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DB-Synthetic Equity & Index Strategy- Asia-Pac Monthly ETF Market Review- ETP attracted $4.7bn inflow despite market stress in June
Data in this report is as of 28th June 2013
July 8, 2013--Market Review
Last month, all the major markets in Asia-Pacific region went into negative territory, impacted by the potential QE tapering and softer economic data in China. The SHIBOR shock further sent major Chinese equity benchmarks into sharp declines.
Compared to the month before, from north to south:
Japan (Nikkei 225) -0.71%
Korea (KOSPI2) -7.34%
China (CSI 300) -15.57%
Hong Kong (HSI) -7.10%
Singapore (FSSTI) -4.86%
Australia (S&P/ASX 200) -2.52%
New ETP launches
Last month, eight new ETPs were launched in the Asia-Pacific ETP market. Horizons management listed two equity ETFs on Hong Kong Exchange tracking MSCI China Index (3040 HK) and Hang Seng High Dividend Yield Index (3110 HK) respectively. KB Asset Management (174360 KS), Invesco Great Wall Fund Management (159924 CH) and Harvest Fund Management (3136 HK) each listed one China focused equity ETF on Korea Stock Exchange, Shenzhen Stock Exchange and Hong Kong Exchange respectively. Krung Thai Asset management listed one sector ETF on Stock Exchange of Thailand tracking SET Commerce Sector Index and Mirae Asset MAPS Global Investments listed one strategy based equity ETF on Korea Stock Exchange tracking FnGuide Low Vol Index. Blackrock listed one fixed income ETF on Hong Kong Exchange tracking Citi RMB Bond Capped Index.
ETP Monthly Cash Inflow of $4.7bn with $2.5bn from DM ETFs
During the month of June, Asia-Pacific ETP market experienced monthly cash inflows of +$4.7bn setting the YTD monthly flows average at +$1.8bn (+$10.8bn YTD in total cash flows). Developed market equity ETFs recorded inflows of +$2.5bn while emerging market equity ETFs registered inflows of +$0.5bn. ETFs focused on Japan, Hong Kong and South Korea recorded inflows of +$2bn, +$0.5bn and +$0.4bn. In addition, leveraged long strategy ETFs received healthy inflows of +$1.6bn. Short strategy and Asian broad EM ETFs witnessed cash outflows of -$137mn and -$110mn respectively.
At ETP level, Samsung’s Kodex Leverage ETF (122630 KS) collected largest monthly cash flows totaling +$1.1bn (+52% of AUM) while E Fund Management’s CSI 100 A-Share ETF (83100 HK) witnessed largest outflows of -$220mn (-29% of AUM).
ETFs focused on Japan & Hong Kong (DM) and China, South Korea & Taiwan (EM) witnessed significant cash flow activity in the last three months. Japan focused ETFs attracted +$6.2bn inflows during Apr’13 to Jun’13 while ETFs benchmarked to China recorded outflows of -$2.1bn over the same period.
Turnover totaled $61.3bn, up 3% from previous month
Asia-Pacific ETP turnover totaled $61.3bn for the last month, 3% up from the previous month’s total. Japan topped the turnover rankings with $19.5bn in turnover, followed by South Korea ($15.6bn), China ($13.7bn), Hong Kong ($10.3bn), and Taiwan ($0.8bn) respectively. Among equity ETFs, the emerging country, leveraged long, Asia-Pacific developed country, and short ETFs had total turnovers of $24.5bn, $17bn, $10bn, and $3.7bn respectively. Within the commodity asset class, turnover in gold ETPs totaled $475mn.
AUM ended at $144.9bn, down 2.3% in June Last month, Asia-Pacific ETP AUM reduced by $3.5bn and ended at $144.9bn. On a year-to-date basis, Asia-Pacific ETP market is up by $9bn or 6.6% above last year’s closing.
Copper at risk, gold to benefit from a Chinese hard landing-Barclays
According to a new note, Barclays says the likelihood that China might experience an economic hard landing has increased, which would have a significant effect on commodities markets.
July 8, 2013--Like the white noise from household electronics that is only noticeable in its absence during a power failure, so the global commodities sector has got used to double digit growth from China.
While there is no doubt that Chinese growth has slowed, initial panicked reaction from markets about this slowdown was replaced by the recognition that, while it is slowing, 7- 8% is still very respectable.
