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Irish Stock Exchange adopts new rules in relation to corporate governance
September 29, 2010--The ISE is to require Irish listed companies to comply or explain against the provisions of the UK Corporate Governance Code. Additional corporate governance provisions arising from the recommendations contained in the report on Compliance with the Combined Code on Corporate Governance by Irish listed companies (“the ISE/IAIM Commissioned Report”)1 will come into force later this year. These requirements are outlined in the feedback statement on proposed changes to the ISE Listing Rules relating to corporate governance published today.
Irish listed companies have been required to comply or explain against the Combined Code for some years. In May 2010, the Financial Reporting Council (FRC) replaced the Combined Code with the UK Corporate Governance Code2. The FRC’s Code is widely regarded as best practice internationally and a benchmark for corporate governance standards. The ISE’s Listing Rules will maintain their existing parity with the standards applying in the UK, by requiring Irish listed companies to comply or explain with the provisions of the UK Corporate Governance Code, with effect from 30th September 2010.
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Source: WFE
NASDAQ OMX Starts Trading In Eight New ETFs From XACT
September 29, 2010--NASDAQ OMX today starts trading in eight new Exchange traded funds (ETFs) from XACT. All the XACT ETFs are based on NASDAQ OMX indexes and will be traded on NASDAQ OMX Stockholm. The new ETFs are XACT Nordic 120, which tracks the 120 largest and most traded Nordic companies, and seven sector ETFs tracking the largest listed Nordic companies within the sectors bank & insurance, material, construction & real estate, energy, consumer goods, health care and industrials.
Jenny Rosberg, Senior Vice President at NASDAQ OMX said, "These new ETFs from XACT will make a great addition to both professional and private investors looking for exposure in individual sectors. The ETFs follow new NASDAQ OMX indexes that include all major Nordic listed companies, and also encompass Norwegian shares."
Henrik Norén, Managing Director of XACT Fonder, commented, "ETFs are one of the fastest growing trading products in the world and have with its low fees become attractive instruments also for long-term investments. With this new offering we will be able to meet the increasing demand for ETFs with exposure to Nordic companies."
The following eight new ETFs will be listed on Nasdaq OMX Stockholm as of today:
XACT Nordic 120 (the 120 largest and most traded Nordic companies)
XACT Bank (the largest Nordic banking & insurance companies)
XACT Materials (the largest Nordic companies, within the material sector) XACT Construction & Real Estate (the largest Nordic construction & real estate companies)
XACT Energy (the largest Nordic energy companies)
XACT Consumer Goods (the largest Nordic consumer goods companies)
XACT Health Care (the largest Nordic healthcare companies)
XACT Industrials (the largest Nordic companies within the industrial sector)
Source: NASDAQ OMX
Treasury to probe high-frequency trading
September 29, 2010--The UK Treasury has commissioned a study into the practice in markets of ultra-fast automated trading because of concerns that a computer-generated error could have “significant impact” on the economy
The move is a sign of rising concern about the rapid growth of computer algorithms and so-called “high-frequency trading”, which allows traders to buy and sell shares, derivatives and foreign exchange in fractions of a second.
The practice now accounts for up to 60 per cent of US equity markets, while the London Stock Exchange estimates that more than a quarter of its trades are driven by high-frequency trading. But it has generated controversy in the wake of the “flash crash” in the US on May 6, when the Dow Jones index plunged 1,000 points in 20 minutes before recovering.
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Source: FT.com
ECB chief warns Europe to stick with financial reforms
September 29, 2010--- European Central Bank president Jean-Claude Trichet urged politicians and financial market actors on Wednesday to stay the course and push for reforms to avoid future crises.
"Effective financial reform needs perseverance," Trichet said in a speech to the Eurofi forum of European financial services in Brussels.
A copy of his remarks was posted on the ECB's website.
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Source: EUbusiness
Deutsche Börse Commodities: Deutsche Börse Commodities launches Xetra-Gold in UK and Netherlands
September 29, 2010--The Xetra-Gold bearer note, issued by Deutsche Börse Commodities GmbH, has met all requirements to be admitted for sale in the UK and the Netherlands. Xetra-Gold (ISIN: DE000A0S9GB0) represents the investor’s right to have one gram of gold stored or delivered per bearer note. The note is exchange-listed in Deutsche Börse’s ETC segment and is tradable on the pan-European Xetra platform as a highly liquid security.
