FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

November 24, 2009 • 12:56 am 0

CMA launches Latin America algo trading offering

CMA the leading Market Data, Order Management and Connectivity provider in Brazil has officially launched CMA Algoritmos onto its Trade Hub platform.

CMA can now provide algorithmic trading as a part of its portfolio of leading LatAm capital markets services and applications. CMA product offerings are currently in use throughout Latin America by over 17,000 workstations, 75 brokers with access to over 100 global exchanges.

CMA Algoritmos is a sophisticated suite of solutions particularly designed for and by the Brazilian trading market with uses throughout Latin American, Europe and North America. The user simply defines trading strategies, customizes triggers while being able to utilize many common methodologies such as SpreadMaker, VWAP, TWAP, QuickBasket, Best Offer, Volume Tracker and Financial Summary as a few examples.

CMA has enabled Algoritmos onto CMA Trade Hub, the largest network of services and applications utilizing all versions of FIX in Latin America, so that any interested trading party Buy-Side or Sell- Side in North America, Europe or beyond would have instantaneous access to broker dealers for execution.

The CMA services and applications on Trade Hub are utilized by more than 17,000 workstations from 60 brokers and many of their clients in Brazil as well as 15 other brokers and their clients throughout: Argentina, Chile, Peru, Colombia, Mexico and Spain. The addition of Algoritmos makes trading Equities, Futures, Options and Foreign eXchange in Latin American Capital Markets even more lucrative.

Source: FINEXTRA, 23.11.2009

Filed under: Argentina, BM&FBOVESPA, BMV - Mexico, Brazil, Chile, Colombia, Exchanges, FIX Connectivity, Latin America, Mexico, News, Peru, Trading Technology , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

November 22, 2009 • 3:50 am 1

Mexican IPC Index ETF “iSHARES NAFTRAC” listed on Spain’s LATIBEX

BGI IShares listed it’s Mexican ETF (TRAC) NAFTRAC on the Spanish LATIBEX exchange on November 19th, 2009.

This is the first time a Mexican traded TRAC is listed abroad. It marks a significant recognition of the Mexican financial markets and in particular for BMV – Bolsa Mexicana de Valores (BMV) the Mexican Stock Exchange in it’s international expansion.

The NAFTRAC tracks the top 35 traded Mexican stocks according to the BMV IPC index. The TRAC was listed on April 16th, 2002 and was the first such instrument to be listed in Mexico and Latin America, and has become one of the most traded instruments in Mexico’s Stock Exchange.

Barclays Global Investors (BGI) Mexico, is underwriting and listing the TRAC on LATIBEX in Madrid, Spain.

Note: TRAC (Títulos Referenciados a Acciones) are the Mexican equivalent for ETF’s traded on the stock exchange and issued by BGI IShare Mexico

Note: BMV IPC tracks companies of global influence like WalMex, FEMSA (CocaCola), Telmex, Modelo, CEMEX, Bimbo, AMX, Bolsa and others with global operations and revenues. See latest performance of IPC here.

Source: BMV, 19.11.2009
Summarized translation by FiNETIK from BMV press release 19.11.2009

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, Services , , , , , , , , , , , , , , , ,

• 1:14 am 0

Mexican Stock and Derivatives Exchanges BMV & MexDer launch Co-location

Bolsa Mexicana de Valores Group (BOLSA), which owns BMV, the Mexican stock exchange, and MexDer, the Mexican derivatives exchange,  announced today that it launched Co-location service on November 12th, which is offered to all the trading members.

Click here for  detailed  Bolsa Transactional Services on DMA and Co-Locations

The new service allows members to colocate trading equipment and proprietary algorithms next to the BOLSA Central Trading Engine, allowing members “to have electronic traders back in the trading floor”. This is a unique opportunity for high frequency traders and algo traders to execute derivatives and equity trades at the lowest latencies available in the market.

The BOLSA’s cross border indicators show an increase in the volume and number of trades executed through Sentra Capitales since 2004, indicating that the Mexican market is also following the trend of automated trading and order execution. As such, the Co-Location service meets the speed requirements for cross border trading, offering latencies below 1 millisecond.

The service envisions the installment of cross border servers for members of BMV, MexDer and real-time information distributors next to the BOLSA Central Trading Engine to increase transmission speed along with top-line service, ongoing monitoring to networks and redundancies at each point of service.

Members of the BMV and MexDer, as well as cross border information distributors, Bursatec and other technology suppliers attended the launching event.

In the financial industry, where trading execution speed is of the utmost importance, the service of Co-Location places you right next to your partner, in the same physical center, offering speed and reliability in their transactions. This project follows the trend to further adopt international standardization practices.

Source:Bolsa Mexicana de Valores Group, 19.11.2009

Press Feedback:

Grupo Bolsa in co-location push, FT 20.11.2009

The move is a further sign of the growing popularity of co-location – where brokerages physically place their servers as close as metres away from an exchange’s matching engine to help shave milliseconds off the time needed to execute trades.

The co-location service meets the speed requirements for cross-border trading, offering latencies – the speed of confirming the trade – below one millisecond, Grupo Bolsa said.

Filed under: BMV - Mexico, Data Vendor, Exchanges, Latin America, Market Data, Mexico, News, Risk Management, Trading Technology , , , , , , , , , , , , , , , ,

• 1:11 am 1

BMV- Mexican Stock Exchange changes Crossing Rules

The Mexican Stock Exchange authorities announced on November 19th that starting on November 30, new rules for crossing stock on the BMV will be implemented.

