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Friday, November 13, 2009
Emerging Markets Bubble Continues to Inflate, but for How Long?
0 comments Posted by shuseel at 8:45 AMYesterday, emerging markets (proxied by the MSCI Emerging Markets Index) recorded their biggest fall since July, ending a week of solid gains. Still, this one-day slide of 1.4% pales in comparison to the nearly 100% gain that the index has achieved since bottoming last March. In other words, while investors might be starting to pull back, the direction of asset prices is still upward.
As for what’s causing this across-the-board appreciation, that was the subject of my previous post (Inverse Correlation between Dollar and Everything Else…Still), in which I merely stated the obvious; that the Fed’s year-long program of negative real interest rates and quantitative easing (i.e. wholesale money printing) has unleashed a flood of cash into global capital markets. Since we’re not just talking about the Dollar, here, it makes sense to point out that the Fed’s easy money policies have been copied by Central Banks in most other industrialized countries, including the UK, Canada, Switzerland, Sweden, and to a lesser extent, the EU.
As for why emerging market assets and currencies seem to be outpacing appreciation in other asset classes, that’s also not difficult to explain. First of all, by some measures, emerging market stocks have hardly outperformed other assets. Oil, for example, has risen by 131% in less than a year, to say nothing of other commodities. Still, by other measures, growth has been remarkable. Most emerging market stock indexes and currencies have fully erased (or come close to erasing) the losses recorded during the peak of the credit crisis. Bonds, meanwhile, have gone one step further. Yields are collapsing, and prices have exploded – by 25% in the last year, sending the JP Morgan Emerging Market Bond Index to a new record.
Is it safe to call this a bubble? Intuition would suggest so; given that all assets are rising across the board, without regard to particular fundamentals, it would seem that only a herd/bubble mentality could offer an explanation. Some analysts, in fact, have given up completely on fundamental analysis, instead using fund inflows (i.e. investor demand) to predict whether some emerging market assets will continue rising. As Nouriel Roubini (the NYU economist that famously predicted the credit crisis) summarizes: “Traders are borrowing at negative 20 per cent rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade.” P/E ratios are nearly twice as high in some emerging markets, compared to stocks in the S&P 500.
On the other side of the equation are the bulls and the efficient market theorists.”By historical price-to-earnings ratios — the ratio of stock prices to per-share profits — these levels can be justified, if the economic recovery continues. With massive layoffs, business costs have been cut sharply. “The hope is that when consumers and companies start spending, the added sales will drop quickly to the bottom line [profits].” Other proponents argue that the rise in asset prices is exactly what the Fed wants, since it implies that the markets are once again characterized by stability and liquidity.
Regardless of whether growth materializes, however, that doesn’t change the fact that the free ride can’t and won’t last forever. At some point, Central Banks will be forced to raise interest rates and start withdrawing Trillions of Dollars from global capital market. This will cause the Dollar to rise, and investors to rapidly unwind their carry trade positions. Warns Roubini, “A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.”
If the tech-bubble and real-estate bubble taught us anything, it is that there is no free lunch in the markets. It is not possible for all investors in all assets classes to simultaneously win. At least, in the long-term. In the short-term, meanwhile – it pains me to say this – let the party continue. My only warning is this: when the music stops, don’t be the one caught with your pants down…
Thursday, October 8, 2009
The pound advanced to the highest level this month against the dollar
0 comments Posted by shuseel at 11:35 PMThe pound advanced to the highest level this month against the dollar as the Bank of England left its bond-purchase program unchanged and kept its main interest rate at a record low.
Sterling also climbed versus the euro and the yen after the central bank said it wouldn’t add to the 175 billion pounds ($282 billion) it has committed to the asset-purchase plan, as predicted by all 42 economists in a Bloomberg survey. Policy makers may consider enlarging the program after reviewing it next month, former Deputy Governor John Gieve said two days ago. Gains by stocks also bolstered the currency.
“There should be a little bit of relief for sterling because there’s always a risk of a surprise,” said Daragh Maher, deputy head of global foreign exchange at Calyon, the investment-banking unit of Credit Agricole SA. “But because we had quite a strong morning for sterling it might not have the same bullish impact as it could have done.”
The pound advanced 0.8 percent to $1.6089 as of 5 p.m. in London, after rising to $1.6114 earlier, the highest level since Sept. 30. It strengthened 0.2 percent to 91.84 pence per euro, after weakening as much as 0.3 percent. It climbed 0.5 percent to 142.22 yen.
Policy makers also left their main rate at 0.5 percent, as forecast in a separate Bloomberg survey.
The yield on the two-year gilt fell to 0.69 percent, the lowest level since at least January 1992, according to Bloomberg generic prices. The 10-year yield declined 3 basis points to 3.36 percent.
The 4 percent 2022 gilt extended gains after the Bank of England said the bond will be included in its asset-purchase program from next week. The yield on the security fell 4 basis points to 3.60 percent.
Stocks Rise
Sterling climbed 0.6 percent against the dollar and 0.5 percent versus the euro on Sept. 10, when the Bank of England left the asset-buying program unchanged. It lost 0.8 percent against the euro and 1.2 percent against the dollar on Aug. 6, when the central bank unexpectedly extended it by 50 billion pounds.
The country’s benchmark stock gauge, the FTSE 100 Index, rose 0.9 percent, and Europe’s Dow Jones Stoxx 600 Index advanced 1.3 percent.
The “next decision point” for the Bank of England will be the Nov. 5 meeting, Gieve said in a Bloomberg Television interview on Oct. 6. Increasing the bond program next month, when the bank will have new economic forecasts, “will be an option they’ll look at pretty closely.
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On Wednesday, as GBPJPY tested and then overturned from 140 once again, the British pound gained ground in opposition to the majors. No UK data was released, but the British pound is going to see event risk on Thursday from the Bank of England’s (BOE) most recent rate conclusion. The BOE is expected to be released at 7:00 ET that they have left their Bank Rate the same at 0.50 %, but this is not going to be influential enough to move the market as the statement. In its place, traders are going to be looking toward the BOE’s policy announcement. This has always been the key news event of current rate conclusions. Last month, the BOE showed a neutral position as they announced they would keep their £175 billion quantitative reduction program go on, and this eventually led the British pound to rally in opposition to the US dollar and euro right away.
Sunday, October 4, 2009
In the light of the recent financial turmoil, the new Banking Act provides a permanent set of tools that allows the tripartite authorities to resolve a distressed bank or building society in an orderly way. These powers will help reduce the impact of bank failure on financial stability and bank customers.
