Turkey is deciding whether shorting a stock is like insulting Turkishness:
Turkey is increasing scrutiny of short sales, joining countries from Greece to South Korea that have sought to prevent bearish bets from fueling declines in stocks after the worst global tumble since 2008.
Turkish regulators are investigating whether short sellers manipulated stock trading during the retreat that sent the ISE National 100 Index down 19 percent this month, Huseyin Erkan, chairman of the Istanbul Stock Exchange, said on Bloomberg HT television yesterday, the same day South Korea began a three- month ban on short sales. Greece started a two-month ban Aug. 9, while Italy increased disclosure rules for short sales in July.
Populist idiocy regarding short-sales is gaining ground:
A European market regulator is considering recommending a temporary ban on negative bets against stocks across the Continent in an effort to stop the tailspin in the markets.
The European Securities and Markets Authority, a body that coordinates the European Union’s market policies, has been requesting information from member states about such bets against stocks, known as short-sales.
European Union states are unlikely to impose a blanket ban on short-selling of stocks in response to volatile trading in bank stocks, a regulatory source familiar with the situation told Reuters.
… and others say ‘a little bit’:
Senior government sources tell Class CNBC, CNBC’s Italian partner, that a short-selling ban will be imposed in France and Italy after Thursday’s market close.
The report conflicts with what CNBC has been told by the European Securities and Markets Authority (ESMA). The independent European Union body, which provides a forum to national financial European regulators, told CNBC on Thursday that it is increasing its market surveillance following the rumor-led drop in French banks’ shares that took place on Wednesday and then again Thursday.
And, after all all the speculation above, it turned out to be FIBS:
The following countries have today announced or will shortly announce new bans on short-selling or on short positions: Belgium, France, Italy and Spain3. Information on these measures can be retrieved from the websites of the relevant competent authorities. The measures will take effect as of 12 August 2011.
The ESMA notice linked above also took care to deprecate that favoured whipping dog of arbitrary rulers everywhere, “spreading false news”.
A margin hike on gold contracts seems to have taken a bit of froth out of the market … for now:
Gold futures fell the most in seven weeks after CME Group Inc. (CME) boosted margins on Comex contracts, prompting investor sales after a three-day rally to a record topping $1,800 an ounce and as equities rebounded.
CME Group, owner of the world’s largest futures market, raised margins on gold contracts by 22 percent. The minimum amount of cash that speculators must keep on deposit for an initial account increased to $7,425 on a 100-ounce contract from $6,075. The Standard & Poor’s 500 Index rose as much as 3.2 percent after a drop in U.S. jobless claims.
…
Gold futures for December delivery declined $27.80, or 1.6 percent, to $1,756.50 at 11:35 a.m. on the Comex in New York. A close at the price would mark the biggest drop for a most-active contract since June 23. Earlier, the metal climbed as much as 1.9 percent to a record $1,817.60.
There has been a sharp decline in US house foreclosures, but that’s not as good a sign as one might think:
U.S. foreclosure filings dropped 35 percent last month to the lowest level in almost four years as lenders and state and federal agencies increased efforts to keep delinquent borrowers in their homes, RealtyTrac Inc. said.
A total of 212,764 properties received default, auction or repossession notices, the fewest in 44 months, the Irvine, California-based data seller said today. Filings fell on a year- over-year basis for the 10th straight month, and were down 4 percent from June. One in 611 households got a notice.
“The downward trend in foreclosure activity has now taken on a life of its own,” RealtyTrac Chief Executive Officer James J. Saccacio said in a statement. “Unfortunately, the falloff in foreclosures is not based on a robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market woes into 2012 and beyond.”
The decline in foreclosure notices began last year when attorneys general across the country began probing a practice known as “robo-signing,” in which lenders and servicers pushed through default documents without verifying their accuracy. Now federal and state officials are also contributing to the slowdown with payment assistance and loan modifications, RealtyTrac said.
There has been a revision to the chatter about SocGen – not French credit at all, never mind:
Societe Generale (GLE) SA, which yesterday plunged 15 percent, is among banks being targeted by investors because of its perceived dependence on short-term funding, according to analysts at Royal Bank of Scotland Group Plc.
“The primary culprit for the share price decline is funding concerns for European banks in general and French banks in particular,” analysts including Stefan Stalmann said in note to clients today. “The mix of euro doubts and rating fears in recent days and weeks may have dented the confidence of funding counterparties, which has then fed back into equity markets.”
