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Investors worry about European national debt: Fitch survey
February 25, 2010--European and US investors are worried about European government debt levels but cautiously optimistic on international corporate debt, a survey by Fitch credit ratings agency showed on Thursday.
Monica Insoll, managing director in Fitch's credit market research group, said in a statement that the survey had found that "investors have a negative view on sovereign debt fundamentals and funding needs in 2010."
But she added: "Responses from senior credit investors across Europe paint a picture of continued improvement in fundamental credit conditions in relation to corporate asset classes."
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Source: EU Business
2010 eurozone growth to lag well behind Asian rivals
February 25, 2010--Economic growth across Europe will be uncertain, fragile and dwarfed by emerging Asian rivals throughout 2010, according to new Brussels forecasts released on Thursday.
As nervous euro countries anxiously study developments in debt-saddled Greece, the European Commission acknowledged that "uncertainty" surrounding even these projections "remains rife, as recent developments in financial markets illustrate well."
Brussels predicts just 0.7 percent expansion for both the eurozone and the full 27-nation European Union, the world's biggest open trading bloc, in disappointing forecasts unchanged from November.
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Source: EU Business
EU interim forecast: Fragile recovery in progress
The European Commission expects GDP in the EU to recover gradually, while still facing strong headwinds.
February 25, 2010--The Commission published its latest interim economic forecasts on 25 February 2010. The underlying message of this update of GDP and inflation variables is that the EU economy is recovering, but still facing headwinds. The updated projections include France, Germany, Italy, the Netherlands, Poland, Spain and the United Kingdom, accounting for 80% of EU GDP.
The Commission has revised slightly upward the growth projections for the first half of 2010. However, the projected growth rate for the whole of 2010 remains mainly unchanged at 0.7% in both the EU and euro area.
This update is based on a global recovery in the second part of 2009 that proved stronger than expected. This is due especially to an uptake in Asia. World GDP excluding the EU did not shrink in 2009 and is expected to grow by some 4¼% in 2010. However, what impact the world uptake will have on EU growth remains to be seen.
The EU is benefitting from improved sentiment indicators, but industrial production and retail sales figures amongst others have been less promising, and investments remain weak. Equally, financial markets have recovered in 2009 but uncertainties remain. Adding a probable weak labour market outlook dampening demand, and many of the growth sources being of temporary nature, the robustness of the EU recovery is yet to be tested.
read more view the Interim Forecast February 2010
ETF Securities to launch ten euro-based currency ETCs on Xetra
The 10 new Currency ETCs will track Morgan Stanley Foreign Exchange Indices (MSFXSM Indices) and are designed to replicate a fully collateralised long or short investment in EUR versus CHF, GBP, JPY, NOK, or SEK and also provide exposure to local interest rates.
The 10 new Currency ETCs will complement the existing platform of 18 Currency ETCs listed on the London Stock Exchange (LSE) on the 12th November 2009 providing long or short passive exposure to G10 currencies versus the US Dollar and include AUD, CAD, CHF, EUR, GBP, JPY, NOK, NZK and SEK. Since the launch of the Currency ETC platform, assets have grown to approximately $50 million and weekly trading volumes have risen strongly, up over 200% since start of 2010.
Currency ETCs which are Long USD and short G10 currencies have seen the most interest from investors, making up 81% of assets. ETFS Short EUR Long USD (LSE: SEUR) has been the most popular trade in 2010, capturing 50% of new assets, while the Australian dollar held the most net long positions.
All Currency ETCs are fully collateralised in order to mitigate counter-party risk and listed in the ETC segment of the Deutsche Börse or the LSE. The 10 new securities to be listed on the Deutsche Börse are:
read more UK DC contributions increase ahead of 2012 read more Investors continue to finance climate-friendly projects read more Investors are regaining their trust in equities and many pension funds plan to increase their holding in listed stocks over the course of the year, a study supported by IPE has revealed. read more Blackrock-ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows, week ending 19-Feb-10 visit Blackrock for more information Coup plans, political tension lead to significant losses in markets read more More powerful EU financial supervisory bodies and less national interest, demand MEPs
All four EP rapporteurs questioned the Council compromise that emerged from December's Ecofin meeting. The safeguard clause protecting Member States' fiscal powers, which the rapporteurs consider over-restrictive, was the major bone of contention. Another concern was the possibility of geographical fragmentation, as the Commission is currently proposing different cities for each authority. The watchdog system being proposed by the Commission is made up of three separate micro-supervisory bodies for the monitoring of banking, insurance and market institutions respectively and another macro-supervisory body for the monitoring of systemic risk. Although willing to preserve these four bodies, the rapporteurs suggest grouping them together under the European System of Financial Supervision proposed in the de Larosière report on financial supervision in the EU. Consequently they also argue - unlike the initial proposal - that a common location should be chosen, with the European Systemic Risk Board report proposing that this be Frankfurt. This would not only reduce operating costs but could also be very useful in the event of a crisis necessitating emergency action. Safeguard or wildcard? As it currently stands the safeguard clause found in the proposed texts establishing the three micro-supervisory authorities offers a quasi-veto for Member States regarding the decisions of these authorities. The rapporteurs therefore propose that the opportunity to invoke such a safeguard be limited and that the Member State concerned be required to provide an impact assessment detailing the extent to which the decision impinges on its fiscal sovereignty. Stronger micro-supervisory authorities
Apart from the very important question of the safeguard clause, the three rapporteurs for the micro-supervisory authorities proposed a number of other improvements to the Commission's proposals, mostly to increase the role of supervision at EU level. The reports propose that these authorities also be tasked with preventing regulatory arbitrage and that they should have a power of initiative to undertake stress tests. They should also represent the EU during international dialogues of supervisors. To varying degrees the rapporteurs would confer mediating powers on the authorities with regard to conflicts between national supervisors, with the report on the banking authority going furthest by suggesting a binding mediating role.
