Global ETF News Older than One Year
JPMorgan to Spin Out 'Special Investments'
May 31, 2012--JPMorgan Chase is spinning out the "special investments group" from its troubled chief investment office as executives clean up the division that caused $2 billion trading losses, say people familiar with the matter.
The unit, whose investments include LightSquared, the wireless internet provider, will be moved to the bank’s corporate division and prevented from seeking fresh investment opportunities, bankers were told on Wednesday.
Source: CNBC
IMF Working paper-Tariff-Tax Reforms in Large Economies
May 31, 2012--Summary: This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian model composed of a developing and an advanced region.
In our baseline calibration, a revenue-neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which typically looks at tariff-tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a "point-for-point" reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue neutral reform.
view IMF Working Paper-Tariff-Tax Reforms in Large Economies
Source: IMF
DCGX Academy-CONTINENT CRACKING: EU Woes drive global assets plunging, only tunnel no light
May 31, 2012--HIGHLIGHTS
INDIAN Rupee
INR fell to a record low, heading for the worst month since November, before a government report today that economists predict will show gross domestic product rose at the slowest pace since 2009. Bonds rose. GDP Forecast 6.1 % Q1 , matching the preceding period's pace that was the slowest in 11 quarters, according to the median of 31 estimates.
Overseas investors cut holdings of Indian equities by $176 mllion this month as Greek leaders' failure to form a new government after a May 6 election fueled concern the debt-stricken nation will leave the euro, sapping demand for riskier assets. GDP number is expected to show a slowdown and we may have a messy divorce in Europe," said Harihar,Mumbai-based treasurer at First Rand Ltd. "TheINR is running in line with the global view but considering the speed of the move, there seems to be panic in the market." The INR declined 6.5 % this month to 56.4150 per USD as of 9:30 a.m. .
FOREIGN EXCHANGE
Yen Rises Against Major Peers on Signs Debt Crisis Is Spreading
Intervention FromINR to Real Shows Focus on Inflation
Brazil Signals More Cuts After Reducing Rate to Record Low 8.5%
Canadian USD Drops the Most in a Week Amid Turmoil in Europe
FX: Barclays Capital Cuts EUR/USD Forecasts Over Next 1 Year
Asian Currencies Weaken Most Since September on Europe,
The yen gained against all of its 16 major peers as turmoil in the Spanish banking sector added to signs Europe's debt crisis is spreading to the region's larger economies, boosting demand for safer assets. The yen reached a more than three-month high versus the greenback as Japan's benchmark bond yield fell to the lowest level since 2003 amid losses in global shares. The euro slid for an 8th day against the yen.
Intervention From INR to Real Shows Focus on Inflation : Just three months ago, emerging nations from Indonesia to Brazil were intervening in foreign exchange markets to make exports more competitive. Now they are selling USDs to stem currency declines and quell inflation. Bank Indonesia said on May 29 it will start offering USD term deposits in two weeks to stabilize the rupiah, the second- worst performer in Asia this year,
Barclays Capital Cuts EUR/USD Forecasts Over Next 1 Year : Barclays Capital lowers EUR/USD forecasts to 1.25 from 1.30 in 1 month, to 1.21 from 1.28 in 3 months, to 1.19 from 1.25 in 6 months and to 1.15 from 1.20 in 1 year, it says in a monthly report yesterday. * These downward revisions are consistent with ongoing market stress in Europe, limited support from European policy makers, and a pro-European election result in Greece
COMMODITIES
Nickel Slump Seen Ending as China Faces Ore Curbs:
Commodities Heading for Biggest Loss in Eight Months on Europe
Oil Enters Bear Market on Europe Debt Crisis, Slow U.S. Economy
Gold Poised for Worst Monthly Run in 13 Years on European Crisis
China Plan to Open Metal Futures to Foreigners Seen Helping LME
Source: DGCX Academy
Emerging Markets Drive Financial Services Growth, Report Finds
Report confirms developing world's growth surge has helped redefine global financial competition, creating a historic opening for firms that innovate
Financial institutions active in emerging markets have benefited from a growth in market capitalization of US$ 572 billion from 2006 to 2011.
Through 33 case studies, the report showcases financial services innovation in Asia, Africa, Latin America and Europe.
