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Liberalization of China's Interest Rate Inevitable
August 11, 2013--As China's economy shifts from an investment-driven model to a consumption-driven one, the country's financial markets will likely continue to liberalize.
Banks need a good risk management system in place to deal with the changes that will be brought about by liberalizing interest rates.
In a panel on the future of China's financial system that took place on the opening day of the Annual Meeting of the New Champions 2013, panellists agreed that interest rate liberalization in China is inevitable, and should be done as soon as possible. Chinese "capital and financial markets are becoming more and more mature. The microeconomic situation [and the global economy] are pretty stable," said Morris Li Ming Shieh, President, China Guangfa Bank (CGB), People's Republic of China, with the European and US economies coming out of the financial crisis. A key and "subtle" question, he said, is whether or not the banks are ready.
The most crucial element for the next stage of China's economic development is risk management, said Zhu Ning, Deputy Director and Professor of Finance at the Shanghai Advanced Institute of Finance, People's Republic of China.
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Source: WEF (World Economic Forum)
TSE ETF/ETN Monthly Report for Aug 2013
September 11, 2013--Trading in the ETF/ETN market continued to be active August, which also saw the listing of one new ETF.
Trading activity in the ETF/ETN market in August continued to be active, with a monthly trading value of about 1.48 trillion yen, and a daily average of about 67.4 billion yen.
In addition to "NEXT FUNDS Nikkei 225 Leveraged Index ETF (1570)" which topped the list, leveraged and inverse ETFs remained among the top-ranked issues. While the trading value of the ETF/ETN market declined slightly from the previous month, two inverse ETFs tracking the Nikkei 225 showed gains in trading value in August.
Precious metal and other commodity ETFs stood out among top-ranked issues in terms of monthly trading value growth rates.
view the Tokyo Stock Exchange ETF/ETN Monthly Report-August 2013
Source: TSE (Tokyo Stock Exchange)
ASIC-13-254MR Hedge funds no systemic risk to financial system
September 10, 2013--Australian hedge funds do not currently pose a systemic risk to the Australian financial system, an ASIC report released today has found.
Key points:
Hedge funds ASIC identified manage only a small share of Australia's $2.1 trillion managed funds industry with more than half of these holding less than $50 million each
The survey indicates Australian hedge funds do not currently appear to pose a systemic risk to the Australian financial system
Listed equities represent surveyed hedge fund managers’ greatest asset exposure, with 32% of this being in Australian-listed shares
Surveyed qualifying hedge funds also use low leverage and appear to have adequate liquidity to meet obligations
The survey was representative of the state of the Australian hedge fund industry as a whole, with the assets of the 12 surveyed qualifying hedge funds representing approximately 42% of the assets held by single-strategy hedge funds in Australia.
Australian wholesale investors are the main investors in the surveyed funds. Their hedge-fund investment relative to their total investments is minimal, which tends to reduce systemic impact of any problems in the sector.
view the Report 370 The Australian hedge funds sector and systemic risk
Source: ASIC
China asset manager association establishes presence in Hong Kong
September 9, 2013--The Chinese Asset Management Association of Hong Kong (CAMAHK), a body that represents Mainland asset management and financial entities in Hong Kong, officially established an office in the territory on September 5.
The association exists to facilitate the offshore RMB business and further the overseas businesses of Chinese fund managers.
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Source: Asia Asset Management
DB-Synthetic Equity & Index Strategy-Asia-Pac Monthly ETF Market Review-Broad based outflows except Japan focused ETFs
September 9, 2013--Market Review
Last month, Asia-Pacific region had mixed markets. Chinese equity markets advanced as China's manufacturing activity accelerated in August, while the Southeast Asia and Singapore markets tanked on concerns over the US Federal Reserve's QE tapering as well as the potential slowing of regional economic growth. Compared to the month before, from north to south:
Japan (Nikkei 225) -2.04%
Korea (KOSPI2) +1.51%
China (CSI 300) +5.51%
Hong Kong (HSI) -0.70%
Singapore (FSSTI) -5.99%
Australia (S&P/ASX 200) +1.64%
ETPs flows: Inflows into Japan focused ETFs drive region’s fund flows
Last month, Asia-Pacific ETP market recorded inflows of +$1.5bn setting the YTD monthly flows average at +$1.6bn (+$12.9bn YTD in total flows). DM equity ETFs outperformed EM equity ETFs and registered inflows of +$2.3bn, driven by positive flows into Japan focused ETFs (+$2.4bn). EM equity ETFs witnessed outflows of -$1.6bn which were primarily contribute by South Korea, China and Taiwan focused ETFs, recording -$0.8bn,-$0.4bn and -$0.3bn of outflows respectively. Financial sector and leveraged long strategy ETFs gained traction collecting +$201mn and +$109mn of inflows.
Fixed income ETFs contributed +$365mn of fund flows in August. Sovereign ETFs were the largest beneficiary with +$347mn of inflows.
Winners and losers: At ETP level, Japan focused ETFs Nomura Nikkei 225 ETF (1321 JP), Maxis Nikkei 225 ETF (1346 JP) and Daiwa Nikkei 225 ETF (1320 JP) received largest inflows of +$660mn, +$481mn and +$395mn respectively.
