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Post-Crisis, China Faces Challenges of Success
Double-digit growth predicted for China
Revaluation of China currency important for rebalancing, says IMF
Warnings against rising housing and asset prices
July 29, 2010--China’s skillful response to the global financial crisis has blunted the worst of the downturn, but IMF economists say trade and current account surpluses must be prevented from reasserting themselves as the global economy recovers and China’s stimulus is withdrawn.
In its regular assessment of one of the world’s leading economies, the IMF said China’s “quick, determined, and effective policy response” meant it was now spearheading the global recovery.
In an interview with IMF Survey online, the Fund’s lead economist on China, Nigel Chalk, said that despite the global slump, the country’s economy had posted an impressive performance.
IMF Survey online: China’s future economic outlook is fairly rosy, according to the IMF, and the Fund is now calling for a gradual withdrawal of stimulus measures. Can you explain how you have come to that conclusion?
Fitch downgrades Vietnam’s credit rating
July 29, 2010--Fitch, the credit rating agency, yesterday downgraded Vietnam’s sovereign debt, sparking rare criticism from the Asian Development Bank and other analysts who said the country’s economy was looking up
The rating was downgraded from BB- to B+, which is four steps below investment grade, with a stable outlook. Moody’s Investors Services and Standard & Poor’s have left their ratings unchanged with a negative outlook.
“Vietnam’s sovereign creditworthiness has deteriorated on the back of weaker external finances and rising external financing requirements amid an inconsistent macroeconomic policy framework, a highly dollarised economy and a weak banking system,” said Ai Ling Ngiam, director at Fitch’s Asia sovereign team.
KRX to list Mini Gold Futures on September 13, 2010
July 28, 2010--Taking into consideration the time required for the member companies to develop or upgrade their system, the Korea Exchange (“KRX”) decided to launch the trading of Mini Gold Futures, the first mini-sized futures contract in Korea, on September 13, 2010.
Trading unit of Mini Gold Futures is 100g of refined gold with purity of 99.99%. Trading hours is 09:00~15:15 from Monday to Friday and the same hours applies on the last trading day.
Last trading day is the third Wednesday of each settlement month and T+2 settlement scheme applies. Final settlement is made by cash and final settlement price is determined by converting the London Gold AM Fixing Price into price per gram and UK Pound into Korean Won. Position limit of 3,000 contracts is set to prevent the risks of settlement default and unfair trading.
KRX expects that Mini Gold Futures provides effective risk management tool to small-scale gold wholesalers and retailers, manufacturers and retail gold investors. It is also expected that it would lure the demand for overseas gold futures by Korean investors into Korea and the publication of real-time price of Mini Gold Futures would enhance the transparency of local gold market. (KRX)
IMF gives ground on yuan exchange rate debate
July 28, 2010--The International Monetary Fund has chosen not to call the yuan “substantially” undervalued, a move that recognizes China’s efforts to free up its exchange rate and avoids friction with an increasingly influential shareholder.
The summary of an annual review of China’s policies omitted the contentious word, used by IMF Managing Director Dominique Strauss-Kahn as recently as June, which has long riled Beijing. Several members of the IMF’s 24-member executive board believed the Chinese currency was too cheap, the fund said. But others said a structural reduction in the balance of payments surplus was already unfolding thanks to past steps to boost consumption, while others took issue with an assessment by IMF staffers that the yuan was substantially undervalued
India raises interest rates, more tightening seen
July 27, 2010--India’s central bank raised interest rates more forcefully than expected on Tuesday to fight inflation that is on track to hit double digits for a sixth straight month, setting the stage for more policy tightening.
One-year overnight interest rate swap rates jumped after the Reserve Bank of India (RBI) notched up its fourth rate rise this year and said it was “imperative” to normalize policy in line with the economy’s growth and inflation.
India plans tough stress tests of banks
July 27, 2010--India plans to start conducting twice-yearly stress tests on its banks, following in the footsteps of financial regulators in the US and Europe.
