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Boerse Stuttgart takes the lead with its Bondm SME segment
Corporate bonds with a total volume of EUR 730 million listed in Bondm
Stuttgart offers transparency and liquidity in the secondary market
November 23, 2010--Boerse Stuttgart has taken on a pioneering role among German stock exchanges. Its Bondm trading segment is specially designed to meet the needs of small and medium-sized enterprises. So far the Stuttgart Stock Exchange has admitted eight bonds with a total volume of EUR 730 million to its new SME segment.
The order book turnover for all Bondm-listed companies in the secondary market has risen to almost EUR 290 million since the segment was launched in May. With its high standards of quality in the secondary market, Boerse Stuttgart offers private investors liquidity and the greatest market transparency in bond trading. To that end Boerse Stuttgart not only follows strict rules, such as the Best Price Principle or the Best Size Principle, but also publishes prices, valuations and corporate information for investors on an ongoing basis.
More and more small and medium-sized enterprises are discovering the bond market as an additional source of finance. Many SMEs have already enquired about issues in 2011. "We expect this development to continue next year as the economic upturn is leading to an increased need for capital among many small and medium-sized companies. Our pipeline for the first quarter of 2011 is already well filled," says Christoph Lammersdorf, CEO of Boerse Stuttgart Holding GmbH.
With Bondm, Boerse Stuttgart addresses the needs of SMEs who require financing in the range of around EUR 25 to 150 million. Previous issuers in the Bondm SME segment include companies such as Dürr AG, Solarwatt AG and Air Berlin. The most recent addition to the Bondm segment is 3W Holdings S.A. / AEG Power Solutions. Boerse Stuttgart plans to expand its successful SME segment even further next year. In the meantime other stock exchanges are following suit. "The fact that other market segments are following our example plays testimony to Boerse Stuttgart's innovativeness and creativity," comments Christoph Lammersdorf.
Source: Boerse Stuttgart
New hybrid bond to be traded on Boerse Stuttgart's Open Market
ETL | Freund & Partner GmbH Steuerberatungsgesellschaft issues hybrid bond
November 22, 2010--
Tax advisors, ETL | Freund & Partner GmbH Steuerberatungsgesellschaft, is to issue a hybrid bond via the Stuttgart Stock Exchange. This bond issue, which has a total volume of up to EUR 25 million, matures in seven years and has an interest coupon of 7.5 percent. It is denominated in units of EUR 1,000. From 22 November private investors can either buy the bond through their house or online bank by sending a buy order to Boerse Stuttgart or acquire it directly through the issuer.
The offering from ETL | Freund & Partner GmbH Steuerberatungsgesellschaft is a subordinate bond with an equity element, which is why it will not be listed in the Bondm segment. For in addition to the annual coupon, the hybrid bond offers an earnings-related increase in book value of up to 0.5 percent per annum, the amount in question being paid out when the bond matures. If the company should post a loss in any financial year, this will also affect the return for bondholders. Depending on the type of loss and its magnitude, the book value of the bond can fall by 0.25 percent or more in the year in question.
The scheduled subscription period runs from 22 to 30 November 2010. At the end of the subscription period the bond will be admitted to Boerse Stuttgart's Open market trading.
Source: Boerse Stuttgart
European SRI fund sales nosedive: RI/Lipper FMI data
Risk appetite moves back into the market, however, as equity fund sales rise.
November 22, 2010--Sales of European SRI funds nosedived during the month of September with asset outflows of €1.14bn, according to the latest available figures compiled for Responsible Investor by Lipper FMI, the investment data group. The plunge in value for ‘RI screened’ funds as they are labelled by Lipper FMI, which have undergone an ‘extra-financial’ ESG (environment, social and governance) screen in their stock selection process, compounded losses of €192.3m during the month of August.
Just one fund made it into treble figures in terms of net sales: French fund manager Amundi’s Tréso ISR cash fund, which took in €209.9m.
