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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
Lyxor closes range of ETFs in London
July 6, 2012--Lyxor Asset Management is delisting and liquidating five exchange traded funds (ETFs) on the London Stock Exchange, including its Luxembourg-domiciled FTSE 100 ETF.
The range of five funds, which also comprises the FTSE 250, FTSE All Share, MSCI AC Asia Apex 50 and Euro Stoxx 50, are being de-listed from the LSE, while the Lyxor Euro Stoxx 50 is also being removed from NYSE Euronext Paris.
The last trading day will be on 26 July, while creation and redemption orders can be made until the cut-off time on 26 for the MSCI AC Asia Apex 50 and 27 July for the four other funds.
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Source: CityWire
ESMA publishes MiFID guidelines to enhance investor protection
July 6, 2012--The European Securities and Markets Authority (ESMA) has today published two final sets of guidelines aimed at enhancing the protection of investors in the EU.
The guidelines relate to the provisions under the Markets in Financial Instruments Directive (MiFID) relating to the suitability of investment advice and the compliance function.
ESMA, by issuing these guidelines, expects to promote greater convergence in the interpretation of, and supervisory approaches to, the MiFID suitability and compliance requirements. The guidelines are aimed at both market participants and national competent authorities who should incorporate them into their supervisory practices.
view the ESMA Final report-Guidelines on certain aspects of the MiFID suitability requirements
Source: ESMA
Eurozone deal effective but costly: Moody's
July 6, 2012-- A deal reached last month by eurozone leaders will reduce short-term risks for the regional economy but at a higher cost for wealthier members, ratings agency Moody's estimated Thursday.
"The measures contained in last Friday's statement by euro area leaders will reduce near-term risks of deposit runs or credit market shutdowns," Moody's said.
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Source: EUbuisness
Strong Polish Economy Faces Risks, Needs to Remain Flexible
Strong policies, protection under IMF's arrangement have contributed to strong performance
But risks threaten outlook, some vulnerabilities remain, room for maneuver more limited
Monetary policy, fiscal automatic stabilizers should support growth if needed
July 5, 2012-- The Polish economy has, on average, performed better than peers throughout the crisis despite the challenging environment in Europe, the IMF said in its annual report on the state of the economy.
This reflected very strong fundamentals, sound policies, and confidence in the economy due in part to the Flexible Credit Line (FCL) arrangement with the IMF. The report added that―given the more limited room for maneuver on the fiscal front―monetary policy should be the first line of defense in providing support to the economy in the event the eurozone crisis intensifies.
The Polish economy grew by a solid 4¼ percent in 2011 despite a substantial decline in public spending. The banking system has remained profitable, well capitalized, and liquid. Credit expanded at a healthy pace, though banks are now tightening their conditions for lending. The IMF expects real GDP growth to moderate to 2½ percent in 2012, as both external and domestic demand are expected to weaken.
view the IMF Country report-Poland 2012 Article IV Consultation
Source: IMF
Short selling: Commission adopts delegated act detailing rules on the ban on uncovered sovereign credit default swaps and short sales of shares and sovereign debt
July 5, 2012--The European Commission has today adopted a Delegated Act which sets out important technical rules needed to ensure the uniform application and enforcement of the Short Selling Regulation1.
In particular, the delegated act specifies the cases in which sovereign credit default swaps are considered covered, and therefore not banned in accordance with the Regulation. Investors can demonstrate that the sovereign credit default swap contracts they have entered into are covered by demonstrating either a quantitative or a qualitative correlation between the hedged assets and liabilities and the sovereign credit default swap. Other issues addressed in the Act include technical rules relating to the reporting of short positions in shares and sovereign debt, and the thresholds which can trigger a short term suspension of short selling in illiquid shares and other financial instruments. A related regulatory technical standard on short selling was also adopted by the Commission today, based on a draft submitted by the European Securities and Markets Authority (ESMA).
view Executive Summary
Source: EUROPA
Europe 2020 Project Bond Initiative: Frequently asked questions
July 5, 2012--On 5 July 2012, the European Parliament adopted the proposal for a pilot phase of the Project Bond Initiative.
Last October, the European Commission proposed the creation of project bonds for infrastructure investment, as a new tool to unlock private funding.
This initiative marks another building block in the European Commission's actions to revive growth through investment in the European Union. The basic principle underpinning this initiative is a better use of public banks better. In the case of the European Union, this is the European Investment Bank (EIB). The EIB and the EU budget can be used more effectively to achieve major leverage through limited risk-sharing with private investors. The legal provisions are being put in place, in order for the first project to be launched as early as this summer.
Q1: What are the main objectives of the Initiative?
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Source: European Commission
EEX and TEIAS sign Memorandum of Understanding for a cooperation on the establishment of a Turkish Energy Exchange
July 5, 2012--Today, the European Energy Exchange (EEX) and TEIAS, the Turkish Electricity Transmission Company, have signed a Memorandum of Understanding for a co-operation on the establishment of an organized energy market.
Turkey represents one of the biggest and most dynamic energy markets with an important geographical position within the Southeastern European and Asian region.
“As a bridge between Asia and Europe Turkey has the potential to develop a reference price for this region. The establishment of a Turkish Energy Exchange with liquid power spot and derivatives markets is crucial for the successful liberalization and further growth of the electricity markets”, says Metin Kilci, Undersecretary for the Turkish Ministry of Energy and Natural Resources.
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Source: European Energy Exchange (EEX)
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