Global ETF News Older than One Year
IMF paper-From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions
April 24, 2012--EXECUTIVE SUMMARY
Large-scale government support of the financial institutions deemed too big or too important to fail during the recent crisis has been costly and has potentially increased moral hazard.
To protect taxpayers from exposure to bank losses and to reduce the risks posed by too-big-tofail (TBTF), various reform initiatives have been undertaken at both national and international levels, including expanding resolution powers and tools.
Source: IMF
ETFS Precious Metals Weekly: Rising European political risk boosts US dollar, weighs on gold price
April 23, 2012--Gold price and ETP demand are hit as European political concerns weaken the Euro and sideline investors. The gold price fell again last week, bringing total losses over the past 2 months to around 10%, as a strengthening US dollar and continued
general investor nervousness kept many investors on the sidelines.
It was reported on the weekend that Socialist candidate Francois Hollande, French president Sarkozy’s main opponent, won the first round of French elections. The first round win adds to European sovereign concerns given Hollande’s pledge to renegotiate the recent Eurozone fiscal compact. On Saturday, the Netherland’s budget talks collapsed, highlighting that it is not just ‘peripheral’ European countries that are facing pressures due to the conflicting goals of fiscal retrenchment and and social stability. When combined with still generally positive US economic data, these growing problems in Europe have the potential to keep downward pressure on the Euro (upward pressure on USD) in the coming few weeks. Therefore, while gold continues to have longer term price support due to a continued need for highly expansionary monetary policy in the US, Europe, UK and Japan, with accompanying currency debasement fears and central bank buying, potential further US dollar strength may act as a weight on further gold price gains in the near-term.
India gold imports weaken as weak Rupee boosts gold price in local currency terms. The Chairman of the All India Gem and Jewellery Trade Federation said that physical ‘demand is lacklustre’ and that ‘no imports of gold have taken place’ in the week following the suspension of the jewellers trade strike. The weak demand is likely to have been driven by the strong rise in the Rupee cost of gold, with the Indian Rupee falling to a four month low following a surprise central bank interest rate cut. Based on historic trends, however, the any weakness in demand due to Rupee strength is likely to be short-lived as gold consumers adjust to a higher price.
visit www.etfsecurities.com for more info
Source: ETF Securities
Towards Sustainable Investment -Taking Responsibility-Calpers Report
April 23, 2012--CalPERS is proud to announce the release of our first report on our Environmental, Social and Governance (ESG) work.
The report explains the fiduciary framework we have adopted to integrate sustainability across the total fund, illustrates achievements from the last few years, and outlines our vision for the future.
view the report-Towards Sustainable Investment-TAKING RESPONSIBILITY
Source: Calpers
Dow Jones Industrial Average Component Companies Increase Expected Annual Dividend Distribution By 8.40% From A Year Ago
Survey By Dow Jones Indexes Also Indicates Expected Annual Dividend Distribution From DJIA'S 30 Stocks
To Rise 2.18% From Previous Quarter
DJIA Components' Dividends Represent 37%
Of Total U.S. Stock Market Payouts
Dividend Data Provides Insight Into Outlook of Bellwether U.S. Corporations, Dow Jones Indexes Says
April 23, 2012--The Dow Jones Industrial Average's 30 component companies are expected to increase their annual dividend payout by 8.40% year-over-year and 2.18% from the previous quarter, according to a first-quarter 2012 survey by Dow Jones Indexes.
DJIA component companies’ $107 billion expected dividend distribution for the 12 months beginning April 1, 2012, represents 37% of all indicated annual dividends (IAD) by U.S.companies as measured by the Dow Jones U.S. Index, a gauge that accounts for roughly 95% of theU.S. equity market. (IAD is a forward-looking measure defined as a company’s most recently paid quarterly dividend multiplied by four.)
Source: Dow Jones Indexes
41 ETFs Based on S&P Indices Launched in Q1 as 2012 Gets Off to Strong Start
419 S&P Linked ETFs Now Available to Investors Worldwide
April 23, 2012--S&P Indices saw a sharp rise in its ETF licensing activity during the first quarter of 2012, as 41 ETFs based on its indices were launched globally during the first three months of the year.
The 41 ETFs launched during the first quarter represents more than half of the total number of S&P index-based ETFs launched for all of 2011. S&P Indices attributes the growth in ETF issuance to a maturing European and Asia-Pacific ETF market.
"Investor interest in ETFs, especially outside of the States, is rapidly increasing as these products are providing greater access to niche market segments and varying asset classes at fractions of the cost typically associated with actively managed products such as mutual funds – once the primary option available to invest in broad baskets of securities," says Alexander Matturri, Executive Managing Director at S&P Indices. "Our ETF business is becoming more international and we are well placed to offer product providers with an ever more varied set of indices to meet the growing and evolving needs of their clients."
The growth in S&P based ETF issuance was lead by S&P Indices' international business, as 23 ETFs were launched in Europe during the first quarter. In addition, 9 ETFs were issued by product providers in Asia-Pacific and 1 in Canada during the first three months of 2012.
Source:S&P Indices
Consequences of Asset Shortages in Emerging Markets
April 23, 2012--Summary: We assess econometrically the impact of asset shortages on economic growth, asset bubbles, the probability of a crisis, and the current account for a group of 41 Emerging markets for 1995-2008.
