Thursday, 25 August 2011

Scholarship Egypt to remain closed until Wednesday

The Agency regulation, said market re-open Wednesday to Sunday as originally planned, because more consultations with brokers and firms are required.

The Egyptian Government farm award January 28, after the outbreak of the revolt which overthrew the Egyptian President Hosni Mubarak has caused the benchmark plunged by more than 16pc within two days.

The crisis has shaken international investors, which prompted an exodus of foreign funds and resume warnings of a predatory renewed by investors fearful once commercial.

Here's how some of its most important listed companies composed as events unfolded.

Second most well enumerated grand developer Egypt said on Tuesday it had resumed operations after a break of one week. It is said that with the Egypt scholarship, he confirmed that his actions could be trade normally when the stock market has reopened.

Palm Hills development is among the biggest fallers main when index it last traded on January 27.

Haitham Moneim, responsible investor relations at carpetmaker shirting machine largest in the world, said February 6: "week last, we have closed all our production as all business facilities, and we made sure our showrooms...". To avoid any delay to customers, we moved orders of plants Egypt plants, the United States and China. »

Biggest steel maker the Egypt said its factories functioned even though not at full capacity, said an investigation involving the President would not affect the business activity. "The company confirms that...". Mr. Ahmed Ezz, President and principal shareholder of Ezz Steel was led by Egyptian remain in Egypt authorities. This measure, which is strictly personal for Mr. Ezz does not affect the functioning of society, "he said, adding that he denied the charges against him."

Most large firm enumerated the Egypt said he had returned to work at almost 90pc of Egypt Sunday construction sites on February 6. BEC said production rates were normal in its fertilizer plants and exports were underway, adding it had shipped 52,000 tons of urea and was in the process of sending 38500 tons of ammonia.

Most large investment bank by the Egypt, which has $6 MD in assets under management, said he had resumed work, and no there was no damage to any of its assets or property elements. The firm said that no there was no change of management to its Board of Directors of events.

The largest cement listed country company said it had resumed deliveries of cement stocks suspended by political demonstrations. Suez, a subsidiary of Italcementi, which supplies about one-quarter Egypt grey cement and its white cement 42 pc repeated operations in all its plants February 5.

Cairo-based enterprise private equity capital of the Citadel resumed full operations on February 6, without damage to its assets or subsidiaries of the affiliate, the firm said. "On the long term, the Citadel capital believes this difficult period will result in a more stable and faster growth Egypt and region," said a statement on its Web site. "In the coming period we see very compelling opportunities for long-term capital Egypt private investors and beyond".

Arafa Holding, largest exporter of clothing Egypt, said that all its production facilities had started again on Saturday. "We expect a delay in delivery of nearly a week mainly due to the interruption of logistics which took place in seaports, last week," said Arafa. "However, we are pleased to say that shipments of goods by sea and air have initiated effective Saturday, February 5.

Al Baraka Egypt Bank, an Islamic Bank based in Cairo, where Al Baraka Banking Group of Bahrain was a part of control, said he had returned to full activity. "Any damage occurred at one of the branches of the Bank and five new branches to Exchange was also opened to the public there.

Great Arab cable said Sunday manufacturer all facilities in Egypt were operational. The firm said its logistics underwent a bottleneck was partially resolved by moving its manufacturing orders and exports sales outside the Egypt.


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Saudi stock market breaks three-week losing streak

Shares in Saudi Arabia have dropped in recent weeks, prompting the State purchasing Fund, news that boosted the market on Saturday. Photo: Reuters

Saudi Basic Industries Corp., manufacturer of petrochemicals most climbed 9 1pc, and Al Rajhi Bank, lender of the Kingdom, jumped 7 FP6.


The Tadawul all share index, Monte 7 3pc, the steepest gain since November 2008, at 5,709.91 at the close to Riyadh. The gauge snap a losing stria of 13 days, the longest predatory from a similar period in July 1996.


The increase in oil prices will boost the "strong condition" of the Kingdom, the Finance Minister Ibrahim al-Assaf said Al Arabiya TV.


Shares in Saudi Arabia, which makes comments 20pc of proven reserves of oil, are now attractive and retirement agency public Saudi bought shares last week, he said.


The General Organization of the State social insurance also bought stocks, according to Fuad Aghabi capital Ajeej.


"The Assaf comments have had the greatest impact on the market," said Aghabi, Director of investment Ajeej Capital in Riyadh.


Stocks fell across the region last week, sending shares of Bloomberg GCC 200 Index of the Persian Gulf level lowest since 2009 and propel the benchmark Saudi down the most in two years, on concerns that the turmoil in Libya is spreading across the Middle East.


"With my confidence in the economy and this country, I also took the opportunity" and bought shares, said Finance Minister Al Assaf. "I am an investor in the long term."


Rose oil 2 5pc to a maximum of 29 months yesterday. Crude oil for April delivery rose $104.42 per barrel on the New York Mercantile Exchange, the highest settlement since September 26, 2008.


Shia Muslims in the Eastern province of Saudi Arabia held two events on 3 March to call for the release of prisoners, a rare event in the top world oil exporter.


Department of the Interior said that demonstrations, marches Saudi and the sit-in is "strictly" prohibited by virtue of the laws of the Kingdom, reported the official Saudi press agency, quoting an unidentified Ministry official.


"Comments of the Minister of Finance contributed today to transform the concern of internal unrest," said Aghabi capital Ajeej.


"It remains to see if sentiment will continue to be positive in course of the week".


Saudi Arabia is the only Gulf Arab scholarship open on Saturday.


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Seeds of euro debt crisis will spread unless politicians Act

Whenever I look at things are capture. The participation rate for the gathering of end of term of my son was only seven - the rest had measles. During this time, for a time Friday night, they were dropping like flies to News Corporation. First Rebekah Brooks, then the Hinton. Who consider their palm and see black spot then?


Nowhere contagion was so virulent that in today's financial markets. We are not near the level of irrational fear sweeping markets in late 2008, but more than any time in the past that three years ago the feeling that no one is safe from infections.


Investing is never completely rational and it is a common place that markets hate nothing more than the uncertainty. Investors are able to watch the same facts and draw completely different conclusions, according to fear how they feel


Take the Chinese companies who chose, for reasons good and bad, win a stock exchange quotation to the United States by taking over a company with a market in the dormant list it but no business - a so-called society.


When confidence in the history of China's investment was high, is there no reason to believe that this was nothing other than a good hunting for interesting investment field. Today, after a flurry of alleged fraud and the attention of speculative short-sellers, it has become a case of "there be dragons".


Nothing has really changed and there is, without doubt, some legitimate Chinese companies for these courageous and diligent enough to do the necessary due diligence, but they are as popular as children with measles now.


Closer to home, contagion is the watchword in the markets of Europe debt too. Ten days ago the line in the sand in the sovereign debt crisis device was drawn to the Spain. It is the "too big for the guarantor". Italy enjoyed the status of a relative safe haven, but within days, he resembled a suspicious Chinese dress establishing its goods in New York.


As shown in the figure, Rome was the interchangeable years with Berlin in the eyes of investors in sovereign debt. This began to change with the onset of the financial crisis in 2008, but last week, as the extra performance required by investors to invest in bonds of the Italy reached a euro-ère high, no one would approach the country unless sanitized in gown and mask.


It is true that the Italy has a larger burden of debt, eye-watering 1.8 billion euros (1.58 billion to £) or 120pc of economic production, all countries in Europe, other than the Greece (150pc). Its debts are almost twice those of Spain (64pc), for example. It is also true that its debt reduction plans have been casual - they were not due to kick in until 2013. Undeniable, is also the divide between Prime Minister Silvio Berlusconi and Finance Minister Giulio Tremonti. And no one would claim that the "liberal revolution" the Italy was a success - the country has suffered a decade of declining productivity.


However, it is also the case that, unlike the Greece, the Italy has a track record of reducing its budget deficit. Unlike the Spain, it is not a housing bubble and bust. According to the IMF, he runs a surplus of low-budget 0 2pc and its current account deficit is relatively low in the FP7 2 of GDP. The external debt of the Italy is only one-fifth of economic production and its loans to deposit ratio is comfortable. It has a decent sector which makes things, that the rest of the world wants to buy therefore exports are recovering and unemployment is manageable. He can afford its pension commitments.


Unfortunately, all little account because, with a big and liquid, Italy bond market has become a proxy for hedge finance betting on a breach of the euro area. It is a bet much better that speculate on the default value of credit market swaps.


Markets are attempts to force the issue, Lasse to the failure of politicians to fight against the evils of long duration in the heart of the European crisis - that the only lasting solution to a broken monetary union is a greater tax integration and, finally, the common euro area bond issue, collectively funded by all Member States.


While policies are outstanding, investors in Europe must expect the dissemination to the germs.


? Tom Stevenson is a Director of Fidelity International investment. The views expressed are his own.


tomrstevenson@fil.com
Twitter: @ tomstevenson63


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Share price up to the levels pre-banking crisis shoot

Move triggered hopes that the largest global economy will begin to develop, encourage investors to buy shares and climb the price on the stock markets from around the world.

