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EU eyes 50-60 percent Greek haircut for sustainable: Troika
October 21, 2011--Private investors would have to forgive 60 percent of what Greece owes them to make its debt sustainable by 2020 and for a euro zone loan package to stay at the 109 billion euros ($151 billion) agreed in July, a report by international lenders said.
The confidential report, discussed by euro zone finance ministers on Friday, will form the basis for talks with private investors on what losses they should accept on their Greek portfolios in the second emergency financing plan for Greece.
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Source: Reuters
New rules for more efficient, resilient and transparent financial markets in Europe
October 20, 2011--In recent years, financial markets have changed enormously. New trading venues and products have come onto the scene and technological developments such as high frequency trading have altered the landscape. Drawing lessons from the 2008 financial crisis, the G20 agreed at the 2009 Pittsburgh summit on the need to improve the transparency and oversight of less regulated markets – including derivatives markets - and to address the issue of excessive price volatility in commodity derivatives markets.
In response to this, the European Commission has today tabled proposals to revise the Markets in Financial Instruments Directive (MiFID). These proposals consist of a Directive and a Regulation and aim to make financial markets more efficient, resilient and transparent, and to strengthen the protection of investors. The new framework will also increase the supervisory powers of regulators and provide clear operating rules for all trading activities. Similar discussions are taking place in the United States and other major global financial centres.
Commissioner for Internal Market and Services Michel Barnier said: "Financial markets are there to serve the real economy – not the other way around. Markets have been transformed over the years and our legislation needs to keep pace. The crisis serves as a grim reminder of how complex and opaque some financial activities and products have become. This has to change. Today's proposals will help lead to better, safer and more open financial markets."
Background
In force since November 2007, the original Markets in Financial Instruments Directive (MiFID) governs the provision of investment services in financial instruments (such as brokerage, advice, dealing, portfolio management, underwriting, etc.) by banks and investment firms and the operation of traditional stock exchanges and alternative trading venues ( so-called multilateral trading facilities. While MiFID created competition between these services and brought more choice and lower prices for investors, shortcomings were exposed in the wake of the financial crisis.
iShares unveils ETP guide for advisers
iShares has launched a due diligence campaign to support advisers and investors when choosing exchange-traded products.
October 20, 2011--The provider has unveiled a Europe-wide framework for investors assessing the structure, tax, performance, trading and valuation, total cost of ownership and securities lending
It has also proposed a classification system with three distinct types of ETPs, exchange-traded funds, exchange-traded notes and commodities and exchange-traded instruments.
David Gardner, head of sales for iShares Europe, Middle East and Asia, said: “As with any investment product, investors need to be sure the ETPs they buy are appropriate and give them exactly the exposure they want.
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Source: FT Advisor
State Street unveils S&P 'Dividend Aristocrats' ETF in UK push
October 20, 2011--State Street Global Advisors has launched two SPDR ETFs focused on dividends on the London Stock Exchange, and has plans to unveil a raft of fixed income products at the start of next year.
The SPDR S&P US Dividend Aristocrats ETF and the SPDR S&P Emerging Markets Dividend ETF physically invest in equities in the respective regions with high dividend yields.
The ETFs offer a regular source of income, which the firm said investors are seeking amid a low-yield environment.
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Source: Citywire
The Spanish Stock Exchange to celebrate its 180th anniversary
The Spanish stock exchange ranks among the top world exchanges in terms of investment flows, transparency and innovation
2011 is already the fourth best year in history in terms of new investment flows channeled through the Spanish stock market
October 20, 2011--On 20 October 1831 the first trading session took place in Spain, in this way making the Spanish stock exchange one of the oldest and best-established financial institutions in Spain.
Its birth, in the first half of the XIX century, anticipated the creation, in the second half, of most other economic and financial institutions that exist today.
Today’s economy and financial markets are under some of the most convulse times in history, surrounded by high volatility. However the Spanish stock exchange has continued to demonstrate its extraordinary capacity to provide objective valuations and liquidity to investments, in large part thanks to the modernisation and significant improvements carried out in the last few years, which have allowed it to become a significant force in the international stock exchange scenario. During this long period of time a stock market developed which today trades a daily average of over €4 billion.
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Source: BME
EU may curb ratings agencies
October 20, 2011--The European Union may seek the power to prohibit the publication of credit ratings of countries that are under a rescue programme, an EU official familiar with the proposal said today.
The proposal from Michel Barnier, the EU official in charge of regulation, may yet get shot down because it needs the blessing of EU countries as well as the region's parliament in order to take effect.
The move would be controversial and experts have previously warned that tough restrictions on rating agencies can undermine efforts to rebuild investor confidence in the euro zone.
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Source: Irish Times
Deutsche Börse recognised again for its achievements in sustainability
October 20, 2011--Deutsche Börse has been confirmed for the seventh time in a row as a member of the Dow Jones Sustainability Indexes (DJSI World and DJSI Europe). The analysts gave particular recognition to the company for its group-wide compliance and risk management, corporate governance and active stakeholder engagement.
The Dow Jones Sustainability Indexes are based on an analysis of the economic, environmental and social criteria of the 2,500 largest companies in the world, as measured by free-float market capitalisation. General and industry-specific criteria are evaluated and only companies with a sustainability profile in the top ten percent are admitted to the indices.
