Global ETF News Older than One Year
Mirae Asset -EM to See the End of US QE
Global markets were volatile in August and suffered from renewed selling.
September 16, 2013--China
Macro indicators were better than expected.
The Chinese market was very volatile in August, but managed to sustain its upward trend.
While the Chinese market,outperformed emerging markets overall, China still posted net outflows from global investors.
Most sectors recorded positive returns, led by materials. On the other hand, underperformers included utilities and health care.
India's economy sees a slowing growth.
The MSCI India Index fell sharply in August. Since talk of QE tapering in the US began, chronic problems in the Indian macro economy, including the depreciating rupee, widening current account and fiscal deficits, and rising inflation, have led to increased concern.
The Indian rupee has been among the worst performing currencies of late, depreciating nearly 20% in the last three months; however, losses were pared toward the end of August as the RBI announced a separate foreign exchange window for state-owned oil companies, its latest measure to reduce volatility in the currency market.
ASEAN
Philippines remain the most favorable.
Indonesia's economy continues to suffer from a widening current account deficit and depreciating currency. In the second quarter, the current account deficit expanded to 4.4% of GDP, the highest level since the Asian crisis in 1997.
In Thailand, GDP growth declined to 2.8% year-over-year in the second quarter on the back of flat export growth, slowing consumer spending, and waning government stimulus. Meanwhile, the consumer confidence index declined to 80.3 in July, indicating that consumers are worried about political uncertainty.
Brazil
Brazil's notable growth led to revise its 2013 output upward.
In August, while the local Bovespa index rose 3.7% in local currency terms, the MSCI Brazil Index fell 2.1% in US currency terms as the Brazilian real depreciated sharply against the US dollar.
Profit-taking in anticipation of the US QE tapering has resulted in significant pressure on emerging market currencies, including the real, with the unwinding of cross-border carry trades playing a significant role.
Russia
Russia outperformed EM overall.
The Russian market outperformed emerging markets overall, due to spiking oil prices caused by rising tensions in the Middle East. Additionally, as Russia remains at a nearly record dis-count to emerging market equities, investors sold off other markets trading at more expensive multiples.
Eastern Europe overall performed in line with emerging markets; however, performance in the region varied. Poland and the Czech Republic posted positive performance as greater optimism for a European economic recovery lifted both markets.
Source: Mirae Asset Financial Group
ETF Securities Precious Metals Weekly-Palladium Holds Up as Investors Focus on Recovering Industrial Demand
September 16, 2013--Gold under pressure as Syria military attack averted and investors focus
on possible Fed tapering. Precious metals declined last week as concerns about an imminent attack on Syria by the US abated and investors continued to focus on the possible announcement of a reduction in Fed bond buying this week.
Palladium was the only precious metal to hold up, as improving global economic conditions and continued strong auto sales lend support. In our view, once the market has put FOMC tapering clarification in the rear view mirror, the focus will likely focus on other issues. Some of these issues include the need to raise the US debt ceiling in the next month or so or face government shut-down, continued upheaval in the Middle East and the Fed's need to keep bond yield increases in check given its large debt servicing burden. All of these factors should be gold price supportive. On top of these factors, China and central bank physical gold demand remains robust and gold jewellery recycling has dropped sharply, tightening the physical supply-demand balance (as reflected in low to negative gold forward rates). These factors should help to keep a floor on the gold price. And any sign of slower growth in the US or of Fed dovishness in the coming months has the potential to push the gold price higher. A key potential beneficiary of a stable gold price and rising industrial growth is silver.
Source: ETF Securities
IMF Policy paper-Key Aspects of Macroprudential Policy
September 16, 2013--The IMF Policy paper-Key Aspects of Macroprudential Policy has been released.
Summary: The crisis has underscored the costs of systemic instability at both the national and the global levels and highlighted the need for dedicated macroprudential policies to achieve financial stability.
Building on recent advances, this paper provides a framework to inform the IMF's country-specific advice on macroprudential policy. It recognizes that developing macroprudential policy is a work in progress, and addresses key issues to help ensure its effectiveness.
view the IMF Policy paper-Key Aspects of Macroprudential Policy
Source: IMF
IMF Research Bulletin-September 2013
September 16, 2013--The IMF Research Bulletin-September 2013 is now available.
view the IMF Research Bulletin-September 2013
Source: IMF
When market movers are the index makers
Investors have outsourced much power to the index providers
September 15, 2013--Who has the power to move markets? Often some unlikely candidates.
