Category Archives: CapitalMarkets

>Mongolia plans to issue first sovereign bonds


The money has not yet come in, but the debt has already started…

Mineral-rich Mongolia plans to issue first sovereign bonds –

Mongolia plans to issue its first sovereign bonds this month, marking a milestone for capital markets in this resource-rich democracy.

The newly created Development Bank of Mongolia will issue $700m in sovereign bonds to fund lending programmesin areas that include infrastructure, industry, energy and roads. 

the issuance would take place in tranches beginning this month, with the first slice likely to be $100m.

The bond will be in tugrik, the Mongolian currency, which has appreciated by 1.6 per cent against the dollar since January.
investment in the mining sector has soared in the past two years along with global commodities prices.

Government revenues from the mining sector are set to jump next year as the Oyu Tolgoi copper and gold mine comes online, and politicians in Ulan Bator are looking for ways to manage the coming influx into state coffers.

The Development Bank is being set up with training from the Korean Development Bank and the Development Bank of Japan. 
yields on the bonds could be quite low, perhaps 6-8 per cent.

Mongolian sovereign debt has a B1 non-investment grade rating from Moody’s

Read the full article here: / Capital Markets – Mineral-rich Mongolia plans to issue first sovereign bonds

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>Ex-Goldman programmer gets 8 years for code theft | Reuters


Ex-Goldman programmer gets 8 years for code theft

6:50pm EDT

By Grant McCool
NEW YORK (Reuters) – A former Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) computer programer was sentenced to eight years in prison on Friday for stealing secret code used in the Wall Street bank’s valuable high-frequency trading system.
Sergey Aleynikov, was arrested by the FBI and charged in July 2009 with copying and removing trading code from Goldman before taking a new job at Teza Technologies LLC, a high-frequency trading startup firm in Chicago.
A onetime collegiate-level competitive ballroom dancer, Aleynikov, 41, was convicted of trade secrets theft and transporting stolen property across state lines on December 10 after a two-week long jury trial in Manhattan federal court.
High-frequency, computer-driven trading has become an important and competitive business. The software codes that trade shares in milliseconds are closely guarded secrets.
“I very much regret the foolish thing of downloading information,” the Russian-born father of three said at his sentencing on Friday. “Part of this information was proprietary to Goldman. I never meant to cause Goldman any harm or harm anyone at the bank.”
Aleynikov’s words fell short of U.S. District Judge Denise Cote’s hopes for “an open and honest statement of responsibility” for his criminal conduct.
“You did not do that,” said Cote, imposing a sentence of 97 months that was within the eight to 10 years recommended by the government. Cote also fined him $12,500.
Aleynikov’s lawyer, Kevin Marino, had originally asked for a sentence of probation but in court on Friday he suggested two years was adequate for what he called Aleynikov’s “foolish, tragic, horrible, ridiculous mistake.”
Aleynikov has the right to appeal the sentence. His defense lawyers have argued that the matter belonged in civil, not criminal court.
U.S. prosecutor Joseph Facciponti said the stolen code was Aleynikov’s “golden ticket” to Teza and “he stood to make millions more” there than he did at the bank. Facciponti said Aleynikov spent several months planning his move, eventually transferring 500,000 lines of Goldman Sachs source code to an outside server.
Cote had revoked the bail of Aleynikov, a dual citizen of the United States and Russia, on the grounds that there was a risk of him fleeing before sentencing.
Throughout the trial and sentencing phase, many comparisons were made with a similar case in the same courthouse against a former Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) trader, Samarth Agrawal.
The citizen of India was found guilty by a jury last November of stealing high-frequency trading code from the French bank before going to a new job. On February 28, a judge sentenced him to three years in prison and he will be deported when he completes his sentence.
The case is USA v Aleynikov, U.S. District Court for the Southern District of New York, No. 10-00096.
(Reporting by Grant McCool; Editing by Tim Dobbyn)

Ex-Goldman programmer gets 8 years for code theft | Reuters: “Ex-Goldman programmer gets 8 years for code theft

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Is AGF (Canada) the next takeover target?

Is AGF the next takeover target?
Financial Post | Business » Trading Desk
Tuesday, November 23, 2010 02:57 PM
Author: Jonathan Ratner  

While a takeover of AGF Management Ltd. appears unlikely in the near future, it is not impossible. In the wake of Bank of Nova Scotia’s acquisition of DundeeWealth Inc., a growing realization of the need for size and scale in the asset management space may force AGF to at least consider its options, according to RBC Capital Markets analyst Geoffrey Kwan.
He upgraded AGF to Outperform from Sector Perform and boosted his price target to $20 from $18, reflecting an 7% increase in 2011 and 2012 earnings per share forecasts.
“As one of few remaining potential ‘partners of size’ following DundeeWealth’s sale, AGF shares may have additional upside potential above our $20.00/share 12-month target in the event it is able to realize strategic value,” Mr. Kwan said in a note to clients.
He believes AGF shares are attractively valued trading at a significant discount to the fund company peer group. The analyst also anticipates that AGF shares will benefit more than others as a result of greater exposure to equities in its asset under management base as the macro environment gradually improves and equity market conditions remain healthy.
Mr. Kwan said net redemption trends could be improving, and although AGF’s fund performance is below its peers, this has improved in the past few months. “We believe fund performance relative to peers is a leading indicator for future net sales,” he said.
So what does Bank of Nova Scotia‘s planned takeover of DundeeWealth mean for CI Financial Corp?
Scotiabank remains committed to its relationship with CI (it owns a 35% stake in Canada’s third-largest fund manager) and a complete takeover at some time in the future, according to BMO Capital Markets analyst John Reucassel. However, he said the timing has probably been pushed out a couple of years.
“While asset management is an attractive business because most of the activities are conducted off balance sheet, acquisition of asset managers can be onerous from a bank capital perspective,” Mr. Reucassel said in a research note.
He explained that mutual fund company balance sheets are overwhelmingly comprised of goodwill and intangible assets, which when consolidated, must be fully deducted (under Basel 3) from common equity to calcultate capital ratios. Therefore, digesting acquisitions of both DundeeWealth and CI could strain Scotia’s capital ratios.
Based on similar multiples to the DundeeWealth transaction, the analyst noted that CI could be valued at $26 to 28 per share, plenty of upside from its current level.
Jonathan Ratner

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