The MasterCharts: The MasterBlog: "It's Not A Market, It's An HFT 'Crop Circle' Crime Scene" - Further Evidence Of Quote Stuffing Manipulation By HFT | zero hedge

High Frequency Trading - HFT - OR THE SCAM IN THE MARKET....

"It's Not A Market, It's An HFT 'Crop Circle' Crime Scene"

- Further Evidence Of Quote Stuffing Manipulation By HFT

By Tyler Durden

Created 07/31/2010 - 12:40

Published on zero hedge (http://www.zerohedge.com)

Recently we posted [1]a required reading analysis by Nanex in which the market trading analytics firm presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks, in which thousands of cancelled quotes would reappear each second with a definitive periodicity and regularity, around the time of the May 6 flash crash. Aside from the fact that it is illegal to indicate a quote without a trade intent, this form of quote stuffing is in fact manipulative when conducted by HFT repeaters in specific "shapes" as it actually moves the NBBO actively higher or lower, in cases pushing the bid/offer range up to 10% higher without even one trade ever having occurred, simply by masking a big block order which other algos interpret as bid interest and pull all offers progressively or step function higher (or vice versa, although we have rarely if ever seen the walking down of a stock over the past 18 months).

It is as if the HFT lobby has been given the green light by the powers that be that it is safe to activate merely the bid-size quote stuffing algorithms, and not worry: the fact that the market is so one sided in its quote stuffing patterns is sufficient reason to worry of a concerted effort to push stocks higher, initiated from the very top, and effected by not only the Primary Dealer community but by the end-market "liquidity providers."

Today, courtesy of Nanex [2]we demonstrate that this type of illegal stock manipulation continues rampant to this very day, and the SEC still fails acknowledge that it is precisely the HFT market participants that persist in destabilizing stock prices, which have given up responding to fundamentals and merely move up or down based on quote stuffing interventions by those who plead innocence and claim to only be providing liquidity. Well take a look at the millions in fake, and thus illegal, bids demonstrated below and tell us just how any of this manipulation is "providing liquidity" - the second the patterns break, the algos responsible for the churn pattern disappear, thus eliminating numerous levels of so called bid liquidity below the NBBO: break enough patterns and you have another flash crash as the market once again goes bidless.


So while the SEC continues to pander merely to the interests of the market manipulation lobby, and is now doing it in more style than ever by refusing to answer to FOIA requests going forward, here is Nanex with yet more evidence that we no longer have a market, but merely a daily recurring crime scene.

In our original Flash Crash Analysis report [3], we dedicated a section to an observed phenomena we termed "Quote Stuffing [4]", in which bursts of quotes (at very high rates) with extremely unusual characteristics were observed.

As we continue to monitor the markets for evidence of Quote Stuffing and Strange Sequences (Crop Circles), we find that there are dozens if not hundreds of examples to choose from on any given day. As such, this page will be updated often with charts demonstrating this activity.

The common theme with the charts shown on this page is they are obviously all generated in code and are algorithmic. Some demonstrate bizarre price or size cycling, some demonstrate large burst of quotes in extremely short time frames and some will demonstrate both. In most cases these sequences are from a single exchange with no other exchange quoting in the same time frame.

And here, for your viewing pleasure, are the illegal market manipulative churn patterns conducted exclusively by various HFT algos:


Read it all on The MasterCharts: The MasterBlog: "It's Not A Market, It's An HFT 'Crop Circle' Crime Scene" - Further Evidence Of Quote Stuffing Manipulation By HFT | zero hedge

_______________________________________
Check it out on The MasterCharts

GDP Misses Expectations, Comes At 2.4%, Plunges From Revised Q1 GDP Of 3.7%

Feed: zero hedge
GDP Misses Expectations, Comes At 2.4%, Plunges From Revised Q1 GDP Of 3.7%

 

