Euromoney (October Issue)
“Rates will rise as the Fed begins tapering. “Short-term interest rates will rise to 3% over the next two to three years, with the 10-year and 30-year rate likely to reach the 6% range,” according to Mike Niedermeyer of Wells Fargo Asset Management. He adds, “I think people will be surprised by the relative performance of equities over fixed income. Past decisions have forced a correlation between fixed income and equities but we could now have a return to negative correlation between fixed income and equities.”
Tags: Correlation, Equities, Fed, Fixed income, Interest rates, Niedermeyer, Performance, Tapering, Wells Fargo
Institutional Investor (October Issue)
“Atsushi Saito has reinvigorated the Japanese exchange world with a merger and a technology overhaul. Now comes the hard part: winning back market share in Asia.” Following the merger of the Tokyo and Osaka exchanges, the Japan Exchange Group ranks third behind only the NYSE Euronext and Nasdaq OMX. “JPX now controls more than 90 percent of all equity-and derivatives-trading volume in Japan.” Yet, “despite its lead in listed companies, JPX trails in foreign listings. It’s also weak in terms of options, futures contracts and exchange-traded funds (ETFs), compared with the big U.S. exchanges”
Tags: Asia, Atsushi Saito, Derivatives, Equities, ETFs, Futures, IT, Japan, JPX, Market share, Merger, Nasdaq OMX, NYSE Euronext, Options, Osaka, Tokyo, Trading volume, U.S.
Institutional Investor (May Issue)
“Investors are clamoring for sell-side research as Japanese equities lead the world in gains…. For quite a long time—decades—most of the economic and financial news out of Japan was negative. Over the past six months or so, it has been overwhelmingly positive. Stock prices are up. Real gross domestic product growth is rising. Investor interest is at its highest level in years.”
Financial Times (March 17)
“Net buying of Japanese equities by overseas investors amounted to slightly more than Y1tn in the first week of March – the highest weekly figure in Tokyo Stock Exchange records going back to 1982.” IPOs have also shot to top position in Tokyo and now rank second globally. “As investors have warmed to the pro-growth policies of Shinzo Abe, prime minister, since the beginning of January, newcomers to Japan’s markets have raised Y181bn ($1.9bn) – more than issuers in Singapore, Hong Kong and Australia combined.”
Institutional Investor (January 31)
“A platform war is intensifying in the global foreign exchange market, with more than half a dozen entrants jumping into the space in the past few months. It’s still too early to know which platforms will emerge as winners, but the proliferation of venues is already sparking declines in already-low trading costs, with banks earning less on each trade, in a situation similar to what’s happened in equity markets over the past decade. One banker estimates that revenue per trade has dropped by about 9 percent over the past year through a narrowing of bid-offer spreads.”
Euromoney (January issue)
“It won’t take much to improve on last year’s ECM and M&A revenue numbers. According to Dealogic’s preliminary full-year 2012 figures, ECM revenue fell to $13.3 billion last year—the lowest since 2003. M&A revenue was $17.3 billion in 2012—down 15% compared with 2011.” Debt capital markets, however, fared better in 2012 with DCM revenue at $21.1 billion, a 23% increase over 2011.
Wall Street Journal (January 1)
“Encouraged by promises of strong action by Japan’s new government to weaken the yen, end deflation and introduce structural overhauls, market experts are generally bullish on Japanese equities for 2013…. Strategists almost uniformly agree that Japanese shares remain undervalued and underexposed to international investors.”
Tags: Equities, Government, Investors, Japan, Undervalued, Yen
New York Times (December 23)
The proposed acquisitions of NYSE Euronext by IntercontinentalExchange (ICE) and Knight Capital Group by Getco both “reflect the demise of traditional stock-exchange trading. The equities market has been eclipsed by the global market in derivatives, and human traders have been increasingly replaced by computers programmed to profit from split-second price anomalies.” Regulators have not kept pace with this change. “The mergers should remain on the drawing board unless and until regulators can reassure the public that the newly created companies will operate not only for private gain, but in the public interest as well.”
Tags: Derivatives, Equities, Getco, High-speed trading, Ice, Knight Capital, Mergers, NYSE Euronext, Regulation
Investment Week (October 25)
Unfazed by a recent slump in the Dow, veteran investor Warren Buffet is taking advantage of the chance to increase his equity holdings. “If the market is down, I am happier buying. If I go to the supermarket and they have reduced prices, I feel better. So if I go to the stock exchange and they have reduced prices I feel better.” Indeed, he believes growth will continue in the U.S., which has stronger fundamentals than Europe.
Institutional Investor (August Issue)
With ￥108 trillion in assets under management, Japan’s Government Pension Investment Fund (GPIF) is almost six times the size of CalPERS. “Even more striking than the fund’s gargantuan size is its composition: Fully three quarters of the GPIF is invested in bonds, including ￥58.4 trillion of domestic bonds and ￥14.4 trillion of government agency debt.” This “mountain of government bonds” is “a low-return and potentially high-risk strategy,” and stands in contrast to other pension funds which are “trying to grow their way out by continuing to bet heavily on equities and making ever-larger allocations to private equity, hedge funds, real estate, infrastructure and other illiquid assets.”