The book reached its highest level against the dollar since January more than $1.62 as the Bank of England has kept historical low 0.5% interest rate.

The Bank decided against pumping money into the system, but the Chancellor said yesterday that facilitate further quantitative is a possibility if the economy slows significantly next year.

George Osborne told MEPs that monetary policy, spending, the Government step should be the "main"tool for stimulating economic demand.

Experts said that floating FTSE is good news for the millions who relied on actions, although they warned that it was not evidence the economy was on track to make a quick recovery.They also warned that many savers find life difficult for some time yet.

The stock market in London, which includes more than 1,000 companies is approximately 1.8 billion to £.A large part of the invested money is owned by the Corporation or public sector pension funds.

The value of the stock market has a direct effect on the size of a pension that someone enjoys if they purchase an annuity on their retraite.Millions households have savings invested directly in equities - many thanks to savings accounts (ISAs), whose annual limit is passed earlier this year to £ 7,200 to £ 10,000.

Someone whose cumulative investment in an ISA was worth £ 20,000 when the market was at its nadir in the spring of last year would have increased the value of their portfolio £ 11,600.

Net gains yesterday followed several months of encouraging economic news.Manoj Ladwa, senior capital ETX trader said: "even if the decision to other funds of pump in the u.s. economy was a surprise, it seems certainly given the equity market."

David Buik, associate principal at BGC Partners, explained the jump in the price of the shares: "there was a momentum of quantitative easing, third quarter earnings were much better than expected, and there is no cloud storm on the horizon that austerity package starts to bite."

Week last economy showed the official figures of the United Kingdom had increased by two per cent in the last six months.

Mark Dampier, Hargreaves Lansdown, an independent financial adviser, said: "much of this gathering is driven by EQ in the États.Mais not enough credit is given to retail - investor private shareholders - in the United Kingdom .they started back on the market and were buying shares seriously in recent months."

"And politicians have been big sellers.Whenever they are taxes, a judicious intelligence looks to the taxe.Avec funding the upper limit of £ 10,000 ISA many have been profiting by buying shares.»

The majority of companies in the FTSE 100 index earn profits abroad, most experts consider the index of blue chip to take account of health economy internationale.Cependant, the FTSE 250 - small businesses, which most do their business in Great Britain - was also renaissante.Il closed until 140.18 yesterday evening at 11,016.46, a maximum of three years.

Mr. Dampier has added: "" companies reported that profits attendus.De companies made it better that Governments should done: cut their debts and get their houses in order .they are reaping the benefits now. ""

Economists warned that the resurgent markets were not a sign that life would be best for the majority of consumers.

Charles Davis at the Centre of the economy and research companies, a think tank, said: "we had some surprisingly strong economic data, but it has not improved from one day to the next."

"There are winds .Familles economy are feeling the pinch of rising cost of living at a rate much faster than average gains.Et which is rising year next TVA and the effects of reduced benefits and public job losses increased."

Investors with money in a bank or building society were warned that they were unlikely to take advantage of the best savings rates.

Although the Bank of England voted against a fresh episode of quantitative easing, most believe that it will keep rates low interest for a future time.

"Cash savers have had a shocker and they will continue to do so, said Mr. Dampier.

Howard Archer, UK to INS Global Insight Chief Economist said: "ahead still interest rates remain low current weakness in registration of 0.5% until at least late 2011."

"In addition, we would not rule out interest rates remain low 0.5% by 2012."


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Wednesday, 24 August 2011

Steve James: farcical events at Glamorgan raise eyebrows in Australia

With so much international cricket being played year-round around the globe, its newspaper coverage may have shrunk, but it still has its legion of supporters and followers. Many of them may be latent – for each of the last two seasons the Cricinfo website has recorded some 30 million hits on its county cricket pages – but they are there.

As indeed I have discovered many miles away here in Australia. There I was at the Gabba the day before the first Test, trying to watch the various net sessions (with Doug Bollinger clearly making the point that he did not like being left out of the Australia side by bowling at the speed of light) and familiarise myself with new surroundings, while rather a lot of people seemed to want to ask only one question: “What on earth is happening at Glamorgan?” And the inquisitors were not all Welsh! Given the mountains of correspondence and calls I have received in the last couple of weeks, I very nearly called a press conference after the captains Andrew Strauss and Ricky Ponting had uttered their pre-series war cries.

“Everyone has resigned, haven’t they?” remarked one top-notch sports writer. Well, not quite, but three in a week is pretty unprecedented. That is captain Jamie Dalrymple, who was sacked and then resigned from the club, director of cricket Matthew Maynard and then president Peter Walker in disgust. Oscar Wilde might have had something to say about this. One? Unfortunate. Two? Careless. Three? Just plain stupid.

As cock-ups go Glamorgan’s recent actions have been top-rank. They wanted to improve matters; instead they have made them many times worse. The broad principles of their thinking were actually reasonably sound. Dalrymple is a fine cricketer – indeed I stand by my assertion three years ago that he was Glamorgan’s best-ever domestic signing – but he is no Mike Brearley. Maynard is a sharp coach, happiest with tracksuit on, but not a director of cricket with all its attendant duties. So to sack Dalrymple and demote Maynard was not wildly ill-advised. But the manner of its implementation, as well as the choice of replacements, was quite shambolic.

Glamorgan wanted Ponting or Graeme Smith to captain. They ended up with Alviro Petersen. It is not quite the same. They say they conducted a worldwide search for a managing director of cricket and ended up with Colin Metson, a former Glamorgan wicketkeeper and recently chairman of their cricket advisory group, but with little experience or knowledge of top-level cricket recently. Perhaps more pertinently he is a friend of chairman Paul Russell.

What is more nobody told Maynard he was being demoted before Russell, Metson and chief executive Alan Hamer took a trip to Dubai to sign Petersen during the recent South Africa versus Pakistan Test series. There has been a nice video clip doing the email rounds showing all three sitting in the stands. Caught red-handed.

There are a couple of wider issues to consider here. Firstly the importance of one-day cricket. Glamorgan missed championship promotion by a whisker (a mutton-headed Sussex declaration handed Worcestershire the spot instead) but yet again were woeful in the one-day stuff. That is where the cash cow lies. The players profess the championship to be the most-prized competition, but the bean counters beg to differ.

Secondly the influence of the county chairman. It is a role that has changed dramatically. Once it was mainly a ceremonial post; now many chairmen prop up their counties financially. Russell certainly does at Glamorgan. And with that comes power.

But the trouble is that very few of these men know their cricket. They think they do, but the truth is they do not. At heart they are just fans. They get star-struck like everyone else. So they make decisions in sport that they would never make in business.

Then business and cricketing needs become confused when they are asked to make decisions about the domestic cricketing structure. Most culpably, though, some poke their noses into team affairs. That was cited as a reason for chief executive David Smith’s resignation at Leicestershire earlier this year. Eventually, after much acrimony, the chairman Neil Davidson resigned too.

A quote from Sir Alex Ferguson strikes a chord: “I am the most important man at Manchester United. It has to be that way,” the manager said recently.

So it should be in cricket. Leave the cricket to the experts.


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So far, but so safe to relax and we are in danger of being pushed to Europe

Portugal denied EU pressure for a rescue operation but markets did not believe them.

Nature at two speeds on the continent were drawn clearly traders on their screens - countries where bond yields are fall (and rise in the price) and those where yields continue their relentless travel upwards where obligations prices fall as investors turn their back on countries financing needs.


Italy and the Spain dislike the concept of "devices" nation, but in terms of funding, they are moving in this direction, join the Ireland, the Portugal and the Greece. Spanish and Italian bonds risk premia were pushed yesterday at their highest levels since the euro was born in 1999.


Sovereign debt crisis becomes a self-sufficient, daytime phenomenon as bond investors refused to believe these Governments claiming political rhetoric from does not need to bail. Their lack of support just exacerbates the problem, the European Central Bank and the international monetary Fund help inevitable.


Without full and credible deficit reduction plans, appearing on politically unpalatable, countries such as the Portugal will be forced into Ireland in reality even more unpleasant to accept a bailout.


By this stage a country facing long-term and permanent damage as it takes even more debt but is supported by an economy struggling to grow or to decline.


At United Kingdom yields gilt 10 years encouraged by once again 3 2pc, continuing the theme of the United Kingdom considered a safe haven. This is partly due to the fact that UK debt has already average maturity 14 years compared to eight in savings in distress and significantly on our credit 80pc is occupied by institutions national as UK pension funds, ready for greater stability on the market.


But we cannot be complacent. Monday with the Agency the responsibility of the budget (TBO) forecasts show that our annual discovered is £ 148. 5bn or 10pc of GDP. Public sector net debt will hit £ 923bn or 61pc GDP.


The fact that investors are comfortable with these record levels of debt is because our policy has changed and we plan credible claims, at least for our annual discovered which is scheduled for the fall to £ 18bn or 1pc of GDP by 2015. However, public sector net debt will continue to rise over the next five years as our annual, although falling, is added to the stack of our total debt exceeded. By 2015, compared to the 923bn £, reach 1.3 trillion of £.


