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Istanbul bourse slightly recovers from CAD losses
May 12, 2011--One day after the Central Bank of Turkey announced the current account deficit (CAD) for March, a fall in the Istanbul Stock Exchange (İMKB) was partly reversed.
The MKB started the day with an immediate loss in the early morning, falling to as low as 65,200 levels right at the get go. However, Thursday’s second trading session kept the bourse from a further fall. The industrial index and the financial index rose separately by 1.06 percent and 1.52 percent.
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Source: Todays Zaman
Changes To The Composition Of The Oslo Børs Benchmark Index (OSEBX) From 1 June
May 12, 2011--Oslo Børs has done its semiannual revision of the composition of the Oslo Børs Benchmark Index (OSEBX). With effect from 1 June, shares in five companies will be removed from the index, while 3 companies will be added. The number of companies included in the index from 1 June 2011 will be 59.
The Oslo Børs Benchmark Index is intended to be an investable index that comprises a representative selection of all the shares listed on Oslo Børs. Since the index is meant to be investable, shares included in the index must be relatively easy to buy and sell in the market at any time.
With effect from 1 June 2011, shares in five companies will be removed from the index, while three companies will be added to the index.
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Source: Oslo Børs
DB Global Equity Index & ETF Research : European ETF Market Weekly Review : Equity market cloud and no silver shining keep ETF investors at bay
May 12, 2011--Investment Outlook: Flat flows beyond the € 2.5 billion DAX inflows
Overall equity ETFs received €2.8 billion in cash inflows in the past week, €2.5 billon of which went to the iShares DAX (DE) ETF. Discounting for the €2.5 billion – highly unlikely long term - inflow into a single ETF, total weekly flows of €247 million into other equity ETFs can be best termed as modest. The only exception to this trend were emerging market ETFs which collected close to €0.5 billion in the last week extending their YTD cash flow figures to over €1.4 billion.
ETFs tracking broad European developed and European sector benchmarks registered outflows of close to €250 million each. The bearish market sentiments were also reflected in the cash outflows from leveraged long ETFs and inflows into short and leveraged short ETFs.
Fixed Income ETFs registered cash outflows of €217 million in the past week. Sovereigns and money market ETFs saw outflows of €215 million and €85 million respectively. With YTD cash outflows of €261 million, it has been a weak year so far for fixed income ETFs with commodities and equities sharing the bulk of cash flows between them.
Commodities witnessed cash outflows of €77 in the past week taking the YTD flow figures to €2.3 billion. Broad commodity benchmarked ETFs and Gold ETPs received €82 million and €71 million in cash flows in the past week. The fortunes of silver benchmarked ETPs declined as falling silver spot prices contributed to outflows of €234 million.
Assets Under Management (AUM): Assets remain Flat
Total European ETP assets decreased by 0.2% and ended the previous week at €242.5 billion. Equities gained €2 billion in assets, to end the week at €158 billion. Most of the European equity benchmarks ended lower than the previous week’s close: Stoxx 50, FTSE 100, CAC, & the DAX lost 1.94%, 1.53%, 1.19% and 0.3% respectively. ETFs tracking European and Eurozone benchmark indices lost €327 million & €273 million week on week respectively. European sector ETFs also witnessed a decrease in assets by €336 million to end the week at €10 billion.
The last week witnessed a broad based correction in spot prices of most of the traded commodities. As a result, overall commodity ETP assets decreased by close to €2.5 billion in the past week. Silver witnessed a decline of 22.9% price ($/oz) decline which translated into a similar decline of 31 %( €1.2 billion) in assets of silver ETPs to end the week €2.8 billion. Gold ETP assets declined by €355 million to end the week at €23.5 billion. ETFs tracking broad commodity benchmarks also declined by €404 million but still maintained a healthy growth of 20.6% over 2010 year end figures.
