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Barclays launches iPath® VSTOXX Mid-Term Futures Exchange Traded Note
New iPath ETN offers investors exposure to medium-term European volatility
November 3, 2010-- Barclays Bank PLC today announces the launch of the iPath® VSTOXX Mid-Term Futures ETN listed in Euros on the London Stock Exchange (LSE) and XETRA under the ticker VSXY and in Sterling on the LSE under the ticker VSYG. The ETN is designed to provide exposure to European volatility.
“We are pleased to offer investors simple and transparent access to medium-term European volatility through our iPath VSTOXX Mid-Term Futures ETN,” said Uwe Becker, Head of Investor Solutions for Barclays Capital in Europe. “While the VSTOXX Short-Term ETN was designed to suit investors taking a view on equity volatility in the near future, this ETN is a useful solution for buy-and-hold investors. While it may be less sensitive to small movements in short term volatility, it is designed to exhibit a lower cost of carry over a longer holding period. It therefore aims to provide a cost-efficient tool for portfolio diversification, potentially going some way to providing protection against a market crash.”
“With two iPath ETNs referencing European volatility over different terms, Barclays Capital can now offer even more flexible solutions to manage risk to a broad range of investors,” added Antti Suhonen, Head of Origination, Equity and Funds Structured Markets (EFS).
iPath® VSTOXX Mid-Term Futures ETNs are senior, unsecured, unsubordinated callable debt securities, issued by Barclays Bank PLC. They are linked to the performance of the underlying EURO STOXX 50 Volatility Mid-Term Futures Index (VSTOXX Mid-Term Futures Index), which tracks the 4th, 5th, 6th and 7th month futures of the VSTOXX. The index futures are rolled continuously throughout each month from the fourth month VSTOXX futures contract into the seventh month VSTOXX futures contract while exposure to the fifth and sixth month contracts is being held constant.
SIX Swiss Exchange and SIX Exfeed publish consultation paper on reference markets
November 3, 2010--SIX Swiss Exchange and SIX Exfeed have published their questionnaire to consult with market participants and regulators on the significance of reference markets for securities and the rules which should govern them. All stakeholders are invited to give their valuable input until 30 November 2010.
Link: http://www.six-swiss-exchange.com/download/participants/consultation.pdf
The issues raised can broadly be split into two areas:
1. The principles of real-time reference data pricing We are seeking advice on the definition, categorization and pricing of the usage of reference data sourced from home markets by alternative venues and others.
2. The meaning of reference markets and reference prices in Europe
As operators of the regulated market for Swiss securities, which are widely traded by EU market participants, SIX Swiss Exchange seeks acknowledgement as the “Reference Market” for these securities, irrespective of the fact that Switzerland is outside the EU. SIX Swiss Exchange also looks to clarify the meaning of “Reference Prices” with regulators, both domestically and within the EU in order to validate the current rules and their cross-border implications and the impacts these have on investors and issuers.
Christian Katz, CEO, SIX Swiss Exchange, commented: “We have received a lot of encouragement in our efforts to lead this industry wide consultation and we are looking forward to sharing the results of this query with the European trading community.”
World Bank Launches its 23rd Russian Economic Report
November 2, 2010--With moderating global and Western European growth and oil prices and volatile capital flows, Russia is likely to grow by 4.2 percent in 2010, followed by 4.5 percent in 2011 and 3.5 percent in 2012 as domestic demand expands in line with gradual improvements in the labor and credit markets says World Bank’s Russian Economic Report No. 23 launched today in Moscow.
view Russian Economic Report 23
A new A-type exchange traded fund starts trading on the Istanbul Stock Exchange tomorrow: “Finansbank A.Ş. GT-30” Wednesday, November 3, 2010 (*) Greece-Turkey 30 Index
Sabotage fears as LSE platform crashes Poll suggests Industry unprepared for the AIFM Directive Of the 186 asset managers questioned, 41% were also concerned that the new EU regulation would lead to increased management fees. EU may legislate on corporate social and environmental data
Proposal 38 referred to the widely anticipated green paper on corporate governance. But the Commission added that it would also “launch a public consultation on the possible ways to improve the transparency of information provided by businesses on social and environmental matters and respect for human rights”.
November 2010: db x-trackers expands corporate bond offering with targeted financial and non-financial listings.
"The listing of these new products gives investors the opportunity to create targeted corporate bond exposures," says Thorsten Michalik, global head of db x-trackers. "db x-trackers is known for giving investors access to liquid exposures traditionally regarded as difficult to access. In the case of the new non-financials listing this is again the case, as bonds in this sector tend not to have a high turnover rate while also generally trading in high denominations."
db x-trackers is the first ETF provider in Europe to offer an ETF linked to the performance of corporate bonds issued by financial entities. The ETFs have an all-in fee of 0.2% per annum. Study highlights investors’ understanding of short and leveraged ETFs in Germany The results show that the majority of short and leveraged ETFs were held for a limited period of time. After 15 days, around 50% of the ETFs had been sold again. After three months the figure was 85%. Also, 50% of trades were for less than Eur 5,000. In general, far less capital is invested in ETFs with higher leverage than in non-leveraged products, while the investment volume also drops as the holding period increases. Extreme outliers in terms of outcomes were also rarely registered, with returns in 90% of all analysed cases sitting between +20% and -22% after the ETF was sold. "We’ve taken the criticisms of short and leveraged products seriously. This study suggests that users of the short and leveraged ETFs have a good understanding of these products and the main risks inherent to them," says Thorsten Michalik, head of db x-trackers. "When we developed our short and leveraged products we worked with the index providers to ensure investors were presented with transparent benchmarks, making the outcomes the products provide as clear as possible. That commitment to transparency, combined with a focus on investor education, has clearly paid off." Short and leveraged ETFs are path dependent because they reset on a daily basis, which means open positions compound daily performance across days. UK govt seeking “new types of investor” for green infrastructure
They said the GIB’s impact “will be many times the scale of the public contribution”. The government has pledged £1bn (€1.15bn) to the bank, although critics such as the Aldersgate Group have said the bank will need up to £6bn.
