Global ETF News Older than One Year
ESMA promotes global supervisory co-operation on alternative funds
May 30, 2013--The European Securities and Markets Authority (ESMA) has approved co-operation arrangements between EU securities regulators, with responsibility for the supervision of alternative investment funds (AIFs), including hedge funds, private equity and real estate funds, and 34 of their global counterparts.
ESMA has negotiated the agreements on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway.
Source: ESMA
IMF Working paper-Inclusive Growth: Measurement and Determinants
May 30, 2013--Summary: We estimate a unified measure of inclusive growth for emerging markets by integrating their economic growth performance and income distribution outcomes, using data over three decades.
Country distributions are calibrated by combining PPP GDP per capita and income distribution from survey data. We apply the microeconomic concept of a social mobility function at the macroeconomic level to measure inclusive growth that is closer to the absolute definition of pro-poor growth. This dynamic measure permits us to focus on inequality as well as distinguish between countries where per capita income growth was the same for the top and the bottom of the income pyramid, by accounting for the pace of growth. Our results indicate that macroeconomic stability, human capital, and structural changes are foundations for achieving inclusive growth. The role of globalization could also be positive with foreign direct investment and trade openess fostering greater inclusiveness, while financial deepening and technological change have no discernible effect.
view the IMF Working paper-Inclusive Growth: Measurement and Determinants
Source: IMF
Global economy advancing but pace of recovery varies, says OECD Economic Outlook
May 29, 2013--The global economy is moving forward, but divergence between countries and regions reflects the uneven progress made toward recovery from the economic crisis, according to the OECD's latest Economic Outlook.
Historically high unemployment remains the most serious challenge facing governments.
World real gross domestic product (GDP) is projected to increase by 3.1% this year and by 4% in 2014. Across OECD countries, GDP is projected to rise by 1.2% this year and by 2.3% in 2014, while growth in non-OECD countries will rise by 5.5% this year and 6.2% in 2014.
In the US, activity is projected to rise by 1.9% this year and by a further 2.8% in 2014. GDP in the euro area is expected to decline by 0.6% this year and then rebound by 1.1% in 2014, while in Japan GDP is expected to grow by 1.6% in 2013 and 1.4% in 2014.
view the OECD Economic Outlook-Volume 2013 Issue 1-Preliminary version
Source: OECD
World Federation of Exchanges Reports on High Frequency Trading (HFT)
May 29, 2013--The World Federation of Exchanges (WFE) today released a review on High Frequency Trading (HFT), describing it as a technology that financial firms are embracing around the world. Besides, the study notes the many initiatives and risk management practices that exchanges have adopted to enhance the safety, stability and integrity of the markets.
The review was directed by the WFE Board of Directors. “Exchanges have enacted many safeguards to ensure orderly markets. The WFE is committed to coordinating information and sharing principles among market operators on surveillance and risk management practices which may also be applied to HFT.” said Hüseyin Erkan, Chief Executive Officer of WFE.
Among the key points in the review
All around the world and across all markets, economic pressures and competition are pushing businesses to find the most effective ways to invest and hedge risks. Today, strategies using algorithmic trading and HFT play a central role on financial exchanges, alternative markets, and some banks’ internalized (over-the-counter) dealings.
Exchanges have adapted to the speed and automation of today’s markets by deploying sophisticated risk mitigation and surveillance technology, and are continuing to innovate in these areas to further enhance the safety, stability and integrity of the markets.
Today’s exchange markets are unquestionably faster, more transparent and more efficient than the market structures that preceded them. The substantial majority of the empirical research has concluded that HFT has had measurable beneficial impacts on a variety of core market quality metrics[1], including tighter spreads, increased liquidity, more efficient price formation, reduced transaction costs for market participants and lower market volatility in most circumstances.
view the Understanding High Frequency Trading (HFT) paper
Source: World Federation of Exchanges (WFE)
Trading precious metals using ETP data returns as much as 30%-JPMorgan
The bank says trading precious metals using ETPs would have returned an annual profit of about 30% since 2007.
May 29, 2013--Trading precious metals against each other based on purchases and sales through exchange-traded products would have returned an annual profit of about 30 percent since 2007, according to JPMorgan Chase & Co.
