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CESR publishes two feedback statements in the field of Credit Rating Agencies
September 13, 2010--Feedback statement on CESR consultation on enforcement practices.
view Feedback statement on CESR consultation on common standards for assessment of compliance of credit rating methodologies
Source: CESR
Markit Announces Roll Of Markit iTraxx Asia Pacific Indices
September 13, 2010--Markit, a leading, global financial information services company that owns the Markit iTraxx indices, today announced that the Markit iTraxx Asia ex-Japan and Markit iTraxx Australia will roll into their 14th series on September 20 2010. The Markit iTraxx Japan will roll into its 14th series on September 21 2010.
The following changes have been made to the Markit iTraxx Asia Pacific family of indices:
The composition of the Markit iTraxx ex-Japan remains unchanged.
The composition of the Markit iTraxx Australia remains unchanged.
Three constituents have been replaced in the Markit iTraxx Japan index.
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Source: Markit
FESE European Equity Market Report
September 13, 2010--FESE publishes for the ‘European Equity Market Report’ which gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market. The FESE Statistics Methodology used in the Report has been agreed by all the trading venues involved, both RM and MTFs.
view the European Equity Market Report - Year 2010 (updated with August figures)
Source: FESE
EDHEC-Risk Institute Finds No New Evidence that SRI Funds Create Financial Value
September 13, 2010--In 2008, EDHEC-Risk Institute analysed the performance of a sample of SRI funds distributed in
France, covering a six year-period from January 2002 to December 2007. This study concluded that
none of the funds in the sample produced both positive and statistically significant alpha.
In a new position paper entitled “The Performance of Socially Responsible Investment and Sustainable Development in France: an Update after the Financial Crisis,” EDHEC-Risk Institute
again finds that a majority of the funds studied over long or short periods produce negative but nonsignificant alpha.
To highlight the period of the financial crisis, the new study examines SRI funds over both a fairly long period, with eight years of data, ending in December 2009, and a shorter period of three years, including data from January 2007 to December 2009.
Including the period of the financial crisis increases the extreme risks borne by SRI funds considerably; it is clear that, on average, these funds provide no protection from market downturns.
Regarding SRI investments more globally, the three main comments are the following: 1. The study confirms EDHEC-Risk Institute’s previous results on SRI as presented in the 2008 position paper. At this stage it has not been shown that the SRI approach on its own creates value in the financial sense of the term.
Business world hails referendum victory
September 13, 2010--After Turks overwhelmingly approved the proposed constitutional amendments in Sunday’s referendum, Turkey’s leading business associations have stressed that the result would be followed by positive market and real economy reactions, attracting more foreign investment and cash inflows to the country.
Turkish Exporters’ Assembly (T?M) President Mehmet Büyükek?i, who endorsed the much-awaited constitutional amendment package, elaborated on how foreign investors would react to Turks’ aspirations for a consolidated democracy. “The result which came out of the ballot box has indicated once again how important trust and stability in Turkey are. Along with this, the cash inflow to Turkey will be accelerated, and this money will later be turned into investment.
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Source: Todays Zaman
Financial reform: Where do we stand?
September 12, 2010--Financial reform programme faces a major test in the months ahead
During the autumn, the EU will continue its work on the overhaul of the European financial regulatory system. While many important measures have already been adopted, for example on improved supervision of credit rating agencies and limits on bonuses paid by banks and investment firms, more work remains to be done in 2010.
Several key pieces of legislation are awaiting final approval, while other elements of the reform are still being fleshed out. The Commission aims to present most of the remaining proposals by the end of the year and invites the EU countries and the European Parliament to adopt the texts by the end of 2011.
Another legislative proposal coming out shortly will aim to ensure increased transparency and safety in trading in derivatives, financial products that derive their value from an underlying asset.
Also in the pipeline is a proposal to regulate the short-selling of financial instruments, including credit default swaps relating to sovereign debt. As a trading practice, short-selling can be useful and legitimate, but it has been suggested that it may have aggravated the debt crisis.
As for measures already on the table, the EU governments and the European Parliament are very close to final agreement on the new European system of financial supervision. This involves the creation of a board to monitor system-wide risks in the financial system of the EU as a whole and the creation of three new European supervisory authorities to oversee and co-ordinate national supervision of the banking, insurance and financial markets.
Another important bill currently under negotiation aims at regulating hedge funds and other alternative investment funds used by professional and institutional investors.
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Source: European Commission
DB Global Equity Index & ETF Research : European Weekly ETP Review: Markets back to positive figures
September 10, 2010--Net Cash flows
After some weeks of downward pressure, markets found some relief and end up the week with significant gains over most of the European equity indices. The Euro Stoxx 50 index was up 4.3%, the CAC 40 index was up by 4.7%, the DAX index rose by 3.1% and the FTSE 100 did alike increasing by 4.4%. The Euro was up against the US Dollar by 1% while the price of gold (USD/oz) continued to rise, up 0.7% for the week that finished on September 3rd 2010.
Weekly total European ETP inflows totaled €989 million (vs. €356 million inflow in previous week). The almost three-fold increase in weekly flows was mainly driven by last week’s bullish market, which for a while brought back investors to the European equity markets.
Equity ETPs experienced inflows of €451 million (vs. €352 million inflows last week). Fixed Income saw inflows of €419 million (vs. €299 million outflows last week). Commodity ETPs registered inflows of €130 million (vs. €321 million inflow during previous week).