“Our innovative securitization provides private and institutional investors with access to the gold market and gives them an efficient and cost-effective portfolio diversification opportunity,” said Martina Gruber, Managing Director of Deutsche Börse Commodities GmbH. “There is already demand for Xetra-Gold in the Netherlands – so far predominantly from private investors, as in Germany. We expect demand in the UK, in contrast, to come more from institutional investors,” she continued.
Xetra-Gold holders may assert their claim for delivery of physical gold. When buying or selling, investors benefit from the transparent pricing and favorable conditions of stock exchange securities trading. The price of one Xetra-Gold bearer note is always exactly the same as the price of one gram of gold on the world market in euros. The spread on Xetra between the bid and ask price of Xetra-Gold is generally around 0.1 percent – a maximum of 1 percent is permitted.
Xetra-Gold is always backed 100 percent by gold. Deutsche Börse Commodities’ gold reserve for Xetra-Gold is currently around 50 tons – valued at around €1.6 billion at current prices. Private investors can have the physical gold delivered to their bank and receive it there personally. More than 400 private investors have taken this option to date. Deutsche Börse Commodities also delivers the physical gold backing the bearer note to markets outside Germany where Xetra-Gold is admitted for trading and sales.
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Source: Deutsche Börse Commodities GmbH
New Strategy indices launched for STOXX and DAX index families
September 29, 2010--STOXX Limited, a global index provider and creator of the leading European equity indices, today announced the launch of the EURO STOXX 50 Monthly Leverage and EURO STOXX 50 Monthly Double Short indices, and the LevDAX x2 (monthly) and ShortDAX x2 (monthly) indices. The new indices replicate leveraged and short investment strategies based on a monthly rebalancing methodology.
The EURO STOXX 50 Monthly Leverage, EURO STOXX 50 Monthly Double Short, LevDAX x2 (monthly) and ShortDAX x2 (monthly) indices are designed to underlie financial products such as exchange-traded funds (ETFs) and structured products.
“The new EURO STOXX 50 Leveraged and Double Short indices and LevDAX and ShortDAX x2 monthly indices enable market participants to track investment strategies based on their bullish and bearish sentiments on European and German equities,” said Hartmut Graf, chief executive officer, STOXX Ltd. “The new indices complement the existing daily leverage and short indices on the EURO STOXX 50 and the DAX by allowing investors to bypass daily market fluctuations and take a more long-term approach. Furthermore, product issuers and their customers also benefit from reduced transaction costs, as portfolios would only have to be balanced once a month instead of on a daily basis.”
The EURO STOXX 50 Monthly Leverage Index is linked to the monthly performance of the EURO STOXX 50 Net Return Index – measured as of the third Friday of the month - in a leveraged way: A positive performance of the EURO STOXX 50 Index results in twice the positive performance of the EURO STOXX 50 Monthly Leverage Index, and vice versa. The EURO STOXX 50 Monthly Double Short Index replicates a short investment strategy that is inversely linked to the monthly performance of the EURO STOXX 50 Gross Return Index, also as of the third Friday of the month. A negative performance of the blue-chip index results in a positive change of twice the performance the EURO STOXX 50 Monthly Double Short Index, and vice versa.
The LevDAX x2 (monthly) also rises and falls twice as much as the performance of the DAX index, thus providing an effective and innovative strategy for magnifying participation in market movements. The ShortDAX x2 (monthly) measures double the negative monthly performance of the DAX index. Its performance is positive when the DAX falls. The index is designed for investors who expect negative performance on the DAX index or who are looking for an efficient hedge against falling prices.
The leverage factor is adjusted on a monthly basis to ensure that LevDAX x2 (monthly) always achieves twice the performance of the underlying index based on the closing level on the third Friday of the previous month. It complements the existing range of daily leveraged indices. However, if an investment is made between the monthly adjustment dates the leverage generally deviates from the factor 2.
