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Euro area investment fund statistics
June 21, 2011--In April 2011, the amount outstanding of shares/units issued by euro area investment funds other than money
market funds was EUR 34 billion higher than in March 2011. This increase was due mainly to net issues of
shares/units.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to EUR 5,790 billion in April 2011, from EUR 5,756 billion in March
2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to EUR 1,071 billion from EUR 1,077 billion.
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to EUR 26 billion in April 2011, while transactions in shares/units issued by money market funds amounted to EUR 6 billion.
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Source: ECB
STOXX Launches Currency Hedged Version Of European Benchmark Index
June 21, 2011--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today introduced the STOXX Europe 600 Hedged EUR Index. The new index is a currency hedged strategy benchmark aimed at investors seeking exposure to the well-known STOXX Europe 600 Index, while at the same time looking to reduce the risk of currency fluctuations.
The new index is designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds and other investable products.
“With the launch of the STOXX Europe 600 Hedged EUR Index, we are offering market participants a single, innovative and rules-based tool that enables them to follow the performance of the renowned STOXX Europe 600 Index, while at the same time limiting the risks of currency fluctuations,” said Hartmut Graf, chief executive officer, STOXX Limited. “This new index caters to the needs of our growing global client base, and thus marks another milestone in STOXX’s global expansion.”
The STOXX Europe 600 Hedged EUR Index replicates a hypothetical investment portfolio that is designed to represent the returns of the STOXX Europe 600 Net Return Index while hedging the currency risk, but not the underlying constituent risk. Market participants who employ a currency-hedged investment strategy are generally willing to forgo potential currency gains in exchange for the reduction in the risks associated with foreign exchange fluctuations. To achieve this, the index combines the performance of the underlying STOXX Europe 600 Index with a hypothetical, rolling investment into one-month foreign exchange forward contracts.
The underlying STOXX Europe 600 Index is reviewed quarterly in March, June, September and December. Daily history is available back to December 30, 1998.
Please see www.stoxx.com for further information on this index family.
Source: STOXX
Statistics on Mortgage Lending: June 2011 Edition
June 21, 2011--Since the beginning of 2007, some 300 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending & Administration Return (MLAR) each quarter, providing data on their mortgage lending activities.
This latest edition covers the period from 2009 Q4 to the 2011 Q1. We publish statistics approximately 2½ months after the end of each quarter. Provisional dates are shown under future editions.
The MLAR covers both regulated and non-regulated residential lending to individuals. Regulated loans are secured by a first charge on residential property, where the property is for the use of the borrower or a close relative. Non-regulated lending includes buy to let, second charge and, in some cases, further advances on loans that were originally taken out before regulation came into effect.
Key statistics for Q1 2011 are as follows1:
The total value of outstanding loans reduced slightly from last quarter to £1,212bn in Q1.
New advances in the quarter totalled £33bn, 10% lower than in Q4 but 3% up on the amount advanced in Q1 2010.
New commitments totalled £35bn, 1% up on last quarter and 3% up on Q1 last year.
Lending for house purchase represented a reduced share of new lending this quarter, accounting for some 54% of new advances and 52% of new
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Source: FSA.gov.uk
GDP per capita in the Member States varied between 43% and 283% of the EU27 average
June 21, 2011--Based on first preliminary estimates for 20101, Gross Domestic Product (GDP) per capita expressed in Purchasing Power Standards2(PPS) varied from 43% to 283% of the EU27 average across the Member States.
In Spain, Italy and Cyprus, GDP per capita was around the EU27 average, while in France it was around 5% above the average. Germany, Belgium, Finland and the United Kingdom were between 10% and 20% above the average,
while Denmark, Ireland, Austria and Sweden were all around 25% above the average. The Netherlands was about one third above the average, while the highest level of GDP per capita in the EU27 was recorded in Luxembourg3.
Greece, Slovenia, Malta, Portugal and the Czech Republic were between 10% and 20% lower than the EU27 average, while Slovakia was around 25% below. Estonia, Hungary, Poland, Lithuania and Latvia were between 35% and 50% lower, while Romania and Bulgaria were around 55% below the EU27 average.
These figures for GDP per capita, expressed in PPS, are published by Eurostat, the statistical Office of the European Union. They cover the 27 EU Member States, three EFTA countries, four candidate countries and three Western Balkan countries.
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Source: Eurostat
OECD Economic Survey of Iceland 2011
June 21, 2011--Summary
Iceland is resolving the economic problems left by the financial crisis. It is well advanced in implementing the comprehensive programme agreed with the IMF. The economy stopped contracting by late 2010 and a consumption and business investment-led recovery is projected to gather momentum, lifting economic growth to 3 per cent by 2012. Inflation is projected to remain low and the underlying current account surplus to be sustained.
