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Regional Economic Outlook: Europe-Fostering Sustainability
May 25, 2010--A weak and uneven recovery is underway in Europe. Macroeconomic policies still support the upswing and extraordinary measures are underway to address the sovereign crisis. Now policymakers face the difficult balancing act between continuing their support for the economy and establishing a credible path to policy normalization.
Priorities are large medium-term fiscal consolidations and, in the financial area, a shift from systemic support to interventions in individual financial institutions. Structural weaknesses also need to be addressed, including the revamping of financial sector regulation and supervision, improvements in the functioning of products and labor markets, and filling gaps in the euro area's fiscal governance. For emerging Europe, policies that facilitate a reorientation of the sources of growth toward the export sector and attract healthy capital inflows are key conditions to restart income convergence.
view the Regional Economic Outlook: Europe
Crisis-hit Iceland showing positive signs of recovery
May 25, 2010--The Icelandic economy is currently on the path to recovery after enduring difficult times since the collapse of its banking system at the start of the global economic crisis, Icelandic Finance Minister Steingrímur Jóhann Sigfússon has said.
Sigfússon noted that despite the gloomy picture in 2008 when several Icelandic banks went bankrupt, fueling a severe economic meltdown in the country, this year started with economic indicators recovering at a faster rate than expected. “We have been through difficult times. We had to take intensely radical decisions in a very short period of time. We are trying to overcome the crisis by trying various methods,” he said in an interview with Today’s Zaman.
STOXX Changes Composition Of European Benchmark Indices Results Of The Second Regular Quarterly Review To Be Effective On June 21, 2010
May 25, 2010--STOXX Limited, a global index provider and the
leading provider of European equity indices, today announced the new composition of
the STOXX Global 1800 Index, STOXX Europe Total Market Index, STOXX Europe
600 Index, STOXX EU Enlarged Total Market Index, STOXX Eastern Europe Total
Market Index, STOXX Eastern Europe 300 Index and their sub- and sector indices, as
well as that of the STOXX Europe Football Index and STOXX Europe Private Equity
20 Index.
Effective as of the open of European markets on June 21, 2010, the following 7
stocks will be added to or deleted from the STOXX Europe 600 Index and its respective
size and sector indices:
Effective as of the open of European markets on June 21, 2010, the following 7 stocks will be added to the STOXX Europe 600 Index and its respective size and sector indices: YELL GRP (U.K., Media, YELL.L), OUTOTEC (Finland, Industrial Goods & Services, OTE1V.HE), SEB (France, Personal & Household Goods, SEBF.PA), GN STORE NORD (Denmark, Health Care, GN.CO), HALFORDS GRP (U.K., Retail, HFD.L), C&C GRP (Ireland, Food & Beverage, GCC.I) and SPECTRIS (U.K., Industrial Goods & Services, SXS.L).
Companies exiting the index are: INTERCELL (Austria, Health Care, ICEL.VI), BEFIMMO (Belgium, Real Estate, BEFB.BR), BB BIOTECH (Switzerland, Financial Services, BION.S), BANK OF GREECE (Greece, Banks, BOGr.AT), SACYRVALLEHERMOSO (Spain, Construction & Materials, SVO.MC), BAM GRP (Netherlands,Construction & Materials, BAMN.AS) and CARPHONE WAREHOUSE GRP (U.K., Retail, CPW.L).
The composition of STOXX Europe Private Equity 20 and STOXX Europe Football Indices will remain unchanged.
The STOXX Europe Total Market, STOXX Global 1800, STOXX EU Enlarged Total Market, STOXX Eastern Europe Total Market and STOXX Eastern Europe 300 indices are also part of this regular quarterly review. The new composition of the indices can be found on their respective pages at www.stoxx.com.
CESR intensifies co-ordination in the light of recent market volatility in euro denominated debt instruments.
May 25, 2010--Following the recent CESR Plenary meeting in Barcelona on 7 May, CESR began intensifying close co-ordination of its Members’ market surveillance efforts. Furthermore, in order to assess if any further action should be taken, dialogue between CESR and its Members has been intensified, especially given the decision by the German BaFin to introduce a short selling ban (which took effect Wednesday 19 May).
At present, CESR Members are closely monitoring the situation along with national Finance Ministers and central banks. If necessary, co-ordination of any further action will take place within CESR.
CESR is of the view that structural reforms should be rapidly introduced to enhance the transparency, organisation and functioning of the bond and CDS markets that are currently largely OTC. Some preparatory steps have already been taken by CESR through the launch of its consultation on enhancing trading transparency on a broad range of non-equity instruments, including corporate bonds and OTC derivatives (published on 7 May 2010, Ref. CESR/10-510). CESR is also in the process of carrying out work on possible measures to enhance the organisation and integrity of OTC derivatives markets. These initiatives would enable regulators to better monitor developments and trace potential cases of market abuse and would enhance the overall efficiency of these markets. In this respect, CESR urges the European Commission to urgently adopt the planned legislative reforms ahead of its original timetable.
CESR will further complement this work by evaluating enhanced transparency for government bonds markets and related CDSs in the light of recent developments, and examining the operation of these markets, including settlement. The appropriate Standing Committees have been mandated to further analyse these issues.
CESR and its Members will continue to monitor developments closely and the existing co-ordination will be maintained on an intensified basis amongst Members. CESR will also maintain close and regular contact with the European Commission.
Inflation fears sustain large FTSE350 deficits
May 25, 2010-- Growing long-term inflation expectations have offset the effects of equity market gains, causing the aggregated pension deficit of FTSE350 companies to be valued at £160bn (€187bn) at the end of March 2010.
