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DB - Equity Research-Weekly European ETF Market Monitor : Euro Stoxx 50 inflows make a come-back this week
July 11, 2012--Equity ETFs: Euro Stoxx 50 inflows make a come-back
The first week of July delivered healthy inflows of €1.5 billion making it the 3rd best cash flow week for the European ETP industry this year. Flows were directional and diversified across equity, fixed income and commodities, thus reflecting improved market sentiment. ETFs were the largest beneficiary with €1.4 billion of inflows.
Equities received €787 million of inflows, primarily channeled towards developed market (DM) equity diversified indices (€700 million). Most of the inflows into equity diversified indices were received by Euro Stoxx 50 benchmarked ETFs (€410 million).
This week’s inflows into DM diversified equity indexed ETFs solidified their gains into positive territory for 2012. YTD diversified DM equity benchmarked ETFs received €864 million of inflows while the Euro Stoxx 50 YTD flows are still well in negative teritorry, totalling €1.2 billion of outflows. The US S&P 500 and MSCI Europe are the two largest YTD diversified DM equity benmarked ETF beneficiaries with inflows of €645 and €691 million respectively. Germany’s DAX benchmarked ETFs continued to experience outflows this week (-€122 million) bringing their YTD outflows to €375 million.
Fixed income ETFs: Positive week across the board
Fixed income ETFs saw another good flows week with inflows totalling €568 million, bringing their YTD inflows to €3.2 billion. YTD fixed income ETF inflows continue to come in at healthy levels and they now outweigh those of equity ETFs by 1.6x times, eventhough fixed income comprises 21% of the European ETF market, while the comparable number for equity benchmarked ETFs is at 67%.
The biggest fixed income beneficiary this week was again corporate bond benchmarked ETFs, receiving inflows of €248, bringing their YTD inflows up to €3.3 billion. Corporate benchmarked ETF inflows remain this year’s biggest trend across all asset classes in Europe.
Commodity ETPs: Marginal gold inflows
Commodity ETPs netted inflows of €106 million this week, primarily driven by inflows into gold benchmarked ETPs totalling €145 million. These gold flows are at comparable levels as those of the prior week (€157 million) and they have brought YTD gold ETP inflows up to €1.8 billion. Gold ETPs continue to dominate the commodity ETP space, where all other non precious metal commodity ETPs saw marginal outflows this week (€39 million). YTD non-gold benchmarked ETPs saw inflows totalling just under €200 million.
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Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
Lords Committee publishes report on MiFID II
July 10, 2012--Rushed proposals from the European Commission to regulate financial markets risk damaging both the City of London and the entire EU financial sector.
Flawed transparency proposals and the risk of creating unnecessary red tape means the EU needs to stop and take the time to get the proposals right, according to a report published today by the House of Lords Economic and Financial Affairs EU Sub-Committee.
view the report-Getting it Right for the City and EU Financial Services Industry
Source: Parliament.uk
db Commodity Momentum Euro Hedged ETC launched on Xetra
A new exchange traded commodity issued by db ETC Index plc has been tradable on Xetra since Tuesday.
July 10, 2012--ETC name: db Commodity Momentum Euro Hedged ETC
Asset class: Commodities
ISIN: DE000A1N4341
Total expense ratio: 0.45 percent
Benchmark: db Commodity Momentum EUR Index
The new db ETC tracks the performance of the db Commodity Momentum EUR Index, which follows an investment strategy based on short-term momentum of individual commodities. The index represents a broadly diversified commodity basket, based on the 14 sub-indices of S&P GSCI. All db ETCs are backed by physically deposited gold bars.
Deutsche Boerse's ETC segment product range currently comprises 274 instruments. The monthly trading volume of ETCs on Xetra averages around €700 million.
Source: Xetra
IMF-Italy: Selected Issues
July 10, 2012--Chapter I. Structural Reforms in Italy: Overview and Macroeconomic Impact
Wide-ranging structural reforms are underway in Italy, aimed at addressing key bottlenecks in the product
and labor markets. This paper reviews and assesses the authorities' reform plans in each area.
Our model-based analysis suggests that the potential gains to the economy from deeper reforms are sizeable.
The priorities should be to strengthen competition in the non-tradable sector and increase flexibility and
participation in the labor market, supported by growth-friendly fiscal reforms.
Chapter II. Fiscal Devaluation In Italy: Towards A More Export, Employment, And Growth Friendly Tax System
A "fiscal devaluation" is a revenue-neutral shift from employer’s social contributions toward value-added tax, meant to promote net exports, employment, and growth. If sizeable, the shift could contribute to addressing Italy’s competitiveness gap. Fiscal devaluation, however, does present potential risks in terms of tax compliance and pension financing. To enhance its effectiveness, fiscal devaluation should aim to reduce VAT tax expenditures, while focusing social security contribution cuts on groups that are poorly integrated into the labor market.
view the IMF paper-Italy: Selected Issues
Source: IMF
Bank troubles and Eurozone's future shape dominate Draghi discussion
July 9, 2012--July 9, 2012--A "reasonable concept by the end of the year" for EU bank supervision is the top priority, ECB President Mario Draghi told Economic and Monetary Affairs Committee MEPs on Monday.
