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EDHEC-Risk study highlights the need to reform retirement systems and corporate pension funds
MAy 3, 2012--A new EDHEC-Risk Institute study entitled "Shifting Towards Hybrid Pension Systems: A European Perspective," made possible with the support of AXA Investment Managers, highlights the need to reform retirement systems and pension funds, as well as the need to adopt professional management structures and to considerably improve the product offering of defined-contribution (DC) funds.
Among the key prescriptions of the study:
In DC plans, primarily in the US and the UK, employees bear all the financial risk and no guarantees are offered by the sponsor or by prudential regulation. However, the lack of guarantees and transparency could lead to a problem of trust – it is thus important that some guarantees are offered in DC funds and that their costs are clearly explained in order to avoid creating a biased risk/return illusion. These changes would help to avoid future disappointment amongst employees, who would reduce their participation in such retirement systems and potentially question their perception of their overall remuneration.
• Participants are first and foremost exposed to inflation risk and longevity risk, and DC funds need to adopt an asset-liability management strategy in the manner that defined-benefit (DB) funds do. Today, DC funds are under-diversified and they need to stop solely investing in equities and government bonds, thus observing the first principle of modern portfolio theory. Such a diversification of asset classes should allow them to invest in illiquid assets in order to benefit from their risk premium over the long term. The long-term choice also means that it is necessary to adopt professional risk management practices, because when the investment horizon, liabilities and eventual guarantees are taken into account, such (dynamic) risk management strategies need to be put in place.
view the EDHEC-Risk Publication Shifting Towards Hybrid Pension Systems: A European Perspective
Fundamental review of trading book capital requirements: consultation by the Basel Committee
May 3, 2012--The Basel Committee on Banking Supervision today issued a consultative document on the fundamental review of trading book capital requirements. These proposals will strengthen capital standards for market risk, and thereby contribute to a more resilient banking sector.
In July 2009, the Committee issued revisions to the market risk framework as part of the "Basel 2.5" package. These revisions substantially increased capital requirements for trading activities, particularly for securitisations and structured credit products, recognising the substantial losses incurred by banks during the financial crisis.
However, Basel 2.5 largely built on the existing regulatory definitions and framework. At the same time, the Committee commenced a fundamental review of trading book capital requirements. Its intent has been to comprehensively evaluate the overall design of the market risk regulatory regime as well as weaknesses in risk measurement under the framework's internal models-based and standardised approaches.
view the Fundamental review of the trading book - consultative document
ARC on FTSE controversy: should indices be free goods?
May 3, 2012--In recent weeks the trade press has seen a lively debate on the issue of index licence charges, sparked off by the FTSE Group approaching a number of small and medium sized wealth managers for payment in relation to the use of FTSE indices on client valuations and marketing documentation.
The terms of use are clear – all FTSE index data is for information and personal use only. But is it fair for a leading player in the financial market index oligopoly to charge wealth management firms for quoting performance numbers that are freely available and ubiquitous?
Two new ETFs launched on the ISE
USD listed on the Istanbul Stock Exchange
May 3, 2012-Finansbank launched two new Exchange Traded Funds on the Istanbul Stock Exchange: DOLAR and GUMUS. DOLAR, Turkey's the first currency ETF, offers the performance of the USD/TRY exchange rate performance to investors. With DOLAR, investors are now able to trade the USD/TRY exchange rate on the Istanbul Stock Exchange with a narrow spread.
Institutional investors are now eligible to trade USD/TRY as DOLAR ETF converts a money market instrument into a capital market instrument. Furthermore, investors do not have to wait until T+2 to convert their equity exposure to USD and/or their USD exposure to equities.
GMSTR - Turkey's first Silver ETF
Finansbank, the first issuer of the Istanbul GOLD ETF on the Istanbul Stock Exchange, has listed GUMUS, the first silver ETF. GUMUS invests in physical silver with more than 99% of its assets in silver. Physical silver in the GUMUS portfolio meets international standards and is held at the Istanbul Gold Exchange on behalf of the fund. GUMUS is traded in Turkish Lira, but tracks the performance of international ounce price of silver; therefore, investors seeking silver exposure do not carry any currency risk.
BNKTR was the worst performing ETF in April
BNKTR, which tracks the Turkey Large-Cap Banks Index consisting of the six bank equities with the highest market capitalization, declined by 6.33% in TRY terms due to investors' decreasing risk appetite (in US$ terms BNKTR declined by 5.04%) and underperformed the ISE-30 Index (which had a 5.11% negative return), yet outperformed the XBANK index (with a 7.35% negative return). With this month’s decline in Ytd returns, the ETF has lost its leading position, yet the ETF has still posted a relatively strong performance so far this year, with a 16.50% gain.
FBIST yielded 0.81% last month
FBIST, the first fixed income ETF in Turkey and Developing Europe, yielded a 0.81% return in April and became one of three ETFs to yield a positive return. On the other hand, the ETF only mustered up a single digit yield in Ytd terms (5.80%).
db x-trackers bond index ETFs on euro zone and German government bonds launched on Xetra
May 3, 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 Thursday.
