Global ETF News Older than One Year
DECPG Weekly Economic Brief
May 9, 2014--April readings of the Purchasing Managers' Index (PMI) show factory output in the U.S. and euro area progressing at a rapid pace,
plummeting in Japan as a result of a consumption tax hike, and weakening in developing countries. Declining activity in Ukraine and Russia
is impacting growth projections for Europe and Central Asia this year. More serious consequences are possible if confidence deteriorates in
the face of worsening conditions on the ground.
Capital flows to developing countries remained strong in April, with developing countries issuing a record $42 billion in new bonds, supported by favorable global financing conditions. The expansion of global manufacturing activity continued in April, despite further signs of slowdown in developing countries and contraction in Japan. Based on April PMI data, industrial activity was firmly in expansion mode in the U.S. and the euro area, but plunged in Japan as both output and new orders were driven sharply down by the dampening impact of a consumption tax hike. In developing countries, slowing activity was broad-based, but more pronounced in South Africa - where strikes in platinum mines have compounded underlying weakness in manufacturing- and Brazil -where deteriorating domestic demand conditions and supply constraints led to declining output after four months of subdued growth. China’s PMI was broadly stable at a level consistent with sub-par industrial activity at the start of the second quarter. A number of countries bucked the trend, with strong export orders in Indonesia and Vietnam leading to increasing confidence in those two countries. PMIs in Mexico, India and Turkey were also broadly stable and continued to indicate modest growth.
Source: World Bank
MSCI May Semi-Annual Index Review Announcement Scheduled for May 14, 2014
May 7, 2014--MSCI Inc., a leading provider of investment decision support tools worldwide, including indexes, portfolio risk and performance analytics and ESG data and research, will announce the results of the May 2014 Semi-Annual Index Review for the MSCI Equity Indexes-including the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indexes, the MSCI Global Value and Growth Indexes, the MSCI Frontier Markets and MSCI Frontier Markets Small Cap Indexes
, the MSCI Global Islamic and MSCI Global Islamic Small Cap Indexes, the MSCI Pan-Euro and MSCI Euro Indexes, the MSCI US Equity Indexes, the MSCI US REIT Index, and the MSCI China A Indexes. All changes will be made as of the close of May 30, 2014.
Source: MSCI
Global economy strengthening but significant risks remain, says OECD in latest Economic Outlook
May 6, 2014--The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook.
"Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again," OECD Secretary-General Angel Gurría said while launching the Outlook during the Organisation's annual Ministerial Council Meeting and Forum in Paris.
"But with the world still facing persistently high unemployment, countries must do more to enhance resilience, boost inclusiveness and strengthen job creation.
view the OECD Economic Outlook, Volume 2014 Issue 1
Source: OECD
Research Paper-Do ETFs Increase Stock Volatility?
May 6, 2014--Abstract-April 2014
A study of whether exchange traded funds (ETFs)-an asset of increasing importance-impact the volatility of their underlying stocks. Using identification strategies based on the mechanical variation in ETF ownership, we present evidence that stocks owned by ETFs exhibit significantly higher intraday and daily volatility.
We estimate that an increase of one standard deviation in ETF ownership is associated with an increase of 16% in daily stock volatility. The driving channel appears to be arbitrage activity between ETFs and the underlying stocks. Consistent with this view, the effects are stronger for stocks with lower bid-ask spread and lending fees. Finally, the evidence that ETF ownership increases stock turnover suggests that ETF arbitrage adds a new layer of trading to the underlying securities.
view the research paper-Do ETFs Increase Volatility?
Source: www.wharton.upenn.edu
A Call for Countries & Companies to Support a Price on Carbon
The debate over carbon pricing has shifted, with the focus moving from whether to have carbon pricing to how to put an effective price on carbon. The change comes in the face of scientific warnings, clear evidence of countries acting to spur low-carbon development, companies moving to develop business strategies for a carbon-constrained world, and a groundswell of interest in how to use economic policy and business planning to transition to low-carbon and resilient development. view the infographic- Carbon Markets of the World
Source: World Bank
ETP Landscape: Record April with $33.5bn inflows
Global ETP inflows surged to a six-month high of $33.5bn in April and were broad-based, led by emerging markets, US large cap equity and renewed strength for non-US developed markets equity
April marked a return to fundamentals-based investing with the global economy on more solid footing, headline risks muted, US earnings season off to a good start and the emerging markets driven equity volatility of Q1 out of the picture
Emerging markets ETPs led both equity and fixed income flows during the month Broad EM equity gathered $5.9bn-the first positive month since October-though the late-March surge that continued into April slowed to close the month EM debt ETPs contributed $1.3bn-the best month since October 2012-and investors continue to favor hard currency over local currency funds Non-US developed equity ETPs, which remain an attractive option for investors seeking relative value as the US bull market continues, generated flows of $9.9bn in April to regain momentum after a flat March
Source: BlackRock-ETP Research
Make growth socially inclusive for improved well-being and stronger economies-OECD report
The wealthy have overwhelmingly captured the benefits of growth. The average income of the richest 10 percent of the population in OECD countries was nine and a half times higher than that of the poorest 10 percent in 2010, compared with a level seven times higher 25 years ago.