Much has been done to restore the financial sector to health. The banking system was recapitalised by the end of 2009 and steps have recently been taken to accelerate private-sector debt restructuring. Reforms have been made to regulation and supervision to address shortcomings exposed by the financial crisis. The Central Bank of Iceland (CBI) and the Financial Supervisory Authority (FME) have signed a co-operation agreement to strengthen macro-prudential supervision, although policy implementation could be more effective if the FME were merged into the CBI, thereby expanding the CBI’s responsibilities to include prudential regulation and supervision. A strategy to relax capital controls was recently adopted, with a period of liberalization likely to span several years.
The monetary policy framework needs to be strengthened. Monetary policy alone has not been very effective either in countering the credit cycle or in delivering price stability. To improve performance, the CBI should adopt an inflation targeting regime that places greater weight on smoothing fluctuations in the exchange rate and is supported by fiscal policy and macro-prudential regulation. In the event that Iceland joins the EU, it should seek to adopt the euro as quickly as possible.
The government has begun to put the public finances on a sustainable path. The budget deficit is set to fall below 3% of GDP in 2011, and a small surplus is projected by 2013. The fiscal framework has been strengthened but the government should go further by adopting a medium-term budget balance fiscal rule consistent with a debt target.
view overview of OECD Economic Surveys
ICELAND
Source: OECD
Eurozone current account shows EUR 5.1bn deficit
June 20, 2011-- The eurozone's current account balance worsened in April to show a deficit of 5.1 billion euros ($7.3 billion), the European Central bank said Monday.
The ECB also revised the figure for the month of March in the 17-nation area to a deficit of 3.0 billion euros from an initial estimate of 4.7 billion euros.
The current account on the balance of payments, which includes imports and exports in both goods and services plus capital transfers, is a closely tracked indicator of a country's or area's ability to pay its way in the world.
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Source: EUbusiness
Italian stocks plunge after Moody's credit warning
June 20, 2011-The main Milan stock exchange index fell by more than two percent at the start of trading on Monday after Moody's warned it may cut Italy's credit rating in view of strains in the economy.
Banking stocks were among the worst affected, with shares in Intesa San Paolo dropping 2.42 percent to 1.775 euros and UniCredit plunging 2.36 percent to 1.487 euros following Moody's announcement on Friday.
Eurogroup head Jean-Claude Juncker also warned on Saturday that the euro crisis hitting Greece and others could affect Italy and Belgium, saying in an interview with a German daily: "We are playing with fire."
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Source: EUbusiness
New EDHEC-Risk Institute research highlights the dangers of accounting and sponsor risk for corporate pension plans
June 20, 2011--A new study entitled “The Elephant in the Room: Accounting and Sponsor Risks in Corporate Pension Plans,” drawn from the AXA Investment Managers “Regulation and Institutional Investment” research chair at EDHEC-Risk Institute, surveys how pension funds and sponsors manage the main risks they face and how institutional constraints—accounting and prudential regulations, the organisation of the relationship between the pension fund and its sponsor, and social laws—influence the investment strategy of sponsors and pension funds.
The survey elicited 100 responses. The assets under management (AUM) of the pension funds with which the respondents are associated amount to more than €730 billion. Sponsoring companies have a total balance sheet size of more than €5.5 trillion.
Among the main results of the survey:
Sponsors of pension funds are concerned primarily about the economic risk of facing higher than expected pension costs—95% mention this risk. 93% of respondents mention accounting risk, the reported cost of pensions in the sponsors’ books as opposed to the true cost of providing pensions, and the balance sheet volatility it causes. Reputation risk comes third.
For pension funds (especially for traditional defined-benefit ones), the main risk is sponsor default and reduced pensions or curtailment. Respondents rank sponsor risk as the greatest risk in pension funds (77% mention this risk, usually with the greatest intensity).
However, 84% of pension funds do not manage sponsor risk. The primary reason in Europe for not managing sponsor risk is the presence of pension fund insurance (46% of respondents). In “other reasons”, 15% of respondents argue that the pension fund’s sponsor is a government or quasi-government entity, and 4% of respondents have purchased protection from sponsor insolvency.
view EDHEC-Risk Publication: The Elephant in the Room: Accounting and Sponsor Risks in Corporate Pension Plans
Source: EDHEC-Risk Institute
FESE European Equity Market Report - May 2011 Figures
June 20, 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 report
Source: FESE
Netherlands to ease rules on pension provider / financial product link
June 17, 2011--Dutch social affairs minister Henk Kamp has said he intends to allow pension providers to link their financial products to their affiliated, mandatory industry-wide pension funds.
In a letter to parliament, he announced a bill that would allow providers to indicate this connection to institutional players, but would maintain the ban on mentioning the link to consumers.
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Source: IP&E
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