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DB - Equity Research - Asia Pacific ETF Weekly Review:Strong ETP flows of $2.1bn in July amid weak markets
August 3, 2011--Market Review
U.S. legislators’ failure to reach an agreement over raising the federal debt ceiling during last week caused a sharp decline across Asia-Pacific markets, as fear levels rose on the idea that a technical default or rating downgrade could become more probable as we came closer to the Aug 2nd deadline.
From north to south, Japan (Nikkei 225) lost 2.95%, Korea (KOSPI2) decreased by 1.94%, China (CSI 300) sank by 3.13%, Hong Kong (HSI) remained almost flat at 0.02%, Singapore (FSSTI) gained 0.20% and Australia (S&P/ASX 200) dropped by 3.87%.
New ETP launches
Last week, two new products were launched in the Asia-Pacific region. Birla Sun Life Asset Management Company listed its first Equity ETF on National Stock Exchange (India) tracking the S&P CNX Nifty Index and Samsung Investment Trust Management listed one Thematic ETF on Korea Stock Exchange tracking the FnGuide Solar Energy Index. (See Figure 5 for further details)
ETP Monthly Flows: Strong flows continue
Although the Asia-Pacific markets experienced mixed results during July (Nikkei 225: +0.17%; KOSPI2: +0.71%; HSI: +0.19%; TAMSCI: -0.92%, CSI 300: -2.37%, S&P/ASX 200: -3.98%), the ETP market witnessed strong cash flows of $2.1bn during the month. This was the third month in a row when the market experienced cash flows of over $2bn. From a market perspective, ETPs in Taiwan led the inflows with $598m, followed by Korea with $525m and Hong Kong with $517m.
Total monthly flows were primarily contributed by Equity ETPs with $2bn of inflows. Within Equity products, Emerging Country ETPs and Asia Pac Developed Country ETPs each recorded $1.1bn inflows. Unlike previous months, Fixed Income ETPs gained some traction in the last two months with $115m and $83m of inflows for June and July respectively. With July’s monthly contribution, year-to-date cash flows reached $9.7bn.
Turnover Review: Slight increase in activity
Turnover activity totaled $4.6bn last week after a week-over-week gain of 8.8%. South Korea topped the turnover ranking with $1.3bn (down 12.5%), followed by Hong Kong ($1.2bn, up 32.3%), China ($935m, up 10.3%), Japan ($665m, up 42.2%) and Taiwan ($165m, down 21.8%). Among Equity ETPs, Emerging Country and Asia Pac Developed Country ETPs experienced $263m (14.3%) and $112m (12.7%) increase in turnover over the previous week.
Asset Under Management Review
Asia-Pacific ETP AUM ended at $95.3bn with a decline of 2% over the previous week. On a year to date basis, Asia-Pacific ETP market is significantly above last year's closing with $11.2bn or 13.2% increase.
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Source: Deutsche Bank - Equity Research - Asia
Indian Government launches Responsible Business Guidelines
August 3, 2011--The Indian Ministry of Corporate Affairs launched the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business on 8 July 2011. The Guidelines provide a basic framework that may be adopted voluntarily by companies to address interests of various stakeholders, including employees, customers and investors.
GRI’s Focal Point India has been closely involved in the creation of the Guidelines. Dr. Aditi Haldar, Director of Focal Point India, welcomed the announcement: “India’s government has been ahead of the game in encouraging sustainable, responsible business practices for a long time. The new Guidelines build on those first issued in 2009, and demonstrate the government’s continued commitment to sustainable business.”
view the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business
Source: Global Reporting Initiative
Japan takes action on strong yen
July 3, 2011--Tokyo has intervened in the currency markets for the first time in four months amid growing pressure to stop the yen strengthening against the dollar.
It is not clear how much yen had been sold so far but market participants are expecting further sales during Thursday amid strong indications that the Bank of Japan – whose board members are meeting – will decide on additional monetary easing measures later in the day.
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Source: FT.com
SEBI begins hedge fund regulation
August 2, 2011--The Securities and Exchange Board of India (SEBI) on Monday released a paper on regulation of alternative investments, including hedge funds.
Alternative investment funds or AIFs have been classified into 9 categories.
Any fund operating as hedge fund shall be required to be registered as a strategy fund under AIF regulation.
