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Option contracts to double transaction volume at VOB
August 19, 2010--Options contracts, which are set to begin trading in February of next year, are expected to double the transaction volume at the Turkish Derivatives Exchange (VOB), Çetin Ali Dönmez, the general manager of the bourse, has said.
Speaking to the Anatolia news agency yesterday, Dönmez emphasized that the volume of forward foreign exchange transactions will increase significantly once the banking and insurance transaction tax (BSMV) and withholding tax on derivative products are removed. “We hope the BSMV and withholding tax will be lifted on Sept. 1 and Oct. 1, respectively. Once the system settles, daily forward foreign exchange transaction volume might increase to around $0.5 billion,” he said.
Platinum and palladium ETCs with currency hedging from DB ETC Index plc launched on Xetra
August 18, 2010-- Two new exchange traded commodities issued by DB ETC Index plc, the ETC platform of Deutsche Bank, are tradable on Xetra.
The two new db ETCs enable investment in exchange traded commodities on platinum and palladium with currency hedging for the first time. Both db ETCs are physically backed by the respective metal in allocated form.
ETC name: db Physical Palladium Euro Hedged ETC
Asset class: commodities
ISIN: DE000A1EK3B8
Total expense ratio: 0.75 percent
Benchmark: Palladium spot price (London)
ETC name: db Physical Platinum Euro Hedged ETC
Asset class: commodities
ISIN: DE000A1EK0H1
Total expense ratio: 0.75 percent
Benchmark: Platinum spot price (London)
Deutsche Börse’s ETC segment product range currently comprises 176 instruments. The monthly trading volume of ETCs on Xetra averages around 550 million euros.
New Credit Suisse Equity Index ETF Launched on Xetra
August 18, 2010-- Since Wednesday, a new exchange-traded equity index fund from the issuer Credit Suisse Fund Management S.A. has been tradable in Deutsche Börse’s XTF segment.
ETF name: CS ETF (Lux) on MSCI EMU Mid Cap
Asset class: equity index ETF
ISIN: LU0312694234
Total expense ratio: 0.54 percent p.a.
Distribution policy: distributing
Benchmark: MSCI EMU Mid Cap
The CS ETF (Lux) on MSCI EMU Mid Cap enables investors to track the performance of the MSCI EMU Mid Cap Index. The index comprises a total of 150 mid-cap companies from the following eleven euro-area countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 680 exchange-listed ETFs, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around 14 billion euros, makes Xetra Europe’s leading trading venue for ETFs.
ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 13-Aug-10
August 18, 2010--Last week saw US$181.4 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF outflows last week were in Basic Resources with US$163.1 Mn and Banks with US$64.6 Mn while Utilities experienced net inflows of US$48.5 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$35.3 Mn net outflows. Basic Resources sector ETFs have seen the largest net outflows with US$171.9 Mn, followed by Food & Beverage with US$75.4 Mn while Media has experienced the largest net inflows with US$235.7 Mn YTD.
The US$8.6 Bn AUM invested in the ETFs is greater than the US$3.7 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in each of the corresponding futures contract in all 19 sectors.
SAM Deepens Cooperation With Dow Jones Indexes
World’s Leading Index Provider And SAM Intensify Partnership To Expand Joint Offering In The Field Of Sustainability Indexes - Dow Jones Indexes Will Serve As Calculation Agent For European Sustainability Indexes - Collaboration With STOXX Terminated Amicably
August 18, 2010--SAM, the investment boutique focused exclusively on Sustainability Investing, is to deepen its successful eleven-year-old collaboration with Dow Jones Indexes by expanding its worldwide Sustainability Index offering. Under this joint marketing agreement, Dow Jones Indexes will be responsible for calculation, marketing and distribution of the indexes including the European indexes, while SAM remains responsible for the component selections. As a result, SAM’s collaboration with STOXX Ltd., which had previously calculated the European STOXX Sustainability Indexes, has been terminated.
Rodrigo Amandi, Managing Director SAM Indexes: “Over the past eleven years, the Dow Jones Sustainability Indexes have been successfully developed and expanded worldwide. Through what is now an exclusive global collaboration with Dow Jones Indexes, we are taking account of the growing significance of sustainability benchmarks by offering investors around the world a homogeneous index family. We extend our thanks to partner STOXX for the positive cooperation to date and look forward, in partnership with Dow Jones Indexes, to continuing our pioneering work in the field of sustainability and shaping the segment’s future growth.”
SAM retains responsibility for component selection
The Dow Jones Sustainability Indexes (DJSI) are the oldest benchmarks for Sustainability Investing. Aggregate investment volumes in DJSI-based portfolios now total more than USD 8bn. Starting September 10, 2010, Dow Jones Indexes will be the calculation agent for the new Dow Jones Sustainability Europe Indexes. Construction and methodology are consistent with those of the existing Dow Jones Sustainability Indexes family. For interested investors, this means more consistency and greater comparability right across the entire index family. The index composition and the development of the Corporate Sustainability Assessment will, as in the past, be the responsibility of SAM.
Dublin forced to pay high yields
August 17, 2010--Investors demanded big premiums from Ireland to buy government bonds on Tuesday, prompting worries over the health of the eurozone debt markets.
Dublin was forced to pay high yields to attract investors, which will put more pressure on already stretched Irish government finances.
Investors also warned that the eurozone was entering “a difficult period” with a funding threat hanging over many single-currency economies.
Nordic and Baltic Ministries, Central Banks and Supervisory Authorities sign Agreement on Financial Stability
August 17, 2010--A co-operation agreement on cross-border financial stability, crisis management and resolution between the finance ministries and other relevant ministries, central banks and financial supervisory authorities of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden has been signed.
