| Financial services watchdogs take flak from MPs
Members of Parliaments Finance Committee say industry regulators are failing to do their duty after hearing from the Ombudsman for Financial Services Providers Charles Pillai about the massive fraud perpetuated by the directors of the Leaderguard group of companies.
A report in Business Report says Leaderguard Securities went into liquidation after losing more than R300m of investors money in fraudulent foreign currency transactions. According to Pillai, three directors of the company pleaded guilty to fraud charges in Mauritius and each paid a fine of 400 000 Mauritian rupees (R91 000). No action has been taken against them in SA. They are all still walking around, having a wonderful life. It looks like crime pays in SA, Eugene Oakes, an internal advisor with the ombudsmans office, told MPs.
Foreign currency investments may be off mark
Everyone seems to hate something these days. Hate clowns? Meet your fellow haters at IHateClowns.com. Think cilantro is a noxious weed? Go to IHateCilantro.com. Hate the Red Sox? Head to Yankee Stadium. In the investment world, everyone seems to be hating the dollar: The consensus is that the dollar will decline in value against other currencies. If you're a dollar hater, you have several new ways to bet against the buck. But pouring money into foreign currencies might not be the best way to display your pique. In the short term, money tends to flow to the country with the highest interest rates. Those flows, in turn, drive currency values up and down. For example, Japanese investors who buy U.S. Treasury bonds have to convert yen into dollars to make the purchase.
Rising yuan `will level trade imbalance'
The yuan Thursday had its highest close since the end of a dollar link in July 2005 as the State Administration of Foreign Exchange signaled the currency will be allowed to strengthen to help address global trade imbalances. Gains in the yuan would increase export prices and lower import costs, reducing China's record trade surplus that has flooded the economy with cash. US lawmakers claim the yuan is undervalued to the detriment of US exporters. The government increased the reserve requirement for banks Thursday to drain excess funds and curb investment. "China still wants a lower dollar- yuan," said Irene Cheung, an economist at ABN Amro Bank in Singapore. "The trade surplus is of course an issue and if there's any reason, the trade gap is partly due to the yuan being undervalued." The currency rose 0.11 percent to 7.7243 against the dollar at the close in Shanghai.
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