Global ETF News Older than One Year
Word 'reform' works its magic for China Equity Funds going into December
December 3, 2013--China Equity Funds came into 2013 on the back of their biggest quarterly inflow in over a decade and looked to have broken decisively with their BRIC (Brazil, Russia, India and China) peers.
But questions about China's export story, the trajectory of its property markets and the health of its financial sector saw over $11 billion pulled out of China Equity funds between March and September. Lately, however, hopes that China's new leadership is committed to reforming the world's second largest economy have translated into four straight weekly inflows with the latest hitting a 45 week high.
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Source: EPFR
European Union: Publication of Financial Sector Assessment Program Documentation
Detailed Assessment of Observance of the CPSS-IOSCO Principles for Financial Market Infrastructures
December
December 3, 2013--Summary: EXECUTIVE SUMMARY Euroclear Bank is a securities settlement system that contributes to the safety and efficiency of global markets for government bonds and other international securities but also concentrates systemic risk. It is one of the largest securities settlement systems worldwide with a daily average settlement value of around 1.1 trillion euro,providing settlement services for securities from 44 markets in 53 currencies. In particular,Euroclear Bank services the largest,global banks with tri-party repo arrangements to secure their interbank financing.
As a default of Euroclear Bank has the potential to highly disrupt global financial markets adequate risk management is necessary. Operational risk is significant but appears to be well-controlled through appropriate risk measures such as contingency plans and back-up facilities allowing for timely completion of settlement processes. A delivery-versus-payment settlement model is in place that mitigates the risk of a participant losing the value of the transaction. Under its banking license Euroclear Bank offers banking and credit facilities that are linked to its custody and settlement functions. Its credit exposures are managed by a combination of credit limits and-in principle-full collateralization. Euroclear discloses information to allow its participants to accurately identify the risks and costs associated with the use of the system. Euroclear Bank’s risk framework is generally sound. Euroclear Bank should become operationally ready to fully implement plans for recovery and the orderly winding-down of operations. In anticipation of the emerging international regulatory standards and frameworks on recovery and resolution of FMIs,Euroclear Bank has developed recovery plans and plans for the orderly winding down of its operations. It should now,in particular,take measures to be operationally ready for their full implementation. Euroclear Bank and the NBB should accord a high priority to addressing this issue as the disorderly failure of Euroclear Bank would likely lead to systemic disruptions to the institutions and the markets it supports,linked payment systems,CSDs and CCPs,and to the financial system more broadly. Important risk measures have been taken to reduce credit risk,but further improvements are needed to comply with the international standards. Euroclear Bank has recently improved the quality of its collateral and liquidity management frameworks. Credit risks are apparent in the current practices for asset servicing. EB should address this credit risk for its normal settlement activities and should also adopt measures to mitigate similar credit risks for settlements done via the bridge with Clearstream Banking Luxembourg (CBL) which necessitates a review of the link agreement with CBL. Also,EB has no tools in place to identify,monitor and measure risks from tiered participation,which is a requirement of the new international standards. Another necessary improvement relates to the frequency of the reconciliation of positions. Eurobonds-that represent more than half of the deposited value-are reconciled on a daily basis. For other securities positions are reconciled on a weekly or monthly basis,which can be a potential source of uncertainly related to the integrity of the securities issues. EB should introduce daily reconciliations of positions for all securities.
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Source: IMF
IMF Releases Results from 2012 Coordinated Direct Investment Survey
New CDIS participants are Burkina Faso and Tanzania. The IMF will also post revised and more comprehensive data in June 2014.
In 2012, 64 percent of the total inward direct investment (US$26 trillion) was concentrated in the 10 economies with the largest inward direct investment, and 78 percent of the total outward direct investment (US$26.6 trillion) originated from the 10 economies with the largest outward direct investment. For the 86 economies that reported data in both 2011 and 2012, inward direct investment positions increased from US$24.1 trillion in 2011 to US$26.0 trillion in 2012, up 7.9 percent.
Source: IMF
Corruption Perceptions Index 2013: Now is the time for action
The index, the leading global indicator of public sector corruption, scores countries on a scale from 0 (perceived to be highly corrupt) to 100 (perceived to be very clean). The results of the 2013 index serve as a warning that more must be done to enable people to live their lives free from the damaging effects of corruption. view moreview the Corruption Perceptions Index 2013 report view the infographic-visualising the Corruption Perceptions Index 2013
Source: Transparency International
Average daily volume of 7.5 million contracts at Eurex Group in November
At Eurex Exchange, the equity index derivatives segment totaled 43.0 million contracts (November 2012: 49.3 million). The future on the EURO STOXX 50 Index recorded 16.3 million contracts. The options on this blue chip index totaled 15.9 million contracts. Futures on the DAX index recorded 1.9 million contracts while the DAX options reached another 3.2 million contracts.
