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Morgan Stanley faces China setbacks
October 29, 2009--When China Investment Corp invested $5bn in Morgan Stanley in late 2007 the US bank was widely seen as having stolen a march on its investment banking rivals.
With China’s $200bn sovereign wealth fund sitting high on the share register, Morgan Stanley surely now had the contacts to help unlock doors in a country which foreign groups find difficult to navigate.
DB Index Research -- Weekly ETF Reports -- Asia -Pacific
October 28, 2009--Highlights
Market Overview
There are 187 equity based ETFs in the Asia Pacific region with 246 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 41.03% of the whole market, whilst China has the largest market share by turnover with 40.40%.
There were four new listings in the last week. Maps Investement Mgmt Co listed one new ETF on the Korean Stock Exchange. Lyxor cross-listed 3 ETFs on the Singapore Stock Exchange.
Turnover
Monthly average daily turnover declined 4.6% in the last week. Turnover for the previous week was USD 800m. The largest ETF by turnover was the China 50 ETF issued by China Asset Management with USD 185m accounting for 23.1% of total turnover.
Assets Under Management
AUM declined 2.8% in the previous week. AUM as of Oct 26th were USD 60.0bn. The largest ETF by AUM is the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker, managed by BGI, with AUM of USD 6.6bn.
To request a copy of the report click here
FTSE and Bursa Malaysia move to semi-annual liquidity review of index series
October 28, 2009--In response to Malaysia’s market initiatives to enhance its capital market and liquidity, the FTSE Bursa Malaysia Index Advisory Committee has approved the move to a semi-annual liquidity review of the FTSE Bursa Malaysia Index Series. The increase in frequency of the liquidity review from an annual to a semi-annual basis is one step further in evolving the index series to better reflect the liquidity of the investable market.
Indices play an increasingly important role in markets today as a tool for stimulating domestic investment and attracting global capital flows. For this reason, the index eligibility criteria are important considerations for investors who expect the index constituents to have sufficient liquidity to enable easy and efficient trading. An increase in the frequency of the liquidity review for the FTSE Bursa Malaysia Index Series will provide more robust indices that are in tune with the market liquidity. This will align with the needs of global investors and increase the profile of listed companies which meet these criteria.
Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia said, “Liquidity is a key area of focus for Bursa Malaysia and the more frequent market reviews will enable market participants to track the index in a broader and more comprehensive manner. This will also allow investors to have a closer assessment on the performance of the public listed companies to create a more efficient market.”
Paul Hoff, Managing Director, Asia Pacific from FTSE Group added, “As an index provider, it is important to work with the investment community and local index partners such as Bursa Malaysia to understand the needs of both domestic and international investors, ensuring these needs are addressed through a robust index methodology. We have found that more frequent reviews aid investment professionals who track the indices by improving the replicability of the index.”
The liquidity review will be conducted semi-annually in June and December starting from June 2010 based on turnover in the twelve months prior to the review. Constituents of the FTSE Bursa Malaysia Small Cap Index and FTSE Bursa Malaysia Fledgling Index will also be reviewed semi-annually starting from the June 2010 review.
For more information on the FTSE Bursa Malaysia Index Series, including the liquidity screening methodology, please visit www.ftse.com/bursamalaysia.
Shenzhen Stock Exchange in efforts to suppress high speculation on first ChiNext listing day
October 28, 2009--As the first ChiNext companies will debut on the trading, SZSE carries out the trading restriction measure with regard to major abnormal transactions for the sake of preventing high speculation on the first trading day, safeguarding the securities market order, protecting the legitimate interests and rights of investors.
The relevant person in charge of the SZSE expressed that the CSRC attached high importance to the high speculation on the first ChiNext trading day. At the ChiNext kickoff ceremony, Shang Fulin, Chairman of the CSRC specially stressed that the regulatory departments shall closely monitor the first trading on ChiNext board, prevent the high speculation, firmly crack down on acts violating laws or regulations, including rigging stock prices and insider trading and maintain the normal market trading order with great effort.
