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Alternative Latin Investor: Wealth Management Issue 18

The Alternative Latin Investor Issue #18 is focusing on Wealth Management in Latin America.

Special Issue: Wealth Management

The World’s First Diamond Fund
Lack of Transparency in Colombia: Root Causes
LatAm Wealth Management Overview
Private Aviation Takes Off in Latin America
High-Tech Financial Technology Hits LatAm

…and much more. Regulations,  Tax & Money Laundering, Structured Finance, Political Risks,  Agri Business, Impact Investment, Wine Investment, Infrastructure, Art

Please view and access Issue 18  in the following formats

Virtual Viewer http://www.alternativelatininvestor.com/Issue18-Preview.htm

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 18.10.2012

Filed under: Argentina, Banking, BM&FBOVESPA, Brazil, Chile, Colombia, Energy & Environment, Islamic Finance, Mexico, News, Services, Trading Technology, Wealth Management, , , , , , , , , , , , , , , , , ,

Latin America: Investor News Letter 19.October 2012

Mexico

Elektra to offer No-Fee Banking and Long Term loans to US low income population
Billionaire Ricardo Salinas said he wants to offer no-fee banking deposits and longer-term loans to low-income U.S. consumers, aiming to export his Mexico business model, successful in 8 Latin American countries to the world’s biggest economy.

Mexico’s market shines as reforms, confidence take hold
NYSE Technologies, Bolsa Mexicana and ATG build Mexican trading infrastructure
Slim-backed Mexican firm plans IPO, new cement company
Alsea to invest $110 million in Mexico, Argentina Starbucks cafes
Mexico passes law to combat cartel money laundering

Brazil

Itau Sinks as Rousseff Plan Hurts Bank Profits: Corporate Brazil

Brazil’s push to drive down consumer borrowing costs is eroding the value of its biggest banks.

Brazil wants to restrict strikes in public sector
Monsanto suspends collection of royalties in Brazil following state court ruling
Brazil M&A hits five-year low on turmoil, state intervention
Brazil and South Africa Form Partnership On Future Investment Promotion Initiatives
Brazil’s Water Sector Benefits From Investment Ahead of World Cup, Olympics

Latin America

Cencosud of Chile to Acquire Carrefour Colombia Division

Cencosud SA agreed to buy Carrefour SA’s Colombian unit for 2 billion euros ($2.6 billion) as it taps rising consumer spending in Latin America and the world’s second-largest retailer retreats from markets it can’t dominate.

Venezuela/Paraguay rift spoils Brazil’s plans for a ‘normal’ Mercosur summit
Singapore, the fastest growing market for Latin America
CAF Encourages Singapore to Invest in Latin America
Cuba Praises China-Latin America Ties
Latin America can produce double-digit investment returns over next decade
Arab and Latin American leaders agree to investment bank
LatAm’s Largest Solar Power Plant  in Peru receiving 40 MW of Solar PV Modules from China
Arab and LatAm leaders agree to investment bank
Peru central bank could allow more pension funds invested abroad
Latin American Ratings Strong Enough to Weather a Commodity-Cycle Downturn
Latin American gold rush brings riches, conflict
Latin lithium output mired in controversy

Source: Various 19.10.2012

Filed under: Argentina, Banking, Brazil, Chile, China, Colombia, Energy & Environment, Mexico, Peru, Singapore, Venezuela, , , , , , , , , , , , , , , , , , , , , , ,

Latin America Fund and Investment News Aug-Oct 2011 – Alternative Latin Investor

American Business Practices in Brazil: A Contrarian’s View

Premium Article OCT, 2011 U.S. companies have been investing heavily in Brazilian private equity in recent years, capitalizing on the across-the-board growth in the country’s small, mid and large cap companies. But according to Malcolm McLelland, an American-born, Brazil-based consultant and…Read Full Article

Latin American Hedge Funds

Premium Article OCT, 2011 Hedge funds have become one of the most vital asset classes in LatAm in recent years, and LatAm hedge funds some of the most successful in the global industry, as local investors aim to diversify their strategies and exposure in the region while foreign investors vie for b…Read Full Article

Brazil

Premium Article OCT, 2011 Given its robust growth in recent years and massive wealth compared to its neighbors, Brazil has attracted the lion’s share of global investment in LatAm, with foreign investors allocating especially aggressively to equity and government bonds. Brazilian investors, …Read Full Article

