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Europe squares up to bonds-bailout conundrum
November 12, 2010--European leaders squared up on Friday to a growing conundrum over how bond markets are reacting to bailout planning for Ireland and other countries classed as bad debtors.
Tensions left Dublin walking a tightrope this week when its yield, or the interest it pays bond buyers, shot up to 8.929 percent, its highest level since the euro's creation in 1999.
Portugal also hit a record 7.117 percent, and although the percentages eased on Friday, Ireland to 7.994 percent and Portugal to 6.588 percent, they remain high and some Italian rates later rose sharply.
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Source: EUbusiness
Eurex to Launch Dividend Futures on Swiss Single Stocks
Introduction scheduled for 30 November 2010/ New listings are extension of successful dividend futures product range
November 11, 2010-- The international derivatives exchange Eurex announced today that it will offer futures contracts based on dividends of leading Swiss companies starting on 30 November 2010.
The new contracts are based on dividends from ABB, Compagnie Financière Richemont, Roche Holding, Credit Suisse Group, Nestle, Novartis, Schweizerische Rückversicherungs-Gesellschaft, Swisscom, UBS and Zurich Financial Services. All underlying firms are part of the Swiss blue-chip index SMI.
“The listing of our new Swiss single stock dividend futures reflects the growing demand by investors for exchange-traded and centrally cleared products. Based on the success of our listed dividend futures, our customers have expressed further interest in Swiss-based contracts. Our new offering enables investors to participate in the performance linked to the dividend element of major Swiss companies”, said Michael Peters, member of the Eurex Executive Board.
The specifications for the new contracts will be similar to the existing dividend products. In order to offer continuous quoting and thus support trading, a designated market making scheme will be offered from day one for the Swiss single stock dividend futures. Eurex will list annual contracts in Swiss franc in each name from December 2010 out to December 2014.
Introduced in June 2008, Eurex’s dividend derivatives product suite trades more than 18,000 contracts daily. Almost 3.8 million contracts have been traded in 2010 so far. Open interest stands at 1.3 million contracts currently, representing more than 8.2 billion euro of notional dividend value.
Source: Eurex
Governments refuse fresh budget leeway for EU Parliament
November 11, 2010-- European Union governments lined up Thursday to dismiss an EU parliament bid to re-negotiate future spending in exchange for cutting next year's planned budget increase in half.
Britain, France and Germany led a firm refusal to budge from a red line offering a 2.91 percent or 3.5-billion-euro increase from the 2010 budget which totalled 123 billion euros (170 billion dollars).
They also rejected the parliament's call to bring forward talks on a range of future changes to funding, possibly including the creation of new direct EU taxes on citizens and businesses.
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Source: EUbusiness
DB Global Equity Index & ETF Research : European Weekly ETP Review: Healthy equity ETF inflows continue
November 11, 2010--Weekly European ETP Market Roundup
Investment Outlook: Healthy developed market equity inflows continue
November started well with all of the major European equity indices finishing the week with healthy gains. The Euro Stoxx 50 index rose by 0.8%, the CAC 40 index was up by 2.2%, the DAX index rose by 2.3% and the FTSE 100 index was up by 3.5%. The price of gold (USD/oz) also rose by 2.5%.
The European ETP industry received total new Inflows of €1.1 billion (vs. €996 million inflow in the previous week). Equity received the majority of the new flow, €909 million, vs. €778 million of inflow last week. Fixed Income and commodities also registered inflows of €47 million (vs. €103 million outflow last week) and €155 million (vs. €108 million inflow during previous week) respectively.
Major developed country indexed ETFs continued to gain ground and received just over 45% of the week’s equity inflows, totaling €425 million. Following equity market gains, leveraged long products had a particularly good week, gathering close to €250 million, amounting to 30% of the week’s equity inflows. Investment in emerging market benchmarked equity ETFs continued but at a slower pace, netting just over €100 million of inflows.
Gold inflows continued to stall, totaling just €5 million, despite the significant rise in the price (to $1,393.7 per oz) of gold for the week that finished on November 5th. Most of the week’s commodity ETP inflows went into ETFs tracking diversified commodity benchmarks (€60 million).
New Launch Calendar: A quiet week
Overall, this was a fairly quiet week when it comes to new product launches. Only one new product was launched by NBGAM. The new ETF was listed on the Athens stock exchange and is benchmarked to the Greek and Turkish equity markets.
Three broad equity market ETFs were cross listed on the NYSE Euronext Paris by HSBC.
On-exchange ETP turnover: Equity driven decline
Average rolling 22 day on-exchange ETP turnover for the week declined by 2%, to €1.85 billion. The decline was led by equity ETF turnover (down 3.2%, to €1.35 billion) and fixed Income (down 3.9%, to €187 million). Commodity turnover rose by 4.6%, to €301 million.
