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DB - Equity Research - Asia Pacific ETF Weekly Review: ETF turnover soars in the middle of declining markets
August 15, 2011--Market Review
Asian markets declined for the third week in a row as fear continues on weakening global economic recovery amid Europe’s debt crisis concerns and fall in U.S. credit rating.
In all, Japan (Nikkei 225) dropped by 3.61%, Korea(KOSPI2) sank by 8.54%, China (CSI 300) decreased by 0.76%, Hong Kong (HSI) dropped by 6.33%, Singapore (FSSTI) declined by 4.81%, while Australia(S&P/ASX 200) gained 1.64% over the previous week.
New Launch Review
After one week of silence, another new product was added in the Asia-Pacific market last week. Chinese issuer GF Fund Management Co Ltd entered the ETP market with the listing of its Guangfa SZSE Small and Mid Cap Enterprises 300 Price Index ETF on Shenzhen Stock Exchange tracking SZSE Small and Mid Cap Enterprises 300 Price Index.
Turnover Review: Volatile markets took trading activity to the new heights
Asia-Pacific market collected total weekly turnover of $14.5bn last week, 81.2% above previous week, and 204% up from last year’s weekly average. This was primarily aided by the ETPs tracking Kospi 200 Index and its inverse and leveraged versions as the index experienced sharp decline in the last week. South Korea topped the turnover ranking with a record $6.4bn (up 108%) followed by Hong Kong ($2.9bn, up 45.2%), Japan ($1.9bn, up 56.9%), China ($1.8bn, up 119.7%), and Taiwan ($721.9m, up 58.7%).
Among Equity ETPs, Emerging Country, Leveraged Strategy, Short Strategy and Asia Pac Developed Country ETPs experienced significant week-over-week rise in turnover of $2.1bn (59.9%), $1.9bn (144.6%), $1.2bn (214.4%) and $989m (49.8%) respectively. On the Commodities section Gold ETPs activity also increased by 97.2% totaling $453m for the last week.
Assets Under Management Review
Amid volatile markets, Asia-Pacific ETP AUM remained technically flat on a week-over week basis and ended at $89.9bn last week. However, on a year to date basis, Asia-Pacific ETF market is $5.7bn or 6.8% above last year's closing.
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Source: Deutsche Bank - Equity Research - Asia
After NSE, USE to impose charge on currency derivatives trade
August 15, 2011--The United Stock Exchange (USE), which has premier bourse BSE as its largest shareholder, has said it will soon take a call on imposing service charges on currency derivatives trading.
"We welcome the decision by the NSE and we will take a call on imposing charges soon. Our board will meet by the last week of this month to decide on this," USE Managing Director and Chief Executive T S Narayanaswami told PTI here.
Source: The Economic TImes India
Japan’s GDP shrinks less than expected
August 15, 2011--Japan’s economy contracted for a third consecutive quarter, reflecting the continued impact of the country’s biggest disaster since the second world war.
Gross domestic product fell 0.3 per cent in the April-June quarter on a seasonally adjusted basis from the previous quarter, due to a sharp drop in net exports following the March 11 earthquake and tsunami. That translated into a 1.3 per cent decline on an annualised basis, according to government figures released on Monday.
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Source: FT.com
After takeover,will Benchmark grow?
Goldman Sachs is expected to pump in money to help Benchmark’s ETFs widen their reach. For investors, this means they can continue to hold their units, but exit is easy too
August 14, 2011--Nothing seems much different as you walk into the cramped office of Benchmark Asset Management Co. (AMC) Ltd at one of Mumbai’s oldest business district at Nariman Point. A nondescript reception quite unlike any in the Rs. 7 trillion Indian mutual funds (MF) industry, a dusty sofa that gives you a feeling you’re sinking in as soon as you sit on it, an office security guard doubling up as a receptionist,
cramped cubicles, a casual dress code with shirts hanging out and just a few jackets hung over chairs; that’s as formal as things get here. But life is set to take a 180 degrees turn for the 50 employees of this fund house.
Goldman Sachs, the US-based fund house that manages assets worth $844 billion (Rs. 38.29 trillion) globally has just acquired it. India’s first fund house to focus only on exchange-traded funds (ETF) has now moved to a big league. The exit option for investors to withdraw without paying an exit load expired on 10 August. For those who missed the exit opportunity, is it too late? Or should you rather hold on? Read on to find out.
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Source: livemint.com
Thai Bourse Lists ThaiDEX SET High Dividend ETF On August 16
August 11, 2011--The Stock Exchange of Thailand (SET) will list ThaiDEX SET
High Dividend ETF, managed by One Asset Management Limited, on its main board on
August 16, under the ticker “1DIV.”
1DIV, an open-end exchange-traded fund (ETF), will mostly invest in constituent stocks of the SET High Dividend 30 Index (SETHD), thus reflecting the price movements of 30 stocks that have constantly paid high dividend yields.
