Connect with us

Investing

Employing your ‘sixth sense’ in systems selection

Published

on

Zurich Expands Global Use Of GuideWire Insurance Platform With Selection Of GuideWire Cyence Risk Analytics

In the asset management world there are many factors involved in the systems selection process and most of these have been well documented by procurement experts aroundthe globe. At a basic level, the decision between an enterprise or best-of breed approach to technology need to be addressed, followed by a review of the functionality on offer from the various relevant vendors.

Some considerations, however, transcend all approaches and these are often overlooked by firms reviewing their businesses’ models. Firstly, the ability to implement the system in a reasonable and predictable time-frame and to a set budget is critical. Implementation becomes more challenging when firms are looking to deploy across regions. Here, the experience and track record of the vendor is crucial.

Abbey Shasore

Abbey Shasore

The second key area is the ability to integrate. A fundamental compromise to ongoing agility is the inability to quickly, accurately and simply assimilate new systems and services. This is almost always underpinned by a technical integration; systems need to be open and able to share and receive information in a transparent and simple manner. The capacity to integrate is often an interesting indicator as to the true age of the system (or certain areas of the system), although it is sometimes exacerbated by the vendor’s defensive culture.This defensiveness can be manifest if the vendor is concerned that other vendors are trying to ‘muscle in’ on their domain.

What is less often discussed, however, are the ‘soft skills’ that will be decisive in the project’s eventual success, long after the selection process is complete. The importance of the personal touch should never be overlooked or underestimated when assessing and selecting a vendor. Any personal chemistry between an asset manager and the vendor under consideration is important and should be a factor. There needs to be a cultural alignment between the two parties, involving an openness and a compatibility.

There is palpable value in engendering trust (something that I consider to be apposite) and drawing your carefully selected vendor-partner into your sphere of confidence. For example, involving a vendor in the process of setting the appropriate parts of the new Target Operating Model is a big step for most asset managers to take, but the payback for such a bold move will be enjoyed long after the deployment is complete.Conversely, the default ‘master-servant’ relationship between the asset manager and a vendor is one that will result in missed opportunities or an ineffective project. Not involving your vendor-partner in the key principles behind your rationale, approaches and decisions (or even just failing to perceive them as part of your wider project team) curtails your ability to capitalise on those positive benefits. It risks not only restricting the capacity of the vendor to deliver but will also have a demotivating effect on the entire team.

The real danger is that relevant peripheral information is withheld from the joint project team in circumstances where the relationship between vendor and client is insufficiently close. The denial of vital information will inevitably doom the project from the outset, whereas the subtler suppression of relevant information is likely to lead to more insidious effects. The inevitable outcome will be a project that fails to deliver its full potential (particularly in terms of known but uncommunicated future client needs or aspirations). Of course, this kind of issue can always be addressed, but time and money will inevitably be wasted in the course of doing so.

Where firms can share concerns early and have a transparent,trusted relationship with their vendor, based upon regular, ongoing and multi-level dialogue, the chances of success are very significantly enhanced. If, as sadly many relationships do, a culture develops whereby at the earliest challenge the interaction rapidly descends into a ‘blame game’, the project will struggle to recover and the association will probably never evolve to the optimum partnership.

In order to mitigate this risk, asset managers should select their suppliers carefully, ensuring a strong cultural fit. Both parties need to develop an open, honest relationship and strive for a true partnership – something that is often quoted, but rarely delivered.

The benefits of this kind of open relationship between asset managers and their vendors are numerous. Aside from increasing the likelihood of the project being completed on time and to budget, the transferral of knowledge between the vendor and the asset manager will be improved. The vendor will have a deeper understanding of the asset manager’s business strategy and therefore be in a better position to adapt and flex the implementation plan if the business strategy needs to evolve.

Of course, one of the growing challenges is the number of vendors to choose from. The lack of a competitive landscape in many areas of investment management technology (often due to vendor consolidation) means that it can be difficult to create real choice. Great solutions are always stimulated by strong competition; vendors with a dominant position tend to become complacent, suffer from a deterioration in service levels and focus on internal or client issues with less regard for the moving market requirements.

In our experience, US asset managers are sometimes more open and direct in their dealings with vendors than their cousins across the Pond. This may simply be a cultural phenomenon, but I believe there is a lesson to be learned here:employing your ‘sixth sense’ during systems selection will reap tangible benefits.

