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S.Korea's Retail Investors Make Market Waves with Wrap Fervour
Wrap accounts explode in popularity over past year in Korea
They exaggerate volatility with concentrated bets on few stocks
Regulators closely watching wrap accounts
Korean investors tend to herd into "next big thing"
August 25, 2011-Henry Seggerman has spent two decades investing in South Korea and over the years he has seen his fair share of market quirkiness. But when he heard about the princes and princesses, he was amazed.
Seggerman, who is chief investment officer of International Investment Advisors, has been closely following the latest investment craze in South Korea -- wrap accounts. Over the past year, they have become a dominant and sometimes dangerous force in the Korean equity market, adding fuel to a sell-off this month that could become the biggest on record.
Moody's cuts Japan rating, blames politics
August 24, 2011--Moody's Investors Service cut its rating on Japan's government debt by one notch to Aa3 on Wednesday, blaming a build-up of debt since the 2009 global recession and revolving-door political leadership that has hampered effective economic strategies.
Japan is preparing to elect its sixth leader in five years to replace unpopular Prime Minister Naoto Kan, under fire for his handling of the response to a March tsunami and subsequent radiation crisis at a crippled nuclear power plant.
China to launch first wine investment fund
August 23, 2011--China’s burgeoning taste for the good life is about to find a new outlet with the launch of the nation’s first wine investment fund.
The Dinghong Fund plans to raise Rmb1bn ($156mn) and will invest in vintages from Bordeaux and Burgundy.
Beijing crackdown hits rare earths mining
August 23, 2011--The red clay hills of southern China might seem like an unlikely spot for a global tug of war. But that is exactly what is playing out there as Beijing cracks down on the mining of rare earths, the 17 elements crucial for the electronics used in everyday life.
In recent weeks some of the mines gouged out of hillsides in Jiangxi province have been broken up, others mothballed, as China – which controls nearly all the world’s rare earths production – tightens environmental rules governing the industry. The move, which will cut supply, will send shivers through the global rare earths supply chain.
Barclays Lists Japan's First Exchange Traded Notes On Tokyo Stock Exchange - Barclays iPath® ETN Series
August 23, 2011--Barclays Bank PLC announced today the launch of nine iPath® Exchange Traded Notes (ETNs) on the Tokyo Stock Exchange (TSE), marking the first ever ETN listing in Japan.
This will also be the first listing of non-Japanese securities in a format of Japanese Depositary Receipts (JDRs). As stated in the below table, two ETNs (volatility and commodity-related) were listed today and seven ETNs (commodities-related) will be listed on September 6, making up a total of nine products.
A listing ceremony was held today at the TSE attended by Eiji Nakai, President and CEO of Barclays Capital, Japan and Atsushi Saito, President and CEO of TSE, who, together with business partners of the firm, were present at a bell ringing ceremony at the TSE to mark this key milestone in the development of the ETN market in Japan.
“iPath® is known globally as a brand name of Barclays' ETNs. iPath® ETNs provide investors a new innovative investment with opportunities to access previously difficult to reach markets and investment strategies. We believe that the creation of an ETN market addresses the shortage of alternative investments and will help revitalise the Japanese economy,” said Eiji Nakai, President and CEO of Barclays Capital Japan.
Atsushi Saito, President and CEO of TSE, said, “The iPath series is issued by Barclays Bank, one of the world's leading financial institutions. We are delighted to welcome this ETN as the first to be listed on our market. In addition to the existing ETF market, I firmly believe that this listing will provide more diversified investment methods to Japanese investors as well as improve market convenience. TSE will strengthen its functions as a platform which provides a variety of financial instruments.”
Arirang KRX100EW ETF and K100EW ETF listed on the Korea Exchange
August 22, 2011--On August 18, 2011 the Arirang KRX100EW ETF and K100EW ETF were listed on the Korea Exchange.
The underlying index of Arirang KRX100EW ETF is the equal weighted version of KOSPI 100 and that of K100EW ETF is the equal weighted version of KRX 100, which are calculated by weighting all index constituents equally.
KRX listed total 28 ETFs this year alone, and two additional ETFs would increase the total number of ETFs to 94.
DB - Equity Research - Asia Pacific ETF Weekly Review: Bear markets keep eroding AUM from Asia-Pac ETFs
August 22, 2011--Market Review
As deepening global growth concerns continue, Asian markets could not get away from the effect. From north to south, Japan (Nikkei 225) dropped by 2.73%, Korea (KOSPI2) sank by 3.21%, China (CSI 300) decreased by 2.35%, Hong Kong (HSI) retreated by 1.12%, Singapore (FSSTI) declined by 4.10% and Australia (S&P/ASX 200) lost 1.69% over the previous week.
