Trading Market – Dinamika Trade http://dinamikatrade.com/ Mon, 16 May 2022 16:57:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://dinamikatrade.com/wp-content/uploads/2021/06/icon.png Trading Market – Dinamika Trade http://dinamikatrade.com/ 32 32 Britons dwindle amid cost of living crisis – McKinsey https://dinamikatrade.com/britons-dwindle-amid-cost-of-living-crisis-mckinsey/ Mon, 16 May 2022 16:57:00 +0000 https://dinamikatrade.com/britons-dwindle-amid-cost-of-living-crisis-mckinsey/ Shoppers browse the aisles of a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall Join now for FREE unlimited access to Reuters.com Register LONDON, May 16 (Reuters) – British consumers are responding to the cost of living crisis by slashing both stores and products, shifting from supermarkets to discounters and from branded to low-cost […]]]>

Shoppers browse the aisles of a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall

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LONDON, May 16 (Reuters) – British consumers are responding to the cost of living crisis by slashing both stores and products, shifting from supermarkets to discounters and from branded to low-cost and private label goods , according to a report by McKinsey consultants on Monday.

Soaring prices are causing the greatest pressure on UK household incomes since at least the 1950s and consumer confidence is at near record highs. Read more

Britain’s consumer price inflation rate hit 7.0% in March and economists polled by Reuters expect it to jump to 9.1%, its highest level since 1982, when the April data will be released on Wednesday.

Join now for FREE unlimited access to Reuters.com

McKinsey said its survey found that 64% of UK consumers say they have reacted to price increases by adjusting their shopping behavior over the past four to six weeks, with notable channel and brand changes as they looking for good value for money.

Their survey found that a net 22% of consumers bought more at a discounter, with a net 9% less at a supermarket and a net 32% less at a convenience store, which tend to have higher prices.

Recent data on the supermarket industry provided by market researchers Kantar and Nielsen also showed a shift to discounters Aldi and Lidl despite the focus of Britain’s big four grocers – Tesco (TSCO.L), Sainsbury’s (SBRY .L), Asda and Morrisons – to keep prices of the most commonly purchased products low. Read more

McKinsey also found that 48% of net consumers had given up household products, 40% had given up both snacks, confectionery and frozen foods, while 24% had given up bread and baked goods.

Elsewhere, there is evidence that cash-strapped Britons are eating out less, cutting back on car journeys to save gas and voiding subscription streaming services such as Netflix and repair warranties on home appliances. Read more

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Reporting by James Davey; edited by Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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It may not be time to buy stocks yet. This technical analyst sees the market going even lower. https://dinamikatrade.com/it-may-not-be-time-to-buy-stocks-yet-this-technical-analyst-sees-the-market-going-even-lower/ Sat, 14 May 2022 20:44:00 +0000 https://dinamikatrade.com/it-may-not-be-time-to-buy-stocks-yet-this-technical-analyst-sees-the-market-going-even-lower/ Text size Michael Nagle/Bloomberg Major U.S. stock indexes are down about 12% to 25% this year, a painful setback after two years of gains. Time to buy? Not so fast, based on a technical analysis of current market conditions. Andrew Addison, seasoned market technician, owner of the Institutional View research service and occasional contributor to […]]]>

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Adani Wilmar stock joins market rally and jumps more than 4% https://dinamikatrade.com/adani-wilmar-stock-joins-market-rally-and-jumps-more-than-4/ Fri, 13 May 2022 07:01:37 +0000 https://dinamikatrade.com/adani-wilmar-stock-joins-market-rally-and-jumps-more-than-4/ Shares of Adani Wilmar were trading higher amid a rally in broader equity indices today. Shares of Adani Wilmar opened 2.96% higher at Rs 599 on BSE. The company’s market capitalization has risen to Rs 78,357 crore. The stock hit an intraday high of Rs 608.9, up 4.66% from the previous close of Rs 581.80. […]]]>

Shares of Adani Wilmar were trading higher amid a rally in broader equity indices today. Shares of Adani Wilmar opened 2.96% higher at Rs 599 on BSE. The company’s market capitalization has risen to Rs 78,357 crore. The stock hit an intraday high of Rs 608.9, up 4.66% from the previous close of Rs 581.80.

A total of 2.11 lakh shares in the company changed hands, representing turnover of Rs 12.62 crore on BSE. The title lost 5.74% in one month and fell 7.16% in one week.