As of November 30, crosses of 50% of the average daily traded volume of the last six months in a particular stock, will be able to be crossed “clean” (without interference from other brokers) as long as the cross is executed at a price between the bid and the offer.

Source: IXE, 20.11.2009

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, Risk Management , , , , , , , , ,

November 21, 2009 • 12:24 am 1

BMV – Bolsa Mexicana de Valores October 2009 Performance Report

Click here to download Mexico’s Stock Exchange market performance report for October 2009.

Source: BMV , 18.11.2009

FiNETIK recommends:

BMV- Bola Mexicana de Valores – September 2009 Performance Report

BMV- Bolsa Mexicana de Valores – August 2009 Performance Report

BMV- Bolsa Mexicana de Valores – July 2009 Performance Report

BMV – Bolsa Mexicana de Valores – June 2009 Performance Report

BMV – Bolsa Mexicana de Valores – May 2009 Performance Report

BMV – Bolsa Mexicana de Valores – April 2009 Performance Report

BMV – Bolsa Mexicana de Valores – March 2009 Performance Report

BMV – Bolsa Mexicana de Valores – February 2009 Performance Report

BMV – Bolsa Mexicana de Valores – January 2009 Performance Report

BMV – Bolsa Mexicana de Valores – December 2008 Performance Report

BMV -  Bolsa Mexicana de Valores – November 2008 Performance Report

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News , , , , , , , , ,

November 19, 2009 • 10:47 pm 0

Fears of China property bubble

A large bubble is forming in China’s property market as a result of Beijing’s credit-driven stimulus programme, one of the country’s most prominent real estate developers warned.

Zhang Xin, chief executive of Soho China, one of the country’s most successful privately owned property developers, told the Financial Times the asset bubble was leading to rampant wasteful investment in the sector, undermining the country’s long-term growth prospects.

“Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment,” Ms Zhang said. “The rising prices are a direct result of so much money coming from the banks and the Chinese banks should be very worried.”

Ms Zhang’s assessment was echoed by Fan Gang, a member of the central bank’s monetary policy committee, who warned on Wednesday that real estate in cities such as Beijing, Shanghai and Shenzhen was expensive and there was a growing risk of asset price bubbles.

Urban property prices in 70 big and medium-sized Chinese cities rose 3.9 per cent in October from a year earlier, accelerating from September’s 2.8 per cent rise, according to government figures.

Price rises in top-tier markets such as Beijing and Shanghai have been much faster. Analysts say the rebound has largely been driven by an unprecedented government-led expansion of bank lending. It is also being driven by government policies, including tax breaks, low interest rates and smaller down-payment requirements.

Investment in real estate development, a key driver of economic growth, rose 18.9 per cent in the first 10 months of the year on a year earlier, a marked acceleration from 17.7 per cent growth in January-September.

Ms Zhang said the current speculation should be a serious warning for the industry and the general economy.

“In Manhattan, they have vacancy rates of 10-15 per cent and they feel like the sky is falling, but in Pudong [the central business district in Shanghai] vacancy rates are as high as 50 per cent and they are still building new skyscrapers,” she said.

“If you look at GDP growth, then China looks like a new engine driving the global economy, but if you look at how growth is being created here by so much wasteful investment you wouldn’t be so optimistic.”

Source: FT, 18.11.2009 Jamil Anderlini in Beijing

Filed under: Asia, China, News, Risk Management , , , , , , , , , , ,

• 10:02 am 2

HSBC Brazil Fund outperforms Asia Pacific Rivals on Economic Outlook, Currency

Nov. 18 (Bloomberg) — HSBC Global Asset Management’s Japan-based mutual fund investing in Brazilian stocks has beaten its biggest peers this year in the Asia-Pacific region as the stronger real boosted returns from bets on JBS SA and Duratex SA.

The 224.36 billion-yen ($2.5 billion) HSBC Brazil Open (Japan) fund has risen 170 percent in 2009, the steepest gain among 2,361 funds tracked by Bloomberg and based in the Asia- Pacific region with assets of at least $100 million.

Brazil’s Bovespa stock index has surged 80 percent this year, buoyed by the outlook for economic growth and by winning bids to host the 2014 World Cup soccer matches and 2016 Olympics. Further boosting returns at HSBC’s yen-denominated fund is the real’s 33 percent appreciation against the Japanese currency. Adjusted into yen, the Bovespa has soared 139 percent this year, the most of 89 benchmarks worldwide tracked by Bloomberg.

“Brazil’s economy is showing a strong recovery, led by domestic demand,” Pedro A B Bastos, chief executive officer of HSBC Global Asset Management in Brazil, said by e-mail. “With the 2014 World Cup and 2016 Olympic Games in Rio de Janeiro, interest in investment into Brazil has grown significantly.”

The country’s economy will expand 3.5 percent next year after a 0.7 percent contraction this year, according to forecasts published Oct. 1 by the International Monetary Fund. The real has strengthened against most currencies this year on the prospects for growth, increased commodity prices, rising stocks and an improved credit outlook.

Brazilian Stock Market

The Bovespa’s percentage gain in yen terms this year compares with increases of 25 percent for the MSCI World Index, 83 percent for the Sensitive Index in India, 78 percent for the Shanghai Composite Index in China and 130 percent for Russia’s dollar-denominated RTS Index.

JBS SA, the world’s largest beef producer and the HSBC fund’s largest holding, has climbed 95 percent this year.

“As emerging economies grow, diets change and more people eat meat, so demand is growing outside of Brazil too,” said Kenji Yamamoto, corporate director at HSBC Global Asset in Tokyo.