CSI-CBN Banks' Wealth Investment Products Index (within 3 months) To Be Launched
July 5, 2013--Designed to reflect the present situation of China's bank wealth investment products market, CSI today launches CSI-CBN Banks' Wealth Investment Products Index (within 3 months).
Appendix 1
CSI-CBN Banks' Wealth Investment Products Index Methodology
Index Code: H30085
Index Name: CSI-CBN Banks' Wealth Investment Products Index (within 3 months)
Index Shortened Name: Banks' Wealth Investment Products
Index Universe
RMB denominated Wealth Investment Products issued nationwide by selected banks within a term of 92 days, both capital-guaranteed products and flexible-return products are included.
Axioma and CSI Launch an Innovative Suite of Optimized Factor Indices for the China A-Share Market
July 3, 2013--Axioma, Inc., a leading provider of advanced tools for risk management and portfolio construction, and China Securities Index (CSI), a leading provider of equity benchmarks, today announced the launch of six innovative factor indices on China's A-share market.
The launch is an important step in the ongoing development of China’s equity market.
China Universal to list RQFII ETF, plans more
July 3, 2013--China Universal Asset Management will become the latest fund house to list a renminbi qualified foreign institutional investor (RQFII) exchange-traded fund.
The Shanghai-based firm’s Hong Kong subsidiary plans on using some of the Rmb2 billion ($325 million) RQFII quota it received in May to launch the ETF, which will track China’s benchmark index CSI 300 and start trading on July 8.
BNY Mellon readies managed-account platform
July 3, 2013--Mellon will launch a separately managed account (SMA) business in Hong Kong later this year, its first in the region, with a view to tapping private bank clients.
The US investment management and services firm, which received the required licence from...
Market-making scheme helps Aussie ETF market, study finds
Rebates have generated a lot of public discussion, but one study found that a scheme for market-making rebates in the Australian ETF market boosted liquidity.
July 2, 2013--The introduction by ASX of its ETF Market Making Scheme has improved trading and market efficiency in the Australian exchange traded fund market, a study by the Capital Markets Cooperative Research Centre (CMCRC) found.
The study analysed market activity for 12 months either side of the scheme's introduction in 2010 to assess the impact of market-maker rebates. To qualify for the rebate, contracted market makers had to meet spread and volume obligations 80% of the time over a calendar month, with the rebate covering all trading and clearing fees. The authors also looked at trades made to see how income was derived and whether market makers supplied liquidity.
ETF market quality improved under ASX scheme-CMCRC
July 2, 2013--Capital Markets Cooperative Research Centre (CMCRC), the Australian independent academic centre for capital market research, has
found that trading activity and market efficiency in the Australian ETF market, which is approaching $7B,
have improved following the introduction
by the ASX of the ETF Market Making Scheme.
The study was conducted by by
Dr Elvis Jarnecic, Research Director,
Financial Markets Research Centre of the CMCRC, and Professor David Michayluk
and Jagjeev Dosanjh of the University of
Technology, Sydney.
Index Regular Review Schedule and Corporate Events Methodology Adjustment
July 2, 2013--To satisfy the needs of securities market development and fully listen to the opinions of our index users, after approval by the Expert Committee, China Securities Index Co., Ltd. and Shanghai Stock Exchange decide to adjust the Index Regular Review Schedule and the Corporate Events Methodology.
1. The effective day of index regular review will be adjusted from the first trading day in January and July to the next trading day after the close of the second Friday in June and December.
2. Index constituents Corporate Events Methodology will be adjusted to Concentrated Implementation method instead of strictly according with the ex-right day or listing day.
Announcement of Adjusting Methodology of SSE Dividend Index and CSI Dividend Index
July 2, 2013--Based on extensive market survey and upon examination by the committee of index experts, the Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. have decided to make the following adjustments to index rules of the SSE Dividend Index and CSI Dividend Index to meet the changes of the securities market:
1. The index Universe: Changed from "Daily average negotiable market cap, trading value in the past one year is ranked top 50% of Shanghai A shares or all the A shares" to “Daily average total market cap, trading value in the past one year is ranked top 80% of Shanghai A shares or all the A shares”.
2. Index Adjustment: Changed from "Daily average negotiable market cap, trading value in the past one year is ranked top 60% of Shanghai A shares or all the A shares” to “Daily average total market cap, trading value in the past one year is ranked top 90% of Shanghai A shares or all the A shares”.