Nonetheless, a rise in assets in SRI equity funds suggests a return of investor risk appetite: 5 of the top ten best sellers in September were share offerings, the highest proportion for some time. AXA’s Euro Valeurs Responsables euroland equities fund was the second best seller, netting €65.1m. The third best seller was Scottish fund manager, Aberdeen Asset Management’s Ethical World fund, with sales of €63.7m.
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Source: Responsible Investor
DB Global Equity Index & ETF Research : European Weekly ETP Review: Euro sovereign fears déjà vu pulls the breaks on ETF cash flows
November 22, 2010--Investment Outlook: Sovereigns spook the markets
A change in market sentiment driven by the impact of continued spending cuts across European countries, as well as fresh concerns about the viability of some of the Union’s financially weaker countries, contributed to deteriorating, primarily fixed income, market sentiment. Nevertheless, this translated to equity market declines as well. The Euro Stoxx 50 index: fell by 1.8%, the CAC 40 index fell by 2.2%, the DAX was down by 0.3% and the FTSE 100 was down by 1.3%. The price of gold (US$/oz) continued to fall, reaching $1,368.8/oz, reflecting a fall of 1.8% for the week. This is 2.9% below its price peak of $1,409.6/oz (08/11/10) which was observed at the beginning of the week that ended on November 12 2010.
The European ETP industry experienced weekly outflows for the first time since the end of July 2010. Outflows netted €327 million versus €858 million of inflow in the previous week. Two major events polarized cash flow patterns in the European ETF market this week. The first was the realization that, sometimes, investors find solace in the familiar, even if those are not so positive. Concerns on Ireland’s credit standing awoke fears and spooked investors. This in turn resurrected behaviors seen last spring, linked to Greek state solvency concerns and their extrapolated impact on the Euro.
The second event which contributed to net weekly outflows was a large outflow from a single ETF tracking the MSCI emerging markets index. Adjusting for the single emerging markets (EM) cash flow, which does not represent a trend as all other ETFs in the EM sector experienced inflows, the equity market inflows were slower than the prior week but were well in positive territory.
Total equity ETF inflows totaled €91 million (vs. €648 million inflow last week). Even though the total number is close to flat, there was directionality in the underlying equity cash flow investment patterns. European benchmarked ETFs gathered a little over €500 million, while, after adjusting for the single €540 million MSCI EM outflow, the remainder of the ETF EM benchmarked ETFs also received a total of €320 million of inflows. Overall, positive cash flow patterns showed no significant change for the week, as compared with the prior week, with the exception of isolated transitional trades.
Contrary to the equity ETF market, fixed income ETF investing showed clear negative directionality, exhibiting an investment trend which left the strongest mark on this week’s ETF market. Relative to the fixed income ETF portion of the European market (20%), the €496 million of fixed income ETF outflows for this week (vs. €47 million inflow last week) marked a clear departure of market sentiment. Most of the week’s outflows came out of sovereign benchmarked ETFs (€365 million). Money market funds, which enjoyed strong backing through government led market liquidity support programs and government safety nets for money market fund sponsors, accounted for the rest of the ETF fixed income sector’s outflows (€165 million).
The continuing silence in gold flows contributed to total commodity inflows of €63 million for the week that ended on November 12th 2010 (vs. €155 million inflow during previous week). Crude oil and gold registered outflows of €33 and €34 million respectively, while broad commodity benchmarked ETFs attracted a total of €64 million of inflows. The strongest trend in the commodity ETP space is the absence of interest in gold. While flows accumulated throughout the year are holding firm, ETF investors are clearly biased towards the equity market when allocating fresh cash. Coupled with gold’s recent price declines, this might signal a reevaluation of gold’s position as a hedge throughout rocky market conditions which peaked in the middle of 2010. Short of the invention of another ‘role’ for gold, such as one in a much discussed revamped currency system – which now seems unlikely - its price could start coming under increased pressure.