Duratex SA, a maker of bathroom fittings and wood panels that has gained 273 percent this year, and BR Malls Participacoes SA, Brazil’s biggest owner of shopping malls, with a 154 percent increase this year, are also among the HSBC fund’s top holdings, Bastos said.

Source: Bloomberg,18.11.2009

Filed under: Asia, BM&FBOVESPA, Brazil, Exchanges, Japan, Latin America, News, Services, Wealth Management , , , , , , , , , , , ,

• 9:56 am 0

Asia:NPLs and SMEs to provide distressed opportunities

Distressed specialists define their terminology and give their take on the market at the second AsianInvestor/FinanceAsia Distressed and Troubled Asset Investing Summit, held in Tokyo.

“What exactly is distress?” reflected AsianInvestor editor Jame DiBiasio at a panel he moderated on Monday at the Tokyo Distressed and Troubled Asset Investing Summit. “Is it a good asset from a distressed seller, or an asset itself that is in bad shape?”

The panel of distressed experts plumped for the former — they want good assets that are being flogged off by an imperilled owner.

“We prefer something that requires re-engineering, assuming that there is some enterprise value left,” said Steve Moyer, a portfolio manager at Pimco. “Banks couldn’t afford to take the losses on clearing portfolios of loans until they rebuild capital. That accomplished, they can begin the process.”

Edwin Wong, a former distressed-investing managing director at Lehman Brothers, and regarded by some in those halcyon days as the finest exponent of distressed investing practice in the hemisphere, recently started his own fund management company, SSG Capital Management.

“Unlike the Asian crisis of the late 1990s, in which all sizes of companies went bankrupt, we’re not seeing it this time around so much with the big companies,” he said. “However, private companies and smaller corporates have built up a lot of leverage, and that’s where we see the main opportunity in China, India and Indonesia.”

In answer to the old conundrum ‘what is the most famous thing that Belgium has ever produced?’, perhaps Michel Lowy will be a contender, if his new firm SC Lowy succeeds.

Lowy says distressed investors have been sharpening their pencils for the past 18 months, expecting lots of deals, only to be disappointed by the available opportunities. He hopes that will change as commercial banks finally bite the bullet and sell off non-performing portfolios.

He also perceives differences geographically in the structure of opportunities on offer. “In North Asia and other sophisticated Asian economies, there is a weighting towards public companies,” Lowy says. “Elsewhere in Asia, there are more family-owned companies. The latter are often in places where the creditor has more limited rights. It’s going to be harder to gain control of a company there by converting debt to equity.”

Source: AsianInvestor.net, 18.11.2009

Filed under: Asia, Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, News, Risk Management, Services, Singapore, Thailand, Vietnam , , , , , ,

November 18, 2009 • 8:36 am 0

SSE Shanghai Stock Exchange new trading system NGTS to go live on Nov 23th

After years of elaborate preparations and several tests on the whole market, the New Generation Trading System (NGTS) of the Shanghai Stock Exchange (SSE) will be put into operation on November 23, 2009 upon approval by the China Securities Regulatory Commission. Systems directly connected to the SSE such as that of the securities companies will be simultaneously switched at that time.

Putting the new trading system into use is a systematic project covering wide areas and involving complicated technologies. The SSE has made careful and ample preparations to ensure the smooth operation of trading.

What’s more, the bourse has formulated relevant contingency plans for possible risks. In case of any abnormal trading resulting from malfunction of the system, the bourse will take necessary measures in time according to the “Detailed Implementation Rules on Handling Abnormal Trading of the SSE (Trial)”. If the trading can not be carried out in a normal way due to the system’s malfunction, the bourse will close the market. And if the trading can not be resumed on the day when the system goes wrong and on the following day, the bourse will switch back to the existing system for trading.

Q&A by SSE on Switch, launch of New Trading System (NGTS)

Q: Would you please introduce to us the construction of the SSE new trading system and the significance of its launch?

A: Thanks to the rapid development of China’s capital market in the last few years, the SSE’s stock trading volume grew by leaps and bounds from the daily average of RMB7.156 billion in 2002 to RMB138.8 billion in 2009. As links at China’s securities market, including issuance, listing, trading and communication, heavily depend on technology, the market keeps propelling us for technical innovations. From the perspective of the global market, the upgrading of trading system is inevitable for market development.

Since November 2004, the bourse has been well on the way to the development of the new trading system. By October 2007, the overall design and software development of the system had been completed, with about 160 key documents under 53 subclasses of 13 categories compiled and approximately 1 million lines of codes for pure source program delivered. The model of the online version, finalized in April 2009, has been at the stage of synchronous operation and maintenance since late June. At present, the last-minute preparations for the switch are under way orderly.

The SSE’s new trading system, inheriting the advantages of the current system, learning from the characteristics and merits of overseas stock trading systems and meeting the long-term development needs of China’s capital market, is a fruit of technical integration and re-innovation.

The smooth launch of the new system, a booster of the bourse’s core competitiveness, is of great importance to the construction of the SSE into a world-class exchange in terms of technical security. First, the SSE provides a powerful guarantee for future market development through improvement in processing and safety capability of its trading system. The new system boasts a peak order processing rate of about 80,000 orders per second, with an average order delay 30% shorter than the current one. The system’s daily bilateral volume of not less than 120 million orders is equivalent to the daily volume of RMB1.2 trillion on a single market and quadruples the maximum peak value ever recorded in the bourse, with a capability of parallel expansion. Moreover, the system, technically more reliable, is capable of ensuring the steady operation under the circumstance of peak data flow. Second, a solid foundation is laid for the SSE’s exploration into international business by ensuring easier access to the technical interfaces for all participants at home and aboard. Third, the SSE’s role in leading industry technical advancement is given full play by tapping up the new channel to future upgrading of technical systems of its members and other market participants. Fourth, an ideal platform is established to support the SSE’s simulated transaction business, custody business, multi-variety-and-platform business in the future.

