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Swedish subsidiary of Boerse Stuttgart sets new trading record
Turnover exceeds EUR 551 million on Nordic Derivates Exchange (NDX) in first six months of 2010
July 13, 2010--The Nordic Derivates Exchange (NDX), which belongs to Boerse Stuttgart’s subsidiary Nordic Growth Market (NGM), has set a new record for turnover in the first half of 2010. With a trading volume of over SEK 5.2 billion (Swedish kronor) (equivalent to approximately EUR 552 million), turnover on the NDX was up more than 245 percent on the same period in 2009.
The strongest month was June, with a record trading volume of SEK 1.4 billion (equivalent to approximately EUR 147 million). This compares with around EUR 28 million in June of the previous year. June 2010 also saw the number of orders increase to a new record level. 37,000 orders were executed, a rise of 171 percent on the same month in 2009.
As well as strong growth and a greater volume of trading, the first six months of 2010 showed signs of improved market penetration. In the knock-out segment, for example, which comprises turbo warrants and mini futures, the NDX’s share of all stock exchange trading in Sweden stood at over 88 percent in May.
“We are delighted by this positive trend. It demonstrates that we are on the right track and confirms our strategy of opening up the Swedish market further to new certificates and new forms of investment. We are convinced that the level of acceptance among investors and their willingness to invest are on the increase,” observed NDX Business Manager, Tommy Fransson.
Source: Boerse Stuttgart
FESE Response to Public Consultation on Derivatives and Market Infrastructures
July 12, 2010--I. Introduction
The Federation of European Securities Exchanges (FESE) represents 45 exchanges in equities, bonds,
derivatives and commodities through 20 full members from 29 countries, as well as 7 Corresponding
Members from European emerging markets.
Our response below is structured according to the different sections included in the consultation paper
and the questions suggested in each of them. We have also included a brief section with some general
remarks.
II. GENERAL REMARKS
FESE welcomes the opportunity to contribute to this public consultation on ‘derivatives and market infrastructures’ which, as explained in its introduction, results from the problems identified in the OTC derivatives markets and follows the mandate of the G20 leaders’ statement agreed on 25th September 2009. In addition to our responses to the different questions outlined below, we would like to note the following:
This consultation covers CCP clearing of OTC derivatives, one part of the mandate of the G20 mandate. Other upcoming legislative proposals of the European Commission should cover the rest of the G20 mandate, including trading of OTC derivatives on organised venues. We consider that trying to meet this mandate through separate legislative proposals may produce unintended consequences and eventually put at risk the implementation of the G20 agreement by end?2012 at the latest.
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Source: FESE
Barbara Georg new manager for IPO candidates and listed companies
July 12, 2010-- With immediate effect, Barbara Georg (41) is to take responsibility for companies planning IPOs or already listed, as well as the further development of the stock exchange segments. She also remains responsible for securities listing on the cash market, a position she has held since 2006.
The turbulence on the capital markets is making equity financing via the stock exchange increasingly important – not only for smal and mid-sized companies, but also for companies from China, Russia and India. By combining these two departments, Deutsche Börse now offers the entire listing process from a single source and makes it easier still for IPO candidates and applicants.
“In Barbara Georg, we have a very experienced manager to assume these key functions in the primary market with expertise in all areas of listing,” said Frank Gerstenschläger, Deutsche Börse Executive Board member responsible for the cash market. Georg has held various managerial positions at Deutsche Börse since 1999. Prior to that, Georg, a trained lawyer, worked for Deutsche Bank, where she was responsible for stock exchange admission for bond issuances.
Deutsche Börse’s high liquidity, strong analyst network for the sectors environmental technology, pharmaceuticals and health care, automotive and technology/software distinguish it as a listing venue from other stock exchanges in Europe. This tends to result in better valuations and lower capital costs as academic studies regularly show.
