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ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 23-Jul-10
July 28, 2010--Last week saw US$226.7 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF inflows last week were in Industrial Goods & Services with US$103.0 Mn and Utilities with US$50.0 Mn while Banks experienced net outflows of US$87.2 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$457.8 Mn net outflows. Banks sector ETFs have seen the largest net outflows with US$237.4 Mn, followed by Telecommunications with US$212.2 Mn while Media has experienced the largest net inflows with US$232.8 Mn net new assets YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in all 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
India's National Stock Exchange and London Stock Exchange Group sign Letter of Intent
July 28, 2010--Agreement to explore feasibility of mutual licensing of indices, enabling access to each other’s markets
Training and education on SME markets
London Stock Exchange Group (LSEG) and India’s National Stock Exchange (NSE) today signed a Letter of Intent to evaluate joint strategic business opportunities, and to co-operate together more closely in the future.
As part of the Letter, both exchanges declared their intent to explore the feasibility of an agreement whereby FTSE Group may licence the FTSE 100 Index to the NSE, and whereby the NSE may licence the S&P CNX Nifty (Nifty 50) to LSEG for the purpose of issuing and trading options and other index contracts.
t also conveys the intention of both parties to evaluate other joint strategic opportunities, such as allowing access to each other’s market as and when regulatory framework permits.
Additionally, the two signatories will explore the possibility of holding joint training & education courses and seminars with a particular focus on Small and Medium sized Enterprises (SMEs).
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Source: London Stock Exchange Group
Banks plan for loss of eurozone member
July 28, 2010--Banks have started early-stage planning to deal with the potential fallout on the derivatives and bond markets of a European country being forced to leave the euro.
After having received queries by some banks about the impact of such an event, the body representing the swaps and derivatives industry last week contacted some of its members to form a group to consider what they may need to do if a eurozone state is ejected.
While those close to the process believe the likelihood of such an event is remote, the sovereign debt crisis of recent months has led banks and other firms to start questioning what impact it could have.
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Source: FT.com
Credit Suisse issues new hybrid bonds
July 28, 2010--Banks’ old-style hybrid capital is to make a high-profile return as finance directors take a bullish line on the likelihood that regulators will continue to allow these controversial bonds to count towards top-notch tier one capital.
Credit Suisse is today set to become the third bank in two months to sell new hybrid bonds – debt with equity-like features – following offerings from HSBC and UniCredit.
Prior to that there had been a sustained period of no tier one hybrid issuance, in part because banks were convinced that regulators were set to outlaw the instruments.
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Source: FT.com
CESR publishes its report on trends, risks and vulnerabilities in financial markets
July 28, 2010--CESR publishes today for the first time its report on trends risks, and vulnerabilities that are
directly relevant to securities markets regulators (Ref. CESR/10-697). Previously, similar reports
have been produced for the benefit of the Economic and Financial Committee (EFC) and the Financial Services Committee (FSC).
Over the last decades, financial markets have been transformed by the rapid development of new
financial instruments, the rise of new categories of key market participants, and a supportive
technological environment. More recently, fundamental areas of the financial sectors in Europe and
elsewhere have experienced a severe crisis which is not yet over. Going forward, CESR would like to
contribute more to the understanding of these trends and risks and communicate its insights to the
general public through regular reports. These reports will focus mainly on the short and medium
term without losing sight, however, of long-term developments. The analysis will naturally focus on
the activity in European financial markets, but also take into full account the international
dimension of the various markets and instruments analysed.
view the Report on Trends, Risks, and Vulnerabilities
Source: CESR
CESR sets out final guidelines on risk measurement and the calculation of global exposure and counterparty risk for UCITS
July 28, 2010--CESR publishes today guidelines (Ref. CESR/10-788) on risk measurement and the calculation of
global exposure and counterparty risk for Undertakings for Collective Investments in Transferable
Securities (UCITS) and a feedback statement (Ref. CESR/10-798). The key purpose of CESR’s guidelines is to provide both regulators and companies managing UCITS with detailed
methodologies to calculate the global exposure and counterparty risk for UCITS, whilst at the same
time, fostering a level-playing-field in the area of risk measurement among EU Member States. CESR’s guidelines are to accompany the Level 2 implementing measures of the UCITS Directive.
This Directive will become applicable from 1 July 2011.
The guidelines set out detailed methodologies that have to be followed by UCITS when they use
either the commitment or the more advanced Value-at-Risk (VaR) approach for calculating their
global exposure (the VaR approaches are designed for more complex investment strategies). For
UCITS using the VaR approach, CESR guidelines also provide additional safeguards which these
UCITS should put in place when calculating the global exposure (stress testing and back testing
obligations of the VaR model, validation of the model etc.).