New Launch Calendar: On holiday
No new product launches took place this week, however, the cross-listing activity continued with 13 new cross-listings.
State Street cross listed 12 of its equity sector ETFs on Deutsche Borse while Blackrock cross-listed one of its emerging market bond ETFs on Borsa Italiana.
On-exchange ETP turnover: On the rise
Average rolling 22 day on-exchange turnover rose by 7.2% to €1.99 billion. The rise was led by equity, it saw its turnover increase by 7.3% to €1.45 billion. Fixed Income ETF turnover also rose, by 11%, to €208 million. Commodity turnover was up by 4.4% to €314 million.
Assets Under Management (AUM)
Much of the AUM talk this week in the industry revolved around ETF provider rankings in the first tier of the European market. Lyxor and Deutsche Bank are locked in what appears to be a tight race for asset gathering. Lyxor continues to maintain the number 2 ETF provider position in Europe with total assets of €35.40 billion while Deutsche Bank is number 3 with 35.00 billion. Accounting for ETCs, that ranking is reversed with Deutsche Bank registering €35.75 billion and Lyxor €35.40 billion. A margin of €400 million, under either scenario, is unlikely to determine the ranking. This is something which is likely to be decided by the respective providers’ cash flow patterns over the next two months
Following weak overall cash flows and falling equity markets, total European ETP AUM fell by 0.5% to €217.24 billion. The decline was largely driven by equity market declines (equity ETF AUM down €755 million for the week) and fixed income outflows and rising bond yields. (fixed income ETF AUM down €632 million). Year to date, the European ETP AUM are up by 28.0%.
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Source: DB Global Equity Index & ETF Research
Turkish banks’ coffers shine brighter with new gold rush
November 22, 2010--Fueled by a larger need for a safe haven by investors, the tremendous surge in gold prices over the last two years, which carried an ounce of gold to the ballpark of $1,400 in global markets, marking an all-time record level, has triggered a rush for gold accounts among Turkish banks and ordinary Turks.
The detailed set of figures concerning the domestic banking industry by the Banking Regulation and Supervision Agency (BDDK) for September 2010, the amount of holdings deposited in precious metals deposit accounts soared by 100 percent in the first nine months of this year compared to the whole of last year, reaching TL 1.76 billion. The gold deposit accounts in Turkish banks were carrying a total fortune of TL 1.4 billion as of the end of September, the BDDK release showed.
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Source: Todays Zaman
Eurex KOSPI Product with Successful First 3 Months of Trading
Efforts to further extend product’s growth planned for rest of 2010 and 2011
November 22, 2010--The international derivatives exchange Eurex today announced that November has become the most successful month for the Eurex KOSPI Product based on the KOSPI 200 options available on the Korea Exchange (KRX) with a record daily volume of 14,636 on 4 November. The total number of traded contracts since their launch on 30 August 2010 is more than 87,000. Volumes are expected to rise as KRX and Eurex further develop the after-hours market for the world’s most widely traded derivatives contract.
In addition to improved bid ask spreads in the order book, one driver of recent volume growth has been the use of Eurex’s block trading functionality.
In order to encourage further participation, Eurex will extend the exchange transaction fee waiver as well as the special incentive market making scheme until 28 February 2011. There are currently two active market makers supporting liquidity for the Eurex KOSPI Product, with additional firms expected to join soon.
Eurex’s give-up/take-up functionality was made available for this product as part of Eurex Release 13. This feature allows member firms to transfer positions to one another on an intra-day basis.
The Eurex KOSPI Product is a daily futures contract based on the KOSPI 200 options available on the Korea Exchange. These futures contracts expire at the end of each trading day and any open positions are transferred to KRX to establish a position in the KOPSI 200 option on KRX. This product cooperation between Eurex and KRX enables Eurex members to trade and clear KOSPI 200 options during European and North American trading hours.
Source: Eurex
Indxis launches UK Mergent Dividend Achievers Index
November 22, 2010--An equity income strategy that is tracked by $7bn of assets in the US will be made available to UK investors in the new year.
