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Monetary developments in the euro area January 2011
February 25, 2011--The annual growth rate of M3 decreased to 1.5% in January 2011, from 1.7% in December 2010.1
The three-month average of the annual growth rates of M3 over the period November 2010 - January 2011
stood at 1.7%, compared with 1.6% in the period October 2010 - December 2010.
LSEG cash equity markets resume trading
February 25, 2011--The London Stock Exchange Group confirms that its UK cash equity markets have now resumed trading.
To ensure an orderly market, the UK cash equity markets were today paused at 8.03am, and then halted at 8.33am, following identification of a real time data dissemination issue.
Having identified the source of the problem and gained confidence in the remedial steps needed to restore market connectivity, the LSEG resumed continuous trading across its cash equity markets at 12.15pm, after an auction call.
Commenting on the disruption, Xavier Rolet, CEO of the London Stock Exchange Group, said:
"We sincerely regret the inconvenience that today's disruption to trading has caused our customers. We have resolved the real time data dissemination issue and our UK cash equity markets have now resumed trading. "
Restoring Growth Key Priority for Europe
Recovery in Europe's largest economies can help propel growth in wider region
Greater focus on competitiveness needed
Deeper financial integration would hasten recovery
February 25, 2011--urope needs a stronger focus on rebuilding competitiveness to restore growth and create new jobs, Antonio Borges, the IMF’s new Director for Europe, said. He told IMF Survey online in a wide-ranging interview that the policy agenda should be broadened much beyond fiscal consolidation
Borges also noted that freeing up capital flows, through deeper financial integration, could provide powerful solutions to some of Europe’s deep-seated problems, by speeding up the reallocation of resources.
Borges joined the IMF in December 2010, leaving a position as Chairman of the Hedge Fund Standards Board in London.
IMF Survey online: How solid is Europe’s recovery? Can strong growth in Germany pull along the rest of the euro area?
Borges: There is a high likelihood that this will happen. Germany is, of course, the biggest economy in Europe, but there are many other economies in Europe that are doing well—some of them very well. All the Nordic countries are recovering, as are the Netherlands and Austria. France’s economy is also robust. The outlook is less certain in Britain, but we are confident that it too is on the right track.
London Stock Exchange Group Confirms Details Of Pan-European Derivatives Platform
Turquoise Derivatives’ to build on success of ‘EDX London’
Customers will benefit from greater choice, new products, ultra-low latency trading, proven clearing arrangements and enhanced access
Product launch timetable to be announced in Q1 2011
February 24, 2011--London Stock Exchange Group (“LSEG”) today confirms that it is to build its pan-European derivatives business, through the creation of ‘Turquoise Derivatives’. This new business will combine with the Group’s existing successful derivatives market, ‘EDX London’ (“EDX”), and will utilise TMX Group’s market leading derivatives trading technology, SOLA, already being used by EDX.
David Lester, CEO of Turquoise said:
“The European derivatives market is currently characterised by high execution costs and a lack of choice. I am certain that Turquoise Derivatives, combined with the proven operating and clearing model already enjoyed by EDX customers, will be the start of the process that turns the sector on its head.”
The new business will utilise EDX’s existing, proven technology and clearing infrastructure, offering customers immediate access and economies of scale through their existing connections. Turquoise Derivatives will be underpinned by ultra-low latency SOLA technology from TMX Group, already successfully used by LSEG’s IDEM and EDX derivatives markets. The new platform will also continue to build-up EDX’s successful emerging markets business as well as use the combined expertise of the EDX and Turquoise management team in its implementation.
ECB warns of high-speed trading risks
February 24, 2011--Automated dealing could “trigger a number of risks for orderly trading and financial stability”, the European Central Bank has warned, in an unusual intervention in the debate over the role of “high-frequency” trading in markets.
