BrokerDealers Drill for Gushers in Middle East: Equity Stake Exports to Surpass Oil

Posted on November 12, 2014November 12, 2014 by admin

Arab Spring Comes to Saudi Stock Mart; BlackRock Leads ETF Charge in Advance of Doors Opening to Foreign Investors; Country’s Largest Bank Raises $6bil in Region’s Biggest IPO

BrokerDealer.com blog update includes extracts from Bloomberg LP reports by Arif Sharif and Sarmad Khan.

Based on recent developments, global investors are now slated to drill for stakes in Saudi Bourse offerings thanks to yesterday’s announcement from ETF behemoth BlackRock, coupled with the next year’s scheduled opening of markets to foreign investors, whose appetite for stakes in Middle East companies is expected to surpass demand for oil, currently the country’s primary export.

Excerpt below courtesy of Bloomberg LP reporting by Arif Sharif

BlackRock Inc. (BLK) plans to start an exchange-traded fund for Saudi Arabian shares as the biggest Arab bourse prepares to open its market to foreigners.

The world’s largest money manager has sought approval for its iShares MSCI Saudi Arabia Capped ETF from the U.S. Securities & Exchange Commission, according to a filing posted on the SEC’s website. The fund will seek to track the results of an MSCI provisional Saudi Arabia index, according to the filing.

“The underlying index is designed to measure the potential equity market in Saudi Arabia, should the market open up to foreign investors,” the filing said. The index “may include large-, mid- or small-capitalization companies and components primarily include financials, materials and telecommunications companies,” it said.

Saudi Arabia, the world’s biggest exporter of crude oil, is preparing to open its $526 billion stock exchange to foreign investors next year. Foreigners currently can’t buy Saudi-listed shares directly, accessing the market through equity swaps and exchange-traded funds instead.

The full story from Bloomberg LP is here

Saudi Arabia’s NCB Rises 10% in Trade Debut After $6 Billion IPO

Reporting courtesy of Sarmad Khan, Bloomberg LP

National Commercial Bank jumped the most allowed on its trading debut after raising $6 billion in the Middle East’s largest share sale.

Shares of Saudi Arabia’s largest bank by assets climbed 10 percent to 49.5 riyals at 12:31 p.m. in Riyadh. The Tadawul All Share Index (SASEIDX), the kingdom’s main measure, gained 0.2 percent.

IPOs in Saudi Arabia, the Arab world’s biggest economy, are picking up as the Tadawul All Share Index plans to open to foreign investors next year as it pursues a $130 billion spending plan to boost non-energy industries. Saudi Arabia typically sells stakes in state-owned companies to the public at below market value as part of efforts to redistribute the country’s wealth.

“For a couple of days at least, or may be three, you will see the stock going limit up,” Saleem Khokhar, head of equities at NBAD Asset Management Group, which oversees about $2.5 billion, said by phone from Abu Dhabi. “It started trading at discount and anything between 50 riyals and 55 riyals is very good value, so you will see investors rushing to grab what’s available.”

National Commercial Bank (NCB) sold a 25 percent stake at 45 riyals a share, attracting 311 billion riyals ($83 billion) of bids for the 300 million shares offered to Saudi investors. It sold another 200 million shares to the nation’s pension fund. The IPO was the second-biggest this year globally after Chinese e-commerce business Alibaba Group Holdings Ltd.’s $25 billion offering, according to data compiled by Bloomberg. Electrical Industries Co. is the latest Saudi company to announce plans for a share sale.

Before the regulator set a limit on daily price moves, offerings surged on their first day of trading. Alinma Bank (ALINMA), a Shariah-compliant lender based in Riyadh, soared 60 percent when it started trading in June 2008, and Saudi Arabian Mining Co. jumped 53 percent in its debut the following month.

To continue reading this story from Bloomberg LP, click here

Warning to BrokerDealers: Stay Out of Ball Player Locker Rooms!

Posted on November 7, 2014November 7, 2014 by admin

Brokerdealer.com blog update includes extract from WSJ Nov 7 story

BrokerDealers and Financial Advisors take notice: stay away from college ball players, even if the rules and regulations that govern stockbrokers are not covered by the same rules that prohibit sports agents from fraternizing at fraternities or any other venue where college athletes could be ripe for solicitation.

Getty Images

Steve Octavien is shown playing for the Dallas Cowboys in a 2009 loss against the Denver Broncos. After graduating from Nebraska, he invested $80,000 with financial adviser Mary Wong. He hasn’t been able to get back any of the money and believes she used it to pay her own credit-card bills and make other clients whole. Getty Images

Former Dallas Cowboys linebacker Steve Octavien recently landed a marketing job, got married, brought his newborn daughter home from the hospital and is saving up for the down payment on a house.

But as he gets on with life after six years of professional football, the 29-year-old Mr. Octavien regrets handing over $80,000, including his signing bonus, to a stockbroker named Mary Wong in 2008. They met while he was playing at the University of Nebraska, where he says she sometimes paid his rent, cellphone bills, car insurance and other expenses, a likely violation of National Collegiate Athletic Association rules.

The $80,000 soon disappeared, he says, and Ms. Wong pleaded guilty in 2010 to securities fraud related to an alleged Ponzi scheme that victimized other clients. She is serving a 63-month sentence in federal prison.

