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BTP futures hit record volumes in early 2011
February 21, 2011--The international derivatives exchange Eurex released today that its Euro-BTP Futures product suite had a very successful start into 2011. These futures are based on notional long and short-term debt instruments issued by the Republic of Italy (Buoni del Tesoro Poliennali, or BTP). The average daily volume (ADV) for the long-term Euro-BTP contract (FBTP) in January 2011 has grown about 25 percent year-on-year (y-o-y), totaling 6,800 contracts.
The ADV of the Short-term Euro-BTP futures was 2,400 in January and continues to rise. Both contracts also had daily record volumes due to Ireland’s credit downgrade, with the Euro-BTP future at 18,289 contracts on 2 February and the Short-term Euro BTP future at 6,829 contracts on 3 February 2011 (excluding daily volumes during roll period).
The open interest on the two contracts has also grown steadily. As of 17 February 2011 open interest on the FBTP is 30,175 compared to an open interest of nearly 20,000 in January 2010. This represents a growth rate of approximately 50 percent y-o-y. For the short-term BTP futures, open interest is 13,124 as of 17 February 2011.
The main users are Italian and Spanish customers as well as institutional clients (asset managers) who run European bond portfolios that are partially hedged with a mixture of German and Italian government bond futures.
Launched in September 2009, the long-term BTP future is part of Eurex’s benchmark interest rate derivatives segment and aims to offer an appropriate hedge for all non-triple A-rated European government bonds and potentially other interest rate bearing instruments (i.e. swaps). Furthermore, the futures add value to the Italian government bond market by enriching the basis and repo trading opportunities. In October 2010, Eurex introduced the short-term BTP contract to further complement its interest rate derivatives offering.
Source: Eurex
Singaporean funds available for settlement in Clearstream
First Asian funds on the Clearstream systems/ Other Asian jurisdictions to follow after regulatory approval
February 21, 2011-- Clearstream, the global liquidity provider of Deutsche Börse Group, announced today that Singaporean investment funds are eligible for order routing, settlement and custody through its existing infrastructure. The Singaporean funds are made available on the Clearstream order routing platform Vestima+ and its post-trade infrastructure for funds, the Central Facility for Funds, for settlement. Investment funds from other Asian jurisdictions will follow after regulatory approval.
Philippe Seyll, Member of the Executive Board of Clearstream and Head of Investment Funds Services, said: “We are happy to include the first Asian funds on our systems and to allow international investors easy access to these financial instruments. Through our order routing platform Vestima+, we bring more than 82,000 investment funds to investors around the globe. We observe a tremendous appetite by Asian investors for investing into the funds that we hold on our platform.”
Clearstream and the Deutsche Börse cash market Xetra recently launched the trading of mutual funds via stock exchange. The new service is especially interesting for investors in non-European timezones as stock exchange execution will allow individual funds units to be priced and monetized immediately and not, as currently the case, the next business day once the net asset value of a funds share has been calculated. Once traded on stock exchange and pooled in the Clearstream systems, funds can also be re-used as collateral.
Clearstream has its headquarters in Luxembourg. With more than €2,200 billion (December 2010) of assets under management, Luxembourg is the second-largest funds market in the world after the US. There are more than 3,500 collective investment schemes administered and distributed globally out of the Grand Duchy. The average daily net inflows into Luxembourg funds reached approximately €1 billion in 2010.
Source: Clearstream
Risk aversion hits the euro
February 21, 2011--Euro bulls were disappointed after early gains for the single currency were pared as tumbling European markets reflected heightened risk aversion to political unrest across north Africa and the Middle East.
The single currency had moved higher on mounting speculation that the European Central Bank might raise interest rates sooner than expected due to rising inflationary pressures.
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Source: FT.com
Eurozone manufacturing and service activity in February hit levels last seen in July 2006 but inflation, an increasing concern, also jumped sharply, a closely watched survey showed on Monday.
February 21, 2011--Eurozone manufacturing and service activity in February hit levels last seen in July 2006 but inflation, an increasing concern, also jumped sharply, a closely watched survey showed on Monday.
The Eurozone composite output index compiled by the Markit research firm rose 1.4 points from January to 58.4 points in February.
It said the latest reading "signalled the strongest monthly expansion since July 2006 and one of the strongest growth rates in the near 13-year history of the survey."
Service business activity alone rose to 57.2 points from 55.9 points in January, with manufacturing output at 61.1 points, up from 59.4 points for a 10-month high, Markit said in a statement.
The eurozone manufacturing sector purchasing managers index, a forward looking measure, hit 59 points, its highest since June 2000, up from from 57.3 points.
A reading above 50 indicates activity is expanding.
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Source: EUbusiness
Europe to unveil new bank stress tests in March
February 21, 2011--The European Union will announce a new round of bank tests to determine their financial health on March 2 after last year's results were criticised for failing to spot a huge black hole at Irish lenders.
EU financial services commissioner Michel Barnier gave the date on Monday having previously said the tests -- seen as vital to gauge potential bank weakness in other weak EU countries such as Spain -- would be conducted as early as this month.
He said the delay was due to the "very complex" nature of testing required if the 2011 edition was to produce "credible" results.
