Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul><li><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Warner Bros.</div></div></div>High-frequency traders, made famous in Michael Lewis' "Flash Boys," are in trouble. </li><li>Low volatility and rising operational costs are making it harder for HFTs to churn out the revenues they once did.</li><li>HFTs are shifting their focus to alternative businesses. </li></ul>Wall Street's fastest traders are going to need a lot more than speed if they're going to survive. High-frequency traders, the Wall Streeters made famous by Michael Lewis' <a href="https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599">Flash Boys</a>, use their technology to get to trades ahead of the competition. For years, this strategy raked in billions. But low volatility and rising operational costs have squeezed HFTs, <a href="http://www.businessinsider.com/kcg-holdings-and-virtu-financial-merger-2017-4">precipitating a wave of consolidation</a> and closures."HFT firms have been facing stiff headwinds due to low volatility," Richard Repetto, an analyst at Sandler O'Neill + Partners told Business Insider in an email. "Both implied and intraday volatility have been at lows making it difficult for HFTs to earn meaningful spreads."Total revenues brought in by HFTs from equity trading have dropped over 85% from $7.2 billion in 2009 to $1.1 billion in 2016, according to data from the <a href="https://www.tabbgroup.com/">TABB Group</a>. The consultancy expects revenues to slide to $900 million this year.But many HFTs are looking forward and revamping their business models to grow despite this environment. "We remain confident that the core results are a consequence of the terrible environment for a market-maker," Douglas Cifu, the CEO of Virtu Financial, a publicly traded HFT, said during an earnings call on August 10. "While we are not happy with the results, we are proactively managing our business to grow and to continue to earn an acceptable return in this environment."<h2>Pesky volatility</h2><div class="KonaFilter image-container display-table"><div><div class="image on-image">Andy Kiersz. Data from Bloomberg.</div></div></div>High-frequency traders have seen revenues decline for years, but the historically low volatility of the past year has led to a breaking point."When markets don't move much, demand for the job high-frequency traders do is low," Dave Weisberger, the head of equities at ViableMkts, a market structure technology company, said. "It's simple supply and demand."As liquidity providers, HFTs are scanning the markets for opportunities in which buyers and sellers aren't matched up. But when volatility is too low, like it has been for the past four months, those opportunities are hard to come by because there are fewer price swings. Similarly, high volatility is undesirable as well. In a sense, HFT is kind of like surfing. A surfer wants to hit the waves during high-tide - not during low-tide or a monsoon. Here's Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird &amp; Co, a Milwaukee-based firm (emphasis is our own):It's an unusual year because there's barely been any major market moving events. Just headlines. No major macro hiccups. No Ebola scare. Generally, you are seeing a global upturn in macro data. If you go across the world, you have a lot of stock markets doing really well. They are really strong. You turn on the Bloomberg and almost everything is green.Volatility is cyclical and so this calm environment will not persist indefinitely. But even if volatility returns to normal levels, the industry won't see the revenues it did three or four years ago, according to Larry Tabb, founder and chairman of TABB Group."We could probably get to $1 billion or $1.5 billion," Tabb told Business Insider."But not $2 billion or $3 billion."<h2>Volatility is just part of the equation</h2>Low volatility is just one issue facing HFTs, according to Don Ross, CEO of PDQ Enterprises, an equity trading platform provider. "Low volatility is compounding an issue high-frequency traders have been facing for years: rising exchange costs," Ross told Business Insider. <div class="KonaFilter image-container display-table float_left"><div><div class="image on-image">Thomson ReutersServers for data storage are seen at Advania's Thor Data Center in Hafnarfjordur, Iceland</div></div></div>HFTs pay exchanges such as Nasdaq and the NYSE to store their servers in the same building as the matching engines. But the price of this service, referred to as colocation, has become more expensive as exchanges continue to roll out more levels of service, according to Weisberger."It started with one gig connection to the matching engine, then they offered 10 gig connection, then 40 gig connection," he said. "[High-frequency traders] don't necessarily want more," Weisberger said. "They just don't want to be one-upped by the competition."This spike in costs has angered a lot of folks in the industry, according to <a href="http://www.businessinsider.com/stock-exchanges-market-data-cost-becoming-big-issue-2016-10">reporting by Business Insider's Matt Turner</a>. "[High costs are] the new normal," Tabb said. <h2>What's next?</h2>HFTs can't rely on speed any longer. In order to adapt to the new environment, they'll have to shift the focus of their technology, according to Gaurav Chakravorty, the CEO of qplum, from speed to making predictions. Chakravorty previously worked at Tower Research, one of the premier HFTs, and his firm recently released a report on innovation in trading. He said high-frequency trading firms are "picking up pennies in front of a bulldozer.""HFTs should reduce the single minded focus on latency," Chakravorty said."And they should look for profit opportunities using deep learning technology."Deep learning tech allows computers to learn things without being programmed to do so. According to Chakravorty, HFTs can use deep learning tech to identify signals, such as when someone cancels an order, that can lead to money-making opportunities. Chakravorty said HFTs are good at developing technology so making the shift wouldn't be difficult. But it will cost money, according to Goldman Sachs."Further, technological advances in the space will require continued investments to stay competitive," the bank said. Mark Smith, the CEO of Symbiont, a blockchain technology company, told Business Insider he knows of HFTs that are looking to use their technology to tap into profit opportunities in the private markets. "There are two HFTs I've talked to who are looking for undervalued assets in the private market," Smith said. "With fewer companies going public there are more opportunities there." HFTs are also looking to expand their technological offerings. Virtu Financial, for instance, notably partnered with JPMorgan to provide the bank with technology to enhance its electronic trading operations. Sun Trading, a Chicago-based high-frequency trading firm, provides another example. It announced a technology partnership on August 20 with Instinet, a division of Japanese bank Nomura, to help it prepare for changes to European regulations. Joe Ciolli contributed reporting. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/16b-hedge-fund-cio-easy-quantitative-trading-2017-7">A $16 billion hedge fund CIO gives an easy explanation of quantitative trading</a></h3> <div> </div> </div>