“1DIV focuses on screened stocks which have had good dividend track records for three successive years to meet the demand of those who favor dividend shares,” said SET President Charamporn Jotikasthira.
As at the end of June 2011, the average dividend yield of the constituent stocks of SETHD was 4.28 percent, compared with 3.75 percent of the overall market. Monrat Phadungsit, President of One Asset Management, said: “This ETF received great attention from both institutional and retail investors during its IPO early this month. It initially raised THB 189.09 million and has a price per unit of THB 10.5049. We believe 1DIV should grow continuously and follow the success of the ThaiDEX SET50 ETF.”
KGI Securities (Thailand) PCL is participating dealer and market maker and Thailand Securities Depository Co., Ltd. is registar for 1DIV.
Currently, the four ETFs listed on Thailand’s stock exchange are KTAM Gold ETF Tracker (GLD), tracking the price of gold; MTRACK ENERGY ETF (ENGY), with the SET Energy & Utilities sector index as the underlying index; ThaiDEX SET50 ETF (TDEX), a SET50 market-weighted index; and W.I.S.E KTAM CSI 300 China Tracker (CHINA), tracking
W.I.S.E.-CSI 300 China Tracker.
Source: Stock Exchange of Thailand (SET)
Japan Market Finds Support As BOJ Steps Up ETF Buying
BOJ steps up buying of ETFs in August
Japanese equity market finds psychological support from the ETF buying
ETF buying is different from previous price-keeping operations in size, impact and objective August 12, 2011--
As investors across the world shuddered in response to the wrenching sell-off in equities this week, some said the Bank of Japan is providing psychological reassurance to the country's stock market with its stepped-up purchases of exchange-traded funds.
On both Aug. 9 and Aug. 11, the central bank bought Y25.6 billion--a single-day record--in ETFs that track the Nikkei 225 Stock Average and the broader Topix index. This month alone, the BOJ has purchased Y147.6 billion, making up about 30% of the total amount of ETFs it has bought since mid-December.
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Source: Fox Business News
ASIC pushes for greater CFD disclosure
August 12, 2011--ASIC today released new disclosure benchmarks for contracts for difference (CFDs) that aim to improve disclosure and investor awareness about risks of these products.
The guidance also covers margin foreign exchange contracts.
In Australia, most CFDs are issued as over-the-counter (OTC) products, making them increasingly accessible and popular with retail investors. But CFDs are a high-risk financial product and their complexity means they are unlikely to meet the investment needs of many retail investors.
ASIC Chairman Greg Medcraft said action was needed to ensure people considering CFDs are aware of the downside as well as the upside.
‘CFDs are extremely risky financial products. Most investors don't understand that complexity and they don't get independent financial advice. That means we need CFD issuers to do a much better job of spelling out to investors the risks as well as the rewards of these complex products,’ Mr Medcraft says.
‘ASIC’s number one priority is ensuring investors and financial consumers are confident and informed. We want issuers to work harder to ensure people investing in CFDs better understand what they are getting into – before they start trading.’
Asia stocks mixed at end of rocky week
August 12, 2011--Asian stocks were mixed on Friday as early gains on the back of rallies in the United States and Europe were sold as markets remained volatile at the end of a rollercoaster week.
Tokyo lost 0.20%, or 18.22 points, to 8 963.72 and Seoul was down 1.33%, or 24.13 points, at 1 793.31 while Sydney added 0.78%, or 31.8 points, to 4 172.6 and Hong Kong added 0.84% in the afternoon.
Shanghai was up 0.31% in the afternoon.
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Source: FIN24
Japan Slashes GDP Forecast
August 12, 2011--Japan cut its growth forecast for this year after a record earthquake disrupted output and depressed consumer spending.
Gross domestic product will increase 0.5percent in the year started April 1, compared with a January forecast for a 1.5 percent expansion, the Cabinet Office said in Tokyo today. GDP will increase 2.7 percent to 2.9 percent in the following year as the nation rebuilds from the March 11 catastrophe, according to the report.
Source: Bloomberg
New Zealand -Government releases draft securities bill
August 11, 2011--Commerce Minister Simon Power today released the draft version of a bill that stems from the comprehensive review of securities law.
"I'm releasing this bill in draft form to ensure that decisions from this once-in-a-generation opportunity to re-write our securities law are enduring for years to come," Mr Power said.
The new legislation will play a crucial role in restoring confidence in our financial markets by providing better protections for mum and dad investors, and clearer rules for companies looking to raise capital.
"The draft bill takes into account the work of the Capital Market Development Taskforce, the effects of the global financial crisis, and the failure of finance companies, and aims to be a one-stop shop for securities law."
The Financial Markets (Conduct) Bill reflects Cabinet decisions announced in March and June of this year, which include:
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Source: Yahoo News NZ