But the powers of market are other obsession tirelessly in Europe are only outstanding here because investors believe our assumptions that budgetary consolidation, reform of welfare and released for the growth of the private sector will make our still precarious equilibrium finance.


For the moment at least, response to serious problems of our own is in our hands, but no sign of convenience by the coalition on our finances and apparent contagion in Europe is rapidly surround us, too.


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Stablise markets after week "nightmare" on the crisis of the Japan

The action United by the countries of the G7, the first of its kind in more than a decade, has caused the yen abandon 81.20 3pc against the dollar, the Nikkei to win 2 FP7 and the price of Brent crude, which had jumped to $117 per barrel settle 0 3pc $114 per barrel.

The confidence of the traders was reinforced by the resolution of the United Nations not to impose a fly no area on the Libya and the statement of ceasefire by Muammar Al-Qadhafi, the leader of the country. Although reports Saturday that the leader Libyan broke the truce is bound to hit markets and the price of oil Monday.

Intervention by the G7, which has been requested by the Government of the Japan, was followed by insurance more than the Bank of Japan that would pump additional funds into the economy of the country.

In a note analysts at Nomura said the G7 action, the exact size that will remain secret for tww months, was "powerful". But they added: "it remains to whether coordinated intervention is temporary or more sustained." We will seek indications of size and duration of interventions in the coming days to assess its potential to take the dollar/yen higher. »

The FTSE 100 closed 0. 4pc day but still down from 1. 9pc on the week. The Nikkei was down 10 2pc on the week. A trader said: "neither to the Japan or the Middle East problems have been resolved, but the international community has shown, he wants to engage rather than allow the crisis to take their own path, which has delivered stability after a week of nightmare.

After a reply veiled markets last Friday, the magnitude of the earthquake and tsunamis Japanese was not included until over the weekend. Monday, concern about the issue of the power plant of Fukushima of Japan plant has triggered fears for a nuclear crisis. The Swiss moved first, announcing a ban on "coverage" permission for nuclear replacements. Germany, followed by suspending a decision on whether to prolong the life of nuclear power plants for three months. In Britain, the Government insists on the fact that its initial response - commissioning of a report - was not sufficient for the moment.

But markets were ahead of the politicians. World uranium stocks took the first impact. A raft of companies throw around 25pc on resource-heavy Australian Stock Exchange, coup of landslides on the markets of Europe and the Canada, too.

Tuesday, the fear spread, wiping more than a thousand billion (£ 622bn) off the coast of values of the market in the world in the fears that the humanitarian and nuclear disaster to the Japan could trigger a global financial crisis.

The Nikkei suffered its biggest fall since the 1987 crash and its third worst in the history with a drop of 10 FP6, taking its losses to 16 3pc in two days.

In Britain, the FTSE 100 lost £ 32bn by the lunch hour, while Dax, France Germany ACC and the Dow Jones Industrial index on Wall Street all plunged. Copper fell to a low shed FP7 and Tin in three months.

There is good hope for recovery on Wednesday, including as the Nikkei jumped by 5 68pc of day to the next day. But the worsening of the crisis to Fukushima was underlined when the China Security Council announced it was "temporarily suspend approval of projects for nuclear power plants, including those in the preliminary stages of development."

During this time, insurers estimated losses of fact sector faces between billion $ (£ 7. 5bn) and $ 25.

Thursday, the nuclear disaster gave way to a crisis costs - the yen. The expectation that large insurance of Japan and the savings industry would sell assets and "repatriate" the yen to fund insurance claims and rebuild the currency had sent to all time high of 76 Yen to the dollar. For the Japan and the g-7 countries, jumping represented a dangerous change that can trigger dislocations in the world. They install to correct the situation.


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Stock exchange mergers: the struggle for world domination

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What, exactly, were their competitors up to? With NYSE Euronext’s shares having risen 6pc in early trading and those in Deutsche Börse following a similar pattern, rumours circulated that the two had been suspended on their own markets.

Within 30 minutes of the LSE/TMX conference call, a statement was issued that confirmed the two smaller exchanges’ worst fears: the Americans and Germans were in 'advanced’ talks about a combination of their own. Blowing the £4.2bn London-Toronto merger out of the water, the New York-Frankfurt tie-up would be valued at about £14.4bn and control 94pc of European futures and 28pc of European equities.

After four relatively quiet years, the silence surrounding exchange consolidation was shattered by the race for repositioning as the world’s largest bourses attempt to move into growth markets, cemented by the biggest day for deal announcements in the industry’s history.

For London, what began as a day full of potential and new growth ended in worries about competition, a lack of dominance, and the City’s place in the new world order.

Although the London and Toronto exchanges had been speaking in-depth for five months, senior staff at both exchanges had known one another for years, furthered by the signing of a strategic partnership two years ago to launch EDX London, a derivatives platform powered by TMX’s SOLA derivatives trading system.

“We all talk all the time,” says Gibson-Smith. “Gradually the volume rose, and all of a sudden we were in full-blooded merger talks.”

However, it is understood the merger was accelerated in part due to the strength of personal friendship between Kloet – who will take on the role of president in the merged structure – and Raffaele Jerusalmi, who runs Borsa Italiana and the LSE’s cash equities market from London.

The two men will work under Rolet, chief executive of the enlarged group; with Fox becoming chairman and Gibson-Smith and Borsa Italiana chief Paolo Scaroni becoming deputy chairmen.

The structure of the planned merger will essentially see LSE Group – the exchange’s holding company – take over TMX in the same way it took over the Italian exchange four years ago.

As a result, local regulators will be able to continue policing their own markets – of which there will be 20 under the combined entity – with the Financial Services Authority (FSA) supervising the parent company. In Canadian circles, this aspect of the deal – and the fact that the LSE will nominate eight of 15 board directors and its shareholders will control 55pc of the overall equity - has not been well received. Not quite the 'transatlantic merger of equals’ it was first billed to be.

“No deal on merger of TMX/LSE” read the headline in the Vancouver Sun. “Proposed TMX/LSE merger will never happen” read the Toronto Star.

In a country where regional politics are often as important as national ones, negative rumblings have already begun.

Dwight Duncan, the Ontario finance minister, is said to be angered that he was given only 24 hours’ notice of the deal – “Control will rest with the other side,” he said. His is one of two provinces – along with Quebec – which has a right to veto the deal, as does the Canadian government.

With this in mind, when Kloet unveiled the deal, he was keen to stress the benefits for his home country, not least the fact that Canadian cities will be the global hub for the combined group’s equity listings, derivatives and energy business, leaving London with international listings, technology and information services. Kloet says: “We looked carefully at the benefits it can bring to Canada’s capital markets.”

Conversely, aware of adverse comment, Gibson-Smith, the LSE chairman of the geographic division of responsibilities, is quick to point out that the UK capital is not losing its power. “We’ve taken the same principle as we did with Borsa Italiana and seen where the best people [are] or best capability is and said 'you’re in charge of this’,” he says. “London’s got the chief executive, board dominance; the whole company will be regulated by the FSA. I don’t think London has lost anything, but we’ve gained Canada.”

Even if the question of nationality and who gains and who loses can be ironed out with politicians and regulators, the question remains as to whether combining London, the tenth largest global exchange, with Toronto, the 11th, will really create the “global exchange powerhouse” Fox predicts.

Even combined, the pair fall short when compared with the likes of the CME, worth $20bn (£12.5m), or the Hong Kong exchange, worth almost $25bn.

Strategically, the deal is a stepping stone for both exchanges, allowing each to access dominance in the other’s market but not squaring the circle in growth terms that access to an Asian bourse would allow.

“The Asian exchanges are all in bubbles and seriously stupidly priced,” says Gibson-Smith, who admits in conversation with The Sunday Telegraph that “you do what’s available at the time”.

However, Elie Darwish, analyst at Exane BNP Paribas, thinks the deal makes sense for both exchanges. “For the LSE, because it helps it further diversify away from under-pressure UK equities, it gives it a critical size and helps build the derivatives franchise.”

She added that for Toronto, the merger of the Singapore and Australian exchanges will create a rival in the natural resource listings, which the London tie-up will bolster.

But the deal is somewhat tinged with a sense that the pair had to merge because of their valuations and what fitted. “It’s the best deal they could have done, as there’s no one else either could have done a deal with,” says a former LSE staffer. “They’ve been limited to marriages of convenience – those who are left at the end of the dance.”

A senior industry source does not agree, however: “It’s blindingly obvious that there is a lot of upside for the users – this cultural affinity based on resources and small and medium-sized companies. After all, they’re the only two exchanges with successful SME markets.”

During the strategic dance of the exchanges from 2004-07, London’s position was always that any bid should carry a premium. That was because of London’s strategic importance as part of the fabric of one of the world’s busiest capital markets and having next to no derivatives business and no clearing operations.

But in this combination there is no premium, which analyst Raul Sinha at Nomura thinks could be a mistake. Sinha said that due to the structure of the deal and the lack of significant valuation premiums, “the potential for a counter bid from another exchange cannot be ruled out”.

