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DB Index Research -- Weekly ETF Reports -- Europe
January 28, 2010--Highlights
ETF Volume
Exchange based Equity ETF turnover rose by 3% on the previous week. Daily turnover for the previous week was E1.1bn. European fixed income ETF turnover declined by 2.5% to E202.2m.
In exchange based bond ETFs, db x-trackers II EONIA TR Index ETF has the highest daily turnover of E18.31m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E55.00m.
There were 17 new listings last week. Blackrock Fund Advisors issued ten new ETFs on Borsa Italiana followed by Lyxor which issued four new ETFs on NYSE Euronext Paris. Comstage issued two new ETFs on Deutche Borse and UBS launched one new ETF on Swiss Stock Exchange. All the new listings were primary listings except those issued by Blackrock Fund Advisors.
European Regional ETFs remained at the top position as leading product area with total turnover of E329m with 29.81% of total ETF turnover followed by Style ETFs with total turnover of E260m accounting for 23.56% of total ETF turnover. The DAX ETFs remain the dominant country products with total average daily volume of E126m across the fourteen listed products and accounting for 11.4% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 14.6% of turnover trading E161m 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 37.0% of total turnover. The Euronext NextTrack platform has 17.4% market share. The LSE’s combined Italian Exchange and London market share is now 28.5%.
Assets under Management (AUM)
Total European Equity related AUM declined by 4.1% to E111bn during last week. AUM for DJ Euro STOXX 50 ETFs was E21.8bn accounting for 19.6% of total European AUM. Fixed Income ETF AUM declined by 2.9% to E36.7bn.
Overall, the largest ETF by AUM was Lyxor ETF DJ Euro STOXX 50, an Equity based ETF, with AUM of E4.9bn. The largest Fixed Income ETF by AUM was the iShares € Corporate Bond with AUM of E3.3bn.
To request a copy of the report
Source: Aram Flores and Shan Lan -DB Index Research
FTSE Expands in Europe with new Milan Office
January 28, 2010--FTSE Group (“FTSE”), the award winning global index provider, today announces that it has opened a sales office in Milan in order to provide dedicated support to investors in Italy.
The office, located in Milan’s financial centre, will be headed by Sales Manager Andrea Beretta. Andrea’s remit is to work closely with local market participants to ensure that FTSE products and services continue to meet the needs of both Italian investors as well as international investors seeking exposure to Italy.
Mark Makepeace, Chief Executive, FTSE Group said, “This is an important step for FTSE as we continue to expand our presence in key investment markets around the world. We look forward to continuing to collaborate with both Borsa Italiana and Italian market participants.
As an independent and internationally recognised index provider, FTSE is uniquely positioned to work with local markets and deliver world-class index solutions. In 2009, FTSE was selected by Borsa Italiana as its preferred index provider, and assumed responsibility for its blue chip index, now known as FTSE MIB. FTSE has also designed and introduced an integrated set of new indices, the FTSE Italia Index Series, calculated in line with international standards, covering a range of segments and sectors and distributed globally on a real-time and end of day basis.
Source: FTSE
Social impact of the crisis: sweeping reforms needed
January 28, 2010--"If 'well-digested intellectually', the economic crisis can perhaps create opportunities for re-launching the market integration process in Europe", President of Milan's Bocconi University and former EU Commissioner Mario Monti told the Special Committee on Financial, Economic and Social Crisis at a public hearing on Thursday.
Setting the scene at the Special Committee's public hearing on Social Impact of the Crisis, Mr Monti sought to put the social dimension of the crisis in the context of market integration in Europe, which should, in his view, continue and be made more compatible with the Lisbon Treaty.
"We shouldn't be afraid to open the question of harmonisation of social and taxation policies, because no issue should be taboo", said Mr Monti. "Exit from the crisis requires this fresh look", but not "the abandonment of competition strategies", he added.
Special Committee rapporteur Pervenche Berès (S&D, FR), said she had "greater expectations" of Mr Monti and invited him to go "much further" on the fiscal issue.
