News > Capital Markets

BHP Billiton lifts copper production
<p>BHP Billiton seems to be pursuing a Saudi Arabia strategy of squeezing out high-cost producers.<br /> The Anglo-Australian miner boosted its copper production outlook: It expects to maintain output at its biggest mine, Escondida, at 1.2 million metric tons a year for a decade, starting in its fiscal year to June 2017, without any further major investment, writes The Wall Street Journal. (paywall)</p> <p>BHP plans to cut copper costs to $1.08 a pound on average, down about 15% on forecasts for the current fiscal year. That is more than 45% below the spot price.</p> <p>Near-term, this adds low-cost metal to the market. BHP’s additions come as about 1.7 million tons of new copper supply from large projects are forecast over the next two years, according to Barclays. The miner’s guidance suggests it should produce 180,000 tons more in fiscal 2017 from those three mines [Escondida, Spence and Olympic Dam] than expected, based on Macquarie’s forecasts,<br /> Earlier this year the Saudi's upped oil production in order to close down competitors, reduce global supply and support the price of crude. That strategy failed and now the Kingdom plans to tap international bond markets to replenish depleted cash reserves.<br /> Photo: Rich Luhr</p>
M&A advisors under the cosh
<p>A U.S. court has delivered another blow to bankers' God-given right to make a penny or two. Already overwhelmed by regulations, penalised for fixing interest rate and FX markets and threatened by upstart boutiques and new financial technology, now banks face additional scrutiny for their corporate advice.</p> <p>On Monday, a Delaware court found that Royal Bank of Canada (RBC) had damaged Rural/Metro shareholders because it provided tainted advice on the $728m buyout of the U.S. ambulance company by Warburg Pincus four years ago, reports the Financial Times. (paywall)<br /> The decision [by the Superior Court] upheld a lower-court ruling that the bank had “aided and abetted” the failure of Rural/Metro board members to get the best deal for their shareholders.</p> <p>The lower court found that RBC’s conflicts of interest — it was advising the seller while simultaneously trying to garner financing fees from the buyer — had led it to manipulate the Rural/Metro board into accepting a deal price that had undervalued the company.</p> <p>Suddenly, simple, fee-based M&amp;A services appear to contain far more risk for the bank. As a result, bankers may become more cautious about taking on advisory assignments, and some may steer away from them entirely, bankers and lawyers say.<br /> Photo: Mike Licht<br /> &nbsp;</p> <p>&nbsp;</p>
Top tech stocks now eclipsing 2000-era bubble peaks
<p>&nbsp;</p> <p> The peak of the Dot Com Bubble included domination by a handful of tech names.</p> <p> These market cap giants of the era singlehandedly supported inflated markets.<br /> A similar class of concentrated tech domination has materialized in today’s markets as well.</p> <p>The nearly seven-year-old bull market has shown its first major signs of weakness in 2015, as investors have begun to grow uneasy about high share prices, emerging market stability and weak commodity demand. With the S&amp;P 500 now sitting more than 30 percent above its pre-Financial Crisis top, traders can’t help drawing comparisons to previous market peaks.</p> <p>In a new report, MKM Partners analyst Jonathan Krinsky compared the size and dominance of a handful of tech companies to a similar situation that developed in U.S. markets during the height of the Dot Com Bubble in the late 1990s.<br /> The Four Horsemen Of The Dot ...<br /> Full story available on<br /> Photo: Indigo Skies Photography <br /> &nbsp;</p>
Daily Scan: Asian stocks end higher; Russia claims Turkey shot down plane to protect ISIS oil
<p>Updated throughout the day</p> <p>December 1, 2015</p> <p>Asian shares ended trading on a high note Tuesday with the Hang Seng Index up 1.75%, the Shanghai Composite up 0.32%, and the Nikkei Average up 1.34%. Shenzhen – which fell as much as 1.40% in the afternoon – seems to be the only bourse in the negative:</p> <p> Hang Seng China Enterprises Index: +1.61%<br /> Shenzhen Composite: -0.24%<br /> Straits Times Index: +0.49%</p> <p>European shares meanwhile are trading mixed with the FTSE up 0.42% while the DAX and the CAC are down 0.18% and 0.13% respectively. The region’s bond yields however seem to be ticking up in unison. The yield on the 10-year German bund climbed roughly 2 basis points to 0.49%, the yield on the 10-year British gilt jumped about 3 basis points to 1.85%, and the yield on the 10-year French oat spiked approximately 3 basis points to 0.81%.</p> <p>Here’s what else you need to know:</p> <p>Moscow alleges Turkey shot down plane to protect its ISIS oil trade. Russian president Vladimir Putin has said Turkey's claims that it was just defending its airspace was merely a pretext. Turkish President Recep Tayyip Erdogan says he'll resign if Moscow can prove its claim. CNN</p> <p>British American Tobacco accused of bribing government officials.  