The ECB could undertake this task, with the European Parliament having a central role to ensure democratic accountability and legitimacy, he insisted.
At the committee's quarterly hearing, Mr Draghi fielded questions on the details of an EU banking union and the wider vision of where the Eurozone should be going. He complimented the efforts of the hardest-hit countries, particularly Ireland and Portugal, whilst also recognising those of Spain and Italy.
EU bank supervision is top priority
Observing that quality must sometimes take precedence over speed, Mr Draghi nonetheless conceded that EU-level bank supervision would need concrete steps by the end of the year. Asked by Jean-Paul Gauzes (EPP, FR), how the ECB envisaged the role of bank supervisor, he replied that the ECB stood ready to fulfil it, but added that it was crucial that its monetary policy decisions should remain independent of its supervisor function. He also insisted that any increase in powers for the ECB would require more accountability, which would be best achieved by ensuring that the European Parliament plays a central role in it.
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Source: European Parliament
Malta Stock Exchange Uses Deutsche Boerse Xetra System
July 9, 2012--The Malta Stock Exchange (MSE) migrated its electronic securities trading to Deutsche Boerse's Xetra trading system on Monday.
Xetra trading participants can now use Deutsche Börse’s infrastructure to easily access the Maltese financial market. It also gives twelve new market participants from Malta access to an extensive pan-European network of traders.
Frank Gerstenschläger, member of the Executive Board of Deutsche Börse and responsible for the Xetra business area, said: “The Malta Stock Exchange now has one of the fastest and most reliable trading systems in the world. It connects participants in Malta to a network of around 4,500 traders in 19 countries and offers them the widest range of products in Europe and highly liquid trading.”
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Source: Xetra
ESMA publishes two Q&A on UCITS
July 9, 2012--ESMA has today published the following Q&A.
view the Notification of UCITS and exchange of information between competent authorities
view the Risk Measurement and Calculation of Global Exposure and Counterparty Risk for UCITS
Source: ESMA
Synthetics hit as ETFs get physical
July 6, 2012--Global inflows into exchange traded funds may have accelerated in the first six months of the year but detailed analysis shows synthetic providers suffered outflows nearing $3bn.
Data from ETFGI shows that Deutsche Bank's db x-trackers experienced the largest net outflows in the year to date with $1.43bn, followed by Commerzbank with outflows of $875m and Societe Generale's Lyxor with $857m.
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Source: Efinancial News
Cloudy Outlook for Sweden After Years of Success
Growth set to slow sharply from 4 percent in 2011 to 1 percent in 2012
Growth prospects in major trading partners in question; krona strengthening
Despite some strengths, the financial sector remains a concern
For years, Sweden has achieved strong growth coupled with low debt and inflation.
July 6, 2012-- Recovery from the 2008 crisis was V-shaped, thanks to a fast recovery in key export markets and a decisive domestic policy response-with output at end-2011 up some 10 percent from its trough.
But the outlook for growth is now clouded as two-thirds of the nation’s exports and much of the banking sector’s lending go to Europe, the IMF said in its regular assessment of the Swedish economy.
Sweden’s record was largely built on strong policy frameworks in the context of a buoyant global economy. But the country surprised markets when GDP contracted 1.1 percent in the fourth quarter of 2011 as exports decreased markedly. The IMF estimates that GDP growth will drop from 4 percent in 2011 to 1 percent in 2012, regain steam in midyear, and come in at 2.3 percent in 2013.
view the IMF Country report-Sweden 2012 Article IV Consultation
Source: IMF
Government publishes vision for building societies
July 6, 2012--Government publishes vision for building societies
The Government has published a discussion document setting out its vision for the building societies sector, Mark Hoban, Financial Secretary to the Treasury, announced today.
The consultation sets out how the recommendations of the Independent Commission on Banking (ICB) will apply to the building societies sector.
Today’s document, which has been welcomed by the sector, confirms the Government’s support for the distinctive alternative offered by building societies. It outlines the Government’s intention to remove unnecessary barriers to growth and help to create a more level playing field with banks. It also confirms that:
building societies legislation will be aligned with ring-fencing requirements to ensure clarity and a level playing field;
the loss-absorbency proposals will apply to building societies in the same way as to banks of a similar profile, and creditor hierarchies for building societies and banks will be equalised; and
view the Consultation document-The future of building societies
Source: HM Treasury
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