The Act will increase the responsibilities, powers and role of the Bank:
- creating a new Special Resolution Regime (SRR) for dealing with distressed banks
- giving the Bank a statutory financial stability objective and with it creating a Financial Stability Committee to advise on financial system matters
- formalising the Bank's payment system oversight role
- creating a new framework for issuance of Scottish and Northern Ireland banknotes to be overseen by the Bank
These changes, beginning with the introduction of the SRR which took place on 21 Febuary, will be implemented in stages during 2009.
The Act draws on an extensive consultation launched by The Chancellor during 2008.
Bank of England's Centre for Central Banking Studies conducts seminars
0 comments Posted by shuseel at 1:17 AMThe Bank of England's Centre for Central Banking Studies conducts seminars and provides expert advice for central banks throughout the world. It is a centre for comparative study and collaborative research on issues at the forefront of central banking.
Its primary aims are to foster monetary and financial stability world-wide, to promote the Bank of England's core activities, and to provide opportunities for central banking staff to obtain broader perspectives on their own areas of expertise. Its goal is to be recognised internationally as a centre of intellectual excellence for the study of central banking.
The CCBS is based at the Bank of England in London and is staffed by experienced central bankers with technical expertise drawn from the various operational and analytical areas of the Bank of England.
Thursday, October 1, 2009
The general factors behind the price of gold are too broad and numerous to be captured in this post. In addition, many of these factors have little to do with currencies (including the Dollar), and thus don’t warrant much space on a blog devoted to forex. At the same time, conspiracy theorists, doomsday predictors, and even some mainstream economists have long argued in support of gold as a hedge against inflation (otherwise understood as currency devaluation). In fact, I am only posting about gold now is because that notion has become much more popular over the last few years, to the point where pundits have come to see the current appreciation almost solely in terms of the decline in the Dollar.
That’s because many of the more conventional factors – the same ones that affect prices for other commodities – suggest that gold prices should be declining. Non-speculative demand (i.e. jewelry, industry) remains subdued as a result of the economic recession. Speaking of which; while there is now some evidence of recovery, it is nowhere near robust enough to support a return to bubble prices. In addition, the International Monetary Fund (IMF) just approved a massive sale of its gold reserves, equivalent to 15% of the world’s annual gold production.
Yet the price of gold remains not only stable, but positively buoyant. According to analysts, this is because of an increasing sense of anxiety about the viability of the Dollar as the world’s reserve currency. Euro Pacific Capital’s Peter Schiff, an effusive source of commentary on the markets, believes the price of gold will skyrocket to $5,000 per ounce. “Schiff’s forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold’s ascent in the 1970s.”
Other analysts take Schiff’s view one step further by arguing that a shortage of viable alternative reserve currencies (Euro, Yen, Pound, Yuan, etc are plagued by similar fundamental flaws as the Dollar) makes gold the best candidate to replace the Dollar. Some people even hold the extreme view that the entire fiat monetary system will collapse, with the result being a barter system centered around gold. In any event, people are nervous: “That means a growing number of investors, traders — and, most troublingly, foreign governments — don’t believe in the strength of the U.S. dollar, analysts warn. People buy gold when there’s fear.”
On the other hand, it seems reasonable that gold is appreciating for the same reason that everything else is. In this sense, rising gold prices are hardly remarkable. Silver and platinum, for instance, have risen nearly 50% year-after-year, despite similarly weak fundamentals. There is a danger in connecting the Dollar’s decline too closely with the rise in gold, since the former is largely a function of short-term factors such as low interest rates and increasing risk appetite. “With the Fed confirming that interest rates could be steady for a long time, the dollar may continue to be dumped in favor of higher yielding currencies, which may favor the yellow metal.”
While there’s reason to be alarmed or even angry about deficit spending, quantitative easing, money printing, and unsustainable debt, there’s very little to support the notion that inflation is taking hold. In fact, based on both Treasury bonds and inflation securities, inflation is the last thing on the minds of investors. In addition, while gold represents a conceptual reserve commodity, it’s not very practical. It has very little utility (especially compared to other commodities), and its supply can be easily manipulated by producers and central banks. One analyst explains, “Even a rather wobbly reserve currency is better than gold. Gold is far less liquid than U.S. Treasury securities, costly to store and insure, and above all more volatile in price.”
Still, perception is reality in financial markets. If investors want to see a connection between a weak Dollar and strong gold, they will simply contrive one. But if the Fed raises interest rates and/or the Dollar stabilizes, you can expect gold prices to follow suit. If this happens, it won’t imply that confidence in the Dollar has been restored. Instead, it will only imply that investors can earn a higher return investing in Dollar-denominated assets and no longer need to speculate in gold.
Tuesday, September 29, 2009
The landscape of lenders willing to work with small business owners has changed dramatically
0 comments Posted by shuseel at 12:23 AMThe landscape of lenders willing to work with small business owners has changed dramatically in the last year, but one bank -- Wells Fargo -- has emerged stronger than ever.
While other financiers that were historically major players took a knee, Wells Fargo (WFC, Fortune 500) increased its lending, emerging as the new number-one lender through the Small Business Administration's loan programs.
CIT Group (CIT, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Banco Popular of North America and others that once held top spots have cut their SBA lending by more than 70% this year. Meanwhile, Wells Fargo upped its loan volume 4%, from $583.4 million in 2008 to $605 million this year.
Some of that gain may be fueled by Wells Fargo's late-2008 acquisition of Wachovia, another bank that traditionally made many SBA-backed small business loans. The acquisition closed three months into the 2009 fiscal year (which the SBA began Oct. 1), leading Wachovia and Wells Fargo to report their loans separately through part of the year.
Taken together, the two banks lent $742.3 million this year -- down 24% from what they collectively lent as independent banks last year, but still far more than any other bank put into the small business market. The next runner-up, U.S. Bank (USB, Fortune 500), made $249.5 million in loans through the SBA's flagship lending program.
Given the retraction of a number of key lenders, Wells Fargo's leap to the top is not a major surprise. "I don't see anything shocking with Wells Fargo being number one," says Bob Coleman, editor of the Coleman Report, which monitors small business lending trends.
Stocks surged Monday, recharging their recent advance after a one-week break
0 comments Posted by shuseel at 12:17 AMStocks surged Monday, recharging their recent advance after a one-week break, as a pair of multi-billion dollar merger announcements gave investors a reason to get back into equities.