The comments come as the growth of high-frequency trading shows no sign of abating with exchanges continuing to upgrade trading systems to accommodate such traders
HSBC launches MSCI Canada ETF in Europe
February 24, 2011--Listed on the London Stock Exchange (LSE: LSE.L - news) , and domiciled in Ireland (Berlin: IIK.BE - news) , the new ETF is designed to replicate the performance of the MSCI Canada Index (total return). The Index is a market-capitalisation weighted index designed to measure the performance of the largest companies in Canada, as defined by the Index Provider. The total expense ratio (TER) of the fund is up to 0.35%.
The admission of the HSBC MSCI CANADA ETF to the Official List and to trading on the London Stock Exchange's main market for listed securities will become effective, and dealings will commence today 24 February 2011.
A copy of the HSBC MSCI CANADA ETF Supplement has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do. The supplement will also be available on the Company's website at www.etfs.hsbc.com, where the Simplified Prospectus will also be available.
Northern Trust to acquire Bank of Ireland Securities Services
February 24, 2011--Northern Trust announced today that it reached an agreement to acquire the fund administration, investment operations outsourcing and custody business of the Bank of Ireland Group, Bank of Ireland Securities Services (BOISS). Northern Trust will pay up to €60 million (approximately US$82 million) to acquire the business.
The acquisition, which is subject to applicable regulatory approvals and other customary closing conditions, is anticipated to close in the second quarter of 2011. It is anticipated that on completion of the transaction, Northern Trust’s combined assets under custody and administration in Ireland will increase by approximately €70 billion (approximately US$96 billion).
“Ireland is one of the largest European domiciles for cross-border fund administration,” Northern Trust Chairman and Chief Executive Officer Frederick H. Waddell said. “We look forward to combining this business with our existing activities in Ireland and continuing to provide the exceptional client service and solutions for which Northern Trust and Bank of Ireland Securities Services are both known.”
Bank of Ireland Securities Services is the largest Irish-owned asset administration provider and is based in Dublin. The business provides specialised, client-driven services to a broad range of funds, including mutual money-market, multi-manager, exchange-traded funds, and property funds, serving both the on-shore and off-shore markets.
“This acquisition will enhance and expand Northern Trust’s Global Fund Service capabilities, particularly in the key areas of fund administration and the support of ETFs,” said Steven Fradkin, President of Corporate and Institutional Services at Northern Trust. “We look forward to working with our new clients and drawing upon the intellectual capital and depth of leadership talent that Bank of Ireland Securities Services will bring to our already successful operations in Ireland.”
Northern Trust has been providing custody and fund administration services to clients from its Dublin office since 2000 and opened its Limerick operations in 2006.
DB Europe:Global Equity Index and ETF Research : Broad commodity indices, oil and agriculture bring spotlight back to exchange-traded commodities (ETCs)
February 24, 2011--Balances change in the European commodity ETP space: Non-precious metals ETCs register the largest growth rate year to date
Many exchange-traded commodity (ETC) products spent much of 2010 on the shelf, while gold was the year’s brightest star. However, as market conditions change and fundamentals shift, ETCs are beginning to receive attention from investors.
Year to date, the overall European commodity ETP sector is down 0.4%. However, that has been largely driven by the decline in the USD/oz price of gold (-2.2%) and gold ETP outflows (€561 million).
Due to UCITS guidelines, in Europe commodity ETFs may only track diversified commodity indices. ETCs operate under the EU prospectus directive and the vast majority of these instruments track single commodity profiles. The only exception to this rule is Switzerland, where legislation permits the creation of funds that track the price of gold.
*Largely driven by broad market confidence uptick and cross-border interest rate dynamics, investment in gold has slowed down in 2011 and non precious metal ETCs have benefited from this. In addition, a number of geopolitical events, such as the political crisis in some oil producing countries, have put oil and agricultural ETCs back in the spotlight.
*Year to date, European non-precious metal ETCs have registered the biggest AUM growth (20.6%), despite the overall commodity ETP space registering a slight decline (-0.4%).
