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CNMEX to introduce cross-asset class Exchange Traded Fund market maker rebate program
Jnauary 18, 2010--“This incentive program is designed to remove hedging friction for options Market Makers and to attract further trading activities and listing opportunities on China Mercantile Exchange, said Liu Wong Huiliang, Deputy Press Officer for China Mercantile Exchange.
Under the rebate program, each options contract traded by the designated Market Maker on China Mercantile Exchange will generate a per-share credit to offset trading activities.
“The development of this new cross-asset class subsidization of options market making activities further supports CNMEX’s efforts to encourage growth in the derivatives sector, and to develop an integrated cash and derivatives trading business,” said Huiliang.
Source: China Mercantile Exchange (CNMEX)
India suspends SocGen from trading
January 15, 2010--Société Générale was on Friday threatened with expulsion from the Indian equities market for allegedly violating “know your client” rules that compel companies to provide complete information on overseas customers.
The Securities and Exchange Board of India, the market regulator, alleged SocGen had provided incomplete information on overseas clients that had bought shares of Reliance Communications, controlled by Indian billionaire Anil Ambani, through offshore derivatives known as participatory notes.
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Source: FT.com
DB Index Research -- Weekly ETF Reports - Asia-Pacific
January 14, 2010--Highlights
Market Overview
There are 199 equity based ETFs in the Asia Pacific region with 258 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 41.02% of the whole market, whilst China has the largest market share by turnover with 52.42%.
There was one new listing in the last week. Guotai Asset Management listed one new Equity ETF in Shenzhen Stock Exchange
Turnover
Monthly average daily turnover declined 24.9% in the last week. Turnover for the previous week was USD 889m. The largest ETF by turnover was the China 50 ETF issued by China Asset Management with USD 288m accounting for 32.4% of total turnover.
Assets Under Management
AUM rose 4% in the previous week. AUM as of Jan 11th were USD 62.8bn. The largest ETF by AUM is the TOPIX ETF managed by Nomura Asset Management with AUM of USD 6.2bn.
To request a copy of the report
Source: Source: Aram Flores and Shan Lan -DB Index Research
'Crash-tested' China fund unveiled
January 13, 2010--Citigroup will today launch China StormRiders, a mutual fund that will invest exclusively in Greater China equities that have proved resilient to market crashes.
The fund, actively managed to respond to changing market conditions, will provide foreign investors with an alternative to the passive index-trackers that dominate the nascent China fund market.
Only companies that have performed well relative to their peers in historical market crashes are eligible for selection in the fund portfolio.
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Source: FT.com
Reply to PQ on Regulatory Framework for Dark Pools
January 12, 2010--Question No. 55
Notice Paper No. 308 of 2009
For Written Answer
Name and Constituency of Member of Parliament
Mdm Ho Geok Choo, MP for West Coast GRC
Question:
Mdm Ho Geok Choo: To ask the Senior Minister with the emergence of dark pools which allow trading of stocks to occur away from public eyes and off central exchanges (a) how will the Ministry deal with the regulatory issues that these dark pools are likely to throw up; and (b) how will the Ministry address issues such as insider trading if investors are allowed to trade anonymously.
Answer:
1. Dark pools, otherwise known as crossing networks, are an alternative trading venue where institutional investors can transact large blocks of shares that are listed and traded on stock exchanges. Concerns that have been raised about crossing networks include possible market fragmentation and a lack of transparency.
2. The Monetary Authority of Singapore (MAS) recognises these concerns and has brought crossing networks under its regulatory regime for recognised market operators1 since September 2007. These market operators are permitted to offer trading access only to institutional investors, and have to comply with the relevant statutory obligations. These include ensuring that the market is fair and orderly; managing any risks associated with its business and operations prudently; and not acting contrary to the interests of the public.
Market Fragmentation
3. Currently, orders above S$150,000 or 50,000 shares can be executed off the Singapore Exchange (SGX) as SGX members can negotiate such orders directly with each other. These off-exchange trades are subject to relevant SGX trading rules which require a trade to be reported to the Exchange within 10 minutes of execution. SGX’s rules seek to balance the ability of institutional investors to execute large transactions, minimising market impact costs2, with the overall requirements of market transparency and integrity. MAS has required crossing networks to match only large orders that comply with the SGX off-exchange thresholds. As an additional measure to prevent liquidity in the exchange from being fragmented by the crossing network, MAS has set limits on the volume any crossing network can trade in any single SGX-listed share.
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Source: Monetary Authority of Singapore
Deutsche Bank lists six more ETFs on SGX
January 11, 2010--The new exchange-traded funds include the first fund in Asia to track the Brazilian stock market. The bank expects sizable growth in inflows from pension and sovereign funds.
Deutsche Bank has launched six more exchange-traded funds (ETFs) on the Singapore Exchange (SGX), including Asia's first ETF tracking the performance of the Brazilian equity market.
The six products are: the Emerging Markets TRN Index ETF, MSCI Brazil TRN Index ETF, MSCI Russia Capped Index ETF, MSCI World TRN Index ETF, MSCI Pacific ex Japan TRN Index ETF and MSCI EM Asia TRN Index.