Adani Group stock is trading above the 50-day, 100-day and 200-day moving averages, but below the 5-day and 20-day moving averages. The stock closed down 1.22% in the previous session.

Read also : Adani Wilmar shares resume their correction and fall 4% at the start of the transaction

In the meantime, BSE has placed the stock under the Additional Monitoring Measures (MSA) list. Stocks that are under watch due to price change, volatility, volume change are included in the list. Adani Wilmar stock is down 30.67% or Rs 269.45 from its record high of Rs 878.30 reached on April 28, 2022 from its listing price of Rs 221 on February 8.

Before hitting the roof, the stock had soared 297.44% from its listing price of Rs 221 on February 8. The company made its muted market debut on February 8. Shares of Adani Wilmar are listed at Rs 221, or 3.91% discount on their IPO issue price on BSE. The issue price of the IPO stood at Rs 230. The company offered its shares in a price range of Rs 218 to Rs 230.

Brokerage KRChoksey initiated a hedge on Adani Wilmar and sees over 20% upside from the current level. The brokerage firm said the company’s raw materials sourcing capabilities are backed by extensive trading networks. It imports 70% of its raw materials and its market leadership has facilitated the sourcing of raw materials from major global suppliers in international markets.

Additionally, Wilmar International is the largest palm oil supplier in the world and provides it with an additional competitive advantage as it does not need to depend on third party suppliers for palm oil supply.

“We believe AWL’s focus on growing the consumer packaged goods and packaged food business and moving into value-added products will result in increased market share and margin expansion,” said KRChoksey.

On May 2, Adani Wilmar reported a 26% decline in net profit to Rs 234.3 crore for the quarter ended March 31, 2022 from a net profit of Rs 315 crore a year ago. However, the company reported a 40% year-on-year increase in consolidated operating revenue to Rs 14,960.4 crore in the fourth quarter from Rs 10,672 crore in the corresponding quarter last fiscal.

Adani Wilmar Ltd is a joint venture between Adani Group and Wilmar Group of Singapore. It is engaged in the manufacture of edible oil, wheat flour, rice, pulses and sugar. The company also owns the popular brand Fortune, which is the top selling edible oil brand in India.

Meanwhile, the Indian market looked set to close in the green today after five losing sessions. Sensex was trading 665 points higher at 53,595 and Nifty jumped 220 points to 16,028 in the afternoon session.

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CLS trading in line with market views, dividend policy update https://dinamikatrade.com/cls-trading-in-line-with-market-views-dividend-policy-update/ Wed, 11 May 2022 09:51:22 +0000 https://dinamikatrade.com/cls-trading-in-line-with-market-views-dividend-policy-update/ CLS Holdings updated its dividend policy on Wednesday as it said it continued to trade in line with market expectations. Following the transformation of its UK business into a real estate investment trust (REIT), the FTSE 250 office space specialist has indicated that it is maintaining a progressive dividend policy, with a dividend coverage of […]]]>

CLS Holdings updated its dividend policy on Wednesday as it said it continued to trade in line with market expectations.

Following the transformation of its UK business into a real estate investment trust (REIT), the FTSE 250 office space specialist has indicated that it is maintaining a progressive dividend policy, with a dividend coverage of 1, 2 to 1.6 times the EPRA, compared to 1.5 to 2.0 times previously. . CLS expects dividend coverage for fiscal 2022 to be around the middle of the new range.

The company also said it continued to trade in line with market expectations.

Chief Executive Fredrik Widlund said: “I am pleased to announce an improvement to our dividend policy following the conversion of our UK operations to a REIT, which will apply to all future dividends until further notice. .

“The Board is clear that the current share price discount to NTAs (Net Tangible Assets) is unjustified given that we are in the process of selling a number of properties at appraisals or above December 31, 2021 and that the quality of our portfolio proves resilient in a challenging macro environment. Accordingly, CLS intends to launch a tender offer following the 2022 half-year financial results.”

The terms of the tender offer will be announced after the company’s half-year results on August 10.

“The quantum of any takeover bid will be staggered to ensure the group’s loan-to-value ratio remains at an acceptable level by the end of the year,” he said.

