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ETF securities lending almost doubles in four years
June 9, 2021--The funds' securities lending jumps 77% outstripping the 21% growth of the broader market
Securities lending by exchange traded funds has almost doubled since 2017, data from EquiLend show, reflecting the huge growth in assets under management in the ETF industry as a whole.
The value of ETFs' on-loan balances-the value of securities on loan at any point in time- rose 77 per cent, from an average of $37.5bn in 2017 to $66bn between January 1 and mid-May, according to EquiLend, a securities lending platform. This dwarfed an overall increase of 21 per cent in the wider securities lending market.
Trackinsight: Shipping, Silver and Sector Plays Dominate ETF Markets in May
June 8, 2021--A new record high of $8.8 Trillion has been reached by ETF assets in May. Significant positive flows across European and North American ETFs were registered over this past month, achieving a total of $509 Billion of new flows year-to-date.
Over this period, investors have been migrating to traditional store-value products such as Gold and Silver. Finally, the cost of shipping good has skyrocketed leading to a 192% increase in the Breakwave Dry Bulk Shipping ETF since the start of the year.
Four Factors Behind the Metals Price Rally
June 8, 2021--As economies reopen in various parts of the world, the price of some commodities has soared, including the prices of prominent industrial metals. The extent to which the metals price rally may lose steam depends on how multiple factors will play out.
As our latest chart of the week shows, metals prices have increased by 72 percent relative to their pre-pandemic levels-reaching a nine-year high in May (in inflation adjusted terms). The increase has been broad-based across industrial metals-copper is up 89 percent in May (year-over-year), iron ore is up 116 percent, and nickel is up 41 percent. The prices of most agricultural and energy commodities are also tracking upward, but at a slower rate. Energy commodities (oil, coal, and natural gas), in particular, sit only a few percentage points above pre-pandemic levels.
Global Recovery Strong but Uneven as Many Developing Countries Struggle with the Pandemic's Lasting Effects
June 8, 2021--Output to remain below pre-COVID trends despite robust rebound by US and China
The global economy is expected to expand 5.6% in 2021, the fastest post-recession pace in 80 years, largely on strong rebounds from a few major economies.
However, many emerging market and developing economies continue to struggle with the COVID-19 pandemic and its aftermath, the World Bank says in its June 2021 Global Economic Prospects.
Despite the recovery, global output will be about 2% below pre-pandemic projections by the end of this year. Per capita income losses will not be unwound by 2022 for about two-thirds of emerging market and developing economies. Among low-income economies, where vaccination has lagged, the effects of the pandemic have reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.
view the World Bank Global Economic Prospects June 2021 report
World Bank The Global Economic Outlook in five charts
June 8, 2021-The global economy is set to expand 5.6 percent in 2021-its strongest post-recession pace in 80 years. This recovery is uneven and largely reflects sharp rebounds in some major economies amid highly unequal vaccine access, with many poorer countries facing subdued prospects.
By 2022, last year's per capita income losses are not anticipated to be reversed in about two-thirds of emerging market and developing economies (EMDEs). To help repair the damage from the pandemic, policy makers will need to promote growth-enhancing reforms and steer their economies onto a green, resilient, and inclusive development path.
1. Global growth is projected to recover in 2021, fueled by robust rebounds in some major economies
The strength of the near-term global recovery is largely attributable to a few major economies, such as the United States and China, with many emerging market and developing economies (EMDEs) lagging behind. The United States and China are each expected to contribute over one-quarter of global growth in 2021, with the U.S. contribution nearly triple its 2015-19 average.
IOSCO Statement on Benchmarks Transition
June 2, 2021--The Board of the International Organization of Securities Commissions (IOSCO) reiterates the importance of ensuring a smooth and timely transition away from LIBOR. Sound functioning of systemically important benchmarks is vital to the global economy and financial markets.
The timelines for the end of all LIBOR panels are now clear. Continued reliance of global financial markets on LIBOR benchmarks, particularly the most widely used USD LIBOR settings, poses risks to financial stability, market integrity and investor protection, which are IOSCO's three core objectives. It also creates various consumer protection, litigation and reputational risks
Why central bankers no longer agree on how to deal with inflation
June 2, 2021--Once, central bankers knew what they needed to do to deal with inflation. As they struggled with the economic consequences of the coronavirus pandemic, the consensus on how to best promote low and stable price growth has broken.
After years of setting interest rates based on inflation forecasts and seeking to reach a target of about 2%, major monetary authorities around the world are adopting different strategies.
Becoming Material: the systemic risks of sustainability need to be incorporated into Modern Portfolio Theory
June 2, 2021-At the moment, changes in materiality and the risk/return profile of the capital markets are taken as entirely exogenous by MPT
Viewed with historical distance and perspective, the connections between societal norms, law, regulation and corporate behaviour are quite apparent. What is considered socially (market) acceptable changes over time and location, sometimes slowly and sometimes quite rapidly.
Slavery, while always controversial among non-slaves (hardly controversial among enslaved people), was part and parcel of early capitalism, but eventually made illegal (though we note that quasi-slave and clandestine practices continue). The same with child labour, labour health and safety standards, hours of work, workplace discrimination and a host of other issues.
Companies and investors traditionally regard values, during the period when they are coalescing into societal norms, as 'non-financial'. A better term might be 'not-yet-financial', making it clear that norm shifts and new understandings, once adopted by a critical mass of investors, firms, the general population and sometimes regulators, become financially relevant and sometimes legally ‘material.
World Bank Pancakes to Pyramids: City Form for Sustainable Growth
June 2, 2021--A new report, Pancakes to Pyramids-City Form for Sustainable Growth, analyzes the dynamic, two-way relationship between a city's economic growth and the floor space available to residents and businesses.
view the World Bank Pancakes to Pyramids: City Form to Promote Sustainable Growth report
OECD Economic Outlook, May 2021 No Ordinary Recovery: Navigating the Transition
May 31, 2021--Prospects for the world economy have brightened but this is no ordinary recovery. It is likely to remain uneven and dependent on the effectiveness of vaccination programmes and public health policies. Some countries are recovering much faster than others. Korea and the United States are reaching pre-pandemic per capita income levels after about 18 months. Much of Europe is expected to take nearly 3 years to recover. In Mexico and South Africa, it could take between 3 and 5 years.
Economic growth projections have been revised upwards
Global economic growth is now expected to be 5.8% this year, a sharp upwards revision from the December 2020 Economic Outlook projection of 4.2% for 2021. The vaccines rollout in many of the advanced economies has been driving the improvement, as has the massive fiscal stimulus by the United States. World GDP growth is expected to be 4.4% next year but global income will still be some USD 3 trillion less by end 2022 than was expected before the crisis hit. USD 3 trillion is about the size of the entire French economy.