“Now I have a family,” says Mr. Octavien, who earned roughly $600,000 in his NFL career with four teams. “That would have been money that I would have loved to give them.” Prison officials say Ms. Wong told them she declined to comment for this article.

It is illegal in most states for sports agents to provide gifts or other items of value to amateur athletes—and agents are supposed to register with state regulators before approaching an athlete. Violators can be prosecuted.

Steve Octavien played linebacker from 2005 to 2007 at the University of Nebraska, where he says financial adviser Mary Wong sometimes paid his rent, cellphone bills, car insurance and other expenses. The gifts are a likely violation of National Collegiate Athletic Association rules but aren’t prohibited by current laws. Huskers

Those laws rarely apply to financial advisers like Ms. Wong. While NCAA rules prohibit athletes from accepting money or gifts from anyone trying to woo them, there is little to discourage financial advisers from trying.

The full article at WSJ

As a result, brokers, insurance agents, bankers and other types of financial advisers often contact athletes who are promising pro prospects, according to college athletic officials.

Wall Street BrokerDealer Aims To Support Veterans

Posted on November 6, 2014 by admin

BrokerDealer.com blog update courtesy of Traders Magazine

In honor of the upcoming U.S. Veteran’s day holiday, one Wall Street institutional broker is increasing the amount of profits it donates that are aimed to help U.S. servicemen and women.

Veteran’s Day is next Tuesday, November 11.

Mischler Financial. a California-based investment bank and institutional brokerage owned and operated by Service-Disabled Veterans, announced it is expanding its current give-back program. This year, the broker is donating a portion of its profits to three additional and separate non-profit organizations in honor of those who have served the country’s military.

The new charities are:

The Bob Woodruff Foundation
Children of Fallen Patriots
BuildOn.org

Dean Chamberlain, CEO Mischler Financial Group

“Through our ongoing commitment to Veterans on Wall Street, this Veteran’s Day we are honored to pledge our financial support to these new organizations,” said Dean Chamberlain, chief executive and principal of Mischler Financial Group. “We also look forward to continuing our commitment to the non-profit devoted to inspiring our young generation to drive positive change through community service and education.”

Headquartered in Newport Beach, California with regional offices in Stamford, CT, Boston, MA and Chicago, IL., Mischler Financial Group is a federally-certified minority broker-dealer and a Service-Disabled Veterans Business Enterprise. It provides capital markets services, agency-only execution within the global equities and fixed income markets and asset management for liquid and alternative investment strategies

Making Marijuana Public; Capital Raising Conundrum:Pot Dealers’ BrokerDealers Test SEC On Registration of Scofflaw Shares

Posted on October 31, 2014 by admin

Brokerdealer.com blog update courtesy of extract from Oct 30 WSJ Risk & Compliance column by Greg Millman.

Two businesses that explicitly state they intend to cultivate and sell marijuana are hoping the Securities and Exchange Commission will soon clear their applications to register shares. Or not.

The SEC’S response to S-1 filings by Terra Tech Corp. and GrowBlox Sciences Inc., initiated in August and September, respectively, could show whether the agency is willing to accelerate the registration of shares of businesses that say they intend to break Federal law.

Derek Peterson, CEO Terra Tech

Both Terra Tech and GrowBlox are now pursuing the S-1 registration process because of contractual commitments to providers of capital who received convertible debt and/or warrants, according to their S-1 forms. SEC registration would allow the holders to sell their securities without meeting the conditions of Rule 144A, which “allows public resale of restricted or control securities” only after a holding period before the sale, and other conditions.

Although marijuana use has been legalized by 20 states, according to the Office of National Drug Control Policy, it remains illegal at the federal level.

Terra Tech’s board made a decision “earlier this year” to compete for permits to cultivate and sell marijuana in states that have such permitting regimes, according to Chief Executive Derek Peterson. The company previously filed two S-1s in 2013. While they were in process, the SEC asked whether the company’s business model violated federal law, and “we responded that were just selling equipment at that point. They were comfortable with that at the time,” said Mr. Peterson. On both of those S-1s, the SEC responded favorably to Terra Tech’s request to accelerate, that is, to allow the filings to become effective without a waiting period.

For the full article from the WSJ, please click here

Israel-based Deal Activity Inspires Bankers & BrokerDealers

Posted on October 29, 2014 by admin

Brokerdealer.com blog update courtesy of extract from Oct 27 edition of MarketsMedia.com

Investing in Israel: More Than Technology

When it comes to investing in Israel, technology is a big part of the story, but it isn’t the only story, according to Steven Schoenfeld, chief investment officer of BlueStar Global Investors.

“Israel is actually a multifaceted story,” Schoenfeld said last week in a panel discussion on the TA-25 Index. “Israel’s tech economy, particularly with the publication of the book Start-up Nation, is the sexier part of Israel, and especially because you see so many of those tech companies coming to list in the New York, that’s a big part of the economy. But, in fact, even if you include all of those tech companies, it’s only about 30 to 35% of Israel’s market cap.”

BlueStar specializes in the Israeli capital markets. Its mission is to develop investment strategies that provide global institutional and retail investors efficient access to the full range of Israeli asset classes.

Its flagship product is the BlueStar Israel Global Index, a benchmark designed for providing balanced sector exposure to Israel’s dynamic economy. The index is designed to serve as an asset allocation tool, a performance benchmark, and the basis for investment products. Continue reading →