Monthly Archives: March 2014

BlackBerry slides on broker downgrades

BlackBerry suffered a second day of declines after two brokers downgraded the company following a fourth quarter marked by continued losses. Analysts at Evercore and Credit Suisse dimmed their view on the struggling smartphone maker, lowering their ratings to underweight and underperform, respectively. Those at Credit Suisse noted they remained doubtful that “BlackBerry can create a meaningful business”. “Our concern…

Investors re-engage with emerging markets

Global investors are more willing to engage in emerging markets than at any time since the sell-off of last summer, according to research by Morgan Stanley – whose analysts coined the term “fragile five” to describe the most vulnerable countries. Despite mounting evidence of a slowdown in China, tensions over Ukraine and tense election campaigns in several countries, the currencies…

New markets provide shot in the Arm

Hopes of a turn of fortunes put Arm Holdings among the FTSE 100’s biggest gainers. Having started 2014 at a record high, the chip designer slipped 10 per cent over the first quarter as slowing smartphone sales put its expected royalty revenue under pressure. Downgrades now look to have run their course, according to Barclays, with handset shipment forecasts falling…

Banks turn to compression for Basel rules

Until recently, the Basel III capital requirements had never been a central part of the post-crisis debate by the derivatives industry. No longer. Banks’ concerns over a rule change introduced by the Basel Committee on Banking Supervision (BCBS) in January are deepening as they digest the implications for their large derivatives portfolios. Market participants fear that a tweak to the…

‘Swaptions’ leap over regulatory hurdles

An obscure pocket of the derivatives world has managed to escape the effects of new regulation to explode in popularity and size. Trading of options on indices comprised of credit default swaps has increased dramatically partly because – unlike credit default swaps themselves – the instruments are not required to be centrally cleared under new rules aimed at preventing a…

How to make a fortune in value investing

Fortune favours the brave. And everything comes to he who waits. In these two well-worn phrases lie differing justifications for two different approaches to value investing. Both have merit, but the trick is to combine them. Value investing has been popular ever since it was promulgated by US academic Benjamin Graham in the 1930s. His idea was that many companies…

Rand gains from calmer EM waters

The South African Reserve Bank on Thursday will deliver its latest monetary policy decision. Analysts’ consensus is for the SARB to leave rates alone after unexpectedly hiking them by 50 basis points to 5.5 per cent in January, ostensibly to support the rand. Still, Capital Economics describes the outcome as a close call. “A renewed slump in the currency before…

Stocks firm on US economic hopes

Wednesday 08:00 GMT. Optimism over the US economy, the prospect of further easing by the European Central Bank and waning market tensions regarding the Crimea crisis are helping European stocks open at two-week highs following a sturdy Asian session. The positive mood sees industrial commodities gain ground and reduced demand for supposed havens such as Treasuries. Gold, which dropped to…

PBoC steps in to calm China bank run

©Reuters Hundreds of depositors have raced to pull their cash from a small rural bank in eastern China, forcing local officials to take emergency measures to calm the panic after the bank run began to spread. Coming weeks after the first true default in the Chinese bond market, the run on Jiangsu Sheyang Rural Commercial Bank is the latest sign…

UK government to sell fifth of Lloyds stake

©Bloomberg The UK government moved a step closer to returning Lloyds Banking Group to the private sector before next year’s election after it announced plans to sell more than £4bn worth of its shares in the bank. The sale of more than a fifth of its stake is likely to take UK Financial Investments, which manages the stake on behalf…