Global ETF News Older than One Year
New iShares ETFs promise better commodity returns
January 24, 2012--BlackRock has expanded its range of exchange traded funds linked to commodities with four new iShares ETFs that aim to deliver more efficient exposures to agriculture, energy, industrial metals and the broad commodities market.
The four new ETFs are based on S&P GSCI dynamic roll indices which are designed to take into account fluctuations in commodity futures prices.
Source: FT.com
ETFS US Precious Metals Weekly: Precious metals investment rebounds as market confidence begins to find its feet
January 23, 2012--Gold, silver prices hit 6 week highs as precious metal prices push up through key technical levels. Gold, silver platinum and palladium are now all tracking back up above their 50 day moving average levels, suggesting that markets have found renewed momentum in the New Year.
Data pointing toward a rebound in US growth and a soft landing for Chinese activity has been a shot in the arm for non-cash assets at the start of 2012, with precious metals benefiting from both lingering sovereign debt question marks in Europe as perceived stores of value and waning safe-haven related USD strength. Palladium has been the largest beneficiary, up 8% over the past 4 weeks.
Investors re-build positions across the precious metals as physical demand shows resilience. COMEX gold net speculative futures positions saw their second consecutive weekly gain last week, the first back to back gain in 2 months. Net speculative futures positioning in other precious metals has similarly lifted off their lowest levels since the credit crisis in January. Gold purchases ahead of Chinese New Year celebrations have also supported prices recently, with Indian demand also holding up despite the import tax hike in January. China surpassed India as the world’s largest gold jewellery market in 2011 according to the World Gold Council.
Gold mine production costs move towards $1,000/oz in 2011, as near double digit annual cost inflation continues. Mining analyst Thomson Reuters GFMS noted that the estimated 4% increase in mine production last year was accompanied by a 9% increase in total production costs to $935/oz, following on from 20% cost inflation in 2010. Global gold mine production in 2011 was just 5% higher than a decade earlier according to the statistics, with a 9% decline in global gold mine production between 2001 and 2008. Gold mining accounted for two-thirds of annual global production on average over the past decade.
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Source: ETF Securities
EDHEC Case Studies and Risk Management in Commodity Derivatives Trading
January 23, 2012--Until recently, one could only gain expertise in commodity-derivatives relationships if one had worked in niche commodity-processor companies or in banks that specialised in hedging project risk for natural-resource companies.
The contribution of this article is to help fill the knowledge gap in the risk management of commodity derivatives trading. The article emphasises the constant challenges to a trader when attempting to navigate the very dynamic flows of both the commodity markets and the prevailing risk environment. The article also emphasises that operational controls are paramount in an age of increasing legal and regulatory risk, particularly for firms involved in large-scale commodity derivatives trading.
Source: EDHEC
Thomson Reuters Launches Fixed Income Global Snapshot To Provide Greater Transparency And Flexibility To Investors
January 23, 2012--Thomson Reuters today announced the launch of a new evaluated pricing capability, the Fixed Income Global Snapshot (FIGS). By re-evaluating all non US fixed income securities with updated benchmark curves and credit spreads at both 3pm and 4pm, Eastern Daylight Time. FIGS will provide investors with updated, accurate fixed income evaluations and transparency they need to meet regulatory requirements and have a full understanding of the risks associated with the investment process.
The expansion into US snap times has been driven by market volatility, customer demand and the focus on the need for appropriate and consistent evaluations, that regulations such as Basel III and the Alternative Investment Fund Managers Directive (AIFMD) have fuelled. The new fair market evaluation service will utilize Thomson Reuters standard methodologies which incorporate trade prices, broker quotes, the latest available news, and vigorous quality control checks. The Asian, Middle East, African, and European fixed income securities were previously valued intraday and at the close within their local markets.
Source: Thomson Reuters
2011 WFE Market Highlights
January 19, 2012--2011 equity volumes remained stable despite a fall in market capitalization. Derivatives, bonds, ETFs, and securitized derivatives continued to grow strongly.
Total turnover value remained stable in 2011 at USD 63 tn despite a sharp decrease of the global market capitalization (-13.6% at USD 47 tn).
High volatility and global uncertainty created from the sovereign debt crisis affected volumes all year through and made August 2011 the most active month in terms of trading value, a highly unusual annual peak for markets.
Despite overall unfavorable conditions for primary markets in several regions, WFE members increased their total listings by 1.7% totaling 45 953 companies listed.
Total number of trades decreased by 6.4% at 112 tn. This trend combined with the stability of turnover value led to a small increase in the average size of transaction which was USD 8 700 in 2011.
The high volatility and lack of confidence that affected financial markets globally probably drove the needs of hedging as derivatives contracts traded grew by 8.9%. WFE members continued to diversify their products range as other products such as bonds, ETFs, and securitized derivatives all had solid growth in 2011.
Source: WFE
IEA-Highlights of the latest Oil Market Report
January 19, 2012--Oil markets began the New Year confronting a host of supply issues, not least a pending EU ban on Iranian oil imports and retaliatory threats from Tehran to close the Strait of Hormuz, through which flows roughly one-third of world oil exports. Oil prices jumped $4 5/bbl on the reports, but eased on mounting euro zone debt issues. Brent was last trading near $112/bbl and WTI at $100.50/bbl.
Clear signs of economic weakness tipped global oil demand into a declining year-on-year trend at the end of 2011, down 0.3 mb/d in 4Q11, its first such drop since the tail-end of the credit crunch. The significantly lower starting point has accordingly trimmed global oil demand growth to 1.1 mb/d for 2012 (from 1.3 mb/d previously).
Non-OPEC supply fell by 140 kb/d to 53.2mb/d in December, as rising North Sea output only partially offset a seasonal decline in biofuels and lacklustre supply from the FSU. Middle East unrest and other unplanned outages limited annual growth in 2011 to only 45 kb/d. A rebound to 340 kb/d growth is expected for 1Q12, and 1.0 mb/d for 2012 overall, as non-OPEC output averages 53.7 mb/d.
Source: International Energy Agency (IEA)
Momentum to drain from world economy in 2012: poll
January 19, 2012--The world economy will lose momentum in 2012 but it will keep moving in the right direction, according to Reuters polls of around 600 economists who said crisis-hit Europe would drag on global growth.
Asian economies will again power the expansion of the world economy this year, but with relatively subdued performances. The United States, meanwhile, should continue to contribute modest growth that will easily outpace its recession-hit European peers.
Source: Reuters
IOSCO publishes principles on suspension of CIS redemptions
January 19, 2012--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published its final report, Principles on Suspensions of Redemptions in Collective Investment Schemes, which contains principles regarding the suspension of redemptions for open-ended collective investment schemes (CIS).
The principles reflect a common level of approach and provide standards against which both regulators and the industry can assess the quality of regulation and industry practices concerning suspensions of redemptions.
Principles for Suspension of Redemptions of Collective Investment Schemes
The principles, which are based on the CIS responsible entities’ basic duty to manage CIS liquidity on an on-going basis so as to avoid suspensions to the extent possible, generally cover all