Exchange to hedge the foreign exchange market

Joint RTS, MICEX Stock Exchange is taking new steps to insurance against risk of default on the foreign exchange market. Since February, increased capital requirements for market players, as well as the amount of insurance contributions to cover the risks.

On February 22, 2012 National Clearing Centre (NCC), which is a subsidiary of the MICEX, RTS, increases the demands on the participants to cover the risks of his foundation, said the exchange. Now, the minimum amount of capital for the participants, banks will rise from € 5 million to € 10 million (400 million rubles.), And for non-bank credit institutions - with € 0,5 million to € 5 million (200 million rubles.). The amount of the premium for each member of the fund will increase from $ 60 thousand to $ 80 thousand

Provisions for risks are being formed in the amount of $ 14.16 million in payments he provided to bidders in the foreign exchange market, where their counterparties do not fulfill their obligations under the transactions of buying and selling currencies. So far, payments from this fund were not made, since the foreign exchange market, there are other tools to reduce risks - preddeponirovanie funds and margin calls, etc. Insurance against risk is not the only reason for the participation of brokers in the fund. Participants have the opportunity to sell stock for a limited amount secured by the fund, with no collateral covering transactions. After the party fund exceeds this amount, all other transactions conducted by the general rules of trading - with the bail.

As explained, "b" on the MICEX, RTS, the decision to increase capital requirements for currency trading participants and their contributions to the insurance fund a number of reasons. Since January 1, Central Bank increased the minimum size requirements for banks' capital to 90 million rubles. to 180 million rubles. to improve the stability of the banking system and stock exchange operates in line with the same trend. "Common volatility in global financial markets makes increased demands to maintain the same level of security fund, which is an important component of overall risk management system", - said the representative of the exchange. "Foreign exchange market is growing - CEO adds," Zerich Capital Management "Alexander Shcheglov, - so the NCC had to revise its risk-management in this area." In 2010, the total volume of transactions in foreign currency on the MICEX amounted to 79.5 trillion rubles. During 2011 the combined market registered a total volume of the foreign exchange market 210 trillion rubles.

Mr. Shcheglov suggests that NFP measures must relate to the future liberalization of the foreign exchange market: "From this year the opportunity to trade the forex market will be all stock market participants, not just the banks, so in order to filter the market from the market players are insolvent to increase the requirements for participants in the fund. "

According to market participants, new requirements will not reduce the number of fund participants. "The current members will continue their presence in the fund - increase the amount of fees and capital requirements will not be problem for them" - says Mr. Shcheglov. In large banks, trading in the forex market, it is confirmed. Andrew Skobelin, head of foreign exchange transactions in international markets PSB (capital - 57 billion rubles.) Stated: "We can easily increase your insurance premium." On the other hand, medium-sized banks will continue to trade currencies without the participation of the insurance fund. In the Russian national bank (the capital - 321 million rubles). "Kommersant" said the bank is not a member of the fund and cover the risks involved in currency trading on the Stock Exchange on the same basis.

Shale gas is not warm to Europe

Europe has less chance of following the example of the United States reduce its dependence on Russian energy supplies from shale gas. Encountering resistance to environmentalists, the government of individual countries have already begun to deny oil and gas concerns in such projects.

The Bulgarian government on Tuesday revoked a license for geological exploration issued in June 2011, Chevron to search for shale gas production Novi, which, according to various estimates, can contain between 300 billion to 1 trillion cubic meters of gas. One of the main reasons for revocation of the license are environmental protests: last week in Bulgaria have been thousands of demonstrations against the shale gas. According to the demonstrators, used for the extraction technology of hydraulic fracturing contaminate groundwater.

As the Minister of Economy and Energy of Bulgaria Traicho Traikov after a meeting of the government, Chevron was allowed to continue the exploration for oil and gas in north-eastern Bulgaria, but if you use benign methods of drilling. "The idea is that they still have the right to search for oil and gas, but without using the disputed technology, hydraulic fracturing," - said Mr. Traikov, noting that the Bulgarian parliament intends to introduce a complete ban on hydraulic fracturing on land and in the territorial waters of Bulgaria .

