Citigroup upgraded Federated to buy following news on Thursday that the
Securities and Exchange Commission
doesn't plan to move forward with plans for increased regulation with regard to money markets.
"On 8/23, the SEC Chairman acknowledged the regulator does not have the necessary votes to bring forth proposals for further money market reform," the firm said. "This is clearly a major structural positive for money market players in particular, and moderate positive for Traditional Managers at large."
As part of the call, Citi also its raised price targets for shares of Federated,
"While low ST [short-term] rates remain an issue, prior reform could have moved substantial money from the industry and would raise friction risk for money flowing back toward LT MFs [long-term mutual funds]," the firm said.
Written by Michael Baron in New York.
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