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Europeans hold aces, even if gas crisis resurfaces
December 3, 2009-The European Union enters Friday's summit with Ukraine in a more relaxed mode thanks to solid gas stocks going into winter and a drastic fall in post-recessionary energy consumption.
While no one rules out a repeat of Russia's decision last January to turn off the gas taps that keep Europe warm and working, the rules of the game have changed somewhat even if Ukraine is in a chaotic state.
On the seventh of each month, Kiev has to sign a painfully large transfer of funds to Moscow to cover its vast internal gas consumption.
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Source: EU Business
Bank of Ireland Securities Services launch Europe’s first pan-European ETF settlement product.
December 2, 2009--Bank of Ireland Securities Services (BoISS) has launched a pan-European exchange traded fund (ETF) settlement platform for ETF issuers, called “BoISS ETP Direct”. The new product is designed to permit ETFs to settle delivery against payment directly in multiple jurisdictions across the EU.
The catalyst for the new system came from the combination of market need and client demand such as Source, the specialist provider of Exchange Traded Products which launched earlier this year.
As Source prepared to enter the market, it knew that if it was successful it would have to handle daily transaction flows significantly larger than any current provider. Current activity levels from the Deutsche Borse indicate that this is occurring with Source representing 59% of total turnover of €4.2BN in European sector ETFs in October alone.
ETP Direct is expected to have a number of benefits for the ETF community. Commenting on the launch Fearghal Woods Director of Business Development said “As the leading service provider to ETFs in Europe, we are delighted to be launching this new offering for our client base. The product is designed to provide a more transparent, cost effective and efficient ETF settlement mechanism across the European depositary network.”
The platform is expected to streamline the trading activities of ETF market makers through reducing costs, minimising risks and improving timeliness of settlement.
Business Development Manager at Bank of Ireland Paul Heffernan noted that “We are witnessing significant growth in the ETF industry throughout Europe. Many of these products are listed in multiple locations and the cross border settlement systems can cause issues for many ETF traders. Through our discussions and close working relationship with many of the product providers and market makers we have identified this problem and we believe ETP Direct will alleviate many of their concerns. As with UCITS products, we are beginning to see listing and trading of European ETFs beyond the EU boundaries. We are actively enhancing ETP Direct to facilitate settlement into these frontier markets”.
A number of clients are operational on the platform and are excited about the prospects of ETP Direct for their ETF product plans.
Ted Hood, Chief Executive at Source commented: “We believe that the European ETF market has huge growth potential, but that improved business processes that leverage technology are vital to that growth. By working with BoISS and our asset manager, Assenagon, Source has been one of the catalyst’s for the creation of ETP Direct and we look forward to seeing this pioneering initiative become the market standard.”
Alan Durrant Chief Investment Officer at National Bank of Abu Dhabi noted: “We are excited about the potential for the growth of an ETF market in the Gulf region. Local investors are seeking a cost effective way to take instant and diversified exposure to markets and an ETF provides an ideal solution. Many international investors want to access the region and an ETF provides them with an internationally recognized way of doing so. Delivering efficient service solutions will be essential to the development of ETFs in this region and we at National Bank of Abu Dhabi welcome the development of ETP Direct in this regard”.
The product will be made available to ETF issuers that use Bank of Ireland as custodian. It is expected that ETF Issuers will benefit from enhanced distribution opportunities in an ever expanding ETF market.
Source: Bank of Ireland Securities Services
ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows, week ending 27-Nov-09
December 2, 2009--Last week saw US$5.0 Mn net outflows to DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Banks with US$61.5 Mn and Telecommunications with US$52.8 Mn while Basic Resources experienced net outflows of US$85.5 Mn.
Year-to-date, Basic Resources has been the most popular sector with US$456.3 Mn net new assets, followed by Telecommunications with US$364.4 Mn net inflows. Travel & Leisure sector ETFs have been the least popular with US$16.8 Mn net outflows YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in 18 out of the 19 sectors. The data required to produce the flow analysis is available by Tuesday evening which means the earliest this publication can be distributed is on Wednesday
Visit www.blackrock.com for more information
Source: ETF Research and Implementation Strategy, BlackRock Advisors (UK) Limited
96 Billion Euros Turnover at Deutsche Börse’s Cash Market in November
13 million trades executed on Xetra/ Total volume of 108 billion euros traded on all stock exchanges in Germany
November 2, 2009--In November, 96.5 billion euros were traded on Xetra® and on the floor at Börse Frankfurt – a decrease of 21 percent year-on-year (November 2008: 122.2 billion euros). Of the 96.5 billion euros, 90.5 billion euros were traded on Xetra, a decrease of 21 percent year-on-year (November 2008: 114.5 billion euros). 5.9 billion euros were traded on the floor (November 2008: 7.7 billion euros).
