Global ETF News Older than One Year
EPFR Global Fund Data News Release-Data, earnings reports, central banks and Europe keep investor compasses spinning
July 6, 2012--Those investors hoping for a more communal approach to underwriting Eurozone debts and further monetary easing got at least some of what they were looking for in early July.
But those steps came against a backdrop of profit warnings and dour macroeconomic data that kept any animal spirits firmly in check. Flows into all EPFR Global-tracked Bond Funds during the week ending July 4 were about a fifth of their year-to-date weekly average while US Exchange Traded Funds (ETFs) accounted for nearly all of the net $8.93 billion absorbed by Equity Funds.
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Source: EPFR Global
IMF Working paper-The (Other) Deleveraging
July 6, 2012--Summary: Deleveraging has two components--shrinking of balance sheets due to increased haircuts/shedding of assets, and the reduction in the interconnectedness of the financial system.
We focus on the second aspect and show that post-Lehman there has been a significant decline in the interconnectedness in the pledged collateral market between banks and nonbanks. We find that both the collateral and its associated velocity are not rebounding as of end-2011 and still about $4-5 trillion lower than the peak of $10 trillion as of end-2007. This paper updates Singh (2011) and we use this data to compare with the monetary aggregates (largely due to QE efforts in US, Euro area and UK), and discuss the overall financial lubrication that likely impacts the conduct of global monetary policy.
view the IMF Working paper-The (Other) Deleveraging
Source: IMF
IMF Working paper-Intertwined Sovereign and Bank Solvencies in a Model of Self-Fulfilling Crisis
July 6, 2012--Summary: Large fiscal financing needs, both in advanced and emerging market economies, have often been met by borrowing heavily from domestic banks.
As public debt approached sustainability limits in a number of countries, however, high bank exposure to sovereign risk created a fragile inter-dependence between fiscal and bank solvency. This paper presents a simple model of twin (sovereign and banking) crisis that stresses how this interdependence creates conditions conducive to a self-fulfilling crisis.
Source: IMF
BCBS and IOSCO issue consultative paper on margin requirements for non-centrally-cleared derivatives
July 6, 2012--The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have today published a consultative paper on margin requirements for non-centrally-cleared derivatives.
The paper is available on the websites of the Bank for International Settlements and IOSCO.
In 2009, the G20 Leaders initiated a reform programme to reduce the systemic risk of over-the-counter (OTC) derivatives markets. In particular, a number of measures were agreed to enhance the transparency and regulation of OTC derivatives, including mandatory central clearing. However, mandatory clearing requirements will capture only standardised OTC derivatives. Non-standardised products will thus continue to be non-centrally cleared and will remain subject to bilateral counterparty risk management. In 2011, the G20 Leaders agreed to add margin requirements on non-centrally-cleared derivatives to the reform programme. These requirements can further mitigate systemic risk in the derivatives markets. In addition, they can encourage standardisation and promote central clearing of derivatives by reflecting the generally higher risk of non-centrally-cleared derivatives. The consultative paper published today lays out a set of high-level principles on margining practices and treatment of collateral, and proposes margin requirements for non-centrally-cleared derivatives.
view the Consultative Document-Margin requirements for non-centrally-cleared derivatives
Source: IOSCO
MSCI Indices Q2 2012 Performance Results-Volatile Global Markets Generate Losses
Global markets produced almost universally negative returns, eroding the semblance of recovery glimpsed in Q1 2012
Only a handful of individual Emerging and Frontier Markets countries posted modest positive returns
High volatility prevailed
July 6, 2012--MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services, today published the Q2 2012 performance of its MSCI Global Equity Indices, revealing widespread negative returns across global markets.
These results significantly pared back the positive gains of Q1 2012; however, year-to-date (YTD) 2012 global market returns for the most part remained in modest positive territory. Major financial markets worldwide showed negative returns across all size segments in Q2 2012. MSCI ACWI IMI, comprised of close to 9,000 large, mid and small cap securities across 24 Developed and 21 Emerging Markets countries, for example, delivered a negative return of -6.44% for the quarter, resulting in a YTD 2012 return of 4.37%1.
