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Understanding Chinese Bond Yields and their Role in Monetary Policy-IMF Working paper
September 28, 2011--Summary:
China’s financial prices are informative enough for the PBC to introduce a monetary policy framework centered around interest rates. While bond yields are not fully efficient—reflecting regulation, liquidity, and segmentation—we find they contain considerable information about the state of the economy as well as evidence of an emerging transmission channel: changes in PBC rates influence the structure of Treasury, financial, and corporate bond yield curves, which are then associated with changes in growth and inflation.
Coporate spreads are also a leading indicator of growth and inflation. While further liberalization will strengthen both efficiency and transmission, several necessary elements to move towards indirect monetary policy are already in place.
Understanding Chinese Bond Yields and their Role in Monetary Policy-IMF Working paper
Source: IMF
TOCOM-The Circuit Breaker Problem on September 26, 2011
September 27, 2011--Sincere apologies for any inconvenience caused to market participants and others who may have been affected by the problem related to the circuit breaker for platinum occurred at 10:18 AM on Monday, September 26, 2011. We are now investigating the cause and will issue a separate report on findings once results are obtained.
1. Incident (September 26)
The CB was triggered for the second time that day at 10:18 AM. Afterward, the trigger level, which should have been set at JPY600, was set at JPY800 (the JPY200 initial trigger level + (3 x JPY200 expansion amounts)) and trading was resumed following a 5-minute halt.
2. Problem cause
The cause of the problem is now under investigation.
3. Immediate measures
Until the defect is corrected, TOCOM will carefully check if the trigger level and the number of CB trigger are appropriate, and will adjust the trigger level if necessary. Trading has progressed normally since the night session of September 26 and no adjustment is being made.
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Source: TOCOM
MAS Invites Comments on Draft Legislative Amendments and Additional Proposals to Enhance the Regulatory Regime for Fund Management Companies
September 27, 2011--MAS has issued a consultation paper to seek comments on the draft legislative amendments to give effect to the revised regulatory regime for fund management companies (“FMCs”), as well as additional proposals to further enhance the business conduct requirements for FMCs.
2 The draft legislative amendments reflect the proposals set out in MAS’ first policy consultation on the regulatory regime for FMCs conducted in April 2010, and MAS’ response to feedback received, which was published in September 2010. The revised regime is expected to take effect in early 2012.
3 As part of our on-going review of the regulatory framework, MAS is also proposing additional requirements to enhance the business conduct requirements for FMCs. MAS proposes to require FMCs to put in place a risk management framework over their fund management operations to identify, address and monitor the risks associated with the assets that they manage. MAS also proposes to require FMCs which operate under the notification regime to undergo independent annual audits.
4 We also intend to introduce a new Capital Markets and Financial Advisory Services (“CMFAS”) examination requirements for representatives of Licensed Retail FMCs which manage or offer Specified Investment Products to persons who are not accredited or institutional investors. This is aimed at raising the competency and product knowledge of FMC representatives.
5 MAS adopts an open and consultative approach with the industry. In developing this set of proposals, MAS has considered the views and comments from the public, investors, market practitioners and industry associations.
6 MAS invites interested parties to give their views and comments on the draft legislative amendments and proposals contained in the consultation paper. The consultation period will end on 26 October 2011.
view consultation paper-Proposed Enhancements and Draft Legislative Amendments to Give Effect to the
Regulatory Regime for Fund Management Companies
Source: MAS (MONETARY AUTHORITY OF SINGAPORE)
TSE publish the index value of TSE Home Price Index for July.
September 27, 2011-TSE published the index value of TSE Home Price Index for July on September 27, 2011.
The index value of TSE Home Price Index (Used Condominium, Composite of Tokyo Metro Area) is 81.57 points. The index value of TSE Home Price Index (Used Condominium, Tokyo) is 85.32 points.
The index value of TSE Home Price Index (Used Condominium, Kanagawa) is 81.56 points. The index value of TSE Home Price Index (Used Condominium, Chiba) is 71.12. The index value of TSE Home Price Index (Used Condominium, Saitama) is 70.72 points.
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Source: Tokyo Stock Exchange
DB - Equity Research - Asia Pacific ETF Weekly Review: ETP AUM loses $4bn on market free fall
September 26, 2011--Market Review
Asian stocks tumbled last week amid downside global economic outlook. In all, Japan (Nikkei 225) dropped by 3.43%, Korea (KOSPI2) sank by 7.95%, China (CSI 300) decreased by 2.36%, Hong Kong (HSI) retreated by 9.18%, Singapore (FSSTI) declined by 3.24% and Australia (S&P/ASX 200) lost 5.93% over the previous week.
