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Getting the best out of a financial transaction tax
February 7, 2012--A Eurozone financial transaction tax would not only curb high-frequency and intermediary traders, but could even boost overall GDP, said financial experts at an Economic and Monetary Affairs Committee hearing on Monday. MEPs also reiterated their support for the idea, although some said that the Commission proposal needs more fine tuning.
Avinash Persaud of Intelligence Capital, Sony Kapoor of Re-Define and Stephany Griffith-Jones of Colombia University all strongly advocated a financial transaction tax which, they argued would indeed hit the right players, such as high frequency traders and intermediary financial players, and not the real economy.
Indeed the overall impact of this tax could be directly beneficial, leading to a 0.25% increase in GDP and helping to stabilise the economy by curbing the practices most responsible for building up risk.
However, Richard Raeburn of the European Association of Corporate Treasurers, did worry that the cumulative impact of the tax, paid by all intermediaries in a transaction, would be too high and warned that end users could be hit harder than they should.
European Parliament: Getting The Best Out Of A Financial Transaction Tax
February 7, 2012--A Eurozone financial transaction tax would not only curb high-frequency and intermediary traders, but could even boost overall GDP, said financial experts at an Economic and Monetary Affairs Committee hearing on Monday. MEPs also reiterated their support for the idea, although some said that the Commission proposal needs more fine tuning.
Avinash Persaud of Intelligence Capital, Sony Kapoor of Re-Define and Stephany Griffith-Jones of Colombia University all strongly advocated a financial transaction tax which, they argued would indeed hit the right players, such as high frequency traders and intermediary financial players, and not the real economy.
Indeed the overall impact of this tax could be directly beneficial, leading to a 0.25% increase in GDP and helping to stabilise the economy by curbing the practices most responsible for building up risk.
Insider trading and market manipulation: first committee debate
February 7, 2012--Draft EU legislation to discourage insider trading and market manipulation was discussed for the first time in the Economic and Monetary Affairs Committee on Monday. MEPs focused on how best to define "insider information", ensure proper surveillance, encourage whistle blowers and punish offenders.
The draft market abuse directive is designed to tackle shortcomings observed in the markets during the financial crisis. It would impose EU-wide criminal and administrative penalties for insider trading and market manipulation. Some EU Member States do not currently impose criminal sanctions.
The draft market abuse regulation aims to harmonise Member States' existing rules and at the same time update them to suit new trading venues and financial instruments and keep pace with technological progress. Because of the growing integration of financial markets in the EU, market abuses can have cross-border effects that need to be tackled as such.
New ComStage ETF launched on Xetra
First leveraged ETF on emerging markets
February 7, 2012--An additional equity index fund issued by ComStage ETF has been tradable on Xetra since Tuesday. For the first time, investors have the opportunity to participate in the performance of the MSCI Emerging Markets Index with a double leverage.
ETF name: ComStage ETF MSCI Emerging Markets Leveraged 2x Daily TRN
Asset class: equity index ETF
ISIN: LU0675401409
Total expense ratio: 0.75 percent
Distribution policy: non-distributing
Benchmark: MSCI Emerging Markets Leveraged 2x Daily Net Index
The MSCI Emerging Markets Leveraged 2x Daily Net Index is weighted according to free float market capitalization. It aims to track the performance of the equity markets in all emerging market countries based on total return with net dividends reinvested, employing a double leverage. Alongside free float market capitalisation, stocks are selected on the basis of further criteria such as minimum capitalisation, liquidity, trading history and accessibility for foreign investors.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 924 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of €16 billion, makes Xetra Europe’s leading trading venue for ETFs.
theScreener Launches a new Fund & ETF Analysis Service
February 7, 2012--In a time when funds and ETFs are being traded more actively than ever, theScreener, market leader in independent stock analysis, launches a new service by evaluating funds and ETFs in a directly comparable way.
For the first time, it is possible to comprehensively recognize where passive investments beat active ones and vice versa.
The Swiss provider of financial analyses, whose evaluations have historically shown above-average performance, is thus extending its range of services to 15,000 funds and ETFs that can be compared by applying the same analytical criteria.
