San Jose, CA (PRWEB) September 16, 2008
The securities industry is extremely competitive and cyclical in nature, resulting in extensive revenue fluctuations for the securities firms. The crucial income source for security firms is brokerage earnings, and profits of these companies move in tune with transaction volumes in major stock exchanges. Trading volumes in stock exchanges depend on many factors, including investor confidence, corporate earnings, economic scenario, capital flow, political stability and strength of the capital markets. Security companies emphasized on value added services, including agency services for mutual funds and unit trusts in an effort to withstand market fluctuations, control operational costs and spread out the income sources. Global market for securities is fostered by developing regions including Asia, Middle East, Latin America and Eastern Europe. Major financial institutions including banks are using securitization, in particular, hedge funds and specialist ABS funds, as the preferred forms of funding, thus driving up the total securitization sector.
Mortgage-Backed Securities (MBS) market is growing rapidly with rise in bond issuance on an annual basis. Major types of MBS include collateralized mortgage obligations, and agency and non-agency pass-throughs. Noteworthy factors driving growth in MBS market include rise in cash-out refinancing, issuance of non-agency residential mortgage-backed securities and change of adjustable rate mortgage to fixed rate mortgages. Future growth in the MBS market would largely be driven by the demand for housing and auto loans and issuance of commercial mortgage-backed securities supported by rise in leasing and occupancy rate, low level of unemployment, and rise in corporate profits.
Global Collateralized Debt Obligation (CDO) market experienced a rapid market expansion in line with rise in issuance of CDO securities. Both hybrid and cash flow CDOs dominate the global CDO sector, followed by synthetic funded and market value. In terms of issuance, arbitrage CDOs dominates the CDO market with nearly 90% share and balance sheet CDOs accounts for the remaining share of the market. CDO sector is supported by Structured Finance Collateral (SSF) group that includes various types of collateral such as Residential Mortgage-Backed Securities (RMBS), Collateralized Mortgage Obligations (CMOs), Asset-backed securities (ABS), Commercial Mortgage-Backed Securities (CMBS) and CDS.
Players operating in the securities market are subject to various factors undermining growth such as the upcoming substitute trading venues with greater capability; the aspirations nurtured by buy-side firms to attain higher anonymity by decreasing the trading costs, the increased activism of institutional investors. Facing pressures from private label securities, players also find themselves fiercely competing on price.
The report titled “Securities: A Global Outlook” provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report provides a bird’s eye view of the industry, and a rudimentary review of select securities industry services. The report also briefly recapitulates recent mergers, acquisitions, and corporate developments. The US market is quantitatively discussed with 21 information rich tables giving the reader a strong macro level understanding of the market. Stock Market Performance, Outstanding Bond Market Debt by category, Corporate Debt Outstanding by Financial Sector, and Asset Backed Securities Outstanding by Credit Type, represent few of the parameters analyzed. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 450 companies worldwide.
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