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EU dangles EUR 50bn infrastructure investment carrot
October 16, 2011--The EU will next week dangle a 50-billion-euro ($70-billion) carrot of investment funds in a bid to "plug" cross-border holes in Europe's transport, telecommunications and energy infrastructure.
Plans seen by AFP on Friday describe new inducements for European inter-connectivity, intended to re-route European Union funding towards projects that have fallen into abeyance among governments facing tough economic conditions.
Transport accounts for the lion's share, with nearly 32 billion earmarked for development in this sector between 2014 and 2020.
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Source: EUbusiness
September 2011 Euro area inflation up to 3.0% Eu up to 3.3%
October 14, 2011--Euro area1 annual inflation was 3.0% in September 20112, up from 2.5% in August. A year earlier the rate was 1.9%. Monthly inflation was 0.8% in September 2011.
EU3 annual inflation was 3.3% in September 2011, up from 2.9% in August. A year earlier the rate was 2.3%. Monthly inflation was 0.6% in September 2011.
These figures come from Eurostat, the statistical office of the European Union.
Inflation in the EU Member States
In September 2011, the lowest annual rates were observed in Ireland (1.3%), Sweden (1.5%) and the Czech Republic (2.1%), and the highest in Estonia (5.4%) and Lithuania (4.7%). Compared with August 2011, annual inflation fell in seven Member States, remained stable in five and rose in fourteen.
The lowest 12-month averages4 up to September 2011 were registered in Ireland (0.6%), Sweden (1.6%), the Czech Republic and Slovenia (both 1.9%), and the highest in Romania (6.9%) and Estonia (5.2%).
Euro area
The main components with the highest annual rates in September 2011 were transport (5.9%), housing (5.0%) and alcohol & tobacco (3.7%), while the lowest annual rates were observed for communications (-1.9%), recreation & culture (0.5%) and household equipment (1.3%). Concerning the detailed sub-indices, fuels for transport (+0.55 percentage points), heating oil (+0.19) and electricity (+0.12) had the largest upward impacts on the headline rate, while telecommunications (-0.16), vegetables (-0.11) and rents (-0.10) had the biggest downward impacts.
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Source: EUROPA
S&P cuts rating on Spanish debt
Standard & Poor's has downgraded Spainish debt by one notch. Here is the text of the report from the credit rating agency.
October 14, 2011--Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain's growth prospects due to high unemployment, tighter financial conditions, the still high level of private sector debt, and the likely economic slowdown in Spain's main trading partners.
The financial profile of the Spanish banking system will, in our opinion, weaken further, with the stock of problematic assets rising further, as highlighted by the recent revision in our Banking Industry Country Risk Assessment on Spain to Group 4 from Group 3.
As a consequence, we are lowering our long-term sovereign credit ratings on Spain to 'AA-' from 'AA'.
The outlook on the long-term rating is negative.
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Source: The Telegraph
Ireland coming out of the crisis, but challenges remain
October 14, 2011--The Irish economy faces tough challenges as the country exits from a deep recession and banking crisis, but its long-term prospects now appear better than many of the other hard hit European countries, according to the OECD’s latest Economic Survey of Ireland.
The report, presented today in Dublin, shows that gains in competitiveness and increased exports are driving a modest recovery which should see growth reach 1.2 percent in 2011, an upward revision from the zero percent rate projected last May in the OECD’s last Economic Outlook.
The new forecast comes with significant downside risks, however, notably market fears over financial stability in the euro area.
The OECD Survey urges Ireland to persevere on the path of fiscal consolidation established under an EU-IMF stabilisation programme, notably that its budget defict drop below 3% of GDP by 2015. The OECD projects that the Irish deficit will be 10% of GDP this year before beginning a downward trajectory in the coming years.
view the Economic Survey of Ireland 2011
Source: OECD
Watchdogs set sights on bank trading floors
October 13, 2011--Europe's watchdogs are lining up a next wave of regulation to crack down on the often opaque and lucrative trading floors of investment banks.
Over-the-counter dealing of financial instruments -- out of sight from closely scrutinised trading platforms -- is under fire, as is computerised trading, a practice often blamed for causing wild swings in markets.
The sprawling trading floors are vast money-spinners. In Fixed Income, Currencies and Commodities alone, banks such as Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE), UBS (UBSN.VX), HSBC (HSBA.L) and Barclays (BARC.L) generate between 40 and 60 percent of investment banking revenues.
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Source: Reuters
The debt crisis in the eurozone
October 13, 2011--Key dates in the latest phase of Europe's financial crisis:
JULY
21: Eurozone leaders agree on a new bailout of Greece totalling 159 billion euros ($216 billion) and for the first time involving private bondholders such as banks.
They also agree to boost the eurozone's bailout fund, European Financial Stability Facility (EFSF), to 440 billion euros and give it new tools to fight a spread of the debt crisis.
AUGUST
3: Borrowing costs for Italy and Spain hit record highs.
10: Concern emerges that France could be the next country to suffer a debt crisis.
11: Trading authorities in France, Italy, Spain and Belgium restrict the financial technique known as "short selling".
15: The European Central Bank (ECB) says it bought a record 22 billion euros of government bonds, mainly to support Italy and Spain.
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Source: EUbusiness
CDP 2011 FTSE 350 findings: UK companies must adopt more ambitious emissions reduction measures to help meet Carbon Budgets
October 13 2011 - The 2011 edition of the FTSE 350 annual Carbon Disclosure Project (CDP) report, published today, has revealed that UK companies must set more ambitious greenhouse gas (GHG) emissions reduction targets if the UK is to meet its Carbon Budgets.
