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Nikkei crashes as nuclear problems escalate
March 15, 2011--Japanese equities plunged in their third-biggest drop on record on Tuesday as foreign investors embarked on panic selling amid an escalating nuclear crisis that has erased a sixth of their value this week.
Tokyo markets were already reeling as investors tried to assess the impact that Tokyo Electric was having in controlling the series of explosions at its Fukushima plant following a devastating earthquake and tsunami last Friday. But news of an explosion releasing radiation into the air on Tuesday sent shares into a tail spin.
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Source: FT.com
Eurozone keeps close eye on inflation threat to growth
March 14, 2011-- Eurozone governments agreed Monday to keep a very close eye on rising inflation amid fears it threatens growth in the 17-nation single currency area.
The head of eurozone finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, blamed the inflationary pressure primarily on a "considerable" rise in commodity prices.
After ministers met in Brussels, he said it was important to prevent a wider rise in prices and salaries "which could spark generalised inflationary tensions in the medium term."
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Source: EUbusiness
Latin America the focus for latest HSBC ETF offerings
HSBC has launched further exchange-traded funds with the announcement of two Latin American equity propositions
March 14, 2011--The HSBC MSCI EM Latin America ETF aims to replicate the performance of the MSCI EM Latin America Net Total Return Index.
The HSBC MSCI Mexico Capped ETF was launched on 4 March with the aim of replicating the performance of the MSCI Mexico Capped Net Total Return Index.
Both ETFs will use physical replication to track their respective indices - as is the case with all HSBC ETFs launched to date - investing in securities in the same proportions as the relevant index. As one distinction between the two the Latin America product may not take exposure to all securities in the index and will instead use a technique known as ‘optimisation’ to replicate performance.
They are both listed on the London Stock Exchange in sterling and US dollar trading currencies.
Source: International Advisor
Listing Of Nine New ETFs On Oslo Børs On Tuesday 15 March
March 14, 2011--On Tuesday 15 March 2011 nine new exchange traded funds (ETFs) will be listed on Oslo Børs. The new funds provide investors with the opportunity for exposure in equities throughout the Nordic and in Norwegian oil service companies through various index funds that follow the Nordic and Norwegian indices.
Handelsbanken is the issuer of the ETF's, and will mark the listing of the new index funds on Oslo Børs by ringing the bell at 0900 am.
After the bell ceremony Handelsbanken will give a short presentation of the funds. The presentation is open to the press and public.
Eight of the funds to be listed on Oslo Børs 15 March are based on Nordic indexes, and the funds are primary listed on Nasdaq OMX Stockholm. The funds will be secondary listed on Oslo Børs in Norwegian kroner and the fund shares that are traded on Oslo Børs will be registered in VPS, the Norwegian Central Securities Depository.
The ninth fund to be listed is based on the new Oslo Børs oil service index, OBOSX. OBOSX consists of all oil service companies in the Norwegian OBX index and is the first oil service index in Europe.
- We are very pleased to offer investors on Oslo Børs new and interesting investment options. ETFs are increasingly popular and sought-after products in the Norwegian market, and we are excited to extend our offer to include products based on both the Nordic indices and our own newly established oil service index, says president and CEO of Oslo Børs, Bente A. Landsnes.
The following funds will be listed on the Oslo Børs on Tuesday 15 March:
•XACT Oil Service - invests in companies in the Oslo Børs Oil Service Index (OBOSX).
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Source: Oslo Børs
Boerse Stuttgart announces new trading hours
Trading in equities and bonds to start at 8.00 hours
March 14, 2011--Boerse Stuttgart will soon be extending its trading hours. With effect from 1 April, trading will commence at 8.00 hours CET. Initially the change will be limited to German DAX, MDAX, SDAX and TecDAX shares as well as international equities, participation certificates and bonds.
Up to the present, the same trading hours (from 9.00 to 20.00 hours), have applied to all categories of securities. “Our decision to extend trading hours comes in response to the wishes of many retail investors, who want to react even more quickly to developments on the international markets. In this age of 24-hour global stock market activity, investors can now follow the latest news in Asia, for example, in the early hours of the morning,” says Christoph Lammersdorf, CEO of Boerse Stuttgart Holding GmbH.