Double dip confirmed as Q2 GDP plunges from revised Q1 number: GDP comes in at a below consensus 2.4%, which a huge drop from the revised Q1 number which came in at 3.7% (from 2.7%). The GDP Price index comes at 1.8%, the core PCE comes at 1.1%, from 0.7% previously. Per the revised GDP numbers, the US economy has now shrunk by 4.1% from Q4 2007 to Q2 2009, compared with the 3.7% previous estimate. From the BEA: The deceleration in real GDP in the second quarter primarily reflected an acceleration in imports and a deceleration in private inventory investment that were partly offset by an upturn in residential fixed investment, an acceleration in nonresidential fixed investment, an upturn in state and local government spending, and an acceleration in federal government spending. The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures, private inventory investment, federal government spending, and residential fixed investment.  Imports, which are a subtraction in the calculation of GDP, increased. Full BEA release here Full Summary: 08:30 07/30 US 2006-2009 CHAIN PRICE INDEX REV TO +2.0% (PREV +2.1% 08:30 07/30 US 2006-2009 GDP REV TO -0.2% (PREV FLAT); 4Q06/4Q09 NOW -0.1% 08:30 07/30 US BEA: 2007 KEY DOWNWARD REVISIONS: PCE, HIGHER IMPORTS, GOVT 08:30 07/30 US 2007 PERSONAL SAVINGS RATE REV TO +2.1% (PREV +1.7%) 08:30 07/30 US 2007 GDP CHAIN PRICE INDEX UNREVISED AT +2.9% 08:30 07/30 US 2007 GDP REV TO +1.9% (PREV +2.1%);4Q/4Q +2.3% (PREV +2.5%) 08:30 07/30 US BEA: 2008 KEY DOWNWARD REVISIONS: NONRES FIXED, INVENTORIES 08:30 07/30 US 2008 PERSONAL SAVINGS RATE REV TO +4.1% (PREV +2.7%) 08:30 07/30 US 2008 GDP CHAIN PRICE INDEX REV TO +2.2% (PREV +2.1%) 08:30 07/30 US 2008 GDP REV TO FLAT (PREV +0.4%);4Q/4Q -2.8% (PREV -1.9%) 08:30 07/30 US BEA: LARGEST QUARTERLY GDP DROP NOW 4Q08; 1Q09 REVISED UP 08:30 07/30 US 2009 SERVICES PCE REVISED DOWN TO -0.8% VS PREV +0.1% 08:30 07/30 US BEA: 2009 KEY DOWNWARD REVISIONS:PCE,GOVT,RESIDENTIAL FIXED 08:30 07/30 US 2009 CORP PROFITS WITH CCADJ -0.4% VS PREV -3.8% 08:30 07/30 US 4Q08 GDP REV TO -6.8% (PREV -5.4%);CHAIN INDEX -1.2%(+0.1%) 08:30 07/30 US 1Q09 GDP REV TO -4.9% (PREV -6.4%);CHAIN INDEX +1.1%(+1.9%) 08:30 07/30 US 2Q09 GDP UNREV AT -0.7%;CHAIN INDEX REV TO +0.3%(PREV FLAT) 08:30 07/30 US 3Q09 GDP REV TO +1.6% (PREV +2.2%);CHAIN INDEX +0.7%(+0.4%) 08:30 07/30 US 4Q09 GDP REV TO +5.0% (PREV +5.6%);CHAIN INX -0.2%(+0.5%) 08:30 07/30 US 2Q REAL DISP INC +4.4% V 1Q +1.7%;SVNG RATE +6.2% V +5.5% 08:30 07/30 US 2Q ADV CORE CHN WT INDX FOR DOM PURCHASES +0.9% V 1Q +1.6% 08:30 07/30 US 2Q ADV CHAIN WT INDEX FOR DOM PURCHASES +0.1% VS 1Q +2.1% 08:30 07/30 US 2Q ADV NONDURABLES PCE +1.6% VS 1Q +4.2% 08:30 07/30 US 2Q ADV DUR PCE +7.5% VS 1Q +8.8%; SVCS +0.8% V +0.1% 08:30 07/30 US 2Q ADV GDP CHAIN PCE DEFLATOR +0.1% VS 1Q +2.1% 08:30 07/30 US 2Q ADV CHAIN WT INDEX EX FOOD, ENERGY +1.0% VS 1Q +1.7% 08:30 07/30 US 2Q ADV MKT-BASED PCE DEFLATOR -0.2% VS 1Q +1.7% 08:30 07/30 US 2Q ADV MKT-BASED CORE PCE DEFLATOR +1.0% VS 1Q +0.7% 08:30 07/30 US 2Q ADV NONRESIDENTIAL FIXED INVESTMENT +17.0% VS 1Q +7.8% 08:30 07/30 US 2Q ADV EXPRT GAP -$425.9B(1Q -$338.4B);IMPRT+28.8%(+11.2%) 08:30 07/30 US 2Q ADV RESIDENTIAL FIXED INVESTMENT +27.9% VS 1Q -12.3% 08:30 07/30 US 2Q ADV CHANGE IN PRIVATE INVENTORIES +$75.7B VS 1Q +$44.1B 08:30 07/30 US 2Q ADV PCE +1.6% VS 1Q +1.9%; GOVT +4.4% VS 1Q -1.6% 08:30 07/30 US 2Q ADV IMPLICIT PRICE DEFLATOR +1.8% VS 1Q +1.1% 08:30 07/30 US 2Q ADV GDP PCE DEFLATOR EX FOOD,ENERGY +1.1% VS +1.2% 08:30 07/30 US 2009 GDP CHAIN PRICE INDEX REV TO +0.9% (PREV +1.2%) 08:30 07/30 US Data: Employment Cost Index - Summary 08:30 07/30 CANADA MAY GDP INDUS PROD. +1.2% VS APRIL +0.1%; +7.2% YR/YR 08:30 07/30 CANADA MAY GDP WHOLESALE -1.8% VS APRIL +0.5%; +8.3% YR/YR 08:30 07/30 CANADA MAY GDP RETAIL +0.3% VS APRIL -1.8%; +4.7% YR/YR 08:30 07/30 CANADA MAY GDP MFCTRING +0.1% VS APRIL -0.3%; +8.6% YR/YR 08:30 07/30 CANADA MAY GDP SERVICES -0.1% VS APRIL -0.1%; +2.7% YR/YR 08:30 07/30 CANADA MAY GDP GOODS +0.6% VS APRIL +0.1%; +6.3% YR/YR 08:30 07/30 CANADA MAY GDP BASIC PRICES +0.1% VS APRIL -0.0%; +3.8% YR/YR 08:30 07/30 US 4Q07-2Q09 CONTRACTION PERIOD REV TO -2.8% SAAR (PREV -2.5) 08:30 07/30 US BLS: Q2 STATE/LOCAL COMP Y/Y AT +1.8% LOWEST ON RECORD('82) 08:30 07/30 US 2009 GDP REV TO -2.6% (PRV -2.4%);4Q/4Q +0.2% (PRV +0.1%) 08:30 07/30 US 2Q PRIV WAGES, SALARIES EX-INCENTIVE 2Q Y/Y +1.7%(1Q +1.4%) 08:30 07/30 US 1Q GDP REV TO +3.7% (PREV +2.7%);CHAIN INX +1.0%(+1.1%) 08:30 07/30 US 2Q WAGES,SALARIES +0.4% V 1Q +0.4%;2Q Y/Y +1.6%(1Q +1.5%) 08:30 07/30 US 2Q ADV CHAIN WEIGHT PRICE INDEX +1.8% VS 1Q +1.0% 08:30 07/30 US 2Q BENEFIT PAYMNTS +0.6% V 1Q +1.1%;2Q Y/Y +2.5%(1Q +2.2%) 08:30 07/30 US 2Q ADV GDP +2.4% V 1Q +3.7%;FINL SALES +1.3% (+1.1%) 08:30 07/30 US 2Q EMPL COST INDEX +0.5% V 1Q +0.6%;2Q Y/Y +1.8%(1Q+1.7%)

