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FSA chairman spells out regulatory challenges beyond Basel III
March 16, 2011--Lord Turner, chairman of the Financial Services Authority (FSA), will say this evening that already agreed regulatory reforms will have a major beneficial impact but further reforms are needed to make the financial system stable. He will also say that regulators need to recognise that the financial system will continually mutate, creating new risks, and requiring a continually evolving regulatory regime.
"The pre-crisis delusion was that the financial system, subject to the then defined set of rules, had an inherent tendency towards efficient and stable risk dispersion. The temptation post-crisis is to imagine that if only we can discover and correct specific imperfections – such as bad incentives or industry structure – that a permanently more stable financial system can be achieved."
Lord Turner will argue that while popular anger often focuses on the direct costs of public rescue of banks, these are likely to be small relative to the overall harm produced by financial crises. This harm derives from volatile credit supply, first too easily and cheaply available then restricted, producing a credit crunch and recession. Such volatile credit supply could moreover, arise in a world where no large banks ever failed or needed public support.
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Source: FSA.gov.uk
Economy: UK recovery slow, but fiscal consolidation must continue
March 16, 2011-- Economic growth will be subdued this year and next in the United Kingdom, but the government must continue its difficult fiscal consolidation and structural reform programmes to return the economy to a sustainable path, according to the OECD’s latest UK Economic Survey.
Spending cuts will curb government consumption, investment and household income growth over the 2011-12 period, but will bring long-term gain. The OECD says that pushing through key reforms will address fiscal sustainability concerns and help bring about a long-term rebalancing of the UK economy.
“By taking hard, though necessary, decisions now, the UK is ensuring that it can continue to provide the British people with effective government services in the future,” OECD Secretary-General Angel Gurría said during the survey’s release in London. “To counter some of the negative impact, monetary policy should remain expansionary to support the recovery, even if headline inflation is currently above target” (read the full speech).
Fiscal consolidation should be adjusted to better support growth. Economic recovery and job creation would both benefit from smaller-than-planned cuts in public investment. Such reforms should be financed through improvements to the efficiency of Value Added Tax, including ending exemptions and bringing lowered rates up.
view the Economic Survey of the United Kingdom 2011
Source: OECD
SPDR ETFs Report Highlights Inflows Of €56 Billion Into European ETF Market
March 15, 2011--The report notes that in 2010, ETF investors concentrated their new investments in several asset classes, most notably emerging market equity, commodities, US, German and Japanese equity, as well as Euro government bonds. ETFs that provide investors with exposure to changes in the VIX - a popular proxy for US equity market risk - also attracted significant assets. Outflows were concentrated in euro zone ETFs, reflecting investor unease about the sovereign debt crisis.
With regards to the 2011 outlook, other points in the report include:
Continued growth of ETF assets expected in 2011 as the search for diversification continues
Greater globalisation of European portfolios and demand for high dividend ETFs is also expected
the trend for investors to have more global portfolios will increase, with an increasing proportion of assets being invested in non-correlated asset classes such as emerging market equity and bonds
With government bond interest rates near historic lows and cash rates at virtually zero, investors have been starved of income in portfolios.
Another trend we expect to continue in 2011 is increased investment in ETFs that focus on high dividend-paying stocks. Investors have become more interested in ‘getting paid while they wait' than counting on capital appreciation. Dividend ETFs offer the potential for capturing much of the upside of traditional equities as well as higher yields.
Source: SS MAG.com
ETF Stat February 2011 -Borsa Italiana
March 15, 2011--The ETF Statistics of the ETF Plus Market for the month of February are now available.
view report
Source: Borsa Italiana
Three new Amundi ETFs launched on Xetra
XTF segment now contains 801 funds
March 15, 2011-- Two new listed equity index funds and a bond index fund issued by Amundi have been tradable in Deutsche Börse’s XTF segment since Tuesday. This brings the number of exchange traded funds listed in Deutsche Börse’s XTF segment to over 800.
ETF name: Amundi ETF AAA Govt Bond EuroMTS
Asset class: bond index ETF
ISIN: FR0010930636
Total expense ratio: 0.14 percent
Distribution policy: non-distributing
Benchmark: EuroMTS AAA Government Index
ETF name: Amundi ETF MSCI Europe Energy
Asset class: equity index ETF
ISIN: FR0010930644
Total expense ratio: 0.25 percent
Distribution policy: non-distributing
Benchmark: MSCI Europe Energy Index
ETF name: Amundi-ETF MSCI Emerging Markets I
Asset class: equity index ETF
ISIN: FR0010959676
Total expense ratio: 0.45 percent
Distribution policy: non-distributing
Benchmark: MSCI Emerging Markets Index
The bond fund ETF, Amundi ETF AAA Govt Bond EuroMTS, allows investors to participate in the performance of the EuroMTS AAA Government Index. The underlying index tracks the value of euro-denominated government bonds that are issued in the euro zone and have at least an AAA rating. All the bonds must have an outstanding volume of at least €2 billion and a minimum residual maturity of one year. With the Amundi ETF MSCI Europe Energy, investors can participate in the performance of all European equities in the energy sector.
The Amundi ETF MSCI Emerging Markets further offers investors an investment opportunity in the performance of 2,600 companies from 21 emerging markets. The index represents 85 percent of market capitalisation.
The product offering in Xetra’s XTF segment currently comprises 801 exchange-traded index funds, making it the largest offering of all European stock exchanges. With this offering and an average monthly trading volume of around €13 billion, Deutsche Börse’s XTF segment is the leading trading venue for ETFs in Europe.
Source: Deutsche Börse
CME Clearing Europe Announces Launch Of European Clearing Services - Initial Products Are Energy, Rapeseed Oil And Freight
March 15, 2011--CME Clearing Europe, a wholly-owned London-based subsidiary of CME Group, today announced that it will begin clearing more than 150 over the counter (OTC) energy and commodity derivative products beginning Friday, 6 May.
"The start of clearing at CME Clearing Europe is timely in light of the need for enhanced risk management in commodity markets and the imminent legislative change mandating the clearing of OTC derivatives," said Andrew Lamb, Chief Executive Officer of CME Clearing Europe. "While the initial focus of our product expansion will be on commodity products – energy, metals and agricultural – we aim to introduce clearing for OTC financial derivatives, beginning with interest rate swaps, in parallel with the deepening of the commodity clearing. Our goal is to offer a full multi-asset OTC clearing service, building on CME Group's clearing experience as well as its established and growing European presence."
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Source: CME Group
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
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