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European institutional investors regaining appetite for risk
July 15, 2010--European transaction volumes in 2010 are expected to exceed those of last year following results from a survey that finds risk appetite has increased among institutional investors in the UK, Germany and France.
Union Investment's Investment Climate index, which tracks attitudes and expectations among European real estate professionals at six-month intervals, has reached 67.5 points, equalling the most recent high point in August 2009.
Union Investment said this showed a greater willingness to invest compared with the second half of 2009.
Olaf Janssen, head of property research at Union Investment, said: "The index is approaching the previous all-time high of 68.7 points, recorded in 2007."
The biggest increase in investor optimism was measured in Germany, where sentiment rose from 66.1 to 67.8 points, overtaking the corresponding values in both France and the UK for the first time since autumn 2008.
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Source: IP&E
Investors plan to flee funds of funds
July 15, 2010--More than a third of investors in funds of hedge funds plan to cut out the industry in future and move towards direct investment in single-name hedge fund managers, according to the results of a new survey.
Funds of funds were once the preferred method of investment in the hedge fund industry, but the financial crisis and the Madoff scandal have exacted a heavy toll.
Many of the industry’s biggest names have suffered from vicious redemptions over the past 18 months as investors – particularly wealthy individuals and private banks – have retrenched in volatile market conditions.
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Source: FT.com
EU clears Bank of Ireland restructuring plan
July 15, 2010-- Europe's competition watchdog approved on Thursday a restructuring for Bank of Ireland which was launched after the Irish government rescued the struggling lender last year.
The European Commission gave a definitive green light to the state's 3.5-billion-euro (4.5-billion-dollar) capital injection for Bank of Ireland in 2009.
The EU executive had granted temporary approval to the recapitalisation as emergency aid during the global recession, pending the submission of a restructuring plan, which was also approved on Thursday.
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Source: EUbusiness
ETF Landscape: European STOXX 600 Sector ETF Net Flows, week ending 09-Jul-10
July 14, 2010--Last week saw US$119.4 Mn net inflows from STOXX Europe 600 sector ETFs. The largest sector ETF inflows last week were in Basic Resources with US$204.5 Mn and Telecommunications with US$21.2 Mn while Chemicals experienced net outflows of US$36.9 Mn.
Year-to-date, Media has seen the largest net inflows with US$262.3 Mn net new assets, followed by Industrial Goods & Services with US$107.5 Mn. Banks sector ETFs have seen the largest net outflows with US$196.3 Mn YTD. In total, STOXX Europe 600 sector ETFs have seen US$420.5 Mn net outflows 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
Eurex and Bombay Stock Exchange Partner to Launch Futures and Options on Indian SENSEX Index
Launch on 4 October 2010/ New listings are latest Eurex product offering targeting the Asia-Pacific region
July 14, 2010--Bombay Stock Exchange (BSE), the Indian securities market operator and Eurex, the international derivatives exchange, today announced that they will launch futures and options on the SENSEX, the blue-chip index of the BSE, on 4 October 2010 at Eurex. The SENSEX Index tracks the daily performance of 30 of the largest and most actively traded companies listed on the Bombay Stock Exchange. It is a value-weighted index that represents approximately half of the float-adjusted market capitalization of all stocks traded on BSE.
“We are committed to offering our members a diverse and truly global product offering across key geographies and asset classes. The SENSEX is the most widely recognized gauge for the Indian market and complements our suite of leading equity index derivatives”, said Peter Reitz, member of the Eurex Executive Board. “By introducing futures and options on this prominent benchmark, we also will advance our efforts in the Asia-Pacific region by creating trading opportunities for customers seeking access to this fast-growing emerging economy.”
Madhu Kannan, Managing Director and CEO of the BSE, commented, “We are very pleased to be working with Eurex to develop a broader international investor base focused on the SENSEX. The SENSEX will now be trading during a larger portion of the global trading day, which will increase its appeal and value. Moreover, we see the growth of overseas liquidity in the SENSEX as helping us to broaden and deepen the market for SENSEX products within India.”
The new contracts will be denominated in US dollars and settled in cash. The futures will have maturity dates of the three nearest months, and the following March, June, September and December. Two market-making schemes will be in effect until the end of December 2011 – one to support liquidity during the overlap of Indian and European trading hours and one for European market hours. The expiration dates of the options will be in the three nearest calendar months, the next three quarters and two next semi-annual expiries.
Source: Eurex
Euro area annual inflation down to 1.4%
EU down to 1.9%
July 14, 2010-Euro area1 annual inflation was 1.4% in June 20102, down from 1.6% in May. A year earlier the rate was -0.1%. Monthly inflation was 0.0% in June 2010.