Turnover in German equities amounted to 81.3 billion euros, while foreign equities turnover stood at 12.5 billion euros. Xetra and the floor at Börse Frankfurt accounted for 97 percent of the transaction volume in German equities on all stock exchanges in Germany. 93 percent of foreign equities traded on stock exchanges in Germany were traded on Xetra and on the floor in Frankfurt.
In November, 13.1 million transactions were executed on Xetra, a decrease of 28 percent against the same period last year (November 2008: 18.3 million).
According to the Xetra liquidity measure (XLM), SAP AG was the most liquid DAX® blue chip in November with 6.7 basis points (bp) for an order volume of 100,000 euros. HeidelbergCement AG was the most liquid MDAX® stock with 20.5 bp. The most liquid ETF was the db-x-trackers II EONIA T.R. 1C with 0.3 bp. The most liquid foreign stock was Total S.A. with 15.6 bp. XLM measures liquidity in electronic securities trading on the basis of the implicit transaction costs. It is expressed in basis points (1 bp = 0.01 percent); a low XLM denotes high liquidity in a security.
Deutsche Bank AG was the DAX stock with the highest turnover on Xetra in November at 5.0 billion euros. HeidelbergCement AG was the top MDAX stock at 969.4 million euros, while KUKA AG led the SDAX® stocks at 50.3 million euros and Aixtron AG headed the TecDAX® at 642.9 million euros. At 1.4 billion euros, the iShares DAX was the exchange-traded fund with the highest turnover.
On all stock exchanges in Germany 108.0 billion euros were traded in November according to orderbook turnover statistics – a decrease of 21 percent compared year-on-year (November 2008: 137.4 billion euros). This total includes 99.8 billion euros in equities, warrants and exchange-traded funds, as well as 8.2 billion euros in fixed-income securities.
Source: Deutsche Börse
One New UBS ETF Launched on Xetra
The new UBS ETF is aimed primarily at institutional investors. It offers them an opportunity to track the performance of the MSCI Japan index. This benchmark tracks the performance of Japanese companies and is based on free-float market capitalization.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 542 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around 11 billion euros, makes Xetra Europe’s leading trading venue for ETFs. Deutsche Börse Launches Bonds Trading on Xetra
Three brokerage firms fulfill the criteria to act as bonds trading Specialists: Close Brothers Seydler Bank AG, ICF Kursmakler AG and Wolfgang Steubing AG will be responsible for trading in the 700 or so selected corporate bonds on Xetra.
The launch of bonds trading on this pan-European trading platform is yet another milestone in Deutsche Börse’s European growth strategy. Boerse Stuttgart set to join Federation of European Securities Exchanges (FESE)
Within Europe, Boerse Stuttgart established itself some years ago as the market leader in exchange-based trading of structured securities. Last year, with a view to expanding this position, it took over the Swedish stock exchange Nordic Growth Market NGM AB. Currently, Boerse Stuttgart already derives some twenty percent of its order flow in European countries outside Germany making it the tenth biggest FESE member by total trading in all securities classes, ahead of stock exchanges such as Athens, Warsaw and Vienna.
FESE represents 42 stock exchanges from all EU Member States as well as Iceland, Norway and Switzerland. Through its members’ activities on a global scale, FESE enjoys links with the regulatory community and industry from around the world. FESE’s overarching objectives are to foster the global competitiveness of European exchanges, promote public recognition of the exchanges and their contribution to the European and global economy, and to provide a forum for an open and forward-looking debate on capital markets. Boerse Stuttgart records trading volumes of EUR 7.3 billion in November The strong growth in investment fund trading was mainly driven by exchange-traded funds (ETFs), which accounted for some EUR 337 million of the turnover, up by more than 60 percent in comparison with the same month in 2008. “Within just a few years ETFs have become the top performing investment fund category at the Stuttgart stock exchange. We have responded to this development with our new trading segment, ETF Bestx, further improving the terms for trading by private investors and offering the best tradable prices in the whole of Germany,” said Oliver Hans, Managing Director of Baden-Wuerttembergische Wertpapierboerse.
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FRC launches proposed reforms to the UK Corporate Governance Code
“The principal lesson of the financial crisis is that those on boards must think deeply about their individual and collective roles and responsibilities. The chairman has a vital role to play in ensuring that the executives have appropriate freedom to manage the business but also accept the importance of opening themselves to challenge and earning the trust of the whole board. For their part, the non-executives must have the skills, experience and courage to provide such challenge.
