The International Organisation of Securities Commissions (IOSCO) has proposed 13 sound practices for large market intermediary firms to consider in the implementation of their internal credit assessment policies and procedures.
In a notice obtained from IOSCO’s website, the global regulator said it believes that identifying sound practices regarding the suitable alternatives to credit ratings for assessing credit risk should reduce the potential overreliance of large intermediaries on credit rating agencies (CRAs).
The report entitled: ‘Sound Practices at Large Intermediaries: Alternatives to the Use of Credit Ratings to Assess Creditworthiness’, said the reduction would help increase investor protection, while contributing to market integrity and financial stability.
Hans Hoogervorst, Chairman of the International Accounting Standards Board (IASB), has today delivered a speech in Seoul, Korea, highlighting the potential challenges linked to companies’ reporting of alternative performance measures, also known as non-GAAP (generally accepted accounting principles) measures. He said there are no problems with companies providing additional information to investors, but highlighted the need for some ground rules to be established to prevent the presentation of misleading information.
Read the full full press release and speech.
Please join us for a webcast July 2 2015 on the Chinese banking sector.
As part of our series of Asia-Pacific banking webcasts, we will be discussing the emerging credit issues for major banking systems in Asia-Pacific.
This webcast is provided on a complimentary basis. Register now.
Qiang Liao, Senior Director, Financial Institutions Ratings
Gavin Gunning, Senioe Director, Financial Institutions Ratings (Moderator)
Please vote for Standard & Poor’s in the AsiaMoney FX and Fixed Income Poll 2015.
China continues to broaden foreign investor access to their onshore bond market. Luxembourg is the latest country being granted an RQFII quota by the People’s Bank of China, followed Canada, Germany, Qatar and Australia. According to the data published by State Administration of Foreign Exchange (SAFE) on April 29, 2015, the approved RQFII investment quota reached CNY 363 billion, representing a 22% increase from December, 2014. The number of the qualified institutions also rose from 93 to 121.
Among the qualified participants, Hong Kong remains to be the biggest player, with an RQFII quota allocation of around 74%, see exhibit 1 for the country breakdown. Outside of Hong Kong, the most significant development observed was by South Korea, with its approved quota jumping 10 times to CNY 30 billion, while the number of the qualified institutions climbed from 1 to 14 since last December.
– See more at: http://www.indexologyblog.com/2015/05/12/foreign-investor-access-to-onshore-chinese-bond-markets-grows/
Ind-Ra Market Wire: RBI’s New 30-year Bond Issuance to Offer a Benchmark to Corporates for Long-Term Funding
Ind-Ra-Mumbai-18 June 2015: The new 30-year government security (G-sec) bond issuance by Reserve Bank of India (RBI) on 19 June 2015 will fix structural issues for Indian issuers which are in need of long-term funding especially infrastructure projects, says India Ratings and Research (Ind-Ra).
As has been the global experience, a long-tenor government security facilitates setting a benchmark for other issuers such as banks, financial institutions and corporates to access long-term funding through capital markets. Lack of a benchmark has often been sighted as a shortcoming, which prevents Indian institutions from raising much required long-term funding from capital markets.
To read the complete press release, CLICK HERE
- The joint handbook assists the production of internationally comparable securities statistics.
- It covers the conceptual framework for statistics on debt and equity securities.
- Set of detailed presentation tables using the concepts and guidelines.
The Bank for International Settlements (BIS), the European Central Bank (ECB) and the International Monetary Fund (IMF) today jointly released the Handbook on Securities Statistics.
The importance of securities markets in intermediating financial flows, both domestically and internationally, underscores the need for relevant, coherent and internationally comparable statistics. This need was recognised by the G20 Data Gaps Initiative, launched in the aftermath of the 2007-08 global financial crisis with the support of the G20 finance ministers and central bank governors and the IMF’s International Monetary and Financial Committee.
Our analysis May 4 reported on the bond market view of HSBC Holdings PLC (HSBC). Citigroup Inc. plays a similar role in the financial services business across the Atlantic. From a bond market perspective, how does Citigroup Inc. compare to HSBC Holdings PLC? We answer that question in this note in light of our analysis of Citigroup Inc. on October 1, 2014.
The first thing to note is that Citigroup Inc., not surprisingly, is much more heavily traded in the U.S. fixed rate corporate bond market, as shown in the trading of fixed-rate senior non-call debt on May 4, 2015.
Eleven bonds of HSBC Holdings PLC and 34 bonds of HSBC USA Inc. traded, and 56 bonds of Citigroup Inc. traded. The underlying principal amount traded on the Citigroup Inc. bonds was $157 million, compared to $107 million for six HSBC Holdings PLC-related issuers.
