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Italian 8-billion euro bond issue a success
Jnauary 28, 2011-- Italy issued over eight billion euros of medium- and long-term bonds at encouragingly low interest rates on Friday, in a sign of easing fears among investors.
The Italian treasury sold off a total of 8.148 billion euros of bonds ($11.17 billion), and had bidders for another four billion euros, the Bank of Italy said in a statement.
The three-year bonds yielded 3.12 percent and the seven-year bonds 2.55 percent, both rates below that of the last such issue by Italy in December -- a welcome sign that investors' fears are easing.
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Source: EUbusiness
Deutsche Bank -Equity Research - Europe: A stellar start to the year: Equity ETFs reign in €2 bil. record inflows
January 28, 2011--Investment Outlook:
Equity ETF trades continue to signal a turn
With the first issue of our weekly ETP market review report in 2011, the European market shows further encouraging signs which cause us to believe that it has decisively turned a corner. Building on a trend which started materializing in the fourth quarter of 2010, the industry experienced record inflows of €1.9 billion this week.
The vast majority of this week’s inflows (97%) were driven by equity investors repatriating assets. In addition to evident directionality, cash flow levels were fairly telling: weekly equity flows were four times those of the 2010 weekly average equity inflows (€0.5 bil.).
Most of the equity cash flow boom is driven by improved market sentiment as rising equity index prices attest. The EuroStoxx 50 index and the CAC index closed the week with gains of 1.7% and 0.9% respectively. Not all European equity markets were up though. The UK’s FTSE 100 was down by 1.8% and Germany’s DAX declined by 0.2%.
Not all equity flows for this week are likely to be associated with rising asset prices. Despite its slight decline, the DAX saw healthy inflows. In fact, two out of the week’s five top single ETF cash flow earners (please see page 20 of the report for more detail), were likely associated to tax optimization. These two ETFs alone took in a total of close to €450 million. These flows are most likely to be associated with the upcoming German dividend season and expected dividend payouts and tax optimization trades.
Assets such as gold, that have historically been linked to more defensive trades during periods of high volatility, portrayed a picture which further supplements the notion that investors’ risk appetite is shifting. Gold’s USD/oz price dropped by 1.2% this week, a move that was accompanied by new outflows of €141 million out of gold ETP products.
ETFs tracking Alternatives (for example hedge funds) benchmarks also showed signs which point to increased investor risk appetite. Alternative benchmarked ETFs received the second highest flows (by asset class) totaling to €94 million, emerging as one of this week’s winners.
The rest of the asset classes witnessed fairly muted weekly flows with a net €74 million of outflows from fixed income ETFs and a total of €17 million of inflows into commodity ETPs.
New Product Launch Calendar: Fixed income defines the month’s flavor
Eight new products were launched so far in January 2011 and 75 products were cross-listed n the first three weeks of the year.
Source made its official debut in the fixed income ETF arena. In a partnership with PIMCO it launched two new ETFs on Deutsche Borse. One of them tracks the performance of the PIMCO European Advantage Government Bond index and the other tracks the returns of an actively managed portfolio of short maturity bonds.
Lyxor also launched two new fixed income ETFs tracking the Markit iBoxx EUR Liquid High Yield 30 index and the Markit iBoxx USD Liquid Emerging Markets Sovereigns index respectively. The same issuer also cross-listed three iBoxx $ Treasury fixed income ETFs.
UBS launched two new commodity ETFs which track broad commodity benchmarks. It also cross-listed three ETFs tracking the HFRX Global Hedge Fund Index.
Finally, BBVA launched two new products; An equity ETF which tracks the Ibex35 Inveso index and a fixed income ETF which tracks the iBoxx Euro Sovereigns short maturity index.
Overall, Credit Suisse led the cross-listing activity with 36 new listings on the NYSE Euronext Paris. BNP Paribas and Blackrock also cross-listed 15 and 13 of their existing products respectively .Amundi cross-listed two products while Deutsche Bank and ETF Securities cross-listed one product each. NYSE Euronext Paris saw by far the largest cross-listing activity, with Borsa Italiana and Deutsche Borse in second and third places.
