Exchanges in London and Singapore said it was business as usual on their bourses for futures broker MF Global Holdings Ltd on Friday, after two rating agencies downgraded its debt to junk status.
MF Global, whose shares slumped 15.9 percent on Thursday and around 10 percent on Friday, had been trying to transform from a brokerage that mainly places customers' trades into an investment bank that bets with its own capital.
But its bets on bonds from euro zone countries, including those issued by Italy, Spain, Portugal and Ireland, have gone bad, prompting regulators to press it to boost capital.
Moody's Investors Service and Fitch Ratings on Thursday slashed MF Global's debt rating to junk. Standard & Poor's said on Wednesday it might cut the New York-based company's counterparty credit rating to junk.
The Singapore Exchange said in a statement on Friday that MF Global's Singapore unit was meeting its financial obligations as a clearing member of the city-state's derivatives market.
It's business as usual here in Singapore, a staffer at MF Global's Singapore office said, declining to be identified as he is not authorized to talk to the media.
None of the clients here have left us, although some are taking a wait-and-see attitude, but essentially, there is no real impact.
The London Metal Exchange (LME), where MF Global is a category one ring trading member, also said it was business as usual.
As long as they remain a member of the LME and in good standing with (clearing house) LCH.Clearnet, then they will be entitled to trade on the LME, an exchange spokeswoman said.
Some customers are moving money away from the brokerage, according to hedge funds, rivals and analysts, though the extent of the outflows is unclear.
I've just got off the phone with a customer who said they've stopped all their hedging with MF Global -- they just don't want the risk exposure, an LME aluminum trader said on Friday.
Any substantial departures are likely to put further pressure on MF Global Chief Executive Jon Corzine, a former New Jersey governor and former head of Goldman Sachs, to sell all or part of the company.
Moody's said the downgrade reflected its view that, MF Global's weak core profitability contributed to it taking on substantial risk in the form of its exposure to European sovereign debt in peripheral countries.
At the end of the second quarter, MF Global's $6.3 billion exposure to European governments represented five times the company's tangible common equity, it said.
(Reporting by Charmian Kok, Melanie Burton and Sue Thomas, additional reporting by Yan Chong Yaw, , editing by Jane Baird)