Global ETF News Older than One Year
China's Currency Unlikely to Topple US Dollar as World's Reserve Currency
China's currency, the RMB, is unlikely to internationalize in the short term
The world needs to better understand how Beijing views its global responsibilities
January 26, 2013--China's currency, the renminbi (RMB), will probably not supplant the US dollar as the world,s reserve currency, except possibly "in the very long term", said Lawrence H. Summers, Charles W. Eliot University Professor, Harvard University, and a former US Treasury Secretary, in a televised session at the World Economic Forum Annual Meeting today.
While the RMB will continue to internationalize, “the centrality of the dollar is unlikely to change in a major way,” Summers said, adding, “just as there is a basic inertia in languages of communication, there’s a basic inertia in mediums of exchange.”
Source: WEF (World Economic Forum)
The Global Economy in 2013: "Fragile and Timid Recovery"
The International Monetary Fund forecasts 3.5% GDP growth for the global economy in 2013
The economic climate is much better this year than last year, but the recovery is "fragile and timid"
A new economic policy in Japan and strength in China and Africa provide glimmers of hope
January 26, 2013--The global economy faces fewer headwinds in 2013 compared with last year and will likely grow a modest 3.5%, participants at the 43rd World Economic Annual Meeting were told in Davos, Switzerland.
But Christine Lagarde, Managing Director, International Monetary Fund (IMF), described the recovery as “fragile and timid” because the Eurozone is prone to political crisis and slow decision-making processes.
“Some good policy decisions have been made in the various corners of the world, including by central banks,” said Lagarde. “In 2013, they have to keep the momentum.” She called on Europe to operationalize the new tools policy-makers have recently devised, including Europe’s banking union. Lagarde also credited the United States with making significant progress on fiscal consolidation, an achievement that she said tended to be overlooked.
Mark J. Carney, Governor of the Bank of Canada, echoed Lagarde’s caution. “There are still tail risks out there,” he warned, refuting some claims made in Davos that these risks have been reduced or totally eliminated. While central bank action is crucial, said Carney, this needs to be reinforced at the national level on the fiscal and structural sides, “and neither of those agendas are anywhere being finished.”
Source: WEF (World Economic Forum)
Liquidity Bubble a Risk as Economy Improves
Central banks will need to remove liquidity from the system as economic conditions improve
2013 will be a transition year in which spending will increase
Productivity will replace liquidity as the primary focus for growth
January 25, 2013--Speaking today at the 43rd World Economic Forum Annual Meeting, Ray Dalio, Founder and Chief Investment Officer of Bridgewater Associates, warned against a growing liquidity bubble. "When spending picks up, it will be incumbent on the central banks to mop excessive liquidity up," he said, warning against inflation risk.
Dalio described the new norm as being a depressed economy, saying the discussion will shift from liquidity to productivity. “Productivity will be the driver,” he said. “The debt cycle will no longer be the driver; 2013 will be a transition year and the shift of cash will be a game changer.”
Dalio was speaking on a panel which included Anshu Jain, Co-Chairman of the Management Board and the Group Executive Committee, Deutsche Bank; Jin Liqun, Chairman of the Board of Supervisors, China Investment Corporation (CIC); Pierre Moscovici, Minister of Economy and Finance of France; Brian T. Moynihan, Chief Executive Officer, Bank of America; and Ignazio Visco, Governor of the Bank of Italy.
Source: WEF (World Economic Forum)
EPFR Global Fund Data News Release-EM Funds extend lead as rush to equities slowed by rocky macroeconomic terrain
January 25, 2013--Heading into the final week of January EPFR Global-tracked Equity Funds outgained Bond Funds for the seventh week running and Emerging Markets Equity Funds trumped Developed Markets Equity Funds for the seventh time in eight weeks.
But the pace of inflows ebbed again as recent European data and IMF forecasts prompted investors to take a more sober look at their assumptions for 2013. Equity Funds did attract retail money for the third consecutive week, something they last achieved in February 2011.
Overall, Equity Funds absorbed a collective $5.65 billion -- of which over 70% flowed into Emerging Markets Equity Funds – during the week ending Jan. 23 while Bond Funds took in a net $3.71 billion and Money Market Funds saw $6.78 billion redeemed. Year-to-date Equity and Bond Funds have posted inflows of $39 billion and $18.7 billion respectively versus $15.82 billion and $17.84 billion for the comparable period last year.
Visit http://www.epfr.com for more info
Source: EPFR
MSCI reshuffles index business management team
January 24, 2013--MSCI has announced a number of changes to its index business management team, with the appointment of Deborah Yang to lead the MSCI index business across Europe, the Middle East, Africa and India.
Yang joined MSCI in 2001, most recently serving as managing director and head of client coverage for MSCI Asia ex Japan, based in Hong Kong. Prior to working at MSCI, she was with Donaldson, Lufkin & Jenrette based in New York and San Francisco.
Source: Investment Europe
Global FDI recovery derails
Global foreign direct investment declined by 18 per cent in 2012-a level close to the trough reached in 2009-due mainly to macroeconomic fragility and policy uncertainty for investors.
January 24, 2013--Global foreign direct investment (FDI) inflows declined by 18 per cent in 2012, down from $1.6 trillion in 2011 to an estimated $1.3 trillion.
The strong decline of FDI flows is in stark contrast to other macroeconomic variables, including gross domestic product (GDP), trade and employment growth, which all remain in positive territory.
