Tuesday, September 29, 2009

Investment management firms

Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades

Major stock exchanges

Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Total Turnover at the end of May 2009

Region ↓ Stock Exchange ↓ Market Value
(millions USD) ↓		 Total Share Turnover
(millions USD) ↓
Africa Johannesburg Securities Exchange 605,040.2 117,424.7
Americas NASDAQ 2,773,684.3 12,256,704.3
Americas São Paulo Stock Exchange 920,263.9 191,926.1
Americas Toronto Stock Exchange 1,347,674.0 490,912.4
Americas New York Stock Exchange 9,574,066.6 7,986,835.8
Asia-Pacific Australian Securities Exchange 839,062.7 273,205.9
Asia-Pacific Bombay Stock Exchange 1,032,589.6 83,906.6
Asia-Pacific Hong Kong Stock Exchange 1,773,002.2 519,465.7
Asia-Pacific Korea Exchange 640,357.6 618,607.8
Asia-Pacific National Stock Exchange of India 968,815.1 242,641.7
Asia-Pacific Shanghai Stock Exchange 2,069,937.1 1,685,862.2
Asia-Pacific Shenzhen Stock Exchange 563,103.3 880,744.6
Asia-Pacific Tokyo Stock Exchange 3,102,492.9 1,561,888.8
Europe Euronext 2,262,751.6 742,885.6
Europe Frankfurt Stock Exchange (Deutsche Börse) 1,132,126.2 1,101,064.6
Europe London Stock Exchange 2,204,320.0 1,483,263.3
Europe Madrid Stock Exchange (Bolsas y Mercados Españoles) 1,084,606.4 591,217.3
Europe Milan Stock Exchange (Borsa Italiana) 554,613.9 341,421.1
Europe Nordic Stock Exchange Group OMX1 664,465.8 319,398.1
Europe Swiss Exchange 854,369.0 272,201.5

^Note 1 includes the Copenhagen, Helsinki, Iceland, Stockholm, Tallinn, Riga and Vilnius Stock Exchanges

The London Stock Exchange in the City of London.
New York Stock Exchange, New York City.
São Paulo Stock Exchange in São Paulo.
The Tokyo Stock Exchange in Tokyo.
Australian Securities Exchange's Sydney Exchange Centre in Sydney.
The Johannesburg Securities Exchange in the City of Johannesburg.

The main stock exchanges:

See also: Category:Stock exchanges

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Money Transfer/Remittance Companies

Money Transfer/Remittance Companies

Money transfer companies/remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, theAite Group estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally.

Major stock exchanges

Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Total Turnover at the end of May 2009

Region ↓ Stock Exchange ↓ Market Value
(millions USD) ↓		 Total Share Turnover
(millions USD) ↓
Africa Johannesburg Securities Exchange 605,040.2 117,424.7
Americas NASDAQ 2,773,684.3 12,256,704.3
Americas São Paulo Stock Exchange 920,263.9 191,926.1
Americas Toronto Stock Exchange 1,347,674.0 490,912.4
Americas New York Stock Exchange 9,574,066.6 7,986,835.8
Asia-Pacific Australian Securities Exchange 839,062.7 273,205.9
Asia-Pacific Bombay Stock Exchange 1,032,589.6 83,906.6
Asia-Pacific Hong Kong Stock Exchange 1,773,002.2 519,465.7
Asia-Pacific Korea Exchange 640,357.6 618,607.8
Asia-Pacific National Stock Exchange of India 968,815.1 242,641.7
Asia-Pacific Shanghai Stock Exchange 2,069,937.1 1,685,862.2
Asia-Pacific Shenzhen Stock Exchange 563,103.3 880,744.6
Asia-Pacific Tokyo Stock Exchange 3,102,492.9 1,561,888.8
Europe Euronext 2,262,751.6 742,885.6
Europe Frankfurt Stock Exchange (Deutsche Börse) 1,132,126.2 1,101,064.6
Europe London Stock Exchange 2,204,320.0 1,483,263.3
Europe Madrid Stock Exchange (Bolsas y Mercados Españoles) 1,084,606.4 591,217.3
Europe Milan Stock Exchange (Borsa Italiana) 554,613.9 341,421.1
Europe Nordic Stock Exchange Group OMX1 664,465.8 319,398.1
Europe Swiss Exchange 854,369.0 272,201.5

^Note 1 includes the Copenhagen, Helsinki, Iceland, Stockholm, Tallinn, Riga and Vilnius Stock Exchanges

The London Stock Exchange in the City of London.
New York Stock Exchange, New York City.
São Paulo Stock Exchange in São Paulo.
The Tokyo Stock Exchange in Tokyo.
Australian Securities Exchange's Sydney Exchange Centre in Sydney.
The Johannesburg Securities Exchange in the City of Johannesburg.