View article...

High frequency trading accounts for 60 per cent of U.S. equity trading, says Reuters

High frequency trading accounts for 60 per cent of U.S. equity trading, says Reuters
And the average trade is held for less than 10 seconds.......


 Pure Trading third again, Asia joins arms trading race


2010-07-19 20:46 ET - Street Wire


by Stockwatch Business Reporter

Pure Trading was the third most active of Canada's alternative trading systems in the week ended July 16, 2010. The leader, once again, was Alpha Trading Systems, which averaged 133.1 million shares per day. In second place was Chi-X Canada, with 34.9 million shares, followed by Pure Trading with 30.2 million shares. In fourth place was dark pool Match Now with 6.8 million, and in last was Omega ATS with 3.9 million shares per day. Combining their volumes, the ATSs accounted for 29.1 per cent of the market.

Alpha will introduce a new trading facility, Alpha IntraSpread, in the fourth quarter of this year. Alpha IntraSpread will offer a pair of new order types that will allow dealers to seek matches within their firm for guaranteed price improvement. Alpha Group chief executive officer Jos Schmitt says Alpha IntraSpread fees will be the lowest of any marketplace in Canada.

The two new orders types are "dark" and "seek dark liquidity." The dark order is fully hidden and will only trade with incoming seek dark liquidity orders. Alpha will cancel any seek dark liquidity order that does not trade immediately.

According to Reuters, high frequency trading accounts for 60 per cent of U.S. equity trading. Last week, the U.S. Commodity Futures Trading Commission began a series of meetings with exchanges, including equity exchanges, to decide if it should place controls on algorithmic or high frequency traders.

While the U.S. markets could face regulations, many news outlets say Asia is joining what the media has taken to calling the "global trading arms race." Reuters says that currently only 30 per cent of equity trading is high freqency in Tokyo and Singapore, however exchanges in Tokyo, Singapore and Hong Kong are planning upgrades to accommodate high frequency traders from the U.S. and Europe.

