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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
European Commission A roadmap for stability and growth
October 12, 2011--The Commission has presented a roadmap outlining the comprehensive response that is needed to restore confidence in the Euro area and the European Union as a whole.
This response is designed to break the vicious circle between doubts over the sustainability of sovereign debt, the stability of the banking system and the European Union's growth prospects'.
Delivering on the commitments made in President Barroso's State of the Union Address, the Commission outlines five areas of action that are interdependent and need to be implemented together and as quickly as possible. The five areas are: a decisive response to the problems in Greece; enhancing the euro area's backstops against the crisis; a coordinated approach to strengthen Europe's banks; frontloading stability and growth enhancing policies, and building robust and integrated economic governance for the future.
President Barroso said, "This roadmap charts Europe's way out of the economic crisis. Reactive and piecemeal responses to different aspects of the crisis are no longer sufficient. We now need to get ahead of the curve. Confidence can be restored through an immediate deployment of all the elements needed to solve the crisis. Only in this way we will be able to convince our citizens, our global partners and the markets that we have the solutions that measure up to the challenges all economies are facing. We need to reach agreement at the European Council on the 23rd October".
The roadmap calls for:
Decisive action on Greece – so that all doubt is removed about Greece's economic sustainability. This must include disbursement of the sixth tranche, a second adjustment programme, based on adequate financing through public sector and private sector involvement and continued support from the Commission Task Force.
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Source: European Commission
FESE European Equity Market Report September 2011
October 12, 2011--FESE has published the ‘European Equity Market Report’ which gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market. The FESE Statistics Methodology used in the Report has been agreed by all the trading venues involved, both RM and MTFs.
view the European Equity Market Report - Year 2011 (updated with September figures)
Source: FESE
Luxembourgish regulator approves Deutsche Börse and NYSE Euronext merger
October 12, 2011--The Luxembourg Commission de Surveillance du Secteur Financier (CSSF) has approved the merger of Deutsche Börse and NYSE Euronext. This represents an important supervisory milestone for the merger at Deutsche Börse Group’s important Luxembourg location.
The CSSF examination of the matter focuses on shareholder control and is comparable to the examination by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin), which has already been successfully concluded, and to that of the shareholder control procedure by the stock exchange regulators. It deals with the admissibility of the acquisition of important shareholdings in Clearstream companies within Deutsche Börse Group in Luxembourg by the parent company of the new group (Holdco) domiciled in the Netherlands. These include Clearstream International S.A. and Clearstream Services S.A., as well as Clearstream Banking S.A. as an international settlement institution.
CSSF’s examination involved assessing the reliability of the Dutch Holdco and its financial solidity, as did BaFin’s. CSSF’s overall conclusion was that there are no banking supervisory reasons against the merger in Luxembourg either.
The transaction is subject to further closing conditions, such as approval by the responsible EU competition authorities and the responsible stock exchange supervisory authorities.
Source: Deutsche Börse
ETF Quarterly Statistics: 3rd quarter 2011
A record-breaking quarter: new report provides detailed figures on the growth of SIX Swiss Exchange's ETF segment.
October 12, 2011--Monthly turnover in SIX Swiss Exchange's ETF segment was distinctly above CHF 10'000 million twice in a row last quarter. The CHF 13'767.8 million achieved in August was in fact an all-time record and the CHF 12'332.74 million in September the second-best result ever. In comparing the quarterly figures of Q3 2011 to those of the same period last year, the results have more than doubled, with CHF 33'398.6 million compared to 14'946.7 million.
Commodities the most actively traded asset class
At product level we also saw a significant increase in turnover from the previous quarter. The ETF with the strongest turnover in Q3 2011 was the ZKB Gold ETF, which more than doubled its turnover compared to the previous quarter, amounting to CHF 1'761.2 million. Second was the CS ETF (CH) on the SMI and third the ZKB Gold ETF (USD), both of which had turnovers much higher than CHF 1 billion and recorded a growth of 137 % and even 214 % respectively.
ZKB ETFs was thus the best product provider in terms of turnover during the third quarter with 21.94 %, pushing CS ETF from the top spot (now second with 21.22 %), while UBS ETF gained a 13.31 % share of turnover in comparison to the previous quarter, putting it in third place.
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Source: SIX Swiss Exchange
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