The Dow Jones industrial average (INDU) gained 124 points, or 1.3%. The S&P 500 (SPX) index rallied 19 points, or 1.8%. The Nasdaq composite (COMP) rose 40 points, or 1.9%.
Last week, the S&P 500 fell more than 2%, in its biggest one-week selloff in nearly 3 months. The declines occurred as investors mulled weaker-than-expected housing reports and an as-expected Federal Reserve decision to hold interest rates steady.
But over the last 7 months, investors have mostly used the dips as an opportunity to get back into stocks at lower levels, something that happened Monday, too.
"The two big mergers really hammer home the point that the credit market is improving," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
He said merger news and the recent series of initial public offerings that have come to market go a long way to counter worries that the stock advance is out of pace with the still-sluggish economy.
Thursday, September 24, 2009
Close to yesterday’s low, both majors remain under pressure early Asia, pointing from more selling in the next hours. Local shares likely to follow Wall Street fall, and trigger more risk aversion across the board, impelling greenbacks recovery. Good to notice, 2 days to the upside don’t made a trend. Dollar tone remains bearish across the board, and till know movements could only be consider corrective in most pairs, except maybe against GBP.
EUR/USD quotes at 1.4640, close to key 1.4600/20 support area. Confirmations under that level could accelerate the fall yet 1.4550 also strong support zone, should keep the downside capped. Meanwhile GBP/USD already quoting under yesterday’s low of 1.6020, has next key support at 1.5970 strong area, ahead of 1.5920 level.
EUR/USD quotes at 1.4640, close to key 1.4600/20 support area. Confirmations under that level could accelerate the fall yet 1.4550 also strong support zone, should keep the downside capped. Meanwhile GBP/USD already quoting under yesterday’s low of 1.6020, has next key support at 1.5970 strong area, ahead of 1.5920 level.
Tuesday, September 22, 2009
Oil eased in Asian trade Wednesday on profit-taking but stayed above $71 a barrel ahead of this week's Group of 20 summit and a US central bank meeting, analysts said.
New York's main contract, light sweet crude for November delivery, was down 44 cents to $71.32 a barrel in morning trade. The October contract expired on Tuesday.
Brent North Sea crude for November dipped 59 cents to $69.94.
Investors are closely monitoring the results of a US Federal Reserve policy meeting that could indicate the pace of economic recovery of the United States, the biggest energy consumer. The meeting ends Wednesday.
Leaders from the Group of 20 developed and developing nations are also expected to discuss the state of the global economy when they meet later this week in the US city of Pittsburgh.
Energy demand plunged after the global economy slipped into its worst recession since the 1930s late last year.
This sent oil prices tumbling from historic highs of more than $147 in July 2008 to around $32 in December.
Prices have since clawed back to around $70, but investors remain concerned over the pace of the global economic recovery.
Analysts expect the US central bank to keep key interest rates at existing levels of virtually zero percent in a bid to stimulate domestic demand and sustain the recovery.
"Concerns over the sustainability of the (US) recovery mean that the Fed will not tighten policy anytime soon," said research house Capital Economics.
"The only changes we expect at the (Fed) meeting are a slightly more upbeat tone in the statement."
Analysts said the weakness in the US dollar is also helping keep oil prices buoyant.
Oil is traded in the US currency, which makes oil cheaper for holders of stronger units, stimulating demand and pushing prices higher.
"The weak US dollar was a plus for the oil price in US dollar terms," the Commonwealth Bank of Australia said in a market commentary.
The dollar slid to a 13-month low against a basket of currencies
0 comments Posted by shuseel at 10:39 PMHONG KONG (Reuters) - The dollar slid to a 13-month low against a basket of currencies as market players seized on surprisingly strong New Zealand economic growth data as a reason to push the kiwi dollar higher and dump the U.S. currency.
Even as commodity prices dipped, the dollar's woes have boosted oil and metals and given a lift resource-related shares around the region. Resource-heavy Australian stocks .AXJO outperformed other markets in the region.
"It's a mixture of optimism about global growth and stronger commodity prices, which is particularly good for Australia," said Tom Elliott, a fund manager with MM&E Capital, which oversees about A$50 million in Australian shares.
Activity was limited, with markets in Japan closed for a third straight day before reopening on Thursday.
Many investors were also awaiting the Federal Reserve's policy decision later in the day, looking for tweaks in its post-meeting statement that would acknowledge the economy's improvement and may suggest more steps towards winding down its emergency measures to support financial markets.
The Fed has already been meeting with primary bond dealers on Wall Street to discuss different methods for absorbing the massive reserves injected into the banking system to stave off the worst financial crisis since the Great Depression.
The MSCI benchmark of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.4 percent, while the Thomson Reuters index of regional stocks .TRXFLDAXPU edged up 0.1 percent.
Australia's S&P/ASX 200 .AXJO was up 1.3 percent on the back of a rise in commodity-linked shares. BHP Billiton (BHP.AX), the world's biggest miner, rose 1 percent.
Thursday, September 17, 2009
Money Supply of people's Bank of China Continues Rapid Growth
0 comments Posted by shuseel at 8:19 PMMoney supply continues to accelerate. At end-July 2009, broad money (M2) stood at RMB57.3 trillion, increasing 28.42% year on year, up 10.6 percentage points from the end of last year but down 0.03 percentage points from the end of last month. Narrow money (M1) registered RMB19.59 trillion, rising 26.37% year on year, up 1.6 percentage points from the end of last month. Cash in circulation (M0) grew 11.59% year on year to RMB3.42 trillion. Net cash injection from January to July totaled RMB2.5 billion, down RMB54.1 billion year on year.
Outstanding loans continue to rise. At end-July, outstanding RMB loans reached RMB38.1 trillion, up 33.9% year on year, 15.17 percentage points higher than the end of last year but 0.54 percentage points lower than the end of last month. From January to July, RMB loans surged by RMB7.73 trillion, accelerating by RMB4.89 trillion year on year. In July, RMB loans increased by RMB355.9 billion. By sector, loans to households rose by RMB236.5 billion, with short-term loans and long and medium-term loans increasing by RMB47.8 billion and 188.7 billion respectively. Loans to non-financial companies and other sectors grew by RMB119.3 billion. In breakdown, short-term loans were down RMB58.1 billion, long and medium-term loans up RMB350.9 billion and bill financing down RMB198.2 billion. At end-July, outstanding foreign currency loans of financial institutions totaled USD306.4 billion, up 12.33% year on year. Foreign currency loans increased by USD11 billion in the month.
