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DB - Equity Research - Asia Pacific ETF Weekly Review:ETP AUM declines while turnover increases
June 20, 2011--Market Review
All the markets in Asia-Pacific region were down last week due to the concerns over faltering U.S. economic growth and Greece’s worsening sovereign debt crisis. From north to south, Japan (Nikkei 225) slid 1.71%, Korea (KOSPI2) declined by 1.05%, China (CSI 300) retreated by 2.36%, Hong Kong (HSI) dropped by 3.23%, Singapore (FSSTI) sank by 2.37% and Australia (S&P/ASX 200) slipped by 1.69%.
Last week, Indian ETP provider Religare Mutual Fund launched an ETF on National Stock Exchange (India) tracking S&P CNX Nifty Index. In the Asia-Pacific region, gradually more and more number of asset management companies are entering into the ETP market as well as increasing their product range.
Turnover Review: Activity soars in Korea
As of the end of last Friday, Asia-Pacific ETP turnover was again back to the $5bn mark after the shorter trading week when total turnover only reached $3.9bn. Korea Stock Exchange witnessed a sharp increase in trading activity with record $1.4bn turnover, followed by Hong Kong ($1.3bn), China ($871m) and Japan ($864m). Significant week-over-week turnover rise were experienced among Emerging Country ETPs ($474m or 30.8%), Leveraged Strategy ETPs ($312m or 74.7%), Asia Pac Developed ETPs ($198m or 16.3%) and Short Strategy ETPs ($160m or 78.6%).
Assets Under Management Review: AUM end lower amid bearish market
Asia-Pacific ETP AUM finally moved last week after almost two months of stickiness. ETP assets could not sustain the $87bn level anymore due to the continuous declining markets in the region and slipped to $85.6bn at the end of last week. However, it was $1.4bn or 1.7% above last year’s closing.
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Source: Deutsche Bank - Equity Research - Asia
Chi-X okay to use ASX clearing system
Chi-X has signed a five-year deal with ASX to use its clearing and settlement service.
June 20, 2011--ASX Group, the company that operates the Australian Securities Exchange (ASX), has approved an application by Chi-X Australia to use its clearing and settlement service, the trade acceptance service (TAS).
Chi-X has signed up for a five-year term, which means the company has to pay $10,000 as an initial application fee plus $275,000 a year in service fees.
Chi-X, which is set to become the first competitor of ASX Group later this year, is required to have clearing and settlement arrangements in place that are approved by the Financial Services and Superannuation Minister before it can begin operating alternative trade execution venues.
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Source: Investor Daily
SGX improves product disclosure for structured warrants, debentures and funds
June 20, 2011--Singapore Exchange (“SGX”) introduces new product disclosure templates to enhance the readability of term sheets for structured warrants, debentures and funds. SGX is of the view that consistent presentation of product features and risks will facilitate clear and efficient comparison of competing product offerings by market participants.
These disclosure templates will apply to the term sheets for:
1.Debentures in the form of asset-backed securities, exchange traded notes and structured notes
[Practice Note 3.1];
2.Funds (including collective investment schemes and exchange traded funds) [Practice Note 3.1]; and 3.Structured warrants [Practice Note 5.1].
Issuers are required to apply the guidelines and term sheet formats with effect from 1 August 2011.
With these two practice notes, issuers making an offer that is not accompanied by a Monetary Authority of Singapore (MAS)-registered prospectus are now able to make clearer disclosure of product features and risks in standardised formats. The changes to the listing manual are in line with MAS’ initiative to improve disclosure with the use of product highlight sheets.
The practice notes can be accessed at www.sgx.com under SGX Rulebooks – Rule Amendments.
Source: SGX
FTSE and KPMG launch new report on China Capital Markets - The Changing Landscape
June 17, 2011--Shanghai is on track to becoming the world’s largest financial centre within the next decade, as China continues to open up its capital markets and expand its investor base.
In absolute size, China’s equity markets have now grown to a significant level, from USD 400 billion in 2005 to USD 4 trillion in 2010. This growth has been fuelled by over 500 initial public offerings, including the listings of China’s largest banks. Shanghai now has some of the world’s largest companies represented on its bourse.
A joint report by KPMG, FTSE Group and Dagong Global Credit Rating, China’s Capital Markets – The changing landscape, highlights the importance of the internationalisation of the RMB and progress towards the launch of the International Board on the Shanghai stock exchange. The new board aims to enable foreign organisations to access the Chinese markets allowing domestic investors direct access to foreign listed companies for investment purposes.
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Source: FTSE
KINDEX Fundamental Large ETF To Be Listed On The Korea Exchange
June 16, 2011--The Korea Exchange (KRX) plans to list KINDEX Fundamental Large ETF on June 21, 2011, which tracks FnGuide-RAFI Korea Large.
FnGuide-RAFI Korea Large is an index that consists of 100 top stocks in intrinsic value that are listed in the KOSPI Market.
The KRX has listed 31 new ETFs this year, thus raising the total number of listed ETFs to 95.
Source: KRX
Thai bourse to launch silver futures trade from June 20
June 16, 2011-- Thailand Futures Exchange PLC (TFEX) will begin trading
silver futures from June 20 and extend the gold and silver futures trading until 22.30 hours, enabling investors to manage risks and improve their profits. TFEX is a part of The Stock Exchange of Thailand,
TFEX has successfully completed systems testing with Thailand's clearing house
and derivative members, and TFEX has held seminars over the past three months to ensure that investors and exchange members understand this new security.