Assets Under Management (AUM)
The European AUM continued to rise swiftly, consistent with the healthy inflows and advances of the equity markets. AUM were up by 2.6%, totaling €218.9 billion. Year to date, European ETP AUM are up by 28.7%.
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Source: DB Global Equity Index & ETF Research
Lyxor global head of ETFs parts company with the firm
November 11, 2010--
Isabelle Bourcier is leaving Lyxor Asset Management after nearly ten years as global head of ETFs, a source close to the situation says.
Bourcier's departure precedes the imminent arrival of former iShares Europe head of sales strategy Nizam Hamid, who is set to join Lyxor on 22 November.
Hamid will join as deputy global head and was due to be reporting to Bourcier, although her replacement has not yet been announced.
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Source: IFA online
European pension fund seeks to invest €80m in equity markets worldwide
November 11, 2010--A European pension fund is looking to invest as much as $110m (€80m) in equity markets worldwide using IPE Quest.
For the first mandate, the continental European scheme is aiming to invest $35m-55m in global emerging markets equity in a pooled vehicle domiciled in a country belonging to the Organisation for Economic Co-operation and Development.
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Source: IP&E
ETF Securities Launches Triple Long and Triple Short Currency ETCs
November 10, 2010--ETF Securities has listed 16 currency ETCs on the London Stock Exchange, tracking the triple long and triple short versions of the MSFXSM Indices published by Morgan Stanley & Co Inc. The launch of the triple leveraged currency ETCs is a first of its kind in Europe.
Structurally, the triple leveraged currency ETCs have unique features which are otherwise not available to investors wanting to access foreign exchange - they are at least 100% collateralised and the maximum possible loss is the value of the initial investment.
The MSFXSM Indices rebalance daily, meaning that returns over periods longer than one day are path dependent. The triple leveraged currency ETCs therefore have the scope to deliver compound returns in trending markets and will likely underperform in volatile, directionless markets. It is important that investors understand this feature of the returns, the details of which are further set out in the UK Listing Authority-approved prospectus for these products.
Commenting on the launch of the new products, Neil Jamieson, Director of Third Party Distribution at ETF Securities, said:
“This is an exciting opportunity for investors. The triple long and triple short currency ETCs can be used by investors both to hedge and to capture market trends. On the latter point, foreign exchange markets are often driven by momentum. Given the historically low levels of volatility on currency pairs, the triple currency ETCs can prove to be a powerful vehicle to capture market trends.
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Source: ETF Securities
ETF Landscape: European STOXX 600 Sector ETF Net Flows week ending 05-Nov-10
November 10, 2010--For the week ending 05 November 2010, there were US$406.1 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF net inflows last week were in oil and gas with US$114.5 Mn and telecommunications with US$70.7 Mn while industrial goods and services experienced net outflows of US$16.3 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$1,434.2 Mn net inflows. Banks sector ETFs have seen the largest net inflows with US$472.7 Mn, followed by basic resources with US$244.3 Mn while food and beverage has experienced the largest net outflows of US$115.9 Mn YTD.
As of 05 November 2010, there is US$11.5 Bn AUM invested in the STOXX sector ETFs which is more than double the US$4.7 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.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
Energy 2020 - A strategy for competitive, sustainable and secure energy
November 10, 2010--On 10 November 2010, the European Commission has adopted the Communication "Energy 2020 - A strategy for competitive, sustainable and secure energy"
The Communication ?defines defines the energy priorities for the next ten years and sets the actions to be taken in order to tackle the challenges of saving energy, achieving a market with competitive prizes and secure supplies, boosting technological leadership, and effectively negotiate with our international partners.
view Communication "Energy 2020 - A strategy for competitive, sustainable and secure energy"
Source: Europa
European Parliament and Commission to join forces in a new step for improving transparency
November 10, 2010--Today, the High Level Group of the European Parliament and the European Commission concluded its discussions on a joint "Transparency Register". It reached consensus on a draft inter-institutional agreement for a common register for organisations and individuals engaged in EU policy making and policy implementation. The agreement is now subject to formal adoption by both institutions.
Vice-President Šef?ovi? declared: "I'm delighted that we have reached an agreement today, which is a major step forward in our ongoing efforts to enhance transparency in EU decision-making. We take transparency extremely seriously, because it's clear that the public needs to know who is involved in making and influencing decisions on its behalf. The joint register is a concrete example of the excellent cooperation between the Commission and Parliament and I'd like to thank Diana Wallis and her team for their efforts."
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Source: Europa
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