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ETF Landscape, Asia Pacific ex-Japan Industry Review, October 2009
October 19, 2009-Highlights:
AT THE END OF Q3 2009 THE ETF INDUSTRY HAD 114 ETFS WITH 187
LISTINGS, ASSETS OF $35.58 BN, FROM 37 PROVIDERS ON 13 EXCHANGES
IN ASIA PACIFIC EX-JAPAN.
YTD ASSETS HAVE GROWN BY 49.7% WHICH IS LESS THAN THE 59.2%
RISE IN THE MSCI AC ASIA PACIFIC EX-JAPAN INDEX IN US DOLLAR TERMS.
YTD THE NUMBER OF ETFs INCREASED BY 18.8% WITH 20 NEW ETFs LAUNCHED, WHILE FOUR ETFs WERE DE-LISTED.
YTD THE AVERAGE DAILY TRADING VOLUME IN US DOLLARS INCREASED BY 92.0% TO US$1,008.95Mn.
STATE STREET GLOBAL ADVISORS IS THE LARGEST ETF PROVIDER IN TERMS OF ASSETS WITH US$9.55 BN UNDER MANAGEMENT IN SIX ETFs AND EIGHT LISTINGS, REFLECTING 26.9% MARKET SHARE; ISHARES IS SECOND WITH US$6.98 BN IN EIGHT LOCALLY DOMICILED ETFs AND 32 LISTINGS IN TOTAL;
A 19.6% MARKET SHARE; FOLLOWED BY HANG SENG INVESTMENT MANAGEMENT WITH THREE PRODUCTS AND ASSETS OF US$4.91 BN AND 13.8% MARKET SHARE AT THE END OF Q3 2009.
THERE ARE CURRENTLY PLANS TO LAUNCH 39 NEW ETFs
IN ASIA PACIFIC EX-JAPAN, NET SALES OF MUTUAL FUNDS (EXCLUDING ETFs) WERE US$51.7 BN, WHILE NET SALES OF ETFs WERE NEGATIVE US$0.1 BN DURING THE FIRST SEVEN MONTHS OF 2009 ACCORDING TO STRATEGIC INSIGHT.
Visit Barclays Global for more information.
Source:ETF Research and Implementation Strategy, BGI
SGX And SPH To Launch Free Financial Portal For Retail Investors
October 16, 2009--Singapore Exchange (SGX) and Singapore Press Holdings (SPH) today signed a Heads of Agreement to develop a free financial portal, targeted for launch in the second half of 2010.
The portal aims to provide the investing public integrated content from both SGX and SPH. In one comprehensive website, users will be able to obtain SGX’s live market data, company announcements, research reports, regulatory news as well as SPH’s breaking news on companies and stock markets. In addition, users will have access to an Investor Relations (IR) section maintained by SPH-owned ShareInvestor.com (SI), which is a financial internet media and technology company. The IR section provides users corporate information of over 200 companies listed on SGX.
The English portal will be launched first, followed by a Chinese version in due course.
SPH will facilitate online advertisements on the portal, which provide advertisers the reach to a large audience of the investing public. The portal will be marketed as part of SPH’s AsiaOne Network.
Mr Hsieh Fu Hua, Chief Executive Officer of SGX said, “SGX is pleased to partner SPH to offer a portal for investors to access key market information from the combined data bases of our two organisations. We expect this to be the choice site for investors in our market.”
Mr Alan Chan, Chief Executive Officer of SPH, said: “SGX’s website is very much the de facto website for the investing public to access stock market information. We believe this collaboration will provide an even more useful portal to the investing public by adding SPH news and Shareinvestor’s investor relations information to the SGX website content. This is in line with SPH’s push to engage minds and enrich lives as well as enhance our financial services offering.”
This collaboration marks the second time SGX and SPH have embarked on a major endeavour. Both companies launched the revamped Straits Times Index and 21 other indices under the FTSE ST index suite.
Source: Online News
OCBC to buy ING's Asia private banking assets
October 15, 2009-Singapore's Oversea-Chinese Banking Corp., the country's third-largest bank, said Thursday it will buy the Asian private banking assets of Dutch lender ING Groep NV for $1.46 billion in cash.
The acquisition will more than triple OCBC's private banking assets to $23 billion and will position the bank to take advantage of the region's burgeoning wealth management sector, it said in a statement.
Last week, ING sold its Swiss private banking business to Julius Baer Group Ltd.