Source: Deutsche Börse
NASDAQ OMX Introduces Nordic Last Sale for Professional Investors
New Market Data Product Responds to Professional Users' Demand for More Transparency, Unbundled Pricing, and a New, Lower Price
July 12, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), the world's largest exchange company, today announced the introduction of a new product -- NASDAQ OMX Nordic Last Sale for Professional Users.
NASDAQ OMX Nordic Last Sale for Professional Users carries real-time trade data for all executions on the NASDAQ OMX book as well as over-the-counter (OTC) trades reported to the NASDAQ OMX Trade Reporting Facility in Stockholm.
Prior to this development, NASDAQ OMX Last Sale in the Nordics had so far only been priced for non-professional users. The non-professional product will continue unchanged.
NASDAQ OMX Nordic Last Sale for Professional Users, available as of September 1, will help foster post-trade transparency. Additionally, it will improve the quality of post-trade OTC data, due to an innovative price validation mechanism. NASDAQ OMX's unique price validation is expected to catch several inaccurate prints per day, allowing any errors to be corrected before erroneous trades become part of the consolidated tape. This new service will address some of the shortcomings resulting from the implementation of the Markets in Financial Instruments Directive (MiFID) recently recognized by European Union (EU) institutions.
"While MiFID has been beneficial in increasing exchange competition and reducing transaction fees for market participants, it has also caused market fragmentation -- thus creating challenges to post-trade transparency," said NASDAQ OMX Executive Vice President Hans-Ole Jochumsen. "NASDAQ OMX Nordic Last Sale for Professional Users enhances post-trade transparency and facilitates vendors' creation of a consolidated tape by providing complete and accurate execution data."
"NASDAQ OMX Nordic Last Sale for Professional Users was introduced in response to customer demand," said Randall Hopkins, Senior Vice President, NASDAQ OMX Global Data Products. "Now market professionals can more effectively identify liquidity and evaluate execution quality, enabling them to make better informed investment decisions. By giving firms a lower price-point for Last Sale data, as compared to Level 1, firms are given more choices, better ways to match their needs precisely to the product type, and in many cases, to lower their market data costs."
NASDAQ OMX Nordic Last Sale for Professional Users is available for a subscription fee of €15/ per month. For more information about NASDAQ OMX Nordic Last Sale for Professional Users, visit
http://nordic.nasdaqomxtrader.com/marketdata/dataproducts/NordicLastSale/
Source: NASDAQ OMX
Two new ComStage ETFs launched on Xetra
July 12, 2010-- Two new listed equity index ETFs issued by ComStage have been tradable in Deutsche Börse’s XTF segment since Monday.
ETF name: ComStage ETF HSI
Asset class: equity index ETF
ISIN: LU0488316729
Total expense ratio: 0.55 percent
Distribution policy: distributing
Benchmark: Hang Seng Index (price index)
ETF name: ComStage ETF HSCEI
Asset class: equity index ETF
ISIN: LU0488316992
Total expense ratio: 0.55 percent
Distribution policy: distributing
Benchmark: Hang Seng China Enterprises Index (price index)
The ComStage HSI and HSCEI ETFs track the performance of companies traded on the Hong Kong Stock Exchange. The Hang Seng Index (HSI) represents the development of the largest and most liquid blue chips listed on the Hong Kong Stock Exchange. Mainland-Chinese companies whose H-shares are listed in Hong Kong can be included in the HSI if they meet certain criteria. The Hang Seng China Enterprises Index (HSCEI) comprises the most important mainland-Chinese shares traded on the Hong Kong Stock Exchange (H-shares). It only comprises the H-shares with the highest market capitalization which are also included in the Hang Seng Composite Index (HSCI). Both of these are price indices.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 680 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
Deutsche Bank ETF Research - Quarterly Update: Retreating to Safety
July 12, 2010--Despite strong Q2’10 inflows, falling equity markets take their toll by shaving over 10% off AUM and bringing 2010 YTD ETP market growth to -0.85%
Euro sovereign concerns and worries about the strength of the recovery in the US kept investors scratching their heads about the likely trajectory of equity markets. This situation put the quarterly growth of the global ETP market in negative territory (-0.85% YTD), despite strong cash flows ($44.1 billion) in both the US ($31.6 billion) and Europe (€9.8 billion) and Asia (estimated at $8 billion). The global ETP market shrunk by 4.1% in Q2’10 and experienced its first decline in the past five quarters. This quarter’s decline wiped out the 3.5% increase registered in Q1’10 AUM, bringing the YTD growth below zero at -0.85%.