Q: What are the arrangements for the switch of the old trading system to the new one and the launch of the new system?

A: The launch of the new trading system is scheduled for November 23 (Monday). The switch and launch falls into three stages: 1. Launch preparation period: all pre-launch preparations will be rounded off before 24:00 on November 20 (Friday). 2. Switch period: the switch from the current system to the new one will be wound up between 00:00 on November 21 (Saturday) and 24:00 on November 22 (Sunday). 3. Trial run period: focus will be put on the operation of the new system to eliminate possible risks from November 23 to December 4. After the end of the trial run, the current system will be shut down. During the trial run period, in case of failure in normal transactions due to technical drawback of the trading system, the SSE will announce market closure. If the trading on the very day and the following day can’t be resumed due to melt-down of the new trading system, the SSE will fall back on the current system for trading resumption.

Q: What preparations has the SSE made for the launch of the new system?

A: The SSE, in the principles of active preparation, steady promotion and step-by-step implementation, has devoted countless hours to the careful preparations for the launch of the new system. So far, preparations for the new system in terms of system, market and bourse have all been in place.

First, the system is ready to go. Since June 2009, the SSE has organized several rounds and batches of all-around tests, special pressure tests and special destructive tests participated in by market participants with a view to verifying the system’s functionality in usability, robustness, high capacity, anti-destructive attack, network monitoring and system monitoring as well as the operating team’s response competence.

The 3 all-around online tests organized by the bourse since October this year have achieved expected results, indicating that the new system is qualified for its launch.

Second, the market is fully prepared. With the completion of prophase laboratory test, on-the-spot access test and overall market training, the SSE officially kicked off the preparations for the launch of the new system by market participants in May 2009. In July and August this year, all market participants including securities companies and fund companies were grouped into 6 batches and underwent 7 all-around tests. According to the inspection results of examination and acceptance, all market participants have completed their preparations for technology and business. The subsequent 3 all-around online tests further proved that all member units and other market participants have got everything ready for the launch.

Third, the bourse itself is ready. After elaborate preparations, the business operation platform of the trading system, the internal business process, the trading hall, the business operation team, the contingency treatment mechanism related to the new trading system as well as the service integration with the back-end depository and clearing system are ready. All this ensures the smooth operation of the new trading system upon its adoption.

Q: What measures have the SSE formulated to ensure the launch of the new trading system?

A: To ensure the smooth and safe launch of the new trading system, the SSE has established a command center for overall direction and coordination during the switch stage. The command center is divided into five working groups of technology switch, technology operation, business operation, relevant systems and comprehensive affairs. In the “special guarantee” month for the adoption of the new trading system since November 2, the SSE will take guarantee measures at the highest level according to the system switch progress.

Besides, the SSE has also made thorough arrangements on the following issues. To begin with, it has strengthened the risk prevention capabilities of member units, keeping close watch on those large in scale with complex technical system, those under reorganization currently, those adjusting the technical systems before and after the launch of the new trading systems, and those lagging behind in technical strength. The SSE has set up a technical service group to provide technical support for members at any time. Meanwhile, a service hotline for the launch of the new system is open to keep in touch with the market.

Next, the internal risk prevention of the bourse has been intensified. In line with the principle of “prevention first, quick response, timely disposal and less impact”, the SSE has kept improving its ability of quick response, recognition and disposal towards all kinds of risks and relevant technical failures based on the previously formulated contingency schemes.

Lastly, the implementation of businesses spanning over one day will be suspended. The SSE will suspend the implementation of businesses spanning over one day related to the product issuance such as the IPO of new products (A shares, B shares, bonds, funds and warrants) and additional issuance from three working days before the adoption of the new system to five working days after the successful switch (from November 18 to 30).

Q: How will the adoption of the new trading system affect the securities companies and other market participants? What are the SSE requirements upon them?

A: While the new trading system is put into operation, systems of the securities companies and other market participants that are directly connected to the SSE will be simultaneously switched to the new system. Market participants shall, in accordance with the general planning of the SSE on the adoption of the new system, make relevant technical and business preparations to ensure the safe and smooth launch of the systems directly connected to the SSE.

In its “Notice of Making Preparations for Launch of New Trading System” in May 2009, the SSE required that the securities companies, fund companies and relevant market participants form the special working groups led by their senior management members. In the recent mobilization meeting of the whole market, the SSE asked all units to, in the light of its organizational mechanism and safeguarding measures, pay much attention to and spare no effort in the implementation of various work as required. The SSE also specified in a notice the following requirements: firstly, market participants shall carefully study relevant documents on system switch and do a good job in publicity and mobilization. Secondly, they shall form the working groups for the switch and designate personnel in charge. Thirdly, apart from keeping the communications smooth and efficient, they shall give the feedback in time if any problem should crop up. Fourthly, they shall work out the operational schemes and contingency plans for the system switch on the member’s side. Related personnel shall be know how to carry out relevant processes and plans to avoid manual operating errors.

Q: How will the adoption of the new trading system affect the investors?