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Live News: US trade deficit widens to $109.8 billion https://dinamikatrade.com/live-news-us-trade-deficit-widens-to-109-8-billion/ Wed, 04 May 2022 21:53:45 +0000 https://dinamikatrade.com/live-news-us-trade-deficit-widens-to-109-8-billion/ One of Maersk Line’s biggest ships, the Maersk Murcia, at the port of Gothenburg: the line’s parent company, AP Møller-Maersk, warned on Wednesday of growing economic risks © AFP via Getty Images AP Møller-Maersk warned on Wednesday of growing economic risks, including potential stagflation and Chinese factory closures, even as the container shipping giant reported […]]]>
One of Maersk Line’s biggest ships, the Maersk Murcia, at the port of Gothenburg: the line’s parent company, AP Møller-Maersk, warned on Wednesday of growing economic risks © AFP via Getty Images

AP Møller-Maersk warned on Wednesday of growing economic risks, including potential stagflation and Chinese factory closures, even as the container shipping giant reported a record quarter.

Søren Skou, chief executive of Maersk, told the Financial Times that the current second quarter was developing very much in line with the first three months, which brought in the highest profits in the Danish group’s 114-year history.

But he added: “We assume a slowdown in the second half, a normalization. Visibility is quite low. We mainly see risks building up in the economy, in China with the Covid-19 policy where they are using these very hard lockdowns, some downgrades due to a very high oil price.

Maersk, which carries more than one in six containers transported by sea, is considered an indicator of world trade. Last week, it lowered its forecast for growth in the shipping industry this year to a potential slight decline.

It also raised its profit forecast for this year to $24 billion in underlying operating profit, up from its February estimate of $19 billion. “The momentum we currently have is enough to complete our upgrade,” Skou said on Wednesday.

Nonetheless, Skou noted that some economists predicted a recession in the United States towards the end of the year, although it was “too early” to tell.

“There are a number of factors that suggest we will see less growth in the second half of the year and into the next year,” he said, pointing to falling consumer and business confidence in Europe. and the United States as well as lower Chinese export orders.

Maersk was suffering from lower volumes due to a “breathtaking” sixth week of shutdowns in Shanghai, Skou said. It had not yet been dramatic.

The company’s after-tax profit for the first quarter was $6.78 billion, compared to $2.7 billion for the same quarter of 2021.

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Stocks fall after worst month since 2020 https://dinamikatrade.com/stocks-fall-after-worst-month-since-2020/ Mon, 02 May 2022 13:39:00 +0000 https://dinamikatrade.com/stocks-fall-after-worst-month-since-2020/ U.S. stocks fell in early trading, signaling market turmoil could drag on into May after major indexes recorded their worst month since the start of the pandemic. The S&P 500 fell 0.6% after the broad index closed 3.6% on Friday. The Dow Jones Industrial Average fell 0.5%. The Nasdaq Composite Index fell 0.8%. Investors await […]]]>

U.S. stocks fell in early trading, signaling market turmoil could drag on into May after major indexes recorded their worst month since the start of the pandemic.

The S&P 500 fell 0.6% after the broad index closed 3.6% on Friday. The Dow Jones Industrial Average fell 0.5%. The Nasdaq Composite Index fell 0.8%.

Investors await Wednesday’s Federal Reserve policy meeting for more signals on the pace of monetary tightening, with markets pricing in another rate hike to counter the highest inflation in decades. The war in Ukraine and a Covid-19 outbreak in China threaten to further tighten supply chains and drive up prices further.

“It’s a choppy and jittery market,” said Sebastien Galy, macro strategist at Nordea Asset Management..

NDA.FI -1.89%

“It’s been fed liquidity for a long time and that’s been priced into expectations for equities,” he said, a situation that is changing as central banks tighten monetary policy.

The S&P 500 fell 8.8% and Dow industrials fell nearly 5% in April, the worst monthly performance since March 2020. The Nasdaq Composite fell more than 13% last month, its worst performance since October 2008. Technology stocks are particularly upside sensitive. interest rate.

The yield on the benchmark 10-year Treasury note rose slightly to 2.962% from 2.885% on Friday, up for a fourth straight trading session. The US dollar held onto its recent gains, with the WSJ Dollar Index rising another 0.1% after its biggest monthly jump in a decade.