Largest redemptions were experienced by Mirae Asset MAPS TIGER 200 ETF (102110 KS), Fubon MSCI Taiwan ETF (0057 TT) and Samsung KODEX 200 (069500 KS) with outflows of -$513mn, -$279mn and -$259mn respectively.
Last three months: ETFs focused on Japan & Hong Kong (DM) and Taiwan, China and South Korea (EM) witnessed significant fund flow activity in the last three months. Japan focused ETFs attracted +$4.2bn inflows from June'13 to Aug' 13 while ETFs benchmarked to China recorded outflows of -$0.5bn over the same period.
Turnover: Floor activity down by 3% on a month-over-month basis
Asia-Pacific ETP turnover totaled $53.2bn for August, 2.7% down from the previous month's total. On a country level, stock exchanges in Japan topped the turnover ranking with aggregate turnover of $15.2bn, followed by China ($14.1bn), South Korea ($14bn) and Hong Kong ($7.5bn) respectively. Among equity ETFs, the emerging country, leveraged long, Asia-Pacific developed country, and short ETFs were the most traded products recording total turnovers of $20.7bn, $14.6bn, $7.3bn, and $4.4bn respectively. Within the commodity asset class, turnover in gold ETPs totaled $541mn.
AUM-Assets increased by 1.7% in July
Last month, Asia-Pacific ETP AUM added $2.6bn and closed the month at $153.9bn. On a year-to-date basis, Asia-Pacific ETP market is up by $17.9bn or 13.2% above last year's closing.
New ETP launches-Equities lead the rally with six new products
During August, Asia-Pacific ETP market saw nine new product launches- six within equity and three in fixed income asset class.
Equity: Penghua Fund Management (159927 CH), China Asset Management (3180 HK) and the new issuer China International Fund Management (510450 CH) each listed one China focused equity ETF on Shenzhen Stock Exchange, Hong Kong Exchange and Shanghai Stock Exchange respectively. Among the 57 new launches this year, Chinese equity indices are the most tracked depicting increasing investors' interest towards Chinese equity markets.
Korea Investment Trust Management listed one equity ETF (181480 KS) on the Korea Stock Exchange tracking the Dow Jones US Real Estate Index. Prudential ICICI Asset Management listed one equity ETF (ICPNCNX IN) on the National Stock Exchange (India) providing exposure to the Indian equity market. Further, Krung Thai Asset Management listed one equity ETF (EICT TB) on Stock Exchange of Thailand tracking SET Information & Communication Technology Index.
Fixed Income: Bosera Fund Management Company listed one China focused fixed income ETF (511210 CH) on the Shanghai Stock Exchange. Harvest Fund Management listed one fixed Income ETF (159926 CH) on the Shenzhen Stock Exchange tracking medium term Chinese sovereign bonds. In addition to one equity ETF, Korea Investment Trust Management launched one fixed income ETF (181450 KS) in August. The fund was listed on the Korea Stock Exchange and tracks the Markit iBoxx USD Liquid High Yield Index.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-Asia
Regulators release conclusions on further proposals for regulating OTC derivatives market
September 6, 2013--The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) jointly published today their conclusions on a joint supplemental consultation regarding the proposed scope of activities to be regulated under the new over-the-counter (OTC) derivatives regime, and regulatory oversight of systemically important participants (Note 1).
The conclusions paper summarises the comments received and the responses of the HKMA and the SFC to these comments. It also notes that further work is necessary and is being conducted to implement the new OTC derivatives regime.
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Source: Securities and Futures Commission (SFC)
China Brings Back Bond Futures
September 6, 2013--In 1995, the same week that a rogue trader brought down venerable British bank Barings PLC, a $10 billion trading scandal erupted in China's bond futures market, taking down the country's biggest brokerage.
Chinese authorities shut down trading in bond futures and spent two and a half years sorting through the mess.
Now, 18 years later, China is reopening the market as it pushes ahead with a broad set of financial reforms aimed at modernizing its capital markets and easing state control over interest rates.
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Source: Wall Street Journal
HKEx delisting notice-
September 6, 2013-HKEx Notice of delisting
SBC MSCI Golden Dragon ETF (Stock Code: 3088)
HSBC MSCI Hong Kong ETF (Stock Code: 3000)
HSBC MSCI China ETF (Stock Code: 3033)
HSBC MSCI Taiwan ETF (Stock Code: 3083)
view notice
Source: HKEx
High Logistics Costs Impede Higher Economic Growth For Indonesia, Says Joint Report
September 6, 2013--September 6, 2013--High logistics costs are a serious impediment to higher economic growth for Indonesia, according to a report launched today by Bandung's Institute of Technology in West Java, in partnership with the World Bank.
"The costs of logistics across Indonesia account for some 24 per cent of GDP (Gross Domestic Product), higher than in neighboring countries. Cutting down costs and improving the quality of logistics and transport systems would vastly improve Indonesia's access to international markets and increase trade," says Henry Sandee, a senior trade specialist at the World Bank.
view the State of Logistics Indonesia 2013 report
Source: World Bank
New ETFs Included in Real-Time Dissemination of "TSE Indicative NAV"
September 5, 2013--Tokyo Stock Exchange, Inc. (TSE) will newly calculate and publish the real-time Indicative Net Asset Value (Indicative NAV) per share for the below Exchange Traded Funds (ETFs) beginning October 7, 2013.
1. Addition
