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DB-Equity Research-Asia-Pac-ETF Market Weekly Review: ETP AUM lost another $2.2bn amid bearish equity markets
May 21, 2012--Market Review
Last week, all the markets in the Asia-Pacific region were down. From north to south, Japan (Nikkei 225) lost 3.82%, Korea (KOSPI2) fell by 7.15%, China (CSI 300) slid by 2.39%, Hong Kong (HSI) decreased by 5.07%, Singapore (FSSTI) was down by 3.62%, and Australia (S&P/ASX 200) declined by 5.57% over the previous week.
New Launch Review
Last week, two new ETFs were launched in the Asia-Pacific region. BetaShares Capital Ltd listed one Fixed Income ETF on the Australian Securities Exchange with an aim of exceeding the 30 day Bank Bill Swap Rate with monthly income distributions. CIMB-GK Securities Pte Ltd launched an Equity ETF on the Singapore Exchange tracking S&P Ethical Pan Asia Select Dividend Opportunities Index.
Turnover Review
Asia-Pacific ETP turnover totaled $6.9bn for last week, 14% up from the previous week’s total. South Korea continued to be on top of the turnover ranking, with $2.9bn, followed by Hong Kong ($1.5bn), China ($1.2bn), Japan ($0.8bn), and Taiwan ($0.2bn). Among Equity ETFs, Emerging Country, Asia Pac Developed Country, Leveraged Strategy, and Short Strategy ETFs had total turnover of $2.8bn, $1.5bn, $1.4bn and $740m respectively. Under the Commodity asset class, turnover in Gold ETPs totaled $168m for the last week.
Assets Under Management Review
Last week, Asia-Pacific ETP AUM declined by $2.2bn and ended at $96.6bn. On a year-to-date basis, Asia-Pacific ETP market is up by $5.1bn or 5.5% above last year’s closing.
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Source: Deutsche Bank - Equity Research - Asia Pacific
Huatai-PineBridge Completes US $5.3 billion Exchange Traded Fund Initial Public Offering
First Cross-Exchange Fund in Mainland China
May 21, 2012--PineBridge Investments, the global multi-asset class investment manager, is pleased to announce that its China joint venture, Huatai-PineBridge Fund Management Co ("Huatai-PineBridge"), successfully launched its CSI 300 ETF product in Mainland China, raising US$5.3 billion (RMB 33 billion) in its initial public offering. It is the largest ETF IPO in the Mainland Chinese capital market since 2006 and is expected to be the second largest equity fund in the A share market.
The Huatai-PineBridge CSI 300 ETF is the first cross-exchange product linking the Shanghai and Shenzhen Stock Exchanges, providing investors with exposure to a well diversified, broad-based index of stocks listed on both the Shanghai and Shenzhen Stock Exchanges. It also matches the CSI 300 Futures Index, the first financial futures index in China, which was launched in April 2010. The CSI 300 ETF has a T+0 trading mechanism, which allows trading and settlement on the same day and enables investors to better capture ETF trading arbitrage opportunities.
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Source: MarketWatch
Notice of Taking ETFs as Underlying Securities of Margin Trading, Securities Lending
May 21, 2012--All member units and fund management companies,
According to Articles 25 and 26 in the "SSE Detailed Rules for Implementation of Margin Trading and Securities Lending", the Shanghai Stock Exchange (SSE) hereby makes the following notice for relevant issues of taking ETFs as underlying securities of margin trading and securities lending:
1. Any ETF which meets the following requirements could be taken as an underlying security of margin trading and securities lending after it traded on the SSE for at least 5 trading days:
a. The average daily asset size is not smaller than RMB10 billion;
b. The number of fund holders is not less than 10,000; and
c. The number of the constituent stocks tracking indices is not less than 30, with the total market capitalization not less than RMB500 billion.
Source: Shanghai Stock Exchange (SSE)
China paves way for foreign investment in futures
Overseas investors may hold up to 5% of local futures firms
May 21, 2012--(originally published May 15, 2012)-- China is mapping out foreign-ownership restrictions in domestic futures firms, as it prepares to reopen the door to foreign investment in its futures market.
The nation’s securities regulator, the China Securities and Regulatory Commission, said in a notification on its website on May 14 that an overseas investor can indirectly hold less than 5% of equities and voting rights in a Chinese futures firm through a Chinese legal entity in which it directly or indirectly holds shares.