Click Here To Read More
The Bank for International Settlements (BIS) today released OTC derivatives statistics at end-December 2014.
- OTC derivatives markets contracted in the second half of 2014. The notional amount of outstanding contracts fell by 9% between end-June 2014 and end-December 2014, from $692 trillion to $630 trillion. Exchange rate movements exaggerated the contraction of positions denominated in currencies other than the US dollar. Yet, even after adjusting for exchange rate movements, notional amounts were still down by about 3%.
- The gross market value of outstanding derivatives contracts – which provide a more meaningful measure of amounts at risk than notional amounts – rose sharply in the second half of 2014. Market values increased from $17 trillion to $21 trillion between end-June 2014 and end-December 2014, to their highest level since 2012. The increase was likely driven by pronounced moves in long-term interest rates and exchange rates during the period.
- Central clearing, a key element in global regulators’ agenda for reforming OTC derivatives markets to reduce systemic risks, made further inroads. In credit default swap markets, the share of outstanding contracts cleared through central counterparties rose from 27% to 29% in the second half of 2014. In interest rate derivatives markets too, central clearing is becoming increasingly important.
Developments in the latest OTC derivatives statistics, including tables with the latest data, are summarised in the statistical release. Additional details and historical data are available on the BIS website. OTC derivatives statistics at end-June 2015 will be released on or before 15 November 2015.
Queries regarding the OTC derivatives statistics may be directed to statistics$bis.org (where “$” denotes “@”).
As of April 30, 2015, the fixed income ETF market in China totaled CNY 8 billion; it is only 0.03% of the total market value tracked by the S&P China Bond Index. The fixed income ETF market in China is small when comparing with that of the U.S., which totaled USD 321 billion as of the same date.
Unsurprisingly, most Chinese investors favor high-risk and high-return products. They tend not to find the fixed income assets appealing, especially after the recent China stock rally. However, Chinese investors often overlook the risk component. As of April 30, 2015, the three-year annualized risk of China’s equity market1 is 19.5% versus 2.77% of Chinese fixed income, represented by the S&P China Bond Index.
– See more at: http://www.indexologyblog.com/2015/05/14/what-are-the-missing-pieces-in-chinese-fixed-income-2/
In what promises to be a transformational moment for ESG integration and investment manager accountability, CalPERS will require all of its managers to identify and articulate ESG in their investment processes.
CalPERS staff led by Anne Simpson, senior portfolio manager and director of global governance, presented the ESG manager expectations, and draft sustainable investment guidelines, to the investment committee this week.
Read more http://www.top1000funds.com/news/2015/05/22/calpers-gives-its-managers-esg-ultimatum/
Did you know : CCRA curriculum covers ESG principles from Equator Principle Association : http://www.equator-principles.com/
[This is Part 4 in a series about China’s property market. See here for part 1, part 2, and part 3.]
When thinking about China’s property market, the image that often springs to mind is that of the endless seas of residential towers one sees when flying into Beijing or Shanghai. And indeed, the demand for investment in residential housing has been a tremendous catalyst for growth in China and around the world. But there is another part of the property story about which less is known. The nonresidential real estate market consists of mainly office buildings and retail property like shopping centers and hotels. Nonresidential makes up approximately 30 percent of China’s real estate market in terms of investment, and total sales of the nonresidential market account for about 20 percent of the total (see chart 1).
[This is Part 3 in a series about China’s property market. See here for part 1 and part 2.]
Several years ago there was an ill-fated theme in the investment community of a ‘great rotation’ of investor capital out of government bonds and into equities. There is discussion once more about a great rotation, but now it is in China. One part of that rotation is the shifting of investors’ desire from owning property to owning financial assets, such as equities and bonds. In this post, we will review the Chinese household’s balance sheet, and look at how the various investment options available have performed.
This is part 2 in a series about China’s property market. See here for part 1.
The property market in China is clearly in a correction. As we showed in a previous post, price growth is deep in negative territory and all signs are pointing to further weakness ahead. This begs the question of whether or not the long-called-for-but-always-avoided hard landing in China could be on the cards. After all, was it not the combination of an overheated housing market and credit build-up that so recently brought low the United States and many other economies? In this post, we try to place China’s recent build-up in a historical context, looking at previous housing “bubbles” and their aftermath.
This is part 1 in a series about China’s property market.
In this post we try to give a broad update of China’s property market the past several years. We take a look at housing prices versus quantity of floor space then we’ll wrap up with an overview of the housing policies Beijing implements in order to tame, and stimulate, the property market. One consistent observation is that the property market is in the midst of a correction, of which we have yet to see the bottom.