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DB Global Equity Index & ETF Research: Asia Pacific ETP Market Weekly Review
December 13, 2010--Market Overview
There are 250 equity based ETFs in the Asia Pacific region with 346 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 39.34% of the whole market, whilst China has the largest market share by turnover with 38.45%.
There were six new listings, including one cross listing, last week. Samsung Inv Trust Mg launched an ETF on the Korea SE tracking the Maekyung FnGuid Core Consumer Index. Blackrock launched four ETFs tracking S&P/ASX Small Ord. Index, S&P/ASX 20 Index, MSCI Australia 200 and S&P/ASX Dividend Opp. Index, on Australia SE. BOCI - Prudential Asset Man Ltd cross listed an ETF on Taiwan SE tracking the SSE 50 China Index
Turnover
Monthly average daily turnover declined 6.7% in the last week. Turnover for the previous week was USD 1,383m. The largest ETF by turnover was the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker issued by BlackRock with USD 252m accounting for 18.2% of total turnover.
Assets Under Management
AUM remained at about the same level in the previous week. AUM as of December 10th was USD 75.1 bn. The largest ETF by AUM is the TOPIX ETF managed by Nomura Asset Management with AUM of USD 7.8bn.
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Source: DB Global Equity Index & ETF Research
Korean ETF Market Forecast to Surge on Products for Grains, Raw Materials
December 13, 2010--South Korea’s exchange-traded funds market is forecast to grow 67 percent in the next 12 months as the country’s bourse introduces products tracking raw materials, grains and corporate bonds, a stock exchange official said.
The value of ETF assets in South Korea, the fourth-biggest market for the products in Asia, may expand to about 10 trillion won ($8.8 billion) by 2011, according to Park Seong Rae, executive director of the Kospi market division at Korea Exchange Inc. That compares with 5.99 trillion won currently, bourse data show.
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Source: Bloomberg
SME board: opening the new thought of multi-layer capital market
December 13, 2010--With the SME board coming into being in 2004, the new era of cultivating the SME growth began. More importantly, since then, China’s securities market embarked on the path to the deep development and the idea of multi-layer capital market was put into practice, which gathered experiences and strength for the launch of ChiNext board.
Thanks to the past five years, the ChiNext board was born in 2009 with the wonderful significance. And the birth of the ChiNext board arising from Chinese wisdom, is not only a historical coincidence but also the historic corollary, embodying the adapted wisdom of the market builders to set up the multi-layer capital market. At this aspect, we can regard the launch of the SME board as the herald of the era of multi-layer capital market.
Liu Hongru, the former chairman of the CSRC, said that the capital market mainly served the transformation and structural reform of stated-owned enterprises twenty years ago, and nowadays, the market shall serve the transform of economic development patterns and support the adjustment to the economic structure and development of technology innovation enterprises. In other words, this is the historic change and during the transformation, it is very important to put much effort to develop the multi-layer diversified capital market system.
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Source: Shenzhen Stock Exchange
"Shanghai Stock Exchange Strategic Plan (2011-2020)" Published
December 13, 2010--Vice President Liu Xiaodong of the Shanghai Stock Exchange (SSE) briefed the media on and answered questions of reporters about the "SSE Strategic Plan (2011-2020)" at a news conference on strategic plan held by the SSE, which will celebrate its 20th birthday soon, in Shanghai on December 10.
After elaborating on the SSE's strategic goals and implementation measures, Liu stressed that the SSE would go all out to fulfill its ultimate aim of building itself into a world-class bourse with improved market, sound legal system, state-of-the-art technology, efficient operation and global radiation by pressing on with five aspects of work by three stages. In the short term (from 2011 to 2013), the SSE would highlight over 100 specific work included within 37 tasks.
According to its long-term strategic development objective, by 2020, the SSE would grow into one of the most influential bourses in the world, boasting a mature stock market, an improved bond market, a highly developed fund market, an abundance of securities derivatives and an increasingly rational investor structure.
During the second phase of the strategic plan from 2014 to 2016, the SSE is expected to evolve into a major capital market in Asia with a more favorable competitive position in the world arena thanks to its efforts in market deepening, self-regulation supervision, technical service, mechanism construction and international cooperation.
