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Eurozone inflation rises sharply to 1.7 per cent
July 30, 2010--- Inflation in the 16-nation eurozone is expected to rise sharply to 1.7 percent in July, the EU forecast on Friday, although analysts saw no cause for alarm citing still-record unemployment.
If confirmed, the latest European Union forecast would mark the highest twelve-month inflation figure since November 2008, when it stood at 2.1 percent -- just above the European Central Bank's core economic target.
The rate had slipped to 1.4 percent in June, but has risen almost continuously from 0.5 percent last November as the bloc emerged from the worst recession since the 1930s.
Martin van Vliet, an economist with Dutch-based ING bank, suspected a rebound in energy price inflation and a further pick-up in food price inflation were responsible, plus rises in VAT in Spain, Portugal, Greece, and Finland.
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Source: EUbusiness
German government bonds offer strongest return, according to S&P Index
July 29, 2010--German government bonds returned almost 7% in the first half of 2010, according to Standard & Poor's (S&P) Eurozone Government Bond index.
At 6.99%, Germany offered more than double the average return, leading the field ahead of the Netherlands, Austria and Slovenia with between 6.7% and 6.3%.
In the wake of its sovereign debt crisis, Greece's bonds dropped in value by almost 20%, with Portugal a distant second after devaluing by 5.5%
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Source: IP&E
Billionaire European family to launch asset management business
July 29, 2010--The Bertarellis, one of the world's wealthiest families, are to build a global asset management franchise and have hired a senior BNY Mellon banker to run it.
Asked what type of client the new venture would target, a spokesman for the family told campdenFB.com: "We will not target a single niche – although a retail focus is unlikely – a lot of it is dependent on acquisitions."
The new firm, the name of which has not been disclosed, will be part of Kedge Capital, the Bertarelli's family office. Third-generation Ernesto Bertarelli (pictured), chairman of Jersey-based Kedge Captial, is leading the initiative.
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Source: Campden FB
Long Euro ETC rallies as Eurozone sentiment continues to improve
July 29, 2010--ETFS Long EUR Short USD has risen by over five per cent over the past month, buoyed by the positive results from the European Commission’s stress tests for the banking system, according to ETF Securities.
Market positioning remains negative the Euro, indicating that there is scope for further Euro gains as long as there is no new negative news from the Eurozone.
In the medium-term, however, with sovereign risks in Europe’s periphery still high, the underlying health of most Eurozone countries still weak and needed fiscal tightening likely to continue to drag growth down, recent Euro strength would appear to be temporary.
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Source: ETF Express
CESR proposes changes to MiFID to improve securities markets’ functioning, transparency and investor protection
July 29, 2010--CESR publishes today the first set of technical advice to the European Commission (Commission) in the context of reviewing MiFID, the Markets in Financial Instruments Directive, which entered into force in November 2007. This covers CESR?s advice on equity markets (Ref. CESR/10-802), non-equity markets transparency (Ref. CESR/10-799), transaction reporting (Ref. CESR/10-808) and investor protection and intermediaries (Ref. CESR/10-859) as well as part of the responses (Ref. CESR/10-860) to the request for additional information in relation to the review of MiFID that the Commission presented to CESR in March 2010.
The advice that CESR puts forward is both extensive and highly significant, tackling the key issues that CESR and market participants have identified as needing action. They aim at improving pre- and post-trade transparency and the orderly functioning of the markets, strengthening investor protection and ensuring securities regulators are equipped with tools which enable them to effectively monitor trading. CESR?s recommendations take into account market developments since MiFID was originally drafted. Importantly, if taken forward by the Commission, they would impact many elements of securities market regulation and constitute a major change in the EU regulatory landscape.
The development of the advice has benefited from a number of public consultations, open hearings and other types of exchange of views in a range of meetings and workshops organised with market participants as well as with representatives of retail investors. These contacts have been pivotal in shaping CESR?s advice.
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Source: CESR
Troika Dialog to list ETF in Russia
July 29, 2010--Troika Dialog asset management plans to unveil an ETF tracking the RTS Standard index on the RTS exchange in Russia on August 1.
The launch of Troika Dialog - Index RTS Standard represents the firm's first index fund offering, and marks the first such fund on Russia's collective investments market tracking the RTS index.
The underlying RTS Standard index comprises securities in the 15 most liquid and highly-capitalised firms on the Russian equity market. These include Gazprom, Sberbank and Lukoil.
The fund's liquidity will be driven by Troika Dialog Investment Company as market maker for the shares. The firm says the target bid-ask spread is 5-10 basis points.
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Source: ifaonline.com
Global Equity Index & ETF Research : Holiday calendar in full swing, another quiet week
Weekly European ETP Market Roundup
July 29, 2010--Net Cash flows
Major equity indices edged higher in the week that ended July 23rd 2010. The Euro Stoxx 50 index rose by 2.8%, the DAX rose by 2.1% and FTSE 100 fell by -0.5%. The price of gold (USD) continued to fall, -0.1% to the end of last week and -2.4% by July 27th.