"TFEX is confident that extending gold and silver futures trading hours will boost convenience for investors in managing risks and create better returns. This is particularly true for those who want to trade when the New York market, which is also having a period of high volatility, is open" said TFEX Managing Director Kesara Manchusree.
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Source: The Stock Exchange of Thailand (SET)
DB - Equity Research - Asia Pacific ETF Weekly Review: ETP AUM proved resilient to bear markets
June 16, 2011--Market Review
After China, Korea raised interest rates for the third time this year from 3% to 3.25% to rein in inflation. Slowing U.S. economic recovery and inflationary concerns have kept the Asian markets on back foot during the last week. Japan (Nikkei 225) was the only market which recorded a gain (+0.23%), while Korea (KOSPI2) declined by 3.51%, China (CSI 300) retreated by 0.82%, Hong Kong (HSI) decreased by 2.31%, Singapore (FSSTI) sank by 2.14% and Australia (S&P/ASX 200) slipped by 0.46%.
Last week, one more ETP provider Lion Fund Management Company Ltd entered the Asian ETP market with the launch of a thematic ETF on Shanghai Stock Exchange tracking SSE Emerging Industries Index. Another thematic ETF was launched on Shanghai Stock Exchange by HFT Investment Management Company Ltd tracking SSE Non-Cyclical Industry 100 Index. (See Figure 4 for more details)
Turnover Review: Shorter trading week causes less activity
Asia-Pacific ETP turnover declined to $3.8bn (-27.5%) in the last week due to a holiday in the most active markets of the region – Hong Kong, China, Korea and Taiwan. The top position held by Hong Kong ($959m) was not impacted by the holiday but this time Japan took the second position ($916m), Korea took third ($798m) and China was left behind with the fourth position ($729m). Singapore witnessed a sharp decline of $297m in the turnover dropping to $56m in the last week. Week-over-week, Emerging Country ETPs turnover declined to $1.5bn (-42.4%), while Thematic ETPs climbed to $204m (+ 96.9%).
Assets Under Management Review
Last week again, Asia-Pacific ETP AUM experienced only a slight change contracting by 0.5% over the previous week. ETP AUM stood at $86.7bn which was $2.5bn or 3% above the last year’s closing. This year-to-date change has been mostly supported by inflows due to new products and, apparently, higher ETF adoption rates by investors in the region, as the markets remain deep into the negative sector which would suggest these inflows are not related to a market trend as we have seen in other regions such as in the US.
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Source: Deutsche Bank - Equity Research - Asia
Thai bourse to launch SET High Dividend Index on July 4
June 15, 2011--The Stock Exchange of Thailand (SET) has scheduled to launch the SET High Dividend 30 Index (SETHD), consists of 30 listed securities which have consistently paid high dividend. The new index is aimed to be used as a
benchmark for investment and served as the basis of the issuance of other
financial products. The 30 constituents have reported a combined Dividend Yield of 3.66% (as of May 31, 2011). SETHD will be launched from July 4, 2011.
The SET High Dividend 30 Index or SETHD is an addition to the existing SET index
series comprising of SET Index, SET50 Index, SET100 Index and mai Index as well as other Industry and Sectoral Indexes. The SETHD index reflects the price movement of the Thai 30 listed stocks which consistently pay high dividend. The new index is expected to be used as an investment benchmark and used in connection with issuance of new mutual funds as well as new financial products, SET Group Head Products & Business Development Ms. Kesara Manchusree said.
"To be eligible for inclusion in the SETHD index, the stock must be a member of the SET100 index. In addition the company must pay dividend for the last 3 consecutive years. The annual dividend payout ratio in such period must not be greater than 85%. The top 30 stocks ranked by dividend yield will be selected to the SETHD index", said Ms. Kesara.
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Source: SET
ETF due diligence critical: BetaShares
June 15, 2011--Local exchange traded fund (ETF) start-up BetaShares is warning investors to do their due diligence before investing in the high-growth sector.
Australia's ETF market growth is accelerating as low-cost investing attracts investors to the listed funds which comprise baskets of securities that track a specific index.
Market leaders State Street Global Advisers and iShares dominate the sector with market shares of 71 per cent and 20 per cent, respectively, according to research released in April by Tria Wealth Management Research.
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Source: Business Spectator
S&P lowers outlook on China property
Real estate market slows as tighter credit and gov't curbs 'start to bite'
June 15, 2011--Chinese developers' outlook was cut to "negative" from "stable" by Standard & Poor's, which said tighter credit and further government curbs may lead to rating downgrades in the next year.
Property sales may start to slow as the government's policy "starts to bite", leading to price cuts that may drive home prices 10 percent lower in the next 12 months, the credit rating company said. Hong Kong's real estate market faces the risk of a "sharp correction", S&P also said in its statement on Wednesday.
"We haven't seen any encouraging news so far," said Bei Fu, an analyst at S&P. "Inventory and sales pressure have increased, government policy is gradually showing effect, and transactions have been curbed. Many companies issued bonds that will improve their liquidity but put pressure on gearing."
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Source: China Daily
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