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Eurex plans to expand cooperation with EEX and aims to increase internationalization of the energy exchange
LBBW and Eurex agree takeover of LBBW’s stake in EEX by Eurex/ Strengthening and expansion of Leipzig’s position
December 23, 2010--The international derivatives exchange Eurex intends to intensify its cooperation with the European Energy Exchange (EEX). The objective is to further strengthen Leipzig as a European center of expertise for energy and emissions products.
In line with this, Eurex and Landesbank Baden-Württemberg (LBBW) today concluded an agreement that will allow Eurex to acquire LBBW’s stake in the EEX. Eurex currently holds a 35.2-percent stake in the EEX. Eurex and the EEX have been cooperating in the trading and clearing of emissions rights and power derivatives since December 2007.
“By expanding our stake we are going to improve EEX’s position in European energy trading through close coordination of our product development and sales activities. At the same time we are strengthening our presence in the commodity markets, as financial and commodities markets are growing ever more closely together,” said Peter Reitz, member of the Eurex Executive Board responsible for product and business development.
Today’s agreement concluded between Eurex Zürich AG and LBBW foresees that Eurex will acquire LBBW’s stake of up to 22.96 percent in the European Energy Exchange AG. The shares are to be transferred at a price of €7.15 per share plus a premium of €0.60 in the event that Eurex Zürich AG becomes the majority shareholder. If Eurex acquires all LBBW's shares, the maximum purchase price for the shares would be €71.3 million. However, under the pre-emption rights laid out in the consortium agreement, LBBW is obligated to offer its shares on a pro rata basis to other EEX shareholders. This means that Eurex will acquire at least 10.7 percent of the EEX in this process for a purchase price of €30.7 million. According to the economic participation in Eurex, Deutsche Börse AG will fund 85 percent of the purchase price. Deutsche Börse AG will finance its share of the purchase price through cash on hand.
In order to strengthen EEX’s competitive position, Eurex aims to secure existing jobs at the EEX and to expand Leipzig as a center of expertise for energy products. In addition, it is planned that the EEX will use Eurex’s international locations in Europe, America and Asia and benefit from Eurex’s global member network.
The transaction is expected to be completed in the second quarter of 2011 and requires the approval of the German Competition Authority (Bundeskartellamt) and the Supervisory Board of Eurex Zürich AG and other internal boards. The EEX Supervisory Board must also approve the transfer of the LBBW shares.
Source: Eurex
CESR Extends The Deadline For Responses To The Call For Evidence On Implementing Measures On The Alternative Investment Fund Managers Directive
December 22, 2010--This call for evidence seeks stakeholders’ input on the provisional mandate from the European Commission regarding CESR’s technical advice on the implementing measures on the Alternative Investment Fund Managers Directive.
This input will help CESR and its successor, the European Securities and Markets Authority (ESMA), in the development of its draft advice on the content of the implementing measures, which will be published for consultation in 2011.
view Implementing measures on the Alternative Investment Fund Managers Directive-call for evidence
Source: CESR
FSA and HM Treasury publish joint consultation paper on implementation of the UCITS IV Directive
December 22, 2010--The Financial Services Authority (FSA) and HM Treasury (HMT) have today published a joint consultation paper setting out proposals for the implementation of the revised Undertakings for Collective Investment in Transferable Securities Directive, known as UCITS IV.
UCITS IV repeals the current UCITS Directive and must be implemented into national law by all European Union member States by 1 July 2011. This Directive represents an important modernisation of the regulatory framework and procedures for selling retail investment funds cross-border in Europe.
UCITS IV introduces the following changes:
Introduction of a management company passport: Allows a UCITS management company to operate a UCITS fund authorised in a different EU Member State, without the need to be established in the Member State of the fund;
Improved investor disclosure: Replaces the simplified prospectus with a key investor information document (KID). This will be a simple pre-sale document giving key facts to investors in a clear and understandable manner. It will assist them in making an informed investment decision;
Removal of administrative barriers to the cross-border marketing of UCITS: A quicker, more streamlined process will allow UCITS funds to access the market of another member State without delay, once the regulator of the fund has notified the regulator in the Member State where the management company wants to sell its product;
view Transposition of UCITS IV:
consultation document
Source: HM Treasury
Danish opposition to euro reaches new high
December 22, 2010--A poll published Wednesday showed Danish opposition to the euro has reached a new high, mainly because of the debt crisis in several European countries, with almost 55 percent of Danes against joining the single currency zone.
Some 54.9 percent of Danes are against joining the euro, while 42 percent are in favour, according to the quarterly barometer published by Danish bank Danske Bank.
The gap between those for and against the single currency now stands at 13 points, while it was less than five points in the last survey in September, which showed 51.7 percent of Danes were against adopting the euro and 46.6 percent were in favour.
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Source: EUbusiness
ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 17-Dec-10
December 22, 2010--For the week ending 17 December 2010, there were US$184.2 Mn net outflows to STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in basic resources with US$124.0 while travel and leisure experienced net inflows of US$51.2 Mn followed by personal and household goods with US$51.1 Mn net inflows.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$159.9 Mn net outflows.
