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Friday, 9 January 2009

Pssst, anyone want a JGB?

Japan, which boasts the world’s biggest government bond market but “fortunately keeps most of its paper at home”, wants to ramp up overseas sales of JGBs and is kicking off with an investor road show to the Middle East, notes Lex on Friday.

Little wonder Japan is looking further afield for buyers. As RBS Securities Japan points out in a note on Friday, JGB retail sales in FY2008 dropped to Y2,300bn, the lowest since FY2003. More dismally, sales were around Y3,900bn less than the initial plan.

The vastly lower figure is due primarily to the low yields. In FY2009, the retail sales plan for JGBs in total is Y2,400bn. However, as RBS Japan’s research team notes, the absence of buying from retail investors will put further pressure on institutional investors.

FEDERATION OF EURO ASIAN STOCK EXCHANGES December 2008 Report

The FEAS December Newsletter, the monthly bulletin, bringing you general secretariat news, Member statistics on stock, bond and other volume comparisons on a monthly, year-to-date and prior period basis, in addition to market cap, currency changes, number of companies traded and index fluctuations, has been put on the FEAS website.





Here are some headlines from this issue:

ARMEX

Starting December 4, the Armenian Stock Exchange (Armex) will extend its trading hours for corporate securities from one hour to four. T For more information please visit http://www.nasdaqomx.am



BELGRADE SE

Inter Capital Securities a.d. Belgrad, member of the Belgrade Stock Exchange since 29.06.2007, is the first broker-dealer company which accepted the requirements prescribed by the Board of Directors of the Belgrade Stock Exchange for performing the activities of the market maker. For more information, please visit http://www.belex.rs



EGX

In its endeavor to keep abreast with technological advancements in order to be the Premier market in the Middle East North African (MENA) Region that best serves its stakeholders, EGX has upgraded its trading platform to OMX high performance "X-Stream" solution, to be launched effective November 27, 2008, replacing the current trading system "EFA Horizon". For more information, please visit http://mondovisione.com



ISE

Shenzhen Stock Exchange signed MOU with ISE.This agreement is the 22nd MOU signed by them.



IRAQ

The Executive Board of the International Monetary Fund (IMF) today completed the second review of Iraq's economic performance under the Stand-By Arrangement (SBA), which is designed to support the country's economic program through March 2009. The Board also completed a financing assurances review under the SBA.

For more information, please visit http://www.imf.org



GEORGIA

The Executive Board of the International Monetary Fund (IMF) today completed the first review of Georgia's performance under an 18-month SDR 477.1 million (about US$726 million) Stand-By Arrangement, which was approved on September 15, 2008 (see Press Release No. 08/208) to support the Georgian authorities' macroeconomic policies, rebuild gross international reserves, and bolster investor confidence.

Emerging nations see window of opportunity

Emerging market sovereign bond issuance has surged this week as governments take advantage of the dramatic drop in yields because of the sharply improving sentiment since the start of the year.

The Philippines, Turkey, Brazil and Colombia have all issued debt in the past few days, raising a total of $4.5bn. This compares with just one deal worth $2bn from Mexico issued in the entire fourth quarter of 2008.

Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: “Sentiment has improved a great deal since January 1 in the emerging market space, so these countries see this as a window of opportunity to issue debt.”

Satyam scandalises

India is rarely as shiny as its fans insist. The $1bn fraud perpetrated by Satyam Computer Services will not only throw the $40bn software and outsourcing industry into a tailspin, it will also raise disturbing questions about the risks of doing business in India – and even the sustainability of the country’s much-vaunted growth miracle.

Only a few months ago, India saw itself as relatively immune from the global credit crisis. Some officials patted themselves on the back for going slow on liberalising capital markets, crediting their prudence as yet further evidence of the country’s inexorable rise. But India now has a credit crunch of its own. Exporters are hurting and threatening to lay off 10m workers. Terror attacks on Mumbai have cast into doubt the competence of the security apparatus and shaken business and consumer confidence. No one can still be under the illusion that anything like 9 per cent economic growth is achievable this year, and probably next. The growth rates of recent years might yet come to be seen as a high-water mark.

Satyam fights for survival

Satyam Computer Services, the company at the centre of India’s largest corporate scandal in more than a decade, was on Thursday fighting for survival as senior managers moved to appoint a new auditor and an investment bank to find a buyer.

Interim managers of India’s fourth largest software company, whose chairman B. Ramalinga Raju on Wednesday resigned after confessing to fraud worth more than $1bn, said its accounts had been so thoroughly manipulated they were not even sure it had the cash to last out the month.

“What we’re trying to do is to respond to a crisis of unimaginable proportions,” said interim chief executive Ram Mynampati. “Our liquidity position is not very healthy right now, we are trying to manage that position appropriately.”

Deal raises hope for end to gas crisis

The crisis between Russia and Ukraine that has cut gas supplies to parts of the European Union seemed to be moving towards resolution Thursday night as Russia agreed to the deployment of international monitors to oversee the transit of Russian gas via Ukraine, the Czech EU presidency said.

However, one senior Czech official added with a note of caution: “There is no absolute deal.”

Vladimir Putin, Russia’s prime minister, said such monitors were a condition for restarting Russian gas supplies to Europe.

Global defaults on most of its debt

Kuwait City, London: Global Investment House, Kuwait's biggest investment bank, said it had defaulted on most of its debt as a crisis of investment firms hit by a global credit crunch widened in the Gulf Arab state.

"The company is in default on the majority of its financial indebtedness," Global said in a statement to the London Stock Exchange where it has a listing for Global Depository Receipts (GDR).

All Kuwaiti listed and unlisted investments firms had a total debt of around eight billion Kuwaiti dinars ($28.27 billion, Dh104 billion) in December, according to the local Al Joman Center for Economic Consultancy.

Six Saudi financial services companies contemplating merger

Riyadh: In a bid to avoid grim fallouts of the looming global financial crisis, six Saudi companies in the field of financial services are mulling merger to form a single entity.

At the same time, a few other companies ponder liquidation after they had lost a major chunk of their capital in the recent stock market crash.

Noted financial analyst Mohammad Al Omran said that the companies licensed in the kingdom's financial services, more than 100 companies in number, are heavier than what the market can accommodate in the current scenario.

Borse Dubai pioneers financing revival

Dubai: Borse Dubai Ltd may be the emi rate's first state-owned company to tap banks to refinance a multibillion-dollar loan since September, a sign interest rates have returned to levels companies are willing to accept.

Borse Dubai, the owner of Nasdaq Dubai, is seeking a $2.5 billion (Dh9.19 billion) loan this month, according to bankers close to the talks who declined to be identified because the negotiations are private.

It needs to replace a one-year syndicated loan taken out last year to pay for the purchase of Swedish exchange OMX AB.

Al Barakah informs investors it is insolvent

Al Barakah, a property development company with more than a dozen projects in Dubai and Ajman yet to get off the ground, has told investors it is insolvent.

Lawyers acting for the company told the investors at a specially convened meeting last week that the company had at least Dh400 million of unsecured liabilities.
Investors said later they were disappointed that the company’s chief executive, Shariq Imran Khan, did not attend the meeting.