The person also said that the SZSE consistently follows the principle of stringent supervision. On the basis of widespread and deep analysis and research, the SZSE will strictly comply with the unified arrangement of the CSRC to hold down the high speculation on the first ChiNext trading day with all strength from the following four points: One is to pop out the emphasis, intensify the supervision and regulation, carry out the key-point monitoring on key members, key business offices, major accounts and key stocks. The second point is to closely monitor the first day trading on ChiNext board, carry out the precise crackdown on accounts affecting stock prices or trading volume, such as block declaration, continuous declaration, high price declaration, fake declaration. The third point is to strengthen supervision on follow-up trading, intensify the information disclosure, implement the special trading suspension system, give a market risk alert and suppress continued speculation. The last point is to further raise the punishment level, with respect to securities companies which ineffectively manage clients or connive at clients’ participation in speculation, and the SZSE will impose on these companies disciplinary sanction or other measures in accordance with the relevant laws and regulations.
The person added that for the ChiNext board as a newly-born thing, the good start is crucial to the steady and healthy development of ChiNext. And at the same time, the person seriously reminded that investors shall clearly understand the special risks of ChiNext board, make a rational investment, lawfully trade securities while seeing the bright future for the ChiNext board.
A new project in the MICEX Group’s currency market. Access to trading in the Unified Trading Session of credit institutions - residents of EurAsEC member countries
October 27, 2009--Beginning from 2 November 2009, credit institutions – residents of the member states of the Eurasian Economic Community will be given access to trading in the Unified Trading Session on the MICEX.
In order to expand the circle of participants in the Unified Trading Session (UTS) of inter-bank currency exchanges, the MICEX is implementing a project in the on-exchange market aimed at providing access to trading in the UTS to credit institutions – residents of the member states of the Eurasian Economic Community (EurAsEC) that have joined the Agreement on Cooperation in the organization of the integrated currency market of EurAsEC member states of January 25, 2006.
As part of this project, in accordance with the decision of the Board of the MICEX of 23 October, 2009, amendments to the Rules of purchase and sale of foreign currency in the Unified Trading Session of inter-bank currency exchanges, approved by the Board of the MICEX on 16 March 2009, will come into force on November 2, 2009. Also on that date, amendments to the Rules of membership in the MICEX Currency Market Section, approved by the Board of the MICEX on 5 April, 2007, as amended on 22 October, 2007 and 16 March, 2009, will come into force.
Amendments to the above internal documents of the on-exchange currency market set out requirements for participation in trading in the UTC for banks – residents of member states of the EurAsEC and suggest that resident banks of EurAsEC member states that have joined the EurAsEC Agreement will have direct access to the MICEX currency market, i.e., they will be member of the MICEX Currency Market Section and will be able to conduct operations in the UTS by concluding transactions with The National Clearing Centre, which is the central counterparty for all transactions in the on-exchange market, both for banks – residents of Russia and for banks – residents of the EurAsEC member states.
ISE and MICEX sign Memorandum of Understanding for cooperation
October 27, 2009--The Istanbul Stock Exchange and Moscow Interbank Currency Exchange (MICEX) signed a Memorandum of Understanding (MoU) in Istanbul on October 26th, 2009. The MoU was signed by Mr. Hüseyin Erkan, ISE Chairman & CEO, and Mr. Konstantin K. Korischenko, MICEX President, in the presence of Prof. Vedat Akgiray, Chairman of the Capital Markets Board of Turkey.
The MoU envisages the two parties to cooperate with each other to facilitate the development of channels of communication and to foster a continuing relationship between the two parties for the benefit of the Turkish and Russian securities markets. Within the framework of the MoU, the parties intend to organize regular meetings between the senior executives and also arrange secondment of staff in order to enhance understanding of developments in each market. Further, the ISE and MICEX plan to carry out joint research projects for the purpose of calculation of a joint composite stock index, which may be the basis of index related products that can be traded on both markets.
Mr. Konstantin K. Korischenko, MICEX President, said “This MoU opens the way for our two Exchanges to start practical dialogue aimed at evaluating areas of bilateralcooperation for the sake of our national markets”. Mr. Hüseyin Erkan, the ISE Chairman & CEO, said “We are very pleased to sign this MoU with MICEX. I am sure that it will facilitate and accelerate our work especially in terms of calculating joint composite indices to be the basis of index related products tradeable on both markets. IT related solutions is also another essential part of this MoU. We also strongly support the cooperation of the central clearing and depository institutions of both markets.”