ETF name: db x-trackers II Eurozone Sovereigns Double Long Daily ETF
Asset class: bond index ETF
ISIN: LU0621755080
Total expense ratio: 0.30 percent
Distribution policy: non-distributing
Benchmark: Deutsche Bank Eurozone Sovereigns Double Long Daily Index
ETF name: db x-trackers II Eurozone Sovereigns Double Short Daily ETF
Asset class: bond index ETF
ISIN: LU0621755676
Total expense ratio: 0.30 percent
Distribution policy: non-distributing
Benchmark: Deutsche Bank Eurozone Sovereigns Double Short Daily Index
ETF name: db x-trackers II iBoxx € Germany 7-10 TRI ETF
Asset class: bond index ETF
ISIN: LU0730820569
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: iBoxx € Germany 7-10 Index
The db x-trackers II Eurozone Sovereigns Double Long Daily ETF and db x-trackers II Eurozone Sovereigns Double Short Daily ETF enable investors for the first time to participate with a leverage factor of two in the positive or inverse performance of government bonds issued by euro zone countries.
The db x-trackers II iBoxx € Germany 7-10 TRI ETF offers investors access to the government bond market of the Federal Republic of Germany with the opportunity to react to interest rate expectations within the maturities of seven to ten years.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 968 exchange-listed index funds, while the average monthly trading volume stands at €12 billion.
STOXX Monthly Index Report -April 2012 In Review
As of April 30, 2012 stock market indices in Europe, Asia, the U.S. and globally were up as well as down in April, according to global index provider STOXX Limited.
For the month of March, the Europe, Asia, global markets were down -1.88%, -2.08% and -0.48%, respectively; while the U.S. markets were up 0.47%. The full performance report is below.
Average daily volume of 10.9 million contracts at Eurex Group in April
May 2, 2012-- In April 2012, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.9 million contracts (April 2011: 10.5 million).
Of those, 8.3 million were Eurex Exchange contracts (April 2011: 7.6 million), and 2.6 million contracts (April 2011: 2.9 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 156.9 million contracts were traded at Eurex Exchange and 52.0 million at ISE. This makes April the best month in terms of trading volumes in 2012.
Eurex Exchange traded 64.6 million equity index derivatives contracts (April 2011: 49.9 million). The single largest contract was the future on the EURO STOXX 50® Index with 26.1 million contracts. The option on this blue chip index totaled 25.1 million contracts. Futures on the DAX index recorded 3.0 million contracts while the DAX options reached another 4.2 million contracts. The Eurex KOSPI Product recorded 3.0 million contracts, an ADV of 157,000 contracts.
Trading turnovers in April-95 billion euros turnover on Xetra
May 2, 2012--Order book turnover on Xetra and the Xetra Frankfurt specialist trading stood at €99.2 billion in April-a decrease by 8 percent year-on-year (April 2011: €108.3 billion).
Of the €99.2 billion, €94.6 billion were attributable to Xetra – a decrease by 8 percent y-o-y (April 2011: €102.6 billion). €4.6 billion were attributable to the Xetra Frankfurt specialist trading, an 18 percent decrease y-o-y (April 2011: €5.6 billion). Order book turnover on Tradegate Exchange* totalled approximately €2.7 billion in April.
In equities, turnover reached €84.2 billion on Deutsche Börse’s cash markets (Xetra: €82.3 billion, Xetra Frankfurt specialist trading: €1.9 billion). Turnover in bonds was €1.5 billion, and in structured products on Scoach €1.6 billion. Order book turnover in mutual funds and exchange-traded funds (ETFs) amounted to €11.9 billion.
A total of 17.2 million transactions were executed on Xetra in April, an increase of 11 percent y-o-y (April 2011: 15.5 million).
EEX launches Derivatives Market for EUAA and ERU-CF Partners new Liquidity Provider
May 2, 2012--On 30 April 2012, the European Energy Exchange (EEX) launched the Derivatives Market for EU Aviation Allowances (EUAA). Thus, EEX expands its product range with emission allowances which can be used by airlines for compliance purposes.
In parallel, trading in futures on Emission Reduction Units (ERU) was launched on Monday. The first trading transaction (25,000 ERU at a price of EUR 3.64 per ERU) was concluded today between ČEZ and Citi.
With the introduction of the new products, EEX has also gained a new Liquidity Provider. CF Partners will support liquidity on the market for EUA Futures (first three front years), CER Futures (first two front years) and EUAA Futures (first two front years). CF Partners is an advisory, trading and investment firm specialising in renewables, commodities and the energy market.
On the occasion of the first trading day of "U.S. Treasury USDTRY Exchange Traded Fund" which, is founded by Finans Asset Management, the executives and guests of the relevant company will visit İMKB (İstanbul Menkul Kıymetler Borsası)
and ring the opening bell
May 2, 2012--On the occasion of the first trading day of U.S. Treasury USDTRY Exchange Traded Fund, which is founded by Finans Asset Management, the executives and guests of the relevant company will visit ÌMKB (Ìstanbul Menkul Kıymetler Borsası) and ring the opening bell of the Stock Market on May 2, 2012.
Mr. İbrahim TURHAN, İMKB Chairman & CEO, Mr. Ömer A. ARAS, Chairman and Group CEO of Finansbank A.Ş, Mr. C. Özgur GÜNERİ, CEO of Finans Asset Management and Mr. Zafer ONAT CEO of Finansinvest A.Ş. will deliver speeches, following which the officials will ring the opening bell and start the session at 09:30.
The participation certificates of “U.S. Treasury USDTRY Exchange Traded Fund” will start to be traded on the İMKB Collective Products Market under the ticker symbol “USDTR” and the ceremony will be open to the press.
