A surprising hawkish tilt by India’s central bank in its April minutes has left money managers dumbfounded, prompting them to seek a higher risk premium for holding the nation’s bonds.The benchmark 10-year yield jumped as much as 17 basis points Friday, and ended last week 29 basis points higher, as minutes of the Reserve Bank of India’s April 4-5 meeting boosted speculation policy makers are moving toward raising interest rates. At the gathering, the RBI had maintained a neutral stance and lowered its inflation forecasts.“The RBI risks losing market credibility,” said Arvind Chari, head of fixed income and alternatives at Quantum Advisors Pvt. in Mumbai. They’ve “managed to sway the bond markets both ways as markets grapple with the assessments of their tone. Investors are building in a risk premium for the uncertainty, not necessarily of macro data points, but on the uncertainty of RBI’s response to it,” he said.The minutes add to … [Read more...] about Bond Investors Can’t Gauge What India’s Reserve Bank is Thinking
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Pros and cons Profit woes at Germany's largest lender have raised doubts about whether to keep or ditch its financial trading activities. Handelsblatt's finance editors weigh in on the debate. Published on April 20, 2018 4:17 pm PRO When deciding whether to radically shrink its securities trading business, Deutsche Bank should toss its ideological ballast overboard. On one hand, this means stepping back from today’s ritual bashing of investment banking, and on the other, quashing nostalgia for “the good old days” when Germany’s largest lender supposedly served customers in a selfless and respectable manner (something of a myth). Granted, the scandals that plunged the bank into crisis were rooted in investment banking. And yes, this corporate culture was famously uninhibited. Still, it must be remembered that Deutsche Bank used to scoop awards for being the world’s best bank. That success came from the edge it held over the German and European … [Read more...] about Sink or swim for Deutsche’s investment banking
The Hungarian financial group OTP announced on Thursday that it withdrew the appeal filed against Romania’s central bank’s decision to reject Banca Romaneasca’s takeover from Greek group NBG. OTP terminates the acquisition of Banca Romaneasca “due to the non-fulfilment of the “OTP Bank Plc. hereby informs the capital markets (…) that – due to the non-fulfilment of the conditions precedents by the longstop date – the share purchase agreement entered into on 26 July 2017 has been terminated. With reference to this development, on 18 April 2018, OBR withdrew the appeal filed against the National Bank of Romania’s first instance decision, in which NBR did not grant its approval with respect to the Transaction,” the bank said, in a press release sent to Budapest Stock Exchange. Banking industry sources told Business Review on March 14 that the National Bank of Romania (BNR), Romania’s central bank, rejected the takeover … [Read more...] about OTP withdrew the appeal filed against Romania’s central bank, terminates acquisition of Banca Romaneasca
By April 19, 2018, 2:47 AM EDT Hong Kong’s central bank is buying Hong Kong dollars for the first time since 2005. And lots of them, too. It follows a long slide in the local currency that took it to the lower end of its trading band against the U.S. dollar. In the first week alone of intervention, the Hong Kong Monetary Authority blew $6.5 billion of reserves. That’s raising questions about how long this can continue and the implications for the city’s finances.1. Should we be worried?Not for now. The central bank had $440 billion of foreign reserves as of end-March (seven times the city’s money in circulation), so in its first week used up just 1.5 percent of the total. The HKMA and the city’s government are resolute about maintaining the 35-year-old peg. What might rock the boat would be massive speculative attacks on the currency, as experienced in 1997. But even then, the central bank held sway.2. What happened in 1997?As the Asian financial … [Read more...] about Why Hong Kong’s Central Bank Intervened and Should We Worry?
Europe's largest bank, has reported the largest difference in male and female staff salaries among large organisations in the UK, as the government looks to pressure big companies to reduce gender pay disparities. HSBC on average paid men 59 percent more than women, the biggest difference among companies with more than 5,000 employees in Britain, according to a Reuters analysis of the published data using the mean as the measure. The next largest gender pay gaps were at Virgin Atlantic, where men received 58 percent more on average more than women, followed by a unit of Barclays, where female staff earned 48 percent less than male colleagues. The Gap Hoping to highlight gender discrimination and force companies into action, Prime Minister Theresa May has implemented long-planned reforms ordering companies with 250 or more employees to publish details of the salary difference between male and female employees by Wednesday evening and report back annually on the pay gap. HSBC … [Read more...] about HSBC Europe’s largest bank has worst gender pay gap