The US Mergent Dividend Achievers Index – based on companies that have increased their dividend pay-outs for five years running – is tracked by $7bn worth of funds managed by BlackRock, Invesco PowerShares and Vanguard.
Mergent is now unveiling a sister index in the UK, which it believed would be available via an exchange traded fund in the next few months.
“We have a sponsor who is looking seriously at it. It will probably [launch] in Q2 next year,” said Jonathan Worrall, chief executive of Mergent, a US business and financial data provider.
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Source: FT.com
NYSE Euronext to launch a consolidated tape for European equity markets
NYSE Technologies Provides Response to MiFID Transparency Challenges ’Tape of Record’ Offers Broad Availability of all European Consolidated Post-Trade Data
November 22, 2010--NYSE Euronext (NYX) today announced plans that its wholly owned subsidiary NYSE Technologies will launch a consolidated tape for European equity markets beginning Q3 2011.
Technologies will launch a consolidated tape for European equity markets beginning Q3 2011. The tape will be available both as a real-time consolidated data feed and as a 15-minute delayed ’Tape of Record’. The ‘Tape of Record’ will be free of charge to all investors and will be made broadly available via both the internet and market data vendors. The consolidated tape will contain complete coverage of post-trade equities data from all European regulated exchanges, MTFs, and OTC markets. The initiative will further increase transparency as a wider access to consolidated post-trade and OTC trading data will be made possible.
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Source: NYSE Euronext
The NASDAQ OMX CRD Global Sustainability 50 Index Expands to 100 Companies and Releases Semi-Annual Evaluation Results
November 22, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and CRD Analytics announced the expansion of the NASDAQ OMX CRD Global Sustainability 50 Index (Nasdaq:QCRD) today.
The index will be expanded to include 100 securities and the name will change to NASDAQ OMX CRD Global Sustainability Index. These changes will be made in conjunction with the semi-annual evaluation, which will become effective prior to market open on Monday, November 22, 2010. To see a full list of securities included in the index, please visit https://indexes.nasdaqomx.com/.
The NASDAQ OMX CRD Global Sustainability Index is an equally-weighted equity index that serves as a benchmark for stocks of companies that are taking a leadership role in sustainability performance reporting and are traded on a major U.S. stock exchange. The Index is made up of companies that have taken a leadership role in disclosing their carbon footprint, energy usage, water consumption, hazardous and non-hazardous waste, employee safety, workforce diversity, management composition and community investing. These are companies that are voluntarily disclosing their current environmental, social and governance risks as well as their revenue opportunities and how it will affect future performance. The securities must also meet other eligibility criteria which include minimum requirements for market value, average daily share volume, and price. The Index is evaluated on a semi-annual basis in May and November. For more information about the NASDAQ OMX CRD Global Sustainability Index, including detailed eligibility criteria, visit https://indexes.nasdaqomx.com/.
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Source: NASDAQ OMX
Europe's Growth Challenges
By Dominique Strauss-Kahn, Managing Director, International Monetary Fund
Frankfurt, November 19, 2010
As prepared for delivery
Good afternoon. I would like to talk to you about one of the greatest challenges facing European policymakers today—how to ignite and sustain economic growth across the continent.
The postwar European model was built upon three pillars—peace, growth, and social cohesion. All three are critically important, and all three feed on each other. Today, Europe has a serious growth problem—a problem magnified by the earthquake of the global financial crisis. Today, with so many European countries under pressure from all sides, these challenges are more urgent than ever. If unaddressed, Europe’s social model could unravel. It is time to renew the founders’ commitment to ever-greater openness and ever-closer integration.
European growth
Europe enjoyed stellar growth in the decades after the war. Growth was then driven by technology catch-up, a stable macroeconomic environment, growing European integration, and a strong banking system. But these gains ground to a halt in the early 1980s.
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Source: IMF
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