Expedia and Clorox CLX 0.33%

are expected to release their results on Monday after markets close. Pfizer,

KKR,

Airbnb,

Starbucks and Lyft are scheduled for Tuesday, and Moderna,

Marriott International and Uber on Wednesday. Kellogg and Apollo Global Management are scheduled for Thursday.

Earnings season has been reasonably strong so far, with more than 80% of companies reporting to date beating analysts’ expectations, according to Refinitiv. Shares fell last month despite this on jitters about the coming months, investors said.

In individual stocks, Moody’s shares fell 8% after the ratings firm said its profits fell by about a third as costs rose.

Oil prices have fallen. Global benchmark Brent fell 2.7% to trade at $104.25 a barrel. European Union officials are working on a proposal to sanction Russian energy. Analysts at Nordic bank SEB say some doubt it will pass because it requires the unanimous backing of EU members, many of whom depend on Russian energy. A benchmark for natural gas in Western Europe fell 3%.

Traders are also monitoring lockdowns in China and awaiting a meeting of the OPEC+ alliance later this week, where members are expected to discuss its supply deal.

The pancontinental Stoxx Europe 600 index fell 1.4%. Data releases showed German retail sales fell in March as economists expected an increase and consumer confidence in the EU fell more than expected. Wind turbine maker Vestas Wind Systems fell 7% after slashing its full-year forecast and reporting a bigger-than-expected loss on asset writedowns in Russia and Ukraine. The UK stock market was closed for a holiday.

In Asia, most major benchmarks fell slightly. The South Korean Kospi fell 0.3% and the Japanese Nikkei 225 fell 0.1%. Markets in China and Hong Kong were closed for the Labor Day holiday.

Surveys of purchasing managers in manufacturing in the United States in April are due to be released by the ISM at 10 a.m.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Democrats boost populist appeal with proposed stock trading ban https://dinamikatrade.com/democrats-boost-populist-appeal-with-proposed-stock-trading-ban/ Sat, 30 Apr 2022 19:05:00 +0000 https://dinamikatrade.com/democrats-boost-populist-appeal-with-proposed-stock-trading-ban/ WASHINGTON (AP) When Rep. Abigail Spanberger first introduced a bill banning stock trading by members of Congress and their families, the Virginia Democrat only managed to get eight co-sponsors. So far this session, 62 — or about one in seven House members — have signed up. It’s a similar story in the Senate. Sen. Jeff […]]]>

WASHINGTON (AP)

When Rep. Abigail Spanberger first introduced a bill banning stock trading by members of Congress and their families, the Virginia Democrat only managed to get eight co-sponsors. So far this session, 62 — or about one in seven House members — have signed up.

It’s a similar story in the Senate. Sen. Jeff Merkley, D-Ore., a once lone voice on the issue, had only one co-sponsor for his proposed stock trading ban in the past two sessions of Congress. Now he has nine.

The slight increase in support reflects a growing appetite among lawmakers to tighten trading rules after several members came under scrutiny over their stock trades during the pandemic. While there’s no guarantee any of the proposals will become law, many lawmakers facing the toughest re-election races have passed the legislation, raising the issue of ethics as a talking point — and a potential point of attack – for mid-term campaigns.

Even with voters focused on issues like inflation and the war in Ukraine, Spanberger said the trade ban comes up time and time again when she meets her constituents.

“No matter where I am, someone is talking about it,” said Spanberger, who is among lawmakers facing a tough re-election bid.

But it’s not easy to navigate. Other lawmakers, especially Republicans, are skeptical and concerned about the merits of such a ban and the logistics of enforcing it. And while congressional leaders say they’re open to the proposals, some lawmakers doubt it will translate into action.

“The headwind is that some members of Congress don’t want to play by these rules, and some of those members are in the lead,” Spanberger said.

House Speaker Nancy Pelosi, D-California, initially said she did not support a stock trading ban in December. “We are a free market economy. They should be able to participate,” she told reporters. But in February, she announced that she was open to one. “It’s complicated, and the members will get through it. And then we’ll move forward with what consensus is,” she said.

Under current law, members of Congress and government employees must report the sale and purchase of stocks, bonds, commodity futures and other securities no later than 30 days after learned that they were made and within 45 days of a transaction over $1,000.

But lawmakers have routinely been slow to file these notices and, in some cases, have not filed at all, leading to a flurry of complaints to the House Ethics Committee.