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Source: FT.com
DB Index Research -- Weekly ETF Reports -- Asia-Pacific
October 14, 2009--Highlights
Market Overview
There are 186 equity based ETFs in the Asia Pacific region with 242 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 41.83% of the whole market, whilst China has the largest market share by turnover with 44.14%.
There were two new listings in the last week. Fortis Haitong Investment Management listed one new ETF. Yinhua Fund Management listed one new ETF. Both ETFs are listed on Shenzhen Stock Exchange
Turnover
Monthly average daily turnover declined 14.8% in the last week. Turnover for the previous week was USD 872m. The largest ETF by turnover was the China 50 ETF issued by China Asset Management with USD 215m accounting for 24.7% of total turnover.
Assets Under Management
AUM rose 4.2% in the previous week. AUM as of Oct 12th were USD 60.1bn. The largest ETF by AUM is the TOPIX ETF, managed by Nomura Asset Management, with AUM of USD 6.6bn.
To request a copy of the report click here
Source: Aram Flores and Shan Lan -DB Index Research
BSE offers trading in NSE-listed ETFs
October 14, 2009-Now investors can trade on the Bombay Stock Exchange in exchange traded funds (ETFs) that are exclusively available on the NSE.
While the Nifty Junior Benchmark Exchange Traded Scheme (Junior BeES) was launched on the BSE on October 12, the Nifty Benchmark Exchange Traded Scheme (Nifty BeES) was launched on October 7.
Gold schemes
All the six gold ETFs – Benchmark Gold ETF, Kotak Gold, Quantum Gold, Reliance Gold, SBI Gold ETF and UTI Gold – are available for trading on the BSE.
The BSE has also launched other Benchmark Mutual Fund’s schemes such as Liquid Benchmark Exchange Traded Scheme (Liquid BeES), Bank BeES, PSU Bank Benchmark ETF and Shariah Benchmark ETF.
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Source: Hindu Business
Taiwan Says NT$500 Billion of Foreign Funds ‘Suspect’
October 14, 2009-Taiwan central bank Governor Perng Fai-nan said overseas investors have NT$500 billion ($15.5 billion) of funds “sitting idle” on the island, an excessive amount that may be being used for currency speculation.
“The purpose of these funds isn’t clear and their motive is suspect,” he told reporters in Taipei today. “If these investors keep 3 percent of their funds as working capital then that’s reasonable, but this is not the case now.” He didn’t say what the current percentage is.
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Source: Bloomberg
Asia Pacific HNWI wealth to grow 8.8 per cent annually despite fall in population
Average Net Worth of Hong Kong HNWIs Remains Highest in the Region
October 14, 2009--Asia Pacific’s population of high net worth individuals (HNWIs[1]) fell 14.2% to 2.4 million in 2008 amid a global economic downturn and market volatility, according to the Asia-Pacific Wealth Report released today by Merrill Lynch Wealth Management and Capgemini. The combined wealth of the region’s HNWIs dropped 22.3% to US$7.4 trillion.
Ultra-HNWIs, or individuals with investable assets of at least US$30 million, witnessed steeper wealth erosion than the HNWI population in the region. The number of ultra-HNWIs in Asia Pacific fell 29.6% to 14,300 and their total wealth shrank 35.1%.
The combined wealth of the region’s high net worth individuals dropped 22.3 per cent to USD7.4trn.
Ultra-high net worths, or individuals with investable assets of at least USD30m, witnessed steeper wealth erosion with the number of ultra-HNWIs in Asia Pacific falling 29.6 per cent to 14,300 and their total wealth shrinking 35.1 per cent.
China and India to Lead Growth in Asia Pacific HNWI Wealth
Growth in Asia Pacific’s HNWI population and wealth is set to pick up as market conditions improve. The region’s economies are showing signs of recovery and are forecast to grow at a faster pace than the global economy by 2010.
China and India are likely to lead HNWI growth in Asia Pacific, underpinned by robust domestic consumption and a growing number of affluent individuals. The combined wealth of Asia Pacific’s HNWIs is estimated to grow at an annual rate of 8.8% until 2018, faster than the global average of 7.1%.
“We expect Asia Pacific to be a significant driver of global HNWI wealth, with China and India at the forefront of growth and Japan remaining an important high net worth market,” said Antony Hung, Head of Asia Pacific Wealth Management at Merrill Lynch Wealth Management. “The region’s diverse economic landscape presents tremendous growth opportunities for wealth management firms.”