In addition, Deutsche Börse has fully met the admission criteria for the FTSE4GOOD Index Series (FTSE4Good Global Index and FTSE4Good Europe Index) since 2009. This index series admits companies which meet strict ethical, social and environmental criteria. Since 2002, the company has also been represented on the EURO STOXX Sustainability Index and STOXX Europe Sustainability Index.
Moreover, the Carbon Disclosure Project (CDP) has confirmed Deutsche Börse’s renewed inclusion in the Carbon Disclosure Leadership Index (CDLI). The CDLI consists of 30 companies which provide particularly transparent and extensive data on their greenhouse gas emissions and climate strategy. Deutsche Börse is ranked 12th this year. The Carbon Disclosure Project (CDP) represents 551 institutional investors, which manage a fund volume totaling approximately US$71 trillion.
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Source: Deutsche Börse
The Spanish Stock Exchange trades the first ETF on the IBEX 35® DOUBLE LEVERAGE index
October 20, 2011--This new strategy domestic equities index started to be calculated and disseminated in real time on May 19th
The Spanish Stock Exchange today started trading a new exchange-traded fund issued by Lyxor Asset Management, called LYXOR ETF IBEX 35® DOBLE APALANCADO DIARIO.
This issue brings the number of ETFs listed on the Spanish stock exchange to 66, in this way increasing the number of assets linked to strategy indices in the Spanish market.
The IBEX 35® DOUBLE LEVERAGE offers double exposure to the daily return on the IBEX 35® NET RETURN, through the investment of an initial capital plus an equivalent loaned capital. A positive daily return on the IBEX 35® NET RETURN yields an also positive return, but double that amount, for the IBEX 35® DOUBLE LEVERAGE and viceversa.
In September the trading volume in the ETF segment of the Spanish Stock Exchange was €207million, up 11.8% year on year. The number of trades on the ETF segment in the same period was 4,058, up 3.9% from the same period last year.
Source: Bolsa De Madrid (BME)
Bats Merger With Chi-X Wins Provisional U.K. Antitrust Clearance
October 20, 2011--Bats Global Markets Inc.’s acquisition of Chi-X Europe Ltd., the region’s biggest alternative trading system, was provisionally cleared by U.K. antitrust regulators, who said sufficient competition remains.
Customers of both exchanges will still have the power to prevent the merged companies from raising trading fees by threatening to take their business to competitors, the U.K. Competition Commission said today.
“The customers of both these exchanges are in a particularly powerful position to combat any attempt by the merged company to raise trading fees, reduce service quality or otherwise exploit any loss of competition,” said Malcolm Nicholson, chairman of the regulator’s inquiry group.
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Source: Bloomberg BusinessWeek
DB Global Equity Index & ETF Research :European ETF Market Weekly Review: : Decreasing outflows as the European ETF investor contemplates market direction
October 20, 2011--Investment Outlook: Cash out flows in commodity and fixed income products
In the week that ended on October 14th, European domiciled ETPs registered net cash outflows of €360 million. Most of the European equity benchmarks ended higher than the previous week’s close: DAX, CAC, Euro Stoxx 50 & the FTSE 100 gained 5.1%, 4%, 3.8% and 3.1% respectively. This rally extended into precious metals as well with gold and silver prices [US$/oz] advancing by 2.8%and 3.7% respectively, week on week. ETF investors chose to stay on the sidelines and this was reflected in muted cash flows and a dip in on exchange turnover levels.
Commodity ETPs registered cash outflows of €283 million over the last week. Gold products attracted cash flows totaling €178 million, which were more than offset by outflows from ETFs tracking broad commodity indices [€336 million].YTD cash flows for commodity ETPs are now at €3.5 billion which represents 9% of 2010 year end assets.
Fixed Income ETFs registered cash outflows of €130 million over the last week. ETFs offering credit exposure and those tracking sovereign benchmarks, witnessed an exit of €130 million and €58 million over the last week. Money market ETFs collected a modest €62 million in weekly cash inflows.
Equity ETFs registered flat flows of €54 million in the past week taking their YTD flows tally to €14.4 billion. Within equities, ETFs tracking emerging market (EM) benchmarks registered cash outflows of €276 million in the past week. European developed country ETFs (mostly Germany) attracted inflows of close to €400 million. ETFs offering exposure to developed non-European countries lost €147 million in cash outflows over the last week. ETFs tracking European and Eurozone sector products registered positive flows on €98 million and €47 million respectively.
Assets Under Management (AUM): Moderate increase in assets
Total European ETP assets increased by 1.5% and ended the previous week at €227.5 billion. Equities gained over €4 billion to end the week with €137.5 billion in assets. Overall commodity assets ended the week with €44.1 billion with a weekly decrease of €231 million. ETFs tracking broad commodity indices lost close to €229 million in assets, week on week. Fixed income ETF assets declined by close to €500 million to end the week at €43.8 billion. ETFs with sovereign exposure lost €373 million over the past week.
Exchange Total Weekly Turnover: Equity and commodities pull down turnover levels
Weekly on-exchange ETP total turnover decreased by 17.7% to end the week at €12 billion. Equity turnover lost over 10% from its previous levels and ended the week at €9.5 billion. Commodity turnover almost halved from its previous levels and ended at €1.3 billion in weekly totals. Fixed Income turnover lost €216 million to reach €1.2 billion.
To request a copy of the report
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
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