… although some beg to differ:
“People are shorting banks as a way of shorting sovereign debt,” Tom Vosa, head of markets economics, Europe at National Australia Bank, told CNBC Thursday. “What we are really seeing is the markets deciding they don’t like the fiscal position in Europe.”
“The best way to get leverage and express that opinion is through shorting the banking system, because they know that the governments have to bail out the banks,” he added.
POW has made a major investment in a Chinese asset manager:
Power Corporation announced today that its bid to purchase 10% of China Asset Management Co. Ltd. (China AMC) from its current owner, CITIC Securities Co. Ltd. (CITIC Securities), has been accepted for an amount equivalent to approximately CDN $276 million. This purchase is the result of a competitive process.
China AMC was established in 1998 and was one of the first asset management companies approved by the China Securities Regulatory Commission. It is recognized as the leading company in the Chinese asset management sector, with approximately US$35 billion in assets under management (excluding annuity and separate accounts) at December 31, 2010.
The Canadian preferred share market had a good strong day, although rather uneven. PerpetualDiscounts gained 24bp, FixedResets were up 1bp and DeemedRetractibles won 76bp. There was a high degree of volatility, with BNA having the honour of having one of its issues ranked second-worst on the day, with another ranked best. Volume was above average.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9383 % | 2,164.1 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9383 % | 3,254.9 |
| Floater | 2.80 % | 2.59 % | 33,491 | 20.79 | 4 | -0.9383 % | 2,336.7 |
| OpRet | 4.90 % | 4.00 % | 57,525 | 0.86 | 9 | 0.1817 % | 2,433.0 |
| SplitShare | 5.43 % | 6.76 % | 60,210 | 2.58 | 4 | 0.0896 % | 2,444.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1817 % | 2,224.7 |
| Perpetual-Premium | 5.70 % | 5.41 % | 138,819 | 2.37 | 14 | 0.2616 % | 2,092.7 |
| Perpetual-Discount | 5.45 % | 5.53 % | 114,320 | 14.50 | 16 | 0.2352 % | 2,190.0 |
| FixedReset | 5.22 % | 3.36 % | 218,711 | 2.78 | 58 | 0.0099 % | 2,297.7 |
| Deemed-Retractible | 5.13 % | 4.88 % | 273,562 | 8.00 | 46 | 0.7636 % | 2,149.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| RY.PR.Y | FixedReset | -8.81 % | Not real. The issue traded 2,882 shares on the day in a tight range of 27.23-30 before closing at 24.53-27.29. Note that this is the “last” quote, not actually the “closing” quote. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.53 Bid-YTW : 6.02 % |
| BNA.PR.E | SplitShare | -4.60 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2017-12-10 Maturity Price : 25.00 Evaluated at bid price : 22.80 Bid-YTW : 6.79 % |
| BAM.PR.K | Floater | -3.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 15.90 Evaluated at bid price : 15.90 Bid-YTW : 3.33 % |
| CIU.PR.C | FixedReset | -2.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 22.94 Evaluated at bid price : 24.35 Bid-YTW : 2.98 % |
| BAM.PR.J | OpRet | -1.90 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2018-03-30 Maturity Price : 25.00 Evaluated at bid price : 26.27 Bid-YTW : 4.64 % |
| ELF.PR.G | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 19.84 Evaluated at bid price : 19.84 Bid-YTW : 6.06 % |
| FTS.PR.G | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 23.69 Evaluated at bid price : 25.34 Bid-YTW : 3.56 % |
| BAM.PR.X | FixedReset | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 22.62 Evaluated at bid price : 23.75 Bid-YTW : 3.78 % |
| RY.PR.A | Deemed-Retractible | 1.04 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.25 Bid-YTW : 4.82 % |
| RY.PR.F | Deemed-Retractible | 1.04 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.20 Bid-YTW : 4.85 % |
| ALB.PR.B | SplitShare | 1.05 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-02-28 Maturity Price : 21.80 Evaluated at bid price : 22.10 Bid-YTW : 1.30 % |
| BAM.PR.T | FixedReset | 1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 22.74 Evaluated at bid price : 24.00 Bid-YTW : 4.10 % |
| BNS.PR.K | Deemed-Retractible | 1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.82 Bid-YTW : 4.94 % |
| RY.PR.D | Deemed-Retractible | 1.08 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.24 Bid-YTW : 4.88 % |
| GWO.PR.I | Deemed-Retractible | 1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.05 Bid-YTW : 6.14 % |