The ministers said they want to “create an enduring institution which can re-invest the proceeds from its investments”. The government plans to complete its design and testing on the GIB proposals by Spring 2011.
November 2, 2010--A new A-type investment fund, namely “Finansbank A.Ş. GT-30 A Tipi Borsa Yatirim Fonu” (A-type Exchange Traded Fund), founded by Finansbank will start trading on the Istanbul Stock Exchange (ISE) on November 3, 2010.
On the occasion of the first trading day of Finansbank A.Ş. GT-30 A-type Exchange Traded Fund(*), executives and guests of Finansbank and the intermediaries will visit the Istanbul Stock Exchange and ring the opening bell of the Stock Market on Wednesday, November 3, 2010. Mr. Hüseyin ERKAN, ISE Chairman & CEO, and Dr. Ömer ARAS, Chairman of the Board and CEO of Finansbank will deliver speeches, following which they will ring the opening bell and start the session at 09:30.
08.45 : Meeting at the ISE Exhibition Hall
09.15 : Arrival at the ISE Stock Trading Floor
09:20 : Speeches
09.30 : Session opening
November 2, 2010--The London Stock Exchange was scrambling to establish how a human error in possibly "suspicious circumstances" had knocked out one of its dealing platforms on Tuesday as the exchange conceded it would now have to delay switching over to a new trading system until next year.
The developments are a blow to the efforts by Xavier Rolet, LSE chief executive, to restore the fortunes of the exchange at a time when it is launching an unprecedented set of initiatives designed to catapault the bourse back into the front ranks of global exchanges.
November 2, 2010--The UK asset management industry is unprepared for the implementation of the Alternative Investment Fund Managers (AIFM) directive, with only 2% saying they know how to implement the changes, according to a study conducted by PwC.
Additionally, more than half of respondents were concerned that the directive, which is awaiting final approval at a plenary session of the European Parliament next Thursday, would reduce their profit margin.
New initiative alongside corporate governance green paper
November 2, 2010--The European Commission says it may legislate not only on corporate governance but also on the transparency of corporate social, environmental and human rights information.
The Commission, the executive arm of the European Union, unveiled a set of 50 proposals last week to improve the bloc’s internal market in a 46-page ‘communication’ Towards a Single Market Act: For a highly competitive social market economy.
November 2, 2010-- db x-trackers, Deutsche Bank’s exchange-traded fund (ETF) platform, has expanded its corporate bond offerings with the listing of ETF linked to the performance of global financial and non-financial corporate bonds.
The two new euro-denominated ETFs, listed on Germany’s Deutsche Börse, give exposure to sub-sets of the iBoxx EUR Liquid Corporate 100, which represents the performance of up to 100 euro denominated corporate bonds taking into account rebalancing costs.
The db x-trackers II iBoxx € Liquid Corporate 100 Non-Financials Sub-Index Total Return ETF is linked to the performance of the broader index’s 53 corporate bonds classed as non-financial. The db x-trackers II iBoxx € Liquid Corporate 100 Financials Sub-Index total return ETF is linked to the remaining 47 constituents of the parent index. The highest weighting in the financials index is to UK-domiciled companies, which constitutes 30% of the weighting. This is followed by the Netherlands at 18%, then the United States with 12%. The index lists bonds from a total of 12 countries. The non-financials index has 11 countries in it, with the largest weighting being to the Netherlands at 36%, followed by France (16%) then the UK (12%).
November 2, 2010--Analysis of trade outcomes for short and leveraged exchange-traded funds (ETFs) suggests German investors have a good understanding of the main risks and trading behaviour of the products they are buying, according to a study.
ETF provider db x-trackers commissioned Germany’s Constance University of Applied Sciences to conduct a study on the use of short ETFs – also known as inverse ETFs – and leveraged ETFs in Germany, Europe’s biggest ETF market. The results show that holding periods are relatively short for inverse and leveraged ETFs, while the amounts typically invested in leveraged products are much lower than for their non-leveraged counterparts. This conservative behaviour implies investors understand the path dependent nature of short and leveraged ETF. "The results imply that in the majority of cases the private investors subject to the study seem to be aware of the majority of risks and opportunities connected with the use of short and leveraged ETFs," said Leo Schubert, Professor of Business Administration at Constance University of Applied Sciences, who headed the study. Investment behaviour with regard to holding period and investment volume is adjusted in line with increased risks. The study analysed data from Germany’s major brokerage houses. A total of 26,394 purchase and subsequent sales of short and leveraged ETFs between 1 January 2008 and 1 April 2010 were analysed. During the period, investors traded in 39 different types of short and leveraged ETFs from six ETF providers.
November 1, 2010--The UK government says its planned new Green Investment Bank will bring “new types of investor” into green infrastructure.
“We are looking to create an institution which will make a radical new contribution to financing green infrastructure,” ministers said in joint written evidence to a parliamentary committee.
“We expect it to have an explicit mandate to tackle risk that the market currently cannot adequately finance,” Business Secretary Vince Cable, Energy Minister Chris Huhne and Economic Secretary Justine Greening told the Commons Environmental Audit Committee. “It will, thereby, catalyse further private sector investment and facilitate the entrance of new types of investor into green infrastructure.” Among the proposals on the table are ‘green bonds’.
