Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Equities

Eurozone shares outperform as inflows rise

Posted on August 30, 2013

Optimism that the eurozone is turning the corner has seen regional equity markets outperform the US, UK and Japan during a volatile trading environment for August.

While the broad European market was rattled this week by expectations that a military strike on Syria looms, sentiment has generally remained resilient, buoyed by a record-breaking $12bn of inflows into eurozone shares over the past nine weeks as investors have sold bonds and emerging market assets.

    Analysts expect eurozone shares will continue closing the gap with US equities.

    “The macroeconomic momentum is getting better in Europe relative to the US,” said Nick Nelson, global equity strategist at UBS. “If you look at industrial surveys, or purchasing managers’ indices, they have improved in Europe from a lower base – but the surprise has been greater.”

    Another key element is the role of central banks, with many investors awaiting next month’s meeting of the US Federal Reserve and a possible decision about reducing its $85bn-a-month bond purchases.

    “The US is looking to start to exit from ultra loose monetary policies whereas the ECB is maintaining loose policy for longer,” said Mr Nelson. “The fiscal austerity for which Europe is famous is starting to ease off. Next year we do not expect any major net fiscal drag, so the focus may be more on US fiscal policies.”

    The divergence in eurozone equity market returns has been most pronounced in regions that were hit hard earlier this year. Shares in Italy and Portugal have risen around 1.2 per cent, while Greece has gained 1.7 per cent this month.

    After starting the final week of August in positive territory, the broad benchmark, the FTSE Eurofirst 300 index, closed out the month with a loss of 1.1 per cent, weighed down in part by Germany lagging other key markets.

    Other major global share markets have fared far worse, with the S&P 500 down some 3 per cent in August, its worst monthly loss since May 2012. The UK FTSE 100 index dropped 3.1 per cent while Japan’s Nikkei 225 index recorded a loss of 2 per cent.

    After such a bruising month for Wall Street, investors expect further uncertainty ahead of a possible Fed taper in mid-September. The August employment report, to be released next week, is seen as a key gauge of whether the central bank will start the taper and will drive equities.

    “A down market on stronger than expected indicators or an up market on weaker than expected indicators suggests that a taper at the meeting will put serious pressure on stocks,” said analysts at Bespoke Investment Group. “An up market on stronger than expected indicators or a down market on weaker than expected indicators suggests that the market is ready to deal with a taper.”