A BBC investigation has found the company illegally paid politicians and civil servants in countries in East Africa in a bid to undermine a U.N. anti-smoking treaty. BBC</p> <p>Two banks warned after BoE annual stress test.  Royal Bank of Scotland and Standard Chartered were the weakest of Britain's seven largest lenders in a Bank of England stress test. It's the second year the central bank has subjected the UK's biggest lenders to tests to measure whether they would survive a financial shock. BBC</p> <p>Faulty part major factor in AirAsia crash.  The first major report into the Java Sea air crash that killed 162 people last December has also found that actions by the crew in response to the malfunction also contributed to the disaster. BBC</p> <p>China manufacturing still contracting in November. An official gauge of China’s manufacturing activity fell to its lowest level in more than three years, fueling fears that the world’s second-largest economy may be cooling further despite a raft of stimulus measures. Wall Street Journal (paywall)</p> <p>Samsung replaces head of mobile unit. Samsung Electronics has replaced the head of its mobile business —  Shin Jong-Kyun — for the first time in six years, as it seeks to reverse a recent trend offalling smartphone sales. Financial Times</p> <p>J.P. Morgan hired 222 in China “sons and daughters” program.  J.P. Morgan Chase &amp; Co. hired friends and family members of executives at 75% of the major Chinese companies it took public in Hong Kong between 2004 and 2013. The Wall Street Journal</p> <p>Developed countries need to lead global warming fight, says President Xi. The Chinese president spoke while in Paris for the climate summit Monday, saying that richer, developed countries need to take the lead in tackling climate change. Xi will met with President Barack Obama and Indian Prime Minister Narendra Modi while in Paris. South China Morning Post (paywall)</p> <p>Morgan Stanley looks to axe a quarter of its fixed income traders. Cuts, possibly up to 25% of the fixed income staff, will happen in the next two weeks. The third quarter was the worst for Morgan Stanley in fixed income, currencies, and commodities in the last five years. Business Insider</p> <p>Japanese whaling ship departs for Antarctic. Despite international opposition, the ships left from the port of Shimonoseki in south-western Japan on Tuesday. Japan says its whaling programme is for scientific research – one of the exceptions in which whaling is allowed under international rules. BBC</p> <p>Federal Reserve puts limits on emergency lending powers. The Fed unanimously approved a proposal to limit its emergency lending, a change encouraged by Congress after the financial crisis bailouts. Reuters</p> <p>U.S. marine found guilty of killing transgender Fil
Renminbi joins elite club
<p>As expected the IMF decided on Monday to include the renminbi in its “special drawing rights” currency basket.<br /> Christine Lagarde, IMF managing director, called it a 'milestone' in China’s economic reform “journey” and its integration into the global financial system, reports the Financial Times (paywall).<br /> The renminbi's weighting will be greater then the pound and yen, and its inclusion is the most significant change in the basket since 1999 when the euro replaced the deutschemark and French franc. It is also the first emerging market currency to be elevated to this status.<br /> For China, the move is a validation of efforts over the past few years to liberalise financial markets and free up flows of funds into and out of China’s capital markets. In this regard, the IMF’s decision could strengthen the credibility of Beijing’s economic reformers against more conservative elements in the Xi Jinping administration, writes the FT.<br /> Most recently, access to China’s interbank bond market for overseas central banks, supranational institutions and sovereign wealth funds was allowed in July. A set of new regulations scrapped approval and quota requirements.<br /> Photo: davidgsteadman<br /> &nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p>
Daily Scan: Stocks fall with retail shares; Yuan joins IMF reserve basket