MILA Integrated Latin American Market

OCT, 2011 On May 30 of this year, the Integrated Latin American Market (Mercado Integrado Latinoamericano, or MILA) was launched, combining the stock markets of Colombia, Chile and Peru into a single cross-trading platform. A key component of a regional trend toward integration, MILA has been wide…Read Full Article

Brazilian Pension Funds

Premium Article OCT, 2011 Alternative asset managers around the globe are vying for the attention of Brazil’s swelling pension funds. As of early 2011, these funds had a total of $342 billion under management and had grown an average of 14% per year for the last five years, one of the highest…Read Full Article

Meta-Trends in LatAm Investment

Premium Article OCT, 2011 The progress of alternative asset investment in LatAm is following two basic meta-trends, that is, large-scale and long-term patterns that transcend specific products, firms or opportunities. These meta-trends are, first, the increasing interpenetration of managers from th…Read Full Article

High Net Worth Individuals in LatAm

Premium Article AUGUST, 2011 The wealth and quantity of high net worth individuals (HNWI) in LatAm has grown in recent years. According to the Capgemini/Merrill Lynch World Wealth Report 2011, the number of LatAm HNWI grew by 6.2% in 2010, and its total HNWI wealth by 9.2%. There are about a half…Read Full Article

Quant Funds

Premium Article AUGUST, 2011 After taking a battering during the 2008 credit crunch and struggling in the early stages of recovery, quantitative (or ‘quant’) funds are trying to reassert themselves in the industry. And a small, but growing, number are looking to start afresh in the …Read Full Article

LatAm Funds

Premium Article AUGUST, 2011 U.S. Institutional investors looking to increase their exposure to emerging markets have been turning increasingly to a handful of LATAM countries, where they see a swelling pool of experienced fund managers working within a context of political stability and economic g…Read Full Article

Institutional Investing in LatAm

Premium Article AUGUST, 2011 For most institutional investors, there is an uncertainty about LatAm´s quality and future – and a certainty about its checkered past – that gives them pause as they investigate young managers in the region. Most of these investors want to see a stron…Read Full Article

Source:Alternative Latin Investor, October 2011

 

Filed under: Brazil, Chile, Colombia, Exchanges, Latin America, Library, Mexico, News, Peru, Risk Management, Services, Wealth Management, , , , , , , , , , , , , , , , ,

Special Report: Evaluated Pricing Oct 2011 – A-TEAM

Valuations and pricing teams are facing a much higher degree of scrutiny from both the regulatory community and the investor community in the glare of the post-crisis data transparency spotlight. Fair value price transparency requirements and the gradual move towards a more harmonised accounting standards environment is set within the context of the whole debate about data quality across the financial services business, in light of incoming regulations such as Basel III and the Alternative Investment Fund Managers Directive (AIFMD). Whether it is related to risk management, pricing, trading or reporting, firms need to be able to stand behind their numbers.

The goal of the AIFMD is to create a level playing field and set basic standards for the operation of alternative investment funds in Europe via new reporting and governance requirements. On the pricing and valuations side of things, firms must establish what the directive calls “appropriate and consistent” procedures to allow for the independent valuation of a fund’s assets. In order to achieve this, the valuation must either be performed by an independent third party or by the asset manager, as long as there is functional separation between the pricing and portfolio management functions.

Download free report here

Source: A-Team, 12.10.2011

Filed under: Data Management, Data Vendor, Market Data, Reference Data, Standards, , , , , , , , , , ,

Citi and Orient Securities Sign China Securities JV Agreement

Citigroup and Orient Securities Company Ltd signed definitive agreements June 2, subject to regulatory approval, establishing a securities joint venture to operate in the Chinese domestic market. The new JV will be called 东方花旗证券有限公司 in Chinese and “Citi Orient Securities Co. Ltd” in English.

The joint venture will engage in investment banking business in the Chinese domestic market, including equity and debt underwriting and advisory services. Orient Securities Company Ltd will have a 67 per cent stake in the new entity with the remaining 33 per cent owned by Citigroup, consistent with existing Chinese regulations.

In addition to the investment banking JV, Orient Securities and Citi will also explore further cooperation in other areas such as research and training.

