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Social Stock Exchange to launch in London
September 14, 2012--A London-based Social Stock Exchange (SSE) aims for launch in the second quarter of 2013. It plans to partner with a Recognised Investment Exchange to create an investment exchange authorised and regulated by the Financial Services Authority (FSA) for trading in securities of social enterprises and other social purpose businesses.
The SSE team are building the trading platform, the pipeline of companies who wish to list, the market-maker and broker communities, and the community of impact investors and have offices in central London, UK.
The goal is to build a securities exchange that lists social businesses from around the world and attracts capital from individuals, private clients, family offices, foundations and institutional investors who are seeking both a financial and demonstrable social return. The target is to become the premier trading venue for social businesses wishing to raise risk capital and for social impact investors who wish to find global businesses that reflect their values.
Ucits sales hit massive slump in Q2
September 14, 2012--The sales of Ucits funds suffered a huge drop between the first and second quarters of 2012 as investors grew cautious due to the economic uncertainty in Europe, according to EFAMA.
According to industry body, which collates 97% of total Ucits and non-Ucits assets on a monthly basis, inflows into Ucits funds fell from €91 billion in the previous quarter to only €7 billion in Q2.
August 2012 Euro area annual inflation up to 2.6% EU up to 2.7%
September 14, 2012--Euro area1 annual inflation was 2.6% in August 2012, up from 2.4% in July2. A year earlier the rate was 2.5%. Monthly inflation was 0.4% in August 2012.
EU3 annual inflation was 2.7% in August 2012, up from 2.5% in July. A year earlier the rate was 3.0%. Monthly inflation was 0.4% in August 2012.
These figures come from Eurostat, the statistical office of the European Union.
Inflation in the EU Member States
In August 2012, the lowest annual rates were observed in Sweden (0.9%), Greece (1.2%) and Latvia (1.9%), and the highest in Hungary (6.0%), Cyprus (4.5%) and Estonia (4.2%). Compared with July 2012, annual inflation rose in twenty Member States, remained stable in two and fell in four.
The lowest 12-month averages4 up to August 2012 were registered in Sweden (1.0%), Ireland and Greece (both 1.8%), and the highest in Hungary (5.1%), Estonia (4.5%) and Slovakia (4.1%).
Euro area
The main components with the highest annual rates in August 2012 were transport (4.8%), alcohol & tobacco (4.5%) and housing (4.1%), while the lowest annual rates were observed for communications (-3.1%), recreation & culture (0.8%) and education (1.0%). Concerning the detailed sub-indices, fuels for transport (+0.38 percentage points), heating oil (+0.10), gas and electricity (+0.09 each) had the largest upward impacts on the headline rate, while telecommunications (-0.18), garments (-0.08) and rents (-0.07) had the biggest downward impacts.
Quality and accountability vital for banking supervision
September 13, 2012--The envisaged EU banking supervision rules must be of good quality and provide for accountability.
However the member states' current preferences for establishing them risk sending the wrong message, as well as perpetuating inefficiencies, warned the Parliament in a resolution voted on Thursday.
The resolution, adopted by a show of hands, comes a day after the Commission tabled two proposals to reinforce banking supervision. It sets out some of the key concerns that MEPs want to see addressed in decisions shaping the system.
At last! But a potentially problematic approach
The resolution welcomes the fact that EU countries have now accepted that an integrated bank supervision system is necessary, more than two years after the European Parliament itself called for this. However, it sounds the alarm about governments' apparent intention to avoid developing a system that is transparent and democratically accountable.
Lyxor gets physical in ETF--turn
September 13, 2012--Lyxor, a long-term champion of synthetic exchange-traded funds whose chairman has previously criticised providers of physical ETFs, will for the first time offer products that track indices through the ownership of listed securities.
Lyxor is one of Europe’s largest providers of swap-based synthetic ETFs but today confirmed it will launch its first batch of physical ETFs, which will initially focus on bonds, by the end of this year.
DB-Global Equity Index and ETF Research-European ETF Market Monthly Monitor:Quest for yield: Dividends and corporate bond credit at the forefront
September 13, 2012--ETFs drive the yield race in August
August brought continuation of trading volume decreases both with regards to cash equities and ETFs, but it also brought continuation of selective yield driven asset allocation themes.
As the year draws to an end, the quest for yield comes across clearly in ETF investment themes on both sides of the Atlantic. We have observed the following ETF asset allocation themes over the month of August:
European broad equity diversified bets on the rise, largely driven by equity price adjustments.
August proved to be strong with US dividend announcements and this helped drive flows towards US diversified equity indices.
ETFs benchmarked to emerging market diversified equity indices see a second round of interest, based on their relative yield attractiveness when compared to developed market broad indices.
