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TSE ETF/ETN Monthly Report for May 2014
June 9, 2014--India ETFs surge forward in May
Trading value in the ETF/ETN market in May 2014 was about JPY 1.7555 trillion, with daily average trading value reaching about JPY 87.8 billion.
During the month, the Indian general election drew attention to the country's stock market. NEXT FUNDS CNX Nifty Linked Exchange Traded Fund (1678) saw trading value grow more than ten-fold, pushing its overall
ranking up to 19th while Listed Index Fund CNX Nifty Futures (India Equity) (1549) also saw increased activity.
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Source: TSE
China's Growth Moderates with Continued Economic Transformation
June 6, 2014--China's growth will moderate over the medium term as the economy continues to rebalance gradually. Growth is expected to slow to 7.6 percent in 2014, and 7.5 percent in 2015, from 7.7 percent in 2013, according to the World Bank's China Economic Update released today.
"The rebalancing will be uneven reflecting tensions between structural trends and near term demand management measures," says Chorching Goh, Lead Economist for China.
The slowdown in the first quarter reflected a combination of dissipating effects of earlier measures to support growth, a weak external environment, and tighter credit, especially for real estate.
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Source: World Bankj
South Koreans drawn to unification-linked funds
June 1, 2014--South Korean investors are pouring millions of dollars into unification-themed equity funds, reflecting local investors' growing optimism over a unified Korea, although the chances of the two countries joining remain as remote as ever.
Such funds have emerged as an unlikely darling for Korean investors after President Park Geun-hye in her new-year speech compared unification to an
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Source: FT.com
IMF Survey online-Asia Faces Five Challenges to Its Economic Future
May 29, 2014--F&D magazine examines the five hurdles to Asia's sustained growth
China rebalancing offers economic opportunity for rest of developing Asia
Region's diversity and adaptability key to continued growth
Asia faces five challenges as it pursues sustained economic growth, says the IMF's Finance & Development magazine: overcoming the middle-income trap, improving its institutions and governance, coping with an aging population, curbing rising inequality, and promoting financial development.
If current trends continue, Asia's economy will surpass those of the United States and Europe combined in less than two decades-a prospect that has prompted some to dub the 21st century the Asian century. But, "while Asia's future appears bright," writes the IMF's Asia director Changyong Rhee, "its success is not guaranteed. It depends crucially on choosing the right policy mix to contain risks and secure growth."
Poverty, middle-class trap, or new growth model
The June 2014 issue of F&D magazine, just released, says that all parts of the diverse region face challenges. Asia still has close to 700 million poor people-65 percent of the world’s poor, defined as living on less than $1.25 a day-and income inequality is growing. The region's emerging markets face the task of moving beyond middle-income status and joining the ranks of advanced economies. And several of Asia's industrial economies have embarked on the difficult process of transforming their growth model.
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Source: IMF
ASEAN Exchanges Introduces Three New Tradable ASEAN Indices
New FTSE ASEAN Index Series provides Comprehensive Suite of Indices Benchmarking the ASEAN Region
May 29, 2014--ASEAN Exchanges today announced an expanded FTSE ASEAN Index Series including a comprehensive suite of indices broadly covering the growing ASEAN equity market. The three new tradable ASEAN indices are the FTSE ASEAN All-Share Index, FTSE ASEAN Stars Index and FTSE ASEAN All Share Ex-Developed Index.
Now with the inclusion of constituents from Vietnam to the FTSE ASEAN Index Series (previously comprising the constituents from the five markets of Thailand,Malaysia,Singapore,Indonesia and the Philippines),the new expanded index series will increase visibility and transparency of ASEAN and create a larger universe of stocks for all ASEAN markets. The ASEAN Exchanges said that the creation of indices will be the building block towards creating broader benchmark indices,meaningful sectors indices and new ASEAN centric products that will bring more ASEAN tradable opportunities for investors and enhance liquidity among the exchanges.
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Source: acnnewswire.com
SZSE Launched the First Exchange Traded REITs
May 22, 2014--Recently, 'CITIC Qihang Special Asset Management Plan'(hereinafter referred as 'CITIC Qihang') issued by CITIC Securities has been approved by China Securities Regulatory Commission(CSRC) for establishment, and will be transferred by listing on Shenzhen Stock Exchange (SZSE) Comprehensive Trading Platform as of 21 May, 2014.
As the first exchange traded real estate investment trust (REITs) launched in China, 'CITIC Qihang' represents a significant measure of implementing Researching and Establishing REITs System and Related Product Operation Model and Plan pushed forward in Opinion on Furthering the Innovative Development of Securities Institutions issued by CSRC.