New Launch Review
Last week, Bank of China Investment Management entered into Asia-Pacific ETP market and launched its first ETF on the Shanghai Stock Exchange. The ETF tracks SSE State-owned Enterprises 100 Index. This was the only product launch in the region during last week.
Turnover Review: Volatility keeps markets active
Asia-Pacific market collected a total weekly turnover of $7.4bn last week, 49.1% below from the previous week's record high turnover, but 54.7% up from last year's weekly average. South Korea continues to be on top of the turnover ranking with $3.3bn (down 47.8%), followed by Hong Kong ($1.5bn, down 49.2%), Japan ($948.8m, down 50.8%), China ($945m, down 46.9%), and Taiwan ($257.6m, down 64.3%). Among Equity ETPs, Emerging Country, Leveraged Strategy, Asia Pac Developed Country and Short Strategy ETPs had total turnover of $2.5bn, $1.7bn, $1.5bn and $1bn respectively. Under the Commodity asset class, turnover on Gold ETPs totaled $316m, 281.6% up from last year's weekly average.
Assets Under Management Review
In the middle of declining markets, Asia-Pacific ETP AUM was reduced by $1.1bn or 1.2% on a week-over week basis and ended at $88.8bn last week. However, on a year to date basis, Asia-Pacific ETF assets are still $4.6bn or 5.4% above last year's closing.
FTSE EPRA/NAREIT Developed REITs Index forms the benchmark for the first ever QDII Real Estate Fund
Augsut 22, 2011--FTSE Group (“FTSE”), the award-winning global index provider today announces the licensing of the FTSE EPRA/NAREIT Developed REITs Index to Lion Fund Management (Lion Fund).
The index has been chosen as the benchmark for the first-ever Qualified Domestic Institutional Investor (QDII) fund specialising in real estate.
Real estate has long been a key component of sophisticated institutional investor portfolios globally, with liquid REITs offering an efficient means to access this asset class. With the FTSE EPRA/NAREIT Developed REITs index as its benchmark, the fund gives Chinese investors under the QDII scheme a new opportunity to gain exposure to international real estate assets such as hospitals, shopping malls and offices. .
The FTSE EPRA/NAREIT Developed REITs index is part of the market leading FTSE EPRA/NAREIT Global Real Estate Index Series. Developed in partnership with two of the world’s leading trade associations for real estate investing, The European Public Real Estate Association (EPRA) and The National Association of Real Estate Investment Trusts (NAREIT), the index series has become the market standard for listed real estate and REITs worldwide.
SGX: "Further Measures to Improve Investor Awareness Of ETF Structures"
August 22, 2011--Recent attention given to the embedded risks of synthetic replication exchange traded funds (ETFs) has raised awareness on the importance of understanding the structures, features and risks of a product for informed investment decisions.
To make it easier for investors to differentiate between direct replication ETFs and synthetic replication ETFs, representing the two broad structures of ETFs, the Exchange has arranged for the trading name of all synthetic replication ETFs to be tagged with an ‘X’, which appears next to the ‘@’ used to mark Specified Investment Products (SIPs). This improves visibility of all the synthetic replication ETFs on trading screens and the SGX live prices website.
The latest measure is part of our overall effort aimed at equipping investors with the requisite knowledge to bring about informed investment decision. In July, the Exchange introduced two online initiatives, “Customer Account Review Module” and “SGX Online Education programme”, to support retail investors in their understanding and trading of SIPs listed on SGX. SGX began working on these initiatives last year, in response to the Monetary Authority of Singapore’s (MAS) proposal to enhance safeguards for retail investors for SIPs. Retail investors can only trade SIPs (which includes ETFs) only after they are assessed by the broking firms as having the relevant knowledge and experience to understand the risks and features of SIPs. The SGX Online Education Programme, in particular, also dedicates a module to educating investors on ETFs.
Investors can learn more about the two broad types of ETFs, classification of each ETF and the associated risks of the different ETFs on SGX’s website (www.sgx.com/etf_risk). Investors also can access information on ETFs such as listing documents, product brochures and information on the underlying at the websites of the issuers. These websites are constantly being updated with new or additional information. In addition, ETF issuers work with the Exchange to provide ETF education through seminars and publications. Information on such seminars is found at the SGX website (www.sgx.com/academy).
Intervention fears weigh on yen
August 22, 2011--The yen pulled back from a record high against the dollar on Monday on speculation that the Japanese authorities could move to weaken the currency.
The yen hit a record high of ¥75.93 against the dollar on Friday as fears over global growth sparked haven demand for the Japanese currency and speculation of further quantitative easing from the Federal Reserve weighed on the greenback.