The FDI recovery that had started in 2010 and 2011 will now take longer than expected. FDI flows could rise moderately to $1.4 trillion in 2013 and $1.6 trillion in 2014, due to slight improvements in macroeconomic conditions and the reprofiling (e.g. releasing record cash reserves for investment) of transnational corporations (TNCs). However, significant risks to this scenario persist, including structural weaknesses in major developed economies and in the global financial system, and significant policy uncertainty in areas crucial for investor confidence. Should these risks prevail, the FDI recovery could be further delayed.
view the Global Investment Trend Monitor, No. 11
Source: UNCTAD.org
Bankers Call for Better-Not More -Regulation
Leaders of financial institutions disagree over whether the sector is still too complex and opaque
Financial institutions must take risks to fuel economic growth, but these risks must be managed
Regulation is needed, but global regulation may be a challenge in today's rapidly changing, multipolar world
January 23, 2013--Leaders of the world's largest financial institutions participating in the World Economic Forum Annual Meeting today agreed that the sector is still too complex and opaque, with the exception of James Dimon, Chairman and Chief Executive Officer, JPMorgan Chase & Co., USA.
Participants agreed on the need for regulation, but disagreed on how much is too much and whether or not global regulation is possible in today’s rapidly changing, multipolar world.
Source: World Economic Forum
World Economic Outlook Update-Gradual Upturn in Global Growth During 2013
January 23, 2013--Global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside. However, this upturn is projected to be more gradual than in the October 2012 World Economic Outlook (WEO) projections. Policy actions have lowered acute crisis risks in the euro area and the United
States.
But in the euro area, the return to recovery after a protracted contraction is delayed. While Japan has slid into recession, stimulus is expected to boost growth in the near term. At the same time, policies have supported a modest growth pickup in some emerging market economies, although others continue to struggle with weak external demand and domestic bottlenecks. If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected. However, downside risks remain significant, including renewed setbacks in the euro area and risks of excessive near-term fiscal consolidation in the United States. Policy action must urgently address these risks.
Source: IMF
WFE Publishes 2012 Global Market Highlights
Market Capitalization Growth Rate Up, Volume of Exchange-Traded Products Down
January 23, 2013--The World Federation of Exchanges' (WFE) annual survey of global markets found that while the global market capitalization increased 15.1% in 2012, the volume of all products traded on WFE member exchanges fell significantly.
According to worldwide statistics compiled by the WFE, the value of Electronic Order Book (EOB) share trading was down 22.5%, and the number of derivative contracts traded on-exchange decreased by 20%.
“We appreciate our members’ commitment to helping us compile our Annual Market Statistics, as we believe it is important to offer a true, objective picture of the current state of on-exchange trading worldwide,” said Hüseyin Erkan, CEO of the WFE. “Our 2012 Global Market Highlights offers the most comprehensive series of data covering a large range of exchanges’ activities, allowing for a more detailed approach of markets.”
According to the WFE figures, which are gathered from WFE member exchanges, the number of listed companies remained stable in 2012, while both ETFs and securities derivatives increased their listings. Specific 2012 highlights from WFE are as follows:
Equity Markets
In 2012, the WFE global market capitalization increased by 15% reaching US$ 54 trillion, getting back to its end-of 2010 level. The best performance was observed in the Americas (+17.2%) followed by Asia-Pacific (+15.4%) and Europe Africa Middle East (EAME) (+11.6%). In the Americas, the growth was primarily driven by the U.S. exchanges that increased 19%.
read more
Source: World Federation of Exchanges (WFE)
Macro Matters-EM: Economic Recovery Maintains
Investors expect rise in foreign capital inflows to benefit brokerage firms. Moreover, the upward trend was further supported by speculation government may increase investment in green energy as the nation’s capital experienced the worst air pollution in recent years over the weekend.
However, the best news came on Friday. The government reported that the economy expanded at a faster pace than expected. The world’s second largest economy expanded at 7.9% yoy and 7.8% in 4Q12 and 2012, respectively.
India-Market welcomes government’s partial deregulation of diesel price. Indian stock market gained last week with Sensex surpassing the 20,000 pt level. Along with better-than-expected earnings, announcements by the government buoyed market sentiment.
Brazil-BCB maintains the Selic rate flat at 7.25%.
The Brazilian Central Bank (BCB) maintained the Selic rate flat at 7.25% during its January Copom Meeting. The post meeting communiqué highlighted a deterioration in recent inflation risks, alongside a less intense recovery in domestic activity.
Russia-Russia outperformed within emerging markets in Dec.
The US debt ceiling debate will intensify over the coming weeks, causing a potential increase in volatility, however the VIX volatility index is currently at lows not seen since 2007, indicative of the improvement in sentiment in recent months.
Source: Mirae Asset Financial Group
January 22, 2013--Economic growth accelerated for the first time in 2 years.
Earlier last week the Chinese A share market by buoyed by news that the market regulation would increase the quota for overseas investors by 10 times.
Indian stock market gained last week with Sensex surpassing the 20,000 pt level. Along with better-than-expected earnings, announcements by the government buoyed market sentiment.
Equities posted further gains in the week ending January 17th, the MSCI Brazil climbing 30bps to sit +6.3% in the month in USD terms. The BRL denominated Ibovespa index rose 80bps and sits +4.4% in the month.
The global asset class has enjoyed a strong December-January period, buoyed by marginally positive, or simply less negative data from Europe, the US and China.
If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