The Redefining the Emerging Market Opportunity: Driving Growth through Financial Services Innovation report is published by the World Economic Forum and The Boston Consulting Group
May 31, 2012--Emerging-market financial services companies, riding a new wave of opportunity
, are rapidly evolving into world-class competitors and now dominate the ranks of firms providing the highest total return to shareholders, according to a new report released today by the World Economic Forum.
The report, prepared in collaboration with The Boston Consulting Group (BCG), says financial providers worldwide should look to developing countries as the source of long-term business growth and shareholder return.
The study, entitled Redefining the Emerging Market Opportunity: Driving Growth through Financial Services Innovation, is being released today at the World Economic Forum on East Asia in Bangkok. It reports that the role of financial firms is rapidly expanding in the world’s developing countries, driven by economic growth that outpaces the slow expansion of developed economies. The result, the report concludes, is a historic opening to provide new financial services to low-income populations rapidly transitioning to middle-income status, as well as to regional companies evolving into world-class competitors.
Redefining the Emerging Market Opportunity: Driving Growth through Financial Services Innovation
Source: World Economic Forum
Barclays Stockbrokers relaunches IFA offering ahead of RDR
May 31, 2012--Barclays Stockbrokers is rolling out a revamped service for intermediaries, providing access to a wider range of investments including exchange traded funds (ETFs), exchange traded commodities (ETCs) and structured product issues.
The firm is offering the service through a single online account, which provides access to multiple asset classes including stocks, bonds, as well as ETFs, ETCs, and the ability to buy new structured product issues.
Source: CityWire
BASF SE, Berkshire Hathaway, Commonwealth Bank of Australia Among Five Stocks Added to Dow Jones Global Titans 50 INDEX
Changes Follow Regular Periodic Reviews of Dow Jones Titans Indexes, Become
Effective After Close of Trading on June 15, 2012
May 31, 2012--Berkshire
Hathaway Inc. Cl B (United States) and Commonwealth Bank of Australia
(Australia) will be among five stocks added to the Dow Jones Global Titans 50
Index, following a regular annual review, Dow Jones Indexes announced today.
The additional two companies to be added are McDonald's Corp. (United States) and Qualcomm Inc. (United States). Companies exiting are Allianz SE (Germany), BNP Paribas S.A. (France), E.ON AG (Germany), Hewlett-Packard Co. (United States) and Petroleo Brasileiro S/A Pref (Brazil).
Source: Bloomberg
Barclays clears $1tn of OTC derivatives
May 31, 2012--Barclays has cleared more than $1tn worth of over-the-counter derivatives arranged with clients globally, the latest in a series of moves as some asset managers rush to embrace some forms of clearing as a way to relieve burdens on stressed capital.
The clearing of interest rate, credit and foreign exchange swaps via CME Group, LCH.Clearnet’s SwapClear unit, and IntercontinentalExchange’s ICE Credit Clear comes well ahead of the final version of the Dodd-Frank Act rules that will require a bulk of the swaps market to be centrally cleared.
Source: FT.com
Transparency on banks' treasury units urged
May 30, 2012--International banks must improve disclosure of often obscure treasury unit investments following the recent $2bn trading loss at JPMorgan's chief investment office, rating agencies and bank analysts have urged.
The US bank’s trading losses have thrown the spotlight on how regulatory pressure to hold higher liquidity cushions has turned treasury departments into an important but opaque revenue driver for international banks.
Source: FT.com
How will tax hit your ETF holdings? -Deborah Fuhr
May 30, 2012--At this time of year, many investors ask questions about the tax implications of using exchange traded funds (ETFs).
There is a hierarchy of three levels of tax to consider when investing in funds and ETFs.
First is within the ETF itself. The investment the fund is making in equities or fixed income and where those securities are domiciled relative to the domicile of the fund will impact on the taxes on income or capital gains within the fund.
Then there is tax relating to where the fund is domiciled. This will have an impact on the type and level of tax the fund might incur in the country in which it is domiciled.
Source: Citywire
Large trade breaks ETF model
May 30, 2012--An unexpected systemic risk in exchange-traded funds has just been brought to light in a research note from credit ratings agency Moody's, which says a recent trade by a large investor caused a breakdown in an ETF and left investors nursing losses.
The research note, which was published this week, says investors in an ETF provided by State Street saw the value of the investors' holdings drop by more than a percentage point below the value of the index the ETF was tracking, after a large investor, probably a hedge fund, redeemed a $780m block of the ETF's shares.
Source: Financial News
