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EPEX Spot's Exchange Council welcomes study about green power product
June 15, 2011-- The eighth meeting of the EPEX Spot Exchange Council was held on June 8th, 2011 in Leipzig and chaired by Dr. Günther Rabensteiner, Verbund AG. The main topics discussed were:
A prospective study on a Green Power product
The shortening of lead-time to 45 minutes on the Intraday Market
A prospective study about the possible trade with labelled Green Power on EPEX Spot’s markets was presented to the members of the Exchange Council, who welcomed this initiative of EPEX Spot. For some months now, EPEX Spot is working on the internal study which will lead to a Green Power product.
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Source: EPEXSPOT
UK government backs separation of banks
June 15, 2011-The British government intends to force banks to separate their retail operations from their more volatile investment banking, and it is putting up for sale the first bank nationalized during the credit crisis, the nation's Treasury chief said Wednesday.
George Osborne endorsed the principle of insulating retail banking from other bank activities, but said he was waiting for the final report of the Independent Commission on Banking to flesh out the details.
The move is intended to help prevent a repeat of the financial crisis of 2008 and to keep banks from becoming too big to be allowed to fail.
Even before Osborne spoke to a gathering of financial executives, bank shares tumbled lower following reports of his decision.
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Source: Yahoo Finance
DB Global Equity Index & ETF Research :European ETF Market Weekly Review : Defensive positions emerge amidst continuing negative market pressure
June 15, 2011--Investment Outlook: Modest flows set the ball rolling after 2 weeks with flat numbers
Markets across Europe braved a difficult week with most of the European equity benchmarks ending lower than the previous week’s close: CAC, Euro Stoxx 50, FTSE 100 & the DAX lost 2.2%, 2%, 1.5% and 0.55% respectively. Concerns around the Greek solvency pushed the Euro to decline by 1.97% against the US Dollar in cross currency trades.
Investors across Europe, after a few weeks of pause to process the negative news, have started building defensive positions. Equity flows have been muted and Commodity ETPs have witnessed net cash outflows in the past 2 weeks.
Fixed Income ETF investing has resumed after a hiatus with over €500 million entering the European ETF markets in the last 2 weeks alone.
*Within Fixed Income ETFs, cash flows were marked by sovereign ETFs which have collected over €314 million in the last 2 weeks. Corporates and broad fixed income ETFs were the next biggest beneficiaries with €161 and €98 million inflows in the past 2 weeks. Overall, fixed income ETFs have registered outflows of €145 million year till date.
Equity ETFs gathered weekly flows of €306 million with the bulk finding its way into European developed country ETFs & non-European developed country ETFs respectively (mostly Germany & US).Together these two segments collected over €250 million in cash inflows in the last week. Broad European benchmarks and European sector ETFs witnessed outflows of €103 million and €105 million respectively.
In the first 2 weeks of June, ETFs tracking German country benchmarks have witnessed net outflows of €180 million. This is in sharp contrast to the flow patterns of May where they received close to €1.7 billion in monthly cash inflows.
Commodities registered cash outflows of €111 million in the last week with broad commodity ETFs alone accounting for €151 outflows.
Assets Under Management (AUM): ETP Assets remain flat
Total European ETP assets stayed unchanged and ended the previous week at €238.5 billion. Equity ETF assets declined by over €786 million (0.5%) to end the week at €151.9 billion. ETFs tracking broad European developed markets and European developed country benchmarks together lost over €700 million in assets in the last week. Commodity assets increased by €511 million with gold and silver assets increasing by €271 million and €158 million respectively. Fixed Income ETFs gained over €368 million to end the week with €42.3 billion in total assets. Sovereign ETFs alone accounted for over €134 million in the weekly increase.
Exchange Total Weekly Turnover: Turnover levels rise as investors return to the markets.
Trading activity across the European ETP exchanges picked up in the last week, registering gains of 14.2% to end with €10.2 billion. Equities had the lion’s share in this increase, adding close to €1 billion to the weekly total turnover. Fixed Income ETFs displayed the highest percentage increase (25%), which added over €200 million to the weekly turnover numbers. Overall weekly turnover levels increased by €1.3 billion week over week.
New ETP Product Launch Calendar: 3 product launches, 26 Cross-Listings
State Street launched 3 new products in the last week on the European ETP markets. These were 3 Fixed Income ETFs offering exposure to US Treasury, US bonds and global bonds. These were listed on the Deutsche Borse.
26 ETFs were cross-listed on the European ETP exchanges in the past week.
To request a copy of the report
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
BlackRock ETF Landscape: STOXX Europe 600 Sector ETF Net Flows - Week Ending 10-Jun-2011
June 15, 2011--For the week ending 10 June 2011, there were US$290.9 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in automobiles and parts with US$70.8 Mn followed by industrial goods and services with US$57.5 Mn net outflows while basic resources experienced net inflows of US$34.4 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$87.8 Mn net inflows. Healthcare has seen the largest net inflows with US$305.1 Mn, followed by banks with US$211.9 Mn net inflows while automobiles and parts experienced the largest net outflows with US$175.5 Mn.
As of 10 June 2011, there is US$10.1 Bn AUM invested in the STOXX sector ETFs which is greater than the US$8.4 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 14 out of 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Istanbul Stock Exchange becomes a shareholder of Sarajevo Stock Exchange
June 15, 2011--The Istanbul Stock Exchange (ISE) became a shareholder of the Sarajevo Stock Exchange (SASE) by acquiring 5 percent of its capital. The ISE Settlement and Custody Bank Inc. (Takasbank) and the Central Registry Agency of Turkey Inc. also became shareholders of SASE with 5 percent share, each.
