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Interview with Deborah Furh-ETF Radar Magazine
February 20, 2012--Deborah Fuhr, Independent ETF Strategist, talks about the latest industry trends, investor education as a never-ending process, arising challenges and her personal plans for 2012.
Debbie, in the last months one could read and hear a lot of transparency initiatives started by several ETF issuers. Was this (in some cases) just nice marketing or has the ETF industry already reached a deep and reliable level of transparency?
Daily transparency of the securities in an ETF has been of the Unique Selling Points, or USPs of ETFs since the launch of the first ETF the Toronto 35 Index Participation Units (TIPs) on March 9, 1990 – nearly twenty-two years ago – in Canada on the Toronto Stock Exchange.
Providers of ETFs have been reacting since the financial crisis in 2008 to investors requests for greater transparency by providing details of swap counterparties and collateral for synthetic ETFs and more recently on securities lending activities including the average and maximum amount of securities on loan, collateral levels, composition, frequently-used counterparties and the net returns to the fund for physical ETFs.
12 new Commerzbank ETNs launched on Xetra
February 20, 2012--Twelve new exchange-traded notes (ETNs) issued by Commerzbank AG have been tradable on Xetra since Monday.
The twelve new exchange-traded notes track both the positive and the inverse performance of the benchmarks DJIA Index Futures, NASDAQ-100 Futures and S&P 500® Futures with a respective leverage factor of three or four.
The underlying indices are strategy indices which participate in the price movement of the reference entity and consist of a leverage component and an interest rate component.
ETNs are tradable notes that track the performance of underlying reference indices outside of the commodities sector and provide investors with access to additional asset classes.
Deutsche Börse’s ETN segment product range currently comprises 123 instruments. The monthly trading volume of ETNs on Xetra averages around €100 million.
Britons' financial fears ease as inflation dips to 3.6 pct
February 20, 2012--Britons are becoming less worried about their finances as inflation eases and employers look more prepared to raise wages, surveys showed on Monday, further fuelling hopes that consumers may lend the fragile economy some support this year.
The improvement in the Markit Household Finance Index survey adds to evidence that consumers are slowly regaining confidence, supporting the Bank of England’s view that consumption will start growing again this year. Mortgage lending rose and house prices picked up in January. Households reported the lowest degree of pessimism about future finances since April 2010, survey compiler Markit said. The measure of current finances, Markit’s Household Finance Index, rose to 38.7 in February from 36.4 in January, still well below the 50 mark separating improvement from deterioration but the least downbeat reading since December 2010. “These positive developments meant that debt levels stabilised and households’ appetite for major purchases moved back to levels not seen since the VAT (sales tax) rise in January 2011,” said Markit economist Tim Moore.
Eurex Exchange to expand dividend derivatives segment
Ten new contracts to be listed on 2 March 2012
February 20, 2012--The international derivatives market Eurex Exchange is further expanding its successful dividend derivatives segment by launching a total of ten new dividend futures on 2 March 2012. These new futures are based on dividends from selected sector indices; out of the EURO STOXX sector and STOXX Europe 600 sector indices the sectors banking, insurance, oil & gas, telecommunications and utilities will be covered.
Consultation revealed the greatest demand among market participants for these dividend sector indices.
The product specifications of the new futures are similar to the products already listed. The contracts are settled in cash and denominated in euro, trading hours are from 8.30 a.m. – 5.30 p.m. CET. A market making incentive scheme will be offered in order to provide a liquid order book from the start. To offer an attractive alternative to the swap-based trading, Eurex offers central clearing for bilateral trading in the new products every trading day via Eurex Exchange's “block trading” OTC trade entry facility. The minimum transaction size is one contract.
The first products in the dividend-based derivatives segment were launched in June 2008. In 2011, more than 23,000 contracts were traded on average each day, equating to six million contracts in total. In January 2012, average daily volume further increased to 26,000 contracts. Open interest currently stands at almost 2.0 million contracts, which is equal to a nominal dividend amount of around 13 billion euros.
Commission reform poses threat to IFAs
February 20, 2012--Mid-sized retail investment groups are expecting a surge in new business because of new regulations set to be introduced next year.
Independent financial advisers have responded to the changes by outsourcing investment management, joining larger firms, or closing their doors altogether.
Euro area investment fund statistics
February 17, 2012--In December 2011, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €243 billion higher than one quarter earlier in September 2011.
This increase was due to increases in share/unit prices and the statistical reclassification of some money market funds as bond funds, which were partially offset by net redemptions of shares/units.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €5,661 billion in December 2011, from €5,418 billion in September 2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €992 billion from €1,067 billion. These developments are partly explained by statistical reclassification of a number of money market funds as bond funds in December 2011, with the amount involved totalling more than €100 billion (see notes).
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to minus €47 billion in the fourth quarter of 2011, while transactions in shares/units issued by money market funds amounted to €15 billion.
STOXX Limited Announcemnt with reference to calculation of several STOXX Indices
February 17, 2012--STOXX Limited today announced that several STOXX Indices, among them the STOXX Europe 600 and STOXX Europe 50 indices, were affected by data issues with currency rates on February 16, 2012.
The EURO STOXX 50 Index and all related sub- und strategy indices have not been affected.
The above issue led to wrong index values being disseminated from 5.30pm – 9.49pm Central European Time (CET) on February 16, 2012. All STOXX Indices which include foreign currencies, except for Euro-only indices, were affected by this. STOXX disseminated corrected closing values for all affected indices at 9.50pm CET and is currently working on correcting index highs and lows.
As a result, all STOXX Strategy Indices which are based on the affected indices are currently showing incorrect values and are thus not being disseminated. STOXX will resume the dissemination of these indices are soon as they have been corrected.
Press conference-Report on high frequency trading in Sweden
February 17, 2012--On Tuesday, 21 February, Finansinspektionen (FI) will present a report on high frequency and algorithmic trading on the Swedish equity market.
FI’s report presents information about automated trade, international research and the effects and impact of the phenomenon on Swedish trading.
Anna Jegnell, Executive Director Markets, and investigator Niklas Johansson will present the report. The presentation will take approximately 45 minutes.
NYSE Liffe Plans Delivery Limits on London Commodity Futures
February 16, 2012--NYSE Liffe, the derivatives arm of NYSE Euronext, plans to introduce delivery limits for its London commodity futures, according to the exchange.
Buyers wouldn’t be able to take delivery of more than 7,500 contracts on cocoa and robusta coffee, 5,000 contracts on white sugar and 2,000 contracts on feed wheat, the exchange said in an “info flash” dated yesterday. The changes would take effect for positions in November 2012 for robusta coffee, December 2012 for white sugar and cocoa and January 2013 for feed wheat, the exchange said in the communication to members.
Euro STOXX 50 volatility index hits one-month high
February 16, 2012--The Euro STOXX 50 volatility index, Europe's main gauge of investor anxiety known as the VSTOXX index, rose 6 percent to hit a one-month high on Thursday as another delay in securing a rescue package for debt-troubled Greece rattled markets.
At 0820 GMT, the VSTOXX, which measures the cost of protecting against a decline in shares on the Euro STOXX 50 index, was up 6 percent at 28.12 after rising to as high as 28.19, a level not seen since mid-January.
