Chinese Firms Halt Trading
About 745 Chinese companies - comprising 26% of firms listed on mainland Chinese exchanges - have suspended trading in response to the recent selloffs that have caused market downfalls in the country. The suspensions halt movement of $1.4 trillion of shares, representing 21% of China's market capitalization. Meanwhile, the Shanghai Composite Index has already fallen 28% since its June 12 peak value. The rout has always erased $3.2 billion in China's markets, equivalent to twice the size of India's entire stock market. Companies such as Searainbow Holding Corp. in Shenzhen has lost 54% in the past 3 weeks, after rising 150% in the year thru June 11.
Russia Contributes $18 Billion to BRICS Reserves Pool
The central banks of Brazil, Russia, India, China and South Africa (BRICS) have signed an agreement on Tuesday to create a reserve pool to provide source of liquidity for the member nations in times of trouble. Worth $100 billion (the fund is denominated in U.S. dollars), China will contribute $41 billion, while B, I and R will provide $18 billion, and South Africa $5 billion. Elvira Nabiullina, governor of Russia's central bank, has stated that the contribution will not reduce the country's official reserves, as the amount comes from Russia's gold and forex reserves. As of end of June, Russia's gold and forex pools stood at $362 billion.
Horizon Pharma Makes Offer of $3 Billion to Depomed
Irish drug maker Horizon Pharma announced it had made an offer to acquire American manufacturer company Depomed for $3 billion, all in shares. While Depomed has so far rejected the proposal, which is valued at $29.25 per share, 42% above Depomed's closing mark of $20.64 on Monday. Horizon Pharma had previously acquired Vidara Therapeutics International for $660 million and California-based Hyperion Therapeutics for $1.1 billion. The mergers reflect current trends in the health care sector, as pharmaceutical companies look to increase strategic and financial value.
London Hedge Fund Lost $1.2 Million in Phone Scam
Hedge fund Fortelus Capital Management LLP lost 742,668 pounds ($1.2 million) after its CFO, Thomas Meston, was conned into providing securities code to who he thought was Coutts, the fund's bank. The scam happened on a Friday afternoon phone call, when Meston was warned of fraudulent activity on the fund's account. Meston has since been fired by the firm and sued by Fortelus for breaching his responsibilities. The event highlights the vulnerability of online security systems, as the Bank of England noted that cyber crime was growing threat to the financial industry. Similar cases have cropped up, as with Zurich Insurance Group AG, where fraud caused a loss of 5 million pounds over 3 months.
Sources:
http://www.bloomberg.com/news/articles/2015-07-07/chinese-trading-halts-freeze-1-4-trillion-of-shares-amid-rout
http://www.bloomberg.com/news/articles/2015-07-07/friday-afternoon-scam-cost-hedge-fund-1-2-million-and-cfo-s-job
http://www.nytimes.com/2015/07/08/business/dealbook/horizon-pharma-offers-to-buy-depomed-for-3-billion.html
http://www.reuters.com/article/2015/07/07/us-emerging-brics-russia-cenbank-idUSKCN0PH1L820150707