Hong Kong Exchanges & Clearing's website say it hopes to increases its order processing speed to 15,000 transactions a second from 3,000 transactions by 2011. Earlier this year, the Tokyo Stock Exchange and Fujitsu introduced their $145-million (U.S.) trading platform called Arrowhead. It executes trades in under five milliseconds. The TSE's website says it is hoping to increase its trading speed further in the next few years. Singapore is also trying to increase trading speeds. Its website says it is building the "world's fastest trading engine," SGX Reach, which it hopes to complete by the beginning of 2011. The SGX says the new $250-million (U.S.) engine will carry out trades in 90 microseconds, which is 55 times faster than Tokyo's Arrowhead.

FW: The Colombian Matinal Venezuela, Gold, construction

Here’s a quick summary from Colombia’s InterBolsa on the day’s (financial) news in Colombia

The Colombian Matinal
- Venezuela, Gold, construction
News of the day

Venezuela: After the complaint to the OAS, the president of Venezuela broke
diplomatic relations with Colombia, third time in recent history. Definitely
trade will be the most affected sector, but as this kind of issues has been
the constant for a decade Colombian companies have diversified its export
markets reducing their exposition to Venezuela. During the first five months
of 2010 exports to Venezuela decreased 71.4% YoY, imports 49.3% YoY, and the
trade balance -73.8% YoY.

Coffee: The National Coffee Growers Federation president forecasted that the
country will produce 14 million (50 kilos) sacs in 2015 from the current
production estimate of 10 million sacs in 2010. Renovation of 500,000
hectares will be the key to increase production.

Construction: The national bureau of statistics (DANE) informed that in May
construction licenses grew 2.1% MoM (housing +3.4%, other +1.6%), 40.3% YoY
and 19.6% YtD. In the monthly comparison licenses for offices increased
494%, commercial space 63.8%, and warehouses 44.9%.

Gold: Marc Cutifani, CEO of AngloGold Ashanti, affirmed that La Colosa could
be the gold discovery of the decade confirming the huge potential of
Colombia. La Colosa is in the exploration phase and could be in operations
in 2017. Key figures of AGA in Colombia: exploration 11 million hectares
since 2003, investment US$200 million (2003 – 2010), budget US$300 mm
(2009 – 2011), 34% of the global budget was invested in Colombia.

Business confidence: The business optimism continues to rise, balance of
2Q2010 this year is positive, the survey shows that today 60.4% percent of a
total of 1,128 employers surveyed by Datexco in 12 major cities ensure that
their views on the situation in the country is improving, while only 12%
believe things will get worse in coming months.
EEB (Empresa de Energía de Bogotá): The board of Directors proposed an
approx. US$110 million reduction of the common capital. This decision
requires the approval of the shareholders.

Financial Times: Commodity bulls

As money has come into the sector, the correlation between commodities and stocks has increased....

  July 21 2010 7:12 PM GMT

Commodity bulls
--

--
Analysts fail to appreciate how volatile Chinese demand could become

Read the full article at: http://www.ft.com/cms/s/3/608ce102-94d2-11df-b90e-00144feab49a.html

Sent from my iPad

Proactive Investors (AU) - Continental Coal closes landmark coal offtake and finance agreement

Continental Coal closes landmark coal offtake and finance agreement

South African focused coal company Continental Coal (ASX: CCC) has signed an off‐take and funding agreement with EDF Trading.

EDF Trading is a leader in the international wholesale energy markets and a wholly‐owned subsidiary of EDF S.A., a leading player in the energy industry.

Under the terms of the legally binding agreement, EDF Trading has secured all export quality thermal coal produced from the Project X, Vaalbank and Vlakvarkfontein mines for a period of 20 years, at the internationally‐recognised benchmark price for coal exported out of South Africa’s Richards Bay Coal Terminal – API4.

In addition, EDF Trading has agreed to provide Continental with US$20 Million, through an advance purchase of export coal from the Vaalbank, Project X and Vlakvarkfontein coal mines. The first drawing of the “coal loan,” (US$7m) expected later this month, will be used by the Company to fund outstanding and deferred acquisition costs for the Vaalbank and Project X projects.

Subsequent drawings of the “coal loan” will be used by the Company to fund mine optimisation studies, pre development costs and site establishment and capital construction costs.

The forecast combined initial production rates of export quality coal from the Vaalbank and Project X mines, attributable to Continental and subject to the off‐take agreement with EDF Trading, is expected to be at an initial rate of approx 145,000 per month (note this does not include the Company’s attributable production of domestic quality coal which will be in addition to this).

First coal production under the off‐take agreement is expected to occur in the first half of 2011 from the Vaalbank resource, with production from Project X expected to occur some six to nine months later.

