Global ETF News Older than One Year
BRICS Bourses Start Cross-Listing Derivative Indices
BRICS nations start cross-listing emerging market derivatives indices but success depends on liquidity
March 30, 2012--Looking to expand product offerings beyond home markets, five of the world's leading emerging market indices, have started to cross-list derivative indices from Friday.
Brazil’s IBOVESPA futures; Russia’s MICEX Index futures; Hong Kong’s Hang Seng Index futures; and South Africa’s FTSE/JSE Top40 futures got listed on the BSE on Friday.
Part of the common linkage platform, the cross-listing however, could run into the same chicken-and-egg problem that has derailed similar efforts like liquidity.
The idea to give investors in one country exposure to another hot market in their local currency carries appeal, on paper at least
Source: Business World
Deborah Fuhr: understanding the counterparty risks
March 29, 2012--We have seen over the past two years a significant increase in regulatory concerns due to the rapid growth in exchange traded funds (ETFs) and other types of exchange traded products (ETPs).
Broadly, those concerns may be categorised under four headings. First, ETFs that use derivatives to replicate their index and especially so where the product provider and the derivative counterpart are part of the same corporate group. Second, the risks associated with securities lending, which is more typically confined to physically replicating funds, and third, the increased complexity of products and exposures, especially leveraged and inverse offerings.
Fourth, and to a significantly lesser emphasis, the risks associated with unregulated exchange traded products.
Source: CityWire
MSCI Launches Economic Exposure Indices
March 29, 2012-- MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, announced today that it has launched a family of MSCI Economic Exposure Indices which aim to reflect the performance of companies with significant exposure to specific regions or countries, regardless of their domicile. Many companies conduct business globally
and are exposed to the economies of multiple countries and regions. MSCI has developed a consistent and transparent methodology for estimating a firm’s economic exposure using the geographic distribution of its revenues, despite the many disparities in the way companies report their sales across geographic segments.
Source: MSCI
Mirae BRIC's Weekly
March 29, 2012--Markets Lose Momentum on Policy Concerns.
Hong Kong stock markets reversed its uptrend while China bourses traded lower with cyclical sectors the laggards when the further loosening policies, which were widely expected by the market, failed to materialize.
Mainland developers continued to retreat amid falling home prices due to housing curbs mentioned during the National People's Congress.
Indian Budget to Target Fiscal Consolidation.
The India market experienced volatility as investor sentiment waned with climbing oil prices hurting margins. However, foreign funds supported the markets on expectations that monetary easing will continue.
Priorities have been given to fiscal consolidation and reviving the investment cycle in the 2012-13 Budget. The FY13 Budget targets a fiscal deficit of 5.1 % of GDP, down from the 5.9% expected to print in FY12.
Source: Mirae Asset Management
Economy: US and Europe facing separate growth tracks, says OECD
March 29, 2012-- Economic growth in the G7 countries is expected to be firmer through the first half of 2012, but the recovery remains fragile and will likely proceed at different speeds in North America and Europe, the OECD said in its latest Interim Economic Assessment.
The Assessment, presented in Paris by Chief Economist Pier Carlo Padoan, says the G7 economies are projected to grow by 1.9 percent in both the first and second quarters of 2012, although a strong variance in outcomes is expected across this group of countries.
"Our forecast for the first half of 2012 points to robust growth in the United States and Canada, but much weaker activity in Europe, where the outlook remains fragile,” Mr Padoan said. “We may have stepped back from the edge of the cliff, but there’s still no room for complacency."
view the What is the economic outlook for OECD countries?-An interim assessment
Source: OECD
ISDA Final IRS, Credit and Equity Derivatives Matrix and Legend published (Standardisation Q2 2011)
March 29, 2012--ISDA has published the Standardisation Q2 (April-June) 2011-Final Interest Rate Derivatives Matrix and Legend Standardisation Matrix / corresponding legend.
Source: ISDA
Accounting Devices and Fiscal Illusions
March 28, 2012--EXECUTIVE SUMMARY
A government seeking to reduce its deficit can be tempted to replace genuine spending cuts or tax increases with accounting devices that give the illusion of change without its
substance, or that make the change appear larger than it actually is.
Under ideal accounting standards, this would not be possible, but in real accounting it sometimes is. For example, governments can sometimes sell assets or borrow money and count the proceeds as revenue, or defer unavoidable spending without recognizing a liability. In each case, this year’s reported deficit is reduced, but only at the expense of future deficits. The result is that the reported deficit loses some of its accuracy as a fiscal indicator.
The use of accounting stratagems cannot be eliminated, but several things can be done to reduce their use or at least bring them quickly to light. Governments can be encouraged to prepare audited financial statements—income statement, cash-flow statement, and balance sheet—according to international accounting standards, and statisticians, who in many countries use accounting data to compile the most important (“headline”) fiscal indicators, can be given the resources and independence to be both expert and impartial, as well as the authority to revise standards in the light of emerging problems. To help reveal remaining problems in headline fiscal indicators, a variety of alternative fiscal indicators can be monitored, since a problem suppressed in one fiscal indicator is likely to show up in another. Many of the devices documented in this note would be revealed if governments also reported change in net worth and high-quality long-term forecasts of the headline indicator of the deficit under current policy.
view the IMF Report-Accounting Devices and Fiscal Illusions
Source: IMF
IMF paper-Revisiting Risk-Weighted Assets
March 28, 2012--Summary: In this paper, we provide an overview of the concerns surrounding the variations in the calculation of risk-weighted assets (RWAs) across banks and jurisdictions and how this might undermine the Basel III capital adequacy framework.
We discuss the key drivers behind the differences in these calculations, drawing upon a sample of systemically important banks from Europe, North America, and Asia Pacific. We then discuss a range of policy options that could be explored to fix the actual and perceived problems with RWAs, and improve the use of risk-sensitive capital ratios.
view the IMF paper-IMF paper-Revisiting Risk-Weighted Assets
Source: IMF
Brics to eye joint bank, exchange ties
March 28, 2012--The Brics group of emerging world powerhouses - Brazil, Russia, India, China and South Africa - is expected to launch plans this week for a joint development bank and measures to bring their stock exchanges closer together.
Officials say the initiatives will take time as they need to sort out details. But they herald a new level of ambition for a bloc that brings together about half the world’s people. The Middle East and energy security will also be discussed, officials say.
Source: FIN24
Lack of UK Government action on mandatory reporting of climate change information for companies surprising and disappointing
March 28, 2012-- The UK Department of Environment Food and Rural Affairs (Defra) yesterday announced that a decision has not yet been reached on the introduction of mandatory reporting for companies' greenhouse gas emissions and other climate change-related information, despite missing a number of previously announced dates for a verdict.
Under the Climate Change Act (2008) the Government was required to implement mandatory reporting by April 2012, or else provide Parliament with an account of why it had decided not to do so.
The explanatory document produced by Defra stated that:
“Ministers are currently considering the analysis of responses to a public consultation in the summer 2011; an analysis of the costs and benefits of different options aimed at encouraging corporate reporting of greenhouse gas emissions; and the review of evidence for how corporate reporting helps the UK meet its climate change objectives.”
Source: CDP