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Source: EUbusiness
STOXX 4 Global Index family launch and rebranding
February 21, 2011--STOXX Limited, the market-moving provider of innovative, substantial and global index concepts, today introduced the STOXX Global Index family with the launch of more than 1,200 indices covering the global equity markets. Effective today, a new index classification system will also be used to further define the different levels of index services offered by STOXX.
STOXX has also introduced a new corporate design that visually reinforces these changes and reflects the firm’s prominence as a leading global index provider.
“The launch of the STOXX Global Index family and new corporate design marks the next era for STOXX as we continue expanding our global business. The differentiating factor in our new global index series compared to its peers is that it includes both traditional equity indices as well as strategy indices designed for more sophisticated investment approaches,” said Hartmut Graf, chief executive officer, STOXX Limited. “Our goal is really to offer our clients the greatest possible choice and flexibility. To that end, we introduced four different levels of STOXX index classification to further enhance our customer focus and aspiration to bring transparency to the index market.”
The STOXX Global Index family consists of total market, broad and blue-chip indices for the regions Americas, Europe, Asia, and Pacific, and sub-regions Latin America and BRIC (Brazil, Russia, India and China), as well as global markets. Furthermore, all broad regional indices can also be broken down into a comprehensive set of supersector indices that follow the Industry Classification Benchmark (ICB). Blue-chip indices are also available for individual countries.
To complement the new global index family, a set of innovative strategy indices will be launched for all regional and country blue-chip indices, including risk control indices, and several short and leverage indices.
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Source: STOXX
FSB Report on Progress in the Implementation of the G20 Recommendations for Strengthening Financial Stability.
February 19, 2011--The FSB published on 19 February its progress report FSB Report to G20 Finance Ministers and Central Bank Governors on implementation of regulatory reforms for strengthening financial stability.
The report focuses on international policy development and implementation that has taken place since the G20 Seoul Summit in November 2010.
BATS enters big league with Chi-X merger
February 18, 2011--From his headquarters in Kansas City, Joe Ratterman can hardly believe that, as of Friday, the company he runs will soon account for more share trading in Europe than the London Stock Exchange
BATS Global Markets began life in 2005 as a technology project to make trading faster and more efficient; the brainchild of Mr Ratterman, a commercially-qualified pilot, and 12 others
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Source: FT.com
Spain brings in new bank capital rules
February 18, 2011--Spain has approved a law obliging its banks to reinforce their capital by September or face partial nationalisation but has granted unlisted cajas or savings banks until March next year to organise stock market flotations.
Spain’s strict new law on “strengthening the financial sector”, approved by the cabinet on Friday, is the latest step in a plan to restructure a savings bank sector burdened by bad property loans.
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Source: FT.com
Six new ETFs from iShares launched on Xetra
First ETFs on the MSCI Japan and MSCI World indices with currency hedge
February 18, 2011--Six equity index funds issued by iShares (BlackRock Inc.) have been tradable on Xetra since Friday.
ETF name: iShares MSCI Japan Monthly EUR Hedged
Asset class: equity index ETF
ISIN: DE000A1H53P0
Total expense ratio: 0.64 percent p.a.
Distribution policy: non-distributing
Benchmark: MSCI Japan 100% Hedged to EUR Index Net
ETF name: iShares MSCI World Monthly EUR Hedged
Asset class: equity index ETF
ISIN: DE000A1H53Q8
Total expense ratio: 0.55 percent p.a.
Distribution policy: non-distributing
Benchmark: MSCI World 100% Hedged to EUR Index Net
ETF name: iShares S&P 500 Monthly EUR Hedged
Asset class: equity index ETF
ISIN: DE000A1H53N5
Total expense ratio: 0.45 percent p.a.
Distribution policy: non-distributing
Benchmark: S&P 500 Euro Hedged Index
The indices underlying these three ETFs are weighted according to free float market capitalisation. The MSCI Japan Index tracks the performance of the developed equity markets in Japan, the MSCI World Index the international equity markets of industrialised nations, and the S&P 500 Total Return Net Index the 500 largest US stock corporations. These three iShares ETFs are hedged against exchange rate fluctuations between the euro and the US dollar.
ETF name: iShares MSCI Russia Capped Swap
Asset class: equity index ETF
ISIN: DE000A1H53L9
Total expense ratio: 0.74 percent p.a.
Distribution policy: non-distributing
Benchmark: MSCI Russia Capped Index
The MSCI Russia Capped Index is weighted by market capitalisation, and comprises components of the Russian standard index MSCI Russia. At present it only covers Russia.
ETF name: iShares S&P CNX Nifty India Swap
Asset class: equity index ETF
ISIN: DE000A1H53K1
Total expense ratio: 0.85 percent p.a.
Distribution policy: non-distributing
Benchmark: S&P CNX Nifty
The S&P CNX Nifty Total Return comprises 50 equities from 22 sectors of the Indian economy and thus approximately 55 percent of the market capitalisation of the National Stock Exchange of India.
ETF name: iShares MSCI USA
Asset class: equity index ETF
ISIN: DE000A1H53M7
Total expense ratio: 0.40 percent p.a.
Distribution policy: non-distributing
Benchmark: MSCI USA Index
The MSCI USA Index is weighted according to free float market capitalisation and tracks the performance of the developed equity markets in the USA.
Source: Deutsche Börse
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