Euromoney (August Issue)Euromoney (August Issue)
“Trust has broken down between IPO vendors and issuers and traditional investors in new stock offerings in Europe. Deal arrangers seem incapable of bridging the valuation gap between the two sides.” Issuer focus on achieving high valuation is colliding with investor expectation to buy at a discount. As a result, 50% of Europe’s large planned IPOs failed this year. The situation is only slightly better for IPOs of all sizes. “In the first seven months of this year, 143 initial public offerings were priced for European issuers, while 50 others, over one-third as many, were either announced and then postponed or launched and then pulled. That’s a very high failure rate.”
“Trust has broken down between IPO vendors and issuers and traditional investors in new stock offerings in Europe. Deal arrangers seem incapable of bridging the valuation gap between the two sides.” Issuer focus on achieving high valuation is colliding with investor expectation to buy at a discount. As a result, 50% of Europe’s large planned IPOs failed this year. The situation is only slightly better for IPOs of all sizes. “In the first seven months of this year, 143 initial public offerings were priced for European issuers, while 50 others, over one-third as many, were either announced and then postponed or launched and then pulled. That’s a very high failure rate.”
Financial Times (August 7)Financial Times (August 7)
Gold has risen to $1,900 an ounce from $280 a decade ago. “The total market value of all the gold in existence…exceeds the combined capitalisation of the German, Chinese and Japanese stock markets.” When the gold bubble will end remains a question, but by some yardsticks it’s nearing a correction. “Gold is at a 120-year high (at least) relative to US house prices. Likewise, it is at a 74-year high relative to US wages, at multi-generation highs relative to wheat, coffee and cocoa.”
“Trust has broken down between IPO vendors and issuers and traditional investors in new stock offerings in Europe. Deal arrangers seem incapable of bridging the valuation gap between the two sides.” Issuer focus on achieving high valuation is colliding with investor expectation to buy at a discount. As a result, 50% of Europe’s large planned IPOs failed this year. The situation is only slightly better for IPOs of all sizes. “In the first seven months of this year, 143 initial public offerings were priced for European issuers, while 50 others, over one-third as many, were either announced and then postponed or launched and then pulled. That’s a very high failure rate.”
Securities Technology Monitor (August 6)
High frequency trading “can wreak havoc in the global financial marketplace by amplifying moves on the up- and down-sides.” The “Knightmare on Wall Street” focused attention on this issue when a software glitch at Knight Capital caused almost 40 NYSE-listed stocks to move more than 10% in less than 60 minutes. “The problem with the rising popularity of High-Frequency Trading is that it may be distorting global financial markets significantly, increasingly destabilising those markets and causing the rise of systemic risk.”
High frequency trading “can wreak havoc in the global financial marketplace by amplifying moves on the up- and down-sides.” The “Knightmare on Wall Street” focused attention on this issue when a software glitch at Knight Capital caused almost 40 NYSE-listed stocks to move more than 10% in less than 60 minutes. “The problem with the rising popularity of High-Frequency Trading is that it may be distorting global financial markets significantly, increasingly destabilising those markets and causing the rise of systemic risk.”
Forbes (August 6)
“Call it the best disaster and recovery Wall Street has seen in a long time. In less than a week, Knight Capital screwed up royally to the point of near failure and then managed to save itself with the help of outside investors…. If a financial institution is going to mess up then this is the way to do it—without hurting clients and without getting taxpayers involved.”
“Call it the best disaster and recovery Wall Street has seen in a long time. In less than a week, Knight Capital screwed up royally to the point of near failure and then managed to save itself with the help of outside investors…. If a financial institution is going to mess up then this is the way to do it—without hurting clients and without getting taxpayers involved.”
Tags: Clients, Investors, Knight Capital, Taxpayers, Wall Street
The Economist (August 4)
“Chinese companies have started to win first place in global markets. Huawei has just overtaken Sweden’s Ericsson to become the world’s largest telecoms-equipment-maker.” Haier and Lenovo are also moving into the lead. “But Huawei inspires fear…. The company is said to be too close for comfort to the PLA. Westerners fret that the networks the firm is building are used by Chinese spooks to eavesdrop during peacetime and could be shut down suddenly during wartime. They see the firm as a potent weapon in China’s burgeoning cyber-arsenal.”
