Day: 10 May 2017

Making the Case for Hedge Funds

Speakers at the Alternative Investment Conference earlier this week spoke out in defense of hedge funds after years of muted performance from some of these firms.

According to the Barclay Hedge Fund Index, which looks at reported data from over 1,000 hedge funds and averages out performance, indicates that the industry has only produced double-digit returns once in the past five years. Over the past three years, the index shows returns of 2.88%, 0.04% and 6.10%, respectively.

Yet speakers at the New York event, hosted by AIA Group, insisted that there is still value to be found by investing in hedge funds.

Study: FX Dealers Narrowing Focus to Chase Profits

A new study from Greenwich Associates suggests that FX dealers are narrowing their focus in terms of which products and clients they will cover.

For the study, Greenwich says that it conducted interviews with 2,393 corporate and financial users of foreign exchange around the world about market trends and their relationships with their dealers.

The results showed that, for the second consecutive year, significant market share was redistributed among the dealers in the top ranks of the FX market in 2016, with some leading dealers adding as much as two full percentage points in market share and others ceding similar amounts.

360T Launches ECN, Announces Record Volumes

360T has revealed that it officially launched its undisclosed marketplace, 360T ECN, in April.

The firm claims that the new ECN will enable access to additional liquidity and trading styles, adding another complementary execution mechanism to its OTC FX trading offering.

Carlo Koelzer, CEO of 360T Group, says: “With the introduction of 360T ECN, our clients can take full advantage of accessing the entire variety of liquidity. Considering new regulatory and capital requirements, our ECN is the right solution for the future FX ecosystem, including the facilitation of the credit mitigation.

IHS Markit Reports Spike in NDF Clearing

IHS Markit says that in 2017 it has processed a monthly average of 54,000 NDF contracts via Markitserv, a 920% increase compared to the same period last year.

“NDF clearing has seen strong interest as a response to the uncleared margin rules and other market factors,” says William Black, US head of OTC derivatives clearing at Credit Suisse. “We are proud to bring a scalable solution to this space and look forward to partnering with non-member clients as the market continues to develop.”

Derivatives’ Positions Outstanding Decrease: BIS

The increase in OTC derivatives positions that took place in the first half of 2016 reversed in the second half according to the latest data from the Bank for International Settlements (BIS).
The notional amount of outstanding OTC derivatives declined from $553 trillion to $483 trillion between end-June and end-December 2016, and their gross market value – the cost of replacing all outstanding contracts at current market prices – fell from $21 trillion to $15 trillion over the same period.