Global ETF News Older than One Year
FSB fourth progress note on the global LEI initiative
December 11, 2012--This is the fourth of a series of notes on the implementation of the legal entity identifier (LEI) initiative.
Following endorsement of the FSB LEI report and recommendations by the G-20, the FSB LEI Implementation Group (IG) has been tasked with taking forward the planning and development work to launch the global LEI system by March 2013. The IG is collaborating closely with private sector experts with a wide range of experience from different sectors and fields through a Private Sector Preparatory Group (PSPG) incorporating members from 25 jurisdictions across the globe.
Source: FSB
Changes to swap costs prompt alarm
December 11, 2012--Off the peg or custom made? For some derivatives users, the choice could soon narrow sharply.
There are growing fears that specially-tailored swaps will become prohibitively expensive under new rules coming into effect from next year. Regulators want most users to pick only from the racks of standardised products.
Source: FT.com
IMF Working paper-Global Financial Crisis, Financial Contagion, and Emerging Markets
December 11, 2012--Summary: The recent global financial crisis was the first in recent history that was triggered by problems in the financial system of the mature economies. Existing work on financial crisis in emerging market countries, however, almost exclusively focus on the role of financial frictions in the domestic economy.
In contrast, we propose a two-country DSGE model to investigate the transmission of a global financial crisis that originates from financial frictions in the rest of the world. We find that the scale of financial spillovers from the global to the domestic economy and trade openness are key determinants of the severity of the financial crisis for the domestic economy. Our results also suggest that the welfare ranking of alternative monetary policy regimes is determined by the degree of financial contagion, the degree of trade openness as well as the scale of foreign currency denominated debt in the domestic economy.
view the IMF working paper-Global Financial Crisis, Financial Contagion, and Emerging Markets
Source: IMF
Index Launch Reveals Significant Differences in Countries' Energy Systems
New Global Energy Architecture Performance Index Report ranks energy systems of 105 countries from an economic, environmental and energy security perspective
Norway, Sweden and France top the ranking; OPEC countries and the USA languish outside the top 50
Purpose of the index is to help countries position themselves for the widespread transition that is expected in the global energy system
December 11, 2012--High-income countries are leading the transition to a new energy architecture but still have work to do on environmental sustainability, according to the Global Energy Architecture Performance Index Report 2013, released today by the World Economic Forum.
The index measures the strengths and weaknesses of countries’ energy systems from an integrated economic, environmental and energy security perspective.
It is also designed to help countries manage and navigate the challenges that arise from this period of change which, according to the International Energy Agency (IEA), will require US$ 38 trillion of investment in energy supply infrastructure by 2035 to meet rising global demand.
view the Global Energy Architecture Performance Index Report
Source: WEF
HSBC attempts to boost ETF liquidity
December 11, 2012--HSBC Global Asset Management has altered the business model of its exchange traded funds operations by adding a second official market maker who will help to improve the trading liquidity of its ETF range.
Susquehanna International Securities, one of the largest ETF traders in Europe, will provide continuous bid and offer prices for HSBC’s range of 25 ETFs, effectively providing competition to the bank’s own ETF market making activities, which are delivered by HSBC Global Markets.
Source: FT.com
Fund managers seek alternatives to automated trade-study
September 10, 2012--Almost a third of fund managers believe automated trading has had its day and are considering a move to alternative trading methods, including a return to "human-led trading models", a study released on Monday showed.
But any mistrust of automated trading by fund managers contrasts sharply with the attitude of brokerages and investment banks, where 67 percent of firms are looking to increase the use of automated trading.
Source: Reuters
Inflows Into ETFs and ETPs Resume as Uncertainty Diminishes
December 10, 2012--Despite a bumpy beginning to the month, by the end of November, assets in exchange-traded funds and other exchange-traded products had hit a record $1.9 trillion, according to data provided by ETFGI.
With at least some sources of market uncertainty removed, investors resumed investing in exchange-traded funds (ETFs) and products (ETPs) during November, contributing net new assets of $21.3 billion to these securities over the course of the month. That propelled assets in ETFs and ETPs to an all-time high of $1.9 trillion, with the lion’s share of that – or $1.3 trillion – invested in ETFs/ETPs in the United States.
Source: AlphaNow
BIS-December 2012 Quarterly Review: Policy measures and reduced short-term risks buoyed markets
December 10, 2012--Forecasts for global economic growth fell in the three months to early December, yet most risky asset prices increased. These prices benefited from further loosening of monetary policies and perceptions that some major near-term risks to the world economy had diminished.
Cross-border claims of BIS reporting banks dropped sharply between April and June, for the second time in three quarters. Interbank claims - especially inter-office positions - fell significantly, whereas claims on non-banks remained relatively stable. Banks from emerging market economies in Asia-Pacific largely filled the gap left by euro area and Swiss banks pulling back from lending to the region.
