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China Expands Bank Financing With Preferred Stock Trial
March 21, 2014--China issued rules for a trial program allowing companies to sell preferred stock, expanding financing options for the nation's banks as they seek to address tougher capital requirements.
Companies can issue the shares if they are included in the Shanghai Stock Exchange 50 A-Share Index, the China Securities Regulatory Commission said in a statement on its verified microblog account yesterday. Publicly traded companies can also issue preferred stock to pay for acquisitions and buy back shares, the CSRC said.
Renminbi marks new trading regime with fall to 11-month low
March 17, 2014--China's central bank underlined its intention to give the market a bigger role in determining the value of its currency when it announced a doubling of the renminbi's trading band on Saturday.
But investors stung by its recent clampdown on speculators will be cautious in testing its tolerance of greater volatility.
Indonesia Economic Quarterly, March 2014: Investment in Flux
March 17, 2014--Highlights-The fourth quarter of 2013 brought welcome signs that Indonesia's economy is rebalancing in response to previous monetary policy and exchange rate adjustments, which is positive for macroeconomic stability.
The overall economic growth rate was broadly unchanged, at 5.7 percent year-on-year, but the composition of growth tilted more towards net exports while fixed investment remained subdued.
Indonesia's current account deficit shrank notably in Q4 2013, reflecting these changes, and also helped by a stabilization in the terms of trade and a temporary increase in mineral exports ahead of the January ban. This has supported Indonesian financial markets and the Rupiah, which has rallied about 7 percent so far in 2014.
view the World Bank report-Indonesia Economic Quarterly, March 2014: Investment in Flux
China's Li Keqiang warns investors to prepare for wave of bankruptcies
World's second largest economy is facing 'serious challenges' and many companies with high debts are being forced to the wall
March 15, 2014--China is braced for a wave of industrial bankruptcies as its slowing economy forces companies with sky-high debts to the wall, the country's premier has said.
Premier Li Keqiang told lenders to China's private sector factories they should expect debt defaults as the world's second largest economy encounters "serious challenges" in the year ahead.
Local bourse eases rules on ETFs
March 14, 2014--The Philippine Stock Exchange (PSE) is easing the rules on exchange traded funds (ETF) to encourage more issuances of the new investment instrument.
Among the "major enhancements" to the ETF rules are the removal of the underwriting condition and the paid-up capital requirement for an authorized participant who is not a market-maker, PSE president and chief executive Hans B. Sicat said in a briefing on Thursday.
IMF-Malaysia: Selected Issues
March 14, 2014--A MEDIUM-TERM FISCAL STRATEGY
1
Malaysia has embarked upon an ambitious consolidateion strategy: the authorities aim to reduce the
federal fiscal deficit from about 4.0 percent of GDP in 2013 to about 3 percent in 2015, and about zero
by 2020.
Under staff's baseline projections, this medium-term fiscal consolidation would lower the federal debt-to-GDP ratio to about 40 percent by 202
0, consistent with staff's recommended medium-term debt target. Several measures have been announced in recent months, including gradual subsidy rationalization starting in September 2013 and the introduction of a Goods and Services Tax (GST) in April 2015. Implementation of these measures will play a key role in faciitating near-term fiscal adjustment.
Goldman Sachs unveils central public sector ETF today
March 13, 2014--The Government will now have another route to divest its holdings in 10 public sector enterprises with the launch of the CPSE ETF (Central Public Sector Enterprises Exchange Traded Fund) by Goldman Sachs AMC, here on Friday.
On May 2, 2013, as part of the disinvestment programme, the Government had approved the setting up of a CPSE ETF comprising equity shares of CPSEs, to be launched as a CPSE ETF mutual fund scheme.
MSCI's China Index Proposal Seen Luring $4 Billion to A Shares
March 13, 2014--MSCI Inc.'s proposal to include China's mainland-traded shares in its emerging-market indexes may lure $4.4 billion in funds, with China Merchants Bank Co. (3968) and Agricultural Bank of China Ltd. among the top beneficiaries.
The estimate of inflows into China's so-called A shares by analysts at Goldman Sachs Group Inc. compares with the $52 billion of approved quotas through China's Qualified Foreign Institutional Investors program. China Merchants Bank, AgBank and Ping,An Insurance Group Co. (2318) would probably receive the most inflows under MSCI's proposal, Societe Generale SA wrote in a report dated yesterday.