The MICEX group is an integrated exchange that provides services related to electronic trading, clearing, settlements as well as depository and information services on the basis of a single technological platform. The Group serves leading Russian banks and broker companies on a number of key financial markets including the currency market, the government bonds market, the share market, the market for corporate and regional bonds, the derivatives market and the money market.
The ISE provides trading in various instruments, including stocks, bonds and bills, real estate certificates, and ETFs in an organized, transparent and reliable environment for local and international investors with its modern technological capabilities.
Collective and Structured Products Market to be activated as from November 13, 2009
October 26, 2009-Collective and Structured Products Market, shall be activated as of the date of November 13, 2009, following System software release to be made on November 12, 2009.
Stocks and exchange-traded funds to be included in the Collective and Structured Products Market shall start being traded on the basis of continuous auction as of the date of November 13, 2009. Upon completion of the regulatory framework, the warrants of the financial intermediary institutions shall start being traded in the Collective and Structured Products Market under the title of structured products.
The principles related to the other transaction methods planned to be applied in the Collective and Structured Products Market (continuous auction with market maker and single price) shall be separately regulated and the principles and enforcement dates of these transaction methods shall be announced to the public.
Principles of Collective and Structured Products Market
China’s ChiNext market finally made its debut after the ten-year effort.
China’s ChiNext market finally made its debut after the ten-year effort.
October 27, 2009--
China held a significant kickoff ceremony in Shenzhen on October 23 afternoon for its ChiNext market. At p.m. 4:25, the new market, a parallel with the main board officially kicked off in China.
Liu Yanhua, vice minister of the Ministry of Science and Technology, Song Dahan, deputy director of the Legislative Office of the State Council, Yao Gang, vice chairman of the CSRC, Geng Liang, the council chairman of Shanghai Stock Exchange, Shenzhen Municipal leaders and other leaders jointly witnessed the historical moment. Chen Dongzheng, the council chairman of the SZSE presided over the ceremony.
The launching of ChiNext market indicates that China has gradually established the multi-layered capital market system framework consisting of the main board, the SME board, the ChiNext board and OTC transfer market after the almost 20-year development of China’s capital market.
Shang Fulin, Chairman of the CSRC, expressed that the launch and development of ChiNext market will be a booster for the high-tech and high-growth start-ups, providing the entry and exit mechanism of joint risk assumption and interests sharing for various venture investment and social capital, improving the operating efficiency and competitiveness of China’s capital market. Some analysts also pointed out that the launch of ChiNext, the China’s Nasdaq-style market will absolutely lead to the important effect on China’s innovative economy.
“China’s ChiNext market is mainly oriented toward growth start-ups, with the key-point support for independent innovation enterprises”, the relevant person from the CSRC said. Presently the applications of 188 companies have been accepted, involving electronic information, new materials, biological medicines, modern service industry, manufacturing and so forth. Among these companies, the first batch of 28 companies will kick off the trading on Shenzhen Stock Exchange on Oct. 30.
Liu Yanhua also said that China’s ChiNext market has rich listing resources and the ChiNext market will forge the important platform to push forward the independent innovation.
Singapore exchange may lose edge in Nifty futures
October 26, 2009--The share of SGX Nifty has risen from 2% in March to 5.9%.
The growth rate of India’s premium benchmark stock index, Nifty, on the Singapore Stock Exchange (SGX) will be appreciably less as a result of extension of trading hours in domestic markets.
The Securities and Exchange Board of India (Sebi) had last week permitted stock exchanges to begin the day as early as 9 am and keep the market open for trading till 5 pm.
However, traders believe the move is unlikely to spell an end to Nifty trading outside the country.
Shanghai eyes free exchange of yuan and New Taiwan dollar
October 26, 2009-Shanghai has applied to regulators to launch a free exchange between the yuan and the New Taiwan dollar to enhance financial cooperation, the head of the Shanghai Financial Service Office said Sunday.
"With growing trade between Shanghai and Taiwan in recent years, we hope that a free exchange between the yuan and the New Taiwan dollar can be conducted in Shanghai as a trial," said Fang Xinghai at the 6th China International Finance Forum.
"We have applied to the regulators and expect it will be approved soon," Fang said at the two-day forum which ended Sunday.