Fixed Income AUM remained flat in the last week at €41.9 billion
On-Exchange Total Weekly Turnover: Robust weekly gains led by equity & commodities
Weekly on exchange European ETP total turnover increased by a massive 49% to end the past week at € 13.4 billion. Aided by increased trading activity in equity and commodity ETPs and 5 complete trading sessions, overall ETP exchange turnover gained by over €4 billion & now is at 35% higher levels than 2010 levels. Equities and commodities added close to €2.5 billion and €2 billion in on-exchange trades week on week. Fixed Income ETF turnover went down by 10% to end the week at €952 million.
New ETP Product Launch Calendar: 10 new launches, 23 listings.
Amundi launched two Equity ETFs in the last week offering exposure to the Asian and Latin American emerging markets. Two fixed Income ETFs were introduced which track the iBoxx Euro Corporates Financials and ex Financials indices respectively. All the 4 offerings were listed on the NYSE Euronext Paris.
Lyxor launched 3 Fixed Income ETFs that offer leveraged exposure to Italian and German Sovereign bonds respectively. These ETFs were listed on the NYSE Euronext Paris.
UBS introduced 3 equity ETFs which track a range of developed market benchmarks offering exposure to Japan, Canada and the EMU. These ETFs were listed on the Swiss Stock Exchange. Overall there were 17 equity and 6 alternative ETFs that were cross-listed in the European exchanges over the last week.
To request a copy of the report
Source: Deutsche Bank Global Equity Index & ETF Research
NYSE Euronext European ETF activity highlights for April 2011
May 11, 2011--Listings
April 2011 saw 19 cross-listings from Lyxor on Euronext Brussels and 8 new ETF listings including:
2 from RBS Market Access on Euronext Amsterdam,
1 from EasyETF on Euronext Amsterdam,
4 from ThinkCapital ETFs on Euronext Amsterdam and
1 from Lyxor on Euronext Paris.
At the end of April, NYSE Euronext had 642 listings of 546 ETFs from 17 issuers. So far this year, there were a total of 101 new listings on the NYSE Euronext European market including 75 new primary listings and 26 cross listings.
These ETFs cover more than 360 indices exposed to an extended range of assets and strategies (Equity, Fixed Income, Commodities, Short, Leverage, etc.).
Trading activity
In April 2011, both the average daily number of trades and the Average Daily Turnover (ADT) figures decreased compared to the same period last year:
On average, there were 7 937 trades on a daily basis, representing a decrease of 12.8% versus April 2010.
ADT of €348.7 million, representing a decrease of 16% from the €415.3 million in April 2010.
Assets under Management (AUM)
At the end of April 2011, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €142.3 billion, an increase of 18.6% from the €120.0 billion at the end of April 2010.
Market Quality
The combination of the flow of 22 first-class Liquidity Providers, competitive market makers, client orders and our high capacity, low latency technology contributed to a median spread of 26.5 bps of all listed ETFs.
view the April 2011 edition of the ETF Monthly Flash
Source: NYSE Euronext
BlackRock ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 06-May-2011
May 11, 2011--For the week ending 06 May 2011, there were US$220.2 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in utilities with US$75.6 Mn followed by insurance with US$75.4 Mn net outflows while chemicals experienced net inflows of US$108.6 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$557.3 Mn net inflows. Oil and gas has seen the largest net inflows with US$467.2 Mn, followed by banks with US$294.5 Mn net inflows while basic resources experienced the largest net outflows with US$181.5 Mn.
As of 06 May 2011, there is US$11.1 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 15 out of 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
The European Debt Investor Landscape
Peak Issuer Demand for Funding Faces Multiple Challenges from Investors
May 11, 2011--Highlights
The continued smooth functioning of the debt markets for the government, bank
and corporate sectors is essential to the functioning of Europe’s economy. In this fifth year since the start of the financial crisis, debt is in high demand from European issuers: many banks require capitalisation to comply with Basel III; and government deficits need funding. For example, Fitch Ratings estimates the latter
need to raise EUR1.8trn in the market in 2011 to finance large deficits and to roll over funding.
