Banking

HSBC, Citi, Deutsche Bank, Morgan Stanley And RBC Traders May Have Broken Competition Law, Watchdog Finds

Published

7 months ago

May 24, 2023

admin

Britain’s Competition and Markets Authority said on Wednesday it had provisionally found five major global banks allegedly broke UK competition law by exchanging sensitive information on government bond trading activities in one-to-one online chats. In a statement, the watchdog alleged Citi, Deutsche Bank (ETR: DBKGn), HSBC, Morgan Stanley (NYSE: MS), and Royal Bank of Canada each unlawfully shared information by participating in one or more one-to-one conversations in Bloomberg chatrooms between a small number of traders at varying times between 2009 and 2013. The conversations allegedly related to buying and selling of UK government bonds – specifically, gilts and gilt asset swaps – and included details on pricing and other aspects of their trading strategies, the watchdog said. Deutsche Bank and Citi have admitted to involvement in anti-competitive activity, while HSBC, Morgan Stanley, and Royal Bank of Canada have not admitted any wrongdoing. At this stage, no assumption should be made that any of the banks have broken the law, the CMA said. “A properly functioning, competitive bond market benefits tens of millions of taxpayers and pension savers as well as being at the heart of the UK’s reputation as a global financial hub,” Michael Grenfell, Executive Director of Enforcement at the CMA, said. “These alleged activities are therefore very serious and warrant the detailed investigation we have undertaken. This could have denied taxpayers, pension savers and financial institutions the benefits of full competition for these products, including the minimization of borrowing costs.” The CMA said it would now consider further representations from the banks before reaching a final decision on next steps.

Banking

GBP/USD Price Forecast: Pound Fixated on US Factors

Published

7 months ago

May 15, 2023

admin

GBP USD fundamental backdrop The British pound carved out some marginal gains this Monday morning after positivity around the US debt ceiling emerged. There has been a tentative meeting scheduled for tomorrow with participants including President Joe Biden and House Speaker Kevin McCarthy to negotiate around avoiding a default. The President commented further stating that he believes a deal could be reached stoking risk sentiment with investors now marginally moving away from the safe haven USD. That being said, until markets receive more clarity around the situation, the greenback will remain the preferred currency against the pound. Last week’s Bank of England (BoE) meeting expectedly raised interest rates by 25bps but money market pricing (see table below) showed a stark downward revision of upcoming rate hikes to roughly 40bps from 70bps peak pre-announcement. The 40bps current view may be overenthusiastic as recessionary fears gain traction as well as the BoE’s inflation forecast suggesting lower inflation in the UK even at current rates. The aggressive monetary policy stance thus far should be sufficiently restrictive for the UK economy as signs of an economic slowdown are starting to appear.

Bank Of England Interest Rate Probabilities

Fed speakers will dominate the calendar today following on from officials last week who were less hawkish relative to prior commentary. Talks of data dependency and bank stress were mentioned but overall the preference remained restrictive. Fed speakers today (see below) could stoke some volatility for cable in what is a comparatively quiet day from an economic perspective. Daily GBP/USD price action saw the 1.2500 handle (now resistance) being breached with 1.2400 not far off. The Relative Strength Index (RSI) fell to cautious levels favoring neither bullish nor bearish momentum short-term – this reflects the uncertain external environment influencing the pair. IG Client Sentiment Data (IGCS) shows retail traders are currently net LONG on GBP/USD with 56% of traders net long (as of this writing). At Daily FX we typically take a contrarian view to crowd sentiment resulting in a short-term downside disposition.

Banking

Gaming Stock Gains 24% In 3 Days; Brokerage Sees Further Upside of 21%

Published

7 months ago

May 15, 2023

admin

Shares of Zensar Technologies (NS :ZENT) climbed 10.72% on Monday to reach a fresh 52-week high of ₹ 375.90 apiece after the company’s results beat analyst expectations. At 01:25 PM, its shares were trading at ₹ 368.55 apiece, up 8.56%. In the past three days, its share price increased by 23.35%, rising from ₹ 304.75 apiece. Zensar Technologies is a digital solutions and technology company. It is a part of the Mumbai-based RPG group and provides custom applications management services. Moreover, its game testing Centre of Excellence (CoE) helps gaming companies leverage the benefits of speed, and efficiency aligned with its testing and development goals.

Result

The company’s consolidated revenue from operations stood at ₹ 1212.6 crores for the January to March quarter (Q4FY23), indicating an increase of 5.10% as compared to ₹ 1153.8 crores reported in the corresponding quarter last year (Q4FY22). Its net profit dipped 8.87% to ₹ 119.2 crores in Q4FY23, compared to ₹ 130.8 crores in Q4FY22. However, it increased by a whopping 55.82% sequentially, from ₹ 76.5 crores in the October to December quarter (Q3FY23). For the entire year (FY23), the company reported a revenue of ₹ 4848.2 crores, up 14.24% as compared to 4243.8 crores in FY22. Its net profit decreased by 22.31% to ₹ 327.6 crores in FY23, as compared to ₹ 421.7 crores reported last year (FY22).

Dividend

The company’s board announced a final dividend at ₹ 3.50 per share (175% of the face value of ₹ 2) for the financial year 2022-23, subject to approval by the shareholders. If approved, the dividend will be paid within 30 days after the company’s AGM.

Targets

HDFC Securities has a buy rating on the stock with a target price of ₹ 445 apiece, which translates to an upside of 20.74%. The brokerage said that Zenas reported a strong EBITDA margin expansion of 324bps quarter-on-quarter (QoQ), while its revenue remained flat sequentially. This expansion was on account of lower sub-contracting, higher utilization, better productivity & business mix (lower pass-through) and FX.

Financials

Zenas Technologies is a small-cap company with a market capitalization of ₹ 7689 crores. It has a low return on equity of 11.57%, an ideal debt-to-equity ratio of 0.09 and a dividend yield of 1.47%. Its shares were trading at a price-to-earnings ratio (P/E) of 23.63, which is lower than the industry average of 29.53, indicating that the stock might be undervalued as compared to its peers. The post Gaming stock gains 24% in 3 days; Brokerage sees further upside of 21% appeared first on Trade Brains. tart Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!