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NYSE Euronext European ETF activity highlights for April 2011
May 11, 2011--Listings
April 2011 saw 19 cross-listings from Lyxor on Euronext Brussels and 8 new ETF listings including:
2 from RBS Market Access on Euronext Amsterdam,
1 from EasyETF on Euronext Amsterdam,
4 from ThinkCapital ETFs on Euronext Amsterdam and
1 from Lyxor on Euronext Paris.
At the end of April, NYSE Euronext had 642 listings of 546 ETFs from 17 issuers. So far this year, there were a total of 101 new listings on the NYSE Euronext European market including 75 new primary listings and 26 cross listings.
These ETFs cover more than 360 indices exposed to an extended range of assets and strategies (Equity, Fixed Income, Commodities, Short, Leverage, etc.).
Trading activity
In April 2011, both the average daily number of trades and the Average Daily Turnover (ADT) figures decreased compared to the same period last year:
On average, there were 7 937 trades on a daily basis, representing a decrease of 12.8% versus April 2010.
ADT of €348.7 million, representing a decrease of 16% from the €415.3 million in April 2010.
Assets under Management (AUM)
At the end of April 2011, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €142.3 billion, an increase of 18.6% from the €120.0 billion at the end of April 2010.
Market Quality
The combination of the flow of 22 first-class Liquidity Providers, competitive market makers, client orders and our high capacity, low latency technology contributed to a median spread of 26.5 bps of all listed ETFs.
view the April 2011 edition of the ETF Monthly Flash
Source: NYSE Euronext
BlackRock ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 06-May-2011
May 11, 2011--For the week ending 06 May 2011, there were US$220.2 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in utilities with US$75.6 Mn followed by insurance with US$75.4 Mn net outflows while chemicals experienced net inflows of US$108.6 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$557.3 Mn net inflows. Oil and gas has seen the largest net inflows with US$467.2 Mn, followed by banks with US$294.5 Mn net inflows while basic resources experienced the largest net outflows with US$181.5 Mn.
As of 06 May 2011, there is US$11.1 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 15 out of 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
The European Debt Investor Landscape
Peak Issuer Demand for Funding Faces Multiple Challenges from Investors
May 11, 2011--Highlights
The continued smooth functioning of the debt markets for the government, bank
and corporate sectors is essential to the functioning of Europe’s economy. In this fifth year since the start of the financial crisis, debt is in high demand from European issuers: many banks require capitalisation to comply with Basel III; and government deficits need funding. For example, Fitch Ratings estimates the latter
need to raise EUR1.8trn in the market in 2011 to finance large deficits and to roll over funding.
At the same time, the region’s debt investors are facing a number of challenges, including new regulation, such as Solvency II (SII), which could lead to en masse changes to asset allocation. This could potentially result in a shift in the tectonic
plates of investor funds, leading to significant changes in the availability, cost and
tenor of funding for borrowers. Fitch, however, notes that the SII proposals are still at a draft stage, potentially subject to material amendments, and that large insurers are likely to use internal models whose impact on asset allocation might diverge from the standard framework.
read more
Source: Fitch Ratings
New EDHEC-Risk Institute research affirms that issuing inflation-linked bonds substantially increases firm value
May 11, 2011--In a climate of increasing inflation uncertainty, EDHEC-Risk Institute has released a new study analysing optimal corporate debt management policies. The study, produced as part of the research chair on “The Case for Inflation-Linked Corporate Bonds: Issuers’ and Investors’ Perspectives,” in partnership with Rothschild & Cie, entitled “Optimal Design of Corporate Market Debt Programmes in the Presence of Interest-Rate and Inflation Risks,” examines the optimal liability structure when the issuer faces such instruments as fixed-rate debt, floating-rate debt, and inflation-linked debt.
The authors of the study, Lionel Martellini, Scientific Director, and Vincent Milhau, Senior Research Engineer, EDHEC-Risk Institute, introduce a general framework with which a corporation subject to default risk may make optimal debt-management decisions.
The main findings of the study are the following:
Debt management has an impact on capital structure. A primary contribution of the paper is to provide a joint quantitative analysis of capital-structure decisions and debt-structure decisions within a standard continuous-time model in the presence of interest-rate and inflation risks.
An optimal debt structure can facilitate substantial increases in firm value. Issuing floating-rate bonds or inflation-linked bonds may increase risk from the perspective of pure debt management, but it may decrease risk from the perspective of integrated asset/liability management. From this trade-off emerges an optimal debt structure, and one can show that under mild simplifying assumptions, minimising the volatility of assets nets of liabilities is equivalent to minimising the risk-adjusted probability of default, which is in turn equivalent to maximising firm value.
A number of corporations would benefit from issuing inflation-linked bonds, bonds usually associated with sovereign states. If a firm’s revenues grow with inflation, issuing some inflation-linked debt can be a natural hedge.
NYSE Euronext Lisbon lists Commerzbank Factor Certificates on commodities
Bank lists 44 certificates on 11 different commodities and reinforces available product offer-
May 2011 – NYSE Euronext today has listed new Factor Certificates issued by
Commerzbank. With this issue, Commerzbank reinforces the current offering of this type of financial
products on NYSE Euronext in Lisbon. Commerzbank adds a new range of 44 new certificates with 11 different commodities as underlying - gold, silver, copper, corn, wheat, oil (Brent and WTI), natural gas, cocoa, coffee and sugar.
Factor Certificates offer on-exchange leverage participation to the daily performance of a specific
underlying with no maturity and a pre-defined fixed leverage. Several fixed leverage levels are
available allowing investors to select the leverage level corresponding to their individual risk profile.
read more
Source: NYSE Euronext
D Börse staff urge rejection of takeover
May 11, 2011--Deutsche Börse’s employee representatives have urged shareholders to reject the stock exchange operator’s takeover proposal for NYSE Euronext, reflecting worries about job cuts in the wake of a merger.
The works council, which represents the German stock market group’s employees, called on shareholders to vote against the proposed offer.
read more
Source: FT,com
Pace of UK Growth Under Threat
May 10, 2011--Britain's economy is unlikely to grow as fast as before the financial crisis because its most productive sectors have been hardest hit, jeopardising government plans to cut the deficit.
A Financial Times analysis of the sectorial performance of the economy before and after the crash highlights how much banks and insurance companies boosted economic growth between 2000 and 2008.
read more
Source: CNBC
Europe close to compromise deal on swaps ban
May 11, 2011--The prospect of Europe imposing a permanent ban on trading in “uncovered” credit default swaps on sovereign debt has receded after senior diplomats threw their weight behind a compromise on how new short-selling rules should work.
Under a deal likely to be endorsed by European Union finance ministers next week, naked short-selling of cash government bonds would be banned.
read more
Source: FT.com
Restructuring Greek debt risks devastation: Commission
May 11, 2011-- The European Union economic affairs chief warned Wednesday that restructuring Greece's massive debt would have devastating consequences for the country and the eurozone as a whole.
Amid growing fears the EU may have to rescue Greece for a second time, European economy commissioner Olli Rehn said a "large part" of the Greek banking system would likely "become insolvent" if the national debt was restructured.
read more
Source: EUbusiness
Ireland expects economic rebound to start this year
May 10, 2011--Ireland's debt-stricken economy will start to rebound this year after three years of recession, Finance Minister Michael Noonan said Tuesday as he announced a series of job creation initiatives.
"The economy has seen three successive years of declining economic activity. Between 2007 and 2010 the volume of goods and services produced in Ireland fell by 12 percent," Noonan told parliament.
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Source: EUbusiness
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