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Behind the scenes, FX industry prepares for euro break-up
January 6, 2012--Before the euro's launch in January 1999, the Bank of England issued a 110-page plan - everything from settlement timetables to roadworks on the big day - to ensure a smooth introduction of the common currency in the world's largest financial centre.
The plan was among quarterly reports, complete with euro-themed cartoons by the BoE's resident artist, issued by the bank from 1996 to 2002 to iron out bumps as euro zone members abandoned their old currencies. Britain stayed out.
Fast forward to 2012 and banks and brokerages in London are quietly preparing for a more unpredictable but potentially more destabilizing event - the possible break-up of the euro.
Euro listing for Nomura Voltage Mid-Term ETF
January 6, 2012--Source is pleased to announce that its Nomura Voltage Mid-Term Source ETF is now listed in EUR on the XETRA segment of Deutsche Börse. This listing complements the existing listing in USD on the LSE, and provides an EUR-tradable listing for easy access to volatility via the efficient ETF structure.
The Nomura Voltage Mid-Term Source ETF tracks the Nomura Voltage Strategy Mid-Term 30-day USD TR index (‘Voltage’) and offers European investors a tactical approach to volatility, allowing them to capture volatility spikes whilst decreasing the costs associated with a constant long volatility position. Since inception in April 2011, the fund saw strong inflows, taking its AuM to US$ 166 MM.
Ted Hood, CEO of Source, said: “Volatility continues to be an attractive asset class for many European investors. The new EUR listing will facilitate trading for EUR-denominated investors and provide access to Nomura’s innovative Voltage strategy. "
New Source ETF launched on Xetra
ETF tracks volatility of US blue chips
January 6, 2011--An additional index fund issued by Source has been tradable on Xetra since Thursday. It is the first Euro-traded ETF to enable investors to invest in the volatility of American blue chips.
ETF name: Nomura Voltage Mid-Term Source ETF
Asset class: volatility
ISIN: DE000A1JQQZ6
Total expense ratio: 0.30 percent
Distribution policy: non-distributing
Benchmark: Nomura Strategy Mid-Term 30 day USD Total Return Index
The Nomura Voltage Mid-Term Source ETF provides investors with the first opportunity to participate in the performance of the Nomura Strategy Mid-Term 30 day USD Total Return Index. The index offers a volatility-adjusted investment in the S&P 500 VIX Mid-Term Futures Index in which roll losses are minimised. Roll losses can arise through the sale of maturing futures and acquisition of longer dated contracts at higher prices to replace them.
The index is composed of the S&P 500 VIX Mid-Term Futures Index and US treasury bonds with three-month maturities. The weighting of the S&P 500 VIX Mid-Term Futures Index fluctuates between zero and 100% depending on its own volatility - the higher the volatility in relation to the past 30 days, the greater the weighting. This approach aims to make use of volatility spikes and to reduce the costs of a permanent long position at the same time.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 900 exchange-listed index funds, while the average monthly trading volume stands at €16 billion.
Strict new rules to undercut synthetic ETFs-report
New ESMA guidelines on synthetic ETFs due within weeks
Uncertainty already impacting synthetic ETF volumes
January 6, 2012--Imminent new guidelines on the regulation of exchange-traded funds (ETFs) in Europe could force Europe's burgeoning synthetic ETF industry into decline, crimping its growth to rates in line with U.S. counterparts, a report on Friday said.
Research and advisory firm Celent warned that an emphasis on controlling counterparty and systemic risk linked to the use of derivatives could repel investors in the synthetic ETF industry in Europe, which in 2010 accounted for almost 90 percent of global issuance of synthetic ETFs.
ETFs are funds that trade like a share and track an index such as the FTSE 100. They are popular as a means to get cheap exposure to indexes without buying a wide range of shares.
NYSE Euronext Activity Report on ETFs - December 2011
January 5, 2012--Listings
Last month, NYSE Euronext welcomed 1 new ETF listing from Amundi IS:
AMUNDI ETF SP500 H
In total, NYSE Euronext had 690 listings of 592 ETFs from 18 issuers. In 2011, there have been a total of 157 new ETF listings on the NYSE Euronext European cash markets, including 129 new primary listings and 28 cross-listings (compared to 111 new primary listings and 22 cross-listings in the same period in 2010).
Trading activity
With the year winding down, trading activity in December equally slowed and was further down from the previous month, which was already comparatively uneventful to begin with. Compared to all months in 2011, December, perhaps not entirely unexpectedly, turned out to be the month with the lowest trading activity of the year:
The average daily value traded on-book last month was €268.7 million, down 19.4% vs. December 2010. The total traded on-book value amounted to €5.6 billion, down 36.8% month-on-month and down 43.2% year-to-date. An average of 7734 on-book trades (single counted) were executed daily last month, up 6.9% vs December 2010. A total of €930.5 million was exchanged in block trades in December, down slightly from the €974.9 million last month but up explosively from the €47.5 million or almost ten times more than in December last year. Overall, block trade volume represented 9.4% of total regulated market ETF trading on NYSE Euronext.
The CAC 40 Index remains the top underlying index measured by turnover in 2011, followed by EURO STOXX 50, CAC 40 Leverage and DAX. These 4 indices represent 71.0% of the 2011 ETF trading activity on NYSE Euronext:
Finansbank A.ŞS applied for listing of “U.S. Treasury USDTRY Exchange-Traded Fund’s Participation Certificates" on the ISE
January 5, 2011--Finansbank A.Finansbank A..ŞS applied for listing of "U.S. Treasury USDTRY Exchange-Traded Fund’s Participation Certificates" on the Istanbul Stock Exchange (ISE).
Name of the fund: U.S Treasury USDTRY Exchange-Traded Fund(www.finansbank.com.tr)
Application date 03.01.2012
Amount of the fund TRY 500.000.000
Turkish economic growth to ease to 4 pct in 2012
January 5, 2012--Turkey's economic growth will likely slow down to 4 percent this year from about 7.5 percent last year, a top government official said on Thursday.
Ali Babacan, one of four deputy prime ministers, said the government might further adjust its forecast for growth of 4 percent depending on developments in Europe's financial crisis. He said the economy was expected to have grown by more than 7.5 percent in 2011.
Babacan claimed the rise in Turkey's inflation rate, which hit a double-digit figure in December, was temporary.
No ‘special regime’ required for ETF regulation
January 5, 2012--The regulation of exchange traded funds should not be subject to any kind of “special regime”, according to the International Capital Markets Association, a trade body.
The ICMA’s Asset Management and Investors Council said regulators should focus on improving transparency rather than imposing restrictive practices that would affect ETFs.
EPEX SPOT / EEX Power Derivatives: Power Trading Results in December
January 4, 2011--In December 2011, a total volume of 30.9 TWh was traded on EPEX SPOT’s auction and intraday markets (December 2010: 26.2 TWh).
During the same period, the volume in power derivatives trading on EEX Power Derivatives amounted to 65.7 TWh in December (December 2010: 84.4 TWh).
In December 2011, power trading on the day-ahead auctions on EPEX SPOT accounted for a total of 28,338,318 MWh (December 2010: 24,970,420 MWh) and
Germany to remain safe haven despite any rating cut
January 3, 2011--A mass ratings downgrade of euro zone countries expected early this year is likely to increase selling pressure on French and Italian government debt, but could paradoxically consolidate Germany's safe-haven status.
Standard & Poor's has warned it could soon downgrade the triple-A ratings of Germany, Austria, the Netherlands, Finland, Belgium and Luxembourg by one notch and the ratings of other euro zone countries, including top-rated France but excluding Greece and Cyprus, by two notches.
