Global ETF News Older than One Year
MSCI Indices 2012 Performance Results
Global Equity Markets Rebound in 2012-Overcoming 2011 Losses
Global markets posted significant positive returns, largely in the double digits
Emerging Markets and the EMU showed strong relative performance
Small caps outpaced large and mid caps across most regions and countries
December 28, 2012--MSCI Inc., a leading provider of investment decision support tools worldwide, today published the year-to-date (YTD) 2012 performance of its MSCI Indices, revealing a vigorous rebound in global equity markets, following the global slowdown experienced in 2011.
Major financial markets worldwide showed healthy double digit returns across all size segments for 2012. The MSCI ACWI Investable Market Index (IMI), comprised of close to 9,000 large, mid and small cap securities across 24 Developed and 21 Emerging Markets countries, for example, delivered a 2012 YTD return of 13.45% versus a loss of -9.87% in 2011.
Source: MSCI
EPFR Global Fund Data News Release-Banner year for bond funds ends with a whimper
December 28, 2012--With the so-called fiscal cliff ahead and a year that saw many of the world's equity markets post double digit gains behind, investors hunkered down during the final days of 2012 with only Emerging Markets Equity Funds seeing significant amounts of new money.
EPFR Global-tracked Bond Funds, which averaged net inflows of $9 billion a week on their way to a new full year inflow record, took in only $419 million during the week ending December 26. Equity Funds absorbed $3.6 billion as retail investors again refused to chase gains, especially in developed markets.
Provisional full year totals, based on combined monthly, weekly and daily data, show a slew of bond fund groups setting new inflow records. They include US, High Yield, Emerging Markets, Mortgage Backed, Canada and Australia Bond Funds. Outside the fixed income universe, Mexico, Colombia and Philippines Equity, Long/Short, Derivatives, Real Estate and Healthcare/Biotechnology Sector and Dividend Equity Funds also posted record inflows while Canada, UK, France, Germany and Taiwan Equity Funds set new outflow marks.
As a quarter that saw fresh rounds of monetary stimulus from all of the world’s major central banks wound down, flows into several of the year’s hotter fund groups -- among them High Yield and Municipal Bond Funds -- were stumbling while commitments to fund groups associated with Developed Europe, emerging markets, real estate and China gained momentum.
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Source: EPFR
Fourth FAQs on Basel III's counterparty credit risk and exposures to central counterparties
December 28, 2012--The Basel Committee on Banking Supervision today issued frequently asked questions (FAQs) on Basel III's counterparty credit risk rules and the interim framework for bank exposures to central counterparties (CCPs).
To promote consistent global implementation of those requirements, the Committee has agreed to periodically review frequently asked questions and publish answers along with any technical elaboration of the rules text and interpretative guidance that may be necessary.
view the Basel III counterparty credit risk and exposures to central counterparties-FAQ's
Source: BIS
WFE Urges International Regulatory Bodies to Modify Capital Standards for Exchange Traded Derivatives in Support of G20 Reforms
November 27, 2012--The World Federation of Exchanges (WFE), representing 59 publicly regulated stock, futures, and options exchanges and associated clearinghouses, today called on international regulatory bodies to modify capital standards to appropriately reflect the liquidity and efficiency of exchange traded derivative (ETD) markets.
In a letter to the Financial Stability Board and other policy organizations, WFE encouraged global standard setting bodies to demonstrate continued support for the G20 commitments to bring greater transparency and central clearing to derivative markets by ensuring that the costs of ETD markets are not unnecessarily increased.
The Basel Committee on Banking Supervision (BCBS) has issued an Interim Capital Standards proposal that “seeks to apply a blanket 5-day margin period or risk standard to highly liquid and transparent ETDs,” the WFE says in a letter from Hüseyin Erkan, Chief Executive Officer, and Jorge Alegria, Chairman of The International Options Markets Association (IOMA) which is the WFE’s global association of options and futures exchange leaders.
If adopted by the BCBS and implemented by national bank regulators, the 5-day capital standard would conflict with current margin standards for highly liquid ETDs, resulting in increasing costs for users of exchange-traded markets. “This may force exchange users (e.g. manufacturers, food producers, employee pension funds, and investors) to either discontinue critical hedging practices or move activity to the less transparent OTC derivative markets. Such outcomes would clearly undermine the G20 OTC market reform commitments,” the WFE letter states.
Source: World Federation of Exchanges (WFE)
2013 Global Manufacturing Competitiveness Index: CEOs see emerging nations surge as U.S., Germany and Japan face changing game
Talent continues to be key driver of manufacturing competitiveness
November 16, 2012--Over the next five years, 20th-century manufacturing stalwarts like the United States, Germany and Japan will be challenged to maintain their competitive edge to emerging nations such as China, India and Brazil, according to the 2013 Global Manufacturing Competitiveness Index report from Deloitte Touche Tohmatsu Limited's (DTTL) Global Manufacturing Industry group and the U.S. Council on Competitiveness.
The report confirms that the landscape for competitive manufacturing is in the midst of a massive power shift – based on an in-depth analysis of survey responses from more than 550 chief executive officers (CEOs) and senior leaders at manufacturing companies around the world.
view the 2013 Global Manufacturing Competitiveness Index
Source: Deloitte Touche
Macro Matters-Emerging Markets Also Waiting for the Fiscal Cliff Resolution
December 24, 2012--China-Government aims to boost domestic consumption.
