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DB Index Research -- Weekly ETF Reports -- Europe
January 14, 2010--Highlights
ETF Volume
Exchange based Equity ETF turnover remained at about the same level on the previous week. Daily turnover for the previous week was E1.1bn. European fixed income ETF turnover declined by 2.6% to E196.2m.
In exchange based bond ETFs, db x-trackers II EONIA TR Index ETF has the highest daily turnover of E15.38m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E50.63m.
There were 37 new listings last week. Julius Baer issued twenty four new Commodity ETFs on Swiss Stock Exchange followed by Source which issued nine new ETFs on London Stock Exchange. UBS issued two new ETF on Deutsche Borse and Zuercher Kantonalbank launched two new ETFs on Swiss Stock Exchange. All the new listings were primary listings except those issued by UBS.
European Regional ETFs remained at the top position as leading product area with total turnover of E361m with 32.75% of total ETF turnover followed by Country ETFs with total turnover of E265m accounting for 24.04% of total ETF turnover. The DAX ETFs remain the dominant country products with total average daily volume of E162m across the fourteen listed products and accounting for 12.9% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 15.6% of turnover trading E172m per day with liquidity split across 17 ETFs and 44 different listings on 9 exchanges.
Market Share
The Deutsche Borse XTF platform has the largest market share with 36.1% of total turnover. The Euronext NextTrack platform has 17.9% market share. The LSE’s combined Italian Exchange and London market share is now 28.3%.
Assets under Management (AUM) Total European Equity related AUM rose by 3.2% to E117.5bn during last week. AUM for DJ Euro STOXX 50 ETFs was E23.4bn accounting for 19.9% of total European AUM. Fixed Income ETF AUM remained at about the same level at E36.3bn.
Overall, the largest ETF by AUM was Lyxor ETF DJ Euro STOXX 50, an Equity based ETF, with AUM of E5.3bn. The largest Fixed Income ETF by AUM was the iShares € Corporate Bond with AUM of E3.3bn.
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SIBEX To List Futures Contract On Dow Jones Industrial Average
January 14, 2010--Sibex has signed a sub-licence agreement with CME Group and Dow Jones Indexes to launch a futures contract based on the Dow Jones Industrial Average.
Derivatives marketplace CME Group owns the exclusive licence to trade US dollar denominated futures and futures-options contracts based on the DJIA.
The DJIA futures contract listed on the Sibex market will be denominated in US dollars and Romanian Leu, will have the multiplier of one and quarterly maturities up to 12 months.
The product is dedicated mainly to Romanian investors and will complete the range of financial instruments available on the Romanian capital market.
ETF Statistics of December 2009-Borsa Italiana
January 14, 2010-ETF Statistics of December 2009 of the Borsa Italiana-ETF Plus Market is now available.
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Alternatives Directive predicted to raise Dutch pension costs by 6%
January 14, 2010--Current European Commission proposals to introduce a directive governing alternative investments managers would increase pension costs by 6%, as it would limit investment options and the spreading of risk, a large sector of the Dutch pensions market has claimed
“The present concept directive will lead to an undue reduction of investment opportunities, higher costs and lower returns,” suggested a letter signed by the pensions associations VB and OPF, as well as 10 of the Netherlands’ largest pension schemes and asset managers.
Germany experiencing serious recession in 2009
January 14, 2010--The German economy shrank in 2009 for the first time in six years. With –5.0%, the decline in the price-adjusted gross domestic product (GDP) was larger than ever since World War II. This is shown by first calculations of the Federal Statistical Office (Destatis). The economic slump occurred mainly in the winter half-year of 2008/2009. Over the year, there were signs that the economic development would slightly stabilise on the new, lower level. In 2008 the GDP had slightly been up by 1.3%, in 2007 by 2.5% and in 2006 even by 3.2%.
What was striking in 2009 is that both exports and capital formation in machinery and equipment slumped heavily. Foreign trade, which in previous years had been a major driving force for growth in the German economy, slowed down economic development in 2009. While exports were down a price-adjusted 14.7%, the decrease was just 8.9% for imports. Hence the balance of exports and imports made a negative contribution to GDP growth, as it had done in 2008. However, with –3.4 percentage points, it was markedly larger in 2009 than in 2008 (–0.3 percentage points). Gross fixed capital formation in machinery and equipment was down altogether by one fifth compared with 2008 (–20.0%). Gross fixed capital formation in construction decreased by just 0.7% on the previous year. The only positive contribution in 2009 was made by final consumption expenditure: Final consumption expenditure of households was up a price-adjusted 0.4%, government final consumption expenditure rose even markedly by 2.7% on the previous year.
Deutsche Börse Publishes Annual Statistics for Primary Market
Volume doubles in capital increases / Further internationalization of primary market
January 14, 2010--Deutsche Börse recorded 58 initial listings in 2009 (2008: 189) and 40 company transfers in all listing-segments (2008: 28). Of the initial listings, 79 percent were companies outside Germany. A total of six companies placed shares as part of an initial public offering (IPO), including one each from China, USA and Canada. Year-on-year the volume of capital increases doubled
The Prime Standard, the segment with the highest transparency requirements in the Regulated Market saw three new entrants (2008: 12). The largest IPO of 2009 was that of Chinese company Vtion Wireless Technology, with a placement volume of 48.4 million euros.
