Red letter day! There was an intelligent quote about high frequency trading in the papers:
Murray Leith, director of investment research at Vancouver-based Odlum Brown Ltd., agrees that markets should be policed properly to eliminate flash crashes and maintain investor confidence.
But, he says, he’s interested in finding investments that are undervalued but will rise to their true value in the long term, as opposed to the minute machinations that high-frequency traders are interested in.
“If I see something that I like at the right price, I buy it. If it’s not at the right price, I don’t. It’s as simple as that.”
He adds that there can even be a bright side of volatility – “it potentially creates opportunity that may not otherwise exist.”
Naturally, this was balanced by something moronic:
Opponents cite increased volatility in the markets, which makes pricing less efficient, as well as the erosion of investor confidence – especially because of a few unsettling, extreme events in which high-frequency trading played a role. One of those occurred in August, when Knight Capital Group Inc. lost $440-million (U.S.) after an upgrade to its computerized trading system went awry, causing share prices on the New York Stock Exchange to fluctuate wildly after Knight put out a huge number of buy and sell orders.
The Knight Capital Group whoopsy had nothing to do with High Frequency Trading. Nothing.
And something a little puzzling…
To really understand high-frequency trading, investors have to grasp three concepts about markets, [professor at the University of Toronto’s Rotman School of Management who also holds the John H. Watson chair in value investing] Prof. [Eric] Kirzner says.
…
The third is that there are two basic types of traders, high-frequency and slow-moving. For the latter, think mutual-fund companies, pension funds and everyday retail investors.
Happy to agree that everyday retail investors are slow-moving. But by and large, HFT helps them by narrowing the spread; retail is very fond of market orders.
But slow-moving mutual-fund companies and pension funds? Why are they slow moving? Do they not charge high enough fees to compete properly? If their incompetence is having a measurable effect on performance, why aren’t they fired?
There’s some noticable capital flight from Greece:
Coca-Cola Hellenic Bottling SA, (EEEK) the world’s second-largest Coca-Cola bottler, plans to move its main stock listing from Athens to London as Greece’s largest company by market value flees the epicenter of Europe’s debt crisis.
The move will make it eligible for inclusion in the benchmark FTSE 100 Index. A new company established in Switzerland by one of the bottler’s main shareholders will make a share-exchange offer for Coca-Cola Hellenic and seek a primary listing in London, according to an Athens bourse filing today. Coca-Cola HBC AG will also seek to list in New York.
…
Coca-Cola HBC operates in 28 countries across three continents and employs more than 40,000 people, generating sales last year of 6.9 billion euros ($8.9 billion). Ninety-five percent of its business and shareholders are outside Greece.Switzerland was chosen as the location for the new company because of its stable economy and regulatory environment and the ease of doing business there, according to the statement. The country is among the existing markets of the business.
Here’s why we need space exploration: one-hundred bazillion carats!
New research suggests that a massive, star-scorched planet in the Cancer constellation, not far from our solar system, is made in large part of diamonds, opening new vistas on the way scientists understand how planets are created.
The planet, 55 Cancri e, is twice the size of Earth and so rich in carbon that it holds at least three times our planet’s mass in diamonds, according to a new paper that has been accepted for publication in the journal Astrophysical Journal Letters.
…
“We’re talking about a rocky planet. Not much gas, almost entirely solid. The outermost layer is at an extremely high temperature … There could also be a lot of diamonds on the surface because of the geophysical movements in the interior. The diamonds could come to the surface very easily,” Dr. [Nikku] Madhusudhan [a fellow at Yale University’s Center for Astronomy & Astrophysics] said in an interview.“But just below the surface there is a very thick layer, about a third of the whole radius [of the planet], just in diamonds.”
It was a mildly positive day for the Canadian preferred share market, with PerpetualPremiums up 5bp, FixedResets flat and DeemedRetractibles gaining 2bp. Volume was low, despite the closing of two new issues, GWO.PR.R and BRF.PR.C.
| 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 | 0.0000 % | 2,434.6 |
| FixedFloater | 4.29 % | 3.62 % | 35,215 | 18.15 | 1 | 0.2578 % | 3,746.6 |
| Floater | 3.01 % | 3.03 % | 62,115 | 19.66 | 3 | 0.0000 % | 2,628.8 |
| OpRet | 4.63 % | 2.17 % | 63,275 | 0.63 | 4 | 0.0669 % | 2,565.3 |
| SplitShare | 5.43 % | 4.94 % | 73,934 | 4.52 | 3 | -0.1055 % | 2,825.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0669 % | 2,345.8 |
| Perpetual-Premium | 5.29 % | 2.27 % | 88,139 | 0.37 | 27 | 0.0518 % | 2,302.3 |
| Perpetual-Discount | 5.02 % | 5.01 % | 50,644 | 15.50 | 4 | 0.0514 % | 2,575.3 |
| FixedReset | 4.98 % | 3.04 % | 185,115 | 3.85 | 73 | 0.0000 % | 2,437.7 |
| Deemed-Retractible | 4.94 % | 3.24 % | 120,623 | 0.78 | 47 | 0.0212 % | 2,380.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| Zip! Zero! Zilch! | |||
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.R | Deemed-Retractible | 332,564 | New issue settled today. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 4.83 % |
| TD.PR.G | FixedReset | 116,709 | TD crossed 100,000 at 26.55. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.52 Bid-YTW : 2.02 % |
| SLF.PR.B | Deemed-Retractible | 54,773 | Nesbitt crossed blocks of 10,000 and 42,900, both at 24.60. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.60 Bid-YTW : 5.07 % |
| SLF.PR.F | FixedReset | 52,273 | TD crossed 50,000 at 26.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.44 Bid-YTW : 2.69 % |
| SLF.PR.E | Deemed-Retractible | 43,275 | Desjardins crossed 38,300 at 23.55. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.55 Bid-YTW : 5.35 % |
| ENB.PR.N | FixedReset | 31,330 | RBC crossed 25,000 at 25.40. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-10-11 Maturity Price : 23.23 Evaluated at bid price : 25.40 Bid-YTW : 3.85 % |
| There were 20 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAG.PR.E | Deemed-Retractible | Quote: 26.43 – 26.92 Spot Rate : 0.4900 Average : 0.2769 YTW SCENARIO |
| BAM.PR.C | Floater | Quote: 17.40 – 18.40 Spot Rate : 1.0000 Average : 0.8001 YTW SCENARIO |
| TCA.PR.X | Perpetual-Premium | Quote: 51.40 – 51.84 Spot Rate : 0.4400 Average : 0.2975 YTW SCENARIO |
| PWF.PR.K | Perpetual-Premium | Quote: 25.11 – 25.39 Spot Rate : 0.2800 Average : 0.1812 YTW SCENARIO |
| CU.PR.C | FixedReset | Quote: 25.94 – 26.20 Spot Rate : 0.2600 Average : 0.1726 YTW SCENARIO |
| RY.PR.I | FixedReset | Quote: 25.71 – 25.94 Spot Rate : 0.2300 Average : 0.1530 YTW SCENARIO |