During a House hearing on the issue in April, Rep. Rodney Davis, R-Ill., said it’s clear that current disclosure laws aren’t working as intended. But he called the violations mostly unintentional.

Davis said he had heard little from voters about stock trading and worried that requiring lawmakers to place assets in a blind trust would prove prohibitively expensive for many lawmakers. Still, he’s open to finding a compromise “that doesn’t encourage the ultra-rich to be the only ones running for Congress.”

Rep. Barry Loudermilk, R-Ga., went further. He said Americans have “the right and freedom to participate in a free and fair market economy.”

“It won’t make a difference to me personally, but it does make a difference to me as an American citizen,” he said.

Watchdog groups warned at the hearing that public disclosure of stock trading has not deterred lawmakers from owning and trading shares in companies subject to their oversight, eroding voter confidence.

California Rep. Zoe Lofgren, the Democratic chair of the House Administration committee that has reviewed the various trade bills introduced, said this week she hopes to push a bill through her committee. But she also said “it’s a lot more complicated than I realized when I started watching it.”

Support for the trade ban is bipartisan. Rep. Chip Roy, R-Texas, co-wrote the bill with Spanberger, but the vast majority of co-sponsors of the various bills are Democrats. That includes progressives such as Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, DN.Y.

Several Democrats facing tough re-election battles have also signed up as co-sponsors. The list includes Reps. Jared Golden of Maine, Sharice Davids of Kansas, Angie Craig of Minnesota, Kim Schrier of Washington, Elissa Slotkin of Michigan and Tom Malinowski of New Jersey.

Malinowski is under investigation by the Ethics Committee after the Congressional Ethics Office determined there were substantial reasons to believe he had failed to properly disclose the actions he had bought or sold. Malinowski said his trading activity was conducted by a third-party investment manager without his involvement. He has since set up a qualified blind trust to manage his investments. But Republicans have made trades and the ethical inquiry an issue as they try to win back Malinowski’s seat in New Jersey.

Slotkin said she was elected in 2018 after promising not to accept donations from corporate political action committees. She called it a defining issue in this race, and she sees the proposed trade ban as an extension of that effort.

“Anything we can do to clean up the perception of elected officials is good for democracy,” Slotkin said.

She said she shared Spanberger’s concern that Pelosi did not see the stock trading ban as a priority.

“When the speaker wants something done, it gets done. When she doesn’t want it done, you have to fight to put it on the agenda, and that’s where we are. said Slotkin.

In the Senate, 13 Democratic lawmakers, but no Republicans, signed a bill by Sen. Jon Ossoff of Georgia that would require lawmakers and their spouses and children to place their securities in a blind trust. Three Democratic senators considered to have the toughest re-election races this year are co-sponsors: Sens. Mark Kelly of Arizona, Raphael Warnock of Georgia and Catherine Cortez Masto of Nevada.

Larry Parnell, director of the strategic public relations program at George Washington University, said the Democratic candidates received a confusing midterm message because “they’re kind of halfway, halfway on some elements of Biden’s agenda.” But he thinks banning stock trading is an idea “that anyone can follow”.

“It’s a win-win situation for anyone looking for a populist message to put across in the marketplace,” Parnell said.

Copyright 2022 Fort Myers Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without prior written permission.

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Consumer fintech trading revenue doesn’t keep up with ARR SaaS – TechCrunch https://dinamikatrade.com/consumer-fintech-trading-revenue-doesnt-keep-up-with-arr-saas-techcrunch/ Wed, 27 Apr 2022 13:51:33 +0000 https://dinamikatrade.com/consumer-fintech-trading-revenue-doesnt-keep-up-with-arr-saas-techcrunch/ Another breakthrough analysis from your friendly Exchange team After a long experimental period, investors have decided that consumer fintech business ventures are not SaaS companies, which means that such fintech revenue should not be valued as if it were annual recurring revenue (ARR ), the main product of software-as-a-service concerns. This point matters because a […]]]>

Another breakthrough analysis from your friendly Exchange team

After a long experimental period, investors have decided that consumer fintech business ventures are not SaaS companies, which means that such fintech revenue should not be valued as if it were annual recurring revenue (ARR ), the main product of software-as-a-service concerns.

This point matters because a slew of mainstream fintech startups have raised capital, spent, and valued in recent years as if they were SaaS businesses. This may be an error.


The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or receive The Exchange newsletter every Saturday.


