Global ETF News Older than One Year
Financial Stability Review
December 2012
December 14, 2012--The ECB's Financial Stability Review, published today, highlights a tangible easing of euro area financial stability strains since the summer that has been evident across various market indicators.
The ECB’s announcement of its Outright Monetary Transactions (OMTs) programme and the decisions taken by the European Council in June are fundamentally responsible for the improvement felt in the financial markets that has reduced the dispersion of yields and spreads of sovereign debt instruments. The agreement reached by the ECOFIN (and the European Council) on the establishment of a Single Supervisory Mechanism, centered in the ECB, is another important indication of the Monetary Union framework continuous improvement with positive consequences for future financial stability.
Nevertheless, key financial stability risks remain and there is no room for complacency. These potential risks stem from imbalances and vulnerabilities in the fiscal, macroeconomic and financial sector domains and they can be grouped into three categories:
1.Possible aggravation of the euro area sovereign debt crisis, partly because of implementation risk for agreed policy measures at the national and EU level: a steady commitment to necessary adjustment by member countries, along with a determined implementation of European-level decisions to complete the strengthening of the institutional framework for Economic and Monetary Union (EMU), is necessary to avoid the materialisation of this risk.
2.A further deterioration in bank profitability and credit quality owing to a weak macro-financial environment: fostering market confidence in the solidity of banks’ balance sheets is paramount – and efforts at the national level to enhance the transparency of balance sheets, notably through strengthened asset quality reviews coordinated by supervisory authorities, are a key step towards easing existing banking vulnerabilities in the euro area.
view the Financial Stability Review December 2012
Source: ECB
Annual Changes to the NASDAQ-100 Index
December 14, 2012--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), parent of the world's first electronic stock market and a leading index provider, today announced the results of the annual re-ranking of the NASDAQ-100 Index(R)(Nasdaq:NDX), which will become effective prior to market open on Monday, December 24, 2012.
"Since its inception, the NASDAQ-100 Index has evolved into a world-renowned brand that includes the 100 largest non-financial stocks listed on The NASDAQ Stock Market," said NASDAQ OMX Executive Vice President John L. Jacobs. "The securities being added to the NASDAQ-100 Index will join Facebook, Costco, Apple, Google and other household names that are leading the new economy forward. Our objective re-ranking process ensures the NASDAQ-100 remains a relevant investable index that is the underlying benchmark for about 7,100 products in 22 countries with a notional value of about $1 trillion."
Source: NASDAQ OMX
CPSS-IOSCO issue a disclosure framework and assessment methodology for their principles for financial market infrastructures
December 14, 2012--The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have today published a disclosure framework and assessment methodology for their Principles for financial market infrastructures (PFMIs), the new international standards for financial market infrastructures (FMIs).
The disclosure framework is intended to promote consistent and comprehensive public disclosure by FMIs in line with the requirements of the PFMIs.
The assessment methodology provides guidance for monitoring and assessing observance with the PFMIs.
Both the disclosure framework and the assessment methodology facilitate greater transparency, objectivity and comparability of assessments of observance of the PFMIs and support consistent implementation and application of the PFMIs.
Source: IOSCO
Pimco looking into selling Total Return ETF in Europe
December 13, 2012--US bond fund giant Pimco is in early talks with exchange traded fund provider Source to bring its flagship Total Return ETF to Europe.
The Pimco Total Return ETF has accumulated $3.77bn in assets since its launch in March, making it this year’s most successful ETF launch in the US by assets.
The ETF, which replicates the world’s biggest bond fund and is managed by Pimco co-founder Bill Gross, is currently marketed only to US investors.
Source: FT.com
Newedge to split clearing and execution
December 13, 2012--Futures broker Newedge announced plans today to transform its business model and split its futures commission merchant (FCM) into two separate legal entities: One focusing on execution and the other on clearing services.
Newedge CEO Nicolas Breteau, leader of the third largest FCM as measured by U.S. customer segregated funds, says the firm’s plan is the result of a recently completed large scale review of its business.
Source: Futures Magazine
NASDAQ OMX Names Borje E. Ekholm Chairman
December 13, 2012--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), the inventor of the electronic exchange and the world's largest exchange company, today announced that its Board of Directors has selected Börje E. Ekholm as Chairman.
Ekholm has served as Interim Chairman of NASDAQ OMX since May 25, 2012, following the retirement from the board of Chairman H. Furlong Baldwin.