As everyone learnt during the global financial crisis, rating agencies had been given too much power.
This was the side-effect of regulations that placed limits on the bonds that banks or fund managers could hold, based on their ratings. The result was to outsource due diligence to the agencies. This put far more weight on the opinion of one or two analysts than they were ever designed to bear....
Source: FT.com
BIS September 2013 Quarterly Review: Markets precipitate tightening
September 15, 2013--Higher yields in advanced economies generated serious tremors in emerging markets.
Cross-border claims of BIS reporting banks were broadly stable in the first quarter of 2013, Banks redirected lending from the advanced economies to emerging markets, especially to China, Brazil and Russia.
Japanese banks returned as the world's largest providers of cross-border credit, a position they had lost in the aftermath of the crisis in the 1990s.
Corporations from emerging markets have overtaken firms from the advanced economies as the largest group of issuers of corporate debt securities in offshore financial centres.
Benjamin Cohen (BIS) finds that large banks raised their capital ratios mainly by increasing retained earnings rather than by reducing their assets or loan books.
view the BIS Quarterly Review, September 2013
Source: BIS
EPFR Global News Release-Equity Fund flows following key indexes higher as fears about Syrian conflict recede
September 13, 2013--With fears of an imminent US strike on Syria receding and positive GDP numbers coming in from all corners of the globe, flows into EPFR Global-tracked Equity Funds rebounded during the second week of September to their highest level since mid-July.
Commitments to US and Emerging Markets Equity Funds hit nine and 30 week highs respectively, Europe Equity Funds posted their second biggest inflow year-to-date and flows into Japan Equity Funds hit levels last seen since the third week of May.
Visit www.epfr.com for more info
Source: EPFR
Concerns Over Shadow Banking, Optimism for Emerging Markets
Global growth is recovering, but still weak.
While GDP growth of developing countries is slowing, it is still much faster than the GDP growth of developed countries.
Chinese economy is entering a period of slower growth.
September 13, 2013--Emerging markets will still lead global economic growth, said Min Zhu, Deputy Managing Director of the International Monetary Fund (IMF), but there will continue to be challenges.
As the world pulls itself out of the financial crisis, uncertainty and volatility remain the norm for the global economy.
Panellists in a debate on the global economic outlook discussed the Chinese shadow banking sector, referring to the system of non-bank intermediaries that provide services similar to traditional financial institutions, and whose size and health has concerned some investors.
Source: WEF (World Economic Forum)
Trade and Development Report 2013: Adjusting to the Changing Dynamics of the World Economy
September 12, 2013--New UNCTAD report argues that the world economy is experiencing a structural shift, and that countries must introduce fundamental changes in their growth strategies in order to adjust to it.
In particular, developing and transition economies that have been overly dependent on exports should give a greater role to domestic and regional demand.
The Trade and Development Report 2013 notes that the current global economic and financial crisis reflects a structural shift of the world economy, and that adjusting to this structural shift requires fundamental changes to the prevailing growth strategies.
view the UNCTAD Trade And Development Report, 2013
Source: UNCTAD
WEF New Report: Bringing Impact Investing From the Margins to the Mainstream
September 12, 2013--World Economic Forum report highlights the potential of impact investing to generate market returns while addressing key social and environmental challenges
79% of impact investors are already targeting market rates of return; to reach a 2020 market projection of more than US$ 500 billion, the impact investment sector needs to grow significantly
The report engaged 150 mainstream investors, business executives and policy-makers, advancing the Forum's impact investment agenda Download the report here.
The World Economic Forum, in collaboration with Deloitte Touche Tohmatsu, today launched From the Margins to the Mainstream: Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors. The report provides a market assessment and recommendations for how mainstream investors can more actively engage in impact investing.
Impact investing- an investment approach intentionally seeking to create both financial return and positive social impact that is actively measured-has been hailed as an emerging investment approach with the potential to reconcile key shortcomings in traditional financial markets.
Source: WEF (World Economic Forum)