The fact that consumer fintech revenue will not be valued like SaaS revenue was made clear this week, with Robinhood announcing layoffs ahead of earnings after seeing its public market value plummet and Coinbase is trading at or near record highs – the American cryptocurrency trading platform has lost more than 65% of its maximum value to date, despite rather robust profitability.

Both companies were once worth a multiple of their current value, and each saw its shares trade hands before going public at higher prices than they do today. So what happened? Politely, optimism. Less politely? A little greed. Let’s talk about it.

Trading income is good, but not great

Robinhood is a good idea for a business. With payment for order flow (PFOF), Robinhood realized it could offer zero-cost consumer commerce while generating big revenue for itself. It was like finding an exploit in a video game, only the game was the stock market, and the exploit was a possibly temporary setup where selling consumer order flow is legal and acceptable.

As the COVID-era savings and investment boom took off, Robinhood saw its user base and trading volume – and, consequently, trading revenue – skyrocket. The unicorn got into trouble when its tech, accounts, or both were pounded during the memestock cycle, but, generally speaking, Robinhood grew through to its IPO and saw early adjusted profits. .

Coinbase caught some tailwinds during COVID, riding the surge in global demand for crypto assets. Thanks to a market that will still incur trading fees, Coinbase has made a mint as individuals and institutions have busied themselves with buying and selling digital assets.

Investors, reviewing both companies while they were still private, saw increased consumer demand, steady revenue per user, and big margins. Software companies are inherently attractive businesses thanks to their high gross margins, and with users busy making transactions, I suspect the founders and investors of both companies were content to value them more as SaaS companies – where the revenues are often contracted and tend to increase over time as the customer’s use continues.

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Commodity traders can no longer be ‘unregulated’ https://dinamikatrade.com/commodity-traders-can-no-longer-be-unregulated/ Mon, 25 Apr 2022 13:31:23 +0000 https://dinamikatrade.com/commodity-traders-can-no-longer-be-unregulated/ Placeholder while loading article actions For the first time in many years, the commodity trading industry has captured the attention of policymakers and regulators. They are not happy. In a series of recent reports, letters and confidential memos from major central banks and global financial regulators, a few words slip in: “opaque” and “unregulated”. Anyone […]]]>
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For the first time in many years, the commodity trading industry has captured the attention of policymakers and regulators. They are not happy.

In a series of recent reports, letters and confidential memos from major central banks and global financial regulators, a few words slip in: “opaque” and “unregulated”.

Anyone familiar with commodity trading would be forgiven for thinking this is obvious. It is, but don’t dismiss this new attention. Coming from some of the world’s most powerful institutions, from the US Federal Reserve to the Financial Stability Board to the International Monetary Fund, it heralds a new era for the industry – one of greater scrutiny, at all less, if not outright regulation.

For decades, policymakers have focused on the more transparent side of commodity markets – futures and options – and paid little attention to the darker corners: above all, over-the-counter derivatives. privately traded over-the-counter and physical markets. Any additional oversight fell on what was already fairly regulated and transparent. This inability to dig in the dark has allowed major commodity trading firms, such as Vitol Group, Trafigura Group, Glencore Plc and Cargill Inc., to grow without the burden of additional regulation.

The Russian invasion of Ukraine and the resulting spike in commodity prices has since drawn attention to “the resilience of corners of global financial markets that were little known to the general public only a few weeks ago.” , as the IMF put it.

It wasn’t just the general public. Regulators themselves knew little. The Bank of England was quite candid about this: “Risk assessment has been made more difficult by the relative opacity of commodity derivatives markets” and the fact that some “large physically settled transactions are not not reportable to trade repositories”.(3) The UK central bank added that several “significant” commodity companies were not subject to the transparency rules put in place after the global financial crisis.

What’s to come is probably similar to what Wall Street faced after 2009: a lot more supervision. More regulation was a given after energy traders asked for help. In a letter to governments and regulators, the lobby group of European energy traders warned in March of “intolerable liquidity pressure” across the sector and called for financial support from taxpayers. Central banks, including the European Central Bank(4) and the Fed, have said no to the bailout. Only the German government decided to use a public bank to support its public services, some of which are large traders. But policymakers have been rather alarmed that energy traders, who have always pushed for self-regulation, have asked for help.