That said, there is no way either exchange can stand still given the number of consolidations in the sector. The rationale for this flurry of deals is best summarised by UBS analyst Arnaud Giblat, who lists scale and distribution, technology rationalisation, product development, and positioning for market structure changes as the common themes of the deals on the table.

On top of the merger of Singapore and Australia’s exchanges, and Hong Kong’s announcement that it would also like to be involved in consolidation, the question of cost savings is key. London and Toronto expect to produce £35m of revenue synergies, rising to £100m, equivalent to 8pc of the combined cost base. However, Giblat estimates that cross-border deals usually deliver 15-20pc cost savings. The New York-Deutsche deal, which could be confirmed in detail as early as this week, will create a global exchange powerhouse, with more than $15 trillion of listed companies on its books and the largest provider of futures and options trading. In spite of the pair’s size, however, the need for the deal is obvious. NYSE once controlled 80pc of the trading in stocks listed on its markets. Today that figure stands at 23pc due to competition from Nasdaq OMX but also from trading platforms such as BATS – which is in advanced talks to take over London’s Chi-X platform – and Direct Edge.

But the deal also remains fraught with regulatory and governance problems. Combining London’s Liffe futures exchange, owned by NYSE Euronext, and the Eurex derivatives platform, owned by Deutsche, would give the pair more than 90pc of the European derivatives market. However, this could be vetoed by European regulators, as it was in 2007, which could create possible potential for the LSE in derivatives.

Questions as to where control will lie could yet cause problems. Although it was proposed that Deutsche Börse chief executive Reto Francioni will be chairman – with Duncan Niederauer, NYSE chief executive, keeping the same role in the wider business – the tussle between Frankfurt and New York could be too much to handle. The added aspect of Paris, Euronext’s old headquarters, could cause issues. Regulators from Paris and the German state of Hesse have vocalised their determination to ensure Frankfurt and Paris sit at the heart of the new group.

But these issues pale in comparison to American pride. The fact the deal is structured as a German takeover of NYSE Euronext, with Deutsche shareholders ending up with 60pc of the enlarged entity, resulted in New York Post headlines of “Achtung! Germans taking over NYSE” on Thursday morning.

The deal will be subjected to approval from the Committee on Foreign Investment in the United States. This could be where the deal falls, just like DP World’s takeover of P&O, which forced the group to sell its US operations.

Whatever the outcome of the NYSE’s flirtations with Deutsche Börse, it is London’s position that remains at stake. Using different metrics, it is possible to argue that the Toronto deal is either a defensive merger with an also-ran partner –something LSE management has discounted – or a stepping stone on the path to true global dominance.

But only in the context of the sector as a whole can this be judged, and that is the one thing the LSE, no matter how hard it tries to, cannot control.

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Monday, 22 August 2011

Slide in European markets for fear of stability Italy

Investors are worried that the Italy Finance Minister Giulio Tremonti is threatened by charges of corruption against a former Wizard

Benchmark of the Italy, the FTSE Mib, closed 3 5pc in that rushed political concerns in Rome threatens the financial stability of the country. CAC 40 Index the France also suffered, dropping 1. FP6 and the Germany DAX lost 0. 9pc. In Spain, the mountain goat fell 2. FP6, while PSI 20 of end Portugal 1. lowest 3pc.


The flight of the Italian government debt saw the yield or return, on its 10-year bonds touch 5 3pc, a euro-ère high.


Mike Riddell, a manager of M & G Fund, described the situation as a "bloodbath". "What is your point of view is or has been [the Italy finance], the reality is that these damned link militia took a view of the Italy, and which is basically all that into account,"he says. ".


Investors are worried that the Italy Finance Minister Giulio Tremonti is threatened by charges of corruption against a former Wizard and seems to have lost the support of Prime Minister Silvio Berlusconi. "It think that it is a genius and that everyone is stupid," said Mr Berlusconi yesterday.


It is feared that if Mr Tremonti was forced to Government it could derail the austerity measures he pushed through to shoot huge debt of the Italy, which rises to its GDP 120pc autour.


Who should leave the Italy in great danger to be sucked into the turmoil which swept the Greece and the Portugal, as doubts about their finances given the closure of the international debt markets.


Mario Draghi, top central banker of the Italy and the next President of the European Central Bank, have tried to provide comfort with a statement of support from the austerity of Rome as "credible".


However, markets were already unstable after the rating agency downgraded Moody debt of the Portugal to junk status earlier this week and disappointing U.S. post numbers did nothing to calm the nerves.


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Slip of gold and oil after the earthquake in the Japan

The Saudi police form a point of control, inspection of the cars near the site where a demonstration should be held in the capital Riyadh Sauid Friday. Photo: AP

Brent crude in London fell $ 3 to $112.39 at noon while in New York oil crude withdraw less than $100 a barrel as traders bet that a huge earthquake in the Japan would reduce imports of crude oil in the country.


"Demand for oil [at Japan] could be lower, at least temporarily, because of the earthquake," said Commerzbank analyst Carsten Fritsch.


"After China and the United States, Japan is third largest consumer of commodities in the world and is dependent on imports for almost all products."


The largest earthquake to hit the Japan since the beginning of the records 140 years ago struck the northeast coast, triggering a 30-foot high tsunami that swept away everything in its path, including homesboats, cars and farm buildings.


Future crude also fell as Saudi Arabia launched a security operation mass in a show threatening force to deter the demonstrators of a planned "Day of Rage" to insist that the democratic reforms in the largest exporter of oil in the world.


Illegal demonstrations were to start after Muslim Friday prayers at noon, but as the mosques emptied were there no sign of gatherings, with men of security staffing positions of control in key locations in several cities.


OPEC Friday warned that prices could curb demand later this year, as oil cartel only slightly improved its estimate of growth in world demand for 2011.


The Organization of petroleum exporting countries said that it was raturés in the growth of global oil demand of 1.44 m barrels per day (BPD), or 1. 67pc to 87,83 m barrels this year. That represents only a revision to the marginal increase of 1. 62pc.


Gold was on track for its biggest weekly decline since early January, down $30 since hitting a lifetime of high $1,444.40 an ounce troy Monday. Spot or a $units an ounce in London in early afternoon trade.


"Gold is trading oil offshore, but helps the earthquakes and the tensions in the Middle East to the Japan, said Andrey Kryuchenkov, an analyst at the Capital of VTB." Markets are also nervous with a day of rage in Saudi Arabia. »


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SOCO international climb while FTSE 100 runs in red

"We believe 400-500 p is a range of fair value recovery for SOCO," said analysts, who helped push SOCO until 16.6 340½p.

But the SOCO gain reflected by other stocks of resources, which collapsed on Wednesday on the fear that China will redouble its efforts to cool inflation.

After having joined the earlier this week as investors rushed into the gold miners lost their lustre with Lonmin dropping back 88 percent to £ 18.06, while Antofagasta declined by 56 percent to £ 14.05.

Poor performance of stocks mining has led to the FTSE 100 down points 58.25 5816.94 - far from the 5,900 touched briefly on Tuesday.

China concerns side, a host country concerns were also darkening mood, with concerns about the debt of the Ireland send a shiver through the markets.

Ireland borrowing costs have reached a record level this week, and concerns were more fed Wednesday clearing house LCH Clearnet place requiring a larger deposit of government bond trading clients.

Patrick Honihan, Governor of the Central Bank of the Ireland admitted the country needs to get its financial situation clearly under control and to reassure investors quickly.

Include the increasing concern about the State of the economy of the country, the economy, Oli Rehn European Commissioner, has denied rumours that the Irish Government had contacted the new euro area Rescue Fund and international monetary Fund on a Greek bailout market.

On a more optimistic note utility stocks were heating, providing support for the index of reference.

The Board winners included Scottish & Southern Energy, spreading up to 42 per cent to £ 11,60 energy provider increases its dividend.

Bank of America - Merrill Lynch analysts were impressed and upgraded their rating."With having lower stock UK utilities since June, we are seeing renewed clarity and management such as positive and upgrade trust to buy," said the broker.

Other public services have increased in the wake of SES on a day when defensive were in favour, with National Grid 7½ to 583 p and Centrica 1.9 percent 336.2 more.

BAE Systems has been too as rating Investec repeated his "buy" on defence society following an "optimistic" investor day is gaining ground.Analysts noted footprint geographic BAE and said that, for the first time in a time management spoke in terms of growth in the top row across its extensive portfolio, despite the slowdown in both sides of the Atlantic defence budgets.BAE ended 10.9 359.4 p.

But coming under pressure Marks & Spencer, losing 10.4 percent 395.6, as investors continue to chew CEO Marc Bolland plans of evolution rather than révolution.Sentiment no help was that M & S President, Sir Stuart Rose, had sold more than £ 400.00 worth actions on the same day, Mr Bolland set out its strategy.

Nick Bubb, Arden partners analyst said the negative reaction on the part of M & S review "seemed rude" it has kept its "neutral" rating and encouraged for its own benefit throughout the year, pre-tax forecast $ 740 million to £ 725 m £.

