Friday, July 31, 2009

Stock Market

A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008 [1]. The total world derivatives market has been estimated at about $791 trillion face or nominal value, [2] 11 times the size of the entire world economy. [3] The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.)

The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Börse and the Paris Bourse, now part of Euronext.

Thursday, July 30, 2009

World Forex

TOKYO (Dow Jones)–The U.S. dollar declined in Asia Wednesday, hitting a seven-month low against the British pound and an eight-month low versus the Australian dollar, as gains in regional stocks helped lift investor demand for riskier currencies.
Sterling touched $1.6658 during the session, the highest in seven months. The Australian dollar, partly helped by the country’s surprisingly strong gross domestic product data, reached $0.8265 - a level unseen since September 29.
The euro also gained versus the U.S. currency.
“With recent stock-market rises as well as signs that the (global) economy is bottoming out, players feel like taking risks,” said Yuji Kameoka, currency analyst at Daiwa Institute of Research.
In early Asian hours, higher Asian shares encouraged short-term players in the region to buy riskier, higher-yielding currencies against the low-yielding U.S. and Japanese units, dealers said. Japan’s benchmark Nikkei 225 Stock Average index was up 0.5% at 9754.86 as of 0400 GMT.
Along with the sterling, the euro rose $1.4326 from New York late Tuesday to $1.4330. Traders say it could reach $1.4500 in the near term.
The U.S. dollar, which is seen as a safe-harbor currency during financial storms, took a beating as investor confidence improved. The Dollar Index - which measures the value of the US dollar against six other currencies, including the euro - fell to near a six-month low of 78.34 from Tuesday’s level of 79.16.
Weighing on the greenback were not only rises in Asian shares but also Australia’s first-quarter GDP, which rose 0.4% from the previous three months, beating market expectations for a 0.1% gain.
But the U.S. currency gained against the yen, which traders consider to be even safer than the greenback.
Next on players’ agenda is the European Central Bank’s planned policy meeting on Thursday. However any impact will probably be muted if the outcome of the meeting is in line with market expectations, dealers said.
The markets anticipate that the ECB will keep its interest rate unchanged, but will release details of its plan to purchase around EUR60 billion in covered bonds.

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Russia calls for revision of SDR currency basket

YEKATERINBURG, Russia (Reuters) - The International Monetary Fund (IMF) should expand the basket of Special Drawing Rights to include the Chinese yuan, commodity currencies and gold, a senior Kremlin official said on Tuesday.
The SDR is an international reserve asset allocated to member countries with its exchange rate determined by a basket of currencies, at the moment including dollar, euro, yen and sterling. A review of the basket is due in November 2010.
“The rouble, yuan deserve to be included in the SDR basket,” Kremlin economy aide Arkady Dvorkovich told a news conference ahead of the first summit of Brazil, Russia, India and China, known as BRIC, in the Russian city of Yekaterinburg.
“It is important that the composition of the basket also reflects the role of commodities in the global economy,” Dvorkovich said, naming Australian and Canadian dollars as possible candidates.
“We also think that gold has a potential as a possible participant. The price of gold has a negative correlation to the dollar. Therefore it is beneficial to tie these two instruments into one so that investors feel safer,” he said.
Dvorkovich said he doubted Russia would complete its transition to an inflation-targeting regime which implies a freely floating exchange rate for the rouble next year when the IMF basket’s review takes place, as announced by the central bank.
Dvorkovich said BRIC leaders will discuss new reserve currencies at the summit but called for caution in the currency debate, saying it was in no-one’s interest to ruin the dollar.
Russia rattled financial markets last week when a central bank official said Moscow will cut the share of U.S. Treasuries in its forex reserves in favour of IMF bonds and bank deposits.

Nigeria to lift forex controls from Monday -

ABUJA, July 9 (Reuters) - Nigeria’s central bank said on Thursday it would lift foreign exchange controls for local buyers of U.S. dollars from Monday, following a decision by governor Lamido Sanusi earlier this week.
The bank imposed forex restrictions in January and replaced the Wholesale Dutch Auction System (WDAS) to try and stem a sharp decline in the naira currency.
Article Controls
‘The Central Bank of Nigeria hereby re-introduces the Wholesale Dutch Auction System with effect from Monday,’ said Batari Musa, director at the bank’s trade and exchange department.
‘This is in a bid to stimulate activities in the interbank and stabilize the foreign exchange market.’
The central bank initially announced the lifting of forex controls on Tuesday after its first monetary policy meeting under Sanusi.
At the meeting, the central bank also slashed interest rates by 2 percentage points and guaranteed interbank transacations for the next nine months.

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Pakistan’s forex reserves rise to $12.27 bln

KARACHI, July 9 (Reuters) - Pakistan’s foreign exchange reserves rose by $430 million to $12.27 billion in the week that ended on July 4, a central bank spokesman said on Thursday.
The State Bank of Pakistan’s reserves edged up to $8.96 billion from $8.55 billion a week earlier, while reserves held by commercial banks jumped to $3.31 billion from the previous week’s $3.29 billion, chief spokesman Syed Wasimuddin said.
He said reserves rose sharply after the central bank received $500 million from the Asian Development Bank on June 30, which were shown in the current data.
Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill.
Pakistan agreed in November to an International Monetary Fund emergency loan package of $7.6 billion to avert a balance of payments crisis and shore up reserves.
Pakistani officials are currently meeting the IMF in the Turkish city of Istanbul to discuss the country’s performance under the programme, and aiming to secure the roughly $875 million third tranche of the loan.