Investment Outlook: Non-precious metals commodities back on the forefront driven by geopolitical tensions and emerging market economic growth expectations
*One of the biggest moves in the exchange-traded products (ETP) industry this year relates to re-allocations that are taking place in the non precious metals commodity ETP space. We have reported recently that exchange-traded fund (ETF) investors have steadily been exiting gold and returning to the mainstream US and European domestic equity indices over the first seven weeks of this year. A clear flow directionality has also emerged in non precious metal commodity segments.
*The commodity ETP (ETF & ETC) market’s biggest compartment, gold, has been experiencing steady outflows since the beginning of the year, totaling €561 million for Europe and $2.8 billion in the US. Apart from gold, no other commodity broad segments have experienced any outflows.
*ETFs tracking diversified commodity indices and ETCs tracking agriculture as well as energy indices have been the biggest beneficiaries so far this year, receiving inflows (on a global level) of €1.4 billion, $818 million and $640 million respectively.
Diversified commodity index investing
*As per our commodities research team, the Deutsche Bank Liquid Commodity Index (DBLCI-MR) has posted negative returns of 1.9% for the week that finished on February 18th 2011. However, since the end of last year total returns on the DBLCI-MR and DBLCI-OY indices are up 1.4% and 3.4% respectively.
*A combination of events that affect a number of commodity sectors are generating ETP investor interest in diversified commodity index investing. Most of it though seems to be driven by events in the agriculture/food and energy markets.
*More specifically, our commodity research team believes that the weakness in WTI and the rally in crude oil contango have been responsible for the strong performance of the DBLCI Harvest index this year. Typically the DBLCI Harvest index performs well when physical fundamentals in commodity markets are weakening.
*Gold has been able to extract positive returns over the past week. However, these have been insufficient to reverse earlier losses, with returns down 2.2% since the end of last year. Our commodities research team believes that gold has been polluted by the prospect of a turn in the global interest rate cycle. However, our commodities research team expects central bank diversification and the dangers of further US dollar weakness will eventually encourage a rebound in gold returns.
*In industrial metals, aluminium returns have posted negative returns of 1.6% over the past week. Our commodities research team expects Chinese consumption to rise this year with the likelihood that the country becomes a net importer of aluminium over the medium term.
Oil
*Crude oil returns were down by 2.5% over the past week to be 8.2% lower since the end of last year. As a result, crude oil is the worst performing component of the DBLCI. However, there continues to be a significant disconnect between the performance of WTI and Brent, with Brent posting returns of over 9%.
*The majority of the energy ETP flows were very concentrated in ETPs tracking the price of oil (US: $505 million and Europe: €85 million). Indeed the pricing of crude oil is providing the backdrop for the investment in oil ETPs. According to our commodities research team, Brent and WTI oil prices have diverged due to over-supplied condition in the US mid-continent, and a geopolitical premium is being reflected in Brent. Our commodities research team expects this disconnect to persist for some time, a factor which has important implications for consumers, producers and index investors.
*Recent unrest in the Middle East and North Africa (MENA) region, particularly in Bahrain, Yemen, Algeria, Libya and Iran has raised concerns about supply disruptions. These countries represent 10% of global oil production.
*From a refined products perspective, the MENA region also represents 10% of global refining capacity. Our commodities research team believes that any disruptions in supply would have a disproportionate effect on the jet/kero markets, although this could be somewhat mitigated by generally healthy inventory levels.
*We expect that, given the developments in a number of oil and other commodity producing countries, the next few weeks will be more active for the energy segment of the commodity ETP market.
Agriculture
*Global ETP agriculture flows have been strong, the majority of those went into broad agricultural indexed ETPs (just over $700 million) and not to a specific agriculture segment.
*Wheat and corn returns have retreated 4.9% and 3.7% over the past week. However, wheat has maintained its status as the best performing component of the DBLCI so far this year. Our commodities research team believes that recent weakness will prove temporary as Chinese demand remains strong.
