Investors looking for exposure to emerging markets FX have limited options, with most EM indices offering exposure (currency hedged or otherwise) to local equity and bond markets. They will soon have the opportunity to invest directly in EM FX markets, however as T3Index is set to launch its E8 index, which it says it a first of its kind as it measures the performance of the world’s eight largest emerging market exchange rates. T3Index is a research driven financial indexing firm that specialises in derivatives benchmarking and the development of investible, proprietary indices that track related strategies across a range of asset classes.
International Finance Corporation (IFC), a member of the World Bank Group, has made an equity investment in compression service provider, LMRKTS (Lmrkts).
IFC joins lead investor Motive Partners, a private investment firm focusing on technology-enabled companies within the financial services industry, in this investment round.
Founded in 2012, Lmrkts provides a compression service designed to enable commercial and investment banks to reduce exposure to each other thereby minimising counterparty risk and leverage costs.
The company balances participants' counterparty limits and their risk management objectives with a structured methodology that aims to deliver mutually beneficial results. After years of testing, Lmrkts launched in late 2016, and has compressed over US$2 trillion of notional equivalent in foreign exchange derivatives.
ING is launching proprietary global emerging markets indices, aiming to provide clients with a new route for gaining exposure to emerging markets currencies.
Bloomberg is responsible for providing the independent calculation and administration of these indices. In addition to leveraging Bloomberg's expertise in strategy index development, calculation and administration, ING is using Bloomberg’s BFIX data source to use in the index, stating in a release issued today that it is an independent benchmark for currency rates that is regularly updated and widely used by the FX market.
Those of you wise enough to listen in to our weekly podcast will know that I am currently in South Africa, although not, I should point out, to stalk the Global FXC. Instead I am here as part of my work with ACI Australia’s Dealing Simulation Course and last week we worked with the IMF to run the course for 30 African central bankers, which made me realise I only told half of the story in last week's column on the FX industry's priorities.