London Stock Exchange Group-MONTHLY MARKET REPORT - December 2011
January 6, 2012--London Stock Exchange Group sits at the heart of the world's financial community, offering international business unrivalled access to Europe's capital markets. In December a total of 24.4 million trades were carried out across the Group's electronic equity order books with a combined value of £128.1 billion (€151.8 billion), down 11 per cent on December 2010 (£143.8 billion).
UK Equities Order Book
During the month, the average daily value traded on the UK order book was £3.5 billion (€4.2 billion), down 5 per cent year on year. The average daily number of trades increased 25 per cent to 584,371.
The LSE's share of trading in the total UK order book for December was 61.7 per cent.
Italian Equities Order Book
On the Italian order book, the average daily number of trades was 200,582, down 13.4 per cent on the same month last year, whilst the average daily value traded on the order book decreased 33 per cent year on year to €1.8 billion (£1.5 billion).
SPDR ETF on high-yield bonds launched on Xetra
February 6, 2012--A further exchange-listed bond index fund issued by SPDR (State Street Global Advisors) has been tradable on Xetra® since Monday.
ETF name: SPDR Barclays Capital Euro High Yield Bond ETF
Asset class: bond index ETF
ISIN: IE00B6YX5M31
Total expense ratio: 0.45 percent
Distribution policy: distributing
Benchmark: Barclays Capital Liquidity Screened Euro High Yield Bond Index
The SPDR Barclays Capital Euro High Yield Bond ETF gives investors the opportunity to participate in high-yield corporate bonds denominated in euros from issuers in or outside the euro zone. High-yield bonds have a sub-investment grade rating. These bonds have a higher risk of default, but therefore pay higher yields. They are senior bonds that may be terminated, with residual maturities of at least one year and less than 15 years.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 923 exchange-listed index funds, while average monthly trading volume stands at €16 billion.
Deutsche Börse plans resegmentation of the Open Market
February 6, 2012--Deutsche Börse is planning a resegmentation of the Open Market. The First Quotation Board in its current form will be discontinued, the Entry Standard's rules are also being tightened.
In future, aside from bonds, only equities which have a listing on another domestic or foreign stock-exchange-like trading venue recognised by Deutsche Börse will be included in the Quotation Board, as was the case in the former Second Quotation Board.
Since 2008, a further financing segment, the First Quotation Board has been available in which the applying Members assume selection of the issuers. At the start of 2011, the requirements for the protection of the capital market were tightened. According to findings by Deutsche Börse, the stock exchange regulator of the state of Hesse and the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht), despite criminal law and supervisory measures and the close involvement of the applicant and the tightening of admission requirements, there have nevertheless continued to be massive and frequent suspected cases of market manipulation.
J.P. Morgan and Source launched the J.P. Morgan Macro Hedge US TR Source ETF
February 6, 2012--J.P. Morgan and Source are pleased to announce the launch of the J.P. Morgan Macro Hedge US TR Source ETF. The ETF aims to provide cost‐effective, long‐term exposure to volatility, via a systematic strategy developed by J.P. Morgan. It is designed for sophisticated investors to either use as a hedging tool or as a way to take stand‐alone volatility exposure.
Volatility as an asset class continues to attract attention: since volatility tends to spike when equity markets crash, it is seen as a potential hedge to long equity positions. However, using volatility as a hedge can be very costly. In normal market conditions, a long volatility investment will typically lose value. J.P. Morgan’s Macro Hedge family of indices take an innovative two‐pronged approach: in times of market stress, they aim to capture spikes in volatility; in normal market conditions, they aim to generate a positive return.
Increased Desire For Tailor-Made Indices
February 5, 2012--Most money in ETFs tracks mainstream indices from one of the major index providers, such as FTSE, Dow Jones, Standard & Poor’s or MSCI.
These indices are familiar products, understood even by not very sophisticated investors and reported on the news as indicators of the overall stock market. Recently, however, as the range of ETFs proliferates, apparently unstoppably, some ETF providers are finding the range of indices available is not sufficient. Some are asking the index providers to help them develop new indices, either to gain exposure to markets that are not already well covered or to use a new methodology that might outperform a traditional index. The FT wrote-up the following market wrap:
