“New York Times (April 7, 2013)
U.S. regulators like FINRA need to confront today’s changing market where trading “has increasingly migrated away from public exchanges, like the New York Stock Exchange, to private trading venues, mostly operated by big banks.” With approximately 40% of trades being handled through dark pools and internalizers, markets are losing transparency and may become more susceptible to crashes and manipulation. Canadian and Australian regulators have already taken steps to protect their markets. U.S. regulators need to get with the program. “The market cannot be efficient if many orders never see the light of day. An inefficient market is neither fair nor stable, which makes a strong regulatory response to protect investors imperative.”
Tags: Australia, Canada, Dark pools, Efficient markets, FINRA, Investors, NYSE, U.S.
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 (February Issue)
“Talk of currency wars is once again in the air, making foreign exchange potentially a major component of investment returns.” Last year, “the dollar underperformed all major currencies except the yen.” In 2013, the Norwegian krone, Australian dollar and New Zealand dollar are likely to benefit if the dollar’s slide continues.
Tags: Australia, Currency, Dollar, Forex, Investment, Krone, New Zealand, Norway, U.S., Yen
Financial Times (November 5)
“In a landmark case that could pave the way for legal action in Europe,” an Australian judged ruled that “Standard & Poor’s misled investors by awarding its highest rating to a complex derivative product that collapsed in value less than two years after it was created by ABN Amro’s wholesale banking division.” The “damning verdict” marked “the first time a rating agency has stood a full trial over a structured finance product.” The court concluded that any “reasonably competent” rating agency would “not have given a triple A rating to the securities,” which were “grotesquely complicated.”“In a landmark case that could pave the way for legal action in Europe,” an Australian judged ruled that “Standard & Poor’s misled investors by awarding its highest rating to a complex derivative product that collapsed in value less than two years after it was created by ABN Amro’s wholesale banking division.” The “damning verdict” marked “the first time a rating agency has stood a full trial over a structured finance product.” The court concluded that any “reasonably competent” rating agency would “not have given a triple A rating to the securities,” which were “grotesquely complicated.”
Tags: ABN Amro, Australia, Court, Derivatives, Rating agency, S&P, Structured finance, Verdict
Advanced Trading (September 27)
Despite several major incidents upsetting markets, “U.S. regulators have been slow to act” to regulate high-frequency trading. Germany, Canada, Australia, the EU and other countries, however, are moving ahead. Approaches include transaction fees and minimum time requirements before orders can be cancelled. These countries “think that by acting now, they can protect their markets against the types of technological disruption we’ve seen here. Let’s wait and see if it works.” High-frequency trades now account for 65% of U.S. stock trading and 45% of European stock trading.
Tags: Australia, Canada, Germany, High frequency trading, Regulators, the EU, U.S.
The Economist (June 2)
Fracking has resulted in a shale gas revolution. “At current production rates, America has over a century’s supply of gas, half of it stored in shale and other ‘unconventional’ formations. It should also spread, to China, Australia, Argentina and Europe. Global gas production could increase by 50% between 2010 and 2035, with unconventional sources supplying two-thirds of the growth.”
Fracking has resulted in a shale gas revolution. “At current production rates, America has over a century’s supply of gas, half of it stored in shale and other ‘unconventional’ formations. It should also spread, to China, Australia, Argentina and Europe. Global gas production could increase by 50% between 2010 and 2035, with unconventional sources supplying two-thirds of the growth.”
Securities Monitor (January 18, 2012)
“Chi-X Japan numbers have shot up significantly since the beginning of the year.” In the fourth quarter, Chi-X Japan increased trades by 50.4%, though it still handles less than 3% of Japan’s trading, most of which remains on the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE). Chi-X is also gaining traction in Australia and Canada, where it now accounts for roughly 11% of trades. In combination with the Singapore Exchange (SQX), Chi-X also operates a Pan Asian dark pool, Chi-East, which “supports trading of 3,264 securities including all Hong Kong main-board listed shares.”
The Economist (September 3)
Japan’s not alone in living with an overvalued currency. The commodities “boom has lifted the Australian dollar by more than 43% since the start of 2009” and “pushed up Brazil’s real by even more.” Switzerland escaped this boom, but it’s blessed (or cursed) “with a commodity prized more than iron ore or soyabeans in uncertain times: safety.” As a result the Swiss franc has shot upward. Policymakers in all three countries are concerned, but efforts to weaken their currencies have born little fruit. “Instead of trying to prevent a rise in the currency, countries can, of course, learn to live with it.”