“The pairing of Citi’s global capabilities and Orient’s local strengths will create a market leading securities company with the ability to serve Chinese and international companies to help them raise capital from local equity and debt markets. This new partnership underscores our strategic commitment to China’s capital markets and complements our well-established banking franchise in China,” said Stephen Bird, CEO for Citi in Asia Pacific.

“We are delighted to be forming this important partnership with Orient Securities, a strong, highly reputable local firm which shares Citi’s management philosophy on building for success.

This announcement underlines our continued investment in China to support our clients,” said Andrew Au, CEO for Citi China.

Source: Asia E-Trading, 02.06.2011

 

Filed under: China, News, , , , , , ,

Alternative Latin Investor Issue 5 July/August

Alternative Latin Investor Issue 5 July/August 2010 click here for a free issue

Issue 5 Content Index

  • Argentine Wind Power A solid investment opportunity in Argentina’s market for wind energy
  • Vanilla Investment potential of the world’s second most expensive spice
  • The Latin American Trust Patricio Abal & Gonzalo Oliva-Beltrán explore a useful tool in project finance.
  • A New Era for Investment in Argentina Javier Canosa discusses post crisis investment issues in Argentina
  • Mexico: Superstar Player of the Emerging Economies Latin America’s newest investment beacon
  • Cuba: Return to capitalism?
  • Merlin Securities’ Best Practices for Latin American Fund Managers
  • Christie’s Latin Art Sale Breaks $20 Million Dollars
  • Chinese Brazilian Trade Ties Continue to Grow
  • Fine Wine Investors Thank Latin America for a Healthy Profit
  • Nordeste Invest : Coming to terms with a new reality        
  • Mark McHugh discusses the resilience of the Brazilian Real Estate Economy
  • Lending Opportunities In Mexican Affordable Housing
  • Mexico’s sovereign debt looks more attractive at present than that of any other G-8 country
  • LatAm Real Estate Index
  • Private Equity real estate investing  in Latin America
  • Forex:  The World Cup Effect
  • Investment Analysts Try Their Luck with World Cup

Source: Alternative Latin Investor 23.07.2010

Filed under: Argentina, Brazil, Chile, Colombia, Energy & Environment, Latin America, Mexico, News, Services, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

Panama: Banco General live on Charles River IMS

Charles River Development (Charles River), a front- and middle-office investment software solutions provider, today announced that Banco General, S.A., the largest private banking institution in Panama, is live on Version 9.1 of the Charles River Investment Management System (Charles River IMS).

The project, delivered on-time and on-budget, is part of Banco General’s initiative to automate the firm’s wealth management operations. Key project goals included: integrating workflows of Banco General’s Private Banking unit and BG Valores brokerage subsidiary on a single platform; providing access to remote brokers; and enabling real-time electronic trading via FIX (Financial Information eXchange).

Over 50 Banco General users benefit from Charles River IMS’ automated portfolio management, trading, and compliance monitoring, as well as seamless integration with accounting and other back-office providers. Users include 39 remote BG Valores brokers who leverage the Charles River Anywhere browser-based workstation to remotely monitor and manage portfolios, compliance, trades and post-trade information in real-time for wealth management clients. The Charles River FIX Network enables Banco General to route orders electronically to its primary offshore broker.

“Charles River IMS has increased our efficiency and reduced operational risk, creating a unified platform and delivering remote capabilities to service both our Private Bank and BG Valores clients,” said Carlos E. Samaniego, Assistant Vice President, BG Valores. “We now have fully-integrated order capture and trading workflows, and FIX trading capabilities. We can also validate compliance anytime – across all asset classes and domestic and international orders – whether trading Panamanian Bolsa de Valores securities, fixed income instruments, hedge funds or mutual funds.”

Supporting BG Valores’ remote brokers was a key project goal. With Charles River Anywhere, brokers can quickly originate client-directed orders and access account information in real-time. “Charles River understands the wealth management business,” said Samaniego. “They have delivered the best technological solution, training and support to meet our operational needs, as well as tools to help build client relationships.”