*Corn prices have more than doubled since June 2010. Our commodities research team expects the rally to continue. However for those concerned about increased corn plantings in the next crop year they indicate that going long the May’11 vs. short Dec’11 time spread is attractive.
*Wheat and corn returns have retreated 4.9% and 3.7% over the past week. However, wheat has maintained its status as the best performing component of the DBLCI so far this year. We believe recent weakness will prove temporary as Chinese demand remains strong.
For more information on our Commodities Research team’s views please refer to Deutsche Bank’s Commodities Weekly research report (18/2/11).
New ETP Product Launch Calendar: 12 new product launches and 10 cross listings on the Deutsche Borse.
*Deutsche Borse has emerged as the strongest exchange – in the ETP sector - this year with 21 of the 34 new product launches in 2011 being listed here. The exchange currently accounts for 30% of the total ETP on-exchange turnover of €9.9 billion and hosts 25% of the ETP listings in Europe.
*10 Equity and 2 Commodity ETFs were launched by RBS on the Deutsche Borse in the previous week.
*2 equity ETFs tracking the S&P 500 & Topix indices were launched offering Euro hedged exposure to the US and Japanese equity benchmarks.
*8 long and short monthly leveraged ETFs on major European equity benchmarks were launched. These included a double leveraged long and a double leveraged short ETF each on the Euro Stoxx 50 & DAX indices. Double leveraged long and unleveraged short ETFs were also introduced on FTSE 100 and FTSE MIB indices respectively.
*Lastly, 2 commodity ETFs offering double leveraged long and double leveraged short exposure on the S&P GSCI capped monthly leveraged indices were launched by RBS.
*The newly launched RBS leveraged products reset exposure to their benchmark index monthly, something which represents a big shift from most other leveraged products in the market that reset their exposure daily.
*Blackrock cross listed 6 equity ETFs on the Deutsche Borse offering exposure to a range of global equity benchmarks from developed to emerging markets.
To request a copy of the report
Transition to a Low Emission Economy in Poland
February 24, 2011 – While challenging, Poland can transition to a low-emissions economy as successfully as it underwent transition to a market economy in the early 1990s, according to the new World Bank report, Transition to a Low-Emissions Economy in Poland, launched today in Warsaw.
The report is part of the World Bank’s series of low-carbon growth studies. Poland’s greenhouse gas emissions are not large by global standards, constituting just one percent of the total. Moreover, its per capita emissions now stand similar to the EU average, at ten tons of emissions per capita, a reflection of the sharply reduced emissions that accompanied the transition to a market economy in the 1990s. However, given its lower income levels, Poland’s economy remains today among the least emissions-efficient in the EU. Over the next few decades, Poland appears to face a particularly difficult test: catching up to EU income levels while becoming less dependent on abundant domestic coal for energy needs.
The international agreement on climate change that is expected to eventually supersede the Kyoto Protocol and, more immediately, compliance with EU energy and climate policies, pose policy challenges for Poland. The EU 20-20-20 package requires Poland’s energy-intensive sectors, covered by the EU Emissions Trading Scheme, to contribute to the EU-wide target of a 21 percent reduction (compared with 2005) while allowing Poland’s other sectors’ emissions to increase by only 14 percent until 2020.
view report-Transition to a Low Emission Economy in Poland
With reference to the today’s suspension of MTA, ETF, SeDeX, MOT and Idem markets,
Borsa Italiana confirms what already stated during the day.
February 23, 2011--Borsa Italiana confirms what already stated during the day.
Due to a technical issue on DDMPlus, real time data feed service used by the majority of domestic operators, Borsa Italiana decided to suspend trading on its markets until the complete restoring of such service.
Borsa Italiana, further to apologise and to express its displeasure, is working to avoid this situation in the future.
The Exchange acted, as usual, with the aim to grant equal disclosure to all market participants.
For futher information, please contact:
Anna Mascioni Media Relations +39 02 72426.211
