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Spain sets up repository for OTC derivatives
July 22, 2010--Spain on Thursday launched a trade repository for over-the-counter derivatives in the first step of a pan-European project to create a reporting system for financial products currently traded off-market.
Bolsas y Mercados Españoles (BME), the Spanish stock market operator, said the repository – called REGIS-TR – had begun a pilot phase after internal testing. BBVA and Banco Sabadell, the Spanish lenders, had signed up to the initial trial period, it said, and other European institutions were expected to join the test “in the near future”.
The first phase will focus on interest rate derivatives, before broadening later this year to include underlying assets such as equities, currencies, commodities and debt.
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Source: FT.com
European banks on edge over stress test exam
July 22, 2010-- Powerbrokers in European finance expect a few black marks when results of tests on the capacity of European banks to survive new shocks are released on Friday but also count on governments to help the weaklings.
Ministers and top eurozone officials have insisted that overall, the European banking system will pass these critical "stress tests."
But they have also made clear that any banks failing the tests will be ring-fenced with official support.
Credit rating agency Fitch said it thought that "capital will be made available by governments where the stress tests ... indicate shortfalls and banks are unable to raise capital in the public markets."
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Source: EUbusiness
Italian banks have passed stress tests: report
July 22, 2010-- Financial "stress tests" on the five Italian banks that underwent them have shown core capital reserves well above what is needed to resist a severe shock, daily Il Messaggero reported on Thursday.
The two largest banks, Unicredit and Intesa Sanpaolo, came out on top with a Core Tier One ratio -- of a bank's core equity capital to its total assets -- of about 8 percent, Il Messaggero reported.
Banca Monte dei Paschi di Siena, Banco Popolare and Ubi Banca also showed positive results, the paper said.
The Bank of Italy declined to comment on the report.
Banks in the 16-nation eurozone and in Britain, Denmark, Hungary, Poland and Sweden have been checked to see if they have sufficient capital to withstand shocks such as those which caused the collapse of US investment giant Lehman Brothers in 2008.
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Source: EUbusiness
Credit Suisse outsources German fund admin to SocGen
July 22, 2010--Societe Generale Securities Services (SGSS) and Credit Suisse (Deutschland) AG have signed an agreement on a partnership under the terms of which SGSS will provide Credit Suisse Asset Management in Germany with comprehensive fundadministration services.
Credit Suisse Asset Management in Germany has decided to outsource its fund administration business to SGSS as a dedicated partner which will provide a broad range of administrative and technological solutions to Credit Suisse (Deutschland) AG, including front-office services (ASP), funds administration and reporting services.
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Source: Finextra
Source fastest growing ETP provider in Q2 2010
July 22, 2010--Source saw higher net cashflows than any other European exchange-traded product provider in the second quarter of 2010, according to a recent report by Deutsche Bank.
Source was dominant in the equity segment of the market, accounting for 63 per cent of net cashflow.
The MSCI Emerging Markets Source ETF had the highest inflows of all European ETPs, with the Dow Jones Euro Stoxx 50 Source ETF in third place.
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Source: ETF Express
Euro Area: Restoring Confidence Key to Growth
IMF Survey online
July 21, 2010
Credible bank stress tests essential to restore confidence
Action needed to establish fiscal sustainability and restore growth
Wake-up call to strengthen area-wide economic governance
Before the euro area economy could recover firmly from the global crisis, it was hit by market concerns related to the sovereign debt of some of its members.
The turmoil has clouded the prospect of a strong regional and global recovery, with the IMF now projecting average growth of just 1 percent for 2010, rising to 1¼ percent in 2011.
Strong action by members of the European Union to establish a European Stabilization Mechanism to help countries in difficulty has helped calm markets, as has austerity plans announced by a number of countries, including Greece, Ireland, Spain, and Portugal. The European Central Bank (ECB) has also proved to be an anchor of stability throughout the crisis. Following much debate, the results of bank stress tests conducted on a large set of banks in the 27-member European Union will now be published on July 23. Successful tests should allay market concerns about the health of major European banks, and boost confidence in the euro area.