He was also cast his eye on HMV, retailer of music, after the Russian billionaire, Alexander Mamut, its participation in 3pc.M.Bubb describes the unexpected news, but welcome, it highlights the anomaly enormous assessment in actions.HMV ticked up to 1.25 percent now.

After taking a fall Tuesday due to low sales figures, Yell Group fell another 0.21 to 12.16% Goldman Sachs reiterated his "sell" rating on the editor page jaunes.Goldman also slashed its target 8% 27% due to a worsening outlook structural and debt.

Analysts said that they continue to remain concerned about the effect of levier.Yell refinanced its debt burden of the 8bn £ 3 through a capital raising last year, said the broker purchased Yell time from having to undergo another refinancing in 2013.Mais to further reduce leverage, analysts estimate that Yell will require approximately £ billion capital supplémentaire.Chute Yell was FTSE 250 lost 10994.52 112.36 points.

Prices of gilts had a fall after the Bank of England revised until his foreacasts inflation for the next year, suggesting a second wave of quantiative easing (QE) is less.

The December gilt future installs 118 ticks down 122.68, barely over the three-month closure 122,60 low on October 27 and after earlier hit by two weeks intra-day low 122.37.

5-10 Years of the gilt - more likely to be purchased by the Bank maturity curve should it regain its program QE - has been the hardest hit, with yields in the sector up to 15 basis points.

The Bank of England expects that inflation coming two years would be less than objective 2 PC, as it did in its quarterly inflation report in August.

But it has increased its forecasts of inflation in the coming year and said that had increased the risk of its forecasts.

"For many of the market it is significantly decreased the probability of EQ,"Francis Diamond, JP Morgan, gilts strategist told Reuters.""


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Sorry investors, there is no such thing as a free lunch

Phrases such as "elephants do ride" and "run your winners and cut your losses" evolving investment adages because they are often real enough to be accepted. There is, however, a world of difference between a good rule of thumb, and something that can inform reliable investment strategy. The bottom line for an investor is: does it work?

The excellent guide annual investment returns of Credit Switzerland and London Business School (lbs.) three of these beliefs is under the spotlight. Proffesors Dimson, Marsh and Staunton the lb overloaded numbers on the effect of size (small shares outperform big ones?), premium value (many labor markets shares are better than growth fast ones?) and momentum (must you return last year winners or losers?). Their conclusions probably disappoint Holy Grail claimants; It looks not as there is a free meal.

The frustrating thing for those seeking a shortcut to the success of investment is that, on the numbers of suggest there may be persistent prejudices that can be exploited by investors. As shown in the figure, £ 1 invested in the stock market UK in 1955 would be pushed to £ 822 at the end of 2010, 12 8pc annualized yield. Not bad, you might think, until you realise investment same index to the companies smaller Hoare Govett (actions that make up the smallest 10pc by the value of the UK market) have pushed £ 3,248 during the same period and the so-called micro-caps which make up the smallest 1pc reportedly worth £ 14,210 by the end of last year.

For much of the 1990s, l'effet smaller company just stopped working, and then, when everyone had abandoned it at the turn of the century, he struck again. The lost decade was essentially a matter of gros-cap.

Evidence for so-called value stocks outperforming the growth stocks is even more convincing at first glance. A study of the top 100 UK market shares goes all the way back to 1900 shows that £ 1 invested in 50 lower dividend yields (a proxy for the growth stocks) have pushed to £ 5,122 at the end of 2010. Still, you may think it was good enough, but only until you realise that an investment in the market as a whole would have pushed to £ 23,335 over the same period and an investment in 50 stocks with highest return (stock value) to a powerful £ 100,160.

Yet again, there is good reason to expect the value of stocks to outperform. It is compensation for the fact that almost by definition, they are lower than the shares of growth opportunities. But what is also clear is that if the expected yields adequately compensate higher-risk. My intuition is that it does, which explains why the best investors seem to share a denier, search for the character value.

Value stock outperformance is a reflection of our gullibility when it comes to attractive growth stories and our willingness to pay for them.

The third approach tested by the lb is even more difficult to use profitably. Yet again, the evidence suggests greenhouse pronounced momentum which choirs from actions which have recently surpassed causes future outperformance too. At the risk of blinding you with even more numbers, back-tests show to buy last year's losers would have net you 3 FP7 per year, while the winners of choirs have given you 14 3pc a year between 1900 and 2010. The power of compounding makes an absolutely phenomenal difference of total return. However, there are two caveats significant to remember with momentum investing. Firstly, in the real world, it is a very expensive strategy to be implemented because the transaction costs eat your statements very significantly. Secondly, as other effects there a bad habit to enter the opposite.

Momentum investor will not forget the whiplash hit they experienced in March 2009, when the market suddenly took off in the opposite direction and above the previous year has become the fastest risers of the market. Unfortunately, it y just not shortcuts.

tomrstevenson@fil.com

Tom Stevenson is an investment at Fidelity International. The opinions expressed here and in his tweets (@ tomstevenson63) are its own


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Monday, 15 August 2011

Stock of the STC is as FTSE reels from quake

The group titles telecoms based in the United Kingdom, who was beaten by the coalition, reducing spending, fell 3.8 - or 5 24pc - 68¾ after he revealed that Tim Weller will be leaving the company in June to "pursue new challenges".

The Daily Telegraph understands that Mr. Weller, who had been in the role of less than a year, will collect nearly 1 m £ in compensation following the termination of his contract. He will be replaced by his assistant Ian Gibson.

The announcement was compounded by a short note of Liberum capital, warned that the departure of Mr. Weller was likely to be "poorly received" by investors.

Reiterating its "sell" on society, she added: "Mr Weller was, in our view, universally well regarded and just happened to STC last May." He came to the STC with a solid reputation of his time at United Utilities. »

Disclosure of the STC came when the London Stock Exchange fell further after losses Thursday with the Japanese earthquake striking companies through the market. The FTSE 100 hardened 16.62 at 5828.6 points, equivalent to a weekly loss of 2 FP7, its worst performance in addition to eight months. During this time, the broader 250 FTSE fell 106.11 to 11409.53.

Insurers have been hardest hit by the earthquake of magnitude 8.9 as fears mounted on the volume of disaster said they are likely to face this year, after the earthquake of February in New Zealand.

RSA fell 3.5 to 133 p, while Legal & General tempered 2.3 for 115.2 p and Prudential another negative 14 to 721 sense p across the sector. Aviva shares also dropped 6.9 at £ 453. 9 p.

Despite the decline of the sector, no insurer FTSE 100 is likely to suffer claims significant earthquake of as losses will be absorbed by General insurers. Although RSA and Aviva sell general insurance policies, RSA insisted his exposure to the Japan is "unlikely to be substantial" while Aviva said he had "no exposure at all."

Analysts said insurers operating in the popular Lloyd of London market insurance would be among the hardest hit.

Also, Carnival, the largest operator of cruise in the world, is one of the biggest losers of the day, fell 72 percent to £ 26 on fears that unrest in the Middle East and rising oil prices will have an impact on its profits from 2011. In a brief statement, the company said: "prices current spot for exchange rates fuel and currency, earnings per share full year 2011 would be lower by about $0.40." In addition, the company estimates that the impact of changes in routes in the Middle East and North Africa will result in a reduction of approximately $0.05 per share for the rest of the year. »

At the other end of the scale, Aggreko reversed early losses to rise 17 percent to £ 14.07.

Temporary power provider warned that instability in the Middle East "the task of predicting the outcome of the year more than usually difficult" as profit before tax rose 24 FP6 to £ 307. 1 m in 2010. Analysts at Investec maintained their rating on the company to "buy", but warned: "there is no underlying improvements today, forecasts that may disappoint some, the crisis in the Middle East and Africa."

ARM Holdings, which designs chips for mobile devices, including Apple iPhone and iPad, gained 0.5 to 523 p. Royal Bank of Scotland has reiterated its "buy" rating on the company, with an emphasis on the fact that "over supply" issues would be not a serious problem in the long term, despite the concerns of some investors.

Among the smaller caps, retailer JD Sports reaches 47 p 930 after excluded society one sportswear made a bid for the smaller rival JJB Sports.


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Stock exchange mergers: the struggle for world domination

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What, exactly, were their competitors up to? With NYSE Euronext’s shares having risen 6pc in early trading and those in Deutsche Börse following a similar pattern, rumours circulated that the two had been suspended on their own markets.

Within 30 minutes of the LSE/TMX conference call, a statement was issued that confirmed the two smaller exchanges’ worst fears: the Americans and Germans were in 'advanced’ talks about a combination of their own. Blowing the £4.2bn London-Toronto merger out of the water, the New York-Frankfurt tie-up would be valued at about £14.4bn and control 94pc of European futures and 28pc of European equities.

After four relatively quiet years, the silence surrounding exchange consolidation was shattered by the race for repositioning as the world’s largest bourses attempt to move into growth markets, cemented by the biggest day for deal announcements in the industry’s history.

For London, what began as a day full of potential and new growth ended in worries about competition, a lack of dominance, and the City’s place in the new world order.