Mr. Hüseyin ERKAN, ISE Chairman & CEO, mentioned that the Bosnia-Herzegovina Capital Markets Law was revised to allow the participation of foreign stock exchanges and other financial institutions in SASE’s capital. Mr. ERKAN said “SASE offered us to become partners. SASE plays an important role in Southeastern Europe, and is a bright, promising market with a high potential. I believe that this cooperation will help SASE to develop its investor profile. We sincerely hope that this cooperation will produce satisfactory results for both sides”.
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Source: Istanbul Stock Exchange (ISE)
ESMA launches a consultation on its technical advice on possible delegated acts concerning the Prospectus Directive and invites comments by 15 July
June 15, 2011--The purpose of this consultation document from ESMA is to seek comments on the technical advice that ESMA proposes to give to the European Commission on a number of possible delegated acts.
On Tuesday 25 January 2011, the European Commission published its request to ESMA for advice on possible delegated acts concerning the Prospectus Directive as amended by Directive 2010/73/EU. The Mandate to ESMA sets out the areas on where the Commission is requesting advice in sections 3, 4 and 5.
ESMA has been asked to deliver its advice on sections 3.1 and 3.2 by 30 September 2011 and has also decided to deliver its advice on the areas included in section 3.3 by 30 September because of the importance of the areas concerned. In order to deliver its advice to the Commission, ESMA has decided to split its advice giving this first advice on possible delegated acts concerning the Prospectus Directive responding to sections 3.1, 3.2 and 3.3 of the Commission Mandate by 30 September 2011. In order to finalise the advice by the due deadline, ESMA considers it necessary to conduct a shortened consultation on these sections of the Mandate in order to deliver robust advice to the Commission.
In order for ESMA to best consider the relevance of comments, please indicate any material concerns over the impact of the advice being considered, including if you consider it may lead to unfair or disproportionate financial or administrative burden. In addition please also indicate any possible advantages or benefits deriving from the implementation of the advice.
RiskMonitor Investment Considerations
June 15, 2011--Introduction
Risk and Return – the Uneven Siblings
The financial crisis has brought risk, the ugly sister of return, front of mind for many investors in a very drastic manner. The way capital markets have evolved in the last three years
has shown in many ways that a balanced approach towards the uneven siblings is necessary.
Human instinct is well equipped to behave intuitively appropriate when facing (potential) hazards. How we
approach risk and return opportunities in the capital markets is to some extent connected to these natural
reflexes deep inside us all. Unfortunately, they are not
sufficient to lead us to the right decisions sometimes. The financial impact can be beneficial to investors, suboptimal (think of hyper loss aversion) and sometimes devastating.
Although economic academia and practitioners have put enormous efforts into making appropriate assumptions,
detecting reliable patterns and calculating probabilities, risk management remains no more than an attempt to describe, measure and price uncertainty. But is it the price
we are willing to pay? Is the potential reward high enough?
What if we are biased in our decision-making?
view the June 2011
Risk Monitor- Risk has many guises report
Source: Allianz Global Investors
Dear CEO letters for wealth firms
June 14, 2011--The FSA has sent a Dear CEO letter to wealth management firms after it found 80 per cent of files it reviewed presented a high risk of unsuitable service.
Speaking at the Chartered Institute for Securities & Investment’s annual conference in London this week, FSA director of conduct policy Sheila Nicoll said the regulator’s review of 16 wealth management firms revealed “significant and widespread failings”. Firms included major international private banks.
She said four out of five of the files reviewed had a high risk of unsuitability or the suitability could not be determined. Of the 16 firms, 14 were judged to pose either a high or medium risk of detriment to their customers.
Over two-thirds of the files were either inconsistent with firms’ models or with clients’ attitude to risk.
view letter
Source: Money Marketing
Eurex Exchange to further expand commodities derivatives segment
June 14, 2011--The international derivatives exchange Eurex announced today that it will admit a new option on the Dow Jones UBS Commodity Index for trading on the Eurex Exchange on 27 June 2011. The new option will complement the future on the Dow Jones UBS Composite Index already listed as well as the nine other futures on the entire range of the Dow Jones UBS family subindices.
“In launching the option, we are taking the next logical step and reacting to the increased interest of our clients in exchange-traded index products in this asset class. Trading in the index future should benefit considerably from the availability of an option,” commented Peter Reitz, member of the Eurex Executive Board. “Commodities have established themselves as an investment vehicle among institutional investors, thus enabling better portfolio diversification.”
The new option based on the excess return version of the index is denominated in US dollars. A market making program will be offered for liquidity in the order book as well as for OTC transactions.
Around 40,000 commodity index futures have already been traded this year, thereof 27,500 in the broad Dow Jones UBS Composite Index.
Source: Eurex
Early extension of Xetra agreement by Vienna Stock Exchange
Cooperation to continue until 2017/Vienna Stock Exchange partners also use Xetra
June 14, 2011-- Electronic securities trading at the Vienna Stock Exchange will continue to use Deutsche Börse’s trading system until at least 2017. The two companies announced this decision today. Wiener Börse AG has extended its Xetra agreement with Deutsche Börse AG, which was due to expire at the end of 2012, by a further five years.
“Xetra is an extremely reliable and high-performance trading system, and with Xetra we have operated a very efficient cash market at the Vienna Stock Exchange for over ten years. The extension of this agreement highlights our successful cooperation with Deutsche Börse,” said Michael Buhl, member of the Management Board of Wiener Börse AG and CEESEG AG.
Frank Gerstenschläger, member of the Executive Board of Deutsche Börse AG, said: “The early extension of this agreement demonstrates the high quality and attractiveness of our trading system. Participants in the Vienna cash market will continue to benefit from state-of-the-art technology in the future, as well as from all the measures we are implementing to extend the functionality of our network and back-end system and to regularly improve performance.”
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