New Launch Review
Last week, only one new product was launched in the Asia-Pacific region. Yurie Asset Management listed Yurie TREX Fundamental 200 ETF on the Korea Stock Exchange tracking the FnGuide-RAFI Korea 200 Index. (See Figure 4 for further details).
Turnover Review: Volatile markets increase activity
Asia-Pacific ETP turnover totaled $9.2bn for the week ending last Friday, 43.5% above the previous week’s total and 92.6% up from last year’s weekly average. South Korea continues to be on top of the turnover ranking with record $4.9bn (up 76.8%), followed by Hong Kong ($1.7bn, up 46.5%), China ($1.2bn, up 16.4%), Japan ($719m, down 2.3%), and Taiwan ($265m, up 6.1%). Among Equity ETFs, Emerging Country, Leveraged Strategy, Short Strategy and Asia Pac Developed Country had total turnover of $3.6bn, $2bn, $1.9bn and $1bn respectively. Under the Commodity asset class, turnover on Gold ETPs totaled $250m, 24.8% down from last week.
Assets Under Management Review
Amid declining markets, Asia-Pacific ETP AUM was reduced sharply by 4.3% and ended at $87.1bn at the end of last week. On a year to date basis, Asia-Pacific ETF assets are $2.9bn or 3.5% above last year’s closing.
to request report
Source: Deutsche Bank - Equity Research - Asia Pacific
Rupee decline catches firms off guard
Initial strengthening of the dollar was ignored and companies, expecting the situation to ease, adopted for a wait-and-watch approach
September 25, 2011--The rupee’s rapid slide against the US dollar has caught many importers unawares as they did not limit their currency risk by booking forward dollars.
Many are still waiting for the market to correct and the rupee to strengthen, but they may not get a chance in the short term, say currency dealers.
Neither companies, which need dollars, nor banks, which advise them, anticipated the sudden slide in the rupee.
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Source: livemint.com
Investors Reminded to Pay Attention to Credit Risks Associated with Structured Product Issuers
September 23, 2011--In light of the economic environment in Europe and the recent market volatility, the Securities and Futures Commission and Hong Kong Exchanges and Clearing Limited (HKEx) would like to remind investors holding uncollaterised structured products, such as derivative warrants and Callable Bull/Bear Contracts, that they should pay close attention to the financial strength and credit worthiness of structured product issuers.
Uncollateralised structured products are not asset backed. In the event that a structured product issuer becomes insolvent and defaults on its listed securities, investors will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer.
Investors should ensure that they understand the nature of structured products and study the risk factors set out in the listing documents and, where necessary, seek professional advice before making investments in structured products.
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Source: Hong Kong Exchanges and Clearing Limited (HKEx)
Bursa Malaysia Amends Listing Requirements and Issues Guide to Raise Disclosure Standards
September 22, 2011-As part of its ongoing efforts to promote high standards of corporate disclosure, Bursa Malaysia has made various amendments to its Listing Requirements (LR) and introduced a Corporate Disclosure Guide (CD Guide) aimed at assisting listed issuers elevate their standards of disclosure. High standards of disclosure is a value proposition that can enhance a listed issuer’s investability.
Bursa Malaysia’s Chief Executive Officer, Dato’ Tajuddin Atan said, “Bursa Malaysia’s regulatory framework aims primarily to maintain market integrity and investor protection. In this regard, reliable, informative and timely disclosures are key towards building a corporate community that is disclosure based and transparent.
“The amendments made are part of the Exchange’s continuous review given the ever-changing capital market environment. In this dynamic environment, investors demand for timely, adequate and relevant information to make informed decisions.”
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Source: Bursa Malaysia
TSE to Begin Calculation and Publication of the “Tokyo Stock Exchange Mothers Core Index”
September 22, 2011--In order to energize the TSE Mothers market as well as respond to the various indexing needs of our market participants, the TSE will begin calculating and publishing the “Tokyo Stock Exchange Mothers Core Index” on Tuesday, October 11, 2011.
This index is comprised of 15 issues from the TSE Mothers market, and is created to serve as a benchmark stock price index for ETFs, mutual funds and other investments.
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Source: Tokyo Stock Exchange
SGX moves to improve market transparency, trading safeguards
September 22, 2011--The Singapore Exchange (SGX) will roll out two new initiatives to improve market transparency and trading safeguards.
This follows a three-month public consultation period.
SGX will now publish real-time indicative equilibrium prices (IEP) during the opening and closing routines.
This acts as an indication of the eventual opening or closing prices and allows punters to better assess market conditions, and adjust their orders accordingly.
The indicative equilibrium price (IEP) is the price at which orders would be executed if auction matching were to occur at that point.
SGX will also have a random ending to the pre-open and pre-close phases of the stock market.
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Source: ChannelNews Asia
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