Eventful October, says Deutsche Bank
26 November 2014 London
Image: Shutterstock
October was an eventful month for European equities, and securities lending was no exception, according to research from Deutsche Bank.
Gyrations in equity indices spurred fast money shorting and covering, but also generally served to cause investors to reduce risk across the board.
In the US, despite the difficult market conditions, some new mergers and approaches were announced, including approaches for Spirit by Greene King and subsequently by C&C, an offer for the balance of Havas by Bollore and an approach for Salamander Energy from Ophir Energy.
The biggest occurrence in the event-driven universe during the month was the withdrawal of an offer for Shire by Abbvie, which was a function of US political moves against inversion trades and not a result of market volatility.
According to Deutsche Bank, the major volatility in the market dampened an otherwise active trend in capital raising continuing from September.
In October, regulators were relatively quick to impose short selling bans as extreme market swings saw a number of stocks trade down.
Italian banks Monte dei Paschi and Banco Carige were subject to bans extending into November as capital raisings required by the European Central Bank weighed over them. Portugal Telecom was another stock subject to bans during the month.
Deutsche Bank has said that, throughout October, it continued to see a slew of capital raising events in the Hong Kong property and insurance sectors with the two most notable names being Agile Property Holdings and China Taiping Insurance.
The Japanese Topix index, which tumbled 11 percent in the first half of November, managed to surge 13 percent in the second half closing the month at 1333.64, the highest in 16 months.
The short-selling on Tokyo’s bourse climbed the highest level on record, 36.7 percent of the total trading value.
The Nikkei 225 Stock Average closed at a 7 year high. This quick rebound in the Japanese market is attributed to the nation’s pension fund unveiling its new asset allocation.
The fund’s allocation target for local shares has increased to about 25 percent from 12 percent and boosted its holdings of foreign bonds and stocks to around a combined 30 percent from 23 percent, while reducing domestic debt to the 40 percent level from 60 percent.
Gyrations in equity indices spurred fast money shorting and covering, but also generally served to cause investors to reduce risk across the board.
In the US, despite the difficult market conditions, some new mergers and approaches were announced, including approaches for Spirit by Greene King and subsequently by C&C, an offer for the balance of Havas by Bollore and an approach for Salamander Energy from Ophir Energy.
The biggest occurrence in the event-driven universe during the month was the withdrawal of an offer for Shire by Abbvie, which was a function of US political moves against inversion trades and not a result of market volatility.
According to Deutsche Bank, the major volatility in the market dampened an otherwise active trend in capital raising continuing from September.
In October, regulators were relatively quick to impose short selling bans as extreme market swings saw a number of stocks trade down.
Italian banks Monte dei Paschi and Banco Carige were subject to bans extending into November as capital raisings required by the European Central Bank weighed over them. Portugal Telecom was another stock subject to bans during the month.
Deutsche Bank has said that, throughout October, it continued to see a slew of capital raising events in the Hong Kong property and insurance sectors with the two most notable names being Agile Property Holdings and China Taiping Insurance.
The Japanese Topix index, which tumbled 11 percent in the first half of November, managed to surge 13 percent in the second half closing the month at 1333.64, the highest in 16 months.
The short-selling on Tokyo’s bourse climbed the highest level on record, 36.7 percent of the total trading value.
The Nikkei 225 Stock Average closed at a 7 year high. This quick rebound in the Japanese market is attributed to the nation’s pension fund unveiling its new asset allocation.
The fund’s allocation target for local shares has increased to about 25 percent from 12 percent and boosted its holdings of foreign bonds and stocks to around a combined 30 percent from 23 percent, while reducing domestic debt to the 40 percent level from 60 percent.
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