In these guidelines, CESR also defines a set of high level principles relating to assets that may be used as collateral and cover rules for transactions in financial derivative instruments.
Guidelines provide calculation methodologies for different investment strategies
CESR wishes to emphasise that the calculation of the global exposure represents only one element of the UCITS overall risk management process. It remains the responsibility of the UCITS to select an appropriate methodology to calculate it.
view feedback statement
Source: CESR
Gold and silver ETCs with currency hedging from DB ETC Index plc launched on Xetra
July 27, 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 gold and silver with currency protection for the first time. All db ETCs are backed by physically deposited gold bars in allocated form.
ETC name: db Physical Gold Euro Hedged ETC
Asset class: commodities
ISIN: DE000A1EK0G3
Total expense ratio: 0.59 percent
Benchmark: Gold spot price
ETC name: db Physical Silver Euro Hedged ETC Asset class: commodities ISIN: DE000A1EK0J7 Total expense ratio: 0.75 percent Benchmark: Silver spot price
Deutsche Börse’s ETC segment product range currently comprises 174 instruments. The monthly trading volume of ETCs on Xetra averages around €550 million.
Source: Deutsche Börse
New Supervisory Board Chairperson elected for the Stuttgart Stock Exchange
Thomas Munz is the new Supervisory Board Chairperson at the Stuttgart Stock Exchange, Dr Michael Völter elected as Deputy Chairperson
July 27, 2010--Following the reshuffle of the Supervisory Board members at the Stuttgart Stock Exchange, a new chairperson has now been elected to head the various Supervisory Boards: Thomas Munz, Chairperson of the association Vereinigung Baden-Wuerttembergische Wertpapierboerse e.V., has been unanimously elected as the Chairperson of the Supervisory Boards of Boerse Stuttgart Holding GmbH, Boerse Stuttgart AG and Euwax AG. Dr Michael Völter, Member of the Management Board of SV Sparkassen Versicherung Holding AG, has been elected as Deputy Chairperson of the boards.
Further Supervisory Board members besides Thomas Munz and Dr Michael Völter are Horst Marschall, Dr Manfred Pumbo and Hans-Joachim Strüder.
Since he started out as a stock exchange trader in 1979, Thomas Munz has served in various functions at the Stuttgart Stock Exchange. These include heading the Chamber of Official Exchange Brokers, Kursmaklerkammer, at Baden-Wuerttembergische Wertpapierboerse, membership of the Exchange Council and the function of Chairperson of the Management Board at EUWAX AG. Thomas Munz has also been member of the Supervisory Boards of the three stock exchange companies for many years. He was appointed to the position of Member of the Board of Management of the association Vereinigung Baden-Wuerttembergische Wertpapierboerse e.V. in May 2003.
The appointment of Thomas Munz to this position continues the stringency with which such appointments are made at the Stuttgart Stock Exchange. Due to his many years as Member of the Board of Management of the association Vereinigung Baden-Wuerttembergische Wertpapierboerse e.V, which is the owner of the stock exchange, it was only natural that the Supervisory Board members would choose Thomas Munz to head the Supervisory Boards of all major companies.
Source: Boerse Stuttgart
db ETC listet weltweit erste physische Edelmetall-ETCs mit Währungssicherung
27. Juli 2010--Gestern hat db ETC zwei währungsgeschützte Edelmetall ETCs auf Gold und Silber an der Deutschen Börse gelistet. db ETC ist die Plattform der Deutschen Bank für börsengehandelte Rohstoffprodukte (Exchange Traded Commodities – ETC) in Form
von besicherten Schuldverschreibungen mit Barabwicklung. Stark vereinfacht
dargestellt erfolgt eine Besicherung der db Physical PM ETC Wertpapiere durch
Barren des jeweiligen Edelmetalls, die physisch eingelagert werden.
Bis Ende Juli wurden durch die beiden Emittenten DB ETC Index plc bzw. die DB
ETC plc bereits 27 db ETC aufgelegt, die die Entwicklung einzelner Rohstoffe oder definierter Rohstoffkörbe abbilden. Die db Physical ETCs auf Edelmetalle sind die jüngste Ergänzung der ETC-Produktpalette der Deutschen Bank. Sie werden von der
DB ETC plc emittiert und tragen die Bezeichnung db Physical Precious Metal ETC(db Physical PM ETC).