“We have also seen that, in order for UK corporate governance to be strong, boards must embrace the spirit of the code and shareholders must play their part. The Code is made up of strong principles that require careful thought and application to the circumstances of each company. The Code is not a set of rules to be applied unthinkingly. It demands that boards seriously and self-critically assess their performance and openly explain themselves to shareholders. And their assessments must be considered equally seriously by major shareholders if the board’s efforts are to be sustained. The FRC therefore welcomes the Government’s request that it takes on the stewardship of the new code on the responsibilities of institutional shareholders.
“The FRC has not found evidence of serious failings in the governance of British business outside the banking sector. However, the proposed changes to the Code are in our view sensible improvements that would benefit governance in all major businesses. They are therefore commended for widespread adoption through the Code.”
2009 Review of the Combined Code: Final Report Consultation on the Revised UK Corporate Governance Code Pensions Regulator asks trustees to focus on managing scheme risk
The new guidance aims to ensure that trustees, especially of smaller schemes, have the tools to perform their critical role in protecting pensions, particularly in the current economic climate.
The implementation of robust internal controls is a legal requirement for trustees and the failure to put processes in place can result in scheme members being exposed to the risks associated with poor record-keeping, inappropriate investment allocation and conflicts of interest in trustee boards. Information for trustees about good governance and administration
December 1, 2009--Since Tuesday, one more new exchange-traded index fund from the issuer UBS ETF SICAV has been tradable on Xetra.
ETF name: UBS-ETF MSCI Japan I
Asset class: Equity index ETF
ISIN: LU0258212462
Management fee: 0.3 percent
Distribution policy: distributing
Benchmark: MSCI Japan index
Source: Deutsche Börse
Specialists to provide liquidity for around 700 corporate bonds/ Investors will benefit from top price quality and commission-free trading for all order sizes
December 1, 2009--On 1 December, Deutsche Börse launched the “Continuous Auction with Specialists” trading model for trading of bonds on Xetra®. Initially around 700 corporate bonds denominated in Euros listed on FWB® Frankfurt Stock Exchange’s Regulated and Open Markets will be tradable in this new model on Xetra. Other types of bonds are to be included gradually.
The model combines the advantages of trading with the support of Specialists and those of fully electronic trading on Xetra. The model allows these Specialists to provide for tradability and high price quality even for small order sizes. With this new trading model, private investors and small to medium-sized institutional investors will benefit not only from the high execution quality in on-exchange bonds trading with continuous quote presence and near-time execution by the Specialists, but particularly since there is no commission fee in the specialist model.
Source: Deutsche Börse
Tenth biggest FESE member by total trading in all securities classes
December 1, 2009--Following a unanimous decision by the General Assembly of the Federation of European Securities Exchanges held in Brussels on 1 December 2009, Boerse Stuttgart, Europe’s leading exchange for investment and leverage certificates, will become a member of the FESE on 1 January 2010.
“In recent years, we have seen a tremendous rise in the impact of European legislation such as the Financial Markets Directive (MiFID), so it is very important that we represent our interests at a European level along with other stock exchanges. Boerse Stuttgart would like to use its membership of the Federation as a way of making an active contribution to the debate on the future development of the financial markets,” said Christoph Lammersdorf, Chairman of the Management Board of Boerse Stuttgart Holding GmbH.
Source: Boerse Stuttgart
Big increase in reverse convertibles / volumes in ETF trading continue to grow / turnover in investment products above previous year's level
December 1, 2009--In November 2009 Boerse Stuttgart’s order book statistics showed a trading volume of EUR 7.3 billion, a 15 percent decline compared with October.
In a year-on-year comparison volumes were down by 10 percent. Investment fund trading at the Stuttgart stock exchange proved to be robust with volumes up by 52 percent to EUR 414 million in comparison with November 2008 and by 7 percent compared with the previous month. Trading in reverse convertibles, accounting for 144 million, was also up sharply. In these products Boerse Stuttgart recorded a growth of 18 percent as compared with October and as much as 788 percent compared with November 2008.
Source: Boerse Stuttgart
December 1, 2009--The FRC has today launched a consultation on its proposals to reform the UK’s Corporate Governance Code (formerly the Combined Code). The Code has been revised regularly to ensure it reflects changing governance concerns and practices and economic circumstances. The latest proposals take into account those lessons of the recent financial crisis that are relevant to all companies.
Sir Christopher Hogg, Chairman of the FRC, has led the latest review. He said:
Source: Financial Reporting Company
December 1, 2009-Aimed at focusing greater attention on risks facing pension scheme members, the Pensions Regulator has today published revised internal controls guidance for consultation, alongside new 'bite-sized' e-learning modules which provide an overview of the topic.
This forms a vital part of the current regulator campaign focused on improving standards in scheme governance and administration.
Source: Pension Regulator