Banco General also streamlined its processes for trading equity and options orders with real-time global electronic FIX trading through the Charles River Network. The firm connects to its brokers via Charles River’s low-cost, internet-based Virtual Private Network option. Charles River’s FIX Network Services provides Banco General with complete FIX software administration, connectivity management and support for each sell-side broker and trading destination. The Charles River Network is fully integrated with Charles River IMS and includes over 120 buy-side firms, 440 broker-dealers, and has 3,700 live broker/client FIX connections.

“Charles River helps wealth managers, like Banco General and BG Valores, support high volumes of high-net worth, SMA, UMA, UMH and discretionarily-managed portfolios,” said Spiros Giannaros, Vice President-Sales, Americas, Charles River Development. “Many of our wealth management clients have rolled out Charles River Anywhere to their Financial Advisors because it increases their efficiency by making account information available 24×7 – anywhere.”

Source: Finextra, 21.07.2010

Filed under: Banking, Data Management, Latin America, News, Services, Wealth Management, , , , , , , , , ,

China Property Market Beginning Collapse That May Hit Banks, Rogoff says

July 6 (Bloomberg) — China’s property market is beginning a “collapse” that will hit the nation’s banking system, said Kenneth Rogoff, the Harvard University professor and former chief economist of the International Monetary Fund.

As China’s economy develops, “especially at the speed it’s growing, it’s going to have bumps,” said Rogoff, speaking in an interview with Bloomberg Television in Hong Kong. He also said that while recoveries across the global economy are “very slow,” the danger of a return to recession isn’t “elevated.”

Rogoff’s concern echoes that of investors, who sent China’s benchmark stock index to its worst loss in more than a year last week. China’s data have been a focus because the nation has led the global recovery from the worst postwar recession.

Chinese authorities have this year been trying to cool the economy as it expanded at an 11.9 percent annual pace in the first quarter, and to reduce property-market speculation. The central bank has told lenders to set aside more money as reserves, and targeted a 22 percent cut in credit growth at banks this year, to 7.5 trillion yuan ($1.1 trillion).

The efforts have contributed to a slump in real-estate sales, while prices continue to climb. The value of property sales dropped 25 percent in May from the previous month.

“You’re starting to see that collapse in property and it’s going to hit the banking system,” Rogoff said today. “They have a lot of tools and some very competent management, but it’s not easy.”

Growth Outlook
Goldman Sachs last week cut its growth forecast for China this year to 10.1 percent from 11.4 percent because of the government’s monetary tightening measures.
Rogoff also said it’s unrealistic to expect China to continue growing its exports to the rest of the world “at the pace it’s been doing.”

“It’s impossible. At some point they have to redirect their strategy” for economic growth, he said.

For your info:
1) About one third of the total bank lending (about 40 trillion) is in real estate sector in China.
2) Most of the bank lending has used land and real estate properties as collateral.

Source: Bloomberg, 06.07.2010

Filed under: China, News, Risk Management, Services, Wealth Management, , , , , , , , , ,

A Definitive Guide to Investing in Panama

Following up with last years release of the Offshore Banking report which, in the midst of the global banking crisis, gravitated towards Panama, Alternative Latin Investor has released an in-depth report of the of the country.

Through extensive interviews, site visits and research the report deals with the main sectors relevant to foreign investors, Real Estate, Commodities, Banking and General Business practices as well as an exclusive interview with Former Panamanian president Nicolás Ardito. With Panama being the integral point of trade and business in the Caribbean, this report provides essential insight for those interested in getting involved in the region.

The economic overview analyzes the trends and indicators affecting the outlook of the Panamanian economy. The real estate portion of the report covers where to invest, coastal developments and “insider tips” from the director of a local Real Estate firm. For those interested in commodities investing – the report highlights the prized Panamanian Geisha coffee bean as well as a complex discussion regarding Teak investment in the region. The final segment covers the details and benefits of banking in panama.    

Alternative Latin Investor Panama Report For free access to the full content of both Panama Outlook 2010 and other ALI publications, visit: http://www.alternativelatininvestor.com

 About Alternative Latin Investor:

ALI believes in the future of the Latin American alternative investment industry, but feels there is a lack of information regarding this sector which does not allow for growth or global exposure.


Every two months ALI releases a digital magazine
  in addition supplemental in-depth reports area also released, such as the just the current Panama Outlook: 2010 as well as Offshore Banking: Latin America 2009.  Both LatAm Commercial Real Estate and Latin Hedge Funds are slated for release later this year.