The econometric estimations confirm that asset shortages pose a serious danger to EMs in terms of reducing economic growth, raising the probability of a crisis, and leading to asset price bubbles. Moreover, asset shortages can also explain the current account positions of EMs. The findings suggest that the consequences of asset shortages for macroeconomic stability are significant, and must be tackled urgently. We conclude with policy implications.
Source: IMF
Exchange-Traded Funds: Growth and Challenges
April 23, 2012--Abstract
The exchange-traded product market has made significant progress in the last decade. Assets under management have increased more than tenfold: from US$146 billion in 2002 to US$1.5 trillion in 2011. There has been a proliferation in the number of funds, and new funds are being regularly introduced. However, future growth is no longer something the industry can take for granted.
In a new report, Exchange-Traded Funds: Growth and Challenges, Celent discusses the evolution of the global exchange-traded product (ETP) market. The rapid growth of ETPs has attracted a lot of attention, from both competitors and regulators. There has been an ongoing debate about whether the growth of ETPs has been at the expense of the mutual fund industry or if ETPs are breaking new ground and attracting investment that might have gone elsewhere. Within the ETP market, there has been an ongoing tussle for supremacy between the managers of physical ETPs and the synthetic ETPs (which use derivatives).
Source: Celent
Custodians look to retune asset servicing
April 23, 2012--Estimated to be worth at least $1.5 trillion, exchange-traded funds offer custodians many opportunities to grow their revenue. ...
But the market is also fraught with challenges as new customers in new territories become more demanding of their asset
Source: Financial News
Dubai Gold & Commodities Exchange Weekly Market Commentary
April 22, 2012--Economic Data Overview
The most successful trading strategy for both commodities and currencies in the dollar / European bloc has been to question market extremes and look for established ranges to prevail.
Last week the euro broke back below 1.3000 very briefly only to be swallowed up by fresh investor demand as doubts emerged about the strength of the US recovery. Both oil and gold attract new demand as they test their long term bull trends, but gains have been modest and volatility is decreasing. The strongest directional markets currently are dollar / yen and dollar/rupee as the dollar continues to register healthy gains against both currencies. These "direction-off" strategies seem to work at the moment, regardless of the news flow. Last week the market chose to focus on the lower than expected weekly jobless claims and poor housing starts data as evidence that the US recovery is beginning to flag. Better than expected German confidence numbers were seen as more important than continued destabilisation of the Spanish and Italian debt markets. Peripheral European debt is struggling to attract investors and governments must pay over 6% in these nations to attract funds. If this situation cannot be reversed, it will not be long before the crisis circuit breaker of 7% will be broken. There is still is no plausible solution in place to reverse this potential crisis.
Last week the market chose to ignore the very promising US corporate earnings which boosted stock markets and highlighted real economic performance. It is also interesting to see that volumes in US Treasuries have begun to decline as investors appear unwilling to take the substantial risk of a pick-up in growth or inflation when yields are just above their all-time lows. The sole destination for investors looking for a safe haven is the German Bund market. It is easy to see that Bunds will continued to outperform their poorer European neighbours, but centralising risk in Europe with no end to the overall debt crisis surely is questionable. The IMF now has a bigger war chest after last week's G20 meeting. However, both Brazil and China have shrewdly limited their commitment of additional funds as they look for Europe to produce a more plausible solution to its own problems. The policy amongst German and French leaders of slowing the process to what will have to be a much larger bailout fund as they attempt to get re-elected is not helping the debt problem and this weekend may not help the current French president.
In terms of the directional plays, next week will be important as Japan and India face important challenges in managing their currencies. The BOJ rate decision is expected to see no change in rates. However, announcements will be important as the new policy of reflating the economy and making the yen more competitive is here to stay and Japan has stated at the G20 does not want any more yen strength. India is running out of options to stabilize the dollar/rupee rate. The market is in intervention territory. Interest rates were reduced this week to boost the economy and while oil prices did not rally strongly, balance of payments problems are still a concern. Next week the FOMC decision is not expected to see any change but the minutes will be important as any sign of easier monetary measures would boost gold and silver prices. The market will also look at the US growth data and measures of inflation in Europe
Source: Dubai Gold and Commodities Exchange (DGCX)
Financial Stability Board reports to G20on progress of financial regulatory reforms
April 20, 2012--The Chairman of the Financial Stability Board (FSB) reported to the G20 Finance Ministers and Central Bank Governors today on progress in the financial regulatory reform programme.
In connection with this, the FSB is publishing today:
a letter by the FSB Chair to the G20, sent ahead of their meeting, reporting on the progress being made in the following priority reform areas: (i) building resilient financial institutions; (ii) ending “too big to fail”; (iii) strengthening the oversight and regulation of shadow banking activities; (iv) completing OTC derivatives and other reforms to create core continuous markets; and (v) implementing agreed G20 reforms in a timely and consistent manner;
a report on progress in strengthening the oversight and regulation of the shadow banking system;
a joint report from the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board on their progress in converging their standards, together with a report on enhancements to the governance of the IASB.
Source: FSB
