Global ETF News Older than One Year
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
IMF Working paper-The Rising Resilience of Emerging Market and Developing Economies
The past decade was particularly good—for the first time EMDEs spent more time in expansion and had smaller downturns thanadvanced economies. In this paper we document the history of EMDEs’ resilience over the past sixty years, and investigate what factors have been associated with it. We find that their improved performance in recent years is accounted for by both good policies and a lowerincidence of external and domestic shocks—better policies account for about three-fifths of their improved resilience, while less frequent shocks account for the remainder. view the IMF Working paper-The Rising Resilience of Emerging Market and Developing Economies
Source: IMF
World Bank Releases International Debt Statistics 2013
The downturn was partially offset by inflows from commercial banks, sustained access to international bond markets and a rise in foreign direct investment.
“These international debt statistics are a vital input for experts working to improve the management of capital flows around the world and having the data open to all is a welcome development,” says Ibrahim Levent, Senior Information Officer in the Bank’s Data Group and part of the team that produced the report. view the International
Debt Statistics 2013
Source: World Bank
ICE to Buy NYSE for $8.2 Billion, Ending Era of Independence
The ICE said it intends to offer $33.12 per share, representing a premium of about 37 percent over NYSE Euronext's Wednesday closing price. CNBC first reported on merger talks between the two companies after the closing bell on Wednesday. In early trading, the NYSE's stock soared by 31 percent in heavy volume that was more than 12 times its normal average.
Source: CNBC
New European Regulations Will Put Compliance Pressures on U.S. Alternative Fund Managers to Plan Ahead
Today, the European Commission adopted the implementing rules for the Directive, which will now be subject to a three- or six-month scrutiny period by the European Parliament and the Council, and will enter into force, provided that neither co-legislator objects, at the end of this period.
The Directive may have long-term implications for investment managers in the U.S. and globally, who are looking to raise capital in Europe.
Source: KPMG International
FTSE Publishes new Research Paper- Emerging Markets: Crossing the Rubicon
A powerful combination of macro trends is driving the long term rise of EMs. These include the emergence of a vast new middle class, mainly in Asia, of around 4 billion people by 2030; rapid urbanization; the gradual move by many EMs from export-led to consumption-led growth; and an emphasis on the production of higher value-added products. view the FTSE Research Paper-Emerging Markets: Crossing the Rubicon
Source: FTSE
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.
December 20, 2012--Summary: Economic performance in many emerging market and developing economies (EMDEs) improved substantially over the past twenty years.
New Publication Has Data on Capital Flows through 2011
December 20, 2012--Net external debt inflows and aggregate net capital inflows (debt and equity) to developing countries fell in 2011, driven by a sharp contraction in net inflows from official creditors and a collapse of portfolio equity flows, according to International Debt Statistics 2013, released today.
December 20, 2012--The Intercontinental Exchange announced on Thursday plans to buy the NYSE Euronext in a transaction valued at approximately $8.2 billion, bringing to an end the Big Board's storied era of more than two centuries as an independent institution.
Alternative Investment Fund Managers Directive Will Have Significant Impact on Fundraising Activities, Operations and Business Models: KPMG International Survey
December 19, 2012--With the compliance deadline for one of the most complex regulatory reform agendas ever introduced into the asset management industry only seven months away, a KPMG International survey of more than 70 alternative investment fund managers reveals that nearly half have not taken any concrete steps to analyze the impact the Alternative Investment Fund Managers Directive (AIFMD) will have on their businesses, or to make changes to their operations.
December 19, 2012--The surging growth of many emerging markets is changing the structure of the global economy. The trend is accelerating such that the term 'emerging' will increasingly cease to apply to many countries and a shift in categorization will be required.
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