MF Global sees Liquidity; Ups some Margins

March 19, 2008Andy No Comments »


MF Global, a futures broker whose shares plummeted earlier this week on liquidity worries, recovered a bit on Wednesday after saying it has “close to $1.4 billion” in available liquidity.

MF Global, which bills itself as the world’s largest broker of exchange traded futures and options, also said it had raised margin requirements for clients in its equities derivatives business “as a result of continued market volatility and dislocations.”.

“Rumors regarding (our) liquidity position are without merit,” the New York-based company said in a statement. “MF Global retains close to $1.4 billion in unused committed liquidity facilities, which have not been drawn on in the last two weeks.” It did not give details on the facilities.

MF Global shares closed up $1.19, or 14.6 percent, to $9.36 on the New York Stock Exchange.

On Monday the shares fell 62 percent to $6.05 and touched a low of $3.88, their worst level since MF Global was spun off from Man Group last July.

The company said it had raised margin requirements on its European equities “contracts for difference,” or CFDs. The contracts are between two parties to exchange the difference between the opening and closing prices of a security over a set period of time.

“The margin requirements being raised were specific to the equities derivatives business. That’s basically our CFD business in the UK. It does not apply at all to any other futures and options,” MF Global spokeswoman Diana DeSocio said on Wednesday.

MF Global offers CFDs to clients in Britain, France, Germany, Italy, Singapore and Australia, according to the company’s Web site.

Man Group holds an 18.6 percent interest in MF Global.


Join the discussion