Instruments and Investments
Hedging Strategies for Grain Farmers
Technical Analysis
Evaluating Risk

High Frequency Trading

Unprecedented Monetary Easing: no free lunch
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16th Edition - October 2012
In this Edition . . . .
Unprecedented Monetary Easing: no free lunch
Until now, the US economy – and even more so the economies of other developed countries – have not shown the hoped for response owing to very accommodative monetary policies. The very low levels of interest rates and liquidity injections are expected to continue until employment and economic growth show a positive response. But could such policies have unintended (and undesirable) consequences? . . . .read full article
High Frequency Trading
J.P. Morgan beaching the whale
On 1 August 2012 an error in its trading software caused losses of USD 440million (ZAR3.6billion) for Knight Capital. During the first 45 minutes of trading on 1 August 2012, Knight Capital’s algorithmic or algo trading system malfunctioned and executed erroneous orders in 148 shares listed on the NYSE . . . .read full article

On 10 May 2012 JP Morgan Chase (JP Morgan) announced a USD 2 billion (ZAR 16.5 billion) trading loss.The sharpest criticism of the loss came from the bank's chief executive, Jamie Dimon who said the loss was the result of “sloppiness”, “poor judgment” and “stupidity” on the part of the bank. The losses at JP Morgan have intensified debate around certain issues that are uppermost in the minds of regulators and policy makers . . . . read full article

Evaluating Risk
Developments at SAIFM
It is commonly known that the VaR model has got a few flaws in its design and yet we don’t come across too many disclaimers from market practitioners warning clients of the dangers of relying on the misuse or reliance on such models. The fact that Trustees of Retirement Funds are being asked to make such important decisions as “how much risk can we tolerate in our fund” based on limited knowledge (theirs and their consultant’s) is grounds for some serious reflection . . . . read full article
Efficient Allocation of Capital
ETFs for Retirement Investments

Weak institutions that are characterised by high levels of corruption and government ineffectiveness have negated financial development and efficient allocation of resources in South Africa. However, improvements in regulatory quality, rule of law, civil liberty, and political stability have enhanced financial development and efficient allocation of resources . . . . read full article

Passive investment management – particularly through the use of Exchange Traded Funds – offers retirement fund trustees a significantly less costly means of realising their investment duties without adversely impacting on possible long term performance . . . .read full article
Stress Testing
Code for Responsible Investing
Stress testing has recently received a great deal of attention due to the financial crisis, which has shown that risk was measured, managed and monitored ineffectively. The soundness of financial institutions is also receiving attention due to the latest regulatory framework in the form of Basel III . . . .read full article
The code gives guidance on how institutional investors should execute investment analysis and investment activities.  It also addresses how institutional investors should exercise their rights with a view to promoting sound governance. Together with the King Code, CRISA provides a framework for all stakeholders in the overall governance system . . . . read full article
Macro top down investment approach
Hedging Strategies for Grain Farmers
In the investment sphere there are a number of different approaches that fund managers and asset managers use to determine the mix of asset classes that a portfolio should contain in order to perform positively or even outperform their respective markets . . . . .read full article
Grain farmers are not supporting routine hedging strategies as a way to improve returns and manage risks associated with grain production mainly due to lack of knowledge. The question is whether the adoption of routine strategies is better than no strategy at all . . . .read full article
Amendments to King III
Dodd-Frank Act : Implications for South African Institutions
Subsequent to the release of King III, amendments were made to the Companies Act, 2008 and related Companies Regulations (the Regulations) were issued. Amendments to King III were therefore made in order to align King III with the final Act . . . .read full article
New Money Market Settlement Officers Module on Offer
Technical Analysis
For a company responsible for the facilitation of risk management in the financial markets, it is imperative that it ensures that market participants and stakeholders have the opportunity to upgrade their education and knowledge. This will ensure that risk is further mitigated in South Africa . . . .read full article


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