Added Bertrand Lavayssière, Managing Director Global Financial Services, Capgemini, “While Asia Pacific saw a decline in HNWI numbers and wealth across the board, diverse economies and a shifting HNWI activity are signs that the region is poised to surpass North America and Europe to have the highest levels of wealth in the world.”
Concentration of Wealth in Japan and China
Japan and China continue to host a large percentage of the Asia Pacific HNWI population and its wealth. Last year, the two markets were home to 71.9% of the region’s HNWIs and 65.8% of total wealth, up from 68.8% and 62.4% respectively in the previous year.
The number of HNWIs in Japan fell 9.9% to 1.37 million and their wealth shrank 16.7% to US$3.2 trillion. The decline was milder than in other markets as Japan already witnessed slower economic growth in 2007, and the country’s HNWIs are typically more conservative in their asset allocations which limited their losses last year.
Despite steep market capitalization losses, China avoided the larger losses in HNWI numbers seen in other markets due to the closed nature of its markets combined with robust macroeconomic growth. The number of HNWIs in China fell 11.8% to 364,000 and their combined wealth dropped 20.7% to US$1.7 trillion. Still, China’s HNWI population surpassed that of the U.K. to become the fourth-largest in the world. India’s HNWI population also took a hit, falling 31.6% to 84,000.
Hong Kong’s HNWI population had the biggest percentage decline in the world, falling 61.3% to 37,000. Nonetheless, despite last year’s decline, the average net worth of Hong Kong HNWIs remained at US$4.9 million, considerably higher than the regional average net worth of Asia Pacific HNWIs which stood at US$3.1 million.
“Unprecedented market conditions last year wiped out two years of gains in Hong Kong’s HNWI numbers,” said Francis Liu, Market Managing Director for Greater China at Merrill Lynch Wealth Management. “Looking ahead, wealth accumulation is set to resume in Hong Kong as the economy recovers and capital continues to flow into the local market.”
HNWIs Retrenched to Cash and Domestic Investments
Asia Pacific HNWIs increased their allocations to safer and simpler investments last year in a move to preserve wealth. The proportion of cash-based holdings rose to 29%, up from 25% a year earlier. Taiwan’s HNWIs had the highest cash/deposits allocation at 41%.
Exposure to equities fell as a plunge in regional markets prompted a broad sell-off. By the end of 2008, Asia Pacific HNWIs had 23% of their wealth in equities, down three percentage points from the previous year. In Australia, HNWIs cut back their allocations to the asset class to 25% from 38%, while Hong Kong HNWIs scaled back their exposure to 21% from 33%.
Investments in home-region and domestic markets rose to 67% from 53%, as global market uncertainty deterred Asia Pacific HNWIs from investing in other regions.
“Capital preservation will remain a priority for the region’s HNWIs in the short term. As markets recover and risk appetite returns, we expect Asia Pacific HNWIs to adopt a more balanced investment approach and increase their allocations to other regions gradually,” said Arvind Sundaresan, Head of Sales for Asia Pacific at Capgemini’s Financial Services Global Business Unit.
view the 2009 World Wealth Report
Source: Capgemini
HSBC makes further changes to Asia business
October 13, 2009--HSBC has made a series of changes to its senior level management team in light of its decision to transfer Michael Geoghegan, chief executive, to Hong Kong.
In a move designed to strengthen further the bank’s position in Asia, Mark McCombe, currently chief executive of HSBC’s global asset management arm, will join Mr Geoghegan in February next year as chief executive of the bank’s Hong Kong arm.
John Flint, group treasurer and deputy head of global markets, will replace him at the helm of HSBC’s asset management unit.
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Source: FT.com
Bosera Asset Management to design blue chip index ETF
October 13, 2009--Bosera Asset Management has been authorised to develop an exchange-traded fund based on the Shanghai Stock Exchange Mega-cap Index.
The index represents the share prices of 20 blue chips with the largest market capitalization and highest fluidity on the SSE, including Industrial and Commercial Bank of China, China Petroleum & Chemical, Ping An Insurance and Citic Securities.
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Source; ETF Express
China Wealth Fund to Buy Shares in Nation’s Three Largest Banks
October 12, 2009-- China’s $300 billion sovereign wealth fund said it will continue increasing its stakes in the nation’s three biggest lenders, seeking to bolster investor confidence after Chinese shares fell last quarter.
Central Huijin Investment Co., a unit of China Investment Corp., “recently” bought Shanghai-traded shares in Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., according to statements issued late yesterday.
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Source: Bloomberg