The bank rates investment in the products on a weekly basis, buying the metal with the highest current holding relative to the past six months and selling the one with the lowest relative holding. The strategy, which was first calculated this month, would have been successful about 56 percent of the time since 2007, according to JPMorgan.
Source: MineWeb.com
Foreign Investors Under Stress: Evidence from India
Summary: Emerging market policy makers have been concerned about the financial stability implications of financial globalization. These concerns are focused on behavior under stressed conditions.
Do tail events in the home country trigger off extreme responses by foreign investors -are foreign investors `fair weather friends'? In this, is there asymmetry between the response of foreign investors to very good versus very bad days? Do foreign investors have a major impact on domestic markets through large inflows or outflows -are they 'big fish in a small pond'? Do extreme events in world markets induce extreme behavior by foreign investors, thus making them vectors of crisis transmission? We propose a modified event study methodology focused on tail events, which yields evidence on these questions. The results, for India, do not suggest that financial globalization has induced instability on the equity market.
view the IMF working paper-Foreign Investors Under Stress: Evidence from India
Source: IMF
First Set of Global Data on Energy Access, Renewable Energy and Energy Efficiency Released
Global Tracking Framework Report identifies countries with most potential to make "high-impact" progress on sustainable energy and specifies policy measures to scale up action
May 28, 2013-- About 1.2 billion people-almost the population of India- don't have access to electricity, 2.8 billion have to rely on wood or other biomass to cook and heat their homes,
renewable energy accounts for 18 percent of the global energy mix, and the largest energy savings and greatest expansion of renewables happened in China.
These are just some of the findings of a unique new report by a multi-agency team led by the World Bank.
view the Global tracking framework (Vol. 3 of 3):Main report
Source: World Bank
IIFM releases 3rd edition of Sukuk report 'A Comprehensive Study of the Global Sukuk Market'
May 28, 2013--The International Islamic Financial Market (IIFM) today released its much awaited IIFM Sukuk Report (3rd Edition) which consists of A Comprehensive Study of the Global Sukuk Market. The research report sheds light on the growth and development of international and domestic Sukuk issuances from 2001-Jan 2013
Mr. Ijlal Ahmed Alvi, Chief Executive Officer of IIFM said, “The last two years were record years of Sukuk issuances which reached BHD35bio and BHD52bio in 2011 and 2012 respectively. This year has also started on a positive note and as per the report over BHD4bio worth of Sukuk was issued in January 2013 and the growth trend is expected to continue in coming years”.
The report also highlights the different Sukuk structures used by international Sukuk issuers as well as Sukuk structures used at domestic level by various jurisdictions active in issuing Sukuk.
Source: International Islamic Financial Market (IIFM)
Automated Trader: "Eurex Exchange releases results of proprietary HFT research"
May 27, 2013--Eurex Exchange is the first exchange in Europe to share part of its proprietary quantitative research on high-frequency trading (HFT) with the public. Key findings of this research include: (a) HFT participants played an important and beneficial role during one of the most extreme market situations Eurex Exchange has seen in recent years,
(b) HFT participants play a unique and indispensable role in the recovery of market quality right after large trades, and (c) Eurex Exchange did not find evidence of abusive HFT activity. In contrary, in the article in Automated Trader, Vassilis Vergotis, Dr. Randolf Roth and Bernard Hosman explain why, according to the study, high-frequency trading activity is an important positive contributor to overall market quality and stability.
Source: Eurex/Automated Trader
ETF Securities-Precious Metals Weekly: Palladium Rallies on Supply Concerns, Gold Retraces 1976 Patterns
May 27, 2013--Precious metal prices saw divergent trends last week, with two of the more
industrially-oriented metals-palladium and silver-seeing gains, while gold was
whip-sawed by Fed comments and US growth data.
Looking forward, we continue to expect the white metals to outperform on the back of continued improvements in global growth data and supply side constraints on palladium and platinum. The gold price in the near term will likely remain under pressure on perceptions the Fed's monetary stance will soon become less accommodative and the related strength of the US dollar.
Medium-term, however, strong physical buying by the public and central banks and a reversal of highly stretched short positions in the futures market make a strong case for a gold price rally later this year. Gold price whip-sawed by perceptions of Fed policy. With the Fed’s policy now tightly tied to highly unpredictable economic data, gold price volatility has increased and technical short-term trading has dominated the futures market.
Source: ETF Securities
