Global ETF News Older than One Year
Huge demand for physical gold has more than countered ETF sales
The WGC's Marcus Grubb has emphasised in a New York interview that gold demand, particularly in Asia, and likely reductions in supply, will have more than balanced the big sales out of the gold ETFs
July 19, 2013--Following on to a rather bearish view on the gold supply/demand picture by French bank Natixis earlier this week,
and reported on Mineweb (see Gold supply surplus could send prices plummeting--Natixis ), the World Gold Council's Managing Director of Investment, Marcus Grubb, has presented a rather different viewpoint in an interesting video interview with The Street, in New York. Here he points out that the big outflows from global gold ETFs so far this year, which he reckoned to have been some 600 tonnes, have been more than countered in the first half of the year by enormous demand for physical gold, particularly from China and India (despite the latter’s clampdown on gold imports).
Source: MineWeb
Proposed requirements on banks' disclosure of the Liquidity Coverage Ratio issued by the Basel Committee
July 19, 2013--The Basel Committee on Banking Supervision has today issued for consultation Liquidity coverage ratio disclosure standards.
Following the publication of the LCR standard in January 2013, the Basel Committee indicated its intention to develop associated disclosure standards. Public disclosure improves transparency, reduces uncertainty in the markets and strengthens market discipline. To promote the benefits of disclosure the Committee believes that it is important that banks adopt a common disclosure framework to help market participants consistently assess the liquidity risk position of banks. Moreover, to promote consistency and ease of use of disclosures related to the LCR, the Basel Committee has agreed that internationally-active banks across Basel member jurisdictions will be required to publish their LCR according to a common template.
Source: BIS
BlackRock profit rises as investors look to multi-asset products
July 18, 2013--BlackRock Inc (BLK.N), the world's largest money manager, said on Thursday that its second-quarter profit rose 32 percent, citing strong global demand from its retail and institutional clients and growth in markets.
Despite outflows from its iShares exchange-traded funds business, as investors pulled out money in the wake of expected changes to the Federal Reserve's stimulus program, BlackRock generated $11.9 billion in long-dated net new business for the quarter.
Source: Reuters
ESMA finalises supervisory co-operation agreements for alternative investment
July 18, 2013--The European Securities and Markets Authority (ESMA) has approved seven co-operation arrangements between EU securities regulators and their global counterparts with responsibility for the supervision of alternative investment funds, including hedge funds, private equity and real estate funds.
ESMA’s Board of Supervisors, at its July meeting, approved Memoranda of Understanding (MoUs) with authorities from the Bahamas, Japan, Malaysia, Mexico and the United States, including the Commodity Futures Trading Commission (CFTC).
Source: ESMA
Market Reacted Negatively to Broader Global Concerns
EM's overall economic conditions were further exacerbated by continuing concern.
July 18, 2013--China
Macro numbers came in weaker than expected.
The weak domestic picture was further exacerbated by continuing concern over QE tapering in the U.S., which had a negative impact on global markets.
The Chinese market corrected sharply in June, as macro numbers came in weaker than expected and increasing interbank interest rates raised concerns about liquidity issues in the financial system.
On the economic front, manufacturing remained in contraction territory for a second consecutive month. Export growth also declined to its lowest level in ten months. And fixed asset investment decelerated for a third consecutive month.
India
Domestic economy maintains weak.
Though the Indian market fell 2% in June, the country outperformed much of the region for the second consecutive month.
Stocks were primarily held back by the significant decline in the value of the rupee against the U.S. dollar (8% depreciation over the past 12 months), which was further fueled by the Fed’s QE tapering announcement.
On a positive note, inflation continues to ease. In May, the Wholesale Price Index grew 4.7% year-over-year. However, despite falling inflation, the country's high trade deficit and depreciating currency left the central bank little room to further decrease interest rates.
ASEAN
Malaysia continued outperforming the rest of ASEAN countries.
The ASEAN equities underperformed in June as the weak foreign exchange market led to further deteriorating investor sentiment. Among the underperformers were the Philippines, Indonesia and Thailand, all of which saw their currencies depreciate, while Malaysia again outperformed. In June, the Indonesia government increased the price of fuel by 44%, the first such increase since 2008, to help address the country’s financial difficulties. Inflation rose to 5.90% YoY and led the central bank to raise the benchmark interest rate by 25 basis points to 6% at its June meeting.
