Brian Bollen's Blog

DTCC, Euroclear In New Collateral JV

Speed read: DTCC, Euroclear create collateral processing joint venture. Two of the industry's largest post-trade market infrastructures to develop and streamline margin settlement processes and enhance access to securities collateral worldwide, improving the stability and soundness of financial markets.

SGSS Launches New Outsourcing Solution

Societe Generale Securities Services (SGSS) has launched a new Global Broker-Dealer Services (BDS) outsourcing solution aimed at institutional brokers, mid-tier banks and broker-dealers. The integrated global service includes middle-office services, back-office processing and post-trade services.

Managing Management

BNP Paribas Securities Services reports the launch of 'Liquidity Access', designed to help banks and broker dealers manage and monitor their liquid assets.

We Might As Well Be Dead

Mint – Blain’s Morning Porridge - September 29 2014

I’ve heard people rant and rave and bellow, that we’re done and might as well be dead.. 

Is the world falling out of synch? Over the last few years I've been relatively bullish about the global macro prospects for growth, based on factors including the perceived pressure to sign new global trade agreements, energy paradigm shifts, central banks collaboration on policy and such like. It all amounts to a pretty decent plan. From a macro perspective it all offers some clear strategies such as buy dollars, buy global growth. To a degree, I’m going to stick with that plan.

Time For Vigilance

Andrew Hall, co-manager of the Invesco Perpetual Global Opportunities Fund, outlines how a challenging and ever changing market environment is causing assumptions about stock selection to be continually tested.

ASX And You Shall Receive

RBC Investor & Treasury Services says it has broadened its service offering to asset managers in Australia by becoming the first custodian bank to act as a product issuer settlement participant (PISP) for the mFunds Settlement Service.

Bill Gross Leaves PIMCO

Watch out for the sun rising in the west tomorrow, and setting in the east, while all the great seas run dry.

PIMCO, the well known global investment management firm, announced that co-founder and chief investment officer (CIO) William H Gross, has resigned and will leave the firm, effective immediately. The firm says it has a succession plan in place and its management board, comprised of its managing directors, will confirm shortly the election of a new chief investment officer. Relevant portfolio management assignments will also be announced at that time.

Northern Trust Announces T2S Strategy

Northern Trust has announced its Target2Securities (T2S) strategy, designed to offer its clients an enhanced range of asset safety holding structures, liquidity assurance, and liquidity products to meet their individual requirements. To support this strategy, Northern Trust has selected Deutsche Bank AG and Euroclear SA/NV. 

Augentius Launches AIFMD Solution

 

Speed read: Augentius partners with KNEIP to launch complete AIFMD Reporting solution. Comprehensive solution tailored to the individual needs of private equity and real estate funds –

Augentius, a global private equity and real estate fund administration specialist, reports the launch of a new AIFMD Reporter service. Developed in conjunction with leading software provider KNEIP, the offering provides a comprehensive solution to a fund’s AIFMD reporting needs, it says.

A Mess Of Feathers

Mint – Blain’s Morning Porridge - September 25 2014

From so little sleeping and so much reading, his brain dried up and he went completely out of his mind…”

I’ve been thinking about Spain’s premier Rajoy beating the well-worn path to Beijing yesterday. Of course he is there to ask for Chinese investment (well, at least he doesn’t need to plead with them to buy Spain government bonds anymore), look for export opportunities and promise a warm welcome to more China tourists. If I was the Chinese, I’d be interested. Visit Seville.. it’s my top European city break! 

Aside from the potential unpleasantness betwixt Catalonia and Spain, and the probabilities of a distracting independence campaign  – Spain is streets ahead of the rest of Europe as an investment proposition. The IFO business sentiment numbers confirm slowdown in Germany on the back of the economy’s Russian business. Austrian banks are in serious trouble because of CEE lending including Ukraine. Italy is essentially utterly un-reconstructed, and France is caught in a long-term crisis of its own making exacerbated by the euro and its reliance on Germany to fuel growth.

Compare and contrast to Spain – where austerity and wage control have shown a willingness to address the crisis with tough action, and create a possible positive outlook. Spain might be using the wrong currency, but the decline in the euro is helping. Spain has made the hard yards resulting in lower wages and thus a greater attraction for anyone looking for European bridgeheads. The Chinese have been buyers of Portugal assets – why not Spain as well?

And since I understand China recently bought Wentworth – a posh housing estate in Surrey with its own pitch and putt – it’s clear the Chinese still have their hands in their wallets. And why not? With China slowing (Goldmans dropping growth to 6.7 percent in 2017) as it transits from export to consumption led economy, overseas investment is bound to look an attractive play.

Meanwhile I had an argument with a leading FX commentator yesterday about how much lower the euro can go. I utterly believe it has to go much lower, but how? Well this chap reckons the ECB’s asset purchase programmes to be announced next month will hoover up some €300bn of ABS and covered bond assets. Really…? Good luck on that. When I suggested that that might prove impossible and would mean that the ECB would have to buy government bonds via full QE – which the Germans won’t allow – I was assured the ECB will be able to buy all the bonds it wants. This from an FX chappie??