Unemployment
The situation in Europe is "appalling, with unemployment reaching more than 10% in some countries", said Special Committee Chair Wolf Klinz (ALDE, DE). "Public funds can't really cope with it," he declared. Mr Klinz called for "long-term reforms, which would allow Europe to keep its competitiveness, strengthen the internal market and ensure it realises its full potential."
The crisis will have a "persistent impact" on individuals, those entering the labour market and their earning potential, said Sir Tony Atkinson, Professor at the universities of Cambridge and Harvard. The EU should "seriously think" about guaranteeing a "minimal income for children" as an investment for the future. This would be a clear signal the EU wants to develop its social dimension, he said in reply to a question from Kinga Göncz (S&D, HU), about policy proposals to improve the situation.
International Labour Organisation estimates suggest there will be 3 million more unemployed people this year and it will be 2013 before the EU reaches the pre-crisis level of employment, said Alice Ouedraogol, Deputy Director Policy Integration Department, ILO. On the other hand, 11 million jobs have been saved "thanks to the social package" implemented by the G20 states, she continued, warning that "we can't afford to drop the social welfare state measures just because we think that we are getting out of the crisis".
Pensions
The "fiscal costs of population aging are about ten times higher than fiscal costs of the crisis," stressed Edward Whitehouse, Principal Economist at the OECD. "No country and no pension system are immune," he said, warning against the risk that some counties might reverse pension reform. The way forward is to diversify pension systems, he added..
To Othmar Karas (EPP, DE), who asked what could be done to make the system comparable across the EU, Mr Whitehouse replied that one "fundamental obstacle" to a pan-European pension scheme model is the fact that pensions are provided differently across the EU. Other obstacles are "taxation, regulation and supervision."
Mr Vit Samek, former special advisor to Commissioner Špidla on pension systems and Vice-President of Czech-Moravian Confederation of Trade Unions, pointed to "huge differences" between so-called "old" and "new" EU Member States in sources of pension income, with the new ones relying far more heavily on public transfers. After outlining various strategies to cope with population ageing and risks for pension funds he concluded that "the best solution is to have not only more children, but many more children, in Europe."
Next Steps
Experts' findings and observations will serve as input for further discussion among MEPs and the final report by Special Committee rapporteur Pervenche Berès. The draft should be unveiled on 29 April, to allow time for amendments before the final report is adopted in Committee on 13 July. The CRIS report than will be put to a vote by Parliament as a whole at the September II Plenary session.
Replying to Elisa Ferreira (S&D, PT), who asked about social development co-operation among international organisations, Ms Ouedraogol observed that the crisis had brought at least one benefit as it led to more intensive co-operation between ILO, WTO, IMF, World Bank and other institutions.
Source: European Parliment
FSA outlines latest steps to address corporate governance at firms
January 28, 2010--The Financial Services Authority (FSA) has today issued a Consultation Paper (CP) on effective governance standards within firms.
As part of its supervisory enhancement programme, the FSA places greater emphasis on the role of senior management at firms.
Since adopting this approach in 2008, the FSA has carried out 332 significant influence functions (SIF) interviews, with 25 candidates withdrawing from the process.
The FSA has issued a number of publications in this area, including a ‘Dear CEO’ letter in October 2009, which clarified its approach to approving and supervising persons performing SIFs. This CP explains this more intensive process in greater detail, but also makes clear that the intention is not to deter strong candidates from pursuing senior roles in firms.
Graeme Ashley-Fenn, FSA’s director of permissions, decisions and reporting, said:
"Our more intrusive approach continues to place a great deal of emphasis on governance and therefore the senior management at firms. This starts with a firm’s own due diligence. Our experience shows that once a firm gets its corporate governance right; with a strong and effective board, everything else flows from that."
Walker Review
The proposals implement the FSA-specific recommendations in Sir David Walker’s review of corporate governance published in November last year. Where appropriate, listed banks and insurers are now strongly encouraged to establish board risk committees and appoint top executives as chief risk officers.