<p>Updated throughout the day</p> <p>November 30,  2015</p> <p>The Dow and the Nasdaq toppled 0.4% Monday, and the S&amp;P 500 fell nearly 0.5%. In-store Black Friday sales disappointed, triggering a dip in retail stocks. Nike and Wal-Mart shares were down more than 1.5% each. Target shares lost 1.3%. Cyber Monday, one the biggest day of the year for online sales, kicked off Sunday evening. More than 121 million shoppers planned to shop online Monday, the National Retail Federation reports.  The IMF announced Monday that the yuan will officially join the fund's basket of reserve currencies. The yuan "met all existing criteria" and should be added by October 2016. The basket hasn't been changed since 2000 when the euro replaced the German mark and the franc.</p> <p>Here is what else you need to know:</p> <p>Morgan Stanley looks to ax a quarter of its fixed income traders. Cuts, possibly up to 25% of the fixed income staff, will happen in the next two weeks. The third quarter was the worst for Morgan Stanley in fixed income, currencies, and commodities in the last five years. Business Insider</p> <p>Cyber Monday shoppers crash websites. Online sales in the U.S. were up 14% Monday from last year, causing web outages for Target, Neiman Marcus, Wal-Mart, Victoria's Secret, and Foot Locker. Reuters</p> <p>Gold on track to lose 7% in November, despite 0.6% gain Monday. That would make the biggest monthly loss since 2013. The metal has been losing its luster as the likelihood of a rate-hike in the U.S. increases. The Federal Reserve meets Dec 15-16 to discuss policy. MarketWatch</p> <p>Chicago PMI surprisingly weak. The Chicago business barometer fell 7.5 points to 48.7 in November from 56.2 in October.  A reading below 50 signals a contraction. The manufacturing sector has suffered from a strong dollar. MarketWatch</p> <p>Obama names new ISIS adviser. Robert Malley, a senior director at the National Security Council, will focus solely on the anti-ISIS fight in the White House's new counter terrorism efforts. CNN</p> <p>Amazon TV may join Apple TV after all. Amazon kicked Apple TV off its website at the end of October. But now the Amazon engineering team is developing an Apple TV app to integrate with its competitor's TV model. TechCrunch</p> <p>BATS Global Markets shoots for 2016 IPO. The second-largest stock exchange operator is valued at more than $2 billion, including debt. The company tried to go public more than three years ago, but was forced to cancel the IPO after technical issues slaughtered its share prices. Wall Street Journal (paywall)</p> <p>Federal Reserve puts limits on emergency lending powers. The Fed unanimously approved a proposal to limit its emergency lending, a change encouraged by Congress after the financial crisis bailouts. Reuters</p> <p>Aberdeen Asset Management drained of more than 40 billion pounds. Investor fears about emerging markets cost Aberdeen heavily, with the firm reporting a 12.5% fall in assets under management between September 2014 and September 2015. Shares for the company fell more than 4% Monday. The Guardian</p> <p>Online rules on Thanksgiving, Black Friday. Online consumers spent $4.45 billion over the two-day shopping period, accounting for 34% of spending -- a record, says Adobe Digital Index. Brick and mortar traffic fell slightly to $12.1 billion on Thursday and Friday from $12.29 billion last year. Reuters <br /> World leaders begin high-level climate talks. A critical U.N. conference aimed at agreeing a new global approach to climate change has begun in Paris. Negotiators from 195 countries will try to reach a deal within two weeks aimed at reducing global carbon emissions. BBC<br /> Pro-choice group blames political rhetoric for shooting. Vicki Saporta, president of the National Abortion Federation, has said the anti-abortion rhetoric had “ignited a firestorm of hate” which contributed to Friday’s shooting at a Planned Parenthood clinic in Colorado. Three people were killed. Washington Times<br /> Trade your Pumpkin Spiced Latte for a Holiday Spice Flat White. Starbucks is
Treasury snapshot as we appoach the month's end
<p>&nbsp;</p> <p>As we approach the end of November, let's take a close look at US Treasuries. The yield on the 10-year note ended the day on Friday at 2.22%, which is at the higher end of the year-to-date range of 1.68% to 2.50%. The yield on the 2-year note closed the week at 0.92%, two bps off its 5-year high set this past Monday.</p> <p>The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the US Department of the Treasury and the St. Louis Fed's FRED repository for the Fed Funds Rate.</p> <p>Here is a closer look at the 2- and 10-year yields along with the FFR.</p> <p>A Long-Term Look at the 10-Year Note Yield</p> <p>A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of "stagflation" (economic stagnation with inflation). The trendline (the red one) connects the interim highs following those stagflationary years. The red line starts with the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&amp;P 500 fell 5.16% that Friday and 20.47% on Black Monday.</p> <p>The dashed lines on the chart above were provided by Bob Bronson of Bronson Capital Markets Research. Bob comments:<br /> "The blue dashed lines are much more closely parallel to the all-data, log-linear best fit line — very similar to the high-low mid-channel line — since 1980. Then there is the even more currently relevant downtrend (black dashed line) since the 2007 high."<br /> The 30-Year Fixed Rate Mortgage</p> <p>The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.76%, off its low of 3.59% in early April, but its lowest level since early May. Here is a long look back, courtesy of a FRED graph, of the Freddie Mac weekly survey on the 30-year fixed mortgage, which began in May of 1976.</p> <p>Now let's see the 10-year against the S&amp;P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior.</p> <p>For a long-term view of weekly Treasury yields, also focusing on the 10-year, see our Treasury Yields in Perspective, which we usually update on weekends.</p> <p>This post originally appeared on Advisor Perspectives.</p> <p>Photo: Nathan Rupert<br /> &nbsp;</p>