Hedge funds would be allowed to use leverage as well as invest in complex structural products and in derivatives.
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Source: DNA India
Financing Infrastructure in India: Macroeconomic Lessons and Emerging Market Case Studies
August 1, 2011--Summary: Driving infrastructure development, notably mobilizing financial resources for infrastructure projects, has been challenging in many countries. This study includes two parts: an empirical analysis of macroeconomic risks associated with infrastructure booms, and a case study of four emerging economies about their practice of funding infrastructure development.
The study shows that (i) there is no empirical evidence that rapid infrastructure growth would undermine contemporary macroeconomic performance, implying that room is created to accommodate infrastructure booms without compromising fiscal and external sustainability; (ii) banks may play an important role in financing infrastructure, but caution is needed to avoid directed lending and regulatory forbearance that the authorities may use to promote financing; (iii) capital market development is important to accommodate the usually high financing needs, and encouraging private investors to move into infrastructure would require regulatory and institutional improvements; and (iv) public support, including credit guarantees, may help bolster investors’ confidence, but the authorities should carefully monitor and manage fiscal risks.
ASIC Makes Rules For Capital And Related Requirements For ASX And ASX 24 Markets
August 1, 2011--ASIC today made market integrity rules for capital and related requirements for the ASX market and the ASX 24 market, formerly known as the Sydney Futures Exchange market.
The rules transfer to ASIC ASX's pre-existing capital and related requirements for the two markets. This is consistent with the smooth transition in market supervision responsibility from ASX to ASIC in August 2010.
These rules amend the existing ASIC market integrity rules for the two markets by inserting three new chapters for capital, reporting and margins. Concurrently, ASX’s pre-existing capital, reporting and margin requirements in the ASX and ASX 24 Operating Rules have ceased to operate.
ASIC Market Integrity Rules (ASX Market) Amendment 2011 (No. 2) has amended the pre-existing ASIC Market Integrity Rules (ASX Market) 2010 and ASIC Market Integrity Rules (ASX 24 Market) Amendment 2011 (No. 1) has amended the pre-existing ASIC Market Integrity Rules (ASX 24 Market) 2010.
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Source: ASIC
Tokyo Stock Exchange: New Product To Be Listed: Exchange Traded Notes (Indicator-tracking Securities)(Barclays iPath series)
July 29, 2011--Today, Tokyo Stock Exchange, Inc. (TSE) approved the listing of the following trust beneficiary certificates (Japanese Depositary Receipts; hereinafter "JDRs") whose trust assets are exchange traded notes (indicator-tracking securities; hereinafter "ETNs") managed by Barclays Bank PLC of the UK.
These ETNs will be the first of its kind to be listed in Japan, and also the first foreign securities listed in Japan using the JDR scheme.
With these nine listings, there will be a total of 112 ETFs and ETNs listed on the Tokyo market. TSE will continue working to diversify the ETF market, promote the listing of other new financial instruments such as ETNs, and improve the convenience of our market for all investors.
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Source: Tokyo Stock Exchange (TSE)
Provisional Translation of “On the Revision of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting(Council Opinions)”
July 29, 2011--Provisional translation of “On the Revision of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions)”, which was published by Business Accounting Council on March 30, 2011, has been prepared in English.
The original texts of the Standards are prepared in the Japanese language, and this translation is only provisional. Therefore, for all purposes including practical application of the Standards, users should make reference to the original Japanese texts.
view the- On the Revision of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting(Council Opinions)
Source: Financial Services Agency, The Japanese Government
Calculation and Publication of New Index for Companies with Exposure to the Asian Region: “TOPIX Active in Asia”
July 29, 2011--In response to the various indexing needs of our market participants, the TSE will begin calculating and publishing the “TOPIX Active in Asia” index, which focuses on companies that have a high degree of exposure to the Asian region.
TOPIX Active in Asia is a price index whose constituents are selected based on the proportion of sales made in Asia.
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Source: Tokyo Stock Exchange
SSE Sustainable development industry Index, CSI Commodity Equity Index to be lauched
July 29, 2011--To further enhance the SSE and CSI index family as well as to provide new analysis tool and underlying instrument for investors, SSE Sustainable development industry Index and CSI
Commodity Equity Index are to be launched on Aug 22 2011 by SSE and CSI.
Source: Shanghai Stock Exchange