SAIFM Financial Markets Journal

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The South African Financial Markets Journal
18th Edition May 2013
In this Edition . . . .
Macroprudential policy and twin peaks Bitcoin
Financial stability theory is still in the process of evolving as an important precondition for sustainable economic growth and employment creation.  Instability in the financial sector may cause macroeconomic costs and defeat national goals of broader economic growth and development. Risk assessment is therefore important for macroprudential authorities to enable efficient policy application. . . . . .read full article Bitcoin, the peer-to-peer electronic cash system, hit mainstream headlines in 2013 where it has remained ever since as a result of its substantial price volatility; vulnerability to hacking, theft and use for illicit purposes; questions around whether or what regulatory oversight is required and how bitcoin transactions are to be viewed by tax authorities across the globe. . . . . .read full article
Financial market systems in African economies Renewable energy: the new economic frontier
The pace at which most African economies have adopted financial market technologies has been generally sluggish - especially considering the positives afforded to late technology adopters, but, most importantly, considering that the cost of adopting these innovations often far outweighs the opportunity cost of not adopting them . . . . . read full article Africa presents itself as a great investment destination as the continent requires greater capital investment in order to fund the infrastructure necessary to meet the forecast demand. Renewable energy makes a compelling case as an investment opportunity, be it in the form of traded derivatives or large scale physical infrastructure. . . . . read full article
Compulsory asset spreads: Regulation 28 Diesel hedge futures and options
Regulation 28 serves as a compulsory guideline for retirement fund trustees and it places upper limits on the allocation of assets within the constitution of both the retirement fund as a whole, and each member’s individual share, specifically. The regulation was necessitated by the need to protect both retirement funds and its members from irresponsible allocation of their investments.  . . . . read full article Investors and businesses can now protect themselves against movements in the local diesel price. The JSE has added Diesel Hedge Futures and Options to its range of commodity derivatives. The contracts provide a hedge against movements in the local pump price of diesel through following the price of European Gasoil futures, as traded on the New York Mercantile Exchange. . . . . read full article
The market for lemons The investment landscape: getting back to normal
A lot of implausible assumptions are made by economists when they create their conveniently tidy descriptions of the real world. A common one is perfect information, which means (amongst other things) that all buyers and sellers in a market have exactly the same knowledge about the quality of the things that are for sale. . . . .read full article It is clear that as quantitative easing is scaled back, the yields of bonds and local listed property are likely to continue to rise. These asset classes will continue to present capital risk until such time as yields have fully adjusted to an investment world without central banks printing money. . . . . . read full article
The bell-shaped curve Equity market recoveries
Here’s an experiment you can do for real. Or you could just think about it. Consider anything you like from nature. Anything: rivers, birds, mountains, trees, mudprawns. Choose one species, or one geographical feature. Decide on something about it that can be measured. . . . .read full article Over the past 45 years, real returns amounted to 8.2% for equity, 2% for bonds, 2.2% for cash and 5.1% for property . . . .read full article
What drives emerging market economies The career of a director
The financing of critical infrastructure that will fund development and contribute to the overall growth of the emerging markets and more specifically the African continent is becoming the new trend in investments. . . . . read full article The profession of non-executive director is a new and emerging one and the role they play has, over time, become central to business success. In line with their expanded responsibilities, non-executive directors have also assumed greater liability for the consequences of their decisions . . . .read full article
High frequency trading Business rescue and suretyships
The use of high frequency tactics in unethical practices (quote stuffing, cross market layering and computerized front running to name a few) gives high frequency trading a bad name. It is however just a tool. It would be like condemning all brokerage houses for making profits when very few of them take part in illegal activities. . . . . .read full article Banks and other entities providing credit and loans should take cognisance of the potential risks posed by recent findings relating to the enforceability of suretyships in business rescue proceedings when business rescue plans extinguishes a claim and as a consequence, the claim against the surety is also extinguished.. . . . .read full article
The role of a settlement specialist A career as a corporate treasurer
Settlement specialists, also known as settlement officers, within the CSD Participants, JSE member firms and Strate process settlement transactions to ensure that the buyers and sellers of securities receive their entitlements. . . . .read full article The role of the corporate treasurer has evolved over time from being a somewhat operational role with a narrow scope to a highly visible role at the heart of the organisation, contributing to corporate strategic planning. . . . .read full article
How to teach your teen about investing Keeping up to date with change in the capital markets
Those who start learning about finances at a young age are more likely to become responsible adults capable of making sound financial decisions. . . . . read full article Given the rapidly changing financial market environment, education in the capital markets, particularly the securities industry, is of utmost importance. . . . . .read full article

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