US liquid high yield flows continue to soar on the back of attractive credit spreads.
Investment grade corporate bond flows have another strong month as low interest rate environments in the US and Europe plus relative credit strength make yields attractive.
We elaborate on this month’s ETF asset allocation themes in the ‘Defining ETF investment trends section’ on page 5.
Over August 2012, the European ETF industry delivered a solid overall cash flow performance with net new money totaling €2.5 billion, which are 24% higher – in USD terms - over those registered by US domiciled ETFs over the same period. The European industry is 3.7 times smaller than the US ETF industry. The US industry had its slower cash flow month this year gathering total flows of $2.5 billion. The health of August’s European ETF cash flows came on the back of strong July flows amounting to €2.6 billion.
Turnover activity remains suppressed both with regards to cash equities in general as well as ETFs. The turnover slump is prevalent both when comparing to the same month last year as well as to the prior month. European cash equities turnover for August is down 16% from July and 49% down from August 2011. European (on-exchange) ETF turnover for August is down 5% from the prior month and 59% from the same month last year. August 2011 was the strongest turnover month for that year, both for cash equities as well as ETFs.
But while the quantity – as measured by turnover volumes - might be thinner this month, we believe that the quality of the trades is there. European ETF industry August activity was characterized both by stronger equity cash flow performance as well as a continuation of fixed income flow themes. European investors allocated net inflows of $780 million into equity benchmarks, while US investors registered outflows of $2.3 billion over August. We consider this month to be a strong one because cash flow activity had directionality and size, as well as consistency when compared to what we have observed in prior months.
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ESMA publishes a Q&A on Short-Selling Regulation
September 13, 2012--The European Securities and Markets Authority (ESMA) has published a Q&A on the Implementation of the Regulation on short selling and certain aspects of credit default swaps.
The purpose of the Q&A is to promote common supervisory approaches and practices amongst the EU’s national securities markets regulators on the requirements of the Short Selling Regulation once it comes into force on 1 November 2012. It will also provide clarity on the requirements of the new regime to market participants and investors.
Issues addressed by the Q&A
The document provides responses to questions posed by market participants, national securities markets regulators, and the general public in relation to the practical application of the forthcoming Short Selling regime.
It addresses issues related to:
territorial scope;
transparency requirements;
calculation of net short positions;
uncovered short sales;
Ferber Promises to Slow HFT Down and Banish Broker Crossing Networks with MiFID II
September 13, 2012--All high-frequency traders and broker-dealers should look away now.
Markus Ferber, the German center-right MEP tasked with guiding the revised Markets in Financial Instruments Directive (MiFID II) through the European parliament, today told Markets Media that new rules will be put in place to slow down high-frequency trading and that there will be no place for broker crossing networks in this post-MiFID II landscape.
Ferber, who is also a member of the Economics and Monetary Affairs Committee (Econ), said that Econ will be ready in two weeks to finally vote on MiFID II. Over 2,000 amendments postponed the original vote on MiFID II in July, which promises a huge shift in the way financial markets operate in Europe and will, according to Ferber, “close the loopholes” of the 2007 original.
Relief as German court clears euro rescue fund, fiscal pact
September 13, 2012-- The eurozone took a major step Wednesday towards solving its debt crisis as Germany's top court cleared a new bailout pot, a ruling Angela Merkel hailed as a "good day for Europe".
In a landmark ruling watched around the world, the Constitutional Court dismissed a raft of legal challenges aimed at preventing German President Joachim Gauck from signing two crucial crisis-fighting tools into law.
db x-trackers bond index ETFs on Italian government bonds launched on Xetra
September 12, 2012--Three new exchange traded funds issued by db X-trackers II, a subsidiary of Deutsche Bank, have been tradable in the XTF segment on Xetra since Wednesday.
ETF name: db x-trackers II MTS Ex-Bank of Italy BTP ETF
Asset class: bond index ETF
ISIN: LU0613540185
Total expense ratio: 0.20 percent
Distribution policy: non-distributing
Benchmark: MTS Italy BTP - Ex-Bank of Italy Index
ETF name: db x-trackers II MTS Ex-Bank of Italy BOT ETF
Asset class: bond index ETF
ISIN: LU0613540268
Total expense ratio: 0.15 percent
Distribution policy: non-distributing
Benchmark: MTS Italy BOT – Ex-Bank of Italy Index
ETF name: db x-trackers II MTS Ex-Bank of Italy Aggregate ETF
Asset class: bond index ETF
ISIN: LU0613540698
Total expense ratio: 0.20 percent
Distribution policy: distributing
Benchmark: MTS Italy Aggregate - Ex-Bank of Italy Index