Sally Dewar, managing director of the FSA’s risk business unit, said:
"We have been very clear about our more intensive supervisory approach of firms and individuals, and our renewed focus on the quality of governance. We were fully supportive of Sir David's recommendations and this CP sets out how we intend to deliver them through our ongoing supervisory work and authorisation processes."
Enhancing the SIF regime Underpinning this intrusive approach, today’s paper consults on extending the scope of the SIF regime and introduces a new, more detailed framework of controlled functions. These will make clearer the exact role an individual is performing within a firm and increases the FSA’s ability to vet and track individuals as they move role. The FSA is also extending the regime to capture more individuals from parent companies who exert significant influence upon a UK regulated firm.
The consultation period closes on 28 April 2010. The FSA hopes to have final rules in place during the third quarter of 2010.
View the consultation paper
Source: FSA
FSA extends scrutiny of bank executives
January 28, 2010--The Financial Services Authority is to extend its scrutiny of bank executives to those at overseas holding companies with “significant influence” over UK banks and brokers, as part of its efforts to tighten governance in the industry.
The City regulator said it also planned to “strongly encourage” banks to appoint board-level risk officers and establish board-level risk committees, as recommended by Sir David Walker in his review of bank governance last year.
Board members would also have to seek regulatory approval if they were to head risk, audit and remuneration committees under the proposals in the consultation paper, in a move that could make it easier for the FSA to hold individual directors to account.
read more
Source: FT.com
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
January 28, 2010--Confidence in Europe's economic future rose for a 10th successive month in January, despite data Thursday indicating a slowing of a fragile post-recession rebound.
The European Commission's economic sentiment indicator rose by 2.1 points to 97.1 points across the 27-nation European Union, and hit 95.7 points (up 1.6 points) in the 16 countries that share the euro currency.
The index is "now back at a level approaching its long-term average in both areas," a statement said.
read more
Source: EU Business
New Exchange Traded Funds (ETFs) on SIX Swiss Exchange
January 27, 2010--Six new products have been listed in the Exchanged Traded Funds segment of
SIX Swiss Exchange, taking the total to 318 ETFs. The new funds are:
Xmtch (IE) on Dow Jones EURO STOXX 50®
Xmtch (IE) on Dow Jones Industrial Average™
Xmtch (IE) on Nasdaq 100
Xmtch (IE) on FTSE 100
Xmtch (IE) on FTSE MIB
Xmtch (IE) on Nikkei 225
Credit Suisse will perform the market making for these funds.
Source: SIX Swiss Exchange
ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows week ending 22-Jan-10
January 27, 2010--Highlights
Last week saw US$173.7 Mn net inflows to DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Utilities with US$140.4 Mn and Oil & Gas with US$100.7 Mn while Banks experienced net outflows of US$63.5 Mn.
Year-to-date, Utilities has been the most popular sector with US$150.1 Mn net new assets, followed by Oil & Gas with US$114.8 Mn net inflows. Food & Beverage ETFs have been the least popular with US$90.4 Mn net outflows YTD
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in all 19 sectors.
Visit Blackrock for more information.
Source: ETF Research and Implementation Strategy Team, Blackrock
Dow to underlie ETF in Switzerland
January 27, 2010--The Dow Jones Industrial Average has been licensed to Credit Suisse to serve as underlying for an exchange-traded fund.
The Xmtch (IE) on Dow Jones Industrial Average is available at the SIX Swiss Exchange.
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Source: ETF Express
Climate Solutions ETF to list on LSE on 8 February
January 27, 2010--The ETF will track the Osmosis Climate Solutions Index, which was developed with the assistance of HSBC’s quantitative techniques business.
The index is a passive basket of global companies whose primary business is to create technologies, products and solutions that help the world move towards a more sustainable, low carbon economy.
The basket is reviewed and rebalanced every six months to maintain a diverse exposure to the global clean technology theme.
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Source: ETF Securities
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