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BlackRock ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 29-Apr-2011
May 4, 2011--For the week ending 29 April 2011, there were US$409.5 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF net inflows last week were in food and beverage with US$152.2 Mn followed by automobiles and parts with US$82.9 Mn net inflows while basic resources experienced net outflows of US$16.1 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$940.2 Mn net inflows. Oil and gas has seen the largest net inflows with US$510.4 Mn, followed by banks with US$333.7 Mn net inflows while basic resources experienced the largest net outflows with US$155.7 Mn.
As of 29 April 2011, there is US$11.9 Bn AUM invested in the STOXX sector ETFs which is almost double the US$6.4 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 17 out of 19 sectors.
French Bank Volunteers Tobin Tax
May 4, 2011--Inspired by the economist and Nobel laureate James Tobin, the French bank Crédit Coopératif has recently unveiled plans to impose its own voluntary contribution on foreign exchange transactions (CVTC) in a bid to fund international development aid.
Eager to persuade other financial institutions to follow suit, the bank is due to present its plans for the solidarity levy (CVTC – Change solidaire) at the forthcoming 2015 Convergence Forum in Paris.
In its official release, the Crédit Coopératif estimated that introducing a 0.01% tax on the total sum of its inter-bank foreign exchange operations will serve to generate in the region of EUR100,000 a year for development projects.
Clearstream and Euroclear Bank set higher standards for international securities
JOINT PRESS RELEASE * Launch of a new industry framework developed in collaboration with the International Securities Market Advisory Group * BNP Paribas Securities Services, Citibank N.A. Issuer Services, European Investment Bank and KfW as early supporters of the initiative and the associated best practice implementation process * Reducing inefficiencies, costs and risks in issuing and servicing international securities while increasing transparency on service quality and market performance
May 3, 2011--Euroclear Bank and Clearstream, the international central securities depositories (ICSDs), have developed jointly and in collaboration with the International Securities Market Advisory Group (ISMAG), a new industry framework to increase transparency and efficiency for the issuance and asset servicing of international securities. The framework sets standards for these securities issued in and primarily deposited with the ICSDs, with outstanding levels close to €9 trillion. Major issuers and industry participants like BNP Paribas Securities Services, Citibank N.A. Issuer Services, European Investment Bank and KfW are supporting the initiative and the associated best practice implementation process.
International securities issuance is becoming more complex, with increasing challenges to reconcile legal and operational requirements. The new international securities standards are the result of a three-year programme led under the auspices of ISMAG to identify and encourage best practices in issuance and asset servicing operations throughout the entire value chain. ISMAG’s recommendations aim to reduce the inefficiencies, costs and risks in issuing and servicing securities while increasing transparency on the use of the new standards for the benefit of the issuer and investor communities.
ETF Securities lines up potential $1bn listing
May 3, 2011--ETF Securities which launched the first gold ETF in 2003, is lining up a potential $1bn share listing, in the latest sign of euphoria in the sector.
Investment bankers said the ETF provider, which has $28bn of products under management and which specialises in the booming commodities sector, had retained Citigroup and Bank of America Merrill Lynch to discuss its strategic options. These include an initial public offering, subject to market conditions, according to three different people.
EU financial system still weighed down by risk
May 3, 2011-The risk burden still threatens Europe's financial stability, and the crisis aftermath will last many years, the two vice chairs of the EU's new financial risk watchdog warned the Economic and Monetary Affairs Committee on Monday. Mervyn King and Andrea Enria repeatedly called for the EP's support when pushing through difficult reforms, particularly in better times when the financial sector would lobby fiercely against regulation.
Mervyn King, the first Vice Chair of the European Systemic Risk Board (ESRB) and Governor of the Bank of England, assured MEPs that the ESRB would not "shy away from making all the warnings and recommendations it considered necessary". Andrea Enria, also an ESRB Vice Chair and head of the European Banking Authority, said that one of the ESRB's most pressing tasks would be to tackle the "shadow" banking sector, whose activities escape the rules applying to normal banks.
Political support vital
Asked whether he had the human and financial resources he needed, Mr King insisted that generating the necessary political will would prove the biggest challenge. "The right judgements will be dependent on the existence of will and determination. At times, the ESRB is going to have to take very unpopular decisions and face an immense lobby. We count on the EP to support us in those days" he said.
Boerse Stuttgart achieves a turnover of around EUR 7.9 billion in April
Trading in securitised derivatives at previous year's level/ higher trading volumes of euro-denominated government bonds
May 3, 2011--According to its order book statistics, Boerse Stuttgart achieved a turnover of around EUR 7.9 billion in April 2011. This meant that trading volumes were at the level of April 2010. In comparison with the eventful months at the beginning of the year, trading activities among investors were less buoyant also due to a number of public holidays.