The Entry Standard welcomed 14 new entrants (2008: 16) including three IPOs. Two companies, zooplus AG and YOC AG, moved up from the Entry Standard to the Prime Standard. Five companies moved from the Regulated Market to the Entry Standard (2008:1). The segment provides in particular small- and medium-sized enterprises with cost-efficient and flexible access to the stock exchange. Currently, 117 companies are listed in the Entry Standard.
The First Quotation Board in the Open Market recorded 57 new entrants (2008: 176), including two IPOs. There were also eleven private placements in the segment, with a total volume of almost 50 million euros. The company with the largest private placement was Agroton, from the Ukraine, with a volume of 28 million euros. All initial listings in the Open Market are grouped in the First Quotation Board.
A huge rise in the volume of capital increases was recorded in 2009. Although the actual number of capital increases dropped slightly (2009: 127 / 2008: 135), the total volume of 8 billion euros in 2008 doubled to 16.2 billion euros in 2009. Of the 127 capital increases carried out, 103 were in the Regulated Market and 24 in the Entry Standard. At least one capital increase was implemented by 18 companies in the General Standard and 64 in the Prime Standard. The largest capital increase of 2.3 billion Euros was carried out by HeidelbergCement from the construction sector.
Overseas unlikely to follow levy move
January 14, 2010--While responding positively to the proposed US levy on banks, which brings the Obama administration closer to European thinking, the international community is unlikely to follow suit, officials in London predicted on Thursday.
The main international reaction this week to the US move has been surprise. This is because the administration has opposed financial transaction and bonus taxes when other countries have proposed them, to the embarrassment of figures such as Gordon Brown, Britain’s prime minister.
Power Trading Results on EPEX Spot and EEX Power Derivatives in 2009
January 13, 2010--In the framework of their cooperation European
Energy Exchange AG (EEX) and the French Powernext SA successfully integrated their Power Spot and Derivatives Markets during 2009.
The extensive cooperation project of EEX and Powernext was formally completed in
autumn 2009 and pertains to the integration of the German/Austrian, Swiss and French
power markets, covering more than one third of the European power consumption.
In 2009, a total power volume of 1,228 TWh was traded on the subsidiaries EPEX Spot
and EEX Power Derivatives.
The 2009 trading volume in the day-ahead auction for the market areas Germany/ Austria, France and Switzerland on EPEX Spot accounted for 196.3 TWh.
The
auction volume can be broken down as follows:read more
EEX: Trading results 2009 for Natural Gas and CO2 Emission Allowances
January13, 2010--The European Energy Exchange concludes 2009 with a
satisfactory performance of trading volumes on the market for Natural Gas and CO2 Emission Allowances.
EEX noted a positive development of the short-dated trade with Natural Gas in 2009.
The trading volume on the Spot Market (Gaspool and NCG market areas) tripled to 3,515,567 MWh (2008: 1,169,780 MWh)....
The volumes on the Derivatives Market for Natural Gas (Gaspool and NCG market areas) amounted to 11,360,866 MWh in 2009 (2008: 16,340,980 MWh).
A total of 9,708,541 EU Allowances (EUA) was traded on the EEX Spot Market for CO2 Emission Allowances in 2009. EEX launched the second period of trading CO2 Emission Allowances (EUA) on the Spot Market on 16th January 2010. Since the first trading period expired in 2008 there is no comparison possible.
The volume on the EEX Derivatives Market for CO2 Emission Allowances decreased compared to 2008. The volume of EUA futures was 22,993,00 EUA (2008: 80,084,000 EUA). On the CO2 Derivatives Market for Certified Emission Reductions a volume of 649,000 CER was traded in the corresponding period (2008: 2,440,000 CER).
As of 31 December 2009, the European Energy Exchange registered 191 trading participants
from 19 countries.
New EuroCCP White Paper Offers Proposals to Reduce Risks of Interoperability
January 13, 2010--In a white paper published today, EuroCCP presents a series of recommendations to address regulatory concerns about potential systemic risk problems that may result when multiple equities central counterparties (CCPs) in Europe interoperate.
Regulators have put on hold interoperability arrangements in Europe pending a full review of the systemic risks attached to multi-CCP interoperability. The paper released today provides EuroCCP’s perspective and outlines possible approaches to mitigating these risks.
“We share the regulators’ concerns. Arrangements between multiple, competing CCPs, where each CCP becomes a counterparty to the other interoperating CCPs, requires a new framework for managing the liquidity and credit risks such arrangements may create,” said Diana Chan, CEO of EuroCCP. “EuroCCP wishes to work with others in the industry to craft an approach that manages these risks properly, in both normal and extreme market conditions. Proposals have to be scalable and allow competition to flourish in Europe’s equity markets.”
The paper, Recommendations for Reducing Risks Among Interoperating CCPs, discusses several options and offers four primary recommendations:
CCPs should augment their existing default funds to cover potential close-out losses in the event of an interoperating CCP’s default.
An Interoperability Convention, to provide transparency of arrangements between interoperating CCPs, should replace confidential bilateral agreements.
Commercial barriers to interoperability should be removed. Each market participant should be able to choose which CCP they use.
Longer term, further consideration should be given to inter-CCP netting, whereby a netting agent would be established to determine each CCP’s net securities and cash position against the other CCPs.
“EuroCCP aims to make interoperability safer and easier. Collective action among CCPs and engagement with market participants and regulators is essential to delivering the benefits of interoperability,” Chan said.
The paper is part of EuroCCP’s drive to build a stronger European equities market through promoting competition, reducing frictional costs and strengthening risk standards.
view Recommendations for Reducing Risks Among Interoperating CCPs