Proactive Investors (AU) - Continental Coal closes landmark coal offtake and finance agreement

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Resume: The Perfect M&A Resume - Finance Career Management, Finance Career News - fins.com

et The Job Jul 20 2010

The Perfect M&A Resume

By Alina Dizik

As investment banks and M&A advisory firms continue to hire for mergers and acquisitions roles, presenting a well-written resume can help get you past the initial gatekeepers.
And even though many of the standard resume requirements hold true, there are some additional points to keep in mind when searching for M&A work, said experts. For one, a standard M&A resume is two pages instead of the traditional one-page resume, to leave room for the level of detail needed for describing M&A experience, said Mary Kier, vice chairman at Cook Associates, a Chicago-based executive search and M&A advisory services firm.
Another difference is the need to include as many numbers as possible to illustrate accomplishments and avoid elaborately-worded statements, said Kier. "Someone that wants to make a better career for themselves in M&A needs to be very cognizant of what the numbers look like and the financial elements of a business."
Here are additional ways to perfect your mergers and acquisitions resume:


Stress Specialized Knowledge

While it may seem better to show knowledge across the board, Brett Good, a district president at staffing firm Robert Half International Inc. said more companies are eager to see candidates that could be an exact fit. Include specialized knowledge about the sector and industry, regulatory policies or any complex modeling experience, said Good, who works with M&A applicants. This can be especially important in differentiating yourself as a fit for some corporate development positions.


Leave Out Company Names

Unless the deal is in the public domain, naming companies could mean a possible violation of the non-disclosure agreement. Instead of using official company names, Good suggested using telling details like "pet food manufacturer in excess of $100 million" to avoid a breach of confidentiality. This common mistake on a resume can cause a hiring manager to question your judgment as a potential employee, he said.


Integrate a Deal List

Kier asks the M&A applicants she works with to include a separate list of specific deals under each company heading. In addition to mentioning accomplishments for each chronologically listed position, use another indented list to explain your work on specific deals. "Show the complexity of those deals -- describe the quantitative structure, what did you do and what did that result in," she suggested. Providing these additional bullet points and including which side of the deal you focused on can help a hiring manager scan a resume quickly for applicable experience.
Wendy Enelow author of "Expert Resumes for Managers & Executives" said bullet points could read similar to the ones below and even be listed under their own section of a resume:
-- $22 million acquisition of Company A
Led financial due diligence, contract negotiations and final deal transaction for acquisition that propelled Company B into the rapidly expanding B2B logistics market in Northern Europe.
-- $40 million acquisition of Company X
Orchestrated complex 2-year due diligence for proposed acquisition. Advised Board of Directors and CEO not to proceed with transaction based on significant risk exposure and poor corporate credit rating.


Make a Short Version

While a two-page resume can be a good fit for a recruiter, consider providing an abridged version if you're simply sending an email introduction to someone within the firm, said Kier. A short bio including past deals and accomplishments can quickly provide relevant info to time-strapped managers who won't read the standard two-page resume, she said. "Deal guys have very little time and five minutes is very valuable to them," she said. "That one page document should grab their attention or you might lose your audience."


Point Out Global Reach

"Every job seeker -- particularly folks involved in M&A transactions -- should highlight their experience working, traveling and studying abroad, and their foreign language skills," said Enelow. Conveying international experience is always important because so many transactions have a global reach even if there's little physical travel involved.


Avoid the Summary

Even as some career experts tout summaries or objectives, most M&A recruiters said it's better left off this type of resume. Especially if you have deep experience, use the extra space to delve into the results from specific deals or flaunt your quantitative knowledge when explaining accomplishments. Since most summaries are simply an easy way to get important keywords to the top of the resume, be sure to still include industry terms throughout. (As a quick guide use the keywords most often listed in the job descriptions you're applying for when writing about your work.)


Skip Subjective Descriptions

Mentioning qualities like "self-motivated" or "articulate" can actually come off sounding too subjective and cause your resume to be passed over, said Steven Provenzano, author of "Top Secret Executive Resumes". Subjective language isn't helpful because a hiring manager already expects these qualities from someone who's been successful in previous M&A roles: "It's obvious that it's fluff material and you can't prove it false," he said. As you list information about each of your previous roles, use verifiable facts instead of opinion-based details to demonstrate high performance, he suggested.
---
As you write your resume, pay attention to which skills you emphasize. Tout the skills that are truly appropriate for an M&A position instead of simply conveying your business skills, said Tim White, a partner at Kaye/Bassman International Corp., a Plano, Texas-based executive search firm. "Orient everything on your resume so that it relates [to the role]," he says. And of course, skipping basics like spell-check, not using appropriate financial terms and presenting a cluttered format can also keep you out of the running.

Write to Alina Dizik here. Please be sure to include the title of the article in the subject line.