Now the Financial Stability Board, a body created in 2009 by the G-20, has promised a “thorough analysis” of vulnerabilities that have arisen in the wake of Russia’s war in Ukraine, “with particular emphasis on financial markets. raw materials”. In a letter last week, Klass Knot, chairman of the FSB and head of the Dutch central bank, highlighted two areas of interest for regulators: (2) the link between commodity traders and the banks that finance them, as well as the potential for a major commodity trader to go bankrupt if commodity prices rise again.

Commodities trading companies depend on bank loans to buy oil, metals and foodstuffs, which means they often risk very little on their own equity, but their health is linked to that of the banking sector which finance them. As the IMF put it, banks “play a crucial role and have significant exposures” in commodity markets, “including providing liquidity and credit to a small group of large energy trading companies. which operate globally, are largely unregulated and are mostly private.”(6)

Let me emphasize a few words of these words: “small group of large companies”, “unregulated” and “private ownership”. This is the kind of stuff that makes policymakers sweat – they point to concentrated risk in an opaque corner of the market that has received little attention so far.

The Fed, through its Dallas branch, has placed a similar emphasis in ruling out a bailout. “The threshold for central bank intervention in unregulated markets is high,” he said(1). Instead, he recommended that the sector consolidate its finances rather urgently. “It would be prudent for companies active in commodity markets to proactively assess and further strengthen their liquidity profiles.”

Now regulators must follow — and resist likely industry lobbying efforts.

A first step is to increase understanding. As the Bank of England has said, many corners of the commodity trading industry are opaque. Before the application of any regulations, greater transparency is needed. So shed light on the OTC derivatives markets, by imposing disclosures similar to those already in place for the futures and options markets. The recent chaos in the nickel market was exacerbated because regulators failed to realize the size of OTC positions, having mistakenly assumed that looking at positions on the London Metal Exchange was enough.

Physical markets also need disclosures. Here is an idea: the G7 countries could agree to set up a register of international oil transactions. Revolutionary? Well, that’s what they agreed to do in 1979(5). This was never implemented because oil traders defeated all attempts at regulation.

Regulators also need to look at the level of risk commercial banks are taking in underwriting the commodity trading industry, and in particular whether traders are backing the loans they take out with a sufficient share of their own funds. Commodity traders may need to raise more capital to stay in business, as the Fed has previously suggested.

For the past decade, commodity traders have been under the microscope of law enforcement, with the US Department of Justice in particular cracking down on corruption and money laundering. It is time for financial regulators to put them under the magnifying glass as well.

(1) Bank of England, Summary of financial policy and minutes of the meetings of the financial policy committee of March 9 and 18, 2022

(2) European Central Bank, Confidential note on “Financing problems related to the functioning of energy markets”, March 30, 2022

(3) Financial Stability Board, Letter “To G20 Finance Ministers and Central Bank Governors”, April 2022

(4) International Monetary Fund, ‘Global Financial Stability Report’, April 2022

(5) Commodity finance markets shaken by Russian invasion; Monitoring for US Financial Stress, Federal Reserve Bank of Dallas, April 2022

(6) G7, Declaration, June 29, 1979

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. He was previously the Commodities Editor at the Financial Times and is the co-author of “The World for Sale: Money, Power, and the Traders Who Barter the Earth’s Resources.”

More stories like this are available at bloomberg.com/opinion

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High cost of listing, trading hinders the development of the bond market https://dinamikatrade.com/high-cost-of-listing-trading-hinders-the-development-of-the-bond-market/ Sat, 23 Apr 2022 15:10:00 +0000 https://dinamikatrade.com/high-cost-of-listing-trading-hinders-the-development-of-the-bond-market/ Despite a delayed start, efforts to popularize bonds as a financing instrument are gaining momentum as more lenders, corporations, a few municipalities and non-governmental organizations issue bonds and the listing of a large number expands the possibility for financial market investors to diversify their portfolios. However, the secondary bond market is miles away from its […]]]>

Despite a delayed start, efforts to popularize bonds as a financing instrument are gaining momentum as more lenders, corporations, a few municipalities and non-governmental organizations issue bonds and the listing of a large number expands the possibility for financial market investors to diversify their portfolios.

However, the secondary bond market is miles away from its necessary status to be called popular or vibrant, experts observe, for several reasons.