Through creating a platform for industry professionals to submit articles concerning their areas of expertise, investors can benefit from the experience of alternative investment insiders. Through participation in Alternative Latin Investor industry professionals will be able to create new synergies both within the region and beyond.

Filed under: Banking, Central America, Latin America, News, Services, Wealth Management, , , , , , , , , , , , ,

Alternative Assets in Latin America: Expert Panel Discusses June 15, 2010

Please join Alternative Latin Investor and Focus Point Press June 15th for a round table webinar of industry experts discussing alternative assets in Latin America.  http://www.alternativelatininvestor.com/Webinar/AlternativesAssetsInLatAm.pdf
Our Panel:

Brigitte Posch
PIMCO Executive Vice President and Portfolio Manager in its emerging markets group. Prior to joining PIMCO in 2008, she was a managing director and head of Latin American securitization and trading at Deutsche Bank.

Will Landers
CFA, Managing Director, Senior Portfolio Manager, is the portfolio manager for the BlackRock Latin America Fund, the BGF Latin America Fund, the BSF Latin American Opportunities Fund and the BlackRock Latin American Investment Trust PLC.

Andrew Cummings
Founder and Chief Investment Officer of Explorador Capital Management, LLC.

Eric Saucedo
Partner at Tricap Partners & Co., an investment banking firm focused on early-stage and middle market growth companies.

Topics:

-How alternative investment vehicles are faring in this recovery phase of the crisis
-What strategies performed the better than others
-What regions, sectors and vehicles are looking good for the coming year
-New players to the region who we should keep an eye on
-Growth of regulation in the alternative space
-Where new capital to Latin America is coming from
-Participation of both, foreign and domestic institutional investors
-How LatAm stacks up against other emerging markets
-The effect of Chavez on investor confidence in LatAm investments
-How sustainable is Brazil
-Countries to watch

Date: Tuesday, June 15
Time: 1pm EST
Price: 89.00USD
Register at http://www.regonline.com/Checkin.asp?EventId=866305

For more information please see,
http://www.alternativelatininvestor.com/Webinar/AlternativesAssetsInLatAm.pdf

Filed under: Argentina, Banking, Brazil, Central America, Chile, Colombia, FiNETIK Events, Latin America, Mexico, News, Peru, Services, Venezuela, Wealth Management, , , , , , , , , , , , , , , , , ,

TABB Group insight into High-Frequency Trading

TABB Group outlines a few principles to which it adheres when discussing the controversial subject of high-frequency trading.

The current discourse on high-frequency trading is often challenged by a distortion of definitions. Journalists, politicians and industry analysts bend or stretch definitions to meet their various (and often conflicting) objectives. For example, flash orders and high-frequency trading have been improperly used as equivalent terms. Front-running has been invoked when “liquidity detection” would be more accurate. While there is room for a legitimate debate over the scope, size and impact of high-frequency trading, the industry must first agree to terms. Below, TABB Group outlines a few principles to which it adheres when discussing this controversial subject:

HFT refers to fully automated trading strategies (in equities, derivatives or currencies) that seek to benefit from market liquidity imbalances or other short-term pricing inefficiencies. These opportunities could last from milliseconds to minutes and possibly hours. While these strategies can be employed overnight, the majority of HFT strategies attempt to be market-neutral or closed out by the end of each day.

The kinds of strategies that fall under HFT include electronic market making, liquidity detection, cross-asset arbitrage, short-term statistical arbitrage and volatility arbitrage. The most prevalent equity HFT strategy is electronic market making, in which firms attempt to profit from intraday imbalances in the supply and demand for liquidity. Not all market making is high-frequency (though almost all of it is), and not all high-frequency trading is market making, but market-making strategies profit by intelligently managing the risk caused by inconsistencies between buyers and sellers.

Perhaps the most controversial and least understood aspect of high-frequency trading falls under the category of liquidity detection. While classic market makers attempt to capture spread by aggressively quoting at the bid and the ask of a number of stocks, a liquidity detector uses techniques to sniff out large orders of blocks being sliced and diced (usually by an algorithm) that a high-frequency trader believes it can outsmart.

Who Does It?