A: The previous trading methods of investors who are directly using the business systems of various securities companies will not be affected by the adoption of the new system. Undoubtedly, the shift of the new system into use is a systematic project covering wide areas and involving complicated technologies. The SSE has made corresponding contingency plans for possible risks to minimize the influence on the investors’ trading.

The new system, yet to-be-launched, with improved match efficiency and ability, safeness and reliability, will allow the investors to trade in a safer, easier, more fair and efficient way.

Q: What contingency measures have the SSE adopted against the emergencies that may crop up in the launch of the new trading system?

A: To ensure a safe system launch, the SSE will promptly deal with the abnormal conditions during the launch according to the issued “Detailed Implementation Rules on Handling Abnormal Trading of the SSE (Trial)”. Firstly, it perfected its contingency plan regarding all possible risks during the system launch and perfected the specific measure for each risk and breakdown situation. Secondly, it established the joint contingency mechanism with China Securities Depository and Clearing Corporation Limited to deal with all kinds of risks involving the registration and settlement during the new system launch. Thirdly, it issued the “Guidance on Contingency Treatment for Market Participants’ Trading of the SSE” to urge the market participants to form the working groups of trading contingency treatment during the trial run period. The working group shall work out the contingency plans and direct the contingency treatment. In addition, the SSE also tried to maintain the market stability through sufficient communication with the investors.

Source: SSE, 17.11.2009

Filed under: Asia, China, Exchanges, News, Risk Management, Trading Technology , , , , , , ,

• 7:44 am 0

Hong Kong: First A-share Industry Sector ETFs to Debut on HKEx

Hong Kong’s Exchange Traded Fund (ETF) market further expands with a series of five Mainland A-share industry sector ETFs setting to debut on Wednesday, 18 November on the Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx).

The new Mainland A-share index ETFs are:

Stock Code Name of ETF Benchmark index
2846 iShares CSI 300 A-Share Index ETF CSI 300 Index
3050 iShares CSI A-Share Energy Index ETF CSI 300 Energy Index
3039 iShares CSI A-Share Materials Index ETF CSI 300 Materials Index
2829 iShares CSI A-Share Financials Index ETF CSI 300 Financials Index
3006 iShares CSI A-Share Infrastructure Index ETF CSI 300 Infrastructure Index

With the listing of these five new ETFs, there will be a total of eight ETFs on Mainland A-share indices listed on the Exchange, and HKEx will be the first exchange with Mainland A-share industry sector ETFs.

All ETFs listed on the Exchange, including these five new iShares listings, are designated for market making and for short selling with tick rule exemption.  The market makers for these five ETFs are Citigroup Global Markets Asia Limited, Credit Suisse Securities (Hong Kong) Limited and UBS Securities Hong Kong Limited.

On 18 November, the Exchange will have listed 42 ETFs.  There are eight ETFs on Mainland A-share indices, seven on Hong Kong equity indices, 22 on other regional and international equity indices, two on commodities and three on bonds and money markets.

The three other Mainland A-share index ETFs are:

Stock Code Name of ETF Benchmark index
2823 iShares FTSE/Xinhua A50 China Index ETF FTSE/Xinhua China A50 Index
2827 W.I.S.E. – CSI 300 China Tracker CSI 300 Index
3024 W.I.S.E. – SSE50 China Tracker SSE50 Index

Investors should note that all A-share ETFs use derivative instruments to synthetically replicate the performance of the underlying benchmarks.  These ETFs are subject to counterparty risk of the derivative instruments’ issuers and may suffer losses if such issuers default or fail to honour their contractual commitments. For a better understanding of the risks involved, investors are advised to read the ETFs’ prospectuses in full prior to making any investment decisions.  Information on the various risks of ETFs and their structures is available on the HKEx website.

Source: MondoVisione 17.11.2009

Filed under: Asia, China, Exchanges, Hong Kong, News , , , , , , , , , , ,

• 7:39 am 0

KRX Listing 10 additional Stock Futures on Dec 14, 2009

10 additional single stock futures will be listed on Dec 14, 2009 since the Korea Exchange introduced 15 single stock futures for the first time on May 6, 2008.

Of the stocks that satisfy the selection criteria related to the market share within the industry group and liquidity, the 10 single stock futures to be listed in December have been chosen by taking into consideration the inputs of securities companies, including how frequently the underlying stock has been used in developing equity linked products such as ELWs, ELSs and single stock options.

The issues selected are:

  • Kia Motors(Motor Vehicle),
  • Daewoo Securities(Securities),
  • Korean Air(Transport),
  • Doosan Infracore(Machinery),
  • Samsung C&T(Distribution),
  • Hynix(Semiconductor),
  • Hyundai Steel(Steel),
  • GSE&C(Construction),
  • NHN(Service),
  • SK Energy(Chemical)

As a result, after December 14, 2009, total of 25 single stock futures will be listed on the Korea Exchange.

It is expected that listing of these additional single stock futures will further facilitate new trading strategies to meet the demand of foreign and domestic market participants.

Source:MondoVisione, 17.11.2009

Filed under: Asia, Exchanges, Korea, News , , , , ,

November 17, 2009 • 11:17 am 0

Asian dark pool BlocSec removes minimum order size requirement

BlocSec, the first Asian dark pool to cater to the buy-side and the sell-side, owned by CLSA Asia-Pacific Markets (‘CLSA’), will remove the current minimum US$250k or 20% of the 30-day Average Daily Volume (‘ADV’) order size requirement 1.