Latest figures from Mercer's quarterly Pensions Update showed that the deficits were down slightly on the £170bn valuations at the end of 2009, but were three times as high as they were 12 months prior, when they were valued at £49bn.
Dr Deborah Cooper, head of Mercer's retirement resource group, said a lot of attention had been paid to the recent rebound in equity markets, with the FTSE All-Share Index increasing by 50% in the 12 months to March 2010. But "the picture is more complex for companies with defined benefit (DB) pension schemes", she added, particuarly given inflation data.
She warned: "The effects of falling corporate bond yields, due to increased market confidence relative to the position last year and higher inflationary expectations, will result in many companies’ balance sheets remaining exposed to significant pension scheme deficits, despite increasing asset values."
IOSCO Publishes Principles on Cross Border Supervisory Cooperation
May 25, 2010--The International Organization of Securities Commissions (IOSCO) has today published a set of Principles Regarding Cross-Border Supervisory Cooperation developed by its Technical Committee's Task Force on Supervisory Cooperation.
These Principles, accompanied by a report and sample Memorandum of Understanding (Sample MOU), set out how securities regulators can better build and maintain cross-border cooperative relationships that will allow them to more effectively oversee financial services providers such as ,investment advisers, asset managers, hedge funds, credit rating agencies, exchanges and clearing houses, that operate in multiple jurisdictions.
The objective of these Principles is to assist regulators in determining the form of cooperation best suited to the regulatory task at hand, and outline the critical issues that experience has shown regulators should agree upon when building a supervisory cooperation arrangement.
view the Principles Regarding Cross-Border Supervisory Cooperation
Berlin poised to extend short selling ban
May 25, 2010--The German government is planning to ban the naked short selling of all German stocks listed on the country’s exchanges in a sweeping enlargement of last week’s contentious bar on the naked short selling of some securities.
The move is part of a national crackdown on financial-market speculation, which Berlin thinks has gone unregulated for too long as European Union and G20 members search for agreement about new rules at an international level.
In a surprise move last Tuesday, Berlin decided partially to ban naked short selling – the practice of selling securities such as shares and bonds that are not owned or borrowed – of eurozone sovereign bonds and credit default swaps, as well as the shares of a group of 10 leading German financial stocks. That caused consternation in other European capitals, largely because of its unexpected, unilateral nature.
Austria extends ban on naked short-selling
May 25, 2010--The Austrian financial market watchdog, the FMA, said Tuesday it had decided to extend a current temporary ban on so-called naked short-selling by a further six months.
"The Austrian Financial Market Authority has extended its temporary prohibition on naked short selling in the cash market" of shares of the banks, Erste Group and Raiffeisen International, and insurers UNIQA and the Vienna Insurance Group, the FMA said in a statement.
The temporary ban, in force since October 2008 and which had been due to run out at the end of May, has been extended until November 30, 2010, the statement said.
Source launches S&P 500 ETF
May 25, 2010--Source has launched an S&P 500 ETF, an exchange-traded fund which tracks the S&P 500 total return (net) index.
Source says that in the current market environment, demand for exposure to US equities market is high and concerns about the Euro continue.
The new fund gives investors access to the US equities market through important benchmarks.
The S&P 500 Source ETF is Ucits III compliant and is domiciled in Ireland. It is listed on the London Stock Exchange and trades in USD. Ted Hood, chief executive of Source, says: “We are delighted to add the S&P 500 Source ETF to our range of products providing exposure to the US equity market. The S&P 500 index is an important benchmark and a good compliment to our growing suite of US exposure which includes the S&P US Select Sectors, MSCI USA and the Russell 2000.”
The management fee: 0.20%
NYSE Euronext Welcomes Knight Capital Group On Its European Market
May 25, 2010--Paris, 25 May 2010 – KNIGHT CAPITAL GROUP, a U.S. dynamic financial services firm providing market access and trade execution services, today celebrated its transfer from Nasdaq to NYSE (ticker symbol: KCG) and its simultaneous cross-listing on NYSE Euronext in Paris (ticker symbol: KCG).
KNIGHT CAPITAL GROUP used the streamlined, cost-effective Fast Path process to expand its operations in Europe, making it the first company to take advantage of this listing procedure in connection with its transfer on the NYSE since it was made available by NYSE Euronext in 2008.
Providing access to major asset classes, global equities, fixed income, foreign exchange, futures and options, KNIGHT CAPITAL GROUP is today the leading source of off-exchange liquidity in U.S. equities. The admission of KNIGHT CAPITAL GROUP on NYSE Euronext in Paris took place following the direct listing of the 155,876,838 existing shares.
The admission and issue price of KNIGHT CAPITAL GROUP shares on NYSE Euronext in Paris was set at €11.42 each, based on the closing price of its shares on 24 May 2010 converted into Euros on the basis of EUR/USD exchange rate of the same trading day. The company’s capitalization on the day of admission amounted to €1.78 billion.
KNIGHT CAPITAL GROUP’s admission is the first cross-listing from an investment services company and the 51st company to be listed on our markets in the U.S. and in Europe this year.
“We look forward to helping KNIGHT CAPITAL GROUP attract international investor awareness and recognition through its transfer from Nasdaq to NYSE and its simultaneous cross-listing on our European market” commented Ronald Kent, Group Executive Vice President and Head of International Listings at NYSE Euronext. “Thanks to our family of market centers, KNIGHT CAPITAL GROUP will benefit from an outstanding visibility platform and the most diverse array of services around the globe.”
Thomas M. Joyce, Chairman and Chief Executive Officer, KNIGHT CAPITAL GROUP, said “It’s an exciting day for KNIGHT. We are actively expanding capabilities and adding new clients in Europe. Cross-listing on NYSE Euronext in Paris reflects our intention to be a full participant in the European capital markets.”