The lion's share of trading volume was accounted for by securitised derivatives. At more than EUR 4.1 billion, turnover in April was lower than in the record-breaking month of March, but nevertheless slightly up on the figure for April 2010. Both leverage products and investment products accounted for around EUR 2 billion of turnover.
Development of Financial Markets in Central Europe: the Case of the CE4 Countries -IMF Working Paper
May 3, 2011-- Summary: Financial markets in the CE4 countries are still shallow compared to other advanced EU countries. While the government bond markets are comparable in size, measured by capitalization in percent of GDP, the private bond, private credit, and equity markets lag behind.
Empirical analysis in this paper helps identify factors that explain this phenomenon. We find that the observed differences cannot be explained by macroeconomic variables only, but incorporating indicators of institutional development and external funding eliminates the gap in the case of the equity and private credit markets. However, for the private bond market a significant gap remains even after accounting for these factors.
ECB: challenges to financial integration in 2010
May 2, 2011--After the improvement observed in 2009 in many market segments and despite continuous equity market integration in 2010, the financial environment with the worsening fiscal situation in some euro area countries posed challenges for European financial integration, the European Central Bank’s Financial Integration report published today concluded.
The main policy-relevant messages of the report can be summarised as follows:
Euro area capital markets continued to increase in size in recent years, and cross-country differences in size declined.
The worsening of the fiscal situation in some countries posed serious challenges to financial integration in 2010. The money and bond markets were particularly affected.
The sharp divergence of yields in some European government bond markets reflected an increase in the perception of sovereign risks as well as liquidity risks, in some cases exacerbated by market overreaction.
The euro area equity markets were less strongly affected by the recent developments. Most available indicators suggest that the equity market integration actually strengthened in 2010.
view the report-Financial Integration in Europe May 2011
The Autorité des marchés financiers calls for the greatest vigilance regarding non-financial products1
May 2, 2011--After the stock market crises of the dot-com bubble in 2000 and subprime mortgages in 2007, retail
investors have become more wary of financial investments and are increasingly tempted to place their
savings in other types of investments, notably due to the current low level of interest rates.
Over the last few years, the AMF has noted growth in offers from market players proposing investments,
sometimes with highly attractive yields, in sectors as varied as works of art, solar panels, stamps, letters
and manuscripts or other niche sectors.
The AMF would like to remind investors that these sectors are not all subject to any specific regulations
other than the Consumer Code and the Civil Code.
Whenever an adviser or intermediary offers an investment in a product other than financial products, ask them or the AMF whether the product in question has an information document approved by the AMF, which is mandatory in certain cases.1 If there is no such information document, the product they are offering is not regulated by the AMF. In such cases, your adviser or intermediary is not bound by the following rules:
Average daily volume of 10.5 million contracts at Eurex Group in April
Eurex Exchange: stable volume year-to-date in 2011/Eurex Repo: continues to grow in all markets year-on-year
May 2, 2011--: In April 2011, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.5 million contracts (April 2010: 12.7 million). Of those, 7.6 million were Eurex Exchange contracts (April 2010: 9.4 million), and 2.9 million contracts (April 2010: 3.3 million) were traded at the U.S.-based International Securities Exchange (ISE).
The decline of Eurex Exchange volume y-o-y is due to the lower volatility compared with April 2010 and the adjustment of contract specification of equity derivatives. In total, 145.1 million contracts were traded at Eurex Exchange and 58.3 million at ISE.
Eurex Exchange traded 49.9 million equity index derivatives contracts (April 2010: 58.1 million). The single largest contract was the future on the EURO STOXX 50® Index with 20.8 million contracts. The option on this blue chip index totaled 20.2 million contracts. Futures on the DAX index recorded 2.3 million contracts while the DAX options reached another 4.3 million contracts. The Eurex KOSPI Product recorded approximately 167,000 contracts, an ADV of almost 8,800 contracts. On 13 April, a new daily order book volume peak was recorded with 17,688 Eurex KOSPI contracts.
The equity derivatives (equity options and single stock futures) segment at Eurex Exchange recorded 54.3 million contracts (April 2010: 80.2 million). Thereof, equity options totaled 19.6 million contracts and single stock futures equaled 34.7 million contracts. The decrease of equity derivatives volume y-o-y is mainly due to the change of contract specifications. In Q1 2011, Eurex Exchange increased the contract size of most equity options and single stock futures to match international standards, with the effect of lower turnover in these products. The adjusted figure of monthly volume in the equity derivatives segment is 73.4 million contracts.