At end-July, outstanding RMB and foreign currency loans of financial institutions added up to RMB40.19 trillion, rising 32.58% year on year. In the January-July period, RMB and foreign currency loans increased by RMB8.15 trillion, accelerating by RMB5.05 trillion year on year. In July, RMB and foreign currency loans saw a RMB431.2 billion rise.
RMB deposits continue to increase. At end-July, outstanding RMB deposits of financial institutions increased 28.54% year on year to RMB57.03 trillion, up 8.81 percentage points year on year but down 0.47 percentage points month on month. From January to July, RMB deposits grew by RMB10.38 trillion, up RMB4.95 trillion from the same period last year. RMB deposits registered an increase of RMB399.3 billion in the month. By sector, household deposits declined by RMB19.2 billion; deposits of non-financial companies and fiscal deposits increased by RMB24.3 billion and 373.6 billion respectively. In deposits of non-financial companies, those of enterprises saw a RMB45 billion slide. At end-July, outstanding foreign currency deposits of financial institutions rose 12.21% year on year to USD207.5 billion. Foreign currency deposits sank by USD700 million in the month.
Outstanding RMB and foreign currency deposits of financial institutions totaled RMB58.45 trillion with a year-on-year growth of 28.08%. In the January-July period, RMB and foreign currency deposits rose by RMB10.48 trillion, accelerating by RMB4.96 trillion. RMB and foreign currency deposits increased by RMB394.8 billion in the month.
RMB transactions in the inter-bank lending market are brisk and market rates go up. In July 2009, RMB transactions in the inter-bank lending market amounted to RMB13.02 trillion. The average daily turnover reached RMB566.1 billion, increasing by 40.4%, or RMB162.9 billion, year on year.
In July, the monthly weighted interest rate for inter-bank lending averaged 1.32%, up 0.41 percentage points from last month but down 1.37 percentage points from the same period last year. The monthly weighted interest rate for bond pledged repo averaged 1.35%, up 0.44 percentage points month on month but down 1.41 percentage points year on year.
The Results of Locational International Banking Statistics and Consolidated International Banking Statistics in Japan
0 comments Posted by shuseel at 8:09 PM- Net external claims reported by banks in Japan were 1.4752 trillion U.S. dollars at the end of June 2009. They increased slightly from the previous quarter-end, after having decreased for three consecutive quarters. Although both gross external assets and liabilities increased, the growth of gross external assets was somewhat higher than that of gross external liabilities.
Locational International Banking Statistics in Japan
Consolidated International Banking Statistics of Japanese Reporting Banks
- Consolidated international claims on an ultimate basis stood at 2.1981 trillion U.S. dollars at the end of June 2009, marking the first increase in five quarters.
The Federal Reserve Board on Monday announced the designation of the chairs and deputy chairs of the twelve Federal Reserve Banks for 2010
0 comments Posted by shuseel at 7:57 PM
The Federal Reserve Board on Monday announced the designation of the chairs and deputy chairs of the twelve Federal Reserve Banks for 2010.
Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as chair and a second as deputy chair.
Following are the names of the chairs and deputy chairs designated by the Board for 2010:
Boston
Henri A. Termeer, Chairman, President and Chief Executive Officer, Genzyme Corporation, Cambridge, Massachusetts, named Chair.
Henri A. Termeer, Chairman, President and Chief Executive Officer, Genzyme Corporation, Cambridge, Massachusetts, named Chair.
Kirk A. Sykes, President, Urban Strategy America Fund, L.P., Boston, Massachusetts, named Deputy Chair.
New York
Denis M. Hughes, President, New York State AFL-CIO, New York, New York, renamed Chair.
Denis M. Hughes, President, New York State AFL-CIO, New York, New York, renamed Chair.
Lee C. Bollinger, President, Columbia University, New York, New York, renamed Deputy Chair.
Philadelphia
Charles P. Pizzi, President and Chief Executive Officer, Tasty Baking Company, Philadelphia, Pennsylvania, named Chair.
Charles P. Pizzi, President and Chief Executive Officer, Tasty Baking Company, Philadelphia, Pennsylvania, named Chair.
Jeremy Nowak, President and Chief Executive Officer, The Reinvestment Fund, Philadelphia, Pennsylvania, named Deputy Chair.
Cleveland
Alfred M. Rankin, Jr., Chairman, President and Chief Executive Officer, NACCO Industries, Inc., Cleveland, Ohio, named Chair.
Alfred M. Rankin, Jr., Chairman, President and Chief Executive Officer, NACCO Industries, Inc., Cleveland, Ohio, named Chair.
Richard K. Smucker, Executive Chairman and Co-Chief Executive Officer, The J.M. Smucker Company, Orrville, Ohio, named Deputy Chair.
Richmond
Lemuel E. Lewis, President, LocalWeather.com, Suffolk, Virginia, renamed Chair.
Lemuel E. Lewis, President, LocalWeather.com, Suffolk, Virginia, renamed Chair.
Margaret E. McDermid, Senior Vice President and Chief Information Officer, Dominion Resources, Inc., Richmond, Virginia, renamed Deputy Chair.
Atlanta
Carol B. Tomé, Chief Financial Officer and Executive Vice President, The Home Depot, Atlanta, Georgia, named Chair.
Carol B. Tomé, Chief Financial Officer and Executive Vice President, The Home Depot, Atlanta, Georgia, named Chair.
Thomas I. Barkin, Director, McKinsey & Company, Atlanta, Georgia, named Deputy Chair.
Chicago
William C. Foote, Chairman and Chief Executive Officer, USG Corporation, Chicago, Illinois, named Chair.
William C. Foote, Chairman and Chief Executive Officer, USG Corporation, Chicago, Illinois, named Chair.
Thomas J. Wilson, Chairman, President and Chief Executive Officer, The Allstate Corporation, Northbrook, Illinois, named Deputy Chair.
St. Louis
Steven H. Lipstein, President and Chief Executive Officer, BJC HealthCare, St. Louis, Missouri, renamed Chair.
Steven H. Lipstein, President and Chief Executive Officer, BJC HealthCare, St. Louis, Missouri, renamed Chair.
Ward M. Klein, Chief Executive Officer, Energizer Holdings, Inc., Town & Country, Missouri, renamed Deputy Chair.
Minneapolis
John W. Marvin, Chairman and Chief Executive Officer, Marvin Windows and Doors, Warroad, Minnesota, named Chair.
John W. Marvin, Chairman and Chief Executive Officer, Marvin Windows and Doors, Warroad, Minnesota, named Chair.
