Global ETF News Older than One Year
European banks have $3 trillion of exposure to emerging markets
February 4, 2014--European bankshave loaned in excess of $3 trillion to emerging markets, more than four times US lenders and putting them at greater risk if financial market turmoil in countries such as Turkey, Brazil, India and South Africa intensifies.The risk is most acute for six European banks--BBVA, Erste Bank, HSBC, Santander, Standard Chartered, and UniCredit-- according to analysts.
But the exposure could be a headache for the industry as a whole, just as it faces a rigorous health-check by the European Central Bank, aiming to expose weak points and restore investor confidence in the wake of the 2008 financial crisis."We think EM (emerging markets) shocks are a real concern for 2014," said Matt Spick, analyst at Deutsche Bank. "When currency (volatility) combines with revenue slowdowns and rising bad debts, we see compounding threats to the exposed banks."The Deutsche Bank analysts said the six most exposed European banks -which they did not name-had more than $1.7 trillion of exposure to developing markets.In recent weeks, emerging market currencies have come under fire as China's growth slows and the US Federal Reserve winds down its stimulus program, with investors selling developing market assets in anticipation of higher US interest rates.
Source: Todays Zaman
SSGA wins in ETFs despite big gold losses in 2013
February 4, 2014--The old adage win some, lose some takes on a whole new meaning for State Street Global Advisors (SSGA), the asset management unit of the State Street Corporation, for its exchange traded fund (ETF) business in 2013.
The SPDR Gold Shares (GLD), one of SSGA’s flagship products and also the largest gold ETF in the world, declined by 28% during the year, closing at US$116.17 per ounce at yearend. GLD tracks the price of gold and global demand for gold has dropped dramatically with the spot price plummeting to US$1,206 an ounce at yearend from US$1,675 at the beginning of 2013. This is its biggest loss in 33 years.
Source: The Asset
OIC Announces January Options Volume Up 8 Percent Setting New January Monthly Record
February 3, 2014--The Options Industry Council (OIC) announced today that 389,821,135 total options contracts traded in January, up 7.96 percent compared to last January when 361,071,621 contracts were traded.
Volume for last month sets the record for the highest January volume and seventh highest monthly volume ever. Average daily volume for the month was also up 7.96 percent with 18,562,912 contracts compared to last January’s 17,193,887 contracts.
Source: Options Industry Council (OIC)
Eurasia's Development: Diversifying Economies, Naturally
February 3, 2014--STORY HIGHLIGHTS
Natural resources have been a blessing for Eurasia: poverty has been reduced by half and millions of lives have improved.
Eurasian countries are nevertheless concerned about their over-dependency on natural resources and the need to diversify exports.
A new World Bank report recommends focusing less on diversification of exports and more on investment in national assets, particularly built capital and economic institutions
view the World Bank Report-Diversified Development-Making the Most of Natural Resources in Eurasia view the infographic-Diversified Development in Eurasia
Source: World Bank
Average daily volume of 8.5 million contracts at Eurex Group in January 2014
At Eurex Exchange, the equity index derivatives segment totaled 58.4 million contracts compared with 47.9 million in January 2013. The future on the EURO STOXX 50® Index recorded 21.1 million contracts. The options on this blue chip index totaled 24.9 million contracts. DAX Index Futures recorded 2.4 million contracts while the DAX options reached another 3.4 million contracts. The Eurex KOSPI Product grew by 24 percent year-on-year and recorded 1.9 million contracts. Options on the RDX USD Index reached a new monthly all-time high with around 138,000 contracts.
Source: Eurex
ETF Securities-Precious Metals Weekly-Gold Rallies Most in 5 Months as Emerging Market Crisis Drives Demand
Gold priced in the Russian Ruble, Turkish Lira and South African Rand gained an average
of 9% in January. In Argentine peso terms the gold price increased a whopping 27% on the
month. After being viewed as a “slam dunk short” by some analysts in the latter part of last
year, gold versus equity sentiment so far in 2013 has shifted-the question is the duration
and magnitude of the change. Last week, long gold ETPs received the largest inflows since
August 2013 as the metal regained its safe haven status. Emerging markets jitters put
downward pressure on platinum and palladium prices last week, although, accelerated strike
activity in South Africa helped drive a gain in the platinum price in January. In the near-term,
with emerging markets still in flux, the gold price is likely to remain supported.
Emerging market turmoil highlights gold's appeal as a long term wealth preserver.
Source: ETF Securities
Emerging markets are badly served by ETFs
A debate is raging over whether this is the fault of the US Federal Reserve, which has effectively encouraged investors to bring their money back home...
Source: FT.com
At $64 trillion, market cap of global exchanges hits 10-year high
The level touched in 2013 is also the highest since the 2008 Lehman Brothers crisis that had pushed the global financial system into a tizzy.
Source: Hindu Buiness Line
Currency crisis at Chinese banks 'could trigger global meltdown'
Charlene Chu, a former senior analyst at Fitch in Beijing and now the head of Asian research at Autonomous Research, said the rapid expansion of foreign-currency borrowing meant a crisis in China's financial system was becoming a bigger risk for international banks.
Source: The Telegraph
Investors pull $12bn from EM stocks
Stocks in the US, UK, Europe and Japan have not posted simultaneous declines for January since 2010 when the eurozone debt crisis was at its height, prompting investors to warn the inauspicious start did not bode well for the rest of the year. US central bank tapering and a slowing Chinese economy are likely to weigh heavily on sentiment.
Source: FT.com
February 3, 2014--In January 2014, the international derivatives markets of Eurex Group recorded an average daily volume of 8.5 million contracts (January 2013: 8.6 million). Of those, 5.5 million were Eurex Exchange contracts (January 2013: 5.9 million), and 3.0 million contracts (January 2013: 2.7 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 121.6 million contracts were traded at Eurex Exchange and 62.6 million at ISE.
February 3, 2014--Gold rallied the most in five months, one of the few assets to record a positive price
performance in January. Gold ended the first month of 2014 as one of the best performing assets, gaining of 3.9% over the month. The S&P 500 declined 3.5%, the US dollar rallied
and emerging markets equities as the Fed began tapering its bond purchasing program.
Following the sharp depreciation of the Argentine peso and Turkish lira in recent weeks and
less monetary stimulus from the Fed, current account deficit emerging markets countries
may see further volatility as markets adjust to continued tapering from the US Fed.
February 2, 2014--Investment vehicles have helped to create another boom and bust cycle
Money is flowing out of the emerging markets.
February 2, 2014--The overall market capitalisation of bourses worldwide crossed $64 trillion last year, the highest level in more than a decade, on the back of improving investor sentiment.
A rise in foreign funding at China's banks poses a threat for international lenders
February 1, 2014--The growing problems in the Chinese banking system could spill over into a wider financial crisis, one of the most respected analysts of China's lenders has warned.
January 31, 2014--The four biggest global stock markets recorded sharp losses in January for the first time in four years, as weeks of turmoil in emerging markets spread to the developed world.
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