Although HFT makes up a large portion of total trading activity, a relatively small number of firms are responsible for its volume. Three types of firms build their strategies around HFT: proprietary trading firms (virtual market makers), the largest hedge funds and investment banks’ proprietary trading desks. While each of these institutions has a unique position in the industry, their common ground is their mandate to achieve uncorrelated and high returns.

Approximately one-half of liquidity provisioning these days comes from traditional market makers or large broker-dealers. The remainder originates from low-profile (though this is now changing) high-frequency trading firms — the proprietary (prop) trading shops — that few other than the industry intimates have ever heard of. Prop shops have been around for many years, earning their profits by risking their own capital. They originated either from groups formerly within broker-dealers or independent firms that have the knowledge, skills and technology to fully automate the trading process; or from screen-based day-trading shops that began automating their strategies in the late 1990s/early 2000s. These prop shops virtually automated the market-making function by leveraging inexpensive computing cycles, low-latency infrastructures and fully automated trading strategies.

Asset Classes Traded by HFT Proprietary Shops

Most HFT prop shops choose to keep their identities and intentions secretive, operating under the radar in the hope of improving their chance to profit. Through a thorough examination of Web sites and other public information, TABB Group has found that while the vast majority of these firms trade U.S. equities, the firms are quick to apply their strategies to the entire array of asset classes (see chart).

Investment banks have always traded for their own accounts. Their prop desks typically operate from a distinct legal entity — separate from the entity that handles customer orders — within the investment bank; the bank risks its own capital by deploying trading strategies designed to maximize profit. Two divisions within investment banks that deploy HFT are automated market making and proprietary desks. Market makers are registered with the SEC, using traditional trading strategies to facilitate liquidity in the market. Prop desks implement a variety of arbitrage strategies, some of which are high-frequency (though certainly not exclusively high-frequency).

For the most part, high-frequency hedge funds engage in short-term trading opportunities rather than bona fide liquidity-based strategies. While the umbrella term statistical arbitrage is frequently applied to strategies with extremely high volumes, there is plenty of ambiguity in this term. It is also true that the majority of funds engaged in statistical arbitrage are not high-frequency by today’s standards. However, over the past 18 months the line between high-turnover strategies and HFT has blurred as hedge funds shorten their time horizons in the face of unexpected market events.

As a result, transaction costs are becoming even more paramount to this sophisticated community. The rationale is that as time horizons shorten, capacity constraints increase and transaction costs become a bigger piece of the pie. High-frequency hedge funds may be layering these liquidity strategies on top of their other strategies so that transaction costs are additive rather than negative.

How Big Is It?

The only art more forgivable than economic forecasting is estimating the market size of an industry that will never reveal its true number. Nonetheless, TABB Group estimates that high-frequency trading accounts for 61 percent of U.S. equity share volume (remember to double-count average daily shares!) and generates $8 billion per year in trading profits.

The methodology begins with an analysis of institutional equity trading volume that we have been collecting since 2006 from 115 U.S.-based equity head traders, including equity assets under management, average daily volume and the percentage of shares executed in blocks. We extrapolate that data to the broader institutional landscape. Retail trade numbers and data from the government are used to determine retail flow. Data from NYSE and Nasdaq and historical market making volumes enhances our picture of current electronic market-making volumes. Last but not least, we discussed our methodology and trading profit calculations (.0024/share) with several HFT hedge funds, independent high-frequency traders and registered market makers.

Is It Good for the Market?

This is the wrong question. The right questions are whether the current market structure can be improved, and what the role of HFT should be in any revised market structure. But that is a scary question because outside of consulting (ahem), IT and perhaps the end investors, there is little for the industry to gain out of major changes to market structure.

The market structure changes and technological advances over the last decade that have made it possible for virtual market makers to supplant the traditional players are viewed as primarily positive for the market. Very few participants or observers suggest that we should roll back the clock on decimalization and exchange competition. Participants feel today’s market structure is orderly despite its complexity, and that it does a very good job of encouraging price discovery (see chart).

How Well Does Market Structure Support the Following Characteristics?

High-frequency equity trading is the lovechild between 12 years of SEC rulemaking and advances in trading technology. The combination of these two trends has been necessary and sufficient to unleash an array of new trading strategies. The continued success of these strategies has exchanges and ECNs, brokers and clearinghouses, and market data providers and technology vendors launching new business models and offerings to support high-frequency traders or to help others adapt to this new environment. Imagining a U.S. equity market structure without high-frequency traders is like trying to remove the c from E=mc2.