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Source: Shanghai Stock Exchange (SSE)
OECD Development Centre Asian Business Cycle Indicators (ABCIs)
December 13 2010--Getting to know the economic climate in Asia:
a tool for analysing short-term economic perspectives and risk management.
view Asian Business Cycles Quaterly (13 December 2010)
Source: OECD
HK gold exchange plans renminbi contract
December 13, 2010-The Chinese Gold & Silver Exchange, Hong Kong’s century-old bullion exchange, plans to launch the first international gold contract denominated in the renminbi in early 2011.
The new contract comes as China pushes for greater international use of the currency and as Hong Kong’s precious metals industry seeks to take advantage of booming gold demand on the mainland.
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Source: FT.com
SSE Large-Cap Equal Weight Index to be Launched
December 10, 2010--The Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. have recently announced that the SSE Large-Cap Equal Weight Index (SSE Large-Cap EWI) and the CSI Leading Technology Index (CSI Leading Technology) will be officially launched on the first trading day of January 2011.
The SSE Large-Cap EWI is an innovative index derived from calculating the constituents of the SSE 50 Index by the equal weight method. The equal weight weighting is simple and ensures a more balanced weight distribution of individual stocks and industries compared with the market capitalization weighting. According to the statistics, the accumulative earning rate of the SSE Large-Cap EWI is 129.44% from December 31, 2003 to the present.
Adopting the equal weight method, the CSI Leading Technology, consisting of 200 hi-tech companies with moderate scale and high liquidity on the SSE and the Shenzhen Stock Exchange, aims to comprehensively reflect the overall performance of a bulk of technological leaders on the two markets. According to the statistics, the accumulative earning rate of the CSI Leading Technology is 459.96% from December 31, 2003 to the present.
It is said that some fund companies are developing the ETF or index fund products with the SSE Large-Cap EWI and the CSI Leading Technology as the underlying indices.
Source:Shanghai Securities News
Normalize monetary policy
December 10, 2010--The recent rise in China's inflation has grabbed the attention of the public and policymakers alike. Consumer price inflation rose to 4.4 percent in October and a further increase is expected. This is higher than we are used to in China, although it is modest in an emerging market perspective. To determine the best policy response to the rise in inflation it is important to know its cause and how much inflation we should expect in the coming 12 months. It is also good to decide what an acceptable rate of inflation is for a country like China.
So far, the rise in inflation is because of higher food prices. The food component of the consumer pice index in October was up 10.1 percent year-on-year, contributing two-thirds of overall inflation, while non-food prices were up 1.6 percent on this basis. In looking for the cause of the higher food prices, monetarist explanations are common.
After the massive monetary expansion since the end of 2008 there is a lot of liquidity sloshing around, potentially putting upward pressure on prices, especially asset prices. In this setting, there are reports that speculative activity has driven up prices of several food products.
It is also true that in the long run sustained monetary expansion drives up inflation. However, the link from money to inflation is more indirect and complex than simplistic monetarist interpretations suggest and, in the meantime, inflation is basically determined on the markets for goods and services.
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Source: World Bank
Publication of Interim Draft for “The Action Plan for the New Growth Strategy” view The Action Plan for the New Growth Strategy” (Interim Draft) Timetable Transforming China: Insights from the Japanese Experience of the 1980s- IMF Working paper read Transforming China: Insights from the Japanese Experience of the 1980s If you are looking for a particuliar article and can not find it, please feel free to contact us
December 10, 2010--On December 7, 2010, the Financial Services Agency (FSA) published the interim draft for “The Action Plan for the New Growth Strategy”.
view The Action Plan for the New Growth Strategy” (Interim Draft) Outline
Source: Financial Services Agency, The Japanese Government
December 9, 2010--Summary: China is poised on the brink of a transition to a service-based economy. The Japanese experience of the 1980s provides several insights about the way to manage such a transition and the downsides to avoid.
In particular Japan offers useful insights on (1) the limits to an export-oriented growth strategy; (2) the role of exchange rate, macroeconomic policies, and structural reforms in rebalancing the economy toward the nontradables sector; and (3) the risks associated with financial liberalization. The similarities between the Chinese economy today and the Japanese economy of the 1980s make these insights relevant for China. However, with the benefit of analyzing the Japanese experience and, given the important differences between the two economies, China should be able to successfully rebalance its growth pattern while avoiding the downsides encountered by Japan
Source: IMF
