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ETF Entering Fast Growth Period, Product and System Innovation Being of Great Significance
August 18, 2011------SZSE 300 Index ETF Released
Recently, Shenzhen Stock Exchange held an ETF business innovation and development workshop, attracting the participation of nearly 50 securities company executives and industry experts, who made an in-depth discussion on the ETF product development and business innovation. According to them, ETF, as an innovative product in our capital market, has been offered an unprecedented development opportunity and is now entering the fast growth period. Therefore, to maintain the proper development of EFT, the product and system innovation is of great significance.
This year, the domestic market scale of ETF has been quickly expanded, and the ETF has become one of the most noteworthy fund products. It is reported that SZSE will boost the development of the listed funds by perfecting the funds market platform, so as to drive the development of ETF and build the SZSE funds market into an interconnected, efficient, stable and cost-effective funds service platform.
According to the participating experts, the appearance of such innovative businesses and products as feeder fund, rating fund, stock index futures, margin trading and short selling, has provided the listed funds represented by ETF with richer investment trading strategies, and the long-term investors and short-term investors with larger investment choices.
According to the expert analysis, SZSE 300 Index is the core index that represents the characteristics of Shenzhen market. Focusing on the emerging industries (up to 43%), it is consistent with the development direction of Chinese economy and features a wide coverage over the three boards of Shenzhen market. This index presents an excellent growth, which will be further reflected in the securities market.
In recent days, SZSE 300 Index received its own ETF. China Universal Asset Management Co., Ltd issued SZSE 300 Index ETF on August 15. The attendees held an optimistic opinion on the investment of ETF. According to them, SZSE 300 Index, as a core index with considerable long-term return and highly consistent with the industry development direction and economic structure adjustment, has a promising development perspective.
Source: Shenzhen Stock Exchange
HKEx: Potential Joint Venture With Shanghai Stock Exchange And The Shenzhen Stock Exchange
Augsut 18, 2011--The Board of Directors of Hong Kong Exchanges and Clearing Limited (HKEx) is pleased to announce that HKEx has agreed in principle to enter into detailed discussions with the Shanghai Stock Exchange and the Shenzhen Stock Exchange with a view to establish a joint venture company to be incorporated in Hong Kong.
Currently the possible areas of business operation of the joint venture company include, but are not limited to, the development of index and other equity derivative products and the compilation of new indexes.
The Board wishes to emphasise that no binding agreement has been entered into as at the date of this announcement. Accordingly, the joint venture may or may not proceed. HKEx will make further announcement in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as and when appropriate. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of HKEx.
Source: Hong Kong Exchanges and Clearing Limited (HKEx)
Gold ETFs mushroom in India
August 18, 2011--Gold exchange-traded funds (ETFs) may be new for India, but are gaining in popularity as investors become aware of the benefits of investing in gold paper as opposed to holding it as jewellery.
ETFs are instruments that trade like shares and are backed by physical holdings of the commodity.
India is the world's top consumer of gold, accounting for 20 percent of global demand. In a country where many of the 1.2 billion population live far from a bank, Indians traditionally invest in gold jewellery.
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Source: Reuters
HKEx looks to mainland joint venture
August 18, 2011--Hong Kong Exchanges & Clearing, the world’s largest bourse operator by market value, plans to form a joint venture with its counterparts in Shanghai and Shenzhen in a move that would mark the most significant commercial link between the three exchanges.
Thursday’s announcement came a day after Li Keqiang, the Chinese vice-premier, unveiled measures to boost Hong Kong’s role as a financial centre and widen the channels for money to flow between the city and the mainland.
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Source: FT.com
ASIC Consults On Consequential Market Integrity Rules For ASX And Chi-X Markets
August 17, 2011--ASIC today released Consultation Paper 166 Market integrity rules: non-AFS licence foreign participants and consequential amendments (CP 166).
Consultation Paper 166 proposes market integrity rules for the ASX and Chi-X markets, and seeks views on:
certain minimum presence requirements for foreign participants not required
to hold an Australian financial services (AFS) licence (non-AFS licence foreign participants) trading on the ASX and/ or Chi-X markets; and
minor consequential amendments to the ASIC Market Integrity Rules (ASX Market) 2010 and the ASIC Market Integrity Rules (Chi-X Australia Market) 2011, resulting from the introduction of the competition market integrity rules, in particular amendments to:
restrictions related to crossings and trading outside of normal trading hours during takeovers and buybacks to ensure that existing restrictions operate effectively;
the prohibition on dealing during a trading suspension; and market participant restrictions relating to client instructions.
view CP 166 Market integrity rules: non-AFS licence foreign participants and consequential amendments
Source: ASIC
Hong Kong ETF planned for mainland investors
August 17, 2011-- Beijing plans to unveil an exchange-traded fund that will enable mainland China investors to access stocks listed in Hong Kong, according to a package of measures unveiled Wednesday by Vice Premier Li Keqiang.
Li, speaking at a forum in Hong Kong midway through a three-day visit, mentioned the ETF along with several other measures to boost the city’s role an offshore hub for the use of the Chinese currency, the yuan.
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Source: Marketwatch
ASIC publishes ETF information for investors
August 16, 2011--ASIC today published new information on its consumer finance website, MoneySmart, to help consumers understand the different types of Exchange Traded Funds (ETFs), and their risks.
ETFs can provide a convenient and low-cost way for investors to diversify and receive returns close to the performance of market indexes or other assets, usually with lower fees than traditional managed funds.
But while standard, ‘physical’ ETFs generally invest in the underlying investments they are designed to track, ‘synthetic’ ETFs also use derivatives, such as swap agreements, to achieve similar outcomes. Benefits to investors of synthetic ETFs may include access to new and varied asset classes and low performance ‘tracking error’. Downsides include increased complexity and counterparty risk.
Standard ETFs are widely available in Australia. A few synthetic ETFs are currently available in Australia and they are increasingly available overseas.
ASIC Chairman Greg Medcraft said: ‘ETFs are growing in popularity and people should understand the different features and risks of ETFs before investing. We want investors to be informed and confident if investing in ETFs so therefore ASIC has published clear and straight forward information at www.moneysmart.gov.au to help investors understand these products. While conventional ETFs are often relatively straight forward, there are complexities and risks to be aware of. Furthermore, the use of derivatives by synthetic ETFs creates separate additional issues for investors to consider. Either way, people should not invest in products they don’t understand.
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Source: ASIC
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.
to request report
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
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