Global ETF News Older than One Year
Hedge fund trade breaks ETF model
May 29, 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.
Source: Efinancial News
DCGX Academy-ITALY AUCTION: Greece Eases; Italy concerns, INR volatility @ 13.7%, gold demand falls 14%
May 29, 2012--HIGHLIGHTS
INDIAN RUPEE
India'' rupee weakened for the first time in four days on speculation importers stepped up purchases of the dollar to pay month-end bills. The currency also dropped after Oil Minister Reddy said yesterday India isn't planning to raise prices of state-subsidized fuels, spurring concern the government's plans to narrow the budget deficit will be delayed.
Global funds cut holdings of local shares by $553 million in the past two months and investments in debt fell $1.4 billion, exchange data show.
The rupee declined 0.7 percent to 55.5525 per dollar as of 10:18 a.m. in Mumbai, The currency's one-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 13.7 percent, after rising to this year's high of 14.5 percent on May 23.
Euro Poised for Monthly Decline Before Italy Auctions Bonds
Dollar Scarce as Top-Quality Assets Shrink After Stimulus
Pound May Decline Against Yen on Fibonacci: Technical Analysis 10.
Swiss Franc Drops Against Euro on Greece as SNB Weighs Controls
Pound Snaps 4-Day Gain Versus Euro as Greece Exit Concern Eases
Broadbent Says BOE Will Respond If Worst Euro Fears Realized
Euro Poised for Monthly Decline Before Italy Auctions Bonds : The euro was poised for the biggest monthly decline since September, before a sale of Italian debt. EUR was 0.2 % from the lowest since July 2010 after yield premiums on Spain's securities over Germany's rose to the most in 17 years.
Source: DGCX Academy
ETFS Precious Metals Weekly: Greece Euro exit fears drive safe haven flows, central banks buy gold
May 28, 2012--Fears of disorderly Greek Euro exit prompts flight to safe havens. Growing investor concerns about the potential negative implications of a disorderly exit of Greece from the Euro caused a flight of investor capital into cash and G-3 bonds last week.
According to Institute of International Finance (IIF) managing director Dallara, a Greek Euro exit would more than wipe-out the ECB’s capital, drive it into insolvency and make it unable to stabilize the Euro area’s financial sector. As the potential costs to the ECB, the European banking system and the European and global economy begin to sink in, investors appear to be taking the recent gold price decline as an opportunity to build their strategic gold holdings.
Central banks continue to aggressively build gold reserves.
Data
released by the IMF last week shows that the official sector has
continued to buy gold in large size this year. According to the latest
statistics, Mexico added around another 3 tonnes in April to its near 17
tonne buying spree in March, while Kazakhstan purchased 2 tonnes. The
Phillippines, which reported March data, added 32 tonnes to its reserves,
the largest official purchase in over a year since Mexico’s 78 tonne
purchase in 2011.
Swiss palladium imports from Russia drop to zero in April. Switzerland is where the bulk of Russian state stockpiles are exported for sale onto the global market. Russian exports dropped from around 65,000 ounces in March to zero in April, indicating that forecasts of dwindling Russian state palladium reserves may be correct. Platinum group metal consultant Johnson Matthey forecasts that a drop of Russian palladium sales in 2012 to 250,000 ounces from over 1,000,000 ounces in 2011 will drive palladium supply into deficit this year. Swiss platinum imports hit a 4-year low in April on the back of reduced supply from South Africa.
visit www.etfsecurities.com for more info
Source: ETF Securities
Trading volume misleading on ETFs
May 27, 2012--Exchange-traded funds have come a long way since they were first introduced 19 years ago, but apparently not far enough, as the majority of ETF assets remain concentrated in a small minority of the available funds.
Although there are more than 1,400 ETFs on the market, more than two-thirds of the trading volume and more than half the assets are linked to just 25 funds.
Source: Investment News
US groups have a head start in UK post RDR
May 27, 2012--Asset managers in the UK may want to keep an eye on their US counterparts when the retail distribution review banning commission on advised sales comes into force at the beginning of January.
In the US, a gradual shift away from a commission model for advice started about two decades ago, triggered in part by brokers – employing financial advisers – keen to gain steady fee revenues rather than commissions on individual transactions.
