Hong Kong Exchange Opens Doors to Islamic-bonds with First Sharia-Compliant Debt Issue

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Brokerdealer.com blog update courtesy of multiple news sources.

Islamic-Finance-CoverHong Kong has raised $1bn in its introduction Islamic bond issue, the city’s latest move to expand its markets amid increased competition from rival financial centres. Local brokerdealers indicated this portends a boom in the market for the issuance of sharia-compliant debt securities.

The HongKong sukuk issue is the very first by a AAA-rated government, and was sold to Asia-based investors while a third went to Middle Eastern funds.

By pricing the five-year sukuk at merely 23 basis points Hong Kong also achieved the lowest spread to get a US dollar bond in Asia excluding Japan.

“Hong Kong has seen a way to step in and fill a gap in the marketplace,” said Karby Leggett, head of capital markets for Greater China and northeast Asia at Standard Chartered. “With this issue, they have . . . Demonstrated this market works.” Many of the leading Asia market broker-dealers can be sourced using the brokerdealer.com global database

Sharia-compliant bonds – which call for debt to be able to provide a return structured – are a fast-growing region. So far this season, $28.4bn has been raised through sukuks, according to Dealogic, a 30 per cent increase on the same period in 2013.

The UK became the very first western nation to issue a sukuk earlier this year, while South Africa and Luxembourg are both poised to follow suit. Goldman Sachs has additionally revived its own sukuk plans, which will make it just the third international bank to issue Islamic-compliant debt, following in the footsteps of Nomura and HSBC.

John Tsang, Hong Kong’s financial secretary, said the successful sukuk sale was evidence the city was now a “viable option” for Islamic law-compliant fundraising.Hong Kong has been looking in a variety of steps to improve the competitiveness of its own markets and bring business from elsewhere in the region.

In July, the Securities and Futures Commission, the market regulator in Hong Kong, announced plans to pass the city’s rules governing real estate investment trusts, or Reits.In spite of a lengthy history as a financial centre for the region’s property firms, several high profile Reits have chosen to list in the past couple of years, which many analysts blamed on a Reit code that was aged in Singapore.

Hong Kong Exchanges & Clearing, the bourse operator, is also investigating a revamp of its own rules to attract more equity listings. Last month it published a 108-page document putting forward various suggestions – such as double-class shares, which are banned under existing regulation.

The move followed Alibaba’s choice to take its listing – poised to be among the largest to date – to ny after Hong Kong rejected its proposed management arrangement. Hong Kong has raised $1bn in its introduction Islamic bond issue, the city’s latest move to expand its markets amid increased competition from rival financial centres.

China Opens Up Exchange to Foreign Investors: One from Column A, Please..(“A Shares”)

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Brokerdealer.com blog update profiles latest news from China, where foreign investors will soon be able to trade shares listed on the mainland’s main stock exchange, the Shanghai Stock Exchange.

The Shanghai Hong Kong Connect, a program set to kick off in mid-October, will allow foreign investors to buy some 568 stocks in the Shanghai Stock Exchange through Hong Kong brokerage accounts, subject to an annual total quota of $48 billion.

The Brokerdealer.com database includes a comprehensive directory of Hong Kong and Taiwan brokerdealers that are qualified to help guide foreign investors to this market.

Shenzhen Stock Exchange is expected to launch a similar program next year. As China’s domestic markets become more open, they could be included in major stock indexes, which would lead to billions of dollars in new cash from funds that track these benchmarks, according to UBS AG.

This isn’t the first time overseas investors are able to buy Chinese stocks. Many of the country’s major companies are listed in Hong Kong, where they trade as so-called H-shares. Investors could invest in A-shares, which trade on China’s domestic markets, by buying funds that had access to the market under a program that accounted for less than 2% of the Shanghai market’s free float.

The new program will let investors buy A-shares directly, giving them more flexibility in that market as well as access to many sectors and stocks—such as Chinese liquor manufacturers and makers of traditional medicine—that don’t trade in Hong Kong.

For the full story from the WSJ, please click here.

SEC’s Latest Pet Peeve: Grammar. BrokerDealers Beware

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great grammar Brokerdealer.com blog post courtesy of extract from Sep 13 WSJ story by Theo Francis.

After combing through a 19,974-word filing for a securities offering, Securities and Exchange Commission senior counsel Catherine Gordon had some guidance for the company that drafted it.

“In the second paragraph, add a comma,” she wrote to an attorney for the trust, sponsored by Incapital LLC, in December, “to improve readability.”

Meet the stock market’s punctuation police. Corporate securities filings are plagued by some of the world’s most impenetrable prose, but it isn’t for lack of effort. Every year, SEC lawyers and accountants review several thousand of the more than half-million documents that companies file with the agency. And while they are primarily on the prowl for accounting inconsistencies and breaches of securities regulations, they also chase down typos, sentence fragments, jargon, puffery and sloppy punctuation.
Making sure corporate disclosures pass muster falls to the SEC’s 350-member Corporation Finance division—Corp Fin in the trade—which reviews every public company’s primary filings at least once every three years.

Last year alone, the securities industry’s style police sent nearly 8,800 letters to more than 4,600 companies, according to LogixData, which analyzes SEC filings. The letters, which eventually become public, contained more than 66,000 questions, most seeking fuller disclosure or better adherence to accounting rules. But many would have been right at home in freshman English.

SEC staffers asked a brewer to provide the volume of a barrel, a wedding organizer to define “marriage-seeking profiles,” racing companies to describe their horses with complete sentences, a biopharmaceutical maker to explain aplastic anemia and an annuity company to punctuate the end of a sentence.

For the full story from the WSJ, please click here.

 

What The Top BrokerDealer CEO’s Are Making Now

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BrokerDealer.com blog up courtesy of extract from InvestmentNews.com.

Data on executive compensation at major Wall Street banks and broker/dealers was released this week by SNL Financial. The data looks at top compensated chief executive officers at firms that are publicly traded. We’ve excerpted the chief executives running firms that manage platforms used by retail financial advisers, from the Charles Schwab Corp. to Wells Fargo & Co.

Total compensation includes salaries, bonuses, perks, incentive plans, stock and option awards, pensions and other deferred compensation, according to SNL, a research firm.
(See also: 10 best-paying indie B-Ds)

Here’s who made the most money in 2013, ranked by total compensation in their industry category as defined by SNL, and how it compares to the year before.

For the full story, please visit InvestmentNews.com

Initial Public Offering for Rocket Internet plans for end of year launch

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Brokerdealer.com blog post comes courtesy of techcrunch.com 

After much speculation, German super-incubator and clone factory Rocket Internet has confirmed that it plans to launch an initial public offering later this year on the Frankfurt Stock Exchange. Rocket Internet intends to raise up to $970 million in the IPO and plans to use the proceeds to “finance its future growth through the launch of new businesses and [provide] further equity capital to its network of companies.”

All of Rocket Internet’s existing shareholders, including Global Founders (the investment vehicle of Rocket Internet’s founder and CEO Oliver Samwer and his brothers), Investment AB Kinnevik, Access Industries, Philippine Long Distance Telephone Company, United Internet, and HV Holtzbrinck Ventures, will continue to remain invested in the company and not sell any shares as part of the offering, which will consist only of new shares.

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