Source: MSCI
Global Foreign Direct Investment losing momentum in 2012, though prospects for 2013 and 2014 are cautiously optimistic, UNCTAD Report says
Investment inflows climbed 16 per cent in 2011, World Investment Report 2012 finds, but economic uncertainty around world now making itself felt
July 5, 2012--Global foreign direct investment (FDI) inflows rose 16 per cent in 2011, surpassing the 2005-2007 pre-crisis level for the first time, despite the continuing effects of the global financial and economic crisis and the current debt crisis in Europe, UNCTAD's annual survey of investment trends reports.
The World Investment Report 20121 , subtitled “Towards a New Generation of Investment Policies”, was released today.
A resurgence of economic uncertainty and the possibility of lower growth rates in major emerging markets risk undercutting FDI in 2012, the report contends. UNCTAD predicts the growth rate of FDI will slow in 2012, with flows levelling off at around $1.6 trillion. Leading indicators are suggestive of this trend, with the value of both cross-border mergers and acquisitions and greenfield investments retreating in the first five months of 2012.
UNCTAD projections for the medium term based on macroeconomic fundamentals continue to show FDI flows increasing at a moderate but steady pace, reaching $1.8 trillion in 2013 and $1.9 trillion in 2014, barring any macroeconomic shocks. Investor uncertainty on the course of economic events for this period is still high, with UNCTAD’s annual survey of executives of transnational corporations (TNCs) finding that roughly half of respondents are either neutral or undecided about the state of the global investment climate in 2012.
view the UN report-World Investment Report 2012
Source: UN
IMF Working paper-International Capital Flows and Debt Dynamics
July 5, 2012--Summary: This paper presents a new model for studying international capital flows and debt dynamics that emphasizes the role played by expectations concerning future trade flows and returns. I use the model to estimate the drivers of the U.S. external position and capital flows between 1973 and 2008.
The estimates show that most of the secular rise in U.S. international indebtedness is attributable to growing optimism about future returns on U.S. holdings of foreign equity and FDI assets. They also show that the transformation of world savings into risky assets by the U.S. had little effect on its external position, but the expected future real depreciation of the dollar allowed the U.S. to sustain a higher level of international debt after the 1990s.
view the IMF Working paper-International Capital Flows and Debt Dynamics
Source: IMF
IMF Working paper-Equity Returns in the Banking Sector in the Wake of the Great Recession and the European Sovereign Debt Crisis
July 5, 2012--Summary: This study finds that equity returns in the banking sector in the wake of the Great Recession and the European sovereign debt crisis have been driven mainly by weak growth prospects and heightened sovereign risk and to a lesser extent, by deteriorating funding conditions and investor sentiment.
While the equity return performance in the banking sector has been dismal in general, better capitalized and less leveraged banks have outperformed their peers, a finding that supports policymakers’ efforts to strengthen bank capitalization.
Source: IMF
IEA sees renewable energy growth accelerating over next 5 years
July 5, 2012--Renewable power generation is expected to continue its rapid growth over the next five years, according to a new report from the International Energy Agency (IEA) that acknowledges the coming-of-age of the renewable energy sector. The report says that despite economic uncertainties in many countries, global power generation from hydropower, solar, wind and other renewable sources is projected to increase by more than 40% to almost 6 400 terawatt hours (TWh)-or roughly one-and-a-half times current electricity production in the United States.
The study, released today, marks the first time the IEA has devoted a medium-term report to renewable power sources, a recognition of the dynamic and increasing role of renewable energy in the global power mix. The study examines in detail 15 key markets for renewable energy, which currently represent about 80% of renewable generation, while identifying and characterising developments that may emerge in other important markets. It completes a series of IEA medium-term market reports also featuring oil, natural gas and coal. Like the others, it presents a forecast of global developments and detailed country projections over the next five years.
Source: International Energy Agency (IEA)
NYSE Euronext to Launch Retail Liquidity Program
Retail investor trades to benefit from price improvement on the NYSE and NYSE MKT
July 5, 2012-NYSE Euronext (NYX) has received approval from the U.S. Securities and Exchange Commission (SEC) to establish a first-of-its-kind Retail Liquidity Program, a market innovation that produces cost savings for individual investors through price improvement on retail equities trading order flow for New York Stock Exchange (NYSE) and NYSE MKT listed and NASDAQ UTP-traded equity securities.
The Retail Liquidity Program is complementary to existing marketplace offerings for retail investors and is intended for use by retail brokerage firms directly and market intermediaries that service retail order flow providers. NYSE Euronext expects to activate the RLP on both the NYSE and NYSE MKT markets on Aug. 1, 2012.
Source: NYSE Euronext