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Source: Shenzhen Stock Exchange
IMF Country report-People's Republic of China-Hong Kong Special Administrative Region: Financial System Stability Assessment
May 22, 2014--Summary: EXECUTIVE SUMMARY Hong Kong SAR's (HKSAR) financial sector is one of the largest and most developed in the world, ranking number one in the World Economic Forum Financial Development Index. The banking system, with assets of US$2 trillion and equivalent to 705 percent of GDP, is highly capitalized, profitable, and liquid. The securities markets are deep, liquid, and efficient, with total stock market capitalization of 1,000 percent of GDP.
The insurance sector has high penetration (now ranked the second in Asia after Japan), and is well capitalized. The sector is very well regulated, with the capacity to withstand a diversity of shocks. While the financial sector faced significant stress during the early stages of the 2008 global financial crisis, market confidence recovered quickly, aided by the decisive measures adopted by the Hong Kong authorities to mitigate its impact.
The sector, however, faces major risks, which puts a significant premium on effective liquidity management, macroprudential oversight and microprudential supervision. The anticipated exit from unconventional monetary policy in the United States could increase capital market volatility and reduce system-wide liquidity. A correction of property prices, which now stand at historical highs, poses risks for both borrowers and banks. The increasing economic and financial integration between HKSAR and Mainland China offers considerable expansion opportunities, but, at the same time, generates significant spillover risks, especially if a significant financial disruption or economic slowdown were experienced. Stress tests suggest that banks are well positioned to absorb a significant realization of risks. Banks' aggregate capitalization would remain well above the Basel III's minimum capital requirement, and the banking sector (including foreign branches) has sufficient liquidity to withstand large deposit and wholesale funding withdrawals. At the same time, the tests highlight that a few smaller banks might be slightly more vulnerable under a severe economic scenario, and, reflecting the nature of their businesses, foreign branches are relatively more sensitive to withdrawals of wholesale funding. This underscores the need for continued vigilance in these areas. The authorities have actively deployed macroprudential policies to mitigate systemic risks. In particular, in the face of a doubling of house prices, the Hong Kong Monetary Authority (HKMA) introduced tighter limits on loan-to-value (LTV) and debt-servicing (DSR) ratios. Going forward, it will be important that the authorities strengthen their capacity for systemic risk analysis at both the Securities and Futures Commission (SFC) and Insurance Authority (IA) to complement the analysis undertaken by the HKMA. This would help ensure that cross-sectoral interconnections are adequately captured when considering systemic risks.
People's Republic of China-Hong Kong Special Administrative Region: 2014 Article IV Consultation-Staff Report
Press Release; and Statement by the Executive Director for the People's Republic of China-Hong Kong Special Administrative Region
May 22, 2014--Summary: KEY ISSUES Outlook and risks. The macroeconomic outlook is favorable. Growth has firmed, inflation has eased, and unemployment has remained low-trends that are expected to continue. The main risks relate to the impact of the Fed's tapering, the outlook for the Mainland, and a possible correction in property prices. Financial.
The Financial Sector Assessment Program (FSAP) conducted in 2013-14 concluded that the financial system is well regulated and supervised and the banking system is resilient to shocks.
The main areas for improvement are the financial sector resolution regime and insurance sector regulation and supervision. The large and growing exposure to the Mainland warrants continued close monitoring. Property. After a prolonged rise, property prices have stabilized. Counter-cyclical prudential and fiscal measures deployed during the upswing provide buffers that can be used to faciliate an orderly adjustment in the market while safeguarding financial stability. A long-run solution to housing hinges on ensuring adequate supply. Fiscal policy. Hong Kong SAR has a track record of fiscal discipline. Casting fiscal policy in a long-term framework will help strike a balance between spending to address aging and inequality, preserving low taxes, and maintaining fiscal prudence. External assessment. Hong Kong SAR's external position is consistent with medium-term fundamentals and desirable policies. The Linked Exchange Rate System remains the best arrangement for Hong Kong SAR.
Bourse explains rules for exchange-traded funds
May 21, 2014--Foreign investors will be able to own up to 100 per cent of exchange-traded funds, participants heard at a seminar held by the HCM Stock Exchange (HOSE) on Tuesday.
For listing, an exchange-traded fund (ETF) should have a minimum chartered capital of VND50 billion (US$2.4 million), at least two authorised participants with one or both of them being a broker or dealer (at HOSE), according to proposed regulations.
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Source: Viet Nam News
China says faster economic reforms needed
May 18, 2014--China will try to quicken the pace of economic reform this year as part of the government's efforts to arrest a slowdown in the world's second-largest economy, the country's top economic planning agency said late on Saturday.
The National Development and Reform Commission (NDRC) reaffirmed nine reform priorities for 2014, including deepening reforms in the power and the oil and gas industries and cutting red tape for investment approvals, according to a statement on its website, www.ndrc.gov.cn
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Source: Reuters