Source: Boerse Stuttgart
Irda to give more investment options
March 12, 2011--The Insurance Regulatory and Development Authority (Irda) is considering allowing insurers to trade in gold exchange-traded funds and equity derivatives. It may also allow them to take part in the securities lending and borrowing (SLB) segment.
The aim is to give them more options to hedge risks.
The regulator has set up a committee under R K Nair, member, Irda, to formulate new investment guidelines.
"We have already allowed investment in infrastructure bonds and venture capital funds . The new guidelines will be far more liberal," Nair said at the Business Standard Insurance Round Table in Mumbai on Thursday evening.
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Source: Busines Standard
LSE admits gap in retail bond data
March 11, 2011--The London Stock Exchange has admitted that real-time prices for some retail bonds traded on its market may not be available to investors as a result of its switchover to a new technology system.
The development is the latest problem to arise from the exchange’s overhaul of its technology, which involves switching the LSE’s markets over to a new system developed by MillenniumIT.
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Source: FT.com
Bond yields of fragile eurozone members hit records
March 11, 2011--Bond yields of the most financially fragile eurozone members hit fresh records on Friday as eurozone leaders began talks on stepping up policy coordination to tame a debt crisis that threatens to claim new victims.
The yield on 10-year bonds from Portugal, which is widely seen as likely to be the next eurozone member to need a bailout, rose to 7.479 percent at 1700 GMT from 7.404 percent late on Thursday.
Portugal had also announced Friday it will adopt more austerity measures to ensure its public deficit meets EU norms by 2012.
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Source: EUbusiness
DB Global Equity Index and ETF Research : ETF investors return with a vengeance: €1.9 billion of inflows across all asset classes
March 10, 2011--Impressive cash flows of €1.9 billion across the board
The week that just passed went down as the strongest yet cash flow week for 2011. The ETP industry gathered close to €2 billion of new money and there was strong positive cash flow directionality for all major asset classes. Year to date, cash flow figures reached the €7 billion mark which translates to a healthy weekly average of €800 million inflows.
Domestic European equity allocations on the rise
European equity developed market benchmarked ETFs received the bulk of the net cash inflows, totaling €1.1 billion. This is in sharp contrast to the last few weeks where non-European developed market ETFs dominated the equity cash flows.
The most prominent recipient among the European developed market ETFs were the DAX benchmarked ETFs, with weekly inflows that totaled €547 million. This comprised around half of the total equity inflows for the week. Historically we have seen significant inflows in DAX ETFs just prior to the dividend season which is typically followed by the unwinding of these positions once the dividend withholding tax benefits are realized. The next couple of weeks should be interesting to observe if the current inflows into DAX ETFs are based on longer term fundamental based allocations or on tax optimization dividend trades.
Developed non-European equity ETFs flows [primarily US benchmarked] extended their good run and added €179 million taking their year to date net inflow figures to €2.6 billion, making them the most sought after ETF segment in 2011 overall. Equity ETFs have had a positive impact on equity cash flow figures throughout the year; a trend which also continues with real estate benchmarked ETFs adding €128 million of the total €233 million inflows in this segment.
Emerging market flows grind to a halt as investors try to decipher impact of the latest commodity market developments
With rising commodity prices [especially oil] and increased political instability in the MENA region, investors seem to be pausing for thought when it comes to emerging markets (EM) investing. Until the dust from the latest events in the MENA region settles, ETF cash flows indicate that investors are adopting a ‘wait-and-see’ stance. EM benchmarked ETF flows continued to decline this week, with net flows close to zero. Flows into global EM indices [such as the MSCI EM] were negative, registering outflows of €118 million, while single country benchmarked ETFs saw net inflows of €116 million.
Traditional safe heaven assets benefit from turbulence in the Middle East
The Middle East turbulence has benefited European money market benchmarked ETFs, and, primarily corporate treasurers, channeling €476 million in the region’s less volatile fixed income section. Year to date money market funds have registered healthy flows of €722 million.
A similar trend has been materializing in gold ETPs, a segment that has witnessed increased positive cash inflows since the Middle Eastern turmoil began a few weeks back. Gold ETPs started the year with negative cash flows, but their trajectory has reversed direction and they are slowly inching back to positive territory with net positive cash inflows in the past three weeks. Current weekly cash flow figures for gold ETPs reached €145 million with the year to date net outflows of €302 million.
