reputation as the industry leader and assure our traders that their investment lies in safe hands.

Shanghai

Chinese Index Plummets on Technology Losses

The benchmark Chinese Index has fallen to its lower level in five months, as losses on technology and consumer shares overtook advances in Aluminum Corp. of China Ltd. and raw-material companies.

Apple Inc. supplier GoerTek Inc. (002241) reached the lowest level since May, while Gree Electric Appliances Inc. lost 3.8 percent. Mineral companies had a good run with Aluminum Corp of China, also known as Chalco, advancing 7 percent in Shanghai and Hong Kong. With Indonesia banning mineral ore exports in an attempt to cut nickel supplies, Jilin Ji En Nickel Industry Co. soared 10 percent.

The Shanghai Composite (SHCOMP) retreated for the fourth consecutive day, although the gauge gained as much as 0.7 percent following the announcement by China’s securities regulator that it planbs to place stricter supervision on IPO’s. With predictions of rising IPO numbers for the coming months, small-company stocks may be dragged down.

Although the IPO decision may offer some short-term relieve to Chinese markets, analysts expect that the effects won’t last for too-long as investors will turn to fundamentals and fine the economy lacking there.

The CSI 300 Index lost 0.5 percent, while the Hang Seng China Enterprises Index (HSCEI) gained over 0.1 percent.

The Shanghai Index has already lost an overall of 5 percent this year on increasing signs of slower economic growth and growing concerns that share sales will take attention away from existing equities.