‘Slow frequency’ technology faces tough shift from FX to stock markets

‘Slow frequency’ technology faces tough shift from FX to stock markets

12:38pm EDT

By Eric Onstad

LONDON (Reuters) – Efforts to curb the advantage of high frequency traders – who use computers churning out numerous transactions at lightning speed – face resistance on stock markets, although technology is already starting to level the playing field in currency dealing. Critics of high frequency trading (HFT) say it distorts prices, causes “flash crashes” when markets dive in an instant, and fuels an expensive arms race to shave milliseconds off trading times. Read more of this post

Will ‘Silk Road’ Bust Kill Bitcoin? Bitcoin Prices Plunge on Bust of Online ‘Black Market’

Will ‘Silk Road’ Bust Kill Bitcoin?

The eBay of the black market has met its demise. The U.S. Justice Department has shuttered Silk Road and indicted its alleged founder.

An online marketplace founded in 2011, Silk Road facilitated commerce in illegal goods and services, including narcotics, counterfeit currency and hacking services, with payments processed in the digital currency Bitcoin. Perhaps not coincidentally, the price of Bitcoin fell to about $119 at 3 p.m. EST, down from $145 at the end of September. Read more of this post

Investors turn their backs on “robot” hedge funds

Investors turn their backs on “robot” hedge funds

1:02pm EDT

By Laurence Fletcher and Tommy Wilkes

LONDON (Reuters) – Investors in the $330 billion computer-driven hedge fund sector are pulling out money for the first time since 2008, data showed on Wednesday, signaling the possible start of a bigger exit from the industry. These so-called CTAs (commodity trading advisors), which employ mathematicians and physicists to build programs betting on market trends, have been in demand since they racked up large profits during the credit crisis. Read more of this post

Henkel CEO Predicts Four More Difficult Years for Europe

Henkel CEO Predicts Four More Difficult Years for Europe

Henkel AG Chief Executive Officer Kasper Rorsted said Europe’s economic struggles may last another four years, downplaying the prospect of any imminent recovery. “We don’t expect a lot of growth, if any at all in western Europe” by 2017, Rorsted said in an interview with Bloomberg TV at the company’s headquarters in Dusseldorf, Germany. “Europe overall in the next four years will have quite a challenging position.” Read more of this post

Gross Says Market Mispricing Eventual Fed Target Rate Increase

Gross Says Market Mispricing Eventual Fed Target Rate Increase

Pacific Investment Management Co.’s Bill Gross said investors should focus on purchasing debt that will benefit from the market’s mispricing of when the Federal Reserve will eventually increase borrowing rates. “If you want to trust one thing and one thing only, trust that once QE is gone and the policy rate becomes the focus, that fed funds will then stay lower than expected for a long, long time,” Gross wrote in his monthly investment outlook posted on Newport Beach, California-based Pimco’s website today. “Right now the market, and the Fed forecasts, expect fed funds to be 1 percent higher by late 2015 and 1 percent higher still by December 2016. Bet against that.” Read more of this post

Emerging-Market Currencies Fall 30% in Reserves, Citigroup Says

Emerging-Market Currencies Fall 30% in Reserves, Citigroup Says

Global central banks sold 30 percent of their holdings in emerging-market currencies from foreign reserves in the second quarter as the Brazilian real to the Indian rupee tumbled, according to Citigroup Inc. Reserve managers divested as much as $20 billion in their holdings in developing-nation currencies, strategist Steven Englander wrote yesterday in a research note to clients, citing data from the International Monetary Fund’s quarterly reserves report. The central banks may have sold a similar amount from the reserves in the third quarter, Englander wrote. Read more of this post

Emerging market firms to reshape corporate world: report

Emerging market firms to reshape corporate world: report

7:02pm EDT

LONDON (Reuters) – The number of large emerging market companies will surge in coming years and they will become competitors but also customers for rich-country firms, according to a new study.

Almost three-quarters of today’s 8,000 companies with annual revenue of $1 billion or more are based in advanced economies.

By 2025, another 7,000 will have joined their ranks, with seven out of 10 of them based in emerging economies, McKinsey Global Institute (MGI) projects.

Emerging markets have fallen out of favor with investors this year because of worries over the sustainability of China’s economic model, slower growth in India and Brazil and worries about the ability of the likes of Indonesia and Turkey to attract funds to plug their current account deficits.

MGI director Richard Dobbs said there would be hiccups along the way but he saw little to stop the rise of the big emerging-market corporation.

“Yes, it’s going to be a turbulent ride for the next 20 or 30 years as we go through this massive transition. But the rise is going to happen. Some countries may stall, but there are enough emerging markets that there’s a degree of inevitability about this,” Dobbs told Reuters.

