Banks jolted as regulators seek to crack down on leverage

Banks jolted as regulators seek to crack down on leverage

10:21am EDT

By Steve Slater

LONDON (Reuters) – New demands from regulators to force banks to keep a lid on risk-taking after the financial crisis has re-ignited a debate over how best to strengthen the industry without stifling lending or alienating investors.

Bank regulators in the United States this week set out plans to impose a leverage ratio on banks that caps their lending based on a simple assessment of their equity. Britain and Switzerland have also demanded their banks “gold-plate” a global rule for this leverage cap or ratio. Read more of this post

ETF Simplicity Betrayed by Volatility in Market Selloff

ETF Simplicity Betrayed by Volatility in Market Selloff

Emerging-market stocks can be volatile to begin with. Investing in them through exchange-traded funds can add another layer of price swings for investors, especially in times of market stress.

Share prices for the 10 largest diversified emerging-market ETFs on average were 42.6 percent more volatile than their underlying indexes from May 22 to June 24, when comments by Federal Reserve Chairman Ben S. Bernanke triggered a selloff that sent emerging-market stocks to a one-year low, according to data compiled by Bloomberg. The group included ETFs from BlackRock Inc. (BLK), State Street Corp. and Vanguard Group Inc., the largest managers of the products. The five biggest emerging-market index mutual funds, by contrast, were 4.8 percent more volatile than their indexes. Read more of this post

A Peek at Trucking Data, and Then the Stock Surged; Glimpses of Key Figures Can Aid Investors in Truck Stocks, Soybeans, Bed Makers and Others

July 11, 2013, 11:34 p.m. ET

A Peek at Trucking Data, and Then the Stock Surged

Glimpses of Key Figures Can Aid Investors in Truck Stocks, Soybeans, Bed Makers and Others

MICHAEL ROTHFELD, JOHN CARREYROU and BRODY MULLINS

Just before the stock market closed March 4, an industry-research firm emailed a monthly report on commercial-truck orders to hedge funds and other subscribers that pay the group $1,700 a year for the exclusive service. The early peek was worth the expense. The next day, after the bullish truck numbers were reported in the media, shares in truck makers surged, generating a tidy profit for investors who traded on the report in the late moments of the previous session. Even as federal, state and congressional investigators examine the preferential release to investors of broad economic data—such as the University of Michigan consumer-sentiment survey—some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public. Read more of this post

China case shows war on drug costs in emerging markets

China case shows war on drug costs in emerging markets

10:16am EDT

By Ben Hirschler, Adam Jourdan and Lavinia Mo

LONDON/HONG KONG (Reuters) – International drugmakers are under fire in emerging markets as governments crack down on high prices and corporate malpractice, raising a risk to the price premiums global players enjoy over local rivals.

China’s probe into pricing by 60 firms, including local units of multinationals, and its dramatic charge against GlaxoSmithKline Plc of widespread bribery to boost sales and prices are the latest salvos. Read more of this post

Thrift trumps Abenomics as Japan shoppers stick to bargains

Thrift trumps Abenomics as Japan shoppers stick to bargains

5:42am EDT

By Sophie Knight

TOKYO (Reuters) – Japanese apparel firm Fast Retailing Co Ltd (9983.T: Quote, Profile, Research, Stock Buzz) has a problem: sales are surging, full-year net profits are expected to rise nearly 28 percent but the customers thronging the stores of its popular Uniqlo brand are far too frugal for its liking.

Prime Minister Shinzo Abe would also disapprove. Abe’s aggressive economic stimulus measures, aimed at lifting Japan out of two decades of deflation, hinge on a pick-up in consumer spending, but eight months after its launch, “Abenomics” has yet to convince many Japanese to part with their thrifty ways. Read more of this post