Just 15% of companies' emissions reduction targets currently stretch beyond 2020 and in carbon intensive sectors the average duration of a target is just 11 years to 2018 with a 2007 baseline. This is despite the UK target of 80% reduction in emissions, from 1990 levels, by the year 2050 and the fact that 79% of FTSE 350 reporting companies are now citing climate change regulation as a risk to their business, up from 68% in 2010. Business needs strong policy signals from Government to encourage further investment in longer term emissions reduction projects.
The report, entitled Can UK Plc help meet the Carbon Budgets?, was written by global professional services firm PwC on behalf of CDP and analysed disclosures from 236 FTSE 350 companies. It showed a rise in the number of reporting companies setting reduction targets from 58% in 2010 to 66% in 2011. However, of these, just 22% have set absolute targets, with the remainder adopting intensity targets. Only 55% of the respondents from the carbon intensive materials, energy and industrials sectors reported emissions reduction targets, despite accounting for almost three quarters of the total emissions disclosed.
view the CDP FTSE 350 Report 2011-Can UK Plc help meet the Carbon Budgets?
Source: Carbon Disclosure Project (CDP)
ESMA publishes an opinion on practical arrangements for the late transposition of the UCITS IV Directive
October 13, 2011--The deadline for the transposition of the UCITS IV Directive into national legislation was 1 July 2011. However, most Member States (MS) have not yet fully transposed the Directive and its implementing measures. Late transposition can create difficult situations where some competent authorities may not have the legislative framework in place to allow a proper implementation of the Directive.
Without prejudice to any initiatives taken by the European Commission in case of late transposition by MS, ESMA intends to address the situation at an operational level in order to minimise, as far as pos-sible, the impact on industry and investors deriving from lack of transposition.
ESMA proposes in today's opinion practical arrangements for cross-border operations involving one MS that has not transposed the Directive.
view the opinion-Practical arrangements for the late transposition of the UCITS IV Directive
Source: ESMA
DB Global Equity Index & ETF Research :European ETF Market Weekly Review:Equity outflows continue across the board
October 13, 2011--Investment Outlook: Equity outflows continue as fixed income and commodities attract fresh capital
In the week that ended on October 7th, European domiciled ETPs registered net cash outflows of €735 million. Most of the European equity benchmarks recovered and ended higher than the previous week's close: Euro Stoxx 50, CAC, FTSE 100 and the DAX, gained 4.1%, 3.8%, 3.4% and 3.2% respectively. Gold and silver spot prices [US$/oz] appreciated by 0.3% and 2.2% respectively. Rising equity benchmarks on both sides of the Atlantic pushed the ETF asset gains into positive territory even as cash flows continued their southward journey.
Fixed Income ETFs registered cash inflows of €139 million over the last week. ETFs tracking sovereigns and those offering credit exposure collected €70 million and €58 million respectively in the last week. YTD, fixed income ETFs have collected €1.2 billion in cash inflows which is close to 3% of its 2010 assets.
Equity ETFs registered across the board outflows totaling over €1 billion in the past week taking their YTD flows tally down to €14.3 billion. Within equities, ETFs tracking emerging market (EM) benchmarks registered the highest cash outflows of €673 million in the past week. Developed non-European ETFs and ETFs tracking Asian benchmarks witnessed cash out flows of €282 million and €217 million respectively. European sector ETFs tracking European sectors and European developed countries pocketed modest cash inflows of €118 million and €60 million respectively.
Commodity ETPs received cash flows totaling (€229 million) over the past week. Most of the inflows were collected by precious metals with gold and silver products receiving the majority in that segment. Gold products witnessed inflows of €259 million over the past week taking its YTD cash flows to €3.2 billion.
Assets Under Management (AUM): Moderate increase in assets
Total European ETP assets increased by 1.1% and ended the previous week at €224.2 billion. Equities gained close to €1.7 billion to end the week with €133.5 billion in assets. European developed country ETFs posted weekly gains of over €1 billion and ended the week at €36.2 billion. Overall commodity assets ended the week with €44.4 billion with a weekly gain of €678 million. Fixed income ETF assets remained flat to end the week at €44.3 billion.
Exchange Total Weekly Turnover: Equity and commodities pull down turnover levels
Weekly on-exchange ETP total turnover decreased by 6.1% to end the week at €14.4 billion. Equity turnover lost 4.8% from its previous levels and ended the week at €10.3 billion. Fixed Income turnover gained close to €200 million from its previous levels and ended at €1.4 billion in weekly totals. Commodity turnover decreased by €607 million to reach €2.5 billion.
To request a copy of the report
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
Euro area securities issues statistics: August 2011
October 12, 2011--The annual growth rate of the outstanding amount of debt securities issued by euro area residents decreased from 3.7% in July 2011 to 3.3% in August. For the outstanding amount of quoted shares issued by euro area
residents, the annual growth rate was 1.9% in August 2011, compared with 1.8% in July.
New issuance of debt securities by euro area residents totalled EUR 853 billion in August 2011 (see Table 1 and Chart 1). Redemptions stood at EUR 825 billion and net issues amounted to EUR 24 billion (see Table 1).1 The annual growth rate of outstanding debt securities issued by euro area residents
decreased from 3.7% in July 2011 to 3.3% in August (see Table 1 and Chart 3).
As regards the sectoral breakdown, the annual growth rate of outstanding debt securities issued by nonfinancial corporations increased from 4.8% in July 2011 to 5.1% in August (see Table 2and Chart 4). For the monetary financial institutions (MFIs) sector, this growth rate was 1.9% in August 2011, compared with 1.8% in July. The annual rate of change of outstanding debt securities issued by financial corporations other than MFIs decreased from 0.5% in July 2011 to -1.0% in August. For the general government, this growth rate decreased from 6.8% in July 2011 to 6.4% in August.
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Source: ECB
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