Daily Scan: China drags Asia down; Japan’s GPIF posts record loss
<p>Updated throughout the day</p> <p>November 30, 2015</p> <p>Asian markets were dragged down on Monday, with the MSCI’s broadest Asia ex-Japan index down 0.6%, after an extended selloff in Chinese stocks. The Mainland bourses only just scrapped into positive territory after a volatile day of trade that saw them shed as much a 3.2%. The China volatility, which continues from Friday's major selloff, is down to Beijing's ongoing crackdown and added caution stemming from the resumption of IPOs.</p> <p>The yuan meanwhile has continued to rebound on anticipated state intervention hours ahead of an IMF decision on whether to add it to a basket of global reserve currencies. Over in Europe, markets have followed Asia’s lead, with the Stoxx Europe 600 down 0.5%  in early trade amid losses in energy and resources sectors.</p> <p>Japan’s GPIF posts record $64B loss in summer rout. Japan's public pension fund, the world's biggest, suffered a record 7.9 trillion yen ($64.34 billion) loss in the third quarter as financial markets turmoil triggered by China's economic slowdown knocked both domestic and overseas equities. Reuters</p> <p>Europe split over refugee deal as Germany breaks away. Months of European efforts to come up with common policies on mass immigration unravelled on Sunday when Germany led a “coalition of the willing” of nine EU countries taking in most refugees from the Middle East, splitting the union formally on the issues of mandatory refugee-sharing and funding. The Guardian</p> <p>More wages, more fixed investment, Kuroda repeats.  Increasing fixed investment and wages would benefit not only Japan's economy but also its companies, Bank of Japan Governor Haruhiko Kuroda said in a speech in Nagoya on Monday. He also told business leaders that now was the time for companies to shed their deflationary mindsets and step up investment. Nikkei</p> <p>Seoul, Tokyo, and Beijing need to kiss and make up, says ex-PM. Former South Korea Prime Minister Lee Hong-koo told the 10th annual Northeast Asia Trilateral Forum on Monday that its high time the three nations repair their trilateral beefs and move toward closer cooperation. Easier said than done. Nikkei (paywall)</p> <p>Obama pays respects in Paris. President Barack Obama paid a midnight tribute Monday to the victims of the Paris terror attacks, ‎laying a single white rose at the Bataclan club where ISIS terrorists unleashed carnage two weeks ago. CNN</p> <p>NZ remembers rugby’s Jonah Lomu at memorial. A public memorial for New Zealand rugby great Jonah Lomu, who died earlier this month at 40, has been held at Auckland's Eden Park stadium. The former All Black was capped 63 times by his country and considered one of rugby's first global superstars. BBC</p> <p>Japan industrial production data a mixed bag. The pace of Japanese production rose at a brisk clip during the month of October, giving policymakers hope - if not more mixed messages - about the strength of the Japanese economy. Industrial production expanded 1.4% month-on-month in October, the quickest pace since a 4.1% in January, but it still fell short of expectations. Financial Times (paywall)</p> <p>Turkey to stem migrant flow to Europe in exchange for cash. The European Union will also consider Turkey's application to join the 28-member group. The Sunday talks promised a package promises $3.2 billion in aid for the 2.2 million Syrians flooding Turkey.</p> <p>Obama sets his sites on Paris climate talks to clinch legacy. The U.S. President is the first to create a climate policy. He joins more than 120 leaders Sunday to launch two weeks of talks designed to create regulations that would lower greenhouse gases. Obama faces opposition both abroad and home. New York Times (paywall)<br /> You won't believe this:<br /> Men are putting glitter in their beards. So they can garner likes on their Instagram accounts. How do they get the glitter out? Vice<br /> Photo: David Dennis</p>
NexChange EMFX conference to address execution and liquidity
Execution, transparency, and liquidity will take center stage at the 2015 EMFX conference in London on December 3 when experts will discuss how to manage the challenges in a world filled with new regulations and constraints. “Everyone is waiting for the regulations to come to see how it will affect market players,” says David Denison, deputy chief investment officer, Florin