This worries me. If the FX market really believes the EU can be saved via a lower euro driven by limited asset purchases – then they don’t understand the market’s reality. The euro has to come down and the ECB’s balance sheet expansion won’t be enough if it is half-hearted and just distorts certain asset prices higher. A much better idea would be for the ECB to simply spend euros to buy US treasuries. Now that would work, and it’s the smart money trade – fund in euros and buy dollars. It’s not rocket-science….

Meanwhile, my colleague Martin Malone reminds me of a question he’s asked many times in recent years: “Who is going to bail out PIMCO?” Since Mo-the-Tash flounced out earlier this year and a spate of accusations were made about Bill’s management style, the firm’s been swimming hard against an outgoing tide.

Last night it was trying to explain to the SEC how its flagship ETF (ALVX) that supposedly tracks its Total Return flagship mutual fund has performed so much better – an issue supposedly related to how bond purchased from the market are marked higher in the fund. It has set alarms jiggling about how asset compositions within ETFs actually work, but, essentially the net asset value of an ETF is a nebulous thing when many of the underlying assets – like illiquid mortgage bonds – are marked to market. I get that, but why is it not same on the underlying fund? I’m going to do some digging on this later today to work it out.

But also in the ETF space – which I like – is how the major Blackrock High Yield Corporate Bond ETF (HYG US) has spiked down in line with the market – down three points since July. A few weeks ago we sent round a trade idea to buy the Pro-shares Short High-yield ETF – an ETF that effectively shorts the junk bond market. Now its only down from 27.50 to 28.00 – but as the high-yield dream continues to wobble.. we still think it's worth a very close look..

Back to stocks, and my equity augurs assure me that after ripping the entrails from an unfortunate pigeon this morning, the signs are good for positive upside. Of course, they didn’t actually say anything about the pigeon, but explained it in terms of “making a lower low and closing above the previous two closes” and something complex sounding about the MACD on the VIX being a buy signal. No pigeons involved at all...they claim. Whatever…but I can see a mess of feathers all round Steve’s desk… 

 

Right…. Time to do my day job…

 

Bill Blain

0207 786 3877

07770 881033

[email protected]

[email protected]

 

T+2 Update

Alan Cameron, head of international bank and broker relationships, BNP Paribas Securities Services, ponders the issue of T+2 in a self-generated Q&A session.

ISDA, Markit Offer Derivatives Help

Speed read: ISDA and Markit offer counterparty classification tool to assist compliance with Canadian derivatives trade reporting rules.

Asset Allocation: Waiting For Policy Normalisation

This communication is intended for investment professionals and is not for the use or benefit of other persons, including retail investors.

Normalisation of monetary policy in the West is the most significant challenge facing markets after an unprecedented period of low interest rates. Given the levels of debt, the process will necessarily take a long time and the repercussions on the rest of the global economy still remain unclear, according to Miles Geldard, manager of the Jupiter Strategic Reserve Fund at Jupiter Asset Management.



Schroders Boosts Property Team

Schroder Property reports the appointments of two newly created property analyst roles within its Schroders Global Property Securities (GPS) team. This follows the strategic decision to bring the investment management of the Global Property Securities funds in-house in July 2014.

Miliband Causes Wobbles

Mint – Blain’s Morning Porridge - September 24 2014

Lots to talk about this morning – including the wobbles apparent in stock markets. The last week of September is nearly always a bad one – but October is the unkindest month! However, let’s start with a long-term market threat.

 

SIX Of One, Half A Dozen Of The Other

Speed read: SIX Securities Services and Euroclear join forces to provide more comprehensive, end-to-end fund services for their clients. Building on SIX’s strong  Swiss market presence and client relations; and Euroclear’s powerful FundSettle processing capabilities, this approach is designed to provide enhanced mutual and  hedge fund services.

NSD Launches Pre-LEI Portal

National Settlement Depository (NSD), Russia’s central securities depository, has launched a pre-LEI website (www.lei-code.ru).

BNY Mellon, Redington In LDI Launch

BNY Mellon says it has teamed up with investment consulting firm Redington to offer its UK pension fund clients an enhanced asset and liability risk reporting service.

We're All Doomed; Or Maybe Not

Mint – Blain’s Morning Porridge - September 23 2014

I’d love to go to Switzerland to find out what their army uses the wee knives for..”

There seems to be an awful lot of negativity out there. I’m swamped in learned articles and annotated charts showing why we are on the verge of the biggest reversal ever in stocks, or how the coming slide in bonds as rates rise will be catastrophic, or that bubbles in high-yield, corporate debt, emerging markets are all about to implode. Oh dear, if I believed every bad thing I heard I simply would not get out of bed. Get over it.

Tech-savvy To Shape Payments Landscape

The next generation of tech-savvy entrepreneurs and business leaders is transforming the global payments market according to a new report, Global Payments 2020: Transformation and Convergence, from BNY Mellon.