Global Market Outlook: battling the bond blues
February 7, 2018--Stocks: off to a strong start
Global equities posted further gains in January, with the MSCI All-Country Index returning 4.1% in local currency terms. By contrast, Australia's S&P/ASX 200 Index delivered a negative 0.4% return, and continued the general trend of underperformance that has been evident over the past year.
The trend for global equities remains firmly up, though the pace of gains in recent months has been so strong that a "cleansing pull back" seems overdue.
There were few negative shocks for the market to contend with over the past month, with economic data in most corners of the world continuing to strike an upbeat tone. The passage of US tax cuts in late 2017 also continued to underpin market sentiment and has already led to some upgrades to 2018 US earnings expectations.
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Source: betashares.com.au
Central banks should consider using digital currencies: China think tank
February 7, 2018--Central banks should consider using digital currencies in cross-border payments that could cut transaction time and costs, researchers at the Chinese Academy of Social Sciences (CASS), a top government think tank, said in a report.
Cryptocurrencies allow parties to transact payments directly without a central intermediary, by means of blockchain technology that uses a shared ledger that verifies, records and settles transactions in a matter of minutes.
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Source: Reuters
IMF Staff Country Reports-Indonesia: Selected Issues
February 6, 2018--HARNESSING INDONESIA'S DEMOGRAPHIC DIVIDEND: OPPORTUNITIES AND CHALLENGES1
With a young and growing labor force, Indonesia is set to enjoy favorable demographic trends for
many years to come. This provides a window of opportunity to raise growth and support the country in
addressing its development challenges. However, reaping the demographic dividend before aging
starts to kick in, in less than 15 years, requires policies to raise productivity and create sufficient quality jobs to absorb the growing working-age population.1
A. Demographic Trends in Indonesia
1. The fourth most populous country in the world, Indonesia's population continues to grow strongly. The country's population grew at 1.3 percent per year on average during 2000-16,
reaching around 260 million in 2016. About 57 percent of the population lives in Java island, which
has the lowest population growth (1.1 percent). Currently at 2.4 children per woman, fertility
rate, while declining, is projected to remain above the replacement rate of 2.1 children per woman until 2030.
view the IMF Staff Country Reports-Indonesia: Selected Issues
Source: IMF
SGX and Bursa Malaysia to set up stock market trading link
February 6, 2018--Singapore Exchange (SGX) is pleased to collaborate with Bursa Malaysia (BM) on jointly developing our capital markets through a stock market trading link.
We welcome and support the announcement made by the Monetary Authority of Singapore (MAS) and Securities Commission Malaysia (SC) this morning on the establishment of a BM-SGX trading link.
This is the first time that both SGX and BM have come together to establish a network that will enable cross-border clearing and settlement of traded stocks. The joint regulatory supervision and enforcement arrangements by MAS and SC will allow investors to use the trading link with confidence. Each market will continue to be governed by its own listing, trading and clearing rules and regulations.
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Source: Singapore Exchange (SGX)
China to stamp out cryptocurrency trading completely with ban on foreign platforms
February 5, 2018--Offshore platforms targeted after recent efforts to shut down domestic exchanges failed to eradicate trading
China is to block all websites related to cryptocurrency trading and initial coin offerings (ICOs)-including foreign platforms-in a bid to finally quash the market completely.
"To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs," said an article published on Sunday night by Financial News, a publication affiliated to the People's Bank of China (PBOC).
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Source: South China Morning Post
Government may come up with more ETFs, including debt ETFs, soon
February 2, 2018--Mutual fund investors can expect more Exchange Traded Funds (ETFs) along the lines of Bharat 22 ETF, in the coming year. "The Government introduced Exchange Traded Fund Bharat-22 to raise Rs 14,500 crore, which was oversubscribed in all segments. DIPAM will come up with more ETF offers, including debt ETF," the finance minister said in his budget speech.
Bharat 22 ETF comprised of 22 stocks of Central Public Sector Enterprises (CPSEs), Public Sector Banks (PSB) and strategic holdings of the Unit Trust of India. It allowed investors an exposure to six sectors- Basic materials, Energy, Finance, FMCG, Industrial and Utilities.
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Source: The Economic Times
WisdomTree Announces Two Additional ETFs Have Filed Notification with the Financial Services Agency of Japan (FSA)
February 1, 2018--WisdomTree Investments, Inc. (NASDAQ:WETF), an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager, today announced that two additional ETFs have recently filed notification with the Financial Services Agency of Japan (FSA).
The newly notified funds include:
The WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (XSOE): An equity fund providing exposure to emerging market companies excluding state-owned enterprises.
The WisdomTree China ex-State-Owned Enterprises Fund (CXSE): A Chinese equity fund providing exposure to broad-based Chinese stocks excluding state-owned enterprises.
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Source: WisdomTree
Reflections on forty years of China's reforms
February 1, 2018--Forty years ago in December, Deng Xiaoping delivered his historic speech "Emancipate the mind, seeking truth from facts and unite as one to face the future." This triggered four decades of reforms that have transformed China into the world's second largest economy.
By some time in the next decade, China will be among the few countries in the world that will have transitioned from low income to high income status since World War II.
Understanding the path China traveled, the circumstances under which historical decisions were made, and their effects on the course of China's economy will inform future decision makers. Increasingly, this reflection is important to the rest of the world as more and more countries see China as an example to emulate.
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Source: Bert Hofman, World Bank
Why is the $US so weak?
January 31, 2018--One of the surprise global market developments over the past year has undoubtedly been weakness in the $US. Why? This note suggests that, rather than simply blaming a dovish Fed or an erratic US President, the main driver of $US weakness has been the broadening (or "synchronisation") of global growth over the past year, which has encouraged investors to increase exposure to (at least up until recently) under performing non-US markets.
If this is the case, it does also suggest the $US is not about to turn around anytime soon.
We can't blame the Fed or Trump for $US Weakness
After surging by 30% between mid-2014 and end-2016, the $US Index fell 9.9% in 2017 and is already down a further 3.2% so far in 2018. Some suggest $US weakness reflects concerns over low US inflation and whether the Fed would be aggressive in raising interest rates. Another argument is that concern with the ability of US President Donald Trump to pass legislation is to blame. But neither argument seems to hold much water.
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Source: BetaShares
BetaShares Australian ETF Review-2017 in Review
January 31, 2018--One word: BIG!
We'll begin our posts in 2018 with a look at the year 2017 in ETF-land. And what a year it was!
The Global ETF industry recorded significant growth in 2017, receiving its highest ever level of net inflows (US$633B)-a growth rate of 18% year on year. In total the global industry ended the year at US$4.8T1.
Locally, our ETF industry followed this global trend in 2017 and broke virtually all records available. The Australian ETF industry's funds under management continued to grow rapidly, increasing a particularly fast 40% year on year to end the year at a new record high of $36B. The industry grew FuM by $10.2B which smashed the previous record ($6.3B) set in 2015.
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Source: betashares.com.au
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