The first wave of development in emerging markets was based on cheap labor, MGI said. As wages rise, a second wave has unfurled – selling to newly rich consumers. The third, overlapping wave is breaking as companies bulk up, propelled by urbanization, income growth and exchange rate appreciation.

By 2025, emerging market firms are likely to account for 40-50 percent of the Fortune Global 500, twice today’s share and up from just 5 percent in the period 1980-2000, reckons MGI, the research arm of the consultancy McKinsey & Co.

The China region alone will account for almost a quarter of the Fortune Global 500 in 2025.

“By 2025, some of the global leaders in many industries may be companies we have not yet heard of, and many are likely to be based in cities that we could not point to on a map,” MGI said.

The projected trend will shift more of the world’s decision making, capital, standard setting and innovation to emerging markets.

“The corporate giants that emerge in the years ahead will be central actors shaping the global economy. They will fuel local growth in some regions and reconfigure global transport and communications networks,” the report said.

The proliferation of large companies is likely to generate increased competition for markets, resources and talent.

What’s more, companies based in emerging markets could be sources of low-cost innovation that could disrupt entire industries. But MGI said their growth will also represent a major opportunity for service firms and suppliers.

“Developed world companies need to change their mindset from seeing emerging markets as a source of cheap labor and of consumption and add emerging markets as a source of corporate customers,” Dobbs said.

Investor Dan Loeb Launches Attack on Sotheby’s; Loeb Seeks CEO’s Ouster, Says He Fails to Grasp Importance of Modern Art

Updated October 2, 2013, 8:10 p.m. ET

Investor Launches Attack on Sotheby’s

Loeb Seeks CEO’s Ouster, Says He Fails to Grasp Importance of Modern Art

DAVID BENOIT, SARA GERMANO and KELLY CROW

Dan Loeb is adding art criticism to his investor activism, accusing the management of auction powerhouse Sotheby’s BID +0.66% of failing to understand what kind of art sells best. The hedge fund manager is seeking to oust William Ruprecht as the chairman and chief executive officer of Sotheby’s, BID +0.66% claiming the auction house’s leader has failed to grasp the modern art world. Instead, Mr. Loeb, himself an avid art collector, says he should be on the board. The activist investor disclosed in a federal filing that his Third Point LLC has boosted its stake to 9.3% from 5.7%, making it the largest shareholder in Sotheby’s.

Read more of this post

Cargill close to agreeing purchase of ADM’s cocoa unit creating global giant

Updated: Wednesday October 2, 2013 MYT 10:43:06 AM

Cargill close to agreeing purchase of ADM’s cocoa unit creating global giant

NEW YORK: Cargill Inc, one of the world’s leading cocoa traders, is in the final stages of a deal to buy Archer Daniels Midland Co’s cocoa business, sources familiar with the situation said, creating a global giant. The two rivals are hammering out the final details of the deal, said the sources, paving the way to the second major takeover this year in an industry that is set to be dominated by two firms. The timing of an official announcement is not known but could be made within days, the sources said. Read more of this post

Tourists baffled and angry as Statue of Liberty shut; Yellowstone visitors, turned away, get taste of U.S. government shutdown

AFP | Wed, Oct 02 2013

Tourists baffled and angry as Statue of Liberty shut

NEW YORK – Where once she welcomed immigrants pursuing the American dream and more recently hordes of tourists, the Statue of Liberty stood alone on Tuesday, victim of the US government shutdown. Thousands of frustrated tourists had the choice of a one-hour boat trip around New York harbour or their money back, with one of the most iconic monuments in the United States closed. Read more of this post

Why Thailand gave up its dream of becoming a duty-free “Shopper’s Paradise”

Why Thailand gave up its dream of becoming a duty-free “Shopper’s Paradise”

By Newley Purnell 2 hours ago

Last month, Thailand proposed a plan to woo a special kind of tourist: Shoppers who splash out on expensive goods. The government would cut taxes on some imported luxury products—like designer clothes and high-end watches—to entice even more of the deep-pocketed, big-spending Chinese tourists who are flooding into the country. “Thais declare shopping war,” blared a headline in Hong Kong’s The Standard. “We can easily compete with Hong Kong and Singapore,” Tos Chirathivat, head of Thailand’s Central Retail Corp., told Bloomberg. “Our infrastructure, our malls are the same or better. We have more. The service is good. The rental cost is lower and labor cost is lower.” Read more of this post

Russia Enters New Era of Stagnation

Russia Enters New Era of Stagnation

Russian Prime Minister Dmitry Medvedev says he recognizes the problems holding back the country’s economy. Sadly, nobody has much confidence in his plans to address them.