"This is an exciting time to be at NASDAQ OMX, and I am humbled by the confidence expressed in me by the Board of Directors," Mr. Ekholm said. "So much has been accomplished by this Board and under the leadership of Bob Greifeld and his team, and still there remain ample opportunities to continue to improve and grow the business profitably.''
Source: NASDAQ OMX
BlackRock Investment Institute-ETP Landscape: 12 Surprises for 2012
December 12, 2012--Overview
It's perhaps no surprise that the ETP industry is about to complete another year with strong asset growth.
Global ETP flows continued at a record-setting pace with $219bn through November 2012 in the face of global
trepidation over the impending US fiscal cliff and continued financial strains in the Eurozone.
Total assets have increased by 23% from 2011 to $1.9 trillion and some surprising trends in the ETP growth
story lie beneath the larger trend
12 Surprising ETP Trends in 2012
1. ETP flows maintained positive momentum throughout changing risk-on and risk-off market conditions. Strong inflows in buoyant equity markets are no surprise and overall 2012 has delivered double digit equity returns1, perhaps unexpectedly in a year characterized by global macro-economic headwinds.
However, within these positive results were downside stretches including a 13% decline from early April to
early June.2 Despite significant and pronounced risk-off periods, ETP flows were positive every month this
year– this for the first time since 2008.
But how are flows impacted during longer downside periods? Remarkably, the strongest year for ETP inflows was 2008, a year in which the MSCI All Country World Index was down 44%.3
Why have flows held up in risk-off markets?
Shifts in investor sentiment during risk-off periods can send money in search of lower risk exposures which are well represented by ETP offerings. Down markets also
draw in investors positioning for an upturn. Because ETPs still represent a small percentage of investable
assets, money in motion under any market scenario has often been favorable to the industry.
Source: BlackRock Investment Institute
IEA-Highlights of the latest Oil Market Report
December 12, 2012--Oil futures extended earlier declines in November, as persistent concerns about the economy and the looming US fiscal cliff appeared to eclipse those about political risks in Israel, Gaza, Syria and Iran. Benchmark crudes inched further down in early December, with WTI last trading at $85.90/bbl and Brent at $107.85/bbl.<
Global oil demand is projected at around 90.5 mb/d in 4Q12, 435 kb/d more than forecast last month, following stronger-than-expected October preliminary demand data and signs of improving Chinese sentiment. Relatively sluggish demand growth is forecast through 2013, as global economic expansion remains tepid.
Non-OPEC production bounced back by 0.7 mb/d in November on the month, to 54 mb/d, after fields in the North Sea and Brazil returned from maintenance. US output also rose steeply and will contribute to an aggregate non-OPEC increase of 0.9 mb/d to 54.2 mb/d in 2013, the highest growth rate since 2010.
OPEC crude oil supply inched up by 75 kb/d to 31.22 mb/d in November, led by higher output from Saudi Arabia, Angola, Algeria and Libya. Nigerian output remained constrained by severe flooding and sabotage. Iranian production edged lower under the weight of shipping constraints and stepped-up sanctions.
OECD commercial oil inventories drew by a seasonal 16.2 mb to stand at 2 722 mb in October, bringing to a halt seven consecutive months of stock building. Forward cover remains at 59.1 days, unchanged from a downwardly-revised September level. Preliminary data indicate a further draw in November.
Source: International Energy Agency (IEA)
HSBC GAM adds second market maker for ETFs
December 12, 2012--HSBC Global Asset Management has signed a deal with Susquehanna International Securities to act as a second market maker for its exchange-traded funds (ETFs).
Market makers are firms which quote both buying and selling prices for assets in order to provide extra liquidity to markets.
Source: FT Adviser
IMF Working paper-Spring Forward or Fall Back? The Post-Crisis Recovery of Firms
December 12, 2012--Summary: This paper studies corporate performance in the aftermath of the global crisis by examining 6,581 manufacturing firms in 48 developed and developing countries in 2010, identifying factors of resilience as well as vulnerability.
Based on a cross-sectional analysis, the results show that pre-crisis leverage and short-term debt have had negative effects on the speed of the recovery, while asset tangibility has had positive effects. The negative effect of leverage is non-linear, being particularly strong in firms with high pre-crisis leverage. Furthermore, the effects are different for advanced and emerging market economies. The paper also shows that the macroeconomic framework critically matters for firm growth. In particular, in countries that have allowed the exchange rate to depreciate, firms have had a faster recovery in sectors highly dependent on trade.
view the IMF Working paper-Spring Forward or Fall Back? The Post-Crisis Recovery of Firms
Source: IMF