The very high cost of listing and trading bonds here tops the list of hurdles and investment bankers are now pushing the Dhaka Stock Exchange (DSE) to streamline costs, while the securities regulator discusses the need for favorable tax policies and other issues with the National Revenue Council.

On behalf of market intermediaries, investment bank City Bank Capital Resources, an industry champion in managing and arranging bond issuance, recently wrote to the First Exchange to address the high costs that hamper the development of the bond market.

The most expensive ad

A comparison of initial listing fees on regional stock exchanges such as the National Stock Exchange (NSE) in India, Colombo Stock Exchange in Sri Lanka, SGX in Singapore or Bursa Malaysia, reveals that making a corporate bond publicly tradable costs its issuer an unusually high amount in Bangladesh. .

The Dhaka Stock Exchange (DSE) charges 0.25% of the total size of a corporate bond until the size of the bond exceeds Tk10 crore, and for larger bonds it charges 0.15 % of total as initial listing fee.

The minimum initial listing fee of Tk50,000 is equivalent to $589 while the maximum of Tk1 crore is over $1.17,000 in the DSE and as bonds tend to be much larger than bond issues shares in terms of size, bond issuers must pay the maximum fee when listing.

The maximum initial registration fees are around $404 in NSE, $11,000 in SGX, $5,900 in Bursa Malaysia and $499 in Sri Lanka, according to City Bank Capital’s study based on exchange rates more early this year.

Singapore and Malaysia’s stock exchanges charge more than India and Sri Lanka, but issuers don’t mind paying this as the two mature exchanges do not charge annual listing fees for the bonds.

Again, Bangladesh charges higher annual fees than India and Sri Lanka.

A high cost of issuance and listing will deter issuers from entering the capital market to raise funds through listed debt securities, City said in its letter to the DSE.

Since the current listing fees for stocks and debt securities are set at the same rate, and the size of bonds is much larger than that of stocks, the listing fees rate for debt securities should be significantly lower than that of stocks. shares, says the letter.

DSE Managing Director Tarique Amin Bhuiyan told The Business Standard: “Along with all other issues, we are also working on bond listing fees so that the bond market becomes popular in the country.

Trade so expensive

Listed bonds are barely traded on the DSE.

The low appetite of retail investors for bonds is one reason, but even institutional investors do not find bond trading profitable enough in Bangladesh.

In India, the NSE charges 5 rupees for trading listed bonds worth 1 crore rupees, which is at least ten times higher in Bangladesh because the DSE has set 50 Tk per trade as a minimum fee.

For wholesale trades that might be overlooked, but for small investors who want to trade a 5,000 Tk lot of bonds at the DSE, the brokerage cost of buying may be as high as 1% and the total cost of trading may rise to 2%. if the cost of selling the same on the stock exchange is included.

Bonds are not instruments that offer a lot of capital gains like that of stocks, said Bangladesh Merchant Bankers Association (BMBA) President Md Sayadur Rahman.

“High trading costs keep investors away from bond trading, but that’s not the only reason for poor trading in the corporate bond secondary market,” said DSE Brokers Association President Richard D. Rozario.

“From the industry, we have discussed the issues with regulators and they are working on solutions,” he added.

“We need to encourage bond issuance and investments to popularize long-term debt instruments as an alternative to bank loans,” Sayadur said.

Financing long-term projects from short-term deposit funds puts pressure on the banking system in Bangladesh.

In recent years, Bangladesh has made significant progress in developing the bond market, and this should continue to remove remaining hurdles, Rahman said.

Like zero-coupon bonds, income from all kinds of bonds should be tax-free for individual investors, helping to increase individuals’ appetite for bonds.

The costs of registering trust deeds have been brought down to a rational level, transaction costs have also dropped significantly, especially for large transactions, following the tax rationalization on bond transactions.

Another reason for not developing the bond market in the country is the lack of on-exchange trading of treasury bills in the DSE, according to experts, as treasury bills dictate the pricing of corporate bonds.

The DSE has made treasury bills free to trade while reducing their trading costs to a lower level and the exchange is preparing to start trading treasury bills soon.

Currently treasury bills are traded within Bangladesh Bank’s market infrastructure module and only banks are involved in buying and selling government securities mainly in their accounts while FX trading would open Treasury instruments to all local and foreign investors.

City Bank Capital predicts that many corporate issuers will raise significantly more funds through various bonds, of course, if they find it profitable.

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