ETP market growth forecast: European growth rates steam ahead, while falling equity markets shadow expected global growth rates 0f 15%
While we still expect positive growth for the global ETP market for the remainder of 2010, recent economic events lead us to also consider the possibility of growth between 15 and 20% slowing, should equity market declines continue. Global ETP market growth above 15% is still within reach, however, it is less likely as it necessitates both a very strong equity market rally (upwards of 20%) as well as cash flow patterns at or above historical highs ($80-90 billion for the remaining two quarters) for the rest of the year.
The European market continued to defy falling equity markets and strong cash flow patterns contributed to growth of 13.4% 2010 YTD. Growth in this region is expected to comfortably outstrip that of the other two major regions and could reach 25-30% before year end. The US and Asian markets are more likely to grow at rates which could be at half those of Europe, both the US and Asia Pacific regions registered close to flat growth 2010 YTD.
Q2’10 flows continue strong but asset allocation indicates clear shift in risk appetite
While market uncertainty and elevated volatility levels had a profound effect on how ETP flows were allocated among asset classes in the second quarter of the year, on both sides of the Atlantic, the ETP sector continued to see strong inflows totaling $44.1 billion. This level is significantly above the $18.1 billion observed in Q1’10. The majority of the flows (71.7%) came into the US market, while the remaining (28.3%) came to the European market. The proportion of the flow allocation, relative to AUM, points that the European market received (relative to its size) higher inflows (US: $779 billion (72%), Europe: $236 billion (21.8%), despite the falling Euro/US$ exchange rate.
Equity flows, while positive, continued to decline over Q2’10. The month of May registered net outflows of $250 million in the US market, while in Europe, the exit from equities was more pronounced in June with €3.2 billion of outflows. Fixed income registered strong inflows in both territories (US: $ 10.7 billion, Europe: €3.1 billion), with large allocations to sovereign benchmarks, despite sovereign solvency concerns in Europe.
The biggest flow-related story was gold. Q2’10 global gold ETP inflows easily surpassed the cumulative gold inflows of the past five consecutive quarters put together and reached $11.6 billion (US: $8.3 billion, Europe: €2.8 billion). Taking into account AUM at the beginning of Q2’10, gold ETPs in Europe were more popular than in the US as they experienced a quarter-over-quarter increase of 43%, to €20.4 billion from €14.3 billion. The real increase is higher, as the price of gold is quoted in US$ and the Euro depreciated over 10% against the US$ over Q2’10. In the US, for the same period, the gold ETP segment rose by 23% to $58.0 billion from $44.4 billion.
European off-exchange ETP trading gathers pace
While to many an oxymoron, it is nevertheless a reality. The combined ETP turnover that takes place off-exchange (within ancillary exchange OTC platforms) in the three of the major European exchanges (Deutsche Borse, SIX Swiss Exchange, London Stock Exchange) is three times higher than the level of on-exchange turnover. The significance of this is that popular data provision services (such as Bloomberg and Reuters) do not account for off-exchange turnover thus giving the impression that turnover volumes are lower than what they actually are.
The level of off-exchange activity differs among the three exchanges that openly report off-exchange trades, with the biggest of the three, Deutsche Borse leading with 80% of trading occurring off-exchange. This is followed by the London Stock exchange, registering close to 60% of its ETP turnover activity off-exchange. The SIX Swiss exchange registers roughly 25% of its ETP trades off the exchange. Combining all three exchanges, 60% of ETP turnover activity has occurred off-exchange historically, with May month end levels closer to 75%.
