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Portugal becomes third eurozone bailout case
May 4, 2011--Portugal is now the third eurozone country to do a debt-rescue deal with the European Union and IMF, announcing a three-year package worth 78 billion euros.
But the reforms required in return are still under wraps and the package is tied to approval by the opposition which has already precipitated an early election by rejecting cutbacks to fight the debt mountain.
A deadline looms on June 15, six weeks away, when Portugal must redeem old loans of nearly 5.0 billion euros ($7.3 billion).
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Source: EUbusiness
New product provider State Street Global Advisors has listed twelve Exchange Traded Funds (ETFs) on SIX Swiss Exchange
May 4, 2011--SIX Swiss Exchange welcomes State Street Global Advisors (SSgA) as a new issuer to the Exchange Traded Funds segment.
State Street Global Advisors launched the first ETF in 1993 and is therefore considered as a pioneer of the industry. Today, the company manages global ETF assets of USD 2551 billion (as at 31 December 2010) and is one of the world's leading asset managers for professional investors.
With the twelve new SPDR® ETFs based on European regional and sector indices, SIX Swiss Exchange's ETF segment now comprises 675 ETFs, of which 108 are also listed in an additional currency. State Street Global Advisors is planning to further expand its ETF offering on SIX Swiss Exchange in the future.
Commerzbank AG is acting as market maker for the SPDR® ETFs.
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Source: SIX Swiss Exchange
BlackRock ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 29-Apr-2011
May 4, 2011--For the week ending 29 April 2011, there were US$409.5 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF net inflows last week were in food and beverage with US$152.2 Mn followed by automobiles and parts with US$82.9 Mn net inflows while basic resources experienced net outflows of US$16.1 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$940.2 Mn net inflows. Oil and gas has seen the largest net inflows with US$510.4 Mn, followed by banks with US$333.7 Mn net inflows while basic resources experienced the largest net outflows with US$155.7 Mn.
As of 29 April 2011, there is US$11.9 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 17 out of 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
French Bank Volunteers Tobin Tax
May 4, 2011--Inspired by the economist and Nobel laureate James Tobin, the French bank Crédit Coopératif has recently unveiled plans to impose its own voluntary contribution on foreign exchange transactions (CVTC) in a bid to fund international development aid.
Eager to persuade other financial institutions to follow suit, the bank is due to present its plans for the solidarity levy (CVTC – Change solidaire) at the forthcoming 2015 Convergence Forum in Paris.
In its official release, the Crédit Coopératif estimated that introducing a 0.01% tax on the total sum of its inter-bank foreign exchange operations will serve to generate in the region of EUR100,000 a year for development projects.
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Source: Investors Offshore
Clearstream and Euroclear Bank set higher standards for international securities
JOINT PRESS RELEASE * Launch of a new industry framework developed in collaboration with the International Securities Market Advisory Group * BNP Paribas Securities Services, Citibank N.A. Issuer Services, European Investment Bank and KfW as early supporters of the initiative and the associated best practice implementation process * Reducing inefficiencies, costs and risks in issuing and servicing international securities while increasing transparency on service quality and market performance
May 3, 2011--Euroclear Bank and Clearstream, the international central securities depositories (ICSDs), have developed jointly and in collaboration with the International Securities Market Advisory Group (ISMAG), a new industry framework to increase transparency and efficiency for the issuance and asset servicing of international securities. The framework sets standards for these securities issued in and primarily deposited with the ICSDs, with outstanding levels close to €9 trillion. Major issuers and industry participants like BNP Paribas Securities Services, Citibank N.A. Issuer Services, European Investment Bank and KfW are supporting the initiative and the associated best practice implementation process.
International securities issuance is becoming more complex, with increasing challenges to reconcile legal and operational requirements. The new international securities standards are the result of a three-year programme led under the auspices of ISMAG to identify and encourage best practices in issuance and asset servicing operations throughout the entire value chain. ISMAG’s recommendations aim to reduce the inefficiencies, costs and risks in issuing and servicing securities while increasing transparency on the use of the new standards for the benefit of the issuer and investor communities.