“Chinese companies have started to win first place in global markets. Huawei has just overtaken Sweden’s Ericsson to become the world’s largest telecoms-equipment-maker.” Haier and Lenovo are also moving into the lead. “But Huawei inspires fear…. The company is said to be too close for comfort to the PLA. Westerners fret that the networks the firm is building are used by Chinese spooks to eavesdrop during peacetime and could be shut down suddenly during wartime. They see the firm as a potent weapon in China’s burgeoning cyber-arsenal.”
Los Angeles Times (August 3)
North Korea is much more difficult to understand than the old Soviet regime. “Kremlin watching” was an “inexact science,” but it brought some understanding of the government. “In North Korea today, it’s nearly impossible even to discover where the government and its new leader, Kim Jong Un, operate.”
North Korea is much more difficult to understand than the old Soviet regime. “Kremlin watching” was an “inexact science,” but it brought some understanding of the government. “In North Korea today, it’s nearly impossible even to discover where the government and its new leader, Kim Jong Un, operate.”
Tags: Kim Jong Un, Kremlin, North Korea, Soviet Union
New York Times (August 2)
An automated trading program went amok at Knight Capital Group, flooding the NYSE and other markets with orders at the opening bell. This “was the latest black eye for the financial markets. The runaway trading suggests that regulators have not been able to keep up with electronic programs that increasingly dominate the supercharged market and have helped undermine investor confidence in stocks.” Some of the trades were cancelled when markets returned to order at 10:15, but Knight is expected to take a large loss.
An automated trading program went amok at Knight Capital Group, flooding the NYSE and other markets with orders at the opening bell. This “was the latest black eye for the financial markets. The runaway trading suggests that regulators have not been able to keep up with electronic programs that increasingly dominate the supercharged market and have helped undermine investor confidence in stocks.” Some of the trades were cancelled when markets returned to order at 10:15, but Knight is expected to take a large loss.
Tags: Automated trading, Knight, Markets, NYSE, Regulators
Wall Street Journal (August 2)
Last week, European Central Bank (ECB) President Mario Draghi was prepared to do “whatever it takes” to save the euro. This week, he
“dashed hopes… unleashing a global selloff.” His “apparent backtracking on ECB intervention illustrates the challenge he faces in managing the central bank’s biggest shareholder, Germany.”
Last week, European Central Bank (ECB) President Mario Draghi was prepared to do “whatever it takes” to save the euro. This week, he
“dashed hopes… unleashing a global selloff.” His “apparent backtracking on ECB intervention illustrates the challenge he faces in managing the central bank’s biggest shareholder, Germany.”
New York Times (August 1)
India outdid its recent outage (see below), with “all the makings of a disaster movie: More than half a billion people without power. Trains motionless on the tracks. Miners trapped underground. Subway lines paralyzed. Traffic snarled in much of the national capital. On Tuesday, India suffered the largest electrical blackout in history, affecting an area encompassing about 670 million people, or roughly 10 percent of the world’s population.”
India outdid its recent outage, with “all the makings of a disaster movie: More than half a billion people without power. Trains motionless on the tracks. Miners trapped underground. Subway lines paralyzed. Traffic snarled in much of the national capital. On Tuesday, India suffered the largest electrical blackout in history, affecting an area encompassing about 670 million people, or roughly 10 percent of the world’s population.”
Tags: 670 million, Blackouts, India, Power failure
Washington Post (July 30)
India has brought power failure to new levels. “While the midsummer outage was unique in its reach — it hit 370 million people, more than the population of the United States and Canada combined — its impact was softened by Indians’ familiarity with almost daily blackouts of varying duration. Hospitals and major businesses have backup generators that seamlessly kick in during power cuts, and upscale homes are hooked to backup systems powered by truck batteries.”
India has brought power failure to new levels. “While the midsummer outage was unique in its reach — it hit 370 million people, more than the population of the United States and Canada combined — its impact was softened by Indians’ familiarity with almost daily blackouts of varying duration. Hospitals and major businesses have backup generators that seamlessly kick in during power cuts, and upscale homes are hooked to backup systems powered by truck batteries.”
Tags: 370 million, Blackouts, Generators, India, Power failure