Shale gas production by fracturing involves injecting into the reservoir under high pressure water with special granules and chemicals. The water pressure destroys the porous shale, and the pellets do not give the breed close up after pressure reduction. As a result of natural gas in the pores of shales is released and can be pumped to the surface. The disadvantage of technology in shale gas production is the rapid decline in well production, suggesting an active drilling new wells.

Until recently, shale gas constrained by the relatively high cost of drilling. In recent years, reducing the cost of drilling and new fracturing technology have led to widespread shale gas production in the U.S. in 2009, shale gas was there 14% of the total production in 2010, U.S. gas production ahead of Russia. As a result, traders bought liquefied natural gas (LNG) for the American market, began to send him to Europe, bringing down prices. In 2009, Qatari LNG individual lots were sold in Europe at a price three times lower than the gas, "Gazprom" long-term contracts. This forced gas producers significantly change their plans - in particular, "Gazprom", revising the forecasts of its presence in the U.S. market, was forced to move the timing of the Shtokman field.

In the USA during the period of rapid growth of the U.S. shale gas "gas revolution" was accompanied by a mass of intrigue, rumor and speculation. Experts from the producing countries, including Russia, talked about the next "bubble" in the gas market, comparing the shale gas at one time as popular, but zaglohshim project of gas produced from coal seams. U.S. officials have admitted the facts alleged overstatement of production levels, calling to check the figures provided by the mining companies. But the most important factor limiting production are environmental concerns. It was found that the benefits of shale gas, the ability to get it in close proximity to consumers, small towns scattered across the U.S., instead of natural gas pipelines, are accompanied by significant disadvantages. The chemicals injected into the reservoir began to be detected in groundwater and drinking water.

Europe is on the same path: from the euphoria of the expected decline in energy prices and the prospects for energy independence from countries supplying gas, primarily in Russia, to minimize production of the protests against environmental pollution. In early 2011, after some hesitation soil in Blackpool, fracturing technology (and with it, and shale gas) has banned England. In July, France followed suit. Russian specialists from the Institute of Oil and Gas Academy of Sciences suggest that the geology of Western Europe will not allow shale gas to become a serious competitor to supplies from Russia. However, in some European countries still believe otherwise - Poland, for example, intends to start production of shale gas in 2014-2015, Romania and Serbia intend to start exploration work in search field slates.

The American banks are falling profits and quotes

The second representative of the six largest financial corporations in the U.S. bank Citigroup, presented a report on the results of its operations for the fourth quarter of 2011. Revenues and profits declined due to growing instability in financial markets. Investors reacted by selling shares in a bad report Citigroup.

Reporting Citigroup's second quarterly report negative after the end of last week to reduce the profits reported by other Finance Corporation, JP Morgan Chase. At Citigroup profit in the fourth quarter totaled $ 1.16 billion ($ 0.38 per share), which is 11% lower than in the fourth quarter of 2010, and below analysts' forecasts, who were waiting on the bank's profit in the region of $ 0.5 per share . Citigroup's revenue for the quarter also not pleased, to $ 17.2 billion, up 7% less than a year ago. Negative trend has been demonstrated in large part because of a sharp decline in unit sales trading in the market - 37% - and investbankinga - 45%. A similar pattern was observed at JP Morgan Chase. "Fears of our clients on developments in Europe have led to the fact that December was a very difficult - said Citigroup Chief Financial Officer John Hershel .- Europe remains a major threat hanging over the markets today. The clouds continued to thicken. " Weak quarterly figures Citigroup led to the fact that the results of yesterday's trading session, shares of the corporation in the U.S. fell 8.2%.

The analysts point out that the problems experienced in the fourth quarter of those American banks that are active in capital markets. "In such a situation is unpleasant banks - said in a Bloomberg TV broadcast head of investment company Loop Capital Markets James Reynolds .- In this case the banks who hold more traditional model, is doing fine." Indeed, in one day with Citigroup in the fourth quarter reported another representative of the "Big Six" of U.S. banks - Wells Fargo, whose activities are focused on retail banking. Profits of the bank rose by 20% in the first hours of trading led to the growth of quotations on the Wells Fargo 2%.

Today is expected to publish quarterly reports the largest U.S. investment bank Goldman Sachs, and tomorrow - the rest of the "big six» - Bank of America and Morgan Stanley.