With the country’s rate of economic growth declining toward zero, Medvedev is making a renewed effort to show the business community that he knows what to do. In an unusually long article published in the business daily Vedomosti, he acknowledged that what growth the country has is largely artificial, that the government is too dependent on revenue from the oil industry, and that Russia offers a terrible environment for investment. Read more of this post

Six Lessons From Blowing $30 Billion in Brazil: Avoid companies no one understands.

Six Lessons From Blowing $30 Billion in Brazil

Brazil’s OGX Petroleo & Gas Participacoes SA, the flawed jewel of ex-billionaire Eike Batista’s EBX conglomerate, is one step closer to bankruptcy after missing a $45 million dollar debt payment that was due yesterday. If OGX goes under, its largest U.S. creditors, Pacific Investment Management Co. and BlackRock Inc., stand to lose millions in Latin America’s largest corporate default. Batista’s salesmanship and Brazil’s growth boom drew investors to his over-hyped companies. The warning signs they missed offer precious investing lessons.

1. Avoid companies no one understands. Batista’s EBX is a head-scratching maze of 13 interconnected startup companies, and only six of them are publicly listed. For instance, OGX was the main client of shipbuilding unit OSX Brasil SA. OSX in turn leased space from Batista’s port operator LLX Logistica, another sister company. As one company ran into trouble the others did as well. Even Batista’s employees couldn’t figure out the corporate puzzle. A company spokesman once confessed to having trouble keeping up with the new companies Batista created. Read more of this post

Singapore will see an even higher percentage of the world’s crude oil pass its coastline over the next couple of decades as the center of global energy demand shifts toward Asia from the U.S.

Oct 2, 2013

Singapore Will Be Seeing Lots More Oil Traffic

By Eric Yep

Already one of the most important transit points in the global energy trade, Singapore will see an even higher percentage of the world’s crude oil pass its coastline over the next couple of decades as the center of global energy demand shifts toward Asia from the U.S. The narrow sea lane that runs through the straits of Malacca and Singapore is expected to carry as much as 45% of global crude trade by 2035, according to the International Energy Agency. That amounts to 16.5 million barrels a day, up from 12 million barrels a day in 2012, when a little over a third of globally traded crude was routed past the city-state, the Paris-based organization said in its “Southeast Asia Energy Outlook.” Read more of this post

Korean business community in depths of crisis; Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment, marking the largest number since the May 16 military coup in 1961

Korean business community in depths of crisis

Kim Eun-pyo, Noh Won-myung

Korea’s business community is moaning in the wake of a series of detentions of top business leaders. Business conglomerates are already triply distressed by reduced competitiveness, cash crunch and poor business performance in a protracted global recession. Business groups which have sought speedy growth buttressed by family owners in the global market have hit a snag in their long-term strategy. SK Group and Hanwha Group, the nation’s third and 12th largest conglomerates, respectively, are in this case. Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment. Some say it marks the largest number since the May 16 military coup in 1961. The market is already weighed by concerns over a liquidity crisis caused by a series of downfalls of Woongjin, STX, Pantech and more recently Tongyang, which had brought a new wave of change in the local business community. Rumors are already swirling that some of the nation’s top 30 business groups may be hit by a severe liquidity crunch although little signs are surfacing. “Authorities should pay attention that there is a serious optical illusion in Korea’s industry situation due to upbeat sales of Samsung Group and Hyundai Motor Group. If they rest on some positive economic figures of foreign exchange reserves and trade surplus, the Korean economy could face a big crisis as early as next year,” warned Jangwoo Lee, Professor of Kyungpook National University.

Demise of ‘too big to fail’; Tongyang, once one of the top 10 conglomerates, has failed to adjust itself to the changing business environment

2013-10-01 17:11

Demise of ‘too big to fail’

Tongyang Group appears headed for a breakup as its main affiliates applied for court receivership after being squeezed by liquidity woes for long. Following the court receivership applications by three affiliates, including Tongyang Inc., Monday, Tongyang Cement, the conglomerate’s flagship company, and Tongyang Networks filed for bankruptcy protection Tuesday. Read more of this post

Tongyang Group Chairman Hyun Jae-hyun is likely to lose his control of the company as five affiliates have filed for court protection to avoid bankruptcy

2013-10-01 18:15

Tongyang chief may lose control

By Choi Kyong-ae

Tongyang Group Chairman Hyun Jae-hyun is likely to lose his control of the company as five affiliates have filed for court protection to avoid bankruptcy.
As he failed to guide Tongyang through the continued economic slowdown, economists urged Hyun to step down as chairman taking responsibility for the current dire situation at the conglomerate. Read more of this post