| CIU.PR.A | Perpetual-Discount | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 22.60 Evaluated at bid price : 22.95 Bid-YTW : 5.00 % |
| FTS.PR.H | FixedReset | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 23.43 Evaluated at bid price : 25.49 Bid-YTW : 2.89 % |
| BNS.PR.J | Deemed-Retractible | 1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-29 Maturity Price : 25.00 Evaluated at bid price : 25.47 Bid-YTW : 4.47 % |
| RY.PR.C | Deemed-Retractible | 1.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 4.85 % |
| BMO.PR.N | FixedReset | 1.12 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-25 Maturity Price : 25.00 Evaluated at bid price : 27.16 Bid-YTW : 2.87 % |
| IAG.PR.A | Deemed-Retractible | 1.16 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.75 Bid-YTW : 6.43 % |
| BMO.PR.K | Deemed-Retractible | 1.18 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-11-25 Maturity Price : 25.00 Evaluated at bid price : 25.66 Bid-YTW : 4.67 % |
| CM.PR.P | Deemed-Retractible | 1.18 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-10-29 Maturity Price : 25.00 Evaluated at bid price : 25.65 Bid-YTW : 3.44 % |
| SLF.PR.E | Deemed-Retractible | 1.26 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.72 Bid-YTW : 6.34 % |
| MFC.PR.C | Deemed-Retractible | 1.33 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.28 Bid-YTW : 6.61 % |
| RY.PR.G | Deemed-Retractible | 1.34 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.24 Bid-YTW : 4.88 % |
| RY.PR.E | Deemed-Retractible | 1.37 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.37 Bid-YTW : 4.82 % |
| HSB.PR.D | Deemed-Retractible | 1.40 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 5.33 % |
| CIU.PR.B | FixedReset | 1.45 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-01 Maturity Price : 25.00 Evaluated at bid price : 27.27 Bid-YTW : 3.18 % |
| SLF.PR.D | Deemed-Retractible | 1.50 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.66 Bid-YTW : 6.31 % |
| BNS.PR.M | Deemed-Retractible | 1.65 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.66 Bid-YTW : 4.71 % |
| FTS.PR.E | OpRet | 1.73 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 27.11 Bid-YTW : 1.64 % |
| SLF.PR.C | Deemed-Retractible | 1.87 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.74 Bid-YTW : 6.27 % |
| MFC.PR.B | Deemed-Retractible | 1.88 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.66 Bid-YTW : 6.56 % |
| HSB.PR.C | Deemed-Retractible | 2.29 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.60 Bid-YTW : 5.41 % |
| GWO.PR.N | FixedReset | 2.31 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 3.53 % |
| BNA.PR.C | SplitShare | 3.81 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 21.55 Bid-YTW : 6.93 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| MFC.PR.A | OpRet | 227,121 | TD crossed 21,200 and 100,000 at 25.25. RBC crossed 25,000 and 75,200 at the same price. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : 4.00 % |
| TRP.PR.C | FixedReset | 157,362 | Nesbitt crossed blocks of 125,000 and 25,000, both at 25.50. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-11 Maturity Price : 23.36 Evaluated at bid price : 25.51 Bid-YTW : 3.05 % |
| BNS.PR.T | FixedReset | 130,123 | Desjardins crossed 50,000 at 27.00; RBC crossed 25,000 at 27.05 and 50,000 at 27.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 26.99 Bid-YTW : 3.26 % |
| GWO.PR.N | FixedReset | 105,511 | TD crossed 100,000 at 24.40. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 3.53 % |
| RY.PR.E | Deemed-Retractible | 104,972 | RBC crossed blocks of 47,700 and 35,000, both at 24.30. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.37 Bid-YTW : 4.82 % |
| BNS.PR.M | Deemed-Retractible | 42,073 | Desjardins crossed 12,500 at 24.45. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.66 Bid-YTW : 4.71 % |
| There were 37 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| RY.PR.Y | FixedReset | Quote: 24.53 – 27.29 Spot Rate : 2.7600 Average : 1.5437 YTW SCENARIO |
| ELF.PR.G | Perpetual-Discount | Quote: 19.84 – 20.62 Spot Rate : 0.7800 Average : 0.6075 YTW SCENARIO |
| BNA.PR.E | SplitShare | Quote: 22.80 – 23.50 Spot Rate : 0.7000 Average : 0.5394 YTW SCENARIO |
| FTS.PR.G | FixedReset | Quote: 25.34 – 25.76 Spot Rate : 0.4200 Average : 0.3134 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 26.27 – 26.75 Spot Rate : 0.4800 Average : 0.3817 YTW SCENARIO |
| HSB.PR.E | FixedReset | Quote: 27.11 – 27.40 Spot Rate : 0.2900 Average : 0.1967 YTW SCENARIO |