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German High-Frequency Bill to Affect Hedge Funds, Official Says
September 25, 2012--Chancellor Angela Merkel's Cabinet will vote on a bill tomorrow that limits high-frequency trading even for market participants outside Germany and requires automated orders to be marked as such, a government official said.
High-frequency traders will have to seek authorization and will be supervised under the legislation proposal, the official told reporters in Berlin today on condition of anonymity because the bill has not yet been published. High-frequency trade will be curbed and market abuse will be punished, he said in Berlin.
MEPs' MiFID text proposes maker-taker ban
September 25, 2012--The European Parliament's version of MiFID II could ban maker-taker tariffs as well as imposing a widely-expected crackdown on high-frequency trading, according documents seen by theTRADEnews.com.
A version of the directive and its attendant regulation proposed by rapporteur Markus Ferber MEP to the Parliament’s Economic and Monetary Affairs Committee (ECON) will be voted on by the committee this Wednesday. It will then be voted on by all MEPs next month.
The document seen seeks to outlaw the use of rebate pricing structures, stating, “an investment firm shall not receive any remuneration, discount or non-monetary benefit for routing orders to a particular trading venue or execution venue”.
EEX wants futures contracts for green power trading
EEX presents five possible new contracts for discussion
Wind, solar and hydroelectric power to be traded
No details of further timing, decision-making
September 24, 2012--The European Energy Exchange
(EEX) said on Monday it aims to introduce futures contracts to
allow investors to trade wind, hydroelectric and solar-derived
power in Europe.
German-based EEX has been looking at ways to capture opportunities in the fast-growing green energy sector. Its
proposals envisage five power futures contracts, tradeable up to
the three years in advance, the exchange said in a note issued
after a meeting of its supervisory council.
Investors force radical reshaping
September 23, 2012--The eurozone's investment industry has been radically reshaped in the past decade, with the proportion of funds owned by retail investors almost halving.
Direct ownership by private investors accounted for just 27.2 per cent of the €4.6tn industry last year, down from 49.1 per cent in 2001, according to figures from the European Fund and Asset Management Association.
British budget deficit swells to August record
September 21, 2012--Britain's budget deficit widened to the biggest on record for any August, data showed on Friday, a day after the central bank governor said overshooting budget targets may now be acceptable.
The government said a weak economy pushed down corporation tax receipts and drove up benefit payments. As a result, public sector net borrowing excluding financial sector interventions - the government's preferred measure - rose last month to 14.410 billion pounds from 14.365 billion in August 2011. That was the highest for any August since records began in January 1993, although slightly below economists' forecast in a Reuters poll for 15.0 billion pounds.
Turkey embraces Islamic finance with sovereign sukuk
September 20, 2012--Turkey's issue of its first sovereign sukuk this week paves the way for Turkish companies to raise money through Islamic bonds, and may help the country become a major market for Islamic investors from the Gulf and Southeast Asia.
After coming to power a decade ago, Prime Minister Tayyip Erdogan's government, which espouses Islamic values, largely shied away from Islamic finance for fear of opening itself to charges that it was trying to roll back state secularism. This prevented the world's eighth most populous Muslim nation from participating fully in rapid growth of the industry. Islamic financial assets globally hit $1.3 trillion in 2011, a 150 percent increase over five years, according to an estimate by lobby group TheCityUK's UK Islamic Finance Secretariat.
Quantitative impact study results published by the Basel Committee
September 20, 2012--The Basel Committee published today the results of its Basel III monitoring exercise.
The study is based on rigorous reporting processes set up by the Committee to periodically review the implications of the Basel III standards for financial markets; the first results of the exercise based on June 2011 data had been published in April 2012. A total of 209 banks participated in the study, including 102 Group 1 banks (ie those that have Tier 1 capital in excess of €3 billion and are internationally active) and 107 Group 2 banks (ie all other banks).