Source: FT.com
The Abu Dhabi Securities Exchange Upgrades To New Trading Platform From NASDAQ OMX
May 26, 2012--The NASDAQ OMX Group, Inc announces that it has entered an agreement with The Abu Dhabi Securities Exchange (ADX) to upgrade their trading platform.
Under the terms of the agreement ADX renews its contract with NASDAQ OMX for a further five years and commits to upgrade to a trading platform powered by NASDAQ OMX's X-stream technology. The upgrade is expected to be rolled out at ADX in the second half of 2013
The upgrade to X-stream technology will provide ADX with a proven, functionality rich, multi-asset trading platform that complies with international standards and policies. The platform will handle trading of equities, fixed income and ETFs with the possibility to introduce additional instruments. NASDAQ OMX has been delivering trading technology to ADX since the year 2000.
Source: AME Info
Economy: Global economy recovering, but major risks remain, says OECD
May 25, 2012-- The global economy is gradually gaining momentum, but the recovery is fragile, extremely uneven across different regions and could be derailed by the crisis in the euro area, according to the OECD's latest Economic Outlook.
"With slow growth, high unemployment and limited room for manoeuvre regarding macroeconomic policy space, structural reforms are the short-run remedy to spur growth and boost confidence”, OECD Secretary-General Angel Gurría said during the launch of the report in Paris.
GDP growth across the OECD is projected to slow from an annual rate of 1.8% in 2011 to 1.6% in 2012, before recovering to 2.2% in 2013, according to the Outlook.
Private sector demand is expected to push activity up in the United States by 2.4% this year and by a further 2.6% in 2013. In Japan, GDP is expected to expand by 2% in 2012 and 1.5% in 2013. Euro area GDP is forecast to contract by 0.1% this year, before picking up to 0.9% in 2013.
Activity remains strong in most emerging-market economies, but policy challenges vary, with inflation acting as a drag on real incomes in some, while it remains subdued in others. Lower inflation provides policy space in some countries that could be used to sustain activity.
“The crisis in the euro zone remains the single biggest downside risk facing the global outlook,” said OECD Chief Economist Pier Carlo Padoan.
Source: OECD
IMF Working paper-Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies
May 25, 2012--Summary: Implementation of fiscal consolidation by advanced economies in coming years needs to take into account the short and long-run interactions between economic growth and fiscal policy.
Many countries must reduce high public debt to GDP ratios that penalize longterm growth. However, fiscal adjustment is likely to hurt growth in the short run, delaying improvements in fiscal indicators, including deficits, debt, and financing costs. Revenue and expenditure policies are also critical in affecting productivity and employment growth. This paper discusses the complex relationships between fiscal policy and growth both in the short and in the long run.
view the IMF Working paper-Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies
Source: IMF
IOSCO Consults on Certain Internal Controls and Procedures of the Credit Rating Agencies
MAy 25, 2012--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published a consultation report, Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest.
This Consultation Report describes certain internal controls and procedures that credit rating agencies (CRAs) use to promote the integrity of the credit rating process and address conflicts of interest, with a view to promoting a better understanding of these practices. The views of stakeholders and CRAs on these questions will assist the IOSCO with further analysis of the internal controls and procedures used by CRAs.
This Consultation Report is based on an IOSCO review of CRAs that focused on the internal controls established by CRAs to enhance the integrity of the credit rating process and on the procedures to manage conflicts of interest. The review was motivated by the role of CRAs in the 2008 financial crisis, which raised concerns about the quality of credit ratings and credit rating methodologies, the timeliness of adjustments to credit ratings, and, more generally, the integrity of the credit rating process. The 2008 financial crisis also raised concerns about how conflicts of interest are being managed by CRAs.
Source: IOSCO
Invasion of covered bonds stalls at US gate
May 25, 2012--Frederick the Great, the 18th century king of Prussia and famed general, never set foot on US soil. But now, more than 200 years after his rule, one of the former European sovereign's most pervasive inventions could be on the brink of a new invasion into the US.
The humble covered bond, a centuries-old mainstay of European debt markets, made major inroads into the US market this week after the Securities and Exchange Commission gave the green light for a $12bn covered bond programme to be sold by Royal Bank of Canada as “registered securities”.
Source: FT.com