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Source: Deutsche Börse
ETF Securities lines up potential $1bn listing
May 3, 2011--ETF Securities which launched the first gold ETF in 2003, is lining up a potential $1bn share listing, in the latest sign of euphoria in the sector.
Investment bankers said the ETF provider, which has $28bn of products under management and which specialises in the booming commodities sector, had retained Citigroup and Bank of America Merrill Lynch to discuss its strategic options. These include an initial public offering, subject to market conditions, according to three different people.
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Source: Financial Times
EU financial system still weighed down by risk
May 3, 2011-The risk burden still threatens Europe's financial stability, and the crisis aftermath will last many years, the two vice chairs of the EU's new financial risk watchdog warned the Economic and Monetary Affairs Committee on Monday. Mervyn King and Andrea Enria repeatedly called for the EP's support when pushing through difficult reforms, particularly in better times when the financial sector would lobby fiercely against regulation.
Mervyn King, the first Vice Chair of the European Systemic Risk Board (ESRB) and Governor of the Bank of England, assured MEPs that the ESRB would not "shy away from making all the warnings and recommendations it considered necessary". Andrea Enria, also an ESRB Vice Chair and head of the European Banking Authority, said that one of the ESRB's most pressing tasks would be to tackle the "shadow" banking sector, whose activities escape the rules applying to normal banks.
Political support vital
Asked whether he had the human and financial resources he needed, Mr King insisted that generating the necessary political will would prove the biggest challenge. "The right judgements will be dependent on the existence of will and determination. At times, the ESRB is going to have to take very unpopular decisions and face an immense lobby. We count on the EP to support us in those days" he said.
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Source: European Parliment
Boerse Stuttgart achieves a turnover of around EUR 7.9 billion in April
Trading in securitised derivatives at previous year's level/ higher trading volumes of euro-denominated government bonds
May 3, 2011--According to its order book statistics, Boerse Stuttgart achieved a turnover of around EUR 7.9 billion in April 2011. This meant that trading volumes were at the level of April 2010. In comparison with the eventful months at the beginning of the year, trading activities among investors were less buoyant also due to a number of public holidays.
The lion's share of trading volume was accounted for by securitised derivatives. At more than EUR 4.1 billion, turnover in April was lower than in the record-breaking month of March, but nevertheless slightly up on the figure for April 2010. Both leverage products and investment products accounted for around EUR 2 billion of turnover.
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Source: Boerse Stuttgart
Development of Financial Markets in Central Europe: the Case of the CE4 Countries -IMF Working Paper
May 3, 2011-- Summary: Financial markets in the CE4 countries are still shallow compared to other advanced EU countries. While the government bond markets are comparable in size, measured by capitalization in percent of GDP, the private bond, private credit, and equity markets lag behind.
Empirical analysis in this paper helps identify factors that explain this phenomenon. We find that the observed differences cannot be explained by macroeconomic variables only, but incorporating indicators of institutional development and external funding eliminates the gap in the case of the equity and private credit markets. However, for the private bond market a significant gap remains even after accounting for these factors.
view the IMF working paper-Development of Financial Markets in Central Europe: the Case of the CE4 Countries
Source: IMF
ECB: challenges to financial integration in 2010
May 2, 2011--After the improvement observed in 2009 in many market segments and despite continuous equity market integration in 2010, the financial environment with the worsening fiscal situation in some euro area countries posed challenges for European financial integration, the European Central Bank’s Financial Integration report published today concluded.
The main policy-relevant messages of the report can be summarised as follows:
Euro area capital markets continued to increase in size in recent years, and cross-country differences in size declined.
The worsening of the fiscal situation in some countries posed serious challenges to financial integration in 2010. The money and bond markets were particularly affected.
The sharp divergence of yields in some European government bond markets reflected an increase in the perception of sovereign risks as well as liquidity risks, in some cases exacerbated by market overreaction.
The euro area equity markets were less strongly affected by the recent developments. Most available indicators suggest that the equity market integration actually strengthened in 2010.
view the report-Financial Integration in Europe May 2011
Source: ECB
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