| CFFEX approves 13 new members
The China Financial Futures Exchange (CFFEX) announced the fourth group of members on Monday. Including the 13 new members, the total number of CFFEX member brokers is now 52, accounting for about one third of all of China's futures brokers. Analysts believe continuous expansion of the membership indicates accelerated preparations for the launch of the country's first financial futures products based on the CSI 300 index. Two of the 13 new members - Donghai and Everbright - have been granted full clearing rights . Six of them are trading and clearing brokers: Topwin, Henan Wanda, Haitong, Shanghai Tonglian, Shanghai Zhonggu, and China Merchants. Five are trading members: Chuangyuan, Hengyin, SC, Zhujiang and Zhejiang Tiandi. As of yesterday, of the total 52 CFFEX members, seven are full clearing brokers, 27 are trading and clearing brokers, and 18 are trading members.
HSBC to set up brokerage in UAE equity markets
The company, to be called HSBC Middle East Securities, will offer UAE domestic market brokerage services to both institutional and retail investors. The company is expected to begin trading for institutions by the end of 2007, and to offer retail brokerage services in 2008. Emirates Securities and Commodities Authority (ESCA), the regulator for the UAE's securities markets, recently granted HSBC authorisation to establish the brokerage company. The authorisation is subject to the various legal and infrastructural requirements meeting the approval of ESCA, as well ADSM and DFM. With this approval, HSBC is poised to become the first global bank on the UAE's exchanges. HSBC already buys and sells UAE shares on behalf of Western institutions through third party brokers. In addition, HSBC is a sub-custodian on both ADSM and DFM, and this service will continue to be provided by the bank's specialist sub-custody operation.
Minority Report: 12 months that changed Apple
There were others sour notes to the year, notably the ongoing investigation into Steve Jobs over stock options. Despite being exonerated of any wrong-doing by the Apple board, the investigation continues, terrifying investors and fans alike. Some early iPhone owners were outraged when Apple dropped the price of the device by $200 after just a couple of months. Meanwhile, users who hacked their iPhones to run them on networks other than AT&T found they were bricked and inactive after a firmware update. Apple left no doubt over their determination to ensure the device remained linked to its chosen telecoms partners. Naturally, there are lawsuits from irate users pending. There were two other key events that didn't make as many headlines as the product launches. The first was the announcement, starting with the iPhone, a version of OS X would be at the centre of all its devices.
Hedge funds scent a market turnaround amid turbulence
London: If hedge funds are, as is often claimed, the investment vanguard, their latest moves appear to be telling financial markets it is time to take a break from the trading patterns that have dominated since mid-2007. Investment banks have been poring over the latest data on hedge fund positioning from the Commodities Futures Trading Commission (CFTC) and concluded that a number of speculative bets have been changed. Societe Generale, for example, says long positions on 10-year government bonds have been closed. That is to say, hedge funds are not expecting demand for such bonds to increase and drive yields lower. .
Road to Ruin
The swing could create real pain for investors, since in recent years numerous firms have created trading strategies which have loaded large debt levels onto these 'safe' securities, precisely because they assumed these instruments would never fluctuate in price. 'The last week has seen some of the worst falls in the ABX market this year, especially higher up the capital structure [with highly rated debt],' said Jim Reid, head of fundamental credit strategy at Deutsche Bank." November 2 - Bloomberg (Shannon D. Harrington): "The risk of owning the debt of Merrill Lynch & Co. and Citigroup Inc. rose to the highest in at least five years on speculation that losses from the mortgage-market collapse will worsen." November 1 - Bloomberg (Shannon D. Harrington and Hamish Risk): "The risk of owning corporate debt reached the highest in seven weeks as credit-default swap traders bet that companies, including Citigroup Inc., will further reduce the value of securities tied to subprime mortgages.
Major grain merchandiser does away with HTAs
DTN Markets Blogger Pat Hill reports Thursday that the Andersons will no longer write hedge-to-arrive contracts for grain for delivery after August of 2008.
Hedge-to-arrive contracts are forward contracts that don't set the basis until a later date. When basis is wide, that's often a good deal for ag producers. But given the increasingly speculative nature of futures markets, it's become harder and harder for grain merchandisers to hedge that basis risk.
According to the DTN story, there aren't any other major grain firms that have sworn off on hedge-to-arrive contracts yet. But some have reportedly increased fees for those contracts.
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Taiwan is Worth a Look
For the first time since the market correction took place, EWT had closed above the downtrend trendline for the 3rd straight day on Friday (black circle on Chart 1 below). It did break through the trendline in mid January, but the closing price fell below the trendline (X mark). In addition, while the price of EWT had fallen about 20% since the end of October, the ROC (Rate of Change) had been making higher lows at major inflection points (blue trendline in lower pane). And then, there's the gathering of the positive volume bars in February. The buildup of buying pressure means the builddown of selling pressure. And, that's self-evident in the intraday charts.
Chart 1 The declining highs (diminishing) of the red selling bars can clearly be noted on this 60-minute, 20-day intraday chart below (Chart 2).
Gold hits new high over $900
Gold hit a record high above $900 an ounce this morning as turmoil in financial markets and expectations of aggressive US rate cuts helped raise the metal's appeal. Comex gold futures touched $908.90 an ounce, surpassing Friday's record high of $900.10. The most active February contract was later quoted at $907.0, up $9.3 an ounce. Platinum hit a lifetime high, while silver touched a 27-year peak, buoyed by gold's rise. Spot gold hit an all-time high of $906.70 an ounce, higher than $895.70/896.50 in New York on Friday. Fears of further subprime mortgage-related write-downs in the US financial sector and inflation fears driven by record-high crude oil also attracted buying from investors and speculators. .
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