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Sell off in green themed funds continues
ESG screened funds also down as lack of equity market confidence bites.
July 15, 2010--The post Copenhagen sell-off in green themed and norms-based European RI retail funds continued during May, with a broader lack of confidence in equity markets contributing to the slump. The sector was down by €373.9m over the month, according to the latest available figures compiled for Responsible Investor by Lipper FMI, the investment data group.
It follows sector depreciation of €95.9m during April. The fund class, labelled by Lipper FMI as ‘RI Extended’, includes those with multiple ethical exclusions, those following a norms-based strategy and themed climate change and microfinance funds. Notably, the best selling fund of the month was in fixed income with the Pimco Funds – Socially Responsible Emerging Markets Bonds – part of the Allianz group – netting €104.4m. Second placed was HBOS’ Ethical fund, part of the Lloyds banking group, with sales of €100.5m.
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Source: Responsible Investor
Korea Exchange and Eurex Receive Strong Support from Major Market Participants for Their Link
Launch of Eurex/KRX Link on track for starting date 30 August 2010
July 15, 2010--Eurex, Europe’s largest derivatives exchange, and the Korea Exchange (KRX), a leading Asian exchange, have received strong commitment and support from major market participants for the launch of their joint Eurex/KRX Link on 30 August. This Link comprises a cooperation to trade and clear options on Korea’s blue-chip index KOSPI 200 on Eurex during European and North American trading hours.
Currently, Eurex and KRX are jointly preparing the launch of daily futures on KOSPI 200 Options (the Eurex KOSPI Product) at Eurex and have been in an extensive member consultation process since the beginning of 2010. Fifteen KRX members have indicated that they will be ready to trade the Eurex KOSPI Product during the course of 2010, thereof eight from day one.
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Source: Eurex
Deutsche Bank ETP Research: European equity investors remain on the sidelines
July 15, 2010--Weekly European ETP Market Roundup
Net Cash flows
Equity markets rose but the holiday season has probably kicked-in. Overall European ETP cash flows pottered along in positive territory but yet equity cash flows failed to make the big leap forward and return to the market. While overall ETP cash flows remained positive they were very subdued as equity investors continued to stay out of the market. This is despite improving market conditions, the Euro Stoxx 50 index rose 4.3% for the post Q2’10 end period that ended July 9. The US market saw similar gains with the S&P 500 rising by 4.6% for the same period.
The European ETP industry received €431 million in inflows in this week. Equity finished the week almost flat, it experienced slight outflows of €43 million, while fixed income and commodities saw inflows of €276 and €187 respectively.
While certain European indices (DAX, FTSE) saw limited inflows, the majority of the Euro zone indices continued to see net outflows. Numbness continued to characterize the equity ETP investment activity, following a dismal equity flows June (€3.2 billion outflows).
The mood was very different in the fixed income ETP sector of the European market as it received net inflows of €276 million. All fixed income sub-segments saw net inflows, with corporate benchmarks leading the flow activity (€102 million).
Commodity flows were positive (€187 million) and were once again defined by precious metals. Gold led inflows by receiving €155 million, while broad precious metals indices and crude oil followed with €21 and €20 million each. All other commodity sub-sectors oscillated around net overall flat flows.
New Listings
Six new products were launched this week, together with four other being cross-listed (See Fig. 8 for further details).
Comstage launched three new equity ETP products targeting European indices and one fixed income product targeting covered bonds.
Both RBS and UBS launched one commodity ETP each, targeting gold and oil respectively.
Turnover
Average daily on-exchange ETP turnover declined 6.2%, maintaining the downward trend seen in the previous weeks, totaling €1.9 billion.
Assets Under Management
The rise in the equity markets helped lift European ETP assets to €196.2 billion, finishing the week with a rise of 3.3%.
The equity ETP segment rose by 4.7%, fixed income by 0.7% and commodities by 1.4%. The equity component of the market was lifted by rising markets, while fixed income and gold were helped by inflows. Gold price (USD) declined by 2.5% between June 30 and July 9. Total European ETP assets are up 15.7% 2010 YTD.
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Source: DB Global Equity Index & ETF Research
ETF Stat June 2010-Borsa Italiana
July 15, 2010--The ETF Statistics of June 2010 of the Borsa Italiana are now available.
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Source: Borsa Italiana
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
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