EU3 annual inflation was 1.9% in June 2010, down from 2.0% in May. A year earlier the rate was 0.6%. Monthly inflation was 0.0% in June 2010.
These figures come from Eurostat, the statistical office of the European Union.
Inflation in the EU Member States
In June 2010, the lowest annual rates were observed in Ireland (-2.0%), Latvia (-1.6%) and the Netherlands (0.2%), and the highest in Greece (5.2%), Hungary (5.0%) and Romania (4.3%). Compared with May 2010, annual inflation fell in fifteen Member States, remained stable in four and rose in eight.
The lowest 12-month averages4 up to June 2010 were registered in Ireland (-2.5%), Latvia (-1.6%) and Portugal (-0.3%), and the highest in Hungary (5.2%), Romania (4.6%) and Poland (3.5%). Euro area
The main components with the highest annual rates in June 2010 were transport (3.9%) and alcohol & tobacco (3.7%), while the lowest annual rates were observed for communications (-1.1%), recreation & culture (-0.2%) and food (0.2%). Concerning the detailed sub-indices, fuels for transport (+0.45 percentage points), heating oil (+0.17) and tobacco (+0.10) had the largest upward impacts on the headline rate, while gas, cars and telecommunications (-0.09 each) had the biggest downward impacts.
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Source: Eurostat
Trading of nine new ETFs begins on the Spanish stock exchange
TRADING OF NINE NEW ETFs BEGINS ON THE SPANISH STOCK EXCHANGE
July 13, 2010--This represents a significant increase in the number of underlying assets
The Spanish stock exchange started trading nine new exchange traded funds (ETFs), issued by Lyxor Asset Management, today. This issue brings the number of ETFs listed on the Spanish stock exchange to 41, thus significantly increasing the number of underlying assets available with new international and sectorial equity indices, both in Asia and North America as well as fixed income indices.
The Spanish exchange traded funds segment, which started on 20 July 2006, marks its fourth anniversary with over 40 listed products. Thanks to a recent change in the regulations, new ETFs will be listed on the market in the coming months.
Trading volume for the ETF segment in June was up 53% on the same month of 2009, at €750 million. The number of trades totalled 6,762 in June, up 83% year-on-year.
Below is a list of the new ETFs listed on the Spanish stock exchange:
Lyxor ETF Stoxx Europe 600 Telecommunications
Lyxor ETF Stoxx Europe 600 Health Care
Lyxor ETF Stoxx Europe 600 Utilities
Lyxor ETF Stoxx Europe 600 Oil & Gas
Lyxor ETF MSCI World
Lyxor ETF MSCI Europe
Lyxor ETF MSCI USA Real Estate
Lyxor ETF MSCI Ac Asia Ex Japan Real Estate
Lyxor ETF Euromts AAA Government Bond
Source: BME
European Repo Market White Paper emphasises importance of repo and urges reform of market infrastructure
July 13, 2010--ICMA’s European Repo Council (ERC) has today published a White Paper on the European repo market, including the role of short-selling, the problem of settlement failures and the need for reform of the market infrastructure. It emphasises the importance of the repo market for the efficiency and stability of the financial system.
The White Paper was commissioned by ICMA’s ERC in response to current regulatory considerations which will impact the repo market. There is concern that regulatory initiatives should not constrain the capacity of the repo market in Europe at a time when increasing demands are being made on it, both by the regulators themselves in terms of proposals for enhanced collateral management to reduce risk and by governments in terms of increased debt issuance.
Proposals relating to the restriction of short-selling would have unintended consequences for the securities market, which will increase costs and risks for issuers and investors.
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Source: ICMA
Borsa Italiana ETF Stat May 2010 Report
July 13, 2010--The ETF Statistics of May 2010 are now available.
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Source: Borsa Italiana
NYSE Euronext to List Non-U.K. Companies in London
July 13, 2010--NYSE Euronext plans to introduce a platform in London to list non-U.K. companies in a bid to compete with the London Stock Exchange Group Plc, according to a statement on the company’s Paris-based website.
Trading in shares and depositary receipts of companies opting for this venue can be in U.S. dollars, euros or pounds, according to a Euronext document. The market was mentioned in March at a NYSE Euronext investor day conference in New York.
“Why not? It’s a me-too strategy and at low marginal cost there’s the chance to attract listings and some trading volume,” said Bruce Weber, a professor at the London Business School who specializes in exchanges and electronic trading. “It’s an opportunity for NYSE though they certainly have competition. London has been a center for international equities trading since the 80’s.”
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Source: Bloomberg
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