Although the London and Toronto exchanges had been speaking in-depth for five months, senior staff at both exchanges had known one another for years, furthered by the signing of a strategic partnership two years ago to launch EDX London, a derivatives platform powered by TMX’s SOLA derivatives trading system.

“We all talk all the time,” says Gibson-Smith. “Gradually the volume rose, and all of a sudden we were in full-blooded merger talks.”

However, it is understood the merger was accelerated in part due to the strength of personal friendship between Kloet – who will take on the role of president in the merged structure – and Raffaele Jerusalmi, who runs Borsa Italiana and the LSE’s cash equities market from London.

The two men will work under Rolet, chief executive of the enlarged group; with Fox becoming chairman and Gibson-Smith and Borsa Italiana chief Paolo Scaroni becoming deputy chairmen.

The structure of the planned merger will essentially see LSE Group – the exchange’s holding company – take over TMX in the same way it took over the Italian exchange four years ago.

As a result, local regulators will be able to continue policing their own markets – of which there will be 20 under the combined entity – with the Financial Services Authority (FSA) supervising the parent company. In Canadian circles, this aspect of the deal – and the fact that the LSE will nominate eight of 15 board directors and its shareholders will control 55pc of the overall equity - has not been well received. Not quite the 'transatlantic merger of equals’ it was first billed to be.

“No deal on merger of TMX/LSE” read the headline in the Vancouver Sun. “Proposed TMX/LSE merger will never happen” read the Toronto Star.

In a country where regional politics are often as important as national ones, negative rumblings have already begun.

Dwight Duncan, the Ontario finance minister, is said to be angered that he was given only 24 hours’ notice of the deal – “Control will rest with the other side,” he said. His is one of two provinces – along with Quebec – which has a right to veto the deal, as does the Canadian government.

With this in mind, when Kloet unveiled the deal, he was keen to stress the benefits for his home country, not least the fact that Canadian cities will be the global hub for the combined group’s equity listings, derivatives and energy business, leaving London with international listings, technology and information services. Kloet says: “We looked carefully at the benefits it can bring to Canada’s capital markets.”

Conversely, aware of adverse comment, Gibson-Smith, the LSE chairman of the geographic division of responsibilities, is quick to point out that the UK capital is not losing its power. “We’ve taken the same principle as we did with Borsa Italiana and seen where the best people [are] or best capability is and said 'you’re in charge of this’,” he says. “London’s got the chief executive, board dominance; the whole company will be regulated by the FSA. I don’t think London has lost anything, but we’ve gained Canada.”

Even if the question of nationality and who gains and who loses can be ironed out with politicians and regulators, the question remains as to whether combining London, the tenth largest global exchange, with Toronto, the 11th, will really create the “global exchange powerhouse” Fox predicts.

Even combined, the pair fall short when compared with the likes of the CME, worth $20bn (£12.5m), or the Hong Kong exchange, worth almost $25bn.

Strategically, the deal is a stepping stone for both exchanges, allowing each to access dominance in the other’s market but not squaring the circle in growth terms that access to an Asian bourse would allow.

“The Asian exchanges are all in bubbles and seriously stupidly priced,” says Gibson-Smith, who admits in conversation with The Sunday Telegraph that “you do what’s available at the time”.

However, Elie Darwish, analyst at Exane BNP Paribas, thinks the deal makes sense for both exchanges. “For the LSE, because it helps it further diversify away from under-pressure UK equities, it gives it a critical size and helps build the derivatives franchise.”

She added that for Toronto, the merger of the Singapore and Australian exchanges will create a rival in the natural resource listings, which the London tie-up will bolster.

But the deal is somewhat tinged with a sense that the pair had to merge because of their valuations and what fitted. “It’s the best deal they could have done, as there’s no one else either could have done a deal with,” says a former LSE staffer. “They’ve been limited to marriages of convenience – those who are left at the end of the dance.”

A senior industry source does not agree, however: “It’s blindingly obvious that there is a lot of upside for the users – this cultural affinity based on resources and small and medium-sized companies. After all, they’re the only two exchanges with successful SME markets.”

During the strategic dance of the exchanges from 2004-07, London’s position was always that any bid should carry a premium. That was because of London’s strategic importance as part of the fabric of one of the world’s busiest capital markets and having next to no derivatives business and no clearing operations.

But in this combination there is no premium, which analyst Raul Sinha at Nomura thinks could be a mistake. Sinha said that due to the structure of the deal and the lack of significant valuation premiums, “the potential for a counter bid from another exchange cannot be ruled out”.

That said, there is no way either exchange can stand still given the number of consolidations in the sector. The rationale for this flurry of deals is best summarised by UBS analyst Arnaud Giblat, who lists scale and distribution, technology rationalisation, product development, and positioning for market structure changes as the common themes of the deals on the table.

On top of the merger of Singapore and Australia’s exchanges, and Hong Kong’s announcement that it would also like to be involved in consolidation, the question of cost savings is key. London and Toronto expect to produce £35m of revenue synergies, rising to £100m, equivalent to 8pc of the combined cost base. However, Giblat estimates that cross-border deals usually deliver 15-20pc cost savings. The New York-Deutsche deal, which could be confirmed in detail as early as this week, will create a global exchange powerhouse, with more than $15 trillion of listed companies on its books and the largest provider of futures and options trading. In spite of the pair’s size, however, the need for the deal is obvious. NYSE once controlled 80pc of the trading in stocks listed on its markets. Today that figure stands at 23pc due to competition from Nasdaq OMX but also from trading platforms such as BATS – which is in advanced talks to take over London’s Chi-X platform – and Direct Edge.

But the deal also remains fraught with regulatory and governance problems. Combining London’s Liffe futures exchange, owned by NYSE Euronext, and the Eurex derivatives platform, owned by Deutsche, would give the pair more than 90pc of the European derivatives market. However, this could be vetoed by European regulators, as it was in 2007, which could create possible potential for the LSE in derivatives.

Questions as to where control will lie could yet cause problems. Although it was proposed that Deutsche Börse chief executive Reto Francioni will be chairman – with Duncan Niederauer, NYSE chief executive, keeping the same role in the wider business – the tussle between Frankfurt and New York could be too much to handle. The added aspect of Paris, Euronext’s old headquarters, could cause issues. Regulators from Paris and the German state of Hesse have vocalised their determination to ensure Frankfurt and Paris sit at the heart of the new group.

But these issues pale in comparison to American pride. The fact the deal is structured as a German takeover of NYSE Euronext, with Deutsche shareholders ending up with 60pc of the enlarged entity, resulted in New York Post headlines of “Achtung! Germans taking over NYSE” on Thursday morning.

The deal will be subjected to approval from the Committee on Foreign Investment in the United States. This could be where the deal falls, just like DP World’s takeover of P&O, which forced the group to sell its US operations.

Whatever the outcome of the NYSE’s flirtations with Deutsche Börse, it is London’s position that remains at stake. Using different metrics, it is possible to argue that the Toronto deal is either a defensive merger with an also-ran partner –something LSE management has discounted – or a stepping stone on the path to true global dominance.

But only in the context of the sector as a whole can this be judged, and that is the one thing the LSE, no matter how hard it tries to, cannot control.

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Stock market crash risk is developing, warns Centre for Economics and Business Research

Veteran forecaster Douglas McWilliams said: "signals seem to be building for a kind of crash of the market - shares and many links are already down significantly from their recent." Earlier this year, we gave one in five ratings on a UK relapse. Now, the chances are about one in three. »

The FTSE fell sharply from a peak of more than 6,000 in early July; whereas the Greek and Italian bond prices fell from a cliff, as investors prepare for a possible defect.

Angus Campbell, Director of sales in Paris to the spread of the company Capital spreads, said: "Sentiment is quite beat;" indices of continue to chop and change between the ups and downs. "It is impossible to make a rational decision on where to invest your money when these huge macro issues dominate the proceedings."

Mr. McWilliams criticizing the US and European politicians for the treatment of their deficits as a policy of bargaining chips. It is few options left open to them to avoid an accident, he said. "The real fear is that major economic weapons have been used to treat the last crisis." "He has no scope to reduce interest rates and printing money is regarded with skepticism, but it may be the only option."

Analysts fear a global crisis if there is any form of positive result of emergency European Summit on Thursday. Mick Gilligan, partner Killik & Co, said: "if it is not an any positive result out of Europe, it could be any of a rough summer." If politicians have disappeared from the break, the markets will wait. »

Deutsche Bank analysts, said last week that global stocks may plunge as much as 35pc if the crisis in a spiral.

Falls may be exacerbated by low trading during the summer and even the Test Match on Thursday, said Mr. McWilliams. "There is a history of crises from August as the financial crisis of 2007 and the default of 1998, not to mention the August crisis more Russian famous which became the first world war."

He joined a growing chorus of voices for a relapse. A recent Deloitte survey showed that one in three Directors finance of FTSE 100 and FTSE 250 companies estimated that the British economy will fall back into recession.

