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October 17, 2012
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  Top Stories 
  • Vikram Pandit steps down at Citigroup
    In a move that caught most by surprise, Citigroup CEO Vikram Pandit has stepped aside, saying that "now is the right time for someone else to take the helm." Pandit, 55, who had headed Citigroup since December 2007, is being succeeded by Michael Corbat. "Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalized the company, strengthened our global franchise and refocused the business," said Chairman Michael E. O'Neill. The Economic Times (India) (10/16) , The Wall Street Journal (10/16) LinkedInFacebookTwitterEmail this Story
  • Spain is reported ready for European rescue
    The Spanish government is prepared to request a European bailout but is awaiting a reading on how the request would affect other troubled eurozone nations. The German government also says it is now open to such a move. Separately, Standard & Poor's cut its rating of the 11 Spanish banks that previously were pegged above BBB-. Financial Times(tiered subscription model) (10/15) , Bloomberg (10/16) , (China) (10/16) LinkedInFacebookTwitterEmail this Story
  • German finance minister calls for deeper integration
    Saying Europe "must now make bigger steps in the direction of a fiscal union," German Finance Minister Wolfgang Schaeuble is calling for a new "currency commissioner" with budget powers, as well as voting reforms in the European Parliament. The proposals, including veto power over national budgets, are likely to draw opposition from other governments. Separately, Greece managed to achieve a slightly lower interest rate in its latest auction of three-month treasury bills. Reuters (10/16) , (China) (10/16) LinkedInFacebookTwitterEmail this Story
  • Eurozone sees hopeful signs in trade surplus, level inflation
    In good news pointing to health in the eurozone economy, exports were up in August while inflation was steady in September, though at 2.6% somewhat above the European Central Bank's target of just under 2%. The trade surplus of €6.6 billion reversed the €5.7 billion deficit of August 2011. "A marked increase in eurozone exports in August raises hopes that net trade made a further positive contribution to eurozone [gross domestic product] in the third quarter and thereby limited what seems certain to have been further contraction," said Howard Archer, an economist at IHS Global Insight. The Wall Street Journal (10/16) LinkedInFacebookTwitterEmail this Story
  • U.K. budget office casts doubt on austerity
    The U.K.'s Office for Budget Responsibility suggested Tuesday that austerity measures might be the wrong medicine for an ailing economy. "We clearly cannot rule out the possibility that the unexpected weakness of economic growth over the past two years can be explained in part by the fiscal consolidation acting as a greater drag than we had assumed," the OBR said in an annual review of its forecasts. The Wall Street Journal/Dow Jones Newswires (10/16) LinkedInFacebookTwitterEmail this Story
  • S&P says credit downgrade is possible for Japan
    Noting that an increase in Japan's consumption tax won't be enough to narrow government budget deficits, Standard & Poor's warned that the country is running the risk of another credit downgrade. "Japan's sovereign credit quality continues to decline slowly despite parliamentary approval of legislation to raise the national consumption tax," S&P said. Yomiuri Shimbun (Japan) (10/16) LinkedInFacebookTwitterEmail this Story
Fund Management: An Emotional Finance Perspective
by David Tuckett and Richard J. Taffler, Research Foundation Publications (August 2012)
To increase understanding of the real world of the fund manager, the authors apply principles from emotional finance.
  Market Activities 
    Gains in the banking sector in Europe on the strength of good results at Goldman Sachs helped lift shares Tuesday in Europe, where investors were also encouraged that Spain is ready to seek a financial rescue. The Stoxx Europe 600 rose 1.32% to 274.38. In the U.S., strong corporate earnings fueled gains, with the S&P 500 advancing 1.03% to 1,454.92. Here is a continuously updated list of global stock indexes. The Wall Street Journal (10/17) , CNNMoney (10/16) , Reuters (10/16) LinkedInFacebookTwitterEmail this Story
  • Strong U.S. retail sales lift Asian markets
    Surprisingly strong retail sales in the U.S. helped buoy Asian exporters and markets across the region Tuesday. The Nikkei climbed 1.44% to 8,701.31, the Hang Seng added 0.28 to 21,207.07, the Kospi rose 0.83% to 1,941.54 and the S&P/ASX edged up 0.18% to end at 4,491.50. Bloomberg Businessweek (10/16) LinkedInFacebookTwitterEmail this Story
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  Economic Trends & Outlook 
  • Analysis shows significant money leaving China
    About US$225 billion has flowed out of China over the past 12 months, according to a Wall Street Journal analysis, as Chinese companies invest overseas and individual Chinese spend abroad. "It's not a good sign when local businessmen begin to think it's better to take money offshore, especially when the world economy is in such bad shape," observed Michael Pettis, a finance professor at Peking University whose earlier career trading Latin American distressed debt gave him experience with capital flight. The Wall Street Journal (10/15) LinkedInFacebookTwitterEmail this Story
  • Domestic consumer market is driving India's growth, OECD official says
    The rapidly developing domestic economy now accounts for most of India's economic growth, according to Angel Gurria, secretary-general of the Organization for Economic Co-operation and Development. Saying India's economy is now more of a "balanced structure," Gurria noted that more Indians "are incorporating themselves to higher levels of purchasing power. That is increasingly fueling the growth of India rather than exclusively relying on external factors." The Economic Times (India) (10/16) LinkedInFacebookTwitterEmail this Story
  • Foreign currency deposits hit record high in South Korean banks
    Deposits denominated in foreign currencies climbed to a record high at South Korean banks last month, topping US$39 billion. "As Korea's trade surplus continued in September, deposits of proceeds from exports at banks grew considerably. In addition, businesses' foreign currency deposits set aside for foreign currency-denominated stock issuances also expanded last month," a Bank of Korea official explained. (South Korea) (10/16) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  Industry & Regulatory Update 
  • Convoy seeks private-bank partners for new investment platform
    High-net-worth individual investors are the target market as independent financial adviser Convoy hopes to team with offshore private banks to introduce a new platform in its base of Hong Kong. The service would be something new for Convoy, whose main business is as a brokerage for investment-linked insurance products. (10/16) LinkedInFacebookTwitterEmail this Story
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