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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.
Source: Northern Trust
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
Source: Deutsche Bank Global Equity Index & ETF Research
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
Source: World Bank
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
Source: Borsa Italiana
ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending Week Ending 18-Feb-2011
February 23, 2011--For the week ending 18 February 2011, there were US$350.5 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF net inflows last week were in basic resources with US$146.5 Mn followed by utilities with US$123.1 Mn net inflows while telecommunications experienced net outflows of US$30.1 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$1,677.8 Mn net inflows. Banks has seen the largest net inflows with US$613.4 Mn, followed by insurance with US$247.1 Mn net inflows while chemicals experienced the largest net outflows with US$89.8 Mn.
As of 18 February 2011, there is US$12.1 Bn AUM invested in the STOXX sector ETFs which is almost double the US$6.7 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 18 out of 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
STOXX changes composition of benchmark indices
Results of the Fourth Regular Quarterly Review to be Effective on December 20, 2010
February 23, 2011--STOXX Limited, a global index provider and creator of the leading European equity indices, today announced the new composition of the STOXX Global 1800 Index, STOXX Europe Total Market Index, STOXX Europe 600 Index, STOXX
Americas 600 Index, STOXX Asia/Pacific 600 Index, STOXX EU Enlarged Total Market Index, STOXX Eastern Europe Total Market Index, STOXX Eastern Europe 300 Index and their sub- and sector indices, as well as that of the STOXX Europe Football Index and STOXX
Europe Private Equity 20 Index.
Effective as of the open of European markets on December 20, 2010, the following stocks will be added to and deleted from the STOXX Europe 600 Index and its respective size
and sector indices:
read more
Source: STOXX
STOXX Launches Islamic Indexes
First set of Shariah compliant indices for Europe introduced
February 23, 2011--STOXX Limited, the market-moving provider of innovative, solid and global index concepts, today announced the launch of the STOXX Europe Islamic Index and its two blue-chip sub-indices, the STOXX Europe Islamic 50 and EURO STOXX Islamic 50. The three new indices measure the performance of Shariah-compliant companies selected from the STOXX Europe 600 Index.
The STOXX Europe Islamic Indices are designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds and other investable products that enable investors to participate in the performance of European companies which are in line with the moral and social doctrines of the Islam.
“With the launch of the STOXX Europe Islamic Indices, STOXX takes another step to broaden its faith-based index offering by offering three Shariah compliant indices for Europe and the Euro zone,” said Hartmut Graf, chief executive officer, STOXX Ltd. “The number of market participants who wish to invest in accordance with their religious beliefs, or to participate in the performance of companies which act responsibly in terms of economic, environmental and social directives, is growing constantly. Therefore, STOXX will continuously expand its innovative index offering in this area to meet the demand.”
The index universe for the STOXX Europe Islamic Index is defined as all stocks in the STOXX Europe 600 Index. To be included in the index, stocks must pass two sets of screens. In a first step, all companies with significant activity in one of the following sectors or activities are removed: non-halal food production; tobacco; alcohol; gambling; advertisement; hotels; non-Islamic banks, financial institutions and insurance companies; entertainment and music production; trading of gold and silver, as well as weaponry and arms manufacturers. In a second step, financial ratios of the remaining companies are screened: income from interest and non-Shariah compliant activities cannot exceed 5% of the company’s total income. Furthermore, the ratio of non-Sharia compliant debt to either the company’s total assets or total market capitalization – whichever is greater - cannot exceed 33%. In addition, the total ratio of interest bearing assets to the company’s total assets or total market capitalization can also not exceed 33%.
The STOXX Europe Islamic 50 and EURO STOXX Islamic 50 Index are derived from the STOXX Europe Islamic Index and consist of its 50 largest stocks in Europe and the Euro zone, respectively.
To ensure the quality of the indices and the integrity of the underlying index methodology, an independent Shariah Supervisory Board has been established to define and build the screening criteria, as well as to oversee the process. It is made up from three Shariah scholars specializing in Islamic finance: Dr. Abdul Aziz Khalifah Al-Qassar, Dr. Eissa Zaki Eissa and Dr. Esam Al-Enezi.
The STOXX Europe Islamic Indices are weighted by free-float adjusted market capitalization, available in price, net and gross return versions and calculated in Euro and U.S. Dollars (USD). They are reviewed quarterly in March, June, September and December. Daily history is available back to December 31, 2004. Each component’s weight in the STOXX Europe Islamic Index is capped at 20% of the index's total free-float market capitalization, while the components’ weights for the blue-chip indices are capped at 10% of the respective index’s total free-float market capitalization.
The STOXX Europe Islamic Indices are the newest addition to the STOXX ESG Index family, which also comprises the STOXX Europe Christian and STOXX Sustainability Indices. Please see www.stoxx.com for further information on this index family.
Source: STOXX
Longevity exposes Europe to 'extreme fiscal risk'
February 23, 2011--Governments will increasingly expect the private sector to provide pensions as longevity threatens to bankrupt European economies over the next few decades, according to Maplecroft, a consultancy.
According to a fiscal risk index published today, Italy tops the list of economies categorised as at "extreme" economic risk. Of the remaining 11, only one – Japan, ranked ninth – is outside Europe.
read more
Source: IP&E
Russia plans Eurobond on back of rising crude
February 22, 2011--Russia is planning to issue a seven-year rouble Eurobond this week, taking advantage of the rise in the price of oil and its effect on the Russian economy.
The issue is expected to take place on Thursday, following a national holiday in Russia today.
read more
Source: FT.com
Milan bourse outage adds to fears over Libya
February 22, 2011--Confusion marred the trading of Italian shares on Tuesday after Borsa Italiana, the Italian exchange, was hit by an outage that delayed the opening of trading for more than five hours amid wider concerns over turmoil in Libya.
The outage, which left brokers unable to process orders, came a day after the main Italian stock market index had closed down 3.6 per cent, making it the worst performing European market on Monday.
read more
Source: FT.com
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