Removal of such minimum order size requirement will enable smaller size orders to flow into the system, increasing both liquidity and matching. BlocSec clients can continue to submit and trade large size block orders in BlocSec simply by specifying the minimum quantity fill for their executions.

Christian Chan, Director of Electronic Execution Sales, CLSA said: “We continue to improve and respond to client needs and have removed our minimum order size to source and deepen our liquidity pool, so as to provide greater flexibility across the platform and markets in which we operate.”

BlocSec has been designed to ensure complete anonymity for buyers and sellers. Order entry and matching occurs without the risk of giving away client name, side, position or price of an order which means zero information leakage.

“In addition, we have added the ability for our Client Relationship Managers to accept manual orders and route any balances to the CLSA trading desk if instructed to do so. Again, ensuring more flexibility for clients and a smooth and seamless trade flow process,” Chan added.

Since its launch in May 2008, BlocSec has become the preeminent Asian liquidity aggregator and electronic crossing network for Hong Kong, Japan, Singapore and Australian equities with an average daily liquidity flow over US$77m and an average cross size of US$1.04m.

BlocSec provides traders the ability to place orders with complete anonymity and zero information leakage into the market. BlocSec continues to gather momentum and build liquidity in over 800 distinct names with 50% of all clients entering orders securing a match.

As a CLSA group company, BlocSec has a substantial community of institutional investors with the ability to provide a deep pool of liquidity. Liquidity is also maximized as BlocSec is open to both buy and sell side clients.

Source: FINEXTRA 17.11.2009

Filed under: Asia, Australia, Exchanges, Hong Kong, Japan, News, Singapore, Trading Technology , , , , , , , , , , , , ,

• 9:14 am 0

China and India – Himalayas, Water and growing conflicts

The brewing disputes and growing concerns of the Himalayan Region by worlds two most populus nations, is a further indication of increasing dangers of latent resource wars, particularly on water. The continuing desertification in China and migration to coastal region increase pressure. While planned deviation of water ways to Chinese low lands could severely affect South- and South East Asia, see also
Global Warming affects Asian Financial Hubs -Yangtze faces climate treath

Political Hands across the Himalayas, FT, 15.11.2009

Excerpt: India and China are touted as white knights coming to the rescue of the world economy. Considerable hope rests on these two countries, with fast-paced growth, developing domestic markets and high savings rates, reviving demand and leading other languishing parts of the world out of recession.

The two rising powers, however, may yet be clashing knights. For in New Delhi it is fear of Beijing, rather than partnership, that all too frequently characterises the trans-Himalayan relationship. While some size up trade balances and growth trajectories, others are measuring missile ranges and comparing military parades.

Mr Mishra advised Atul Behari Vajpayee, the former premier. His views, albeit hawkish, are respected by the current Congress party-led government and carry weight with the diplomatic community.

So his recent forecast that India might face a second military front within five years turned heads. The former intelligence chief predicted that India could find itself locked in an armed stand-off simultaneously with Beijing and Pakistan, the traditional rival.

Mr Mishra’s suspicions of China have been newly aroused by Beijing’s warm relationship with Islamabad and its supply of military hardware to Pakistan’s army.

They have also been stoked by territorial claims to Arunachal Pradesh, a north-eastern Indian state, and predictions on Chinese websites that India, a country of huge diversity, is doomed to fall apart.

Mr Mishra says China’s stridency in its territorial ambitions has grown over the past two years to a level not seen since the early 1960s. Moreover, he accuses China of trying to bring into question India’s sovereignty over the state at the international level.

Military strategists interpret China’s policies as a regional power play. They say that tying India up within its own borders prevents it from projecting itself in the region and rivalling China.

In spite of the fighting talk in India, the relationship between India and China holds much more potential than antagonism. China’s impressive record of infrastructure development and lifting people out of poverty holds lessons for India. Likewise, India’s democratic credentials and inclusiveness are instructive to China.

Read full article hear:  15.11. 2009 by James Lamont in New Delhi

The high stakes of melting Himalayan glaciers, CNN 05.10.2009

Execerpt – The glaciers in the Himalayas are receding quicker than those in other parts of the world and could disappear altogether by 2035 according to the 2007 Intergovernmental Panel on Climate Change (IPCC) report. The result of this deglaciation could be conflict as Himalayan glacial runoff has an essential role in the economies, agriculture and even religions of the regions countries.

Satellite data from the Indian Space Applications Center, in Ahmedabad, India, indicates that from 1962 to 2004, more than 1,000 Himalayan glaciers have retreated by around 16 percent. According to the Chinese Academy of Sciences, China’s glaciers have shrunk by 5 percent since 1950s.

Dr. Vandana Shiva, an environmental activist, physicist and leader in the International Forum on Globalization, has just returned from a “Climate Yatra,” a research journey to the Himalayas to study the impact of climate change and the glacial melt upon communities in Asia.

“Himalayan rivers support nearly half of humanity,” Dr. Shiva told CNN. “Everyone who depends on water from the Himalayas will be affected.”

Both India and China are exploring opportunities to harness Himalayan waters for hydroelectric power projects, and while the initial melt promises to provide plenty of water for both sides, the loss of glaciers could lead to water shortages further in the future.

Water-related conflicts have already been witnessed in other parts of the globe such as in the West Bank and in Darfur.

According to Himanshu Thakkar of the South Asia Network on Dams, Rivers and People, almost 70 percent of the non-monsoon flows in almost all the Himalayan rivers come from glacier melt.

International water security issues within Asia could be likely since the waters of the Indus, Ganges and the Brahmaptura basins flow into China in the upstream, and are shared across South Asia in the downstream.