Resume: The Perfect M&A Resume - Finance Career Management, Finance Career News - fins.com

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AgBank’s Odd Cornerstone Investors

AgBank’s Odd Cornerstone Investors

If you thought the cornerstone investors for the Hong Kong leg of Agricultural Bank of China’s initial public offering were a motley crew, take a look at the cast for the Shanghai IPO (PDF, in Chinese).

Accounting for a whopping 40% of the mainland issue (assuming the greenshoe option is exercised), the 27 investors come from all corners of China’s economy and — with the exception of the occasional financial investor — it’s not immediately obvious why they might feel their business will be enhanced by taking a piece of AgBank.

Firms with some involvement in China’s agricultural sector, such as Cofco Ltd., China’s main grain producer, and China Tobacco Corp., may have a strategic reason for investing. Similarly, if AgBank is poised to taking a leading role in the urbanization of China’s hinterland, as it has been telling investors, then there may be some synergy for State Grid Corp. of China, the monopoly power distributor in all but five southern provinces, and China State Construction Engineering Corp.

But it’s more difficult to divine the strategic thinking that went into, say, Aviation Industry Corp. of China or China State Shipbuilding Corp. stumping up cash for a piece of AgBank. Ditto for China Aerospace Science & Industry Corp., China National Nuclear Corp. and Dongfeng Motor Corp.


Cornerstone investors became popular a few years back when Chinese companies started listing on the Hong Kong stock exchange. Little was known about many of the Chinese firms choosing Hong Kong for their IPO and foreign investors were wary of stumping up cash. One way to calm jitters was by taking on cornerstone investors, well-respected entities that would agree to take a percentage of the offer prior to the price being set, and to hold onto that stake for a pre-arranged period of time. That vote of confidence in the stock would then hopefully encourage other investors to buy in.

But in some cases, rather than stimulating interest, the involvement of cornerstone investors seems more an exercise in shoring up enough funds in advance so the issuer doesn’t have to rely on the market.

That seems to be the case with AgBank, which choose to push ahead with its IPO despite markets globally having been in the doldrums. Rather than savvy investors like sovereign wealth funds or well respected entrepreneurs — which make an appearance on the Hong Kong roster of AgBank’s cornerstone investors — the mainland leg is dominated by companies that, like AgBank, are owned by the Chinese government.

In an amazing mobilization of state resources, those investors were willing to pay a combined $4.8 billion for a piece of AgBank. They ended up paying around $4.1 billion after the price came in below the upper limit of the indicative price range.


So far AgBank has raised $19.23 billion in a dual listing in Hong Kong and Shanghai, still a way behind Industrial & Commercial Bank of China Ltd’s IPO in 2006 which raised $21.9 billion making it the biggest ever.


ICBC also made heavy use of cornerstone investors, signing up 23 firms for its A-share listing, many of which such as Cofco, the investment arm of mining group China Minmetals Corp, and China Life Insurance Co. have also turned out for AgBank. Similarly, the funds raised from them also accounted for about 40% of the Shanghai leg of ICBC’s IPO.

– Dinny McMahon, with contributions from Rose Yu

AgBank’s Odd Cornerstone Investors - China Real Time Report - WSJ

-- The MasterFeeds

Abu Dhabi eyes BP stake purchase FT.com / Middle East -

Abu Dhabi eyes BP stake purchase

By Andrew England in Abu Dhabi

Published: July 13 2010 14:53 | Last updated: July 13 2010 14:53

Sheikh Mohammed bin Zayed Al-Nahyan, Abu Dhabi’s powerful crown prince, said on Tuesday that the wealthy emirate was still considering whether to invest in BP.

“We are still thinking about it,” he was quoted as saying by Bloomberg after being asked about buying a stake in the troubled oil company. “We are looking across the board. We have been partners with BP for years.”

Sheikh Mohammed’s comments come just under a week after Tony Hayward, BP’s chief executive, made a brief visit to Abu Dhabi that included a meeting with the crown prince.

There has been much speculation that BP has been looking to investors in the Middle East to raise funds and help ward off any hostile takeover bids after its share price plummeted following the Gulf of Mexico oil spill.

BP on Monday said it had installed a new cap to the leaking well head. It reiterated hopes that by the end of the week its leaking Macondo well could be shut off, or all the oil could be captured using the new 40-tonne containment device. BP said on Tuesday that it would begin pressure tests on the new device at midday local time.

BP shares, which halved in value in the weeks following April’s explosion in the Gulf of Mexico, rose 16¾p or 4.2 per cent to 415.7p in London.

Abu Dhabi, capital of the United Arab Emirates, is home to a broad range of state investment vehicles, including the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, and a number of government-controlled companies that invest in energy related assets.