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Source: Asian Investor
Malaysia Is World's Top Sukuk Listing Destination
Bursa Malaysia Attracted USD 17.6 Billion In Sukuk Listings In 2009
January 11, 2010--Bursa Malaysia topped the world’s exchanges in terms of value of sukuk programme
listings in 2009, recording a total of USD17.6 billion. Since its inaugural sukuk listing in August 2009, the Exchange listed 12 sukuk by end of December 2009 which contributed
towards this development.
Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia said, “Despite the slow down in trading activities and issuances in 2009, Bursa Malaysia has marked a new era
of sukuk listings. Our expedient achievement is reflective of Malaysia’s significance in the world of Islamic capital markets. Bursa Malaysia will continue to facilitate investors with the
most conducive Islamic platform and will strive to remain in the leading position of sukuk listing worldwide.”
He added that the positive commitment shown by market participants is a reflection of their confidence in the Islamic capital market underlined by a high level of governance and transparency, where issuers are provided with the access to greater profiling opportunities on Bursa Malaysia.
The first sukuk listing on Bursa Malaysia was registered in August 2009 with the inaugural US Dollar (USD) listing led by Petroliam Nasional Bhd (PETRONAS) Al-Ijarah Sukuk and Ringgit Malaysia (RM) listing by Cagamas MBS Bhd (Cagamas MBS) Islamic papers.
In November 2009, GE Capital Sukuk Ltd issued its first foreign sukuk of USD500 million on the bourse.
December 2009 saw the listing of CIMB Islamic Bank’s RM2 billion subordinated sukuk programme while Khazanah Malaysia listed its outstanding sukuk programme amounting to USD 14 billion.
Malaysia has over 20 years experience of experience in Islamic finance and is the world’s largest sukuk origination centre driven largely by an investor-friendly regime, as well as a
robust regulatory and Shari’ah framework propelled by heightened promotional efforts under
the Malaysia International Islamic Financial Centre (MIFC) initiative.
Source: Bursa Malaysia
Revisions to the Index Guidebook with Regard to Stock Transfers, etc.
January 8, 2010--Tokyo Stock Exchange, Inc. (TSE) announced today that it will revise the index calculation method regarding the addition/removal of constituent issues of the Tokyo Stock Exchange Second Section Stock Price Index (*), Tokyo Stock Exchange Mothers Index (*), and Tokyo Stock Exchange REIT Index.
The revisions aim to enhance the suitability of those indices as benchmarks.TOPIX calculation will remain unchanged.
The details are as follows:
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* Includes the Tokyo Stock Exchange Second Section Composite Index and Tokyo Stock Exchange Mothers Composite Index.
Source: Tokyo Stock Exchange (TSE)
Turnover of ETFs on SGX rises 56% to S$4.6b in 2009
January 8, 2009-- Turnover of exchange-traded funds (ETFs) listed on the Singapore Exchange grew 56 per cent to S$4.6 billion in 2009, the third straight year in which record turnover was achieved.
SGX said ETFs with a non-domestic focus account for over 90 per cent of ETF turnover on the exchange, unlike most other Asian markets, where such funds with a domestic focus tend to dominate trading.
As a result, investors leverage on SGX-listed ETFs to access markets that have limited access.
The three most active ETFs by turnover were the iShares MSCI India ETF, the Lyxor ETF India and the SPDR Gold Shares ETF. Together, these three accounted for about 60 per cent of total ETF turnover.
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Source: Chanel News Asia
ChiNext releases Business Memorandum to regulate use of over-raised funds
The SZSE recently released the"Business Memorandum No. l for ChiNext Information Disclosure—Use of Over-raised Funds
January 6, 2010--In order to further regulate the use and management of raised funds of ChiNext listed companies, especially over-raised funds, enhance the safety and use of raised funds of listed companies, protect the rights and interest of investors and interest of listed companies, the SZSE recently released the “Business Memorandum No. l for ChiNext Information Disclosure—Use of Over-raised Funds”
The Memorandum sets out the stringent restrictions in respect of the use of over-raised funds, emphasizing that the over-raised funds shall be used for main business of listed companies, not for high-risk investment such as engaging in securities investment, entrusted finance management, derivatives investment, venture investment and financing other parties or individuals.
The Memorandum also requires that listed companies shall properly make plans for the use of over-raised funds in light of the company’s development planning and actual production and operation needs within 6 months after the aforementioned funds are collected. And the Memorandum sets forth that before a listed company puts over-raised funds into use, the company shall perform the duties including going through the corresponding procedure for consideration of the board or the general meeting and information disclosure in accordance with the requirements of the “Rules of Shenzhen Stock Exchange for ChiNext Stock Listing”.
In addition, with respect of information disclosure and the procedure for consideration in relation to changes in projects to be actually invested by over-raised funds or plans for use of over-raised funds, or using over-raised funds to temporarily replenish working capital, the Memorandum gives specific provisions.
Source: Shenzhen Stock Exchange
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