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European markets tumble after Moody's downgrades 16 Spanish banks
May 18, 2012--European stock markets faced their biggest weekly decline today since November, after 16 Spanish banks were downgraded by Moody's overnight and Fitch cut its debt rating for Greece.
Spain's main share index fell more than 2% before recovering, while shares in London fell by as much as 1%.
The downgrading included Banco Santander, the eurozone’s largest bank, owing to a weak economy and the government’s inability to bail-out the troubled lenders
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Source: The Finance page
Spain falls into recession amid fears of eurozone bank run
May 17, 2012--Spain tumbled into recession and European stock markets and the euro fell Thursday as Greece installed a crisis government to tackle its crippling debt, EU leaders prepared for talks and analysts raised the spectre of a run on eurozone banks.
"Markets are worried about eurozone bank deposit runs and an escalating banking crisis," London-based VTB Capital economist Neil MacKinnon told AFP.
Heavy withdrawals of deposits have been reported in Greece and Spain, and top European Union leaders were to hold a videoconference later in the day.
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Source: EUbusiness
Italy's assets under management at 974bn Euro, Assogestioni reports
May 17, 2012--Italian assets under management have reached €974bn in the first quarter of 2012, with a particularly positive performance of bond funds, according to a report published on May 16 by Assogestioni, the association of Italian asset managers.
Despite an outflow of €3bn, the overall value of assets under management has increased from €937bn at the end of December.
Net inflow has been of €5.2bn for bond funds, with a positive performance for insurance and pension funds, which recorded inflows of €933m and €1.4bn respectively.
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Source: Investment Europe
PLUS Markets Group PLC Statement re Press Speculation
May 17, 2012--The Board of PLUS Markets Group plc ("PLUS" or the Group") notes the recent press speculation and makes the following update to shareholders.
The Group can confirm that it is in talks with ICAP plc that may lead to the disposal of its subsidiary company PLUS Stock Exchange plc ("PLUS-SX"), the cash equities recognised investment exchange for a nominal amount due to the loss making nature of PLUS-SX. As indicated in previous announcements, the board believe that this would be in the best interests of shareholders to preserve remaining shareholder value. There can, however, be no certainty that a transaction will complete.
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Source: Wall Street Journal
Moody's downgrades Spanish banks; ratings carry negative outlooks or remain on review for downgrade
Actions follow rating reviews announced on 15 February 2012 and other dates
May 17, 2012--Moody's Investors Service has today downgraded by one to three notches the long-term debt and deposit ratings for 16 Spanish banks and Santander UK PLC, a UK-domiciled subsidiary of Banco Santander (Spain) SA.
The rating downgrades primarily reflect the concurrent downgrades of most of these banks' standalone credit assessments, and in five cases also Moody's assessment that the Spanish government's ability to provide support to the banks has reduced.
The debt and deposit ratings declined by one notch for five banks, by two notches for three banks and by three notches for nine banks. The short-term ratings for 13 banks have also been downgraded between one and two notches, triggered by the long-term ratings changes.
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Source: Moody's
IMKB celebrates the trading of "Kuveyt Turk Participation Bank B Type Silverplus ETF"
May 18, 2012--On the occasion of the first trading day of "Kuveyt Türk Participation Bank B Type Silverplus ETF", the executives and guests of the relevant bank will visit ÍMKB (Ístanbul Menkul Kıymetler Borsası) and ring the opening bell of the Stock Market on May 21, 2012.
Mr. İbrahim TURHAN, İMKB Chairman & CEO, Mr. Mohammed Al OMAR, Chairman of the Board of Kuveyt Turk, Mr. Abdullah TIVNIKLI, Vice Chairman and Member of the Board of Kuveyt Turk,
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Source: Istanbul Stock Exchange
DB - Equity Research-Weekly European ETF Market Monitor-Swapping gold for volatility?
May 16, 2012--Signs of an interesting trade emerge
European ETP cash flow patterns this week paint a very interesting picture. The week brought nothing unussual in the long equities space, mild negative pressure continued leading to a total of €226 million of equity ETF outflows. The only country that experienced inflows over €100 million was Germany, but that was by no means a game changer. DAX benchmarked ETFs gathered a moderate €175 million over the week.
Fixed income and commodities investment patterns this week yielded much more interesting information, with fixed income ETFs experiencing inflows of €339 million and commodity ETPs experiencing outflows of €493 million. Fixed income inflows were led by sovereign benchmarked ETFs (€300 million), primarily German government bunds (€210 million). Commodity ETP outflows were driven by gold product outlows (€463 million).
