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Chinese stock market

Markets 12th May 2015

From brick and mortar to stocks and shares; China’s new investment frenzy

Until very recently, Chinese investors’ preferred choice was the real estate sector. Chronic new housing oversupply led many to fear an eventual burst of the real state bubble and to abandon their brick and mortar investment ambitions. Looking for fresh alternatives, many are rushing into the buying of shares in the local stock exchanges. The number of individual investment accounts grew 400% in the first quarter of this year.

ECB next meeting

Markets 11th May 2015

“Apparent coordination of the Fed and the ECB to cool down the market rally”

The Corner | May 11, 2015 | Yellen’s words about stocks being overvalued and bond yields too low was a signal that investors should not expect to enjoy the Fed’s cheap money forever. ECB’s policymakers have also warned about risks in the financial system that can arise in a situation of protracted low interest rates and abundant liquidity. “It is positive that central banks may be working together to avoid potential bubbles, yet the problem isn’t stocks but bonds,” Bankinter analysts pointed out.

Negative bond yields

Markets 10th May 2015

Does it make sense to keep buying despite negative yields?

The Corner | May 10, 2015 | Markets seem to be suffering from “uncertainty hangover,” as Bankinter analysts put it. They are worried about the short term, after the last US DGP weaker numbers and the decrease of appetite for German bunds. But isn’t that sensible to stop betting on negative yields? In the graph above: Current 10yr government bond yields across the EU. Source: Saint Louis Fed/Seeking Alpha.

 

A hand shake

Markets 7th May 2015

Europe’s barren landscape forces banks to make radical changes

BRUSSELS | May 7, 2015 | By Alexandre Mato | Plans to spin off Deutsche Bank’s retail business is the latest rumour to emerge from a changing European banking sector eagerly looking for ways to be more profitable under Basel III regulations. Too big to fail institutions are worried about a decline in their margins because of the low interest rates outlook. For these lenders, breaking up their investment and commercial business, as well as going on a shopping spree within the sector, seem to be solutions for growth.

 

Equities across the Atlantic

Markets 6th May 2015

Equities: Diverging trends in Europe and US

May 6, 2015 | UBS | April European cash equity volumes remained flat but were +27% ahead of the same month last year. In the US, combined average daily NYSE and NASDAQ value traded was down -4% m/m and -6% y/y. 

Question mark

Markets 6th May 2015

Spanish banks: earnings rise amid uncertainties

MADRID | May 6, 2015 | By Francisco López | Spanish banks first quarter results have been very good in terms of earnings, but a closer look at their recurrent business is not so positive. The seven banks listed on the Ibex 35 index earned € 1,677 million in the first three months of the year, up 32% from a year earlier.

A fence at sunset

Markets 5th May 2015

Regulatory changes drive shift in banks’ traditional business model

MADRID | May 5, 2015 | By JP Marín Arrese | Banks have undergone a massive overhaul to meet demanding requirements under Basel III. They have substantially strengthened their core capital over the last couple of years to keep abreast of increasing requests tabled by regulatory bodies. The leverage ratio under implementation represents a new challenge which is likely to have a significant influence on their business strategy.