Equity ETF inflows were driven by investment in European developed country equity indices (€252 million), while Global regional ETFs (€104 million) and Leveraged Short ETFs (€80 million) experienced outflows.
Fixed income inflows were very concentrated in terms of exposure. Sovereign funds recorded the largest inflows (€308 million). While none of the debt-related sub segments experienced outflows.
The majority of commodity inflows were received by ETPs tracking the price of gold (€195 million this week vs. €300 million last week). On the other hand, ETPs tracking broad agriculture benchmarks experienced the largest outflows (€ 75 million).
New Listings
The launch calendar was marked by the listing of two new physical commodity ETCs. The new products were listed by Deutsche Bank on the Deutsche Borse, the ETCs aim to replicate the performance of physical Gold and Silver, respectively.
Turnover
On-exchange daily average ETP turnover for this week rose by 0.6%, to €1.74 billion. This shy rise is the third in as many weeks and is consistent with the cash flow and market performance patterns.
Average daily equity ETF turnover rose by 2.0%, reaching €1.28 billion. Fixed Income ETF turnover decreased by 2.2%, reaching €213 million. Commodity turnover was down by 4.2%, to €236 million.
Assets Under Management (AUM)
European ETP assets were up 2.4%, finishing the week at €202.7 billion. Most of the AUM increase came in the form of capital appreciation within Equity ETPs. Year to date, European ETP AUM are up by 19.1%.
Request a copy of the report
Source: DB Global Equity Index & ETF Research
Four new ComStage equity index ETFs launched on Xetra
September 10, 2010--: Four new exchange-listed equity index funds issued by ComStage have been tradable in Deutsche Börse’s XTF segment since Friday.
ETF name: ComStage ETF FTSE 100 Short Strategy TR
Asset class: equity index ETF
ISIN: LU0488316562
Total expense ratio: 0.45 percent
Distribution policy: non-distributing
Benchmark: FTSE 100 Short Strategy Index
ETF name: ComStage ETF FTSE 100 Leveraged TR
Asset class: equity index ETF
ISIN: LU0488316646
Total expense ratio: 0.45 percent
Distribution policy: non-distributing
Benchmark: FTSE 100 Leveraged Index
ETF name: ComStage ETF FTSE 250 TR
Asset class: equity index ETF
ISIN: LU0488316307
Total expense ratio: 0.30 percent
Distribution policy: non-distributing
Benchmark: FTSE 250 Total Return Index
ETF Name: ComStage ETF FTSE All-Share TR
Asset class: equity index ETF
ISIN: LU0488316489
Total expense ratio: 0.35 percent
Distribution policy: non-distributing
Benchmark: FTSE All-Share Total Return Index
The four new ComStage ETFs enable investors to participate in the performance of companies based in the UK. While the ComStage ETF FTSE 100 Short Strategy TR tracks the inverse performance of the 100 largest companies by market capitalization based in the UK, ComStage ETF FTSE 100 Leveraged TR tracks the performance of the same companies with double leverage.
ComStage ETF FTSE 250 TR allows investors to participate in the performance of the 250 largest mid-cap companies based in the UK and which are not included in the FTSE 100 Index. ComStage ETF FTSE All-Share ETF TR tracks the performance of all companies based in the UK that are admitted to the London Stock Exchange's Main Market. The underlying FTSE All-Share Index comprises all companies on the FTSE 100, FTSE 250 and FTSE Small Cap indices.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 697 exchange-listed index funds, 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.
Source: Deutsche Börse
BBA publishes new code for financial disclosures
September 10, 2010--The BBA has today published a new code for financial reporting disclosure which combines the best international practices with the needs of the UK’s largest lenders’ investors and regulators.
The British Bankers' Association's new Code for Financial Reporting Disclosure sets out the best principles for clear and transparent information about the UK's largest lending institutions. In complying with the Code, the banks will undertake not only to provide high quality disclosures in their annual and interim reports, but also to re-evaluate the disclosures given to ensure that they continue to be relevant and of high quality.
BBA chief executive Angela Knight said:
"The highest quality financial information is essential to building market confidence and ensuring financial stability. The BBA Code for Financial Reporting Disclosure is an excellent example of the industry working together to enhance market practice. It surpasses all of the current international and local reporting requirements and fits with the call of from the G20 and others to identify the types of risk disclosure that are relevant and useful to investors."
The lenders voluntarily adopted the Code in their 2009 accounts and received very favourable feedback from the market. They will now meet before key accounting periods to share views on emerging and topical market issues and to discuss ways of enhancing the comparability of their disclosures. They will also meet with the Financial Services Authority to report on the development of the Code.
view the The BBA Disclosure Code
Source: British Bankers' Association'
First estimate for the second quarter of 2010-EU27 current account deficit 50.8 bn euro
18.6 bn euro surplus on trade in services
September 10, 2010--The EU271 external current account2 recorded a deficit of 50.8 billion euro in the second quarter of 2010, compared with a deficit of 44.7 bn in the second quarter of 2009 and a deficit of 34.8 bn in the first quarter of 2010.
In the second quarter of 2010, the EU27 external balance of trade in services recorded a surplus of 18.6 bn euro, compared with a surplus of 16.4 bn in the second quarter of 2009 and a surplus of 10.8 bn in the first quarter of 2010.
These provisional data3, issued by Eurostat, the statistical office of the European Union, will be subject to revision.
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Source: Eurostat
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