The agreement enhances preparedness to handle cross-border financial stability concerns in the financially integrated Nordic-Baltic region. It also establishes the first European cross-border stability group.
The financial integration between the Nordic and Baltic countries warrants deeper cooperation between public authorities in the area of financial stability. In response to this, an agreement has over the past year been designed to enhance cooperation in financial crisis prevention, management and resolution. By signing the agreement, the public authorities in the Nordic and Baltic countries increase their preparedness to handle problems in cross-border banks. These authorities are the first to implement the provisions of the EU-wide Memorandum of Understanding on cross-border financial stability of June 2008.
European Commission 'analysing' EU members' proposal on pension debt
August 17, 2010--Nine countries have sent a letter to the European Commission asking for changes to how private pension debt is included in the calculations of a country's debt levels.
The letter, signed by the finance ministers of Poland, Hungary, the Czech Republic, Romania, Slovakia, Sweden, Bulgaria, Lithuania and Latvia, argues they are disadvantaged due to reforms made to their private pension system.
Commission spokesperson Amadeu Altafaj-Tardio confirmed the letter had been sent.
Deutsche Börse IPO Indicator Shows Increase in Issuing Activity
More IPOs expected
August 17, 2010--Deutsche Börse published the IPO indicator for the 3rd quarter of 2010 on Tuesday. Volatility, which has been going back down for a few weeks, in connection with rising share prices and the improved IPO climate expected by market participants all point to an increase in IPOs over the next few months. All in all, the environment for IPOs appears to be steadily improving. The uncertainties on the markets for European government bonds triggered not least by crisis seem to have abated.
The IPO indicator, which is published each quarter, is an important measuring instrument for companies seeking capital that aim to go public and that are looking for the right moment to enter the capital market. The indicator is compiled from surveys of market participants and calculations by the Technical University in Munich using Deutsche Börse trading data.
“If you take a closer look at the results of the survey, the fact that issuer sentiment has improved much more than that of other market participants particularly stands out. This development is primarily due to the upward movement in the valuation level. That, in conjunction with falling volatility could form a good basis for increasing issuance momentum,” said Professor Christoph Kaserer from the Technical University in Munich.
European Weekly ETP Review: ETF investors begin to return to the market, mid-summer reprise?
August 16, 2010--Weekly European ETP Market Roundup
Net Cash flows
Overall, it was a good week for European ETFs and for the equity markets in general: almost all major European equity indices finished the week higher. The Euro Stoxx 50 index rose by 1.3%, the DAX rose by 1.82%, the CAC rose by 2.00% and the FTSE 100 rose by 1.42%.
The price of gold/oz (USD) also went up by 2.04%, while the Euro continued to rise against the US dollar, finishing the week 1.64% up.
The positive market mood also carried in ETF flows, the week that finished August 6th signaled what could be the beginning of the return of investors to the market with €1.1 billion of inflows. Cash flows in the European market have been extremely subdued for all of July, lacking any real sense of direction. In fact, weekly net cash flows for the entire month of July hovered very close to zero. Figures this week indicate that we might be turning a corner.
Not only this week experienced strong cash flows, trades proved to have a reasonable sense of direction with equity taking in three quarters of all weekly European ETP market inflows (€788 million) and fixed income almost all of the rest (€288 million). Commodity ETPs continued to experience unusually quiet activity, with total inflows of just €8 million.
Two themes defined equity ETF investor activity: return of investors to the European indices and continuation of healthy inflows into emerging market benchmarks. Almost half of the equity cash flows for the week (€406 million) went into emerging market indices, while the remainder was split between European and other developed market indices, including leveraged and short products (€144 million). Overall flow patterns indicate a renewed interest in the equity market, at a level which is the highest following the May 2010 volatility highs. Whether this mini equity ETF cash flow rally reflects something more substantial than post-holiday blues and whether it will gather pace remains unknown, but it is certainly a good start.
Concurring with an improved equity market environment, fixed income investors began to withdraw from sovereign benchmarked ETFs (€222 million outflows) and for the first time in a long time, money market funds began to register inflows (€317 million). Money market funds became a gravity indicator of sorts over the past six months, outflows gathered pace as spikes in overnight rates largely expressed market counterparty concerns. Simultaneously, corporate bond ETFs continued their positive trajectory with €112 million of inflows. All of the fixed income flow data points align to point to an improved ETF market sentiment.
While the strong inflows that went into gold ETPs over the months of May and June are certainly holding put, incremental cash flows have died down as quickly as the surge of gold ETP investment came to be earlier this past Spring. Gold ETPs, which comprise 61.5% of the European commodity ETP segment finished the week with €11 million of outflows, which are a far cry from the €1.75 billion of inflows observed in more turbulent market conditions back in May 2010. Again, this indicator points to an improvement in market temperature.
New Listings
While flows returned to the ETF market, new product launch activity was quiet with one new product coming to market. Deutsche Bank listed one currency ETF on the London Stock Exchange.
Turnover
Continuing its decline from May and June highs, average daily turnover activity continued to decline the week that finished on August 6th. Daily average ETF turnover fell by 3.4% to €1.70 billion. The decrease in turnover activity and increase in cash flows indicates that while investors are beginning to return to the market, trading activity continues to be subdued, pointing to a smaller number of investors driving most of the trades.
Equity ETF turnover experienced the largest decline, down by 6.1% from the prior week, to €1.25 billion. Fixed income daily average ETF turnover in fact registered an increase of 8%, to €201 million.
Assets Under Management (AUM)
Consistent with rising equity markets and a healthy level of inflows, European ETP AUM rose by 1.1% for the week, to €197.89 billion. Year to date, European AUM are up by 16.3%.