Despite generally positive market sentiment, cash flows grinded to a complete halt. Total European ETP cash flows registered at just €142 million for the past week. In addition to lingering questions about the strength of the economic recovery, the very slow cash flows mainly reflect subdued investment activity due to the European summer holiday calendar.
European Equity ETPs netted €75 million of outflows, compared to the €650 million of inflows taken in last week. Commodity cash flow traffic was again consistently slow this week, taking in a mere €58 million of inflows. Fixed income continued its positive flow trajectory with €165 million of inflows over the week.
Perhaps the most noteworthy cash flow news for the week has been the net slight outflows from gold, totaling €52 million. While the absolute number does not amount to much, it continues the trend down pointing to slowing gold inflows. Whether this is a trend or a result of the overall slowing cash flow activity, it is yet not clear. The majority of this week’s fixed income inflows (€129 million) went into ETFs tracking corporate indices. All other fixed income categories saw very little activity.
New Listings
Three new ETFs were listed this week and 34 were cross-listed. Emerging markets continued to be the new launches theme this week, with two of the three ETFs tracking China and overall emerging market indices.
Comstage was the most active ETF provider for the week, with two new listings and 32 cross listings on the Swiss Stock Exchange. Lyxor continued its cross listing activity on the BME (Bolsas y Mercados Españoles), with two additional commodity ETP cross listings this week.
Turnover
Consistent with the general July calm trading environment, average daily on-exchange ETP turnover declined 3.7%, maintaining its downward slope of the previous weeks, totaling €1.8 billion.
AUM
Rising equity markets contributed to the European ETP AUM rising by 2.2% to €196.5 billion. The equity segment of the market saw the biggest rise, 3.1%, with the commodity segment rising by 1.7% and fixed income by 0.5% respectively. European ETP AUM growth for 2010 YTD remains robust, registering at 15.5%.
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Source: DB Global Equity Index & ETF Research
FSA consults on changes to its Remuneration Code
July 29, 2010--The Financial Services Authority (FSA) today announced plans to update its Remuneration Code to take on board remuneration rules required by the Capital Requirements Directive (CRD 3) and the Financial Services Act 2010 (FS Act).
The FSA also reports on the implementation of the Code so far, lessons learned from last year’s implementation and discusses progress made in achieving international alignment.
The FSA’s current Code applies to the largest banks, building societies and broker dealers. However, CRD3 will bring over 2,500 firms within the scope of the Code. These include all banks and building societies, asset managers, hedge fund managers, UCITS investment firms as well as some firms that engage in corporate finance, venture capital, the provision of financial advice and stockbrokers.
The FSA does not intend the final rules to be super-equivalent to the CRD3 requirements unless required to do so by UK legislation.
view the CP10/19: Revising the Remuneration Code
Source: FSA.gov.uk
July 2010: Business Climate Indicator for the euro area picks up
July 29, 2010--Important notice: since May 2010 business surveys data are classified in accordance with an updated version of the Nomenclature of Economic Activities (NACE rev. 2) causing a potential break in series at this date
In July, the Economic Sentiment Indicator (ESI) edged up to 102.2 (by 1.9 points) in the EU and to 101.3 (by 2.3 points) in the euro area. These results are strongly influenced by markedly positive readings in Germany.
The majority of Member States reported improvements in sentiment.
Among the largest Member States, Germany registered the most significant increase (+4.0), followed by France (+2.6), Poland (+1.9) and Italy (+1.7). Improvements were less pronounced in the UK (+1.4) and the Netherlands (+1.2). In contrast, sentiment declined in Spain (-2.2).
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Source: Europa
July 2010: Economic Sentiment Indicator edges up
July 29, 2010-- In July, the Economic Sentiment Indicator (ESI) edged up to 102.2 (by 1.9 points) in the EU and to 101.3 (by 2.3 points) in the euro area. These results are strongly influenced by markedly positive readings in Germany.
The majority of Member States reported improvements in sentiment. Among the largest Member States, Germany registered the most significant increase (+4.0), followed by France (+2.6), Poland (+1.9) and Italy (+1.7). Improvements were less pronounced in the UK (+1.4) and the Netherlands (+1.2). In contrast, sentiment declined in Spain (-2.2).
Sentiment in industry, which increased by 2 points in both regions, was the main contributor to the overall improvement. Most respondents in this sector reported substantial improvements in their order books. However, managers were cautious on their production expectations. The quarterly manufacturing survey indicates an increase in capacity utilisation. It now stands at about 77% in both the EU and the euro area, though still below the long term average (81%).
As indicated in the flash estimate released earlier, confidence among consumers regained momentum (+3 in the euro area and +1 in the EU). More optimism about the general economic situation and very significant easing unemployment fears in Germany contributed to the overall improvement. Confidence in services improved by 2 points in the EU and the euro area, driven by brighter assessments of demand and the business situation over the past 3 months. Sentiment in the retail sector increased by 2 points in the euro area and by 4 points in the EU, mainly owing to upbeat business expectations in the UK and in Germany. Sentiment in construction remained broadly unchanged in both regions.
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Source: Europa
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