The fastest traders on Wall Street are in trouble

NEW DELHI: As we inch closer to the Budget 2014, Dalal Street is abuzz with expectations of strong pro-growth reforms from Finance Minister Arun Jaitley. 
 
Given high expectations from the government, all attempts are expected to be made to present a comprehensive Union budget. However, the residual period until the next Budget to be presented is relatively small. 
 
Experts feel that the focus of the new government would be more on creating opportunities for retail investors in financial markets. But it is definitely not going to be a cakewalk for them. 
 
“The budget itself is not going to be a cakewalk. In fact, it is going to be a tight rope walk for the government,” said Killol Pandya, Senior Fund Manager-Debt, LIC Nomura MF. 
 
“The economy has certain structural and macro issues which it is facing and the government will be at pains to balance putting our growth story back on track while battling the inflation bugbear,” he added. 
 
The fact is that most of the steps which the government can take to promote growth and kick start the economy will have short-term inflationary ramifications. However, in terms of market performance, analysts see the markets rallying nearly 5-6 per cent in the run-up to the event. 
 
 
 
<table align="center" border="0" cellpadding="4" cellspacing="4">
	<tbody>
		<tr>
			<td>
				</td>
		</tr>
	</tbody>
</table>
 
 
Traders carried forward bullish futures bets to the July series on the expiry of the June contracts on Monday on expectations the market could rebound in the run-up to the Union Budget on July 10. 
 
Fresh build-up of positions in Nifty options suggests the benchmark index could gain about 5-6% by the Budget day from the current levels, said an ET report. 
 
Most analysts are of the view that despite escalating tensions in Iraq and depreciating rupee, Indian markets should be able to scale higher from the current levels, supported by strong FII flows and as most of the oil, which is imported, comes from the southern region, which remains unaffected. 
 
“The overweight by international investors in India will be highest in the whole emerging market space and we think it will continue. We think there is a re-rating going on in India,” said Hans Goetti, Head of Investment Asia, BIL. 
 