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Source: MarketWatch
Rupee hits new record low of 54.82 per dollar
May 18, 2012--The rupee on Friday tumbled by 35 paise to trade at a new all-time time low of Rs 54.82 against the US dollar in early trade on increased capital outflows and strong demand from importers for the American currency.
Traders said apart from capital outflows by foreign funds, strengthening of dollar against the euro, which plunged to a four-month low following renewed worries over deepening eurozone debt crisis, put pressure on the rupee.
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Source: India Times
China to increase 2012 rare earth exports by 10,680 metric tons
An additional 10,680 tonnes of light and medium to heavy rare earths will be allocated this year to 12 Chinese companies for export, China's Commerce Department has announced.
May 18, 2012--The Chinese Ministry of Commerce Thursday announced an update to the 2012 rare-earth export quotas, which increased allocations by an additional 10,680 tonnes for a total of 21,226 tonnes this year.
The government had previously insisted its total rare earths export quotas would remain about the same this year as last year at 30,184 tonnes. However, the U.S., the European Union and Japan in March filed a complaint at the World Trade Organization over China's rare earths quotas.
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Source: MineWeb
Japan's Economy Grows 1% In Q1 On Reconstruction Activities
May 17, 2012--Japan's economy grew in the first three months of the year from the preceding quarter on reconstruction in tsunami-damaged areas, but the increase in the nation's gross domestic product is seen as short-lived.
Japan’s gross domestic product (GDP) rose 1 percent in the first quarter as compared to last quarter of the previous year, according to data released by the government on Thursday. However, exports are weighed down on account of the falling global demand and the rising strength of yen. With Greece on the verge of exiting euro zone, the debt crisis in Europe has revived, severely affecting Japan’s market sentiments, as a consequence.
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Source: International Business News
Changes in BSE Indices
May 17, 2012--Trading members of the Exchange are hereby informed that the following replacements shall be made in below mentioned indices.
Vide Notice No. 20120516-17, dated May 16, 2012 India Securities Ltd. (BSE Code: 500204) has been suspended w. e. f. May 17, 2012 as per SEBI’s advise. At present company is constituent of BSE-200 BSE-500 & BSE-Midcap Index, which necessitates its exclusion.
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Source: BSE
ETF investors forecast to number 66,500 by end of 2012, says BetaShares
May 16, 2012--The number of exchange traded funds (ETFs) used by investors is on the rise despite continued market volatility, with 63,000-70,000 ETF investors expected by the end of 2012, according to forecasts contained within the BetaShares/ Investment Trends ETF Report. At the end of 2011, there were 60,500 ETF investors, an increase of 13% from the prior year.
The BetaShares Report is the only comprehensive survey of Australian ETF users surveying 6,785 investors and 966 advisers on their experiences and usage of ETFs.
The findings show diversification and low cost continue to be the main reasons driving investment in ETFs although most respondents provided 3.5 reasons suggesting multiple benefits are apparent. The average ETF transaction size increased 13 per cent to $18,000 from the prior year.
“It’s not surprising investors are finding multiple reasons to use ETFs, ranging from accessing investments and liquidity as well as the core benefits of diversification and low cost,” says Drew Corbett (pictured), Head of Investment Strategy at BetaShares.
Data in the report indicates that current fear levels are just shy of those experienced during the GFC, which has resulted in a major shift in returns expectations. In considering the next 12 months, investors returns expectations of the equities markets have decreased from 8 per cent in December 2010 to 4.4% in April 2012.
“A lower returns outlook due to market volatility explains investor behaviour in seeking refuge in cash and term deposits. Despite this, ETF investors or those considering the product continue to increase,” says Corbett.
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Source: Canadian ETF Watch
China Expands Scope for Short Selling, Securities Journal Says
May 16, 2012--China will start a trial next week that will allow brokerages to borrow stocks for clients wishing to conduct short selling, the China Securities Journal reported.
Brokerages can also borrow money on behalf of clients for margin financing, the newspaper reported today, without saying where it got the information. Twenty-five securities companies will participate in the test, along with the stock exchange, fund management companies and China Securities Finance Co., which was set up as an agency to provide funds and stocks for brokerages’ short selling and margin trading. The journal is a publication affiliated with the official Xinhua News Agency.
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Source: Bloomberg
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