Dr. Shiva believes the situation will render major security issues, between India and China particularly, as flows reduce and demands intensify.

Read full article here: CNN, 05.10.2009


In retreat: the roof of the world is experiencing rapid summer melting.

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• 8:23 am 0

Bursa Malaysia and KRX: Support of the Malaysia International Islamic Financial Centre’s Initiative aims to boost Growth of Islamic Finance Market- Event 19.11.2009

The Korea Exchange (KRX) and Bursa Malaysia will be playing host to the Korean investment bankers, advisers, issuers and institutional investors at its inaugural KRX-Bursa Malaysia Islamic Capital Market Conference, which will be held on 19 November 2009 in Seoul, Korea. This conference which is co-organised in support of the Malaysia International Islamic Financial Centre (MIFC) initiative, aims to share Malaysia’s Islamic finance experience and to promote the opportunities in the Malaysian Islamic capital market landscape. This collaborative effort hopes to strengthen the growth opportunities of Islamic finance amongst the discerning Korean investors and issuers.

This conference is timely as there is a strong interest for Korea to grow the Islamic finance industry, following from the proposed liberalisation measures by the Korean government which are aimed to allow the issuance of Islamic bonds or sukuk as well as allow incomes from sukuk to be tax-exempted. These proposed laws are expected to be passed by the Korean government’s National Assembly later this year.

In conjunction with the KRX-Bursa Malaysia Islamic Capital Market Conference, delegates of the MIFC initiative, which comprises senior management of Bank Negara Malaysia (Central Bank of Malaysia), Securities Commission Malaysia and Bursa Malaysia, will be participating in the conference. Malaysia acknowledges Korea as a potential Islamic financial market and welcomes Korea’s participation in shaping the Islamic finance landscape together, via leveraging on Malaysia’s more than 30 years of experience in developing the world’s most comprehensive Islamic financial system.

Chief Executive Officer of Bursa Malaysia Berhad, Dato’ Yusli Mohamed Yusoff said, “We hope this conference will stimulate interest in the Shari’ah compliant products which are currently in demand from investors who are seeking returns from alternative and ethical investments. In addition, this visit by the delegates from the MIFC will pave the way for more opportunities to exchange ideas in Islamic finance and forge greater working relations between Korea and Malaysia for the interest of growing this important industry. We are confident that the Malaysian and Korean authorities as well as KRX and Bursa Malaysia would be able to leverage on our respective strengths in the establishment of an Islamic capital market in Korea.”

This KRX-Bursa Malaysia Islamic Capital Market Conference is expected to attract 200 participants and will provide a platform for all attendees to gain an insight into the outlook and trends of Islamic capital markets. Key discussion topics will centre around the liberalisation of Islamic financial markets, investment and business opportunities in Islamic capital market, the Islamic finance landscape and framework as well as the growth of Islamic finance products in Asia and globally.

Source: MondoVisione, 16.11.2009

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November 14, 2009 • 11:53 pm 1

Mexico the NEW China ?

When it comes to global manufacturing, Mexico is quickly emerging as the “new” China.

According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil.

In fact, Mexico’s cost advantages and has become so cheap that even Chinese companies are moving there to capitalize on the trade advantages that come from geographic proximity.

The influx of Chinese manufacturers began early in the decade, as China-based firms in the cellular telephone, television, textile and automobile sectors began to establish maquiladora operations in Mexico. By 2005, there were 20-25 Chinese manufacturers operating in such Mexican states Chihuahua, Tamaulipas and Baja.

The investments were generally small, but the operations had managed to create nearly 4,000 jobs, Enrique Castro Septien, president of the Consejo Nacional de la Industria Maquiladora de Exportacion (CNIME), told the SourceMex news portal in a 2005 interview.

China’s push into Mexico became more concentrated, with China-based automakers Zhongxing Automobile Co., First Automotive Works (in partnership with Mexican retail/media heavyweight Grupo Salinas), Geely Automobile Holdings (PINK: GELYF) and ChangAn Automobile Group Co. Ltd. (the Chinese partner of Ford Motor Co. (NYSE: F) and Suzuki Motor Corp.), all announced plans to place automaking factories in Mexico.

Not all the plans would come to fruition. But Geely’s plan called for a three-phase project that would ultimately involve a $270 million investment and have a total annual capacity of 300,000 vehicles. ChangAn wants to churn out 50,000 vehicles a year. Both companies are taking these steps with the ultimate goal of selling cars to U.S. consumers.

Mexico’s allure as a production site that can serve the U.S. market isn’t limited to China-based suitors. U.S. companies are increasingly realizing that Mexico is a better option than China. Analysts are calling it “nearshoring” or “reverse globalization.” But the reality is this: With wages on the rise in China, ongoing worries about whipsaw energy and commodity prices, and a dollar-yuan relationship that’s destined to get much uglier before it has a chance of improving, manufacturers with an eye on the American market are increasingly realizing that Mexico trumps China in virtually every equation the producers run.

“China was like a recent graduate, hitting the job market for the first time and willing to work for next to nothing,” Mexico-manufacturing consultant German Dominguez told the Christian Science Monitor in an interview last year. But now China is experiencing “the perfect storm … it’s making Mexico – a country that had been the ugly duckling when it came to costs – look a lot better.”