At the same time, the region’s debt investors are facing a number of challenges, including new regulation, such as Solvency II (SII), which could lead to en masse changes to asset allocation. This could potentially result in a shift in the tectonic
plates of investor funds, leading to significant changes in the availability, cost and
tenor of funding for borrowers. Fitch, however, notes that the SII proposals are still at a draft stage, potentially subject to material amendments, and that large insurers are likely to use internal models whose impact on asset allocation might diverge from the standard framework.
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Source: Fitch Ratings
New EDHEC-Risk Institute research affirms that issuing inflation-linked bonds substantially increases firm value
May 11, 2011--In a climate of increasing inflation uncertainty, EDHEC-Risk Institute has released a new study analysing optimal corporate debt management policies. The study, produced as part of the research chair on “The Case for Inflation-Linked Corporate Bonds: Issuers’ and Investors’ Perspectives,” in partnership with Rothschild & Cie, entitled “Optimal Design of Corporate Market Debt Programmes in the Presence of Interest-Rate and Inflation Risks,” examines the optimal liability structure when the issuer faces such instruments as fixed-rate debt, floating-rate debt, and inflation-linked debt.
The authors of the study, Lionel Martellini, Scientific Director, and Vincent Milhau, Senior Research Engineer, EDHEC-Risk Institute, introduce a general framework with which a corporation subject to default risk may make optimal debt-management decisions.
The main findings of the study are the following:
Debt management has an impact on capital structure. A primary contribution of the paper is to provide a joint quantitative analysis of capital-structure decisions and debt-structure decisions within a standard continuous-time model in the presence of interest-rate and inflation risks.
An optimal debt structure can facilitate substantial increases in firm value. Issuing floating-rate bonds or inflation-linked bonds may increase risk from the perspective of pure debt management, but it may decrease risk from the perspective of integrated asset/liability management. From this trade-off emerges an optimal debt structure, and one can show that under mild simplifying assumptions, minimising the volatility of assets nets of liabilities is equivalent to minimising the risk-adjusted probability of default, which is in turn equivalent to maximising firm value.
A number of corporations would benefit from issuing inflation-linked bonds, bonds usually associated with sovereign states. If a firm’s revenues grow with inflation, issuing some inflation-linked debt can be a natural hedge.
NYSE Euronext Lisbon lists Commerzbank Factor Certificates on commodities
Bank lists 44 certificates on 11 different commodities and reinforces available product offer-
May 2011 – NYSE Euronext today has listed new Factor Certificates issued by
Commerzbank. With this issue, Commerzbank reinforces the current offering of this type of financial
products on NYSE Euronext in Lisbon. Commerzbank adds a new range of 44 new certificates with 11 different commodities as underlying - gold, silver, copper, corn, wheat, oil (Brent and WTI), natural gas, cocoa, coffee and sugar.
Factor Certificates offer on-exchange leverage participation to the daily performance of a specific
underlying with no maturity and a pre-defined fixed leverage. Several fixed leverage levels are
available allowing investors to select the leverage level corresponding to their individual risk profile.
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Source: NYSE Euronext
D Börse staff urge rejection of takeover
May 11, 2011--Deutsche Börse’s employee representatives have urged shareholders to reject the stock exchange operator’s takeover proposal for NYSE Euronext, reflecting worries about job cuts in the wake of a merger.
The works council, which represents the German stock market group’s employees, called on shareholders to vote against the proposed offer.
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Source: FT,com
Pace of UK Growth Under Threat
May 10, 2011--Britain's economy is unlikely to grow as fast as before the financial crisis because its most productive sectors have been hardest hit, jeopardising government plans to cut the deficit.
A Financial Times analysis of the sectorial performance of the economy before and after the crash highlights how much banks and insurance companies boosted economic growth between 2000 and 2008.
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Source: CNBC
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