Food and beverage sector ETFs have seen the largest net outflows with US$239.9 Mn, followed by basic resources with US$184.3 Mn net outflows, while personal and household goods have experienced the largest net inflows with US$132.6 Mn.
As of 17 December 2010, there is US$9.7 Bn AUM invested in the STOXX sector ETFs which is almost double the US$5.1 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
Db x-trackers launches 10 ETFs
December 21, 2010--Ten ETFs have been launched by Deutsche Bank, giving access to a range of MSCI world sectors.
The 10 global equity ETFs are listed on the London Stock Exchange and investors can choose from specific sectors such as global healthcare, information technology, energy, utilities, industrials and financials.
The other ETFs cover consumer discretionary, consumer staples, telecommunication services and materials.
Each has a low total expense ratio of 0.45 per cent.
The ETFs can be traded in the US dollar or sterling share classes and are the first specific sector products from db x-trackers, Deutsche Bank’s ETF arm.
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Source: Money Observer
European Financial Linkages: A New Look at Imbalances-IMF Working Paper
December 21, 2010--Summary: We document external investment positions among European Union countries at the start of the financial crisis through the creation of a new database comprising bilateral external financial asset and liabilities, excluding reserve assets and derivatives.
While there are some gaps in the data, the overall coverage of reported bilateral net international investment positions (IIPs) appears satisfactory. The dataset provides a richer picture of financial linkages, enabling us to map the financing of Euro area imbalances. Creditor and debtor positions vis-à-vis the rest of the EU have tended to increase between 2000 and 2008, with capital flowing largely from wealthier to catching-up economies. This has in particular resulted in an increased interdependency among Euro Area economies.
view the European Financial Linkages: A New Look at Imbalances
Source: IMF
Three billion a year could be saved from costs of infrastructure says report
December 21, 2010--A Government report by Infrastructure UK (IUK) today sets out a blueprint to save up to three billion a year on building and maintaining infrastructure.
Treasury Ministers welcomed the plan saying it could promote growth by freeing up more money for infrastructure investment, as well as helping keep water, gas and electricity bill costs down for consumers by reducing costs for utility companies.
The report outlines how costs of building and maintaining energy, transport, waste and flood defence infrastructure projects can be reduced by at least 15%. With between £15 and £20 billion being spent each year, this equates to savings of between two and three billion a year – between £20 billion and £30 billion over the next decade.
The savings in delivery cost would be achieved by Government working with industry to improve procurement, raise productivity, simplify processes and promote innovation and better industry integration.
Chief Secretary to the Treasury, Danny Alexander said:
“One look at projects like the Olympics, where over £600million has been saved, shows that the UK can deliver big infrastructure projects on time and within budget.
view Infrastructure cost review
Source: HM Treasury
UK borrowing hits new record as Government spending jumps
Britain's public borrowing hit a shocking new record as Government spending surged in November, sounding alarm bells about the Treasury's ability to hit its targets for reining in the UK's finances.
December 21, 2010--Public sector net borrowing jumped to £23.3bn in November - excluding bailing out the banks - the highest for any month since the Office for National Statistics (ONS) began its records in 1993.
The borrowing figure was almost £6bn up on the £17.4bn seen in the previous November, disappointing forecasts for a small improvement.
The pound dipped 0.4pc to under 85p against the struggling euro amid fears the Government will miss its chance to sort out the UK's finances.
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Source: FIN24
Emissions Trading: Statement by Commissioner for Climate Action Connie Hedegaard on regulatory oversight of the EU carbon market
December 21, 2010--The European carbon market is a relatively young market which has grown rapidly during its first six years of operation, both in size and sophistication. With a climate crisis and an economic crisis, the world more than ever before needs cost-effective means of reducing greenhouse gas emissions. It is therefore important that the market can continue to expand and safely be relied upon to give an undistorted carbon price signal to investors and decision-makers in boardrooms across the EU.
Over the last years, the market has reached a size which makes it a potential target of fraudulent practices. Therefore, as the market matures and grows further, it is critical that it continues to be subject to appropriate and effective regulatory oversight."
Background
Today's Communication is the first step in a work stream that may lead to a legislative proposal in this field in 2011. It takes stock of the level of oversight in the European carbon market. It also describes ongoing developments in the field of energy markets and financial markets with a bearing on the carbon market and lists the options that are available to safeguard the continued integrity of the growing market. It concludes that the lion's share of the carbon market is subject to appropriate oversight, but that more may be needed in the spot market.
As a next step, the Commission will examine in greater detail the structure of the carbon market, the level of market oversight and the available options (incl. the classification of allowances as a financial instrument). An internet-based stakeholder consultation will be conducted in the first half of 2011, the results of which will feed into a thorough impact assessment. This work will inform the decision on whether to come forward with a legislative proposal.
Market participants and other stakeholders are encouraged to engage in this process and support the Commission in identifying robust solutions to guarantee the further development of the European carbon market.
view Emissions trading: Questions and Answers on enhanced market oversight for the European carbon market MEMO/10/697
Source: Europa
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