While the Basel III framework sets out transitional arrangements to implement the new standards, the monitoring exercise results assume full implementation of the final Basel III package based on data as of 31 December 2011 (ie they do not take account of the transitional arrangements such as the phase in of deductions). No assumptions were made about bank profitability or behavioural responses, such as changes in bank capital or balance sheet composition. For that reason the results of the study are not comparable to industry estimates.
view the Results of the Basel III monitoring exercise as of 31 December 2011
Eurozone business activity gloomiest in three years
September 20, 2012--Eurozone private sector business activity declined for an eighth straight month in September, hitting its gloomiest patch in three years as French activity plunged, a survey showed Thursday.
The closely-watched Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm and a key forward-looking indicator, came in at 45.9 points, down from 46.3 in July.
Any reading below 50 indicates contraction in activity.
Taken together with previous months the data suggested "the worst quarter for three years," Chris Williamson, Markit chief economist said in a statement.
He tipped a 0.6 percent contraction in gross domestic product for the quarter, which would confirm a return to recession.
DB-Global Equity Index and ETF Research-Weekly European ETF Market Monitor: European equity ETFs continue to attract strong interest
September 19, 2012--European broad equity benchmarked ETFs continue to attract strong interest
Equity ETFs: A market rally draws investors
Global ETF cash flow patterns for the week that finished on September 14th signal an improvement in equity market sentiment. US domiciled ETFs received €14.2 billion of inflows, while European domiciled ETFs received inflows of €1.4 billion. Equity ETFs received the lion’s share on both sides of the Atlantic, with US domiciled ETFs receiving over 90% ($12.8 billion) of inflows, while European domiciled ETFs received comparable interest (79%, €1.1 billion).
In Europe, European developed markets (DM) diversified equity benchmarks received 75% of the week’s total equity ETF cash flows (€829.5 million). This is a continuation of a trend we have noted in our August monthly report published on September 13th and titled Quest for yield: Dividends and corporate bond credit at the forefront . During August diversified European DM equity benchmarks received inflows of €702 million. YTD, ETFs that are benchmarked to European DM diversified indices have received €1.8 billion.
Last week’s European equity cash flows were strongly tilted towards EuroStoxx50 benchmarked ETFs (€493 million), while Stoxx 600 (€194 million) and MSCI Europe (€127 million) also received healthy interest. On the outflows front, DAX benchmarked ETFs continued to experience negative pressure and registered €149 million of outflows, bringing their YTD outflows to over a billion (€1.1 billion).
The European broad equity benchmarked ETF flow gains come on the back of positive market gains over the past week. The EuroStoxx 50 is up 15.7% YTD, up 5.0% in August and up 2.2% over the week that finished on September 14th. The STOXX 600 and the MSCI Europe indices have seen similar gains.
Fixed Income ETFs
Fixed income ETFs received €260 million of net inflows over the past week, the majority of which (€303 million) went to corporate bond benchmarked ETFs. High yield continued its run and attracted €176 million while investment grade benchmarked corporate ETFs received €127 million. US domiciled fixed income ETFs also received healthy flows totalling $1.4 billion.
Commodity ETPs
European domiciled commodity ETPs received €348 million for the week, with Gold ETPs gaining the lion’s share €251 million. This brings YTD gold inflows to €3.9 billion, making by far the most popular commodity with ETP investors. The price of gold ($/oz) rose by 2.1% over the past week, while it is up 12.5% YTD.
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Deutsche Boerse, Unscheduled component change made to SDAX
Schuler AG to be replaced by SMT Scharf AG on September 24, 2012
September 19, 2012--Deutsche Börse today announced an unscheduled component change to the SDAX.
Schuler AG will be replaced by SMT Scharf AG in the index. Due to the takeover of Schuler AG by Andritz Beteiligungsgesellschaft, the company’s free float has dropped below 10 percent, making it ineligible for inclusion in the index.
The adjustment will become effective on 24 September 2012.
The next regular review of the Deutsche Börse equity indices is scheduled for 5 December 2012.