Adam Sussman is director of research for TABB Group. Previously he served as a senior product manager at Ameritrade, where he was responsible for order management systems, routing and next-generation trading tools focused on the equities and options markets.

Source: Advance Trading, 07.10.2009

Filed under: Exchanges, News, Trading Technology, , , , , , , , , , , , , ,

Actinver Plans Mexican IPO in First Quarter, CEO Madero Says

Actinver SA, a Mexico City-based investment bank, plans to sell shares in an initial public offering in the first quarter, seeking to drum up underwriting business by setting a precedent for its clients to follow.

A sale would show companies needing capital that the equity market is a viable option in Mexico, where the last IPO was in June 2008, said Hector Madero, Actinver’s chief executive officer. He said Actinver is working with a “couple” companies that are considering share offerings.

“We want to provide access to mid-size companies, but the first statement has to be us,” Madero, 44, said in an interview in Mexico City. He said Actinver will sell shares to help open up the market even though it has no pressing need for the money.

A surge in kidnappings in Mexico is discouraging executives from taking their companies public, deepening an IPO drought sparked by the global credit crisis, Madero said. Mexico’s benchmark Bolsa stock index has climbed 32 percent this year, rebounding from a 24 percent slide in 2008.

Actinver, co-founded by Madero’s father in 1994, is “very close in a couple of deals” to underwrite IPOs, the CEO said. The firm co-led last month’s offering of 1.3 billion shares by Cemex SAB, the largest cement maker in the Americas.

The company is completing today the purchase of some of Prudential Financial Inc.’s Mexican assets. The Prudential units, which include a mutual fund business and a bank, bring Actinver’s assets to 109 billion pesos ($8.1 billion), according to Francisco Suarez, an equity strategist at the firm.

Banking License

Actinver acquired a banking license as part of the deal, allowing it to offer investment consulting services for individuals at a network of 70 offices around Mexico.

“We’re not going to be a bank that lends to institutions or corporations,” Madero said. “It’ll be a private bank with a retail business.”

The bank division will be headed by the CEO’s brother Alvaro Madero, currently the director of operations at Actinver.

In June Actinver launched a mutual fund with Brazil’s Itau Unibanco Holding SA in Mexico whose portfolio is mostly Brazilian stocks. Actinver is “very close” to a similar arrangement with a U.S. company, Madero said.

Mexico’s last initial share sale was Genomma Lab Internacional SAB’s $233.7 million offering in June 2008. There have been six IPOs in Mexico since the beginning of 2007, compared with 70 in Brazil, according to data compiled by Bloomberg.

Source: Bloomberg 06.10.2009

Filed under: Banking, BMV - Mexico, Brazil, Exchanges, Latin America, Mexico, News, Services, Wealth Management, , , , , , , , , , , , , , , , , ,

HSBC in China JV talks with Industrial Securities

HONG KONG -(Dow Jones)- HSBC Holdings PLC (HBC) is in advanced talks to set up an investment banking joint venture in China with Industrial Securities Co., a person familiar with the situation said Wednesday.

The UK-listed HSBC, which already has a wide-reaching presence in China, is seeking to join the handful of foreign firms with a presence in the mainland’s lucrative underwriting and advisory markets.

The person familiar with the situation said it is difficult to say when HSBC and Industrial Securities will agree on a deal, and declined to elaborate.

Industrial Securities is a Fujian-based brokerage with a registered capital of CNY1.93 billion, according to its website. It provides a full-range of services in China, including broking, advisory, and new listing underwriting.

The Apple Daily reported Wednesday, citing unnamed sources, that the two sides may strike a deal by the end of this year to set up the venture, subject to agreeing on the terms and regulatory approval.

HSBC wants management rights over the entity, a model that UBS AG (UBS) and Goldman Sachs Group Inc. (GS) used when setting up their Sino-foreign brokerage joint ventures, according to the report in the Chinese-language newspaper. China has capped the maximum stake foreign banks can have in a Chinese brokerage venture at 33%, though a few of the tie-ups have accorded management control to the foreign firm.

If its venture is approved, HSBC would be joining a list of just a handful of foreign brokers that have set up shop in the mainland through joint ventures in recent years.

