The New York Stock Exchange's board of directors, as expected, today approved a plan to begin pricing trades in sixteenths instead of eighths by the end of the month as an interim step to decimalize prices.
``The exchange believes the industry should be prepared to convert to decimals by January 2000,'' a statement from the NYSE said. ``We believe our initiative confirms that the markets will address the question of decimalization in a timely manner without the need for legislation,'' said Richard A. Grasso, NYSE chairman and chief executive, in a statement.
SEC Commissioner Steven M.H. Wallman, in a statement, called the announcement a ``tremendous improvement for investors and for all our markets.'' He said he believed other markets also will make the switch.
The NYSE board also voted to close the NYSE on Martin Luther King Jr.'s birthday, beginning next year.
Putnam Investments formed a strategic alliance with Nippon Life Group to manage Japanese pension assets. Under agreements signed Wednesday, Putnam will collaborate to develop investment products and manage assets for Nippon Life and will market international investment products with Nissay Asset Management, an investment advisory subsidiary of Nippon Life. Putnam will run a variety of assets invested globally for Nippon Life Group. Jointly with Nippon Life, it also will develop products for institutional pension clients in Japan, share data and advice with Nippon on the global investment outlook and collaborate in the training of personnel.
The Dow Jones industrial average will become available through derivatives and exchange-traded funds under agreements between Dow Jones and the Chicago Board of Trade, the Chicago Board Options Exchange and the American Stock Exchange. CBOT's Dow Jones Industrials futures and futures options contracts will have a value of about $75,000. The Amex offerings will include a DJIA fund and other Dow Jones index funds. A launch date is pending regulatory approval.
The Chicago Mercantile Exchange, which lost the battle to license the Dow, subsequently announced plans to introduce a smaller version of its S&P 500 index contract. The new S&P 500 futures and futures options contracts will be valued at $50 times the index, one-tenth the size of existing contracts. The CME contracts are subject to regulatory approval.
Officials of the Chicago Mercantile Exchange, SBF-Paris Bourse and Matif SA signed a previously announced agreement today swapping the Merc's and the New York Mercantile Exchange's Clearing 21 clearing system for the bourses' NSC electronic trading system. No money will change hands, but the CME will use the NSC system for electronic trading, adopting the GLOBEX name, while the French exchanges will use the CME's clearing system. NYMEX officials are considering using the NSC system for after-hours electronic trading. Implementation is expected in the second half of 1998.
Maine State Retirement System, Augusta, is searching for a fixed-income manager to handle $50 million to $75 million. Interviews are expected to take place over the next several weeks, and the $4.7 billion fund is expected to make its choice before the end of the summer, said Executive Director Claude Perrier. Assets are coming from cash. Ennis, Knupp & Associates is assisting in the search.
Framlington Group Ltd. launched the West Africa Growth Fund, the first fund to invest in the emerging economies of West Africa. Framlington has raised $25 million for the fund, including $6 million from the International Finance Corp. and $5 million from Caisse Francaise de Développement and Proparco, part of the CFD Group. The Luxembourg-listed SICAV will invest in Ivory Coast, Cameroon, Senegal, Republic of Congo, Gabon and Mali. Investments in neighboring countries might be considered as well.