TABB Examines Adoption of New Structures and Technologies Moving Equity-Style ETF Trading into Corporate Bond Liquidity
Trading in US Corporate Bond ETFs Accelerated During First Half of 2012, Accounting for Average Daily Bond Volumes of $262M in Investment Grade and High-Yield Markets
September 13, 2012--In spite of the boom in the US primary markets this month, the corporate bond industry faces a level of demand among asset managers far greater than issuance, leading to the adoption of new structures and technologies driving a rise in equity-style, fixed-income exchange-traded fund (ETF) use.
In new research published today, TABB Group estimates trading in US corporate bond ETFs accelerated during the first half of 2012, accounting for average daily bond volumes of $262 million, specifically $146 million in par value in the investment grade and $116 million in par value in the high-yield markets.
“As corporate bond ETF trading accelerates,” says Henry Chien, research analyst and author of “Corporate Bonds and the ETF: Odd-Lot Arbitrage,” “unique liquidity dynamics and information flow of ETFs will increasingly impact prices and trading behavior in the underlying bond markets.”
Source: TABB Group
Rethink Role of State in Finance, says World Bank
September 13, 2012--It is time to rethink the role of the state in the financial sector, so that governments can better balance the need for credit and emergency support for banks with measures to promote transparency and competition when crises erupt, says a new World Bank report.
“Governments need to provide strong supervision and ensure healthy competition in the financial sector. They also need to support financial infrastructure, such as better quality credit information that is shared more systematically,” says World Bank Group Managing Director Mahmoud Mohieldin. "But the mixed results of their direct role in issuing credits merits close examination. Indeed, as we emerge from the global financial crisis, governments may want to consider shifting toward indirect interventions."
Source: World Bank
Economic crisis and weak outlook hit R&D, says OECD
September 13, 2012--Business spending on research and development has been hit hard by the economic crisis, with nearly all OECD countries seeing a fall in investment which could impact innovation and long-term growth, according to a new OECD report.
The OECD Science, Technology and Industry Outloook 2012 says that business spending on R&D fell a record 4.5% in 2009 in the OECD. Only France and Korea bucked the trend.
The current weak economic recovery will likely lead to continued sluggish growth in R&D spending by firms, notably in Southern and Eastern Europe, in the foreseeable future. The outlook for France, Germany, the United Kingdom and the United States is also uncertain, according to the report.
Spending by Asian economies, such as China, India and Korea, on the other hand continued to increase during the crisis. Year-on-year growth in R&D investment by firms in 2010 was 29.5% in China and 20.5% in Korea and India.
Source: OECD
DGCX Signs MoU with Dalian Commodity Exchange
DGCX to strengthen its footprint in China
The partnership will provide support for the innovations and development in both markets
September 13, 2012--The Dubai Gold & Commodities Exchange (DGCX) today announced the signing of a Memorandum of Understanding (MoU) with Dalian Commodity Exchange (DCE), the first
MoU that DCE has signed with an Exchange in the Middle East.
The partnership will strengthen DGCX’s and DCE’s global collaboration and support opportunities that will mutually benefit the exchanges.
The agreement is designed to facilitate closer cooperation in areas such as product development, price risk management and the sharing of market resources. It additionally will support Middle Eastern investors and producers of energy, petrochemical and plastics to benefit from China’s huge consumer market.
Source: DGCX
Melrose and Wood Group (John) to Join FTSE 100 Index
September 12, 2012--FTSE Group ("FTSE") confirms today that, Melrose, the supplier of turbogenerators and Wood Group (John), the energy services company, will be joining the FTSE 100 Index.
In the rebalance, ICAP and Ashmore Group will leave the UK’s leading index and enter the FTSE 250 Index.
The changes announced today are part of the impartial quarterly reviews approved by the independent FTSE Europe, Middle East and Africa Regional Committee. The rules-driven reviews ensure the indices continue to portray an accurate reflection of the market they represent, and form an essential component to the management of the indices
Source: FTSE
S&P Capital IQ expands private company fundamental data coverage for Europe and North America
September 12, 2012--S&P Capital IQ, a leading provider of multi-asset class data, research and analytics, today announced an agreement with Dun & Bradstreet (D&B) that expands its offering of fundamental data for private companies in Western Europe and North America.
The comprehensive package procured from D&B will more than double S&P Capital IQ's coverage of private company financials in key markets including Germany, the Nordic countries, the United Kingdom and the United States.
"This initiative represents an important milestone for the industry, as private company financials will be presented in a more detailed and traceable chart of accounts that align with S&P Capital IQ data quality standards," says Silvina Aldeco-Martinez, Managing Director at S&P Capital IQ. "In addition, this content will be available via Xpressfeed – the firm's enterprise data feed management solution – for the first time."
Source: S&P Capital IQ
ISDA-Regulation of OTC derivatives markets: A comparison of EU and US initiatives
September 12, 2012--Both the EU and the US have now adopted the primary legislation which aims to fulfil the G20
commitments that all standardised over-the-counter (OTC) derivatives should be cleared through central
counterparties (CCPs) by end 2012 and that OTC derivatives contracts should be reported to trade repositories (and the related commitments to a common approach to margin rules for uncleared
derivatives transactions).
The US Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in July 2010 and the text of the EU Regulation on OTC Derivatives, CCPs and Trade Repositories (EMIR) was finally published in the Official Journal on 27 July 2012.
There is a significant commonality of approaches between EMIR and the Dodd-Frank Act in relation to the regulation of OTC derivatives markets, but there are also some significant differences. This paper summarises the way in which the two regimes treat different categories of counterparty and highlights certain other major differences between EMIR and the Dodd-Frank Act in relation to OTC derivatives regulation.
Source: ISDA
Platinum ETFs poised for record
September 12, 2012--Platinum assets held in exchange-traded products are poised to climb to a record as labor disputes in South Africa, the world's largest producer, threaten supplies of the metal that's used to make catalytic converters.
The amount held in ETPs was 45.727 metric tons yesterday, 1.3 percent below the peak of 46.316 tons in September 2011, according to data compiled by Bloomberg. Holdings have risen 8.7 percent since a strike began on Aug. 10 at Lonmin Plc's Marikana operations in a dispute that's led to more than 40 deaths.
Source: MineWeb
September 11, 2012--Falling mortality rates to increase liabilities by 1%, actuaries warn
September 11, 2012--Revisions to Dutch mortality predictions could add another 1% to pension funds' liabilities, the Actuarial Society (AG) has warned.
After fine-tuning its estimate for the 2010-60 period, the AG found that mortality expectancy had seen a stronger downturn over the last two years than it had during the entire period between 1988 and 2010.
Source: IP&E
Brics bring new dynamic to globe
September 11, 2012--The Brics bloc has introduced a new dynamic to the world's political and economic systems, International Relations Minister Maite Nkoana-Mashabane said on Monday.
"We (Brics) also envision and work to realise a more equitable global political and economic system," she said at a business breakfast in Johannesburg hosted by The New Age newspaper.
Brics refers to the Brazil, Russia, India, China and South Africa group of large emerging market economies
Source: FIN24