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Gold holdings at a record level in 2011
Xetra-Gold reserve with a value of around €2.1 billion in central vault
January 9, 2012--The value of gold stored by Deutsche Börse Commodities rose by around 32% in 2011 to €2.1 billion (as at 31 December 2011), thus achieving a new record level. The gold in the central vault well crossed the 50 ton mark in the course of the year. The highest demand for Xetra-Gold was in July and August.
“Investors showed an increased interest in gold during the turbulent phases of the market. Xetra-Gold gave them the opportunity to invest simply and flexibly in physical gold and to trade it economically like a share. The bid/ask spread is generally only around 0.1 percent. Every security has a value equivalent to exactly one gram of physical gold. The gold is in safe custody in our central vault and can be delivered at any time,” said Martina Gruber, managing director at Deutsche Börse Commodities GmbH.
Since Xetra-Gold launched in 2007, investors have already made use of this physical backing 643 times – a total of 3.4 tons has been delivered from the central vault in Frankfurt to investors' own banks. This only involves fees for packaging, transport and insurance which differ according to the quantity delivered. Delivery normally takes around two weeks. The smallest amount that has been delivered so far was 10 grams, the largest 213 kilograms.
Xetra-Gold is by far the best-performing security among the 218 exchange traded commodities (ETCs) available on Xetra. Its annual turnover for 2011 was €3.2 billion. Its annual average share of total order book turnover in the ETC segment was 26.9 percent.
Source: Deutsche Börse Commodities
Seven new Deutsche Bank ETFs launched on Xetra
New funds track bond and credit derivative indices
Janaury 9, 2012--Seven new exchange traded funds issued by db X-trackers II, a subsidiary of Deutsche Bank, have been tradable in the XTF segment on Xetra since Monday. Four are credit derivative ETFs on iTraxx indices and three are bond index ETFs on government bonds.
The four db X-trackers II credit derivative ETFs give investors the opportunity for the first time to participate in the positive or inverse performance of the iTraxx Europe and iTraxx Crossover indices with a leverage factor of two. iTraxx Europe comprises 125 European companies with an investment-grade rating. iTraxx Crossover, on the other hand, reflects the yields of 45 European companies with a rating of Baa3/BBB minus or below.
The db X-trackers II iBoxx € Sovereigns Eurozone 1-3 Total Return Index ETF and db X-trackers II iBoxx € Sovereigns Eurozone 3-5 Total Return Index ETF give investors the opportunity to invest in the performance of euro zone government bonds with a maturity of one to three years and three to five years, respectively.
And the db X-trackers II Global Sovereign Index ETF allows investors to participate in the performance of global government bonds. The underlying index, the Deutsche Bank Global Investment Grade Government Index, currently comprises government bonds from 20 industrialised nations with an investment-grade rating.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 907 exchange-listed index funds, while average monthly trading volume stands at €16 billion.
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Source:Deutsche Börse
Basel III liquidity standard and strategy for assessing implementation of standards endorsed by Group of Governors and Heads of Supervision
January 8, 2011--The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, met on 8 January 2012. The main items of discussion were the Basel Committee's proposals on the Liquidity Coverage Ratio (LCR) and its strategy for assessing implementation of the Basel regulatory framework more broadly.
The GHOS endorsed the Committee's comprehensive approach to monitoring and reviewing implementation of the Basel regulatory framework. GHOS Chairman and Governor of the Bank of England Mervyn King noted that "the focus on implementation represents a significant new direction for the Basel Committee. The level of scrutiny and transparency applied to the manner in which countries implement the rules the Committee has developed and agreed will help ensure full, timely and consistent implementation of the international minimum requirements".
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Source: BIS
Reinforced economic union: MEPs call for roadmap towards eurobonds
January 6, 2012--As the working group drafting the "international agreement on a reinforced economic union" reconvenes on 6 January, European Parliament representatives Elmar Brok (EPP, DE), Roberto Gualtieri (S&D, IT) and Guy Verhofstadt (ALDE, BE) stress in their amendments that all decisions must be based on normal EU procedure in order to ensure democratic accountability and Parliament’s legislative role are respected. They also call for a roadmap with a view to introducing eurobonds.
The European Parliament representatives' proposed changes to the draft agreement aim at reinforcing the ‘debt brake’. They call on Member States to establish a national debt reduction fund and to adopt a roadmap towards creating the conditions that will allow them to issue part of their sovereign debt in common, with joint and several liabilities. A “sustainable framework” is needed for the possible introduction of stability bonds, with the aim of enhancing economic governance and economic growth in the euro area, say the MEPs.
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Source: European Parliament
London Stock Exchange Group Monthly Market Report - December 2011
December 6, 2012--London Stock Exchange Group (LSE.L) 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).
Derivatives
On the Group's derivatives platforms, the total number of contracts traded was 5,346,435, down 12 per cent compared with December 2010.
Exchange Traded Products
Total value traded in Exchange Traded Products across the Group's order books in December was down 14 per cent year on year to £8.0 billion (€9.5 billion). The total number of trades was also down 21 per cent at 281,496.
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Source: London Stock Exchange Group
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.
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Source: FT.com
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. "
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Source: Source ETF
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.
Source: Xetra/FWB:
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.
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Source: Reuters
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:
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Source: NYSE Euronext
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