“We think if there is a new earning cycle start on the back of a stronger economy, then it can grow at about 6.5 per cent for several years, accompanied by higher prices in the equity markets,” he added. 
 
History suggests that the Union Budget’s influence on the market’s short-term performance is declining, but the next budget could still leave a trail of impact. 
 
The upcoming budget could be important because of where India is placed cyclically, what the mandate for the government implies and because this is the first non-Congress government in a decade, say experts. 
 
“Though history suggests that the budget’s influence on short-term performance is declining, expectations (measured by pre-budget performance) are still important in deciding what the market does after the budget,” said Ridham Desai, India Strategist at Morgan Stanley, in a report. 
<div style="page-break-after: always;">
	&#xa0;</div>
“If the pre-budget returns are positive, there is a 90% chance that the post-budget returns are negative,” he added. 
 
We have collated a list of ten stocks which investors can look at ‘buying’ ahead of the Budget 2014, for the next 12 months: 
 
<table align="center" border="0" cellpadding="4" cellspacing="4">
	<tbody>
		<tr>
			<td>
				</td>
		</tr>
	</tbody>
</table>

	Brokerage Firm: BofA-ML 
 
 
Titan Company Ltd: Target price set at Rs 406 
 <keyword id="10899" type="CITY" weightage="40" keywordseo="Titan-Industries">Titan Industries</keyword>, a Tata Group company, is India’s leading watch and jewelry retailer. Titan’s growth can pick up in FY15/16E as SSSG in jewelry bottoms out. This can be led by a favorable macro: easing inflation, possible pick-up in the urban job scenario and wage hikes. 
 While resumption of the sale of <keyword id="18712" type="ENTERTAINMENT" weightage="40" keywordseo="Gold">gold</keyword> coins can improve operating leverage, possible margin benefits due to focus on premiumization in jewelry as well as watches can boost earnings. 
 
ICICI Bank Ltd: Target price set at Rs 1,850 
 
The global investment bank is bullish on ICICI Bank as it has built a strong retail franchise to complement its corporate banking activities and capitalize on the fast-growing retail market. ICICI Bank has expanded distribution to 3,500 branches, allowing it to acquire customers at a very rapid pace and also gain share. 
 
The bank enjoys a strong capital position (Tier 1 at 12.8%), and is well placed to manage credit cycle/regulatory changes and deliver earnings growth of 16-22% through FY15/16. Outperformance should be driven by: 1) Op. efficiency (CI ratio improving to lesser than 38-39% in FY15/16 vs 41% in FY13); and 2) Credit cost at 80bps. 
 
Maruti Suzuki Ltd: Target price set at Rs 2900 
 Maruti Suzuki (MSIL) is a subsidiary of <keyword id="111052" type="CITY" weightage="40" keywordseo="Suzuki-Motor">Suzuki Motor</keyword> Corp, Japan. Set up in 1983, MSIL is presently India’s largest passenger car company which primarily sells compact hatchbacks (65% of volumes), vans and upper sedans. 
 
MSIL is our top pick in the Indian autos space, being best positioned to ride the country’s consumption recovery theme due to its rich product pipeline over the next three years. 
 
The stock deserves a valuation premium due to superior growth prospects (31% EPS CAGR over the forecast period) and also because it is the sole listed proxy in the domestic car industry. 
 
<keyword id="111992" type="CITY" weightage="40" keywordseo="Oil-India-Ltd">Oil India Ltd</keyword>: Target price set at Rs 694 
 
Oil India (OIL) is a state-owned (67.6% stake) E&amp;P company with only onshore production and exploration mainly in north-east India. This region accounts for its entire crude oil and most of its gas production and reserves. 
 
Gas price hike drives a 41-59% YoY rise in FY15E EPS at a gas price of US$6.8-9.0/mmbtu. A rise in oil price net of subsidy drives 34-70% YoY growth in FY15E EPS. FY15E EPS would rise by 60-114% YoY if the prices of both oil &amp; gas increase. 
 