DB-Synthetic Equity & Index Strategy-Asia-Pac Monthly ETF Market Review-Japan focused ETFs attracted $3.3bn inflows
March 13, 2014--Data in this report is as of 28th February 2014
Global Summary
Global equity markets rebounds in February as economic situation continue to improve in developed markets while emerging markets still struggling with their adverse macro economic factors. Global ETP assets increased by $46bn (2%) YTD and closed the month at $2.3 trillion. Asia-Pacific ETPs assets reached to $168.7bn at the end of February.
Overall cash flows for the global ETP industry were positive recording inflows of +$30bn in February. US domiciled ETPs experienced the largest inflows (+$18.9bn) followed by ETPs in Europe (+$6.8bn) and Asia-Pac (+$4.3bn) regions. Globally, fixed income lead the tally with the inflows of +$19.8bn, followed by equities (+$8.8bn) and commodities (+$1.1bn).
Monthly Trends-Asia Pacific
Market Review
Last month, Asia-Pacific region had mixed markets. Compared to the month before, from north to south:
Japan (Nikkei 225) -0.49%
Korea (KOSPI2) +2.18%
China (CSI 300) -1.07%
Hong Kong (HSI) +3.64%
Singapore (FSSTI) +2.76%
Australia (S&P/ASX 200) +4.14%
ETP flows: Inflows into Japan and China ETFs
Asia-Pacific ETP market continued the positive trend and registered +$4.3bn of inflows in February (+$3.3bn in Jan’14). Total inflows were primarily contributed by equity ETFs collecting +$4.1bn in new money.
Within equity, developed market benchmarked ETFs led the tally receiving inflows of +$3.5bn, primarily driven by Japan focused ETFs (+$3.3bn). Within EM benchmarked ETFs, China focused ETFs recorded inflows of +$0.2bn while South Korea ETFs experienced outflows of -$0.1bn. On a sub-segment level, leveraged long strategy ETFs collected inflows of +$0.3bn.
Winners and losers: At ETP level, largest inflows were received by Daiwa ETF - Nikkei 225 (1320 JP), Nomura Nikkei 225 ETF (1321 JP) and Topix ETF (1306 JP) collecting +$1.2bn, +$0.6bn and +$0.6bn respectively. Largest redemptions were experienced by Daiwa ETF – Topix (1305 JP), Bosera FTSE China A50 Index ETF (2832 HK) and Mirae Assets MAPS TIGER 200 ETF (102110 KS) with outflows of -$0.3bn, -$0.2bn and -$0.2bn respectively.
Turnover: Floor activity down by 8.5% on a month-over-month basis
Asia-Pacific ETP turnover totaled $55.2bn for February, 8.5% down from the previous month’s total. On a country level, stock exchanges in Japan topped the turnover ranking with aggregate turnover of $25.3bn (-5.1%), followed by South Korea ($13bn, -12.5%), China ($8.6bn, -7.8%) and Hong Kong ($6.4bn, -17.4%). Among equity ETFs, leveraged long strategy, emerging country, Asia-Pacific developed country, and short strategy ETFs were the most traded products recording total turnovers of $23.6bn, $16.2bn, $7.3bn and $3.4bn respectively. Within fixed income, turnover for money market ETFs totaled $1.2bn, while among commodity ETPs, gold ETPs recorded $0.3bn of monthly turnover.
AUM: ETPs attracted $4.5bn assets in February
Last month, Asia-Pacific ETP AUM added $4.5bn and closed the month at $168.7bn. On a year-to-date basis, Asia-Pacific ETP market is down by $0.4bn or -0.2% below last year’s closing.
New ETP launches -Equities lead the tally
In February, Asia-Pacific ETP market saw five new product launches-four within equity and one in fixed income asset class.
Equity: Mitsubishi UFJ Asset Management listed one country (1593 JP) and one sector ETF (1597 JP) on Tokyo Stock Exchange tracking JPX Nikkei Index 400 and Tokyo Stock Exchange REIT Index respectively. Kyobo AXA Investment Management (192720 KS) and Mirae Asset MAPS Global Investments (192090 KS) listed one equity ETF each on Korea Stock Exchange benchmarked to KOSPI 200 LVHD Index and CSI 300 Index respectively.
Fixed Income: CSOP Asset management listed one RQFII fixed income ETF (83199 HK) on Hong Kong Stock Exchange tracking performance of medium term Chinese treasury bonds.
Big China ETF Seen Hitting 'Great Recession' Lows
March 13, 2014--China's economy is reforming and most investors are not willing to place big bets on success.
The hotly traded iShares FTSE China (FXI) exchange traded fund is under pressure to fall below $31 a share, which would take another 10% decline to get there. If more weaker-than-expected data comes out of Beijing in the months ahead, then FXI will hit lows not seen since May 2009 when the U.S. was mired in its "Great Recession" and China export-dependent economy suffered as a result.