Mary K. Brainerd, President and Chief Executive Officer, HealthPartners, Minneapolis, Minnesota, named Deputy Chair.
Kansas City
Lu M. Cordova, Chief Executive Officer, Corlund Industries, LLC and President & General Manager, Almacen Storage Group, Boulder, Colorado, renamed Chair.
Lu M. Cordova, Chief Executive Officer, Corlund Industries, LLC and President & General Manager, Almacen Storage Group, Boulder, Colorado, renamed Chair.
Paul DeBruce, Chief Executive Officer and Chairman/Founder, DeBruce Grain, Inc., Kansas City, Missouri, renamed Deputy Chair.
Dallas
James T. Hackett, Chairman, President and Chief Executive Officer, Anadarko Petroleum Corporation, Houston, Texas, renamed Chair.
James T. Hackett, Chairman, President and Chief Executive Officer, Anadarko Petroleum Corporation, Houston, Texas, renamed Chair.
Herb Kelleher, Founder and Chairman Emeritus, Southwest Airlines, Dallas, Texas, renamed Deputy Chair.
San Francisco
T. Gary Rogers, Chairman of the Board, Levi Strauss & Co., San Francisco, California, renamed Chair.
T. Gary Rogers, Chairman of the Board, Levi Strauss & Co., San Francisco, California, renamed Chair.
Douglas W. Shorenstein, Chairman and Chief Executive Officer, Shorenstein Properties LLC, San Francisco, California, renamed Deputy Chair.
The Bank of England maintain the official Bank Rate paid on commercial bank reserves at 0.5%
0 comments Posted by shuseel at 7:50 PM
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £175 billion financed by the issuance of central bank reserves.
The Committee expects the announced programme to take another two months to complete. The scale of the programme will be kept under review.
The minutes of the meeting will be published at 9.30am on Wednesday 23 September.
Tuesday, September 15, 2009
Wednesday during early deals, the Indian rupee plunged to a 15-day low against the dollar as overseas investors trimmed holdings of riskier emerging-market assets on concerns over global economic recovery.The Indian market is trading sharply lower amid weak global cues on worries a world economic recovery would take longer than expected. Net FII selling and concerns about a rising fiscal deficit are also weighing on investor sentiment.
The BSE Sensex opened lower at 14,040 and fell further in early trading. The index is now trading near the day's low at 13,746, down 425 points or 3% and the S&P CNX Nifty is trading at 4,071, down 3.12%.
The rupee fell to a 15-day low of 48.9350 against the dollar today and this may be compared to yesterday's New York session close of 48.4650. If the Indian currency weakens further, it may likely target the 49.5 level.
The Indian currency has been showing weakness against the dollar after it reached a 15-day high of 47.5650 on July 02. Since then, the rupee has lost 3% against the dollar.
Monday, September 14, 2009
The USD was able to pick up some lost ground today, as risk aversion in equity markets lent the greenback some support. There was an article in the NY times, which reported that China is moving forward with levying tariffs on US automotive products and chicken meat, in response to President Obama's recent decision to levy tariffs on Chinese tire exports. The renewal of protectionism concerns between the US and China led to the overnight sell-off in risk correlated trades. The Nikkei was down -2.3% and S&P futures are pointing to a lower open. Gold and silver fell to $994.00 and $16.30, respectively. The USDJPY fell to 90.20 before rallying back to 90.70. Interestingly, the correlation between the JPY and equity markets continues to fall, while USD/JPY and DXY correlation has significantly increased. We expect that the recent JPY strength will force investors to consider the spillover effect to Japanese exporters’ earnings witnessed in today's Nikkei sell off. In the days to come, we believe Japanese policy markets will become increasingly vocal with their dissatisfaction. In this regard, traders will be specifically focused on Tuesday’s BoJ monetary policy meeting and the central bank’s accompanying statement. In addition, this will be the first BoJ meeting after the historic elections and the marginally independent CB might provide some direction for the young government. The other central bank meeting that traders will be watching, considering the recent currency strength, will be the SNB. Along with the JPY, the CHF has been one of the biggest gainers in recent weeks. We expect the SNB on Thursday to hold rates, but to once again affirm that CHF strength is unacceptable and halting further appreciation is at the top of their agenda. Today's Producer and Import prices came in at -5.5% vs. -5.4% y/y exp. If nothing else, they confirm Switzerland’s subdued inflationary trend and support the SNB fear that deflation remains a strong risk. The USD strength has been very apparent in the GBP, as markets speculate that the sterling is due for a correction. The Cable is now trading below its 5day MA at 1.6540. This should be an eventful week for the UK and sterling, as along the normal economic releases, Governor King and other MPC members are expected to testify to lawmakers on Tuesday and will be asked some very direct question of the future plans of QE. For the rest of the day, markets will be watching Capacity Utilization from Canada (USDCAD has found buyers briefly penetrating the 1.0990 psychological resistance), equity markets and a US Fed speakers.
Sunday, September 13, 2009
U.S. Dollar Continues to Lose Ground - Euro, British Pound Climbs to Fresh Weekly High
0 comments Posted by shuseel at 9:22 PM
The euro rallied against the greenback for the sixth day to reach a fresh yearly high of 1.4630 during the overnight session however, the EUR/USD may hold a narrow range going into the weekend as the pair remains overbought.
Talking Points
· Japanese Yen: USD/JPY Breaks Below 91.00
· Pound: Producer Prices Advance for Sixth Month
· US Dollar: U. of Michigan Confidence Survey on Tap
The euro rallied against the greenback for the sixth day to reach a fresh yearly high of 1.4630 during the overnight session however, the EUR/USD may hold a narrow range going into the weekend as the pair remains overbought. Meanwhile, the economic docket showed wholesale prices in Germany rose 0.7% in August, while the annualized rate fell at a slower pace from the previous month, and the extraordinary efforts taken on by the European Central Bank should help to stem the downside risks for growth and inflation as policy makers anticipate economic activity to improve going into the following year.
Meanwhile, ECB board member Lorenzo Bini Smaghi held a hawkish tone during a speech in Rome and said that the Governing Council will have to hike the benchmark interest rate before inflation begins to materialize as the central bank maintains its one and only mandate to ensure price stability. Mr. Smaghi said that the current policy is only “temporary” and expects borrowing costs to rise as the output gap narrows, but went onto say that now is not the time to implement an exit strategy. Moreover, the board member stated that the exit strategy is likely to have a substantial impact on the yield curve once it’s implemented, and said that the non-standard measures have achieved its objectives. At the same time, ECB’s Jose Manuel Gonzalez-Paramo said that the exit strategy will be dependent on the outlook for inflation and financial stability, and expects to see a modest recovery going forward as he anticipates economic activity in some countries to expand throughout the first half of 2010. As the central bank holds an improved economic outlook and expects the euro-region to recover going into the following year, long-term expectations for higher interest rates may continue to drive the euro higher as investors speculate the ECB to tighten policy over the next 12 months.