Historically, gold ETP inflows spiked during periods of negative equity market pressure and high volatility. Similarly, during such periods, other perceived safe assets, such as bonds issued by highly rated sovereigns, experienced inflows. The week just passed registered a departure, with gold ETPs loosing close to 50% of 2012 YTD flows, as market uncertainty rose.
The week that ended on May 11th saw gold ETPs experiencing outflows of €463.1 million, bringing year to date ETP inflows down to €541.9 million. Conversely, ETPs targeting volatility indices saw year to date inflows rise to €614.9 million.
Gold - $/oz- price (BBG ticker GOLDS) declined by 12.8% from its high point this year, (28/2/12: $1,784.2/oz), to its low point (14/05/12: $1,5567/oz). Conversely, over the same period, the price of the VSTOXX (BBG ticker: V2X), an index designed to measure volatility of the Eurozone by looking at implied vol on Euro Stoxx 50 index options, rose by 37.5%, reaching 33.3 as of May 15th, its highest point in 2012.
The decline in gold’s price is most likely due to a combination of escalating market worries and political uncertainty in Europe, coupled with the lack of monetary accomodation both in the US and Europe. Together, these factors resulted in more extreme risk aversion than the environment that historically led to gold inflows.
The large majority of gold outflows came from Swiss based phsically backed gold ETPs.
Most of the YTD volatility inflows were received by the Nomura Voltage Mid-Term Source ETF, a product that tracks an index which allocates exposure of between 0% and 100% to the S&P 500 VIX short-term futures index, with the remainder earning a three-month US treasury bill rate. The proportion of the strategy index invested in futures contracts varies dynamically, with allocations increasing, the more "spot" volatility exceeds a 30-day historical average.
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Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
Vanguard brings low-cost ETFs to Britain
May 16, 2012--U.S. group Vanguard, the world's third-largest exchange-traded-funds provider, has launched its first products in Britain, hoping to steal business from rivals by pushing a low-cost model that has been successful in its home market
"In the U.S., ETFs are a very large part of our business and account for a significant amount of new cash flow," Nick Blake, head of retail at Vanguard Asset Management told Reuters.
"The key thing is about access ... They are just another way to index with many more ways to access."
Vanguard Asset Management, a subsidiary of Vanguard, will list five ETFs on the London Stock Exchange . ETFs -- funds tracking baskets of shares, bonds or commodities that are traded like stocks -- have become increasingly popular among investors seeking cheap access to indexes without having to buy the underlying securities.
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Source: The Guardian
Bank of England Inflation Report, May 2012
May 16, 2012--Overview
Output had barely grown for a year and a half and was estimated to have contracted slightly in the
past two quarters. The euro-area economy remained weak, but global activity overall continued to
expand at a moderate pace. A number of one-off factors are likely to affect the pattern of quarterly growth of domestic output during 2012.
Looking through those effects, underlying demand growth is likely to remain subdued in the near term, before a gentle increase in households’ real incomes and consumption helps the recovery to gain traction. Stimulus from monetary policy should continue to support demand, although headwinds from the external environment, tight credit
conditions and the fiscal consolidation are likely to persist. The possibility that the substantial challenges within the euro area will lead to significant economic and financial disruption continues to pose the greatest threat to the UK recovery.
CPI inflation stood at 3.5% in March 2012, down from a peak of 5.2% in September 2011. That fall reflected the effects of earlier increases in energy prices and VAT dropping out of the twelve-month inflation rate. The prospects for inflation are uncertain. The near-term outlook is judged to be somewhat higher than expected three months ago, with inflation now likely to remain above the 2% target for the next year or so.
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Source: Bank of England
Bank of England cuts growth forecasts, warns on euro crisis
May 16, 2012--The Bank of England on Wednesday cut its forecast for British growth and warned that the eurozone debt crisis was the biggest threat to recovery, even if a credible solution is found.
Gross domestic product (GDP) was predicted to grow by just under 1.0 percent this year, down from the central bank's previous forecast of just over 1.0 percent, the Bank of England (BoE) said in a quarterly report.
It also slashed the 2013 growth estimate to 2.0 percent, down from previous guidance for 3.0-percent expansion. Annual inflation was forecast to remain stubbornly above the central bank's 2.0-percent target until mid-2013.
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Source: EUbusiness
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