Mr. McWilliams finished by taking a potshot at David Cameron. He said that the Prime Minister could take advantage of the crisis to renegotiate links of the United Kingdom with Europe, which could bring down the Coalition and an early election of the force. "Much could happen in the coming weeks," he concludes.


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Stocks suffer from disorders of the Middle East?

Airline investors were already concerned about rising prey Libya protests before oil prices. Photo: REUTERS

In London, shares of business travel, defence and mining stocks were among slaughterers more marked.


International Consolidated Airlines Group (AIG), the newly merged British Airways and Iberia, has suffered a heavy fall, slide 3 3pc, rising costs of fuel oil prices climbed investors worried.


Tuesday, prices of oil reaches $108 per barrel as Libyan production was plagued by violent demonstrations and concerns grew up Middle East and North Africa crude-producing strategic region on propagation of disturbances.


Airline investors were already concerned about rising prey Libya protests before oil prices. Earlier this month, AIG said it would increase its fuel surcharge on long distance services to account for "substantial continuous increase" of oil prices


But analysts at Investec stated that "given the uncertain economic environment, we are cautious on the ability of airlines to retrieve cost increases through fuel supplements".


AIG was also hit by concerns that the crisis in the Arab world to increase travel and tourism - a concern that took havoc tui travel. Most large tour operator Europe fell 2 FP6 and midcap Thomas Cook throw a 5pc 3. Panmure Gordon analysts cut their ratings on Thomas Cook to "hold", saying:


"We have reduced our forecast of revenues by sharing 2011 6 FP7 to fully reflect the impact c £ 20 m of political agitation in Tunisia and guided Egypt to branch in the first quarter interim management statement."


"We believe that the economic and geopolitical context will remain negative and negative impact on sentiment towards operators".


Agitation in Libya also took havoc on minors, that prices for industrial metals hanging. Investors were outgoing long positions in assets closely focused on the economic recovery that cloud the Outlook for demand political concerns.


Rio tinto hangar 0. 9pc and Kazakhmys falls 1. FP7 on Tuesday. However gold has retained its status as safe haven and African Barrick Gold edged up 0 4pc.


Even if oil prices were surging, energy stocks withdrew the fears over their exposure to the troubled region. BP fell 1pc, while its European peers Total and Repsol declined around 1pc and 1. FP7 respectively.


Royal dutch shell, which Tuesday, said that all expatriate employees and their relatives in Libya had been relocated, Tomb 1pc.


While pharmaceutical companies are often considered to be defensive, mid-cap stocks hikma Pharmaceuticals took a fall.


Jordan-based drug manufacturer has 2 investors 9pc concerned of his exhibition in the Middle East. Since one month, its price share came under pressure as unrest across the Egypt and Tunisia hit a sense.


However, some analysts remained relatively optimistic. Earlier this month retained Morgan Stanley analysts "hold them" rating on Hikma, saying:


"Fluid developments across the Tunisia, Egypt and Jordan (8pc 10pc of sales) are a blow to sentiment, even if we do not anticipate a change in long-term structural growth for pharmaceutical markets history throughout the region.


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Friday, 5 August 2011

FTSE today: report - the market here on February 17, 2011.

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Another commodity was also causing problems for the retailers. As the price of cotton broke through $2 per pound, investors worried about squeezed margins. Mid-cap Supergroup fell 58p to £16.60 and blue-chip, Next, dropped 30p to £19.67.

3.15pm: Wall Street falls on unemployment benefits rise

Wall Street edged into negative territory in afternoon trading following a bigger-than-expected jump in first-time applications for unemployment benefits last week. The Dow Jones Industrial Average fell 15 points to 12273.

London's large-caps were in indecisive mood, with the FTSE 100 edging down 9 points to 6075. The FTSE 250 put on 12 points to 11819.

Housebuilders were experiencing mixed fortunes after Redrow swung back into the black at its half-year results.

Analysts at Matrix Partners kept their "add" rating, saying:

"While there is still much to be achieved, the group under the new management team is moving more rapidly into a position of robust health than we would have thought possible in this tough housing market. The rate of recovery seems to be gathering some momentum, but the aspect that needs careful consideration, we believe, is the durability of the new strategy if consumer confidence and mortgage availability declines further."

Despite its return to profit, Redrow fell 2.8 to 130.2p, but the chairman's comments about the strength of the housing market boosted other housebuilders.

Steve Morgan told journalists: "I'm a lot more confident than I've been at any time since I've been back in the business about the spring selling season."

"We're definitely, definitely seeing a big, big uptake," he said, adding that consumers are "fed up of the doom and gloom".

That helped Taylor Wimpey rise 1.39 to 38.42 and Barratt Developments put on 2.55 to 100.9p.

11.50am: Ladbrokes investors unimpressed by full-year results

Ladbrokes disappointed the market with a fall in full-year profits as revenues from high rollers slumped 95pc to £3.5m. Britain's biggest bookmaker was also silent on takeover talks with 888. Ladbrokes fell 3.9 to 138.1p while Sportingbet dropped 1.51 to 46.99p.

Analysts at Matrix Partners kept their "add" recommendation on Ladbrokes, but said:

"We would expect that sentiment will be on the slightly negative side in terms of the short-term outlook for the numbers. After the very surprising bounces in both Ladbrokes and William Hill share prices following the ‘broadly as expected’ Levy announcement, we would expect both stocks to give up some of those gains today."

William Hill edged up 0.5 to 192.8p.

The wider market was marking time, with the FTSE 100 virtually flat - it nudged up 1 point to 6086.28 while the FTSE 250 put on 20.4 points to 11827.48.

Sean Power, equity analyst at City Index , said:

"The first hour of trading had a very subdued feel to it, which was evident with the ease and speed at which the 6100 mark was reached and then retreated from. In quiet sessions volumes are thin and markets can make ‘false’ moves, which can be quickly reversed. With no real negative news at present the markets could continue to drift slowly upward. Unless there is any market moving news released during the remainder of this morning’s session, one should be wary of any excessive ‘false’ lurch in either direction by the market. Until the US trading session begins investors should trade cautiously given the quiet nature of today’s market."

9.15am: BAE Systems takes tumble as FTSE 100 marks time

The FTSE 100 was trading up just 1.7 points at 6086.92 at 9am, after briefly rising to its highest level since May 2008.

Part-privatised lenders, Royal Bank of Scotland and Lloyds Banking Group, both rose over 1.7pc, buoyed by strong results from Barclays and French bank Societe Generale this week - the two report results next week.

Britain's biggest defence and security company, BAE Systems, posted healthy profits but disappointed on outlook. Shares in the company fell 3.5pc after it said it expected sales to fall in 2011, citing cuts in defence budgets in Britain and the US.

Investec Securities placing its "buy" rating for the stock under review, saying: "It feels like profits can be sustained (on lower revs) in 2011, meaning our forecasts would be largely unchanged. However, risk is firmly on the downside and the shares are likely to reflect this."

Talk of a gradual recovery this year by publisher Reed Elsevier after it reported a 2pc rise in underlying sales in 2010 that was broadly in line with forecasts, put off investors. The shares fell 2.2pc.

Among the second liners, Sports Direct, Britain's biggest sporting goods retailer, said it would meet its target for year profit, with trading still strong after a robust third quarter. The bullish update lifted the stock 4.4pc to 175p, with Seymour Pierce raising its price target to 190p from 165p.

06:00 Asia lacklustre

Asian markets were mixed Thursday, with some boosted from strong US corporate earnings while China sagged after Beijing slapped new restrictions on property purchases to cool the overheating sector.

The Nikkei 225 stock average rose 0.26pc, to 10,837 as the country's auto sector rose. Honda gained 2pc and Nissan 1.4 pc.

Meanwhile, mainland property shares in Hong Kong were pummeled a day after Beijing's city government announced measures to ease its housing squeeze, including restrictions on purchases by nonresidents and limits on the number of homes that residents can buy.

Hong Kong's Hang Seng index was flat at 23,158 and the Shanghai Composite index dropped 0.4pc to 2,910.

In New York overnight, the Dow Jones industrial average gained 0.5pc, to close at 12,288, its highest since June 13, 2008.

The tech-heavy Nasdaq composite index rose 21.21, or 0.8pc, to 2,825.56 on Wednesday.

Thursday's Market Report:

Banks bounce back as blue-chips tread water

FTSE today: market report - as it happened February 17, 2011

Wednesday's Market Report:

Resolution races up ahead of market update

Tuesday's Market Report:

Imagination surges up as Micro Focus melts

FTSE today: market report - as it happened February 15, 2011

Tools: Shares and Markets: News, charts, data

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Sorry investors, there is no such thing as a free lunch

Phrases such as "elephants do ride" and "run your winners and cut your losses" evolving investment adages because they are often real enough to be accepted. There is, however, a world of difference between a good rule of thumb, and something that can inform reliable investment strategy. The bottom line for an investor is: does it work?

The excellent guide annual investment returns of Credit Switzerland and London Business School (lbs.) three of these beliefs is under the spotlight. Proffesors Dimson, Marsh and Staunton the lb overloaded numbers on the effect of size (small shares outperform big ones?), premium value (many labor markets shares are better than growth fast ones?) and momentum (must you return last year winners or losers?). Their conclusions probably disappoint Holy Grail claimants; It looks not as there is a free meal.