The British pound continued to retrace the sell-off from the previous month and advanced against the U.S. dollar for the fourth day to reach a fresh weekly high of 1.6744, and the improved outlook for inflation may drive the GBP/USD higher going into the North American trade as investors anticipate the Bank of England to raise the benchmark interest rate next year. Producer prices in the U.K. rose 0.2% in August, with the annualized rate falling 0.4% from the previous year amid forecasts for a 0.5% decline, while input prices surged 2.2% from July to top expectations for a 1.0% rise. At the same time, core prices rose 0.2% during the month, which was in-line with expectations, while the annual rate grew 0.7% from last year after rising 0.1% in the previous month. As the extraordinary efforts taken on by the government helps to stem the downside risks for growth and inflation, the central bank is likely to hold an improved outlook for the economy, and the British pound may continue to trend higher over the near-term as growth prospects improve.
U.S. dollar price action was mixed across the board, with the greenback tumbling lower against the Japanese yen for the fourth consecutive day to trade below 91.00, and the reserve currency may face increased volatility going into the U.S. session as the economic docket is expected to show a rebound in consumer confidence. The U. of Michigan confidence survey is anticipated to improve for the first time in three months, with economists forecasting the index to rise to 67.5 in September from 65.7 in the previous month, and the data is likely to encourage an enhanced outlook for private sector spending as household sentiment improve. At the same time, import price are expected to rise 1.0% in August, with wholesales inventories projected to fall for the eleventh month in July, while the public deficit is anticipated to widen to $139.5B in August from $111.9B in the previous month, and the slew of data is likely to move the markets as the markets thin ahead of the weekend.
UCOBANK has international presence for over 50 years now. UCO presently has four overseas branches in two important international financial centres in Singapore and Hong Kong and representative office at Kuala Lumpur, Malaysia and Guangzhou, China.
The international linkage from India is supported by a large Indian network through Integrated Treasury Branch and Authorised Forex Branches. Our other branches in India also provide international banking facilities through the Authorised Branches of our bank.This international network is further augmented by correspondent arrangements with leading Banks at all important world centres in various countries.Thus UCO has a true global presence and can offer a variety of international banking products, services and financial solutions to all cross-section of clients, tailor-made to their banking requirements through one of the best international banking relationship networks both in terms of strength and spread.
1. PRODUCTS & SERVICES
The international banking services in India is provided for the benefit of Indian customers, corporates, NRIs, Overseas Corporate Bodies, Foreign Companies/ Individuals as well as Foreign Banks etc. by our International Banking Branches, Authorised Forex Branches and Integrated Treasury Branch. Our other branches in India also provide international banking facilities through the aforesaid network of our branches.
All the facilities are subject to the prevalent rules & guidelines of the Bank and RBI. Brief details of services provided are as under:-
1. NRI Banking (Please visit NRI Corner)
2. Foreign Currency Loans
3. Finance/Services to Exporters
4. Finance/Services to Importers
5. Remittances
6. Forex & Treasury Services
7. Resident Foreign Currency (Domestic) Deposits
8. Correspondent Banking Services
9. All General Banking Services (Please visit Domestic Banking Sections)
2. FOREIGN CURRENCY LOANS
a) In India (FCNR 'B' Loans):
The foreign currency denominated loans in India are granted out of the pool of foreign currency funds of the Bank in FCNR(B) Deposit etc. accounts as permitted by Reserve Bank of India. These loans are commonly known as FCNR(B) Loans.
UCO has a broad base of NRI customers/depositors. Therefore, with the resource base of FCNR(B) deposits etc. UCO is in a position to offer the Foreign Currency Loans in India to our customers as an alternative to loans in Rupees.
These loans are denominated in foreign currency such as US Dollars and are offered as short term loans. The interest is fixed with a reasonable spread over LIBOR
UCO also allows loans in foreign currency to NRIs against their FCNR(B) Deposits at the Indian Branches. The details are available in NRI Banking section.
b) From Outside India:
With presence at two major financial centers of the world, UCO has foreign currency resources to arrange /grant Foreign Currency Loans to Indian as well as multinational corporates at the competitive rates.
The foreign currency denominated loans are granted by our overseas branches to Indian Corporates as per External Commercial Borrowing (ECB) Policy of Govt. of India/RBI.
3. FINANCE/SERVICES TO EXPORTERS
UCOGOLD CARD FOR EXPORTERS
UCO launches Goldcard for creditworthy exporters - Simplified access to export credit on very good terms:
Better terms of credit including rates of interest than those extended to other exporters by the Bank.
Processing of applications for credit faster than for other exporters.Simpler norms, subject to specific requirements in each case, if any. 'In-principle' limits for a period of 3 years with a provision for automatic renewal, subject to fulfillment of the terms and conditions of sanction. Preference for grant of packing credit in foreign currency (PCFC), subject to availability of foreign currency funds. Lower charges schedule and fee-structure than those provided to other exporters.
Relaxations in the norms in respect of security and collaterals, wherever feasible. Other facility/benefit to the exporters, subject to the fulfillment of extant rules and regulations applicable to export finance.
Types of Facilities for Exports
a) Rupee Export Credit (pre-shipment and post-shipment):
UCO provides both pre and post shipment credit to the Indian exporters through Rupee Denominated Loans as well as foreign currency loans in India. Credit facilities are sanctioned to exporters who satisfy credit exposure norms of UCO. Exporters having firm export orders or confirmed L/C from a bank are eligible to avail the export credit facilities.
Rupee Export Credit is available generally for a period of 180 days from the date of first disbursement. In deserving cases extension may be permitted within the guidelines of RBI. The corporates may also book forward contracts with UCO in respect of future export credit drawls, if required, as per the guidelines/directives provided by RBI.
UCO provides both pre and post shipment credit to the Indian exporters through Rupee Denominated Loans as well as foreign currency loans in India. Credit facilities are sanctioned to exporters who satisfy credit exposure norms of UCO. Exporters having firm export orders or confirmed L/C from a bank are eligible to avail the export credit facilities.
