Fixed Income
| Our product range goes way beyond the ordinary vanilla | At RMB FICC our product range goes way beyond the ordinary vanilla…
BondsRMB FICC is a dominant player in the fixed income market and is one of ten primary dealers in government bonds. RMB is consistently in the top three banks in auction participation and secondary trading market share. We participate in government auctions on behalf of our clients, local and international non-primary dealers and for our own account.DerivativesRMB FICC has a number of products available to manage risk or enhance returns and which cover the full spectrum of the yield curve. Our portfolio approach enables us to create structures of any complexity. FRAs can be traded with FICC using MarkitWire.For more information on MarkitWire click here. Inflation deskRMB FICC pioneered the development of the local inflation market by advising and arranging the first inflation-linked debt placement in the South African market in 1994 – the R800m project finance deal for the N1 Toll Road Concession. We are currently the premier inflation-linked debt house in South Africa and dominate primary and secondary market trading in inflation-linked bonds and swaps. We also dominate the repo market where we are involved in almost all reported trades.RMB FICC has been first to market on all new products to the local market and launched inflation futures in 2006, which allow investors to go long or short the official inflation-linked bond index (ILBI). OptionsWe offer a full range of OTC options and option structures including Calls, Puts, Bear and Bull spreads, Straddles, Strangles and Butterflies.ReposRepos are used to secure short-term financing of government bonds bought by financial institutions or their clients, in the open market.The RMB FICC repo desk is currently doing in excess of 20% of all repos booked on BESA. SolutionsWe offer specialised solutions for the more complex needs of portfolio managers and corporates. These include debt origination issues, inflation-linked structuring and other tailor-made derivative and vanilla innovative solutions.International PaymentsRand Account Services maintains the rand-designated currency accounts of foreign financial institutions. Our specific products include providing Nostro accounts, CLS Nostro accounts and Cash Account services, including electronic transfers, cheques, drafts, collection services and cash management solutions to banks and brokers worldwide. We want to be the provider of choice in South Africa for foreign financial institutions' trading, custody and commercial payments accounts and to offer product functionality and quality service that rivals best practice worldwide. With a significantly experienced team, ongoing investment in technology and focus on innovation, Rand Account Services is able to provide high quality, value-added banking services tailored to meet the specific needs of its clients.Money MarketView the Money Market Terms and Conditions document.
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Currency
The currency team has long-standing experience and knowledge of the international, local and African markets.
Our professional dealing teams are acknowledged market makers in the South African foreign exchange sector. We provide a comprehensive service to corporate, retail and institutional clients, and local and non-resident banks, and are supported by professional risk management and administration services.
- Foreign exchange spot – all major traded currencies, ZAR and some African currencies.
- Foreign exchange forwards – all major traded currencies and ZAR.
- Derivatives – foreign exchange derivative products (options).
- Client sales – personalised local and international client services
- Structuring – innovative structured solutions
View the General conditions of contract relating to foreign currency transactions and the collection of foreign cheques document.
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Derivatives
RMB FICC has a number of products available to manage risk or enhance returns and which cover the full spectrum of the yield curve. Our portfolio approach enables us to create structures of any complexity. FRAs can be traded with FICC using MarkitWire.
For more information on MarketWire click here.
Active currency management
Until recently, it’s been difficult for South Africans to enter into foreign currency hedging contracts without proof of foreign exchange commitments. Documentary evidence had to be presented to a bank when (or within 14 days of) establishing a currency contract. Under previous exchange control rules, currency contracts could not be changed or cancelled unless the underlying foreign currency obligation changed or fell away.
RMB first approached the Reserve Bank in 2005 with a request to permit a more effective method of currency management – actively managed currency hedging on an over-the-counter basis.
The Reserve Bank has granted permission for banks to provide you with actively managed currency hedging facilities, in line with international best practice.
How are you affected?
If you are a South African or non-South African resident, individual, corporate or institutional investor, you may now actively manage your currency exposure by entering into, changing, or cancelling foreign currency contracts provided these contracts are for periods of less than six months. Eligible foreign currency contracts include forwards and all currency derivative contracts. Existing currency contracts established under the previous exchange control rules may also be cancelled or altered provided the residual maturity on the contract is less than six months.Forward contracts exceeding six months may only be established by Authorised Dealers who have viewed suitable documentation confirming the underlying exposure, at the time of establishment or alternatively within 14 days of establishing such contracts. In these instances, as well as for spot transactions, the endorsement of documentation and reporting of transactions in terms of the Cross-Border Foreign Exchange Transaction Reporting System will remain the responsibility of the converting bank.
Administration procedures have also been simplified and documentation is now only required by the bank doing the physical cross-border payaway, and not the bank that establishes the contract.
However, South African residents may still only deal in foreign exchange with South African Authorised Dealer Banks and may not hedge directly with foreign banks. Currency contracts that do not result in a physical payaway under existing exchange control rules, or contracts that are cancelled may only be settled locally in rand.
"It must be noted that any position held by an institutional investor as a result of active currency management transactions, which do not result in the actual pay away or receipt of currency, i.e. the "in-between trades", is regarded as foreign exposure and must be marked off against their respective foreign portfolio investment allowances as well as being accounted for in the quarterly asset allocation reports." In this clause "which do not result in the actual pay away or receipt of currency," the "do" needs to change to "does".
How can you benefit?
With immediate effect, you may now restructure existing economically inefficient hedges and may hedge new types of currency risks including balance sheet hedging/translation risk; pre-hedging of possible future commitments; and foreign investment risk.We would welcome the opportunity to discuss various solutions with you. Please don’t hesitate to contact Customer Dealing Gauteng on +27 11 269 9190/9230 or the FICC Structuring Desk on +27 11 269 9150 if you have any questions.
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Commodities
RMB FICC is committed to supporting the resource industries by providing the focus, industry expertise, and international network to ensure that our clients receive products and services that are relevant, original and cost effective. We are active in all major commodity markets.
South Africa’s wealth of natural resources makes it the world’s foremost producer of gold and platinum-group metals (PGM), and a significant producer of many base metals. Equally, the country’s significant coal reserves support a well-developed electricity infrastructure, and it has pioneered several alternative fuel technologies.
Trading
Authorised dealer, rand specialist, hedge expert.Commodity finance and securitisation
Our structured trade and commodity finance team offers a range of services including cross-border, self-liquidating, commodity-linked transactions. Headed by a seasoned professional, this team prizes the personal relationships that lead to innovative solutions.Click here for a full contact list
JSE Commodity Futures
SAFEX now lists WTI, Gold and Platinum futures, allowing individual and institutional investors access to the energy and precious metals complex. Finally, investors can hedge their risks, add enhanced financial engineering to their commodity stock portfolios, combine various equity and commodity positions, and participate in the price appreciation of South Africa’s flagship commodities.Important for the investor, settlement in rands means that the currency risk is removed and that the contracts will perform according to local conditions e.g. the WTI crude contract is a good proxy for the South African Basic Fuel Price. Risk is further decreased by removing the physical settlement requirement of the overseas contracts while still enjoying the same underlying commodity exposure. The SAFEX contracts are also smaller than their overseas counterparts allowing smaller consumers the ability to access the market. Larger consumers can trade in bigger volumes or go direct to market makers such as RMB for more tailored hedging solutions.
South African investors can now have access to many of the same commodity products enjoyed by investors in other countries.
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Prime Broking
RMB offers hedge fund managers a multi-product prime broking platform which caters for all trading, settlement, funding and related requirements. Locally based with global reach, we deliver fixed income and equity products off world class technology platforms.
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