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Concern as Turkish growth hits 11%
June 30, 2011--Turkey has outpaced China with first-quarter annualised economic growth of 11 per cent, but its red-hot economy is proving more of a headache for policymakers than a cause of celebration.
The data, showing quarter-on-quarter growth of 1.4 per cent driven mainly by consumer spending, will fuel doubts over the central bank’s unorthodox attempts to cool the economy by limiting banks’ lending, rather than raising interest rates.
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Source: FT.com
Evercore Pan-Asset moves ahead of market to bring clarity and simplicity to ETF fund structures
June 29, 2011-Evercore Pan-Asset (EPA) announced today that they will exclude swap-based Exchange Traded Funds (EFT) from the majority of their popular PanDYNAMIC model portfolios and OEIC funds to address investor concern after further Bank of England and FSA warnings last week
Action will be taken immediately to rebalance portfolios. Only the higher risk PanDYNAMIC Aggressive model portfolio and Aggressive OEIC fund will continue to use properly-structured, well-collateralised synthetic ETFs where an asset class cannot be efficiently accessed by other means.
EPA have confidence in their carefully-researched universe of synthetic ETFs and will continue to use them for direct clients with whom a dialogue can be held about the true risks and benefits.
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Source: Evercore Pan Asset
Borsa Italiana welcomes on the ETFplus market a new issuer: Ossiam listed its first 4 equity ETFs.
June 29, 2011--First 2 ETFs track minimum variance indices which aim is to select the most liquid components of the base index (respectively Stoxx 600 and S&P 500) so that the expected volatility of the portfolio obtained is minimized and is guaranteed a minimum sector diversification. The 2 ETFs are:
OSSIAM ETF ISTOXX EUROPE MIN VARIANCE NR (LU0599612842)
OSSIAM ETF US MINIMUM VARIANCE NR (LU0599612685)
The other 2 ETF track "Equally Weight" indices which are composed by the same shares of the base indices (respectively Stoxx Europe 600 and Eurostoxx 50) but with the same weight. The 2 ETFs are:
OSSIAM ETF EURO STOXX 50 EQUAL WEIGHT NR (LU0599613063)
OSSIAM ETF STX EUROP 600 EQUAL WEIGHT NR (LU0599613147)
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Source: Borsa Italiana
BlackRock ETF Landscape: STOXX Europe 600 Sector ETF Net Flows -Week Ending 24-Jun-2011
June 29, 2011--For the week ending 24 June 2011, there were US$216.2 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in healthcare with US$98.4 Mn followed by oil and gas with US$97.7 Mn net outflows while telecommunications experienced net inflows of US$77.2 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$211.6 Mn net outflows. Insurance has seen the largest net outflows with US$188.8 Mn, followed by basic resources with US$173.6 Mn net outflows, while banks experienced the largest net inflows with US$298.0 Mn.
As of 24 June 2011, there is US$9.5 Bn AUM invested in the STOXX sector ETFs which is greater than the US$5.5 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 16 out of 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
Deutsche Bank acts as market maker in Eurex’s dividend option
June 29, 2011-The international derivatives exchange Eurex announced today that Deutsche Bank will serve as a market maker in the option on the EURO STOXX 50® Index Dividend future. Deutsche Bank is the first Permanent Market Maker in this product, providing continuous quotation in the order book. Since 1 June 2011, Eurex Exchange has been offering its Permanent Market Makers who fulfill predefined quote obligations in the option on EURO STOXX 50 Index Dividend future significant rebates until the end of 2012.
“We are pleased to have Deutsche Bank as a Permanent Market Maker as price transparency in the order book is one major precondition for the further success of our dividend option,” said Peter Reitz, member of the Eurex Executive Board. “With our option on the EURO STOXX 50 dividend future, investors can hedge the income streams from the dividends of the euro zone’s leading equity index and thus improve risk management of expected dividends in their portfolios.”
Eurex launched its dividend options in May 2010. So far in 2011, more than 270,000 options contracts were traded, while open interest is approximately 260,000 contracts.
The dividend options are part of Eurex’s dividend derivatives product suite, with the initial products introduced in June 2008. Year to date, in all dividend products approximately 20,000 contracts are traded daily; altogether more than 2.4 million contracts in 2011. Open interest stands at 1.6 million contracts currently, representing approximately 11 billion euros of notional dividend value.
Source: Eurex
Brussels wants 'Tobin' trading tax in Europe: EU sources
June 29, 2011--The European Commission is to call for a "Tobin" tax on financial transactions in Europe as part of a wide-ranging reform of the bloc's next seven-year budget, EU sources said Wednesday.
The move is part of a bid by the European Union's executive arm to enable the bloc to raise its own finance rather than depend on funding by EU states.
EU commissioners meeting on Wednesday "adopted a proposal on a tax on financial transactions," one of the sources close to the matter told AFP.
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Source: EUbusiness
RTS and Moscow School of Management SKOLKOVO will establish the Sustainability Index
June 28, 2011--On June 27, 2011 a visiting meeting of representatives from the Committee on Corporate Social Responsibility of the Russian Union of Industrialists and Entrepreneurs, Moscow School of Management SKOLKOVO and RTS Stock Exchange took place.