It also boasts about 95 per cent of the hydrocarbons resources of UAE, which is one of the few Gulf states in which international oil companies are able to get fully involved in upstream exploration and production operations.

BP describes the UAE as the centre of the company’s Middle East and Pakistan operations and the company’s relationship with the Gulf state goes back to the 1930s.

Sheikh Mohammed, who is a half-brother to Abu Dhabi’s ruler and the UAE’s president, is considered the driving force behind the massive development taking place in Abu Dhabi.

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© Copyright The Financial Times Ltd 2010.

FT.com / Middle East - Abu Dhabi eyes BP stake purchase

--The MasterFeeds

Colombian Exports Could Reach $40 Billion In 2010

charging ahead!!!

Colombian Exports Could Reach $40 Billion In 2010 

First Published Monday, 12 July 2010 11:29 pm - © 2010 Dow Jones 

(Updates with comments from Trade Minister; adds details and background) 

By Darcy Crowe 

Of DOW JONES NEWSWIRES 

BOGOTA -(Dow Jones)- Colombian exports are on pace to reach a record-breaking $40 billion this year as companies offset a decline in exports to neighboring Venezuela by finding new 

markets in Central America and the Caribbean, Trade Minister Guillermo Plata said Monday. 

The government expects exports to climb 22% in 2010 and break the $37.2 billion mark from 2008, despite a diplomatic dispute with Venezuela that has led to a 70% plunge in sales to that 

country, Plata said. 

"Colombia is diversifying its exports, and in the last three months, firms have started to offset the losses to Venezuela," he said. Venezuela has traditionally been Colombia's second-largest 

trading partner, surpassed only by the U.S. 

Venezuelan President Hugo Chavez essentially shut the border to Colombian products last year in a heated diplomatic spat with Bogota. President-elect Juan Manuel Santos has said that 

fixing diplomatic and trade relations with Venezuela will be one of his priorities. Chavez is slated to attend Santos' inauguration on Aug. 7. 

Plata said that even if the new administration is able to reopen the Venezuelan border to Colombian goods, the main goal should be diversifying exports. "Putting all our eggs in one basket 

is very risky," he said. 

Exports to Venezuela could also suffer even if relations are restored due an economic recession and strict currency controls. 

As a result of the problems with Venezuela, China is now Colombia's second-largest trading partner. Plata, however, highlighted that the products Colombia used to sell to Venezuela, such 

as manufactured and agricultural goods, are being redirected to markets in Central America and the Caribbean. 

This year's export boom, however, has been driven by sales of commodities like oil, coal, coffee and ferronickel. Manufactured and agricultural goods, among others, are down 4.5%, a 

figure that Plata says is the result of the problems with Venezuela, which was a key market for these types of items. 

"It's actually a very good number if you consider that sales to Venezuela are down 70% and shows that other markets are compensating for the decline," he said. 

Foreign direct investment, meanwhile, could reach $10 billion this year, as money continues to pour into Colombia's booming oil and mining industries, Plata said. Foreign direct 

investment in the country so far this year was $4.4 billion, 8.5% higher than in the same period in 2009. 

-By Darcy Crowe, Dow Jones Newswires; (57) 1 703 8953; darcy.crowe@dowjones.com 

Copyright © Automated Trader Ltd 2010 

FT.com / Companies / Banks - Daiwa buys KBC capital markets unit

FT.com / Companies / Banks - Daiwa buys KBC capital markets unit

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Chavez Crackdown on Brokerage `Thieves' Leaves Traders Jobless

Chavez Crackdown on Brokerage `Thieves' Leaves Traders Jobless

Venezuelan President Hugo Chavez. Photographer: Chris Ratcliffe/Bloomberg

Trader Jofmar Heredia was thrown out of work when Venezuelan President Hugo Chavez shut the unregulated currency market in May and seized about 40 brokerages, accusing them of setting artificial rates, capital flight and money laundering.

Heredia, 31, said she’s worried she may never find a job at a bank again because of Chavez’s crackdown.

“I’m unemployed and leaving my resume in banks but no one is calling,” said Heredia, who worked at Proinversion Sociedad de Corretaje CA in Caracas. “A lot of my friends in brokerages taken over by the government have been let go.”

The brokerage business is in danger of becoming obsolete in this socialist nation, said Noris Aguirre, a director at the clearing firm Caja Venezolana de Valores. Since November, Venezuela’s securities regulator has taken control of about 35 percent of the 112 trading firms and closed four after they were blamed for the 27 percent drop in the bolivar through May 18. That may leave up to 2,500 without jobs even as Chavez says his biggest economic priority is preserving employment.