The OTC derivatives market continued to shrink. Notional amounts outstanding declined for the second half-year in a row, to $639 trillion at end-June 2012.
Source: BIS
ETF Securities-ETFS Precious Metals Weekly-A Temporary Identity Crisis for Gold
December 10, 2012--December 10, 2012--Diverging views of gold price outlook. While the gold price has rallied 6% in the last 6 months, futures market selling prompted a modest sell-off last week. Futures market selling stands in direct contrast to increased demand for gold from the ETP sector, with global ETP holdings rising last week to another all-time high of 84.5m oz.
Investors appear to be split across most asset classes, with both equity and bond markets posting gains last week. Given strong physical demand, we expect the gold price weakness to remain temporary. Investor demand for gold ETPs is likely to remain high as strategic investors use gold as a hedge against worst case outcomes from the fiscal cliff negotiations and European fiscal and debt problems. Italian Prime Minister Monti's threat over the weekend to resign (and his possible replacement by former Prime Minister Berlusconi) substantially adds to Europe's sovereign debt risk profile. In addition, the official sector continues to build gold positions to diversify reserves. South Korea's central bank bought around 14 tonnes of gold in November, a jump of around 20% in its holdings. With the US manufacturing ISM slipping back below 50 and US fiscal policy likely to tighten in 2013, the FOMC is likely to further ease monetary policy to ensure its target of lower unemployment is met. Therefore while a recovery in US growth in 2013 may cause real interest rates to rise and add headwinds to gold price performance, there are enough supporting factors to indicate relatively limited gold price downside. Meanwhile, there are many potential upside tail risks.
Euro and Franc weakness could have opposite impact on gold. The euro reversed earlier strength on the back of downward GDP growth forecast revisions by both the ECB and Bundesbank at the end of the week, with a strong US dollar putting downward pressure on the gold price. While the Swiss Franc (CHF) also weakened versus the US dollar after Swiss banks started to charge negative interest on deposits, ultimately this could potentially benefit gold demand, as defensive investors begin to incrementally prefer gold over the CHF as their wealth preservation currency.
Further signs of recovery in the US may support cyclical precious metals. The US economy added 146k jobs in November, beating expectations that were tempered by Superstorm Sandy that hit the east coast last month. More jobs were added in November than October (although the October figure saw a large downward revision). If the US can avoid a worst-case fiscal-cliff induced recession next year, white precious metals silver, platinum and palladium may outperform, given their gearing into the global industrial cycle.
Key events to watch this week: FOMC meeting and US fiscal negotiations. Given the lack of progress in US budgetary discussions, the Fed is likely to continue to support loose monetary conditions to counter weak business investment. Announcements of new bond purchases to replace "Operation Twist" flows will likely be taken positively by gold investors.
Visit www.etfsecurities.com for more info.
Source: ETF Securities
NYSE Euronext Monthly ETF Activity Report -November 2012
December 10, 2012--Listings
November 2012 saw a total of three new ETF listings from two different issuers: 1 ETF from ThinkCapital and 2 ETFs from Lyxor:
ETF Symbol: TAT
Listing date: 26/11/2012
ETF Trading name: TC iAAT
Underlying index: iBoxx Gov AAA-AA 1-5 Index
ETF Symbol: LVX
Listing date: 30/11/2012
ETF Trading name: Lyxor ETF VIX USD
Underlying index: S&P 500 VIX Futures Enhanced Roll
ETF Symbol: LVO
Listing date: 30/11/2012
ETF Trading name: Lyxor ETF VIX EUR
Underlying index: S&P 500 VIX Futures Enhanced Roll
At end of November, NYSE Euronext European markets had 680 listings of 590 ETFs from 16 issuers.
Trading activity
Average daily value traded on-book in November of €210.4 million, down 7.43% MoM.
Total value traded on-book amounted to €4.63 billion, down 20.61% vs. YTD Average.
Average of 6,213 on-book trades (single-counted) executed daily last month, a decrease of 43.3% vs Novemberber 2011, and up 2.3% MoM.
Total of €663.0 million exchanged in block trades in November, down 10.42% from the €740.1 million in October.
Overall, block trade volume represented 14.32% of total regulated market ETF trading activity on NYSE Euronext.
Assets Under Management (AUM)
At the end of Novemberber 2012, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €154.0 billion, up 7.65% YTD.
Market Quality
2 LPs took on liquidity responsibilities for 8 additional LP contracts on 8 different ETFs:
IMC FINANCIAL MARKETS started activity on 6 new ETFs: 2 Amundi ETFs, 1 CS ETF, 1 db-x tracker, 1 iShares ETF and 1 Lyxor ETF.
FLOW TRADERS took the lead on the new ThinkCapital ETF while also adding 1 CS ETF to their list.
Median spread for all listed ETFs of 35.7 bps.
23 Liquidity Providers currently active on ETFs.
view the EU ETP Monthly Activity Report
view US ETP Monthly Flash report
Source: NYSE Euronext