As a result of the meeting RTS and SKOLKOVO have started working on a joint project for establishing and calculating the first Russian Sustainability Index.
The Index constituents list will include shares of Russian issuers traded on the organized stock market and selected on the basis of regularly published corporate and social responsibility reports (CSR).
According to the global practice CSR reporting allows companies to release information on their issues in the area of economy, environmental impact and social service. By publishing non-financial reports a company stresses the importance of its relationships with employees, customers, investors and local community and establishes that such relationships are a key to successful sustainable growth by the company.
Two large-scale tasks face the project participants. The first task is the development of criteria for selection of securities to be included in the calculation of the Index. To solve this task best world practices and expert opinions will be used. The second task is the development and promotion of sustainable growth idea as an important and integral part of companies daily activities.
Final results of the project will be presented in a month.
Source: RTS Group
IMF-Luxembourg: Financial System Stability Assessment—Update
June EXECUTIVE SUMMARY: Luxembourg hosts a large international financial center that plays a pivotal role in its
economy and in European financial markets. Over the last two decades, the financial center has been the key driver of domestic economic growth, while also playing an important
role in European Union (EU) financial markets, with sizable shares in terms of fund domiciliation, primary bond listing, and private banking. The banking industry is mostly
foreign-owned and outward-oriented, and only a handful of banks are active in the domestic retail market.
The crisis exposed significant vulnerabilities in Luxembourg’s financial system, due primarily to large cross-border exposures to foreign parent banks. Bank balance sheets
contracted significantly during the crisis, mainly through reduced cross-border intra-group transactions, and a few bank subsidiaries failed on contagion from their parent groups. The
investment fund industry faced sizable redemptions at the peak of the crisis.
However, the effects of the crisis in domestic credit markets were muted, owing to the dual nature of the banking system, relatively low household indebtedness, and resilient housing markets.
view the Luxembourg: Financial System Stability Assessment—Update
Source: IMF
Republic of Kazakhstan: Selected Issues
June 28, 2011-- I. KAZAKHSTAN: RESPONDING TO INFLATION1
Inflationary pressures in Kazakhstan have intensified with the rise of global commodity prices. Given the additional risks to prices from the rapid pace of economic recovery,
planned public expenditure increases, and strong capital inflows, a comprehensive policy response is needed to control inflationary pressures. In this regard, the NBK should continue
to gradually withdraw monetary accommodation, and clearly communicate the causes and outlook for inflation. In addition, hard-to-reverse fiscal outlays—particularly higher
wages—should be avoided, while administrative measures to control inflation should be used
cautiously and phased out over time in favor of existing social safety nets.
Further ahead, efforts should be undertaken to strengthen the transmission of monetary policy, improve
social safety nets, and enhance the economy’s supply response.
A. Background
1. The surge in global commodity prices has revived concerns about inflationary
pressures in Kazakhstan. Annual headline inflation increased to about 8½ percent in April, exceeding the official objective range of 6-8 percent for the fourth consecutive month. The
increase in inflation is largely attributable to the pass through of surging global food prices despite the wide use of administrative measures. Domestic food prices grew by 13½ percent
year-on-year in April, up markedly from 4¾ percent in July 2010 when the global food price shock began to emerge. Alternative measures of core inflation suggest, on balance, that high
food prices have been the main driver of inflation.
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Source: IMF
Doing Business in South East Europe 2011
June 28, 2011--Overview
Doing Business in South East Europe 2011—the second subnational report in the series following Doing Business in South East Europe 2008—compares the ease of doing business, both within a single economy and across the region, among 22 cities from: Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Moldova, Montenegro, and Serbia. The report focuses on national and local regulations that affect 4 stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, registering property and enforcing contracts.
Main Findings
It is easier to do business now in all cities, as compared to 2008 – all 19 cities measured for the second time show improvements in at least 1 of the 4 areas measured. Between January 2008 and January 2011, national and local governments carried out 48 reforms aimed at making it easier to start a business, strengthening property rights, rendering the process of dealing with construction permits more efficient, and improving the efficiency of commercial dispute resolution. As a result, the average cost to start a business across the region decreased from 23% to 13% of the average income per capita. Meanwhile, the average time to deal with construction permits and to register property decreased by more than one month.
Skopje (FYR Macedonia) and Banja Luka (Bosnia and Herzegovina) took top honors with the most improved business regulation in the past 3 years. They implemented business reforms in all 4 regulatory areas.
No single city outperforms the others across the board. Across the region, it is easiest to start a business in Skopje (FYR Macedonia), deal with construction permits in Niksic (Montenegro), transfer a property title in Balti and Chisinau (Moldova), and resolve a commercial dispute through the courts in Zrenjanin (Serbia). It is most difficult to start a business in Pristina (Kosovo), register property in Mostar (Bosnia and Herzegovina), and enforce a contract in Prizren (Kosovo). Dealing with construction permits is most burdensome in Belgrade (Serbia), while in Tirana (Albania) no permit has been issued since 2009.
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