Chavez, a 55-year-old former paratrooper who’s been in power for 11 years, says the country doesn’t need such companies and accuses them of exploiting loopholes to become rich. The government banned investment instruments known as mutuos in February -- which are akin to repurchase agreements, or repos -- and prohibited brokers from trading in a new currency market established last month. Securities firms use repos to borrow money to finance positions in bonds and other securities.

Chavez Takes Control

In a speech on May 23 to supporters, Chavez said his country should eliminate brokerages.

“We’re going to respond strongly against these thieves that are trying to wash their hands now,” Chavez said. “There’s no economic reason for the weakening of the bolivar. It’s a huge fraud against the republic.”

The government took control of the country’s largest brokerage, Econoinvest Casa de Bolsa, after raiding it on May 24, arresting four directors and ordering it to cease operations for a week pending an investigation. Of the 420 workers at the company, 126 have resigned, according to the nation’s regulator. The directors are being held at the national intelligence service in Caracas awaiting final charges against them for illegally trading foreign currency and association with delinquency.

Authorities are investigating “irregularities” at Econoinvest and are trying to guarantee the investments of its 44,000 clients, the Finance Ministry said today in a statement.

No Opportunities

Rene Buroz, the lawyer for the directors, declined to comment, as did an Econoinvest public relations official, who asked not to be identified in accordance with company policy.

The government took control of Finalca Casa de Bolsa today for failing to prove the origin of funds and putting its clients’ investments at risk after a raid on June 2, according to a resolution published in the Official Gazette.

Nelson Venero, a 32 year-old accountant, lost his job at the end of May after working for five years in the brokerage industry. After securing a job at AVC Valores Sociedad de Corretaje and a pay raise with a dollar bonus in October, he said he was fired after the government seized the company in May.

“This limits operations so much for brokerages that I don’t see any opportunities for them,” Aguirre of Caja Venezolana de Valores, which helps manage bonds and equities owned by brokerage houses, said in an interview. “They’re allowed to buy and sell company shares, but all of the companies that traded on the stock market have now been nationalized.”

Nationalizations

Chavez nationalized Cia Anonima Nacional Telefonos de Venezuela, the phone company known as Cantv, in 2007 to boost the state’s hold on the economy. The government has also taken over assets from Exxon Mobil Corp., ConocoPhillips, Ternium SA and Mexican cement maker Cemex SAB, which listed on the Caracas Stock Exchange.

The brokerage industry boomed between 2005 and 2010, growing 42 percent to more than 100 institutions, according to the securities regulator. Traders were hired to perform bond swaps as a means of obtaining dollars for companies that failed to receive government authorization to buy at the official exchange rate.

The bond trading set an implicit unregulated rate. That rate plunged to 8.2 per dollar on May 11, seven days before Chavez shut down that market.

‘Destined’

The central bank re-opened the market on June 9, setting the maximum rate and limiting the amount of dollars for purchase. The average rate is now about 5.3 bolivars per dollar. In addition, there are two official exchange rates of 2.6 bolivars per dollar and 4.3 per dollar for imports.

“This was destined to happen,” said Roberto Gonzalez, 39, a former partner at a Caracas-based brokerage who left the firm last year. He declined to identify the company.

Tomas Sanchez, president of the securities regulator known as CNV, said the number of brokerages will likely be cut to less than 20 and that most of the unemployed traders may be able to live off savings since they earned commissions in dollars.

“We know some workers will be affected by this situation but they enjoyed exorbitant benefits and have savings,” Sanchez said in an interview in Caracas on June 9. “Maybe the secretaries and couriers can be incorporated into the public banking system.”

‘Blackmail’

Heredia said that she wasn’t paid in dollars and received a commission of about 10 percent of the value of bolivar transactions.

Raul Maestres, a consultant at Korn/Ferry International, an executive search firm, said their offices in Caracas have been inundated with resumes.

“It’s not the best moment to find work,” Maestres said.

Venezuela’s unemployment rate rose to 8.1 percent in May, from 7.7 percent a year earlier, as the economy slid into the first recession in seven years. Gross domestic product shrank 3.3 percent last year and will likely contract 2.5 percent this year, according to the median forecast in a Bloomberg survey.

Brokers are “not going to blackmail us with the idea that this is going to hurt employment,” Ricardo Sanguino, the president of the congressional finance committee, said in an interview. “Many of them acted outside the law and created more problems than benefits.”

Venero, the unemployed accountant, said that he feels powerless to find work and that he may take a broker course in Panama, where Venezuelan banks have opened branches.

“I don’t think I’ll find work in the capital markets because they’ve been very hard hit,” he said in a phone interview. “A lot of friends are out of work.”

To contact the reporters on this story: Corina Rodriguez Pons in Caracas atcrpons@bloomberg.net; Daniel Cancel in Caracas at dcancel@bloomberg.net.

-- The MasterFeeds