In December, the Chinese government ended an almost two-year moratorium on approving new joint ventures, as it shielded its domestic brokerages from foreign competition. Since then, China has approved ventures by Credit Suisse Group and Deutsche Bank AG (DB), though those tie-ups are only allowed to underwrite and sponsor deals domestic securities and debt deals, and not the trading of Chinese-listed shares.

But the list of foreign firms seeking entry is long, especially with China’s stock market being one of the world’s best performers this year. Many Shanghai-listings also registered gains of more than 90% on their first-day of trade.

Australia’s Macquarie Group Ltd. (MQG.AU) has signed a memorandum of understanding with Inner Mongolia-based Hengtai Securities Co. on setting up an investment banking joint venture, while South Korea’s Samsung Securities Co. (016360.SE) said earlier it was finalizing which domestic partner it is going to team up with.

Citigroup Inc. (C) and Morgan Stanley (MS) are also awaiting regulatory approval for their China joint ventures. Morgan Stanley has a stake in China International Capital Corp, but it is a passive financial investor.

“I’m not surprised to hear of more joint-venture acquisitions by HSBC in local financial institutions rather than in banks,” said Dominic Chan, an analyst at BNP Paribas.

“I think HSBC has been focusing on mainland China and Asia, and this deal is part of its ongoing program to divert effort and capital from Europe and America back to Asia,” he said.

A brokerage in China would add another crucial leg to the bank’s already dominant presence in the country. In China, HSBC has an 18.6% stake in Bank of Communications Co., the nation’s fifth-largest lender by assets; a 16.7% holding in Ping An Insurance (Group) Co. of China Ltd.; 8% ownership of Bank of Shanghai Co., and a 49% stake in HSBC Jintrust Co, a Shanghai-based fund company. HSBC’s 50-50 life insurance joint venture with Beijing-based financial services provider National Trust Ltd. was approved by regulators recently and is set to be up and running in the third quarter.

The lender has also hired investment bankers to advise it on listing on the Shanghai bourse next year, in potentially the country’s first listing by a foreign company. Although based in the U.K., HSBC made a quarter or around US$2.98 billion of its first-half pre-tax earnings from China.

Source: Dow-Jones, 19.08.2009

Filed under: Asia, Banking, China, News, Services, , , , , , , , , , , , , , , ,

Credit Suisse China JV with Founder Securities

The China Securities Regulatory Commission has given Credit Suisse the go-ahead to launch a joint venture with local firm Founder Securities. The Swiss bank takes a 33% share in the new entity, which will be able to sponsor and underwrite A shares, foreign investment shares and government and corporate bonds. The firm will not be able to offer secondary market services such as research and broking, however: under new regulations announced in 2007 Sino-foreign joint ventures must show a track record of five years’ unblemished service before being able to expand their activities.

Credit Suisse has already made some headway in China through its Shanghai representative office, ranking fifth on the Dealogic league table for equity bookrunners for financial year 2007 with 24 deals and a market share by value of 5.32%. That puts it in a large group of peers with similar market shares, as compared with top-three banks Morgan Stanley, Goldman Sachs and UBS, all of which have more established presences in China and each of which commands more than 10% of equity capital markets share. Those three top players all have established joint ventures of their own, and Credit Suisse and Founder Securities will be hoping to break into the 10% market-share club now that they are following suit.

Euromoney understands that the two firms have been in talks since last summer, with a memorandum of understanding signed in January. A spokesperson for the firm said that it had yet to decide on a name for the new entity. The joint venture will be run from Beijing and will be headed by Neil Ge, previously managing director at Credit Suisse’s Shanghai office. Lei Jie, chairman of Founder Securities, will take on the role of chairman.

The announcement of the Credit Suisse-Founder Securities joint venture follows the news on June 16 that CLSA had met the five-year requirement and its 33%-owned Sino-foreign joint venture, CESL, now has a securities broking licence (restricted to the Yangtze River Delta area) and a securities investment consultancy licence. CLSA, a brokerage, investment banking and private equity group headquartered in Hong Kong, says that the licence permits CESL to offer full-service research, sales and broking services for local and offshore clients wishing to trade A shares on the Shanghai and Shenzen stock exchanges.

Source: Euromoney, 11.08.2009

Filed under: Asia, China, News, Services, , , , , , ,

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