Source: Eurex
Deutsche Boerse Group and Bank of China announce Strategic Cooperation
Under the memorandum of understanding the two parties will enter into a preferred partnership to fully explore potential cooperation's across the value chain in their respective geographies. As part of an on-going strategic dialogue, the intention of the parties is to provide high quality products and services in order to further develop cross border business between China and the European Union.
Source: Deutsche Börse
ESMA identifies deficiencies in CRAs sovereign ratings processes
The Report follows an investigation carried out by ESMA into the sovereign rating processes at the three CRAs, between February and October 2013. The investigation was prompted by concerns about potential conflicts of interests, the impact of sovereign ratings on other types of ratings, CRAs' capacity to cope with the number of rating actions during a period of high volatility, the use of bulk rating actions, and issues around the confidentiality and timing of rating actions.
Source: ESMA
China's yuan surpasses euro as 2nd most-used currency in trade finance: SWIFT
The market share of yuan usage in trade finance, or Letters of Credit and Collection, grew to 8.66 percent in October 2013. That improved from 1.89 percent in January 2012.
The yuan, also known as the renminbi, now ranks behind the U.S. dollar, which remains the leading currency with a share of 81.08 percent.
Source: Reuters
Hedge funds turn to 'long-only' investing in bid to grow
Hedge funds have made their name wagering on asset prices both rising and falling, and often increase the risk of their bets with borrowed cash. By contrast, traditional long-only managers can only bet the price of a stock or bond will go up.
Source: Reuters
IMF Working paper-Aggregate Uncertainty and the Supply of Credit
This prediction is tested with the universe of U.S. commercial banks over the period 1984-2010. Identification of credit supply is achieved by looking at the differential response of banks according to their level of capitalization. Consistent with the theoretical predictions, increases in uncertainty reduce the supply of credit, more so for banks with lower levels of capitalization. These results are weaker for large banks, and are robust to controlling for the lending and capital channels of monetary policy, to different measures of uncertainty, and to breaking the dataset in subsamples. Quantitatively, uncertainty shocks are almost as important as monetary policy ones with regards to the effects on the supply of credit. view the IMF Working paper-Aggregate Uncertainty and the Supply of Credit
Source: IMF
December 3, 2013--The International Monetary Fund (IMF) today released preliminary results from its 2012 Coordinated Direct Investment Survey (CDIS), the Fund's worldwide survey of bilateral direct investment positions.1 The survey has been conducted annually since 2009, with revised data released semiannually. The results, published as an online database, comprise preliminary direct investment positions data for end 2012 and revised data for 2009-2011. The 2012 survey includes data from 88 economies, two more than in the 2011 preliminary results.
December 3, 2013--Corruption continues to have a devastating impact on societies and individuals around the world, with more than two-thirds of countries surveyed scoring less than 50 out of 100 in the latest Corruption Perceptions Index (CPI).
December 2, 2013-- In November 2013, the international derivatives markets of Eurex Group recorded an average daily volume of 7.4 million contracts (November 2012: 7.5 million). Of those, 4.9 million were Eurex Exchange contracts (November 2012: 5.0 million), and 2.6 million contracts (November 2012: 2.5 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 103.4 million contracts were traded at Eurex Exchange and 51.2 million at ISE.
December 2, 2013--Deutsche Börse Group, a leading global market infrastructure provider headquartered in the EU with global customers and operations, and Bank of China, the most internationalized and diversified Chinese bank headquartered in Beijing with comprehensive products and powerful customer networks worldwide, today announced that they have signed a memorandum of understanding regarding a strategic cooperation.
December 2, 2013--The European Securities and Markets Authority (ESMA) has published a Report identifying a number of deficiencies in the processes for producing and issuing sovereign ratings at the three largest credit rating agencies (CRAs), Fitch Ratings, Moody's Investors Service and Standard & Poor's.
December 2, 2013--China's yuan currency overtook the euro in October, becoming the second-most used currency in trade finance, global transaction services organization SWIFT said on Tuesday.
December 2, 2013--Half of hedge funds now sell products traditionally the preserve of mainstream asset managers such as "long-only" strategies, a study shows, reflecting how conservative investors have come to dominate the industry's client base.
December 2, 2013--Summary: Recent studies show that uncertainty shocks have quantitatively important effects on the real economy. This paper examines one particular channel at work: the supply of credit. It presents a model in which a bank, even if managed by risk-neutral shareholders and subject to limited liability, can exhibit self-insurance, and thus loan supply contracts when uncertainty increases.
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