Rupee Export Credit is available generally for a period of 180 days from the date of first disbursement. In deserving cases extension may be permitted within the guidelines of RBI. The corporates may also book forward contracts with UCO in respect of future export credit drawls, if required, as per the guidelines/directives provided by RBI.
b) Pre-shipment Credit in Foreign Currency (PCFC):
UCO offers PCFC in the foreign currency to the exporters enabling them to fund their procurement, manufacturing/processing and packing requirements. These loans are available at very competitive international interest rates covering the cost of both domestic as well as import content of the exports.
The corporates/exporters with a good track record can avail a running account facility with UCO for PCFC. PCFC is generally available for a period of 180 days from date of first disbursement. In deserving cases extension may be permitted within the guidelines of RBI.
The corporates/exporters with a good track record can avail a running account facility with UCO for PCFC. PCFC is generally available for a period of 180 days from date of first disbursement. In deserving cases extension may be permitted within the guidelines of RBI.
Features:
(The forward covers can be booked in respect of future PCFC drawls.)
In the PCFC drawls permitted in a foreign currency other than the currency of export, exporter bears the risk in currency fluctuations. The foreign currency drawls are restricted to major currencies at present. In case, the export order is in a non-designated currency, PCFC is given in US$. For orders in Euro, Pound Sterling and JPY, PCFC can be availed in the respective currencies or US$ at the choice of exporter.
In the PCFC drawls permitted in a foreign currency other than the currency of export, exporter bears the risk in currency fluctuations. The foreign currency drawls are restricted to major currencies at present. In case, the export order is in a non-designated currency, PCFC is given in US$. For orders in Euro, Pound Sterling and JPY, PCFC can be availed in the respective currencies or US$ at the choice of exporter.
Multi-currency drawls against the same order, are not permitted at present due to operational inconvenience.
Repayment:
PCFC is to be repaid with the proceeds of the export bill submitted after shipment.In case of cancellation of export order, the PCFC can be closed by selling equivalent amount of foreign exchange at TT selling rate prevalent on the date of liquidation.
The PCFC in foreign currency are granted at our various branches through our Integrated Treasury Branch in Mumbai.
The PCFC in foreign currency are granted at our various branches through our Integrated Treasury Branch in Mumbai.
c) Negotiation of Bills under L/C
UCO's Authorised Forex Branches are active in negotiation/discounting of sight/usance international export bills under L/Cs opened by foreign banks as well as branches of Indian banks abroad. UCO offers the most competitive rates. These transactions are undertaken by our branches within the Bank/Country Exposure ceilings prescribed by UCO.
d) Export Bill Rediscounting:
UCO provides financing of export by way of discounting of export bills, as a post shipment finance to the exporters at competitive international rate of interest. This facility is available in four currencies i.e. US$, Pound Sterling, Euro and JPY.
The export bills (both Sight and Usance) drawn in compliance of FEMA can be purchased/ discounted.
Exporters can avail this facility from UCO to cover the bills drawn under L/C as well as other export bills.
The export bills (both Sight and Usance) drawn in compliance of FEMA can be purchased/ discounted.
Exporters can avail this facility from UCO to cover the bills drawn under L/C as well as other export bills.
e) Bank Guarantees:
UCO, on behalf of exporter constituents, issues guarantees in favour of beneficiaries abroad. The guarantees may be Performance and Financial. For Indian exporters, guarantees are issued in compliance to RBI guidelines.
4. FINANCE/SERVICES TO IMPORTERS
4. FINANCE/SERVICES TO IMPORTERS
a) Collection of Import Bills:
UCO has correspondent relationship with reputed International Banks throughout the world and can thus provide valuable services to importers who may be importing from any part of the Globe. The import bills are collected by our Authorised Forex Branches at very competitive rates. The import bills drawn on customers of other branches are also collected through these branches.
b) Letter of Credit:
On account of UCO's presence in international market for decades, UCO has established itself as a well known international bank. L/Cs of UCO are well accepted in the International market. For any special requirement UCO can get the L/C confirmed by the top international banks.
Thus UCO's L/C facility for the purchase of goods/services etc. fulfills the requirements of all importers to arrange a reliable supply. UCO offers this facility to importers in India within the ambit of FEMA and Exim policy of Govt. of India. UCO uses state of the art SWIFT network to transmit L/Cs and with a worldwide network of correspondents and our overseas branches facilitates prompt & efficient services to the importers.
L/C facility is granted to the importers on satisfying credit exposure norms of the Bank.
L/C facility is granted to the importers on satisfying credit exposure norms of the Bank.
c) Financing of import
Usance L/C facility
Usance L/C facility
UCO's Usance L/C facility provides the importer an opportunity to avail credit from their supplier/supplier's bank.
Deferred Payment Guarantee/Standby LC
UCO's Deferred Payment Guarantee/Standby LC facility also provides the importer an opportunity to avail credit from their supplier/supplier's bank.
Rupee finance
UCO also offers to Indian importers Rupee finance for payment of goods and services imported from abroad under its various Rupee credit facilities on satisfying credit exposure norms of the Bank.
Foreign Currency Loans
Short term External Commercial Borrowings or Trade Credits for less than three years as permitted by RBI for imports into India is allowed by our overseas branches to Indian importers at very competitive rates. These are generally backed by L/Cs opened by importer's bank. Indian importers can also avail this facility from our overseas branches as roll-over credit on their bank agreeing to extend the L/C in favour of our overseas branches.
d) Bank Guarantees:
UCO, on behalf of importer constituents or other customers, issues guarantees in favour of beneficiaries abroad. The guarantees may be both Performance and Financial.
5. REMITTANCES
UCO, through its worldwide network of correspondents, Indian branches and overseas branches, offers prompt inward and outward foreign remittance facilities at very competitive rates. The use of SWIFT network adds to reliability and efficient handling.
The remittances are handled by our Authorised Forex Branches. The outward remittances of customers of other branches are also remitted through these branches. Through our well-spread network of branches in India, inward remittances reach every nook & corner in India. UCO has tie-up arrangements with Western Union Money Transfer.
The remittances are handled by our Authorised Forex Branches. The outward remittances of customers of other branches are also remitted through these branches. Through our well-spread network of branches in India, inward remittances reach every nook & corner in India. UCO has tie-up arrangements with Western Union Money Transfer.
6. FOREX & TREASURY SERVICES
UCO operates in the Forex Market in India as well as abroad. In India the inter-bank forex operations is centralized at our Integrated Treasury Branch in Mumbai, country's undisputed financial hub. UCO's Authorised Forex Branches undertake customer transactions. The forex requirements of customers of other branches are also routed through these branches. Overseas branches undertake the forex treasury operations in Singapore and Hong Kong centre.