The real eye opener was a 2008 speculative frenzy that sent crude oil prices up to a record level in excess of $147 a barrel – an escalation that caused shipping prices to soar. Suddenly, the labor cost advantage China enjoyed wasn’t enough to overcome the costs of shipping finished goods thousands of miles from Asia to North America. And that reality kick-started the concept of “nearshoring,” concluded an investment research report by Canadian investment bank CIBC World Markets Inc. (NYSE: CM)

“In a world of triple-digit oil prices, distance costs money,” the CIBC research analysts wrote. “And while trade liberalization and technology may have flattened the world, rising transport prices will once again make it rounder.”

Indeed, four factors are at work here.

Mexico’s “Fab Four”

  • The U.S.-Mexico Connection: There’s no question that China’s role in the post-financial-crisis world economy will continue to grow in importance. But contrary to the conventional wisdom, U.S. firms still export three times as much to Mexico as they do to China. Mexico gets 75% of its foreign direct investment from the United States, and sends 85% of its exports back across U.S. borders. As China’s cost and currency advantages dissipate, the fact that the United States and Mexico are right next to one another makes it logical to keep the factories in this hemisphere – if for no other reason that to shorten the supply chain and to hold down shipping costs. This is particularly important for companies like Johnson & Johnson (NYSE: JNJ), Whirlpool Corp. (NYSE: WHR) and even the beleaguered auto parts maker Delphi Corp. (PINK: DPHIQ) which are involved in just-in-time manufacturing that requires parts be delivered only as fast as they are needed.
  • The Lost Cost Advantage: A decade or more ago, in any discussion of manufactured product costs, Asia was hands-down the low-cost producer. That’s a given no more. Recent reports – including the analysis by AlixPartners – show that Asia’s production costs are 15% or 20% higher than they were just four years ago. A U.S. Bureau of Labor Statistics report from March reaches the same conclusion. Compensation costs in East Asia – a region that includes China but excludes Japan – rose from 32% of U.S. wages in 2002 to 43% in 2007, the most recent statistics available. And since wages are advancing at a rate of 8% to 9% a year, and many types of taxes are escalating, too, East Asia’s overall costs have no doubt escalated even more in the two years since the BLS figures were reported.
  • The Creeping Currency Crisis: For the past few years, U.S. elected officials and corporate executives alike have groused that China keeps its currency artificially low to boost its exports, while also reducing U.S. imports. The U.S. trade deficit with China has soared, growing by $20.2 billion in August alone to reach $143 billion so far this year. The currency debate will be part of the discussion when U.S. President Barack Obama visits China starting Monday. Because China’s yuan has strengthened so much, goods made in China may not be the bargain they once were. Those currency crosscurrents aren’t a problem with the U.S. and Mexico, however. As of Monday, the dollar was down about 15% from its March 2009 high. At the same time, however, the Mexican peso had dropped 20% versus the dollar. So while the yuan was getting stronger as the dollar got cheaper, the peso was getting even cheaper versus the dollar.
  • Trade Alliance Central: Everyone’s familiar with the North American Free Trade Agreement (NAFTA).  But not everyone understands the impact that NAFTA has had. It isn’t just window-dressing: Mexico’s trade with the United States and Canada has tripled since NAFTA was enacted in 1994. What’s more, Mexico has 12 free-trade agreements that involve more than 40 countries – more than any other country and enough to cover more than 90% of the country’s foreign trade. Its goods can be exported – duty-free – to the United States, Canada, the European Union, most of Central and Latin America, and to Japan.

In the global scheme of things, what I am telling you here probably won’t be a game-changer when it comes to China. That country is an economic juggernaut and is a market that U.S. investors cannot afford to ignore.  Given China’s emerging strength and its increasingly dominant financial position, it’s going to have its own consumer markets to service for decades to come.

Two Profit Play Candidates

From a regional standpoint, these developments all show that we’re in the earliest stages of what could be an even-closer Mexican/American relationship – enhancing the existing trade partnership in ways that benefit companies on both sides of the border (even companies that hail from other parts of the world).

In the meantime, we’ll be watching for signs of a resurgent Mexican manufacturing industry that’s ultimately driven by Chinese companies – because we know the American companies doing business with them will enjoy the fruits of their labor.

Since this is an early stage opportunity best for investors capable of stomaching some serious volatility, we’ll be watching for those Mexican companies likely to benefit from the capital that’s being newly deployed in their backyard.

Two of my favorite choices include:

  • Wal Mart de Mexico SAB de CV (OTC ADR: WMMVY): Also known as “Walmex,” this retailer has all the advantages of investing in its U.S. counterpart – albeit with a couple of twists. Walmex’s third-quarter profits were up 18% and the company just started accepting bank deposits, a service that should boost store traffic. And while the U.S. retail market is highly saturated – which limits growth opportunities – there are still plenty of places to build Walmex stores south of the border. After all, somebody has to sell products to all those thousands of workers likely to be involved in the growing maquiladora sector.
  • Coca-Cola FEMSA SAB de CV (NYSE ADR: KOF): Things truly do go better with Coke – especially higher wages and an improved lifestyle. According to Reuters, Mexicans now consume more Coca-Cola beverages per capita than any other nation in the world. The company just posted a 25% jump in its third-quarter net earnings, aided by a strong 21% jump in revenue. Coca-Cola FEMSA continues to experience strong growth from its Oxxo convenience stores, and strong beer sales, too. And all three product groups are logical beneficiaries of strong maquiladora development and the growing incomes and rising family wealth that will translate into higher consumer spending in the immediately surrounding areas.

Source: Money Morning, 13.11.2009 by Keith Fitz-Gerald, Chief Investment Strategist,  Money Morning/The Money Map Report

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