Assets Under Management (AUM): Stable
European ETP assets showed a slight decline and ended the current week at €232.6 billion. Despite very strong inflows, equity ETF assets were flat for the week, at €151.3 billion. Commodity ETP assets declined by 2.2 % and finished at € 37.1 billion. The fall was consistent with the decline in gold’s price. Fixed Income ETFs also registered a €215 million decline and finished the week at €41.9 billion. Alternatives and Currency ETPs registered a healthy asset growth of 5% and 2% reaching €1.8 billion and €0.5 billion of assets respectively.
On-Exchange Total Weekly Turnover: Equity led rise
As of 1/1/ 2011, reported ETP turnover in our reports represents total weekly € exchange-traded volumes. This does not include OTC turnover. We previously, reported one month rolling daily average numbers. We have switched to weekly totals in order to more accurately reflect short term trend changes.
Weekly total turnover is calculated by adding daily € volumes for each ETP. Daily volumes are in turn calculated by multiplying a day’s close price (by product) by the number of shares traded on that day.
Total European ETP on-exchange weekly turnover rose by 9.5% and reached €12.4 billion for the week that ended on 21st January. This follows a consistent turnover rising trend in 2011, weekly ETP turnover is up 25% from 2010 weekly average levels.
Equity ETFs led this week’s turnover increase, with a rise of 11.5%, reaching € 9.5 billion. Commodities followed suit with a 7.9% week to week turnover rise, reaching €1.8 billion. Fixed income ETF weekly turnover declined by 2.8%, down to €1.0 billion.
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Source: Deutsche Bank Global Equity Index & ETF Research
10th Anniversary of ETFs listed on NYSE Euronext
ETFs listed on the European market of NYSE Euronext top the 500 mark
One of the leading platforms for listing and trading ETFs in Europe
January 28, 2011--NYSE Euronext (NYX) celebrates today the 10th anniversary of ETFs on its European market following the listing of products by iShares and Lyxor in January 2001.
NYSE Euronext confirms its position as a pace-setter for ETFs
Over the past five years, the number of ETFs listed on NYSE Euronext’s European market has increased more than tenfold, rising from 53 in January 2005 to 543 ETFs today with 618 listings and covering a range of more than 350 indices for a variety of asset classes and market segments.
ETFs are winning increasing favour, with assets of the products listed on our European market rising 50% since 2007 to top €130 billion at present. The number of trades in these products almost tripled over the same period.
Today the diversity of our 17 issuers is an important part of our community and service to connecting capital markets. In 2010 two new issuers, Comstage ETF and ESAF ETF, joined the NYSE Euronext European ETF market place with products based on the CAC 40, CAC 40 Short, CAC 40 Leverage, PSI 20, PSI 20 Leverage and NYSE Euronext Iberian Index.
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Source: NYSE Euronext
Government Debt Issuance in the Euro Area:The Impact of the Financial Crisis-IMF Working paper
January 28, 2011--This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007-09, we find evidence of a shift away from pre-crisis standards of best funding practices competitive auctions of debt instruments with a fixed coupon, long maturity and local currency denomination (DLTF).
Exploiting the cross-country panel data dimension of the data, we conclude that the crisis and related changes in the macroeconomic environment and investor sentiment can account for a significant proportion of the deviation. The negative effect of the crisis on DLTF debt issuance was especially pronounced in high deficit and high debt euro area countries, and has forced governments to assume additional risk.
view the working paper-Government Debt Issuance in the Euro Area:The Impact of the Financial Crisis
Source: IMF
SPDR ETFs - State Street Global Advisors
Starting from January 27th 2011, 12 new SPDR ETFs will be listed on the ETFplus market
January 27, 2011--Borsa Italiana welcomes on the ETFplus market a new issuer: SPDR ETFs listed 12 new ETFs.
