Repo Market Decline Raises Alarm as Regulation Strains Debt

Repo Market Decline Raises Alarm as Regulation Strains Debt

Regulations aimed at reducing the risk of another financial crisis are starting to upend a key part of the bond market that expedites trading in everything from U.S. Treasuries to junk bonds.

The repurchase, or repo, market where banks and investors borrow and lend Treasuries and other fixed-income securities shrunk to $4.6 trillion daily outstanding last month, down 35 percent from a peak of $7.02 trillion in the first quarter of 2008, based on Federal Reserve data compiled from its 21 primary dealers. Read more of this post

Mobile-Payment Startups No Match for PayPal

Mobile-Payment Startups No Match for PayPal: Tech

The market for tools that help consumers buy goods using mobile phones is getting crowded, inundating small businesses, putting off venture capitalists and making it hard for many payment startups to make a buck.

Just ask Kristy Fassio, owner of a Fit4Mom exercise franchise near Seattle. She’s getting bombarded with pitches from mobile and web-payment companies pledging to provide low-cost, easy ways for her to accept payments for the mom-focused workout classes she teaches. Some don’t even charge fees. Read more of this post

Nestle’s Sales Slowdown Seen Leading to Slimmer Brand Portfolio

Nestle’s Sales Slowdown Seen Leading to Slimmer Brand Portfolio

Nestle SA, (NESN) the world’s biggest food company, needs to reignite sales that have disappointed investors for four straight quarters. One solution: Get smaller.

The maker of Nescafe coffee and DiGiorno pizza said Aug. 8 that it’s “actively looking” at its 8,000 brands and is seeking to identify the laggards after posting its weakest quarterly revenue growth in four years. Nestle has said it will struggle this year to meet its long-term forecast for annual sales growth of 5 percent to 6 percent, hurt by a deceleration in emerging markets, European weakness and sluggish performances from its diet products, frozen entrees and water. Read more of this post

China Trading Error Reduces Investor Confidence in Stocks

China Trading Error Reduces Investor Confidence in Stocks

The biggest swing in China’s benchmark equity index since 2009 threatens to further erode confidence in the nation’s stock market after it lost more money for investors than any in the world during the past four years.

China’s shares were roiled Aug. 16 by a trading error at Everbright Securities Co. (601788) that spurred a 53 percent surge in volumes and a swing of more than 6 percent in the Shanghai Composite Index. The gauge jumped from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session, then ended the day with a 0.6 percent drop. Erroneous buy orders from Everbright’s proprietary trading group sparked the early rally, the securities regulator said. Read more of this post

Indonesia Rupiah, Stocks Plummet on Current-Account Gap

Indonesia Rupiah, Stocks Plummet on Current-Account Gap

Indonesia’s rupiah fell to 10,500 per dollar for the first time since 2009, stocks dropped by the most in 22 months and government bonds plunged after the current-account deficit widened to a record last quarter.

The Jakarta Composite Index of shares has fallen 8 percent in two days, and is now the world’s worst performer this quarter. The yield on 10-year notes surged to the highest since March 2011 after Bank Indonesia said late Aug. 16 the current-account shortfall was $9.8 billion, the largest in data compiled by Bloomberg going back to 1989. Inflation quickened to a four-year high and economic growth slowed to the least since 2010, figures showed last week. Read more of this post

India Markets Plunge Pressures Singh as Economy Teeters

India Markets Plunge Pressures Singh as Economy Teeters

India’s biggest stock market slide in almost two years, surging bond yields and an unprecedented plunge in the rupee are pressuring officials for fresh steps to stem capital outflows and revive a struggling economy.

The S&P BSE Sensex (SENSEX) Index sank 4 percent on Aug. 16 as the rupee touched an all-time low of 62.005 per dollar and the yield on the government bond due May 2023 rose 39 basis points to 8.88 percent, the highest on a 10-year note since 2011. Read more of this post

Investors Ditch Ratings for Returns in Bond Boom: Nordic Credit

Investors Ditch Ratings for Returns in Bond Boom: Nordic Credit

Norway is about to share its European dominance in unrated bonds with the rest of the Nordic region.

Issuance of bonds ignored by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings has surged in Sweden and Finland. Many of the companies selling, such as Skanska AB and Finnair Oyj (FIA1S), are finding the lack of a credit rating is no impediment to attracting more local buyers. Read more of this post

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