Mit den db Physical Euro Hedged ETCs auf Gold und Silber steht Anlegern eine neue Investitionsmöglichkeit zur Verfügung. „Bisher konnten Edelmetall-ETCs nur in US-Dollar und mit dem damit verbundenen Währungsrisiko gehandelt werden“, sagt Thorsten Michalik, verantwortlich für db ETC. Die neuen ETCs bieten Anlegern im Euro-Raum eine attraktive Möglichkeit, täglich flexibel an der Wertentwicklung der Edelmetalle zu partizipieren. Die db Physical PM Euro Hedged ETC sind zudem mit einem Währungssicherungsmechanismus ausgestattet, um das EUR/USDWechselkursrisiko zu minimieren. Im Falle einer Abwertung des USD gegenüber dem EUR erhöht sich der Metallanspruch je Wertpapier. Die Absicherung erfolgt täglich auf rollierender Basis.
Die Entwicklung des Wertes des db Physical PM ETC ist unter Berücksichtigung einer Basisgebühr an den Kassakurs des Edelmetalls gekoppelt. Die jährlichen Kosten betragen aktuell 0,29 Prozent für den db Physical Gold ETC sowie 0,45 Prozent für den db Physical Silver ETC. Die Kosten der Währungssicherung für die währungsgeschützten Varianten sind transparent nachvollziehbar. Sie bestehen aus der Differenz zwischen US-Dollar-Tagesgeldzinsen und Euro-Tagesgeldzinsen, die vom Wert des ETC abgezogen beziehungsweise zugerechnet wird, und einer Währungssicherungsgebühr von derzeit 0,30 Prozent p. a..
Name:db Physical Gold Euro Hedged ETC
ISIN:DE000A1EK0G3
Listing:Xetra
Produktgebühr
p.a.:0,29%
Währungssicherungsgebühr
p.a.:0,30%
..
Name:db Physical Silver Euro Hedged ETC
ISIN:DE000A1EK0J7
Listing: Xetra
Produktgebühr
p.a.: 0,45%
Währungssicherungsgebühr
p.a.:0,30%
..
Name:db Physical Gold ETC
ISIN:GB00B5840F36
Listing:London
Produktgebühr
p.a.:0,29%
Währungssicherungsgebühr
p.a.:-
..
Name: db Physical Silver ETC
ISIN:GB00B57Y9462
Listing:London
Produktgebühr
p.a.:0,45%
Währungssicherungsgebühr
p.a.-
..
Name:db Physical Platinum ETC
ISIN:GB00B57GJC05
Listing:London
Produktgebühr
p.a.:0,45%
Währungssicherungsgebühr
p.a.:-
..
Name:db Physical Palladium ETC
ISIN:GB00B5VYVZ75
Listing:London
Produktgebühr
p.a.:0,45%
Währungssicherungsgebühr
p.a.:-
db Physical Precious Metal Exchange Traded Commodities für Gold, Silber, Platin
und Palladium sind bereits an der London Stock Exchange gelistet, allerdings hier in
US Dollar denominiert. Währungsgeschützte db Physical PM ETC auf Platin und
Palladium wurden bereits emittiert, sind allerdings bisher nur institutionellen
Investoren zugänglich. Ein Listing an der Deutschen Börse (Xetra) und damit auch
eine Öffnung für Privatkunden sind für August geplant.
Source: Deutsche Bank
EU Investment Grade Corporates Lead Switch from Bank to Bond Funding
Structural Shift to Bonds from Loans to Continue
July 27, 2010--European corporates are increasingly embracing funding disintermediation by
substituting bonds for bank debt, and Fitch Ratings believes structural factors will accelerate the use of this asset class over the next two to three years. The loan market is a key determinant of the extent of bond growth — should lending remain at the subdued levels of the last couple of years, pressure would potentially be exerted to refinance substantial additional corporate debt via the bond markets.
This could result in average issuance from European corporates higher than double the historical average, while in line with the EUR502bn record of 2009.
Increased funding disintermediation in Europe is a positive development on many fronts. A stronger bond market is expected to overall lower the cost of capital for companies, enable them to borrow longer term with fewer restraints, and increase funding diversity — hence being a broadly credit positive development. As a strong corporate sector is critical for the economy overall, this will potentially help eurozone economic prospects.
Furthermore, increased bond funding provides highly?sought yield product for investors while at the same time reducing credit losses for banks, especially through the dispersion of credit losses in the case of distress or bankruptcy. Another positive for banks is the greater transparency necessitated by strong bond markets, allowing them to benefit from a greater number of credit opinions regarding the corporate borrowers on their books.
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Source: Fitch Ratings
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