Investing

GameStop jumps nearly 19%; ‘meme stocks’ fade after another wild ride

Published

on

GameStop jumps nearly 19%; 'meme stocks' fade after another wild ride 1

By Aaron Saldanha, Thyagaraju Adinarayan and David Randall

(Reuters) – GameStop Corp shares rallied on Thursday, finishing with double-digit gains despite a sharp retreat from session highs and leading a surprise resurgence of so-called “stonks” championed online by passionate retail investors. GameStop shares, which doubled their value on Wednesday, hit $160 at Thursday’s open before being halted after several minutes of trading and fell to around $129 before the second halt. The stock closed for the day at $108.73 for an 18.5% gain, after soaring almost 90% at the session peak.

Other “stonks” or “meme stocks” popular on sites such as Reddit’s WallStreetBets also saw their rallies fade. Headphone company Koss Corp closed up 16.8% gain after rocketing nearly 61% during the session. AMC Entertainment ended down nearly 9% after jumping more than 15% during the session.

Analysts were puzzled by the rally that came even as the benchmark S&P dropped 2.4%. Some ruled out a short squeeze like the one in January that battered hedge funds that had bet against GameStop and were forced to cover short positions when individual investors using Robinhood and other trading apps pushed the video game retailer’s shares as high as $483.

“The power of the “three R’s” (Robinhood, Retail, Reddit) are back in play,” said Neil Campling, head of technology research at Mirabaud Securities.

The number of GameStop shares shorted stood at 15.47 million, analytics firm S3 Partners said Thursday, with short interest accounting for 28.4% of the float, compared with a peak of 142% in early January.

Wednesday’s late day rally added $664 million in mark-to-market losses for investors betting against GameStop, and short sellers were down $10.75 billion in year-to-date mark-to-market losses midday Thursday, according to S3.

Some analysts said the rally may be partly fueled by a fear of betting against GameStop.

“There are not a lot of people who are just sitting there, ‘oh yeah, let’s for fun, let’s just short GameStop and get my head ripped off.’ The investors learn.,” said Dennis Dick, a trader at Bright Trading, on the Benzinga podcast.

Some investors may be jumping on the GameStop bandwagon hoping to reap gains similar to turbo-charged advances of January and then sell the stock, said David Starr, vice president of quantitative analysis at Simpler Trading.

“All of these stocks are once again rising together. It demonstrates that there is nothing intrinsic in the companies themselves,” he said.

Former GameStop shortseller Citron Research said the company should buy online gambling company Esports Entertainment Group Inc

“It would be an easy acquisition for GameStop to tuck in right now,” Citron’s Andrew Left told Reuters in an interview. “Some people say it would be a ‘Hail Mary pass’ but I think it would be a major pivot.”

HEAVY VOLUME

More than 145 million shares of GameStop had changed hands by mid-morning, almost triple its 30-day average volume of 62 million, yet below the more than 190 million shares that traded hands daily in late January.

The surge came after Reddit trader Keith Gill, who runs the YouTube channel Roaring Kitty, bought additional GameStop shares last week. Last week, Gill testified in the U.S. Congress: “I like the stock,” words since quoted by hundreds of online followers and featured in memes on financial sites.

This week’s GameStop rally began the day after the retailer announced the resignation of Chief Financial Officer Jim Bell as the company focuses on shifting into technology-driven sales.

Reddit forums were buzzing again with bullish GameStop posts on Thursday.

“Bought lots more #GME today, let’s keep fighting !!,” wrote Reddit user Fundssqueezzer.

In January, GameStop shares skyrocketed by more than 1600% as retail investors, urged on by WallStreetBets, bought shares to punish hedge funds that had taken an outsized short bet against it.

Gabriel Plotkin’s Melvin Capital hedge fund was left needing a $2.75 billion lifeline from Citadel LLC and Point72 Asset Management.

Investing legend Charlie Munger, longtime business partner of Warren Buffett, criticized the risky trading strategies employed by some traders on Reddit.

“It’s really stupid to have a culture which encourages as much gambling in stocks by people who have the mindset of racetrack bettors,” said Munger, Berkshire Hathaway’s vice chairman.

(Reporting by Aaron Saldanha in Bengaluru, Tom Westbrook in Singapore and Danilo Masoni in Milan; Additional reporting by Lewis Krauskopf, Sagarika Jaisinghani, John McCrank and Medha Singh; Writing by Anirban Sen and David Randall; Editing by Jason Neely, Bernard Orr, Nick Macfie and David Gregorio)

 

Continue Reading

Investing

Oil eases from 13-month high on worries output could rise

Published

on

Oil eases from 13-month high on worries output could rise 2

By Scott DiSavino

NEW YORK (Reuters) – Oil prices slipped from 13-month highs on Thursday as worries that four months of rising futures will prompt U.S. producers to drill more and OPEC+ to remove some production cuts.