Risk-reward ratio is evenly balanced with the worst-case fair value implying around 30% potential downside, and the best-case fair value implying a potential upside of 16-39%. 
 
Voltas Ltd: Target price set at Rs 282 
 
Voltas, a Tata Group company, is India’s leading air conditioning and engineering services company. It operates in India through an extensive dealer and service network. Cyclical recovery in macro will drive stronger consumer discretionary sales, ie AC. 
<div style="page-break-after: always;">
	&#xa0;</div>
There will better construction demand as well. Sharp expansion of margin led by favourable product mix change will be drive 80% of the 27% earnings CAGR in FY14-17. The stock is cheaper relative to peers and is likely to rerate along with stronger growth. 
 
Analyst: S Ranganathan of LKP 
 
Dishman Pharma: Target price set at Rs 160 
 
Dishman Pharma is an integrated global outsourcing partner in CRAMS for innovator drug companies and derives close to 65 percent of its 1400cr revenues from CRAMS with marketable molecules forming the balance 35 percent of its revenues. 
 
With all its capital expenditure behind, the company has forward integrated its Vitamin-D facility and with a 24 percent sustainable EBIDTA margin we believe that it is now focused on de-leveraging its balance sheet having a debt of 850 cr. 
 
We recommend a BUY on the stock trading at 8x the current year's expected earnings with a price objective of 160. 
 
Zensar Technologies Ltd: Target price set at Rs 500 
 
Zensar Technologies is a Rs 2300-cr software company of the RPG group, which derives two-third of its revenues from ETS (enterprise transmission solutions) and one-third of its revenues from IM (infrastructure management). Zensar has the largest Oracle practice business in India and has a strong focus on digital transformation, which is primarily a consulting-oriented business. 
 
The company has consistently grown at a CAGR of more than 20 percent over the past 5 years both on top-line and bottom-line. Zensar (a debt-free entity) with a sustainable EBIDTA margin of more than 30 percent is well on its way to post a net profit of close to Rs 300 cr this fiscal. BUY with a price objective of Rs 500. 
 
ITNL: Target price set at Rs 250 
 
ILFS Transportation Network Ltd is a leading surface transportation infrastructure company belonging to the ILFS group. We believe that ITNL is the best proxy to play this theme not only in India, but also outside India and could be a prime beneficiary of the road development projects. 
 
This business is highly capital intensive and hence the high debt equity of 3x. ITNL with its 6500cr revenues is well placed to capitalize on the large addressable opportunity as it has attractive EBIDTA margins of 30 percent. Buy ITNL with a price objective of Rs 250. 
 
Escorts Ltd: Target price set at Rs 160 
 
Escorts with business interests in agricultural equipment, construction and railway equipment is the third largest player in tractors and is now launching new products in the mid to heavy segment of tractors and is aggressively foraying into the southern parts of the country where it lacks presence. 
 
The monsoon, although delayed, is expected to gather momentum in the next 3 months, which would also act as a positive trigger for the stock in the coming quarter. ESCORTS trading at 6.5x historical earnings should be bought with a price objective of 160. 
 
Federal Bank: Target price set at Rs 160 
 
Federal Bank was punished rather unjustly for its aggressive lending to the SME sector where it has seen fast traction and we believe that the markets have now factoring in the fact that its asset quality continues to be good with net NPA at 0.74% and provision coverage at a very healthy 84%. 
<div style="page-break-after: always;">
	&#xa0;</div>
The bank has a very healthy CASA of more than 30% and net interest margins are at a healthy 3.3% with branch expansion happening at a faster clip ( it now has 1175 branches) 
 
A quality private sector bank with an able leader available at a compelling price to book of 1.5x should be bought for a price objective of Rs 160. 
 
(Views and recommendations expressed in this section are the analysts’ own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stocks mentioned.)

You Searched For "nomura report monsoon" and got 2 results

The fastest traders on Wall Street are in trouble

Frank Chaparro

Budget 2014 No Cakewalk For Government, Says Expert; Top Ten Stocks To Buy

Economic Times

Popular Keywords

Buying Guides