In the United States, the richest 1 percent took 47 percent of total income growth between 1976 and 2007, compared with 37 percent in Canada and around 20 percent in Australia and Britain. The gap between rich and poor has widened even faster since the financial crisis. view the OECD All on Board: Making Inclusive Growth Happen report
Source: OECD
Healthy, happy and wise', users top priorities as OECD releases its 2014 Better Life Index
More than 3.6 million people in 184 countries have used the wellbeing barometer to measure and compare their quality of life based on their own priorities. Typically people have used it to compare countries according to the weighting they give to 11 categories ranging from income to the environment. A new feature for 2014 reveals to users for the first time what more than 60,000 people around the world believe to be the most important factors for quality of life. This living database, viewable via an interactive map, allows policymakers everywhere to see what matters to users of the Better Life Index.
Source: OECD
ETF Securities-Precious Metals Weekly-Precious Metals Decline as US Growth Prospects Improve
The silver price also declined, dropping 2.5% on the week. Palladium bucked the trend adding 1.4% for a year-to-date (YTD) gain of 14.0%. Inflation and inflation expectations remained non-existent as demonstrated by declining bond yields. On the first day of May, the US 30-year bond yield dropped to the
lowest yield since June 2013 at 3.41%, down from near 4.0% at the end of 2013. Gold GOFO rates continued to indicate a tight market with rates ending the week in negative
territory out to 6-months. Expanding economic growth with disinflation from such low levels is not usual but appeared to be the state of things at the end of last week, overshadowing
Russian aggression fears. Historically, gold has performed best in strong inflationary and deflationary environments but not so well during disinflationary periods. There is not much disinflation left from 1.1% CPI, the YOY level at the end of 2013. .
A lack of resolution of labour dispute in South Africa boosts palladium price.
Source: ETF Securities
Average daily volume of 8,7 million contracts at Eurex Group in April
In total, 177.2 million contracts were traded, thereof 122.2 million at Eurex Exchange and 54.9 million at the ISE.
In its largest segment -equity index derivatives- Eurex Exchange achieved 47, 6 million contracts (April 2013: 54.3 million). Futures on the EURO STOXX 50 Index stood at 18.6 million contracts and 17.1 million on the index options. Futures on the DAX index totalled 2.1 million contracts while the DAX options reached another 2.6 million contracts.
Source: Eurex
Francesco Franzoni, University of Lugano and the Swiss Finance Institute
Rabih Moussawi, Wharton Research Data Services, The Wharton School, University of Pennsylvania
May 5, 2014--STORY HIGHLIGHTS
Through a statement of support to be launched at the UN Climate Summit, countries and companies could work to strengthen carbon pricing policies and implementation to better manage investment risks and opportunities and also share their expertise.
The proposed statement reflects a sense of urgency and inevitably for carbon pricing. Growing momentum by countries and businesses in support of carbon pricing was evident at a global meeting of government officials, corporate leaders and investors ahead of the Summit.
May 5, 2014--ETP flows exceed $30bn in record April as economic outlook stabilizes after a volatile first quarter.
May 5, 2014--But policies to tackle the widening gap between rich and poor will only succeed if they also look beyond income and address better access to high-quality education, health care and public infrastructure, it adds.
May 5, 2014--Japanese users of the Better Life Index (BLI) worry most about safety, Australians seek work-life balance, Latin Americans strive for better education, and Danes want to be happy-user feedback shows as the Index marks its third birthday.
May 5, 2014--Strong April US unemployment report overshadows weak Q1 GDP, pushing gold price down. The gold price continued to decline last week as equities recovered despite a
mere 0.1% print for US Q1 GDP, with investors' preferring to focus on the green shoots of spring. Better than expected US unemployment data on Friday with the rate dropping to 6.3% from 6.7%, confirmed what most analysts have been expecting, a pickup in economic
growth following the extremely harsh winter.
May 2, 2014--In April, the international derivatives exchanges of Eurex Group recorded an average daily volume of 8, 7 million contracts (April 2013: 9.8 million). Of those, 6.1 million were Eurex Exchange contracts (April 2013: 7.1 million), and 2, 6 million contracts (April 2013: 2.7 million) were traded at the U.S.-based International Securities Exchange (ISE).
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