The Reserve Bank of India said on Tuesday that it had conducted rudimentary stress tests during the global financial crisis to check credit and interest rate risk. The bank said it would undertake more sophisticated tests in the future to build confidence in the country’s banking system
First Domestic NASDAQ-100 Index ETF Available in Japan
NEXT FUNDS NASDAQ-100(R) EXCHANGE TRADED FUND Will be Listed on the Osaka Securities Exchange ETF Market
July 27, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Osaka Securities Exchange Co., Ltd. (OSE), the premier Japanese derivatives and securities exchange, today announced that the first domestic exchange-traded fund (ETF) based on the NASDAQ-100 Index® will soon be available to Japanese investors. The OSE has approved the listing of the NEXT FUNDS NASDAQ-100® EXCHANGE TRADED FUND (OSE:1545) on OSE's exchange-traded fund market. Nomura Asset Management Co., Ltd., one of Japan's largest asset management companies and a wholly-owned subsidiary of Nomura Holdings, Inc., is the sponsor of the ETF.
The NEXT FUNDS NASDAQ-100 EXCHANGE TRADED FUND gives investors in Japan, which has the world's second largest economy, the ability to invest in 100 of the largest and most innovative global non-financial securities listed on NASDAQ – including Apple, Intel, Google and Microsoft.
"We are honored to have the NEXT FUNDS NASDAQ-100 EXCHANGE TRADED FUND, linked to one of the world's largest growth indexes, to be listed on OSE's market," said Michio Yoneda, President and CEO of OSE.
"The introduction of the NEXT FUNDS NASDAQ-100 EXCHANGE TRADED FUND gives retail and institutional investors in Japan access for the first time to a domestic product that tracks 100 of the world's most dynamic large-capitalization growth companies," said NASDAQ OMX Executive Vice President John Jacobs. "We look forward to continuing to work with the OSE and Nomura Asset Management as we explore other opportunities to serve investors in Japan."
NASDAQ OMX and OSE signed a memorandum of understanding (MOU) to form a strategic partnership in February 2009. The partnership facilitates cooperation and potential growth opportunities among both exchanges in various areas. As a result of this partnership, both exchanges introduced the NEXT FUNDS NASDAQ-100® EXCHANGE TRADED FUND in Japan.
The listing ceremony will be held at JASDAQ Plaza in Tokyo on the day of the listing, August 16th.
DB Index Research -- Weekly ETF Market Review -- Asia-Pacific
July 26, 2010--Market Overview
There are 226 equity based ETFs in the Asia Pacific region with 318 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 39.31% of the whole market, whilst Hong Kong has the largest market share by turnover with 33.78%.
Blackrock listed two sector ETFs tracking the Chinese A-Share Market Consumer Staples and Consumer Discretionary sectors. Both funds are listed on the Hong Kong Stock Exchange
Turnover
Monthly average daily turnover rose 5.2% in the last week. Turnover for the previous week was USD 823m. The largest ETF by turnover was the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker issued by BlackRock with USD 189m accounting for 23.0% of total turnover.
Assets Under Management
AUM rose 2.7% in the previous week. AUM as of July 23rd was USD 65.2bn. The largest ETF by AUM is the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker managed by BlackRock with AUM of USD 7.4bn.
To request a copy of the report
Release of the “Discussion Paper Regarding the Extension of Trading Hours”
July 26, 2010--Today, Tokyo Stock Exchange, Inc. (TSE) released the “Discussion Paper Regarding the Extension of Trading Hours”.
TSE is engaged in initiatives to improve the convenience and reliability of the market, in order to better support the wealth-building of all people according to their varying life plans and become a vibrant destination for international investment assets (risk money).
Recently, remarkable changes have been occurring in the environment surrounding the securities market. The needs market users have of our exchange market are also constantly evolving. Under such circumstances TSE has received comments from users requesting an extension of trading hours.
Regarding this extension, there are comments citing the benefits of increased trading opportunities from the perspective of market user convenience. Meanwhile, there are also opinions that, depending on methods of expansion, current market practices, etc. would need to be greatly altered, thus increasing costs overall and possibly decreasing efficiency. TSE believes that this should be pursued while maintaining an awareness of market users' opinions and comparing the costs and needs of the market overall.
view Discussion Paper regarding the Extension of Trading Hours-English
SGX proposes new rules and measures for short selling
July 23, 2010--The Singapore Exchange (SGX) has proposed new rules and measures to provide more information on short selling activities.
This includes the requirement to mark all sell orders, either as a normal sell order or a short sell order. With the collated data, SGX intends to report the short sales volume and value by counter for each trading day.
To facilitate the marking of sell orders, SGX requires its Trading Members to put in place procedures to ensure that customers indicate their sell orders.
The dealer or remisier cannot transmit a sell order to SGX if the customer has not made his or her order indication.
SGX said the move is to facilitate greater market transparency as timely short selling information, will provides greater disclosure and contributes to enhanced accountability.