Global ETP product launch calendar: Europe leads Q2’10 new product launches
The second quarter of the year registered 173 new product launches, the majority of which were ETFs (130), with the remainder being ETCs (41) and ETVs (2). Most of the new products were launched in Europe (110), with the US (47) and Asia (16) in second and third places respectively. This brings the total new ETP products launched to date in 2010 at 405, following the 232 ETPs launched in Q1’10.
ETPs targeting equity benchmarks led the pack (103), with fixed income (24) following and commodities third (23). Currency ETPs had a particularly strong quarter with 22 products being launched in Europe on a number of pair currencies. Just over three quarters of the products launched target long benchmark indices (135), with the remainder targeting short (18) and leveraged (20) benchmark indices
ETP research universe revision
Our core coverage universe is exchange-traded funds and our aim is to produce research that can facilitate informed decision making across asset classes. As legislation stands today, both in the US and Europe, the vast majority of ETFs may only track equity and fixed income benchmarks. When making investment decisions and in the interest of constructing efficient portfolios, investment managers look for uncorrelated return sources. Therefore, recognizing both the need to make decisions utilizing information across asset classes, and at the same time, the secure/funded nature of ETFs, we are continuing to include in our coverage universe exchange-traded funds (ETFs), Exchange-Traded Commodities (ETCs, Europe) and Exchange-Traded Vehicles (ETVs, US), however, we will be reporting ETNs separately going forward.
ETNs in our reported universe are close to $10.0 billion as of the end of Q2’10 (Figure 52). The impact of their exclusion from our reported universe will be therefore immaterial (less than 1%) in terms of AUM. The impact is more noticeable in terms of product count, we currently include 273 ETN products in our reported universe. Excluding them will reduce the total ETP product count by 10.3% to 2,379 products, down from 2,652.
to request report
Source: Christos Costandinides-Deutsche Bank - Equity Research
Deutsche Bank’s Exchange Traded Commodity Platform Lists Ten New ETCs On LSE
July 12, 2010--Deutsche Bank’s Exchange Traded Commodity (db ETC) platform today announces the listing of ten new Exchange Traded Commodities (ETCs) on the London Stock Exchange.
The new ETC range enables investors to gain simple and efficient exposure to a wide spectrum of commodities. This includes the db Physical Gold ETC and the db Physical Silver ETC that are backed by the relevant precious metal being tracked by the ETC.
Also being launched are a range of index linked ETCs such as the db S&P GSCI Industrial Metals ETC and db Energy Booster ETC which are unique because the exposures to the swap transactions incorporated in these ETCs are fully collateralised with physical gold.
: Another distinguishing feature of some of the index linked ETCs is that they are linked to Deutsche Bank’s Optimum Yield commodity indices. The indices underlying ETCs are typically linked to the performance of a basket of commodity futures contracts. Due to the costs (or gains) associated with “rolling” commodity futures contracts (i.e. selling a maturing contract and buying a new one) there may be a divergence between the spot and future price of a commodity. The “Optimum Yield” technique represents a way of investing into commodities with the aim of minimising such costs (or maximising gains) from the “rolling” of commodity futures contracts. The index linked ETCs which utilise the Optimum Yield technique have the word “Booster” in their name.
All of the db ETC products have competitive fees and are offered with full liquidity through Deutsche Bank which acts as market maker for all of the products. These ten new db ETC products add to the range of 19 which were listed on Xetra Frankfurt earlier this year.
Deutsche Bank Exchange Traded Product (ETP) research shows that the ETC market is one of the fastest growing investment segments in the ETP market. Total assets in ETPs across Europe grew by 145% in 2009, compared to only 43% in equities and 17% in fixed income.