The frustrating thing for those seeking a shortcut to the success of investment is that, on the numbers of suggest there may be persistent prejudices that can be exploited by investors. As shown in the figure, £ 1 invested in the stock market UK in 1955 would be pushed to £ 822 at the end of 2010, 12 8pc annualized yield. Not bad, you might think, until you realise investment same index to the companies smaller Hoare Govett (actions that make up the smallest 10pc by the value of the UK market) have pushed £ 3,248 during the same period and the so-called micro-caps which make up the smallest 1pc reportedly worth £ 14,210 by the end of last year.

For much of the 1990s, l'effet smaller company just stopped working, and then, when everyone had abandoned it at the turn of the century, he struck again. The lost decade was essentially a matter of gros-cap.

Evidence for so-called value stocks outperforming the growth stocks is even more convincing at first glance. A study of the top 100 UK market shares goes all the way back to 1900 shows that £ 1 invested in 50 lower dividend yields (a proxy for the growth stocks) have pushed to £ 5,122 at the end of 2010. Still, you may think it was good enough, but only until you realise that an investment in the market as a whole would have pushed to £ 23,335 over the same period and an investment in 50 stocks with highest return (stock value) to a powerful £ 100,160.

Yet again, there is good reason to expect the value of stocks to outperform. It is compensation for the fact that almost by definition, they are lower than the shares of growth opportunities. But what is also clear is that if the expected yields adequately compensate higher-risk. My intuition is that it does, which explains why the best investors seem to share a denier, search for the character value.

Value stock outperformance is a reflection of our gullibility when it comes to attractive growth stories and our willingness to pay for them.

The third approach tested by the lb is even more difficult to use profitably. Yet again, the evidence suggests greenhouse pronounced momentum which choirs from actions which have recently surpassed causes future outperformance too. At the risk of blinding you with even more numbers, back-tests show to buy last year's losers would have net you 3 FP7 per year, while the winners of choirs have given you 14 3pc a year between 1900 and 2010. The power of compounding makes an absolutely phenomenal difference of total return. However, there are two caveats significant to remember with momentum investing. Firstly, in the real world, it is a very expensive strategy to be implemented because the transaction costs eat your statements very significantly. Secondly, as other effects there a bad habit to enter the opposite.

Momentum investor will not forget the whiplash hit they experienced in March 2009, when the market suddenly took off in the opposite direction and above the previous year has become the fastest risers of the market. Unfortunately, it y just not shortcuts.

tomrstevenson@fil.com

Tom Stevenson is an investment at Fidelity International. The opinions expressed here and in his tweets (@ tomstevenson63) are its own


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FTSE today: report - the market here on February 11, 2011.

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However, Wall Street weakened, with the Dow Jones Industrial Average losing 21 points to 12207. Confidence was dented by food giant, Kraft, lowering its full-year earnings forecasts in light of rising commodity costs.

Back on this side of the Atlantic, Barclays was amongst the sharpest fallers after Arturo de Frias, banking analyst at Evolution Securities, reiterated his “sell” rating. While he believed that Project Merlin was good news for Barclays, the next obstacle - capital - will be far more difficult to negotiate.

Barclays fell 4.4 to 308.85p.

But on a more positive note, Legal & General advanced 3.8 to 122.6p on the back of a bullish note from Nomura. Analysts suggested that the market was underestimating the potential of the insurer’s asset management operations. While that division accounts for 21pc of earnings at the moment, the broker reckons that could rise to 37pc by 2013.

Amongst the small-caps, Renovo tumbled 50.75 - or 74pc - to 17.75p after announcing that its anti-scarring product, Juvista, had failed a late-stage trial.

"We are extremely surprised and disappointed by the failure of Juvista to meet the Phase III trial primary and secondary endpoints," chief executive Mark Ferguson said.

"The board of Renovo will now consider all options open to it to maximise shareholder value."

11.40am: Retailers fall back as John Lewis posts underwhelming sales growth

Leading the benchmark index into negative territory during morning trading were the retailers, with Next shedding 64p to £19.99. Marks & Spencer and Kingfisher lost 9 to 362.6p and 4.5 to 248.5p respectively.

Weighing on the retailers were underwhelming weekly sales figures from John Lewis. The department store chain said that its 1pc increase in sales was "admittedly not a large one, but in positive territory nonetheless".

Howard Archer of IHS Global Insight said the small rise, following on from modest declines over the previous two weeks, "reinforces concerns that consumers are reining in their spending".

He added:

"The recent softer trend in John Lewis sales reinforces suspicion that consumers will be very cautious in their spending in 2011 in the face of serious headwinds. Higher inflation (fuelled by January's VAT hike) and muted earnings growth is increasingly squeezing purchasing power. Meanwhile, unemployment is high and likely to rise further, other elements of the fiscal squeeze will increasingly bite as the year progresses (for example, employers' national insurance contributions will rise in April), and debt levels are elevated."

John Lewis was responsible for an even heavier fall on the second tier. Ocado plunged 44.4 to 240.6p after the John Lewis pension fund cashed in its 10.4pc stake in the online grocer, raising £152m.

John Lewis transferred a 29pc stake in Ocado to the pension fund in 2008. The fund sold more than half that holding in Ocado's initial public offering in July, and was prevented from selling the rest for six months. Analysts had been expecting the fund to sell the rest of the holding at some point.

Ocado's share price languished below its 180p float price for much of last year, but has recently perked up as short sellers covered their positions and speculation around a possible bid for the company, which delivers Waitrose groceries.

Analysts at Jefferies, who have a "hold" on Ocado, said:

"We do not see any operational significance from today's development. We do note, however, the extent to which Ocado's equity had recently benefited from a favourable supply and demand imbalance. We believe today's placing is likely to address that technical situation."

Ocado was the sharpest faller on the second tier. The FTSE 250 fell 28 points to 11693 and the FTSE 100 shed 19 points to 6000.67.

Asian indices drop back

Hong Kong's Hang Seng index dropped 0.4pc to 22,620.22, a day after closing below 23,000 for the first time this year.

Tom Kaan of Louis Capital Markets said the drop was led by faltering shares in the company that runs the territory's stock exchange, following a flurry of merger discussions between exchanges that didn't include Hong Kong's.

China's Shanghai Composite index was off 0.1pc to 2,815.61. Australia's S&P/ASX 200 let go of the previous day's gains, dropping 0.3pc to 4,898.60.

Indexes in Singapore, Taiwan, Malaysia and Indonesia were also lower. Japan's markets were closed for a public holiday.

Seoul was the only bright spot, with South Korea's benchmark Kospi rising 0.1pc to 2,010.01 after the Bank of Korea left its key interest rate at 2.75pc despite rising inflation.

Market sentiment was glum as anti-government protests in Egypt picked up steam and Wall Street started to sag after a bright week.

"With Egypt looking like it's blowing up again, investor confidence is really not there," said Kaan. "I am worried about the U.S. market after an eight-day winning streak, you may see a correction coming in and that could weigh on Asian markets next week."

Oil prices jumped as Egyptian President Hosni Mubarak clung to power amid growing protests calling for his resignation. The dollar was up against the euro and the yen.

US stocks finished flat Thursday, dragged down by Cisco Systems Inc. and Akamai Technologies Inc. Both issued weak earnings forecasts, raising concerns about business and technology spending.

Cisco, the world's largest networking equipment maker, had a 14pc drop — the largest fall of the 30 stocks that make up the Dow.

The Dow Jones industrial average lost 10 points to 12,229. The S&P 500 rose a point to 1,321. The Nasdaq composite rose 1.4 point to 2,790.

Stocks traded lower much of the day, despite the Labor Department saying that 383,000 people applied for unemployment benefits for the first time last week, the lowest level in nearly three years.

Economists say applications would need to fall to 375,000 or below on a consistent basis before the unemployment rate will decline.

Benchmark crude for March delivery was up 65 cents at $87.38 a barrel in New York. The contract rose 2 cents to settle at $86.73 per barrel on Thursday.

A surge in Portugal's borrowing costs, meanwhile, again inflamed concerns about Europe's debt crisis, leading to a slip in the euro against the dollar.

The European currency slid to $1.3577, after falling to $1.3593 late Thursday. The dollar was also stronger against the Japanese yen, at 83.44 from 83.32 late Thursday.

Friday's Market Report:

Retailers retreat as FTSE rallies on Egypt relief

FTSE today: market report - as it happened February 11, 2011

Thursday's Market Report:

ICAG nosedives on Air France profit warning

FTSE today: market report - as it happened February 10, 2011

Wednesday's Market Report:

LSE-TMX merger prompts global jump in bourse shares

FTSE today: market report - as it happened February 9, 2011

Tuesday's Market Report:

GKN speeds ahead as car sales accelerate

Tools: Shares and Markets: News, charts, data

Get free advice on protecting your assets with the Telegraph Wealth Management Service


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