All the forex treasuries are equipped with state of art technology and professionally skilled staff to handle forex treasury operations efficiently.
UCO deals in all the important international currencies. Our Forex Treasuries generally undertake the following treasury related activities:-
Forex Inter Bank Placements/Borrowings
Sale & Purchase of currency on behalf of customers
Forward Cover Bookings
Cross Currency Swaps
Interest Rate Swaps (IRS)
Forward Rate Arrangements (FRAs)
Forex Money Market Operations
Forex Inter Bank Placements/Borrowings
Sale & Purchase of currency on behalf of customers
Forward Cover Bookings
Cross Currency Swaps
Interest Rate Swaps (IRS)
Forward Rate Arrangements (FRAs)
Forex Money Market Operations
Forex Services For Corporates
To improve the standard of service to the valued clientele, UCO has integrated its Forex and Domestic Treasury Operations under one roof in Mumbai. UCO's Forex Inter-bank desk at Treasury Branch is an active market player. UCO's Integrated operations at one place in Mumbai enables it to participate in inter-bank transactions on a large scale. Forex Dealing Rooms in Singapore and Hong Kong and a worldwide network of correspondents add to UCO's strength in providing the best forex corporate services.
Authorised Forex Branches spread across the country cater to needs of all customer in foreign exchange. Corporate Forex Services include Foreign Currency Sale & Purchase, Forward Booking, Cross Currency Forward etc. Other products like Collection & Negotiation of Export & Import Bills under LC, LC Issuance, Advising & Confirmation Services, Arrangement of Trader Credits, the guarantees on behalf of Indian Corporate/Projects, EEFC Accounts, Remittance etc. are all available to corporate customers from UCO.
UCO is establishing a Derivative Desk in India to offer various Derivative Products, such as IRS, FRA, Cross-currency Options, Currency Swaps with Cross-currency Interest Rate Swap etc. With this UCO will also offer structured products suitable for Corporates who have large receivables or payment obligation in foreign currencies. Derivative Desk will deal in hedging products to hedge the market risks i.e. interest rate risk and foreign exchange risk in Bank's balance sheet.
7. RESIDENT FOREIGN CURRENCY (DOMESTIC) A/Cs
Authorised Forex Branches spread across the country cater to needs of all customer in foreign exchange. Corporate Forex Services include Foreign Currency Sale & Purchase, Forward Booking, Cross Currency Forward etc. Other products like Collection & Negotiation of Export & Import Bills under LC, LC Issuance, Advising & Confirmation Services, Arrangement of Trader Credits, the guarantees on behalf of Indian Corporate/Projects, EEFC Accounts, Remittance etc. are all available to corporate customers from UCO.
UCO is establishing a Derivative Desk in India to offer various Derivative Products, such as IRS, FRA, Cross-currency Options, Currency Swaps with Cross-currency Interest Rate Swap etc. With this UCO will also offer structured products suitable for Corporates who have large receivables or payment obligation in foreign currencies. Derivative Desk will deal in hedging products to hedge the market risks i.e. interest rate risk and foreign exchange risk in Bank's balance sheet.
7. RESIDENT FOREIGN CURRENCY (DOMESTIC) A/Cs
UCO also offers Resident individuals in India, the facility to open non-interest bearing current account in foreign currency at the selected Indian branches as permitted by RBI. Joint accounts with a resident eligible to open RFC (D) account is permissible. Nomination facility is also permitted.
Thus UCO will provide an option to resident individuals to retain their receipts from abroad in foreign currency as permitted by RBI.
8. CORRESPONDENT BANKING SERVICES
Thus UCO will provide an option to resident individuals to retain their receipts from abroad in foreign currency as permitted by RBI.
8. CORRESPONDENT BANKING SERVICES
The extensive network of branches in India and presence in two important international centres enables UCO to offer correspondent banking services to the banks.
The Authorised Forex Branches in India as well as our overseas branches are capable of providing the services that an international correspondent Bank can offer.
The Authorised Forex Branches in India as well as our overseas branches are capable of providing the services that an international correspondent Bank can offer.
UCO can provide the following main services:-
- Collection of bills both Documentary and Clean.
- Advising/confirming of L/Cs opened by banks
- Discounting of Bills drawn under L/Cs
- Maintanence of foreign currency accounts in S$ and HK$
- Maintanence of Rupee accounts in India
- Making foreign currency payments/remittance on behalf of customers of banks.
UCO's excellent service with competitive charges provide a good Correspondent Banking solution.
UCO's overseas branches are active in discounting of usance international trade bills. With foreign currency resources of overseas branches, UCO offers the most competitive rates for discounting of these bills. The bills under the L/Cs of the most of the Indian Banks as well as International Banks are also discounted at competitive rates. These transactions are undertaken by them within the Bank/Country Exposure ceilings prescribed by UCO.
UCO's overseas branches are active in discounting of usance international trade bills. With foreign currency resources of overseas branches, UCO offers the most competitive rates for discounting of these bills. The bills under the L/Cs of the most of the Indian Banks as well as International Banks are also discounted at competitive rates. These transactions are undertaken by them within the Bank/Country Exposure ceilings prescribed by UCO.
EXTERNAL COMMERCIAL BORROWING (ECB)
The foreign currency loans to the Indian corporate are granted by UCO's overseas branches. The borrowings raised by the Indian corporate from specified banking sources outside India are termed "External Commercial Borrowings" (ECBs). These ECBs can be raised within the Policy guidelines of Govt. of India/Reserve Bank of India, as applicable from time to time. ECB includes the following:-
- Commercial LoansSyndicated Loans
- Floating/Fixed rate notes and bonds
- Lines of Credit from foreign banks and financial institutions
- Import loans, loans from the export credit agencies of other countries.
UCO is very active in granting and arranging various forms of ECB facilities for the Indian Corporate. UCO can offer following services to the Indian corporates in respect of cross border financing :-
- Arranging/granting External Commercial Borrowings by way of Foreign Currency Loans, FRNs, Bonds for the Indian corporates.
- Arranging/underwriting International Syndicated Loans for the Indian corporates.
- Participating in the International Loan Syndications.
- Granting loans backed by Export Credit Agencies.
- Providing import finance for Indian Corporates.
- Issue of Guarantees such as Bids, Bonds, Performance, Advance Payment etc. for the overseas projects bagged by the Indian Corporates.
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