Today is a very sad day for Poland

Hi,

Today we had a very "green day" on the financial markets. I hope that you used of my analysis published yesterday and made ​​the decision that led to the increase the value of your portfolio :)

Today, in addition to increases in the stock markets had given a lot of interesting information. The most important of these, which is worth remembering I put below. Happy reading. Comments always welcome.

Take care, oscarjp :)


Industrial production in France: +0.2% m/m; Consensus: +0.7% m/m; previously: -0.6% m/m

Industrial production in Italy: -0.3% m/m; Consensus: +0.6% m/m previously: -1.0% m/m

Unemployment Claims: 

Jump from 308 to 374 thousand. At first glance it seems shocking, but when assembled it into its component data seem to be quite logical. Half of the increase, so 33 thousand. is the result of the processing of outstanding requests from California, where he had for four weeks was broken computer system. In this situation, the previous four readings can you add to the eight thousand. Another 1/3 of growth, so 22 thousand., The effect of the dole applications employees of companies living off government contracts. In this situation, increase the "net" is 11 thousand., The actual situation well illustrated four-week average to 325 thousand., Still at a very favorable level.Of course, that's assuming that the shutdown is about to expire. If not, we will soon have claimsy again at 340k +.

The main conclusions after the speech Bullard:

- By shutdown in October cutting of QE3 less likely;
- Yellen will guarantee the continuation of the Feds policy;
- With low inflation, the Fed can keep QE3;
- September's decision proved to be correct.

The main conclusions after the Mario Draghi conference (NY):

- credit growth rate remains weak;

- monetary policies must support growth, and countries need to reform;

- The ECB has promised low interest rates for a long time; (the only guide)

- guidance helped markets to better read the ECB's policies;
- focus mainly on medium-term inflation.

Very, very, very important information for my region:

Moody's: The CEE hardest to reduce the risk of QE3 are Hungary and Romania. Poland by the agency is relatively average, exposed to strong outflow of capital as a result of the expected decision of the Fed. Least in our region this factor are exposed to Slovakia and the Czech Republic. The degree of exposure to capital outflows due to a reduction QE3 should translate into a potential weakening of the currency at the time of the decision of the Federal Reserve.

Unfortunately, the last nice information for the Polish today. Today we also heard the specifics in terms of the nationalization of the Open Pension Funds (OFE) by the ruling authority. Here are the main ones:

-  Pension funds will not be able to advertise !!! (unfair competition);

- The office will probably need to go in person or send a letter (Who chooses this option OFE? Majority of people forget about that. If there is no publicity, it will result in a large outflow of retirees with pension funds - that is, less money will go to the stock exchange);

- New prudential thresholds: 43% instead of 50% and 48% instead of 55% (information irrelevant, rulers have already shown this year that, as the need arises, even constitutions change);

-  February 3, 2014 all OFE will need to provide 51.5 percent assets to ZUS. In this: All bonds issued by the Treasury and the territorial units of local governments but not only. Will also be taken CASH or bank securities held by OFE!;

- OFE will have a minimum 75% of the funds invest in stocks!;

- 3 months to select between OFE or ZUS from April 1, 2014;

-  Contributions from 2.8 to 2.92%

- The next "window" after two years, then every 4 years;

- Removed the minimum rate of return;

- 30% of the funds can be invested abroad in 2016;

All calculations at the present day. This means that OFE would give out all government bonds worth PLN 124mld, as the later mentioned in the Act assets, even to the 150mld PLN. Then OFE  remain about 142mld PLN, including 120mld in shares (valuation today).

This means that OFE of the machine to reach the required 75% of the investment share. If the valuation of pension fund assets would not change, it's February 3rd invested in equities will be about 84% of assets.

oscarjp