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EU urged to restart carbon trading
January 31, 2011--Energy traders have warned European regulators that they must reopen the region’s carbon trading markets within days if they are to avoid damaging the fledgling emissions trade.
However, regulators have been unable to give a firm date for the resumption of trading in the physical market, known as the “spot” market, while a sale of 300,000 metric tonnes of carbon planned for Tuesday in Germany was cancelled.
Eurozone inflation accelerates to 2.4 per cent
January 31, 2011-- Eurozone annual inflation shot up to 2.4 percent in January, the EU warned Monday, fuelling household fears of an earlier rise in interest rates than anticipated, though experts insisted they see no need.
The European Union Eurostat agency said the flash-estimate climb, from 2.2 percent in December, was almost certain to be confirmed in official figures next month.
The European Central Bank's core target for economic management, inflation close to but not above 2.0 percent, has now been breached for the second successive month, and the eurozone figure comes on top of inflation in non-euro Britain topping 3.7 percent in December.
Source launches Man GLG Europe Plus ETF
January 31, 2011--Source is pleased to announce today the launch of its new Man GLG Europe Plus Source ETF, providing exposure to the Man GLG Europe Plus Index, a long-only index developed by Man Systematic Strategies (MSS), a new group which draws on the combined expertise of GLG, AHL and Man’s Multi-Manager business.
The Man GLG Europe Plus Index, created by MSS, is a long-only total return European equity index designed to capture outperformance from broker ideas provided specifically for Man GLG. It uses high quality ideas from approximately 60 leading brokers to create a liquid, highly diversified, long-only European equity portfolio. The index has similar market-cap exposure to the broad European equity market, with the potential for enhanced returns.
Europe’s brokerage community employs thousands of experienced research analysts who generate trade ideas for active investors. There is substantial evidence that these ideas add value. Since 2005, GLG has used a systematic process to select the highest quality broker ideas and run a liquid, diversified portfolio. This strategy is now available in index format, via the new Source ETF.
Commenting on the launch of the ETF, Ted Hood, CEO of Source, said, “Similar proprietary MSS strategies have delivered impressive and consistent outperformance relative to MSCI Europe over the last few years. We are very excited to be able to offer this quality of investment in the form of a Source ETF. It is groundbreaking to deliver an outstanding actively managed product in an investment with such a high degree of liquidity and transparency.”
HSBC launches new China ETF in Europe
January 31, 2011--HSBC has ushered in the Chinese New Year with the launch of the HSBC MSCI China ETF in Europe
The fund is listed on the London Stock Exchange in sterling and US dollar trading currencies, while further registrations and cross-listings across Europe are planned. The fund has a total expense ration (TER) of 0.6 per cent.
The HSBC MSCI China ETF will aim to mirror the MSCI China Index through ‘physical replication’, which is designed to offer exposure to leading companies in China.
Luxembourg Stock Exchange To List First Bond Issued By The European Financial Stability Facility
January 28, 2011--The first bond to be issued by the European Financial Stability Facility (EFSF) will be admitted to trading on the Luxembourg Stock Exchange on 1 February 2011.
This bond issue, which is guaranteed by fourteen EU Member States, is for an amount of EUR 5 billion and a term of 5 years with a final maturity on 18 July 2016. It will pay an annual coupon of 2.75% and will be issued at 99.302%. The majority of the proceeds of the issue will be used for the EU/IMF financial stability package for Ireland.
OPEC sees no oil shortage, disputes S. Arabian rise
January 28, 2011--Top OPEC officials on Thursday reiterated that oil prices nearing $100 were not caused by a shortage of crude, and the group’s chief disputed a report that Saudi Arabia had quietly opened its taps.
In comments likely to reinforce expectations that the producer group is disinclined to step up production for now, OPEC Secretary-General Abdullah al-Badri said he was “100 percent sure” there was no shortage in the oil market. Badri said the near-record spread between US oil futures and European Brent showed futures had become “disconnected” from the physical market; UAE’s Mohammed al-Hamli blamed cold weather and trader buying for price gains.
Italian 8-billion euro bond issue a success
Jnauary 28, 2011-- Italy issued over eight billion euros of medium- and long-term bonds at encouragingly low interest rates on Friday, in a sign of easing fears among investors.
The Italian treasury sold off a total of 8.148 billion euros of bonds ($11.17 billion), and had bidders for another four billion euros, the Bank of Italy said in a statement.
The three-year bonds yielded 3.12 percent and the seven-year bonds 2.55 percent, both rates below that of the last such issue by Italy in December -- a welcome sign that investors' fears are easing.
Deutsche Bank -Equity Research - Europe: A stellar start to the year: Equity ETFs reign in €2 bil. record inflows
January 28, 2011--Investment Outlook:
Equity ETF trades continue to signal a turn
With the first issue of our weekly ETP market review report in 2011, the European market shows further encouraging signs which cause us to believe that it has decisively turned a corner. Building on a trend which started materializing in the fourth quarter of 2010, the industry experienced record inflows of €1.9 billion this week.
The vast majority of this week’s inflows (97%) were driven by equity investors repatriating assets. In addition to evident directionality, cash flow levels were fairly telling: weekly equity flows were four times those of the 2010 weekly average equity inflows (€0.5 bil.).
Most of the equity cash flow boom is driven by improved market sentiment as rising equity index prices attest. The EuroStoxx 50 index and the CAC index closed the week with gains of 1.7% and 0.9% respectively. Not all European equity markets were up though. The UK’s FTSE 100 was down by 1.8% and Germany’s DAX declined by 0.2%.