Balance is finally emerging in commodity ETP space
An interesting investment paradigm is emerging the commodities ETP sector. For the first time in more than a year, gold is not dominating the sector. Instead, this week’s healthy €442 million were sourced from primarily four segments: diversified commodity indices, precious metals and energy.
Year to date, commodity ETPs have received €1.3 billion of inflows. Adjusting for gold outflows this number inches closer to €1.6 billion, well surpassing comparable levels last year. In 2010, non-gold commodity ETP cash flows totaled just 2.4 billion for the twelve month period. So far this year we are at over half of that number in the first two months of the year.
Assets Under Management (AUM): Strong inflows and declining markets lead to moderate increases in AUM
Total European ETP assets increased by 0.6% and ended the week at €237.8 billion. Strong inflows into equity ETFs offset the decline in equity markets and let to equity ETFs ending the week at €153.6 billion; resulting in a moderate increase of 0.3% week on week. The French CAC Index & Euro Stoxx 50 indices declined by1.2% respectively while the UK’s FTSE 100 & German DAX lost 0.1% week on week.
Commodity ETFs had the dual advantage of rising prices and healthy inflows and thus ended the week with a generous AUM increase of €726 million (1.9%). Fixed Income ETFs saw an increase in assets under management by €221 million and ended the week at €41.8 billion.
On-Exchange Total Weekly Turnover: Commodity led decline
Weekly on exchange ETP total turnover declined by 4% to end the week at €12.4 billion. Commodity turnover declined by more than 20% (€ 490 million) reaching €1.8 billion. Fixed Income turnover gained a healthy 24.7% to reach €1.1 billion. Equity turnover declined moderately by 2.3% and ended at €9.4 billion.
ETP Product Launch Calendar: 9 new launches, 7 cross listings, first infrastructure ETF
Product launches resumed in the past week with 9 new product offerings and 7 cross-listings in the European ETF space.
ETF Securities launched 3 equity and 1 alternative benchmarked ETF on the London Stock Exchange. 2 equity ETFs were launched which track the Dow Jones Brookfield Infrastructure Indices with Global and Emerging markets exposures respectively. An ETF tracking the performance of the Dow Jones Global Select dividend index was also introduced in the past week.
The ETFX Bofaml IVSTOXX ETF is the first in Europe which tracks the forward implied volatility of the popular pan Euro-zone benchmark, the Euro Stoxx 50.The ETF tracks the Euro Stoxx 50 Investable Volatility Index which targets a constant 3-month (90 days) forward, 3-month maturity volatility exposure.
Blackrock launched 2 equity thematic ETFs which track the Dow Jones Europe sustainability index and the Dow Jones Global sustainability index respectively.
Amundi launched 2 equity ETFs tracking the MSCI Europe ex UK Index and the FTSE UK dividend plus Index respectively.
HSBC supplemented its recently launched series of country ETFs based on MSCI country indices with the launch of the MSCI Mexico capped ETF. This was listed on the London Stock Exchange.
Lastly, UBS cross listed 4 commodity and 3 equity ETFs on the Swiss Stock Exchange. The Commodity ETFs are based on the Bloomberg Constant Maturity Commodity Indices and are denominated in both Swiss Franc and US Dollars. The 3 equity ETFs are based on broad US benchmarks.
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Source: Deutsche Bank Global Equity Index & ETF Research
ICMA-ERC survey confirms long term recovery in European repo market activity to pre-crisis levels
March 10, 2011--The European Repo Council of the International Capital Market Association (ICMA) today released the results of its 20th semi-annual survey of the European repo market, undertaken in December 2010. The survey sets the baseline figure for market size at EUR 5,908 billion representing a modest year-on-year increase of 6% on the figure of EUR 5,582 billion for the survey in December 2009.
There was a sharp fall from the headline total of EUR 6,979 recorded in June 2010, but this figure included unusual specialised transactions that have subsequently been unwound. The results of the latest survey confirm the continuing trend of modest recovery in the European repo market towards pre-crisis levels. The survey is based on returns received from 57 offices of 55 financial groups, mostly banks, including most of the largest European repo market participants. It is a snapshot of the size of the market in terms of the volume of outstanding transactions on a date in December; it does not include the value of repos undertaken by Central Banks as part of their intervention in the market, which would clearly have been important.
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Source: International Capital Market Association (ICMA)
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