Latin America-Events in Brazil cast shadow on the entire Latin America region.
Brazilian equities declined sharply in June. The market reacted negatively to domestic social unrest, further cuts to output and earnings forecasts, as well as broader global concerns. Brazilian economic activity was badly affected by a series of organized protests, with thousands of voters demonstrating against transportation fare hikes, misuse of taxpayer money and widespread corruption endemic within the political class.
EMEA-Middle East Africa and Eastern Europe outperformed EM overall.
Russian equities fell in June, in line with the EMEA and emerging countries overall. Like much of the global market, Russia sold off due to Fed’s QE concern, as well as the sudden spike in China’s interbank rates. Meanwhile, ruble depreciation further detracted from performance in U.S dollar terms.
The Middle East Africa region outperformed the entire EMEA region. After lagging for much of the year, South Africa outperformed, while Egypt underperformed due to rising political unrest in the country.
Source: Mirae Asset Financial Group
EU wants financial services included in US trade deal
July 18, 2013--The European Union wants to include financial services in negotiations on the world's largest free-trade accord with the United States despite US opposition, a top EU official said Thursday.
EU Financial Markets Commissioner Michel Barnier said that on a visit earlier this week to Washington, he had called for the inclusion of "all financial services, not only access to financial markets but also regulatory aspects" in the talks.
Barnier met US Treasury Secretary Jack Lew who was quoted by Le Figaro daily on Tuesday as saying that the issue should be left out of the negotiations which officially began earlier this month.
Source: EUbusiness
Regulators give markets leeway on financial benchmarks
July 17, 2013--Global regulators will give markets some leeway in compiling financial benchmarks, stopping short of U.S. calls for more radical action to stamp out price-rigging.
The guidance from the International Organisation of Securities Commissions (IOSCO) on Wednesday, which will cover all benchmarks from interest rates to oil and gold, is the first attempt to forge a global approach and avoid conflicting national rules.
Source: Reuters
IMF Working paper-Systemic Risk Monitoring ("SysMo") Toolkit-A User Guide
July 17, 2013--Summary: There has recently been a proliferation of new quantitative tools as part of various initiatives to improve the monitoring of systemic risk. The "SysMo" project takes stock of the current toolkit used at the IMF for this purpose.
It offers detailed and practical guidance on the use of current systemic risk monitoring tools on the basis of six key questions policymakers are likely to ask. It provides "how-to" guidance to select and interpret monitoring tools; a continuously updated inventory of key categories of tools ("Tools Binder"); and suggestions on how to operationalize systemic risk monitoring, including through a systemic risk "Dashboard." In doing so, the project cuts across various country-specific circumstances and makes a preliminary assessment of the adequacy and limitations of the current toolkit.
view the IMF Working paper-Systemic Risk Monitoring ("SysMo") Toolkit-A User Guide
Source: IMF
IMF Working paper-Evaluating the Net Benefits of Macroprudential Policy: A Cookbook
July 17, 2013--Summary: The paper proposes a simple, new, analytical framework for assessing the cost and benefits of macroprudential policies. It proposes a measure of net benefits in terms of parameters that can be estimated: the probability of crisis, the loss in output given crisis, policy effectiveness in bringing down both the probability and damage during crisis, and the output-cost of a policy decision.
It discusses three types of policy leakages and identifies instruments that could best minimize the leakages. Some rules of thumb for policymakers are provided.
view the IMF Working paper-Evaluating the Net Benefits of Macroprudential Policy: A Cookbook
Source: IMF
FSB Releases Consultative Document on Principles for an Effective Risk Appetite Framework
July 17, 2013--The Financial Stability Board (FSB) is today launching a public consultation on its draft Principles for an Effective Risk Appetite Framework.
The Principles will enhance supervisory oversight of firms, in particular of systemically important financial institutions (SIFIs), by establishing minimum expectations for the key elements contained in an effective risk appetite framework, such as: an actionable risk appetite statement; quantitative risk limits; and clearly defined roles and responsibilities of the board of directors, senior management and business lines. The Principles also aim to establish a common nomenclature for terms used in the risk appetite framework, which will help to facilitate a common understanding between supervisors and firms and to narrow any gaps between supervisory expectations and firms’ practices.
view the Principles for An Effective Risk Appetite Framework-Consultative Document
Source: Financial Stability Board (FSB)
