Global ETF News Older than One Year
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
Thomson Reuters Announces Findings of its Annual Sukuk Perceptions and Forecast Study
Global captive sukuk demand is expected to almost double from $240 billion in 2012 to reach $421 billion by 2016
December 10, 2012-- Thomson Reuters today released the findings of a Sukuk Perceptions and Forecast Study conducted by Thomson Reuters and Zawya in November 2012.
The study centres around a survey of sukuk lead arrangers and investors conducted in August and September 2012. The primary empirical data gathered from the survey was subsequently developed to provide forward-looking analytics on the appetites and preferences of sukuk investors for 2013 and beyond.
According to the study, global captive sukuk demand is expected to double from $240 billion in 2012 to reach $421 billion by 2016. Supply is also forecasted to grow but the spread between demand and supply is expected to widen even further to more than $280 billion within the next four years.
Source: Thomson Reuters
NASDAQ OMX Acquires 25% of Dutch Derivatives Trading Venue TOM
December 10, 2012--NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the acquisition of 25 percent of the Dutch cash equity and equity derivatives trading venue TOM, The Order Machine. The agreement also includes an option for NASDAQ OMX to acquire an additional 25.1 percent of the remaining shares and secure a majority stake in TOM.
The transaction provides TOM global reach and scale and delivers on NASDAQ OMX's strategy to expand its derivatives presence across the European market. The current owners will remain shareholders, and as co-owners BinckBanck will provide order flow and Optiver and IMC will provide liquidity in the Dutch market. The fourth co-owner ABN AMRO will also connect to TOM.
Source: NASDAQ OMX
Former iShares boss returns to ETF arena
December 9, 2012--Lee Kranefuss, a former head of iShares, the world's largest exchange traded funds manager, has been appointed by Warburg Pincus to lead the $30bn global private equity group's expansion into the ETF market.
Mr Kranefuss was the chief executive officer of iShares from its launch in 2000 under the watch of Barclays Global Investors until 2010 when the business had accumulated assets of more than $600bn.
Cary Davis, managing director at Warburg Pincus said Mr Kranefuss has been hired to evaluate opportunities in ETFs,
Source: FT.com
Backroom dealing exposed
December 9, 2012--Large asset management groups appear to be routinely co-ordinating internal trades in order to protect funds that are suffering heavy redemptions from being forced to sell stock at fire-sale prices.
The findings raise serious questions as to whether fund managers engaging in such “backroom dealing” are violating their fiduciary duty to their own investors by buying stock in order to aid a colleague.
Source: FT.com
EPFR Global Fund Data News Release-
December 7, 2012--China Funds benefit from data, shift in perceptions about US deficit deal
With investors translating the apparent deadlock between Democrats and Republicans as "cliff on" for the US economy, China reclaimed their affections during early December.
EPFR Global-tracked China Equity Funds posted their second biggest weekly inflow year-to-date during the week ending December 5 as recent factory, retail and investment data showed the Chinese economy regaining momentum. US Equity Funds, meanwhile, posted outflows for the ninth time in the past 11 weeks while flows into US Bond Funds slipped to a five week low.
Emerging Markets Equity and Bond Funds sustained their year-end surge, with flows into EM Equity Funds hitting a 10 week high while the YTD total for EM Bond Funds climbed to within $1 billion of breaking the existing full year inflow record.
There are also some signs that investors on both sides of the Atlantic believe the Eurozone crisis may have passed its high point. Europe Money Market Funds have seen net redemptions of over $17 billion during the past two weeks -- versus inflows of more than $35 billion for their US counterparts -- while flows into Europe Equity Funds hit an 11 week high and Europe Bond Funds extended their longest inflow streak since 2Q10.
Visit http://www.epfr.com for more info
Source: EPFR
ETFs enter plans as part of higher risk strategies
December 7, 2012--Exchange traded funds may not yet be ubiquitous in defined contribution (DC) retirement plans, but they are beginning to appear in some inconspicuous areas.
The DC market has been considered a holy grail for some promoters of the ETF industry, if only for its significant asset base. But ETFs have so far struggled to make headway in the $4.5tn market. Within the 401(k) segment of DC, more than half of 401(k) assets are in mutual funds, while less than 1 per cent of assets are in standalone ETFs as of 2011, according to Cerulli Associates.
Source: FT.com
MIGA Report Finds that Sovereign Default and Expropriation Risks Worry Investors
However, Investors Moving Forward Despite Ongoing Uncertainty
December 6, 2012--Foreign investors, attracted by stronger economic growth in developing countries while mindful of risks, remain relatively optimistic about these destinations in the short term according to the results of a survey released in a report by the World Bank's Multilateral Investment Guarantee Agency (MIGA).
World Investment and Political Risk notes that half of the survey’s respondents plan to increase investment in developing countries in the next 12 months.
This sentiment dovetails with foreign direct investment (FDI) trends that show developing-country flows continue to account for a substantial share of global FDI: in 2012 they are estimated to be 36 percent of inflows and 14 percent of outflows. FDI to developing countries is expected to rebound in 2013 to exceed pre-2008 highs. New challenges, especially the ongoing sovereign debt crisis and recession in the euro zone, have slowed the flow of FDI from traditional sources. However, FDI from new investors based in developing countries has risen significantly in recent years, and is expected to reach a record level this year. Notably, about a quarter of developing countries’ outward FDI currently goes into other developing countries (“South-South” investment).
view the 2012 World Investment and Political Risk report
Source: World Bank
Vanguard considering active rollouts in Europe
December 6, 2012-- Vanguard says it is "possible" its current European fund line-up will be extended to include actively managed products.
The US mutual fund firm, which launched into the UK in 2009 with several low-cost index funds, says its success in the US active fund sector would provide it with the ideal springboard to offer similar products in Europe.
Source: FT.com