The main stock exchanges:

See also: Category:Stock exchanges

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Non-bank Foreign Exchange Companies

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.

It is estimated that in the UK, 14% of currency transfers/payments[10] are made via Foreign Exchange Companies.[11] These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
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FOREX

The foreign exchange market (currency, forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies.[1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remainedfixed as per the Bretton Woods system

till 1971.

Presently, the FX market is one of the largest and mostliquidfinancial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations,governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]

The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollars, Euros, Japanese yen, Pounds Sterling, etc., and the need for trading in such currencies.



The foreign exchange market is unique because of

  • its trading volumes,
  • the extreme liquidity of the market,
  • its geographical dispersion,
  • its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
  • the variety of factors that affect exchange rates.
  • the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
  • the use of leverage
Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.

As such, it has been referred to as the market closest to the idealperfect competition, notwithstandingmarket manipulation by central banks. According to the Bank for International Settlements,[2]average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:

Of the $3.98 trillion daily global turnover, trading in Londonaccounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%.[4] In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.

Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.

Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[2]; [3]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account.

FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Top 10 currency traders [5]
% of overall volume, May 2008
RankNameVolume
1Flag of GermanyDeutsche Bank21.70%
2Flag of SwitzerlandUBS AG15.80%
3Flag of the United KingdomBarclays Capital9.12%
4Flag of the United StatesCiti7.49%
5Flag of the United KingdomRoyal Bank of Scotland7.30%
6Flag of the United StatesJPMorgan4.19%
7Flag of the United KingdomHSBC4.10%
8Flag of the United StatesLehman Brothers3.58%
9Flag of the United StatesGoldman Sachs3.47%
10Flag of the United StatesMorgan Stanley2.86%

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[6] Because foreign exchange is anOTCmarket where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spreadis the difference between the price at which a bank or market makerwill sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".


These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
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Banks

Banks

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in mosttrading rooms, but turnover is noticeably smaller than just a few years ago.

Major stock exchanges

Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Total Turnover at the end of May 2009

Region ↓ Stock Exchange ↓ Market Value
(millions USD) ↓		 Total Share Turnover
(millions USD) ↓
Africa Johannesburg Securities Exchange 605,040.2 117,424.7
Americas NASDAQ 2,773,684.3 12,256,704.3
Americas São Paulo Stock Exchange 920,263.9 191,926.1
Americas Toronto Stock Exchange 1,347,674.0 490,912.4
Americas New York Stock Exchange 9,574,066.6 7,986,835.8
Asia-Pacific Australian Securities Exchange 839,062.7 273,205.9
Asia-Pacific Bombay Stock Exchange 1,032,589.6 83,906.6
Asia-Pacific Hong Kong Stock Exchange 1,773,002.2 519,465.7
Asia-Pacific Korea Exchange 640,357.6 618,607.8
Asia-Pacific National Stock Exchange of India 968,815.1 242,641.7
Asia-Pacific Shanghai Stock Exchange 2,069,937.1 1,685,862.2
Asia-Pacific Shenzhen Stock Exchange 563,103.3 880,744.6
Asia-Pacific Tokyo Stock Exchange 3,102,492.9 1,561,888.8
Europe Euronext 2,262,751.6 742,885.6
Europe Frankfurt Stock Exchange (Deutsche Börse) 1,132,126.2 1,101,064.6
Europe London Stock Exchange 2,204,320.0 1,483,263.3
Europe Madrid Stock Exchange (Bolsas y Mercados Españoles) 1,084,606.4 591,217.3
Europe Milan Stock Exchange (Borsa Italiana) 554,613.9 341,421.1
Europe Nordic Stock Exchange Group OMX1 664,465.8 319,398.1
Europe Swiss Exchange 854,369.0 272,201.5

^Note 1 includes the Copenhagen, Helsinki, Iceland, Stockholm, Tallinn, Riga and Vilnius Stock Exchanges

The London Stock Exchange in the City of London.
New York Stock Exchange, New York City.
São Paulo Stock Exchange in São Paulo.
The Tokyo Stock Exchange in Tokyo.
Australian Securities Exchange's Sydney Exchange Centre in Sydney.
The Johannesburg Securities Exchange in the City of Johannesburg.

The main stock exchanges:

See also: Category:Stock exchanges

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Monday, June 8, 2009

World MasterCard

World Card
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