David Silbert, Global Head of Commodities at Deutsche Bank said, “The ETC platform offers investors a simple, efficient and liquid way to gain exposure to a wide range of commodities at a competitive price. We anticipate strong demand for these products.”
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Source: Mondovisione
UK slump deeper than thought, gov’t spending key in Q1
July 12, 2010--Britain’s record recession was even deeper than previously thought, and the economy could still have contracted in the first quarter of this year were it not for hefty government spending, official data showed on Monday.
The Office for National Statistics left its earlier estimate of first-quarter growth unrevised at 0.3 percent, giving an unchanged annual decline of 0.2 percent.
Britain faces mixed prospects for the second quarter, after data released at the same time showed that services output contracted 0.3 percent in April, the biggest fall since January.
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Source: Todays Zaman
Risk and Trend Mapping No9 - 2010 risk and trend mapping for financial markets and retail savings
July 12, 2010--Introduction
Risks identified and action taken in 2009
From the financial crisis to the economic crisis
The AMF published its previous risk and trend mapping study in June 2009, when markets conditions were still
highly volatile. The report highlighted the tensions prevailing in credit markets and the considerable uncertainty
about future changes in asset prices and the balance sheets of banking and financial intermediaries. Accordingly,
when monitoring the financial crisis, the AMF paid special attention to financial reporting by banks and the
application of accounting standards.
Moreover, the sharp deterioration in post-crisis economic conditions created
specific problems involving market disclosures by struggling companies and the enforcement of standards,
especially in the event of breaches of covenants. Some companies carried out capital raising exercises in very short
timeframes, which led to particular problems when processing their requests for regulatory approval. In this harsh
economic environment, there were almost no initial public offerings in 2009 (apart from one major flotation at
year's end) and very few tender offers – a similar pattern to 2008. By contrast, fundraising through rights issues and convertible bond issuance reached record levels, especially for large capitalisation companies.
The 2009 report also pointed to operational risk in the over-the-counter (OTC) market for derivatives, particularly credit derivatives, caused by a lack of robust post-trade procedures. In accordance with the recommendations of the G-20, the international financial community made major efforts in this respect, under the guidance of regulators; and these initiatives are ongoing in 2010. The AMF chairs the Post-Trading Standing Committee of the Committee of European Securities Regulators and is monitoring projects involving clearing houses and trade repositories in connection with the forthcoming legislative proposal from the European Commission on clearing and settlement. The AMF is also contributing to the review of the CPSS-IOSCO standards.
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Source: AMF
CESR launches a consultation on the advice to the Commission in the context of the MiFID Review – Client Categorisation
July 12, 2010--In the context of its review of the Markets in Financial Instruments Directive (MiFID), the European Commission (EC) posed a series of questions to CESR. The purpose of this consultation is to gather stakeholders’ views on client categorisation issues to assist CESR in its responses to the Commission’s questions on these issues.
The main points in this consultation paper are under the following three headings:
Technical criteria to further distinguish within the current broad categories of clients [“other authorised or regulated financial institutions”, “locals”, “other institutional investors” (Annex II.I(1) (c), (h), (i) of MiFID)]: Part 1 of the consultation paper asks whether distinctions should be made between regulated entities for the purposes of determining which entities are to be treated as “per se” professional clients.
Public debt bodies: Part 2 of the consultation paper asks whether it is necessary to clarify, for the purposes of the client categorisation regime, whether local authorities/municipalities can be treated as public debt bodies.
Other client categorisation issues: Part 3 of the consultation paper asks whether tests of knowledge and experience should be used more widely for client categorisation than is currently the case, whether for very complex products (such as asset backed securities and non-standard OTC derivatives) the scope of the eligible counterparty categorisation should be narrowed and what standards should apply to transactions done with eligible counterparties.
Responses to the consultation paper should be submitted online in the section Consultations by 9 July 2010.
view consultation paper
Source: CESR
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