All reports give a more important role to the European Parliament, particularly by entrusting it with the task of overseeing the activities of the authorities. Specifically for the banking authority, the rapporteur proposes that the authority takes over from national supervisors the direct supervision of cross-border 'too big to fail' financial institutions and puts forward the idea of setting up a European guarantee fund which could be used to bail out banks in difficulty. As for the markets authority, the draft report proposes that the authority be granted the right to prohibit the trading of certain products to protect investors and ensure stability. read more If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
Source: European Commission
February 25, 2010--ETF Securities (ETFS), the global pioneer in Exchange Traded Commodities (Commodity ETCs) and 3rd generation Exchange Traded Funds (ETFs) is planning to expand the world’s largest and Europe’s first Exchange Traded Currency (Currency ETCs) platform with the launch of 10 new Euro-based Currency ETCs on the Deutsche Börse (Xetra) in the coming weeks.
The upcoming listing of 10 new Euro-based Currency ETCs on the Deutsche Borse adds to ETF Securities’ commitment to the German market. ETF Securities is already an established player in Germany with over 114 Commodity ETCs and 11 ETFs listed on Xetra, totaling approximately $1.5 billion of local investment and close to $200 million weekly trading volume on Xetra.
Security Name
ISIN
ETFS Long CHF Short EUR
DE000A1DFSA1
ETFS Long GBP Short EUR
DE000A1DFSC7
ETFS Long JPY Short EUR
DE000A1DFSE3
ETFS Long NOK Short EUR
DE000A1DFSG8
ETFS Long SEK Short EUR
DE000A1DFSJ2
Source: ETF Securities
February 25, 2010--Companies appear to be restructuring their defined contribution (DC) pension schemes ahead of the 2012 reforms to give higher contributions to employees who are engaged and contribute more themselves, according to Towers Watson.
In its annual survey of FTSE 100 DC pensions, the study revealed the average maximum contribution made by employers to their DC pension schemes has increased to 16.5%, up from 15.3% in 2009 and 13% in 2004.
Source: IP&E
February 24, 2010-- Investment in World Bank green bonds have now surpassed the $1bn (€736m) mark, reflecting a growing interest by investors in climate change adaptation and mitigation projects.
The latest issue, a World Bank green bond denominated in Swedish Kronor (SEK), attracted investors including WWF-Sweden, Church of Sweden, European private banks and life insurance companies, as well as the Swedish National Pension Fund AP3.
Source: IP&E
February 24, 2010-- Investors are regaining their trust in equities and many pension funds plan to increase their holding in listed stocks over the course of the year, a study supported by IPE has revealed.
A survey of 78 European pension funds in 16 countries found respondents expect to increase their equity holdings by almost five percentage points by the end of 2010.
Source: IP&E
February 24, 2010--Last week saw US$102.6 Mn net inflows to DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Basic Resources with US$153.8 Mn and Industrial Goods & Services with US$46.8 Mn while Telecoms experienced net outflows of US$87.6 Mn.
Year-to-date, Utilities has been the most popular sector with US$176.6 Mn net new assets, followed by Media with US$148.9 Mn net inflows. Telecommunications ETFs have been the least popular with US$256.9 Mn net outflows YTD.
Source: ETF Research and Implementation Strategy Blackrock
February 24, 2010--Turkey's capital markets are reacting wildly to recent internal developments regarding coup plans, the Ergenekon indictment and talk of another closure case against the Justice and Development Party (AK Party), while the lira lost value against the dollar due to this political tension.
The Ýstanbul Stock Exchange's (ÝMKB) ÝMKB-100 index was down nearly 1,000 points by the end of the first session of trading on Wednesday to 50,443.16, continuing this week's trend of continuing losses. The index closed last Friday at 53,318.97, a slight recovery from a two-week dip. This recovery was short-lived, however, as the index had dropped a staggering 5.4 percent, or nearly 2,900 points, from that figure by the end of the first session of trading on Wednesday.
Source: Todays Zaman
February 24, 2010--The need for more ambition and more Europe was the main message to emerge from debates on the EU financial supervisory package at Parliament's Economic Affairs Committee on Tuesday. Calls for tougher legislation and a bigger transfer of powers to the EU supervisory level were among the chief demands made by the four MEPs presenting their draft reports.
One supervisory system in one city
Source: European Parliment