The new STOXX and DAX strategy indices are calculated in euro. Daily historical index values are available back to December 31, 1991 for the EURO STOXX 50 Monthly Leverage and Short indices and back to December 30, 1987 for the LevDAX x2 (monthly) and ShortDAX x2 (monthly) indices. The cost of borrowing and the benefit of earning interest are also taken into account in the calculation of the new indices.
The EURO STOXX 50 Monthly Leverage and EURO STOXX 50 Monthly Double Short indices are part of the STOXX Strategy Index family. Further information on the new indices is available at www.stoxx.com.
The LevDAX x2 (monthly) and ShortDAX x2 (monthly) indices are part of the DAXplus family. Further information is available at www.dax-indices.com.
Source: STOXX
ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 24-Sep-10
September 29, 2010--Last week saw US$306.2 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in Banks with US$280.0 Mn and Industrial Goods & Services with US$40.5 Mn while Food & Beverage experienced net inflows of US$55.8 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$272.0 Mn net outflows. Telecommunications sector ETFs have seen the largest net outflows with US$122.6 Mn, followed by Food & Beverage with US$92.4 Mn while Media has experienced the largest net inflows of US$193.8 Mn YTD.
The US$9.0 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 the corresponding futures contract in all 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Ten New Lyxor ETFs Launched on Xetra
September 29, 2010-- Deutsche Börse continues to expand its XTF segment for exchange-traded index funds. Ten new exchange-traded funds (ETFs) issued by Lyxor International Asset Management have been tradable in XTF since Wednesday.
The new ETFs track the performance of the world’s largest companies from the following sectors in the MSCI World Index family: Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Utilities and Telecommunication Services.
The acquisition of the new ETFs via Deutsche Börse does not involve a front-end load, and the annual total expense ratio is 0.45 percent.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 717 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, makes Xetra Europe’s leading trading venue for ETFs.
A list of the new exchange-listed Lyxor ETFs tradable in Deutsche Börse's XTF segment since 29 September is attached to this mail.
view list of new Lyxor ETFs
Source: Deutsche Börse
Istanbul bourse breaks new record
September 29, 2010-The Istanbul Stock Exchange benchmark index (IMKB-100) broke a new record yesterday at 3 p.m., when it surpassed 65,970 points.
The IMKB is still continuing to rise sharply. According to experts, there are two basic reasons for this consistent rise: the outcome of the public referendum and investor confidence, and the recently concluded International Finance Summit that was held in ?stanbul.
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Source: Todays Zaman
Centrally Cleared CFDs: The Buy-side Perspective
September 28, 2010--Executive Summary
A centrally cleared Contract-For-Difference (ccCFD) is a CFD/equity swap that is initiated as an over-the-counter (OTC) trade and is brought on-exchange and cleared through a central clearing counterparty (CCP) instead of as a bilateral agreement. Clearinghouses and execution facilities are entering the space to benefit from expected growth in CFDs, proposed regulatory changes, and address buy-side concerns surrounding OTC counterparty risk.
One of the first offerings in this space is LCH.Clearnet and Chi-X Europe, who will launch a unique ccCFD clearing service as a joint initiative in the fourth quarter of 2010, starting with FTSE 100 stocks. The CCP model effectively makes the CFD a standardised product that can trade multilaterally between counterparties while retaining the efficiencies of the OTC trading element. There is strong potential beyond UK shores as the initiative will be rolled out down the UK list and to Pan-European shares.
So-called retail aggregators, which sell CFDs to the retail market, will be drawn to the new service as they seek to mitigate possible future regulation requiring OTC CFD providers to set aside additional risk capital. UCITS III (Undertakings for Collective Investments in Transferable Securities III) funds, which use OTC CFDs for synthetic short exposure, will favour ccCFDs for reduced counterparty credit risk. Long-only asset managers who currently use single stock futures may also be drawn to the new ccCFD service because it provides an additional risk management tool that should fit with their fund mandates.
But large long/short hedge funds and absolute return hedge funds who make up the bulk of the existing market will not initially use the service. This is because a CCP model introduces anonymity and eliminates the special relationship and beneficial pricing structure large hedge funds currently enjoy with incumbent prime brokers providing OTC CFDs. In order to migrate to the service, their hand will have to be forced by new regulation.
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Source: TABB Group
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