2 equity Europe ETFs:
SPDR MSCI EUROPE ETF-FR0000001885
SPDR MSCI EUROPE SMALL CAP ETF -FR0010149880
10 equity sectors (Europe) ETFs:
SPDR MSCI EUROPE UTILITIES ETF-FR0000001646
SPDR MSCI EUROPE TELECOM SERVICES ETF- FR0000001687
SPDR MSCI EUROPE MATERIALS ETF-FR0000001794
SPDR MSCI EUROPE INFORMATION TECH ETF -FR0000001695
SPDR MSCI EUROPE INDUSTRIALS ETF- FR0000001778
SPDR MSCI EUROPE HEALTH CARE ETF-FR0000001737
SPDR MSCI EUROPE FINANCIALS ETF -FR0000001703
SPDR MSCI EUROPE ENERGY ETF-FR0000001810
SPDR MSCI EUROPE CONSUMER STAPLES ETF-FR0000001745
SPDR MSCI EUROPE CONSUMER DISCRETION ETF-FR0000001752
Source: Borsa Italiana
Hedge funds lured by exchange-traded funds
January 27, 2011--While exchange-traded funds have traditionally been marketed to retail investors as a cost-effective and easy way to access baskets of stocks, they are becoming increasingly popular with sophisticated European investors such as hedge funds.
The attraction of ETFs lies in the fact that they can be easily traded and can facilitate long or short exposure to underlying assets that may be hard to invest in directly and offer cheaper hedging opportunities.
John Lowry, chairman of alternative investment firm ML Capital, said: “There has been a significant uptake in the use of ETFs as an investment tool. We are seeing a growing trend for some managers to utilise ETFs to get 100% of their exposure to underlying markets – there is definitely a growing trend to dedicated ETF-based hedge funds.”
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Source: Financial News
Sarkozy says he and Merkel will never abandon euro
January 27, 2011--French President Nicolas Sarkozy passionately defended the euro against skeptics at the World Economic Forum on Thursday, saying he and German Chancellor Angela Merkel would never let the currency fail.
Sarkozy spoke as financial executives attending the Davos gathering voiced cautious optimism that the euro zone's debt crisis could be resolved without contagion spreading to Spain or investors being forced to take unbearable losses.
"To those who would bet against the euro, watch out for your money because we are fully determined to defend the euro," Sarkozy said in a keynote speech. "Mrs Merkel and I will never -- do you hear me, never -- let the euro fall."
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Source: Reuters
Bank researchers call for doubling equity safety net
January 27, 2011--The new Basel III rules requiring banks to hold more capital are too weak and should be doubled to provide optimal protection against future economic shocks, researchers at the Bank of England have concluded.
The discussion paper issued on Thursday calculates that forcing banks to hold twice as much equity against potential losses would cut economic output by 6 per cent over a long period. But the authors, led by David Miles, an external member of the Bank committee that sets interest rates, argue the additional stability is worth it.
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Source: FT.com
EU extends hacker-induced emissions trading halt
January 27, 2011-- The EU extended a freeze Thursday on trading in carbon credits ordered after hackers broke into national trading registries and stole and then sold millions of euros worth of polluting rights.
"Security comes before trading," said Maria Kokkonen, spokeswoman for European Union climate action commissioner Connie Hedegaard.
"It's going to take time," she told AFP, with only internal trading in the best-protected national registries targeted for resumption next week.
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Source: EUbusiness
Lyxor celebrates 10th anniversary of first ETF launch on the Paris stock exchange
January 27, 2011--Lyxor Asset Management, a subsidiary of Société Générale, launched it's first ETF – linked to the CAC40 Index – on the Paris stock exchange back in January 2001. Ten years later, the firm's exchange listed index funds have enjoyed considerable growth in France and Europe for both institutional and retail investor clients, with more than two million transactions and nearly EUR95 billion traded on NYSE Euronext in 2010, representing some 5.81% of total trades.
A leading player in the ETF industry since 2001, Lyxor AM targets the best investment opportunities matching its clients’ needs and has extended its ETF offering in all asset classes. In 2010, Lyxor AM was the first issuer to launch an ETF on European dividends as well as the first ETF in the S&P 500 index on the Paris Stock Exchange, and offers the widest range of ETFs on sector indexes.
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Source: ETF Express
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