That small decline came despite an assurance that U.S. interest rates will stay low and a sharp drop in U.S. crude output last week due to the winter storm in Texas, both of which helped boost crude prices to their highest since January 2020 earlier in the day.

Brent futures for April delivery fell 49 cents, or 0.7%, to $66.55 a barrel by 1:34 p.m. EST (1834 GMT), while U.S. West Texas Intermediate (WTI) crude fell 23 cents, or 0.4%, to $62.99. The April Brent contract expires on Friday.

“With momentum appearing to slow a week before the next OPEC+ meeting, crude may be positioning for a small correction,” said Craig Erlam, senior analyst at OANDA, noting “There’s still plenty of downside risks in the market and one of them is OPEC+ unity coming under strain in the coming months.”

Analysts noted higher oil prices in recent months – both Brent and WTI have gained more than 75% over the past four months – could encourage U.S. producers to return to the wellpad and OPEC+ to loosen its production reductions.

The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, are due to meet on March 4.

The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.

Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices.

Meanwhile, an assurance from the U.S. Federal Reserve that interest rates would stay low for a while helped support oil prices earlier in the day and should boost investors’ risk appetite and global equity markets.

The winter storm in Texas caused U.S. crude production to drop by more than 10% or 1 million barrels per day (bpd) last week, the Energy Information Administration (EIA) said.

Fuel supplies in the world’s largest oil consumer also tightened as its refinery crude inputs dropped to the lowest since September 2008, EIA data showed.

Texas state legislators on Thursday started digging into the causes of deadly power blackouts that left millions shivering in the dark as frigid temperatures caught its grid operator and utilities ill-prepared for skyrocketing power demand.

ING analysts said U.S. crude stockpiles could rise in weeks ahead as production has recovered fairly quickly while refinery capacity is expected to take longer to return to normal.

Barclays, which raised its oil price forecasts on Thursday, said oil could rally again on the weaker-than-expected supply response by U.S. oil operators to higher prices.

“However, we remain cautious over the near term on easing OPEC+ support, risks from more transmissible COVID-19 variants and elevated positioning,” Barclays said.

(Reporting by Julia Payne in London and Florence Tan in Singapore; Editing by Marguerita Choy and Steve Orlofsky)

 

Continue Reading

Investing

Oil holds close to 13-month high, supported by sharp drop in U.S. output

Published

on

Oil holds close to 13-month high, supported by sharp drop in U.S. output 3

By Julia Payne

LONDON (Reuters) – Oil prices remained close to 13-month highs on Thursday, with profit-taking limited by an assurance that U.S. interest rates will stay low and a sharp drop in U.S. crude output last week due to the storm in Texas.

Brent crude for April hit $67.70 a barrel during the session, its highest since Jan. 8, 2020. By 1437 GMT, it had slipped 48 cents, or 0.7%, on the day to $66.56.

U.S. West Texas Intermediate was down 49 cents or 0.8% at $62.73, after also hitting a 13-month high of $63.79.

Tamas Varga, analyst at PVM Oil Associates, said the dip was partly due to profit taking after a three-day rally.

An assurance from the U.S. Federal Reserve that interest rates would stay low for a while weakened the U.S. dollar, while boosting investors’ risk appetite and global equity markets.

The winter storm in Texas caused U.S. crude production to drop by more than 10% or 1 million barrels per day (bpd) last week, the Energy Information Administration said. [EIA/S]

Fuel supplies in the world’s largest oil consumer could also tightened as its refinery crude inputs had dropped to the lowest since September 2008, EIA’s data showed.

ING analysts said U.S. crude stocks could rise in weeks ahead as production has recovered fairly quickly while refinery capacity is expected to take longer to return to normal.

Barclays, which raised its oil price forecasts on Thursday, said it oil could rally again on the weaker-than-expected supply response by U.S. oil operators to higher prices.

“However, we remain cautious over the near term on easing OPEC+ support, risks from more transmissible COVID-19 variants and elevated positioning,” Barclays said.

The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, are due to meet on March 4.

The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.

Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices.

(Reporting by Florence Tan; Editing by Steve Orlofsky and Edmund Blair)

 

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Newsletters with Secrets & Analysis. Subscribe Now