view the report-Euro Area Policies-Staff Report for the 2010 Article IV Consultation with Member Countries
Source: IMF
ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 16-Jul-10
July 21, 2010--Last week saw US$263.9 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF outflows last week were in Basic Resources with US$179.5 Mn and Media with US$49.6 Mn while Banks experienced net inflows of US$46.1 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$684.5 Mn net outflows. Telecommunications sector ETFs have seen the largest net outflows with US$224.1 Mn, followed by Basic Resources with US$176.8 Mn while Media has experienced the largest net inflows with US$212.7 Mn net new assets YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in 18 out of 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Focusing on Booming Threshold Countries
ETFlab with two new emerging market funds
ETFlab MSCI China (ISIN: DE 000 ETF L32 6)
ETFlab MSCI Emerging Markets (ISIN: DE 000 ETF L34 2)
July 20, 2010--ETFlab Investment GmbH, the Munich specialist for exchange traded funds, is
offering two new threshould country index funds. The ETFlab MSCI China comprises a broadly
diversified basket of stocks of Chinese companies traded in Hongkong. The ETFlab MSCI Emerging
Markets tracks a broadly diversified portfolio of companies listed on the stock exchange of 21
threshold countries. “Thus we provide an access to the fastest-growing regions of the world“,
Andreas Fehrenbach, ETFlab’s managing director, points out. “Investors wishing to achieve aboveaverage
returns must engage there.“
The demand for the funds of threshold countries has increased significantly following the financial crisis. Dr. Ulrich Kater, the chief economist of DekaBank asserts: „The emerging markets have drawn their lessons from former economic and financial crises and have for the most part chosen to
follow a solid fiscal course.” In addition, Kater sees the sustainability of the strong economic growth:
“In the years to come, the development will be supported by two demographic trends: On the one
hand, there is a continuous strong population growth, on the other hand, the migration into the cities
will continue unchanged.”
The ETFlab MSCI China puts high value on high liquidity and broad coverage of the overall market. With currently 123 assets it represents 85 per cent of the market capitalization and has been the most comprehensive China index fund traded in Germany up to now. The highest weighted stocks are financial assets (38 %), providers (16.9 %) and telecommunications services providers (12.6 %). The ETF tracks the index in a fully replicating manner, which means that the original securities are contained in the fund assets, which are in compliance with the UCITS III guidelines. The management fee is 0.65 per cent annually. Dividend payout takes place up to four times per year.
The index tracked by ETFlab MSCI Emerging Markets comprises currently 756 individual companies the stocks of which are traded on the stock exchanges of 21 threshold countries. The highest weighted of them are issues from China (19 %), Brazil (16 %), and South Korea (13 %). The index they are based on has the form of a performance index. Any accruing dividends will be retained. Tracking is performed by means of swaps. DekaBank, Deutsche Girozentrale, was chosen as a Swap partner. The management fee is 0.65 per cent annually.
Both ETFs will be listed continuously on the XETRA and Stuttgart stock exchanges, as of July 20.
Source: ETFlab
Deutsche Börse to target pension funds directly
July 20, 2010-- Stock exchange operator Deutsche Börse wants to "increase direct business with institutional investors", including pension funds, according to chief executive Reto Francioni
The Deutsche Börse, which runs the Frankfurt Stock Exchange, is preparing to compete with German banks and asset management houses as "a neutral and independent" service provider, Francioni said.
However, he pointed out it was not so much about competition as widening the range of available products and said the Deutsche Börse group did not want to disgruntle any existing clients.
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Source: IP&E
Two New ETFlab Equity Index ETFs Launched on Xetra
July 20, 2010--Deutsche Börse continues to expand its XTF segment for exchange-listed index funds. Two new ETFs issued by ETFlab have been tradable on the pan-European platform Xetra since Tuesday.
ETF name: ETFlab MSCI China
Asset class: equity index ETF
ISIN: DE000ETFL326
Management fee: 0.65 percent
Distribution policy: distributing
Benchmark: MSCI China
ETF name: ETFlab MSCI Emerging Markets
Asset class: equity index ETF
ISIN: DE000ETFL342
Management fee: 0.65 percent
Distribution policy: non-distributing
Benchmark: MSCI Emerging Markets
The ETFlab MSCI China ETF tracks the performance of the MSCI China Index, which comprises companies from the MSCI China H, China B, China Red Chip and China P Chip sub-indices. Investors can participate via a single transaction in the performance of the around 50 largest and best-performing Chinese companies listed on the Hong Kong Stock Exchange.
The ETFlab MSCI Emerging Markets ETF tracks the performance of the MSCI Emerging Markets Index. The index contains companies from emerging market countries Brazil, Chile, China, Columbia, the Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Morocco, Mexico, Peru, the Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. The index tracks approximately 85 percent of market capitalization in the total market.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 682 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of €14 billion, makes Xetra Europe’s leading trading venue for ETFs.
Source: Deutsche Börse
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