Not all equity flows for this week are likely to be associated with rising asset prices. Despite its slight decline, the DAX saw healthy inflows. In fact, two out of the week’s five top single ETF cash flow earners (please see page 20 of the report for more detail), were likely associated to tax optimization. These two ETFs alone took in a total of close to €450 million. These flows are most likely to be associated with the upcoming German dividend season and expected dividend payouts and tax optimization trades.
Assets such as gold, that have historically been linked to more defensive trades during periods of high volatility, portrayed a picture which further supplements the notion that investors’ risk appetite is shifting. Gold’s USD/oz price dropped by 1.2% this week, a move that was accompanied by new outflows of €141 million out of gold ETP products.
ETFs tracking Alternatives (for example hedge funds) benchmarks also showed signs which point to increased investor risk appetite. Alternative benchmarked ETFs received the second highest flows (by asset class) totaling to €94 million, emerging as one of this week’s winners.
The rest of the asset classes witnessed fairly muted weekly flows with a net €74 million of outflows from fixed income ETFs and a total of €17 million of inflows into commodity ETPs.
New Product Launch Calendar: Fixed income defines the month’s flavor
Eight new products were launched so far in January 2011 and 75 products were cross-listed n the first three weeks of the year.
Source made its official debut in the fixed income ETF arena. In a partnership with PIMCO it launched two new ETFs on Deutsche Borse. One of them tracks the performance of the PIMCO European Advantage Government Bond index and the other tracks the returns of an actively managed portfolio of short maturity bonds.
Lyxor also launched two new fixed income ETFs tracking the Markit iBoxx EUR Liquid High Yield 30 index and the Markit iBoxx USD Liquid Emerging Markets Sovereigns index respectively. The same issuer also cross-listed three iBoxx $ Treasury fixed income ETFs.
UBS launched two new commodity ETFs which track broad commodity benchmarks. It also cross-listed three ETFs tracking the HFRX Global Hedge Fund Index.
Finally, BBVA launched two new products; An equity ETF which tracks the Ibex35 Inveso index and a fixed income ETF which tracks the iBoxx Euro Sovereigns short maturity index.
Overall, Credit Suisse led the cross-listing activity with 36 new listings on the NYSE Euronext Paris. BNP Paribas and Blackrock also cross-listed 15 and 13 of their existing products respectively .Amundi cross-listed two products while Deutsche Bank and ETF Securities cross-listed one product each. NYSE Euronext Paris saw by far the largest cross-listing activity, with Borsa Italiana and Deutsche Borse in second and third places.
Assets Under Management (AUM): Stable
European ETP assets showed a slight decline and ended the current week at €232.6 billion. Despite very strong inflows, equity ETF assets were flat for the week, at €151.3 billion. Commodity ETP assets declined by 2.2 % and finished at € 37.1 billion. The fall was consistent with the decline in gold’s price. Fixed Income ETFs also registered a €215 million decline and finished the week at €41.9 billion. Alternatives and Currency ETPs registered a healthy asset growth of 5% and 2% reaching €1.8 billion and €0.5 billion of assets respectively.
On-Exchange Total Weekly Turnover: Equity led rise
As of 1/1/ 2011, reported ETP turnover in our reports represents total weekly € exchange-traded volumes. This does not include OTC turnover. We previously, reported one month rolling daily average numbers. We have switched to weekly totals in order to more accurately reflect short term trend changes.
Weekly total turnover is calculated by adding daily € volumes for each ETP. Daily volumes are in turn calculated by multiplying a day’s close price (by product) by the number of shares traded on that day.
Total European ETP on-exchange weekly turnover rose by 9.5% and reached €12.4 billion for the week that ended on 21st January. This follows a consistent turnover rising trend in 2011, weekly ETP turnover is up 25% from 2010 weekly average levels.
Equity ETFs led this week’s turnover increase, with a rise of 11.5%, reaching € 9.5 billion. Commodities followed suit with a 7.9% week to week turnover rise, reaching €1.8 billion. Fixed income ETF weekly turnover declined by 2.8%, down to €1.0 billion.
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10th Anniversary of ETFs listed on NYSE Euronext
ETFs listed on the European market of NYSE Euronext top the 500 mark
One of the leading platforms for listing and trading ETFs in Europe
January 28, 2011--NYSE Euronext (NYX) celebrates today the 10th anniversary of ETFs on its European market following the listing of products by iShares and Lyxor in January 2001.
NYSE Euronext confirms its position as a pace-setter for ETFs
Over the past five years, the number of ETFs listed on NYSE Euronext’s European market has increased more than tenfold, rising from 53 in January 2005 to 543 ETFs today with 618 listings and covering a range of more than 350 indices for a variety of asset classes and market segments.
ETFs are winning increasing favour, with assets of the products listed on our European market rising 50% since 2007 to top €130 billion at present. The number of trades in these products almost tripled over the same period.
Today the diversity of our 17 issuers is an important part of our community and service to connecting capital markets. In 2010 two new issuers, Comstage ETF and ESAF ETF, joined the NYSE Euronext European ETF market place with products based on the CAC 40, CAC 40 Short, CAC 40 Leverage, PSI 20, PSI 20 Leverage and NYSE Euronext Iberian Index.
Government Debt Issuance in the Euro Area:The Impact of the Financial Crisis-IMF Working paper
January 28, 2011--This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007-09, we find evidence of a shift away from pre-crisis standards of best funding practices competitive auctions of debt instruments with a fixed coupon, long maturity and local currency denomination (DLTF).
Exploiting the cross-country panel data dimension of the data, we conclude that the crisis and related changes in the macroeconomic environment and investor sentiment can account for a significant proportion of the deviation. The negative effect of the crisis on DLTF debt issuance was especially pronounced in high deficit and high debt euro area countries, and has forced governments to assume additional risk.
view the working paper-Government Debt Issuance in the Euro Area:The Impact of the Financial Crisis