Both Hong Kong and China markets gained due to expectations that China will introduce more supportive measures to boost domestic consumption after an annual top-level economic policy-setting meeting over the previous weekend.
At the meeting, economic agenda for 2013were set out.
In a statement issued after the meeting, Beijing's leadership said it wanted to speed up integration of rural migrants into cities as a way to boost domestic consumption, according to reports by China's official Xinhua News Agency.
India-A rate cut likely to be as early as January.
India market retreated as index dropped on Friday as uncertainty surrounding talks to resolve the fiscal cliff in the U.S. led traders to consolidate positions in blue chips.
Market was buoyed by sustained foreign fund inflows and hopes of passing the banking amendment bill by the parliament at early-week.
Brazil-Economic activity posted another good print.
The Economic Activity Index (IBC-Br) posted another positive print in October (0.4% MoM) on a seasonally adjusted basis. This confirmed the positive trend on Brazilian economic activity observed since the second quarter.
Another important point was that not just the Brazilian internal demand or sectors directly influenced by the stimulus measures which are posting a good growth. Both industrial production and the broad retail sales posted increases in October, 0.9% MoM and 8.0% MoM, respectively.
Brazilian economic indicators are doing well with the real income still in a high level and growing as well as the unemployment rate continues its downward trend what will keep supporting the internal demand.
Russia-Russia underperformed emerging markets.
Global focus remains on Capitol Hill and the ability of US politicians to arrive at a bipartisan deal to avert the so-called Fiscal Cliff as tax reductions and spending programs expire in January. Until clarity is achieved, investors remain wary of allocating new capital ahead of what is likely a binary outcome – a positive scenario whereby a deal is reached and the US economy sustains its gradual recovery, or a major negative impact on growth is delivered, pushing the US into a brief but sharp recession.
In November, emerging markets outperformed developed markets largely due to positive momentum from China. Within emerging markets, Russia underperformed mainly due to worsening macroeconomic data.
Source: Mirae Asset Financial Group
EPFR Global News Release-Municipal Bond Fund flows take a tumble as talks to avert fiscal cliff rumble on
December 21, 2012--Amidst all the talk of the US economy falling off fiscal cliffs, flows into Municipal Bond Funds actually did so.
Those tracked by EPFR Global saw redemptions hit their highest level in 23 months during the third week of December, snapping a 68 week inflow streak along the way, as speculation that municipal debt’s tax exempt status could be a casualty of any agreement to head off the mixture of spending cuts and tax hikes due to kick in early next year spooked investors.
Municipal Bond Funds were not the only fund group to post striking flow numbers as investors responding to shifting perceptions of how the fiscal cliff negotiations will play out, took profits and positioned themselves for the year-end holiday season.
Redemptions from Real Estate Sector, Europe Bond and US Bond Funds were the highest in 24, 27 and 72 weeks respectively while France Equity Funds recorded their biggest outflow since 2Q08. Canada, Korea, Mexico and Peru Equity Funds, meanwhile, posted their biggest weekly inflows in over a year.
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Source: EPFR
IOSCO Publishes Two Reports Advancing its Work on Credit Rating Agencies
December 21, 2012--The International Organization of Securities Commissions (IOSCO) published today two reports on Credit Rating Agencies: the final report on Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest and a consultation report on Supervisory Colleges for Credit Rating Agencies.
Both reports form part of IOSCO´s effort to improve the integrity of credit rating agencies (CRAs), as part of the global effort to enhance investor protection and the fairness, efficiency and transparency of securities markets. In a communiqué last month, the G20 Finance Ministers and Central Bank Governors encouraged further work by IOSCO “to enhance transparency of and competition among credit rating agencies.”
Despite concerns about their performance during the 2008 crisis, CRAs continue to play an important role in most modern capital markets. Issuers and corporate borrowers rely on the opinions of CRAs to raise capital. Lenders and investors use credit ratings in assessing the likely risks they face when lending money to, or investing in, securities of a particular entity. Institutional investors and fiduciary investors, likewise, use credit ratings to help them allocate investments in a diversified risk portfolio. Finally, laws and regulations use credit ratings to distinguish creditworthiness.
Source: IOSCO
Morgan Stanley to Buy Stake in Eris Rate-Swap Exchange
December 20, 2012--Morgan Stanley, the sixth-largest U.S. bank by assets, plans to purchase a stake in Eris Exchange LLC and become a liquidity provider for the interest-rate swaps futures market.
Morgan Stanley will participate in electronic and block trading on Eris early next year, the New York-based company said today in a statement. The bank will also join the board of directors of Chicago-based Eris as part of the deal, the terms of which weren’t disclosed.
Source: Bloomberg
IMF Working paper-Global Bonding: Do U.S. Bond and Equity Spillovers Dominate Global Financial Markets?
The results suggest that U.S. financial shocks reverberate around the world much more strongly than shocks from other regions, including the Euro area, while inward spillovers to the U.S. from elsewhere are minimal. There is also evidence of two-way spillovers between the UK and Euro area financial markets and spillovers from Europe to Japan. The results also suggest that the uncertainty about the direction of causality of contemporaneous correlations—an issue that other techniques cannot tackle—is the dominant source of uncertainty in the estimated impulse response functions.
Source: IMF
December 20, 2012--Summary: This paper uses a novel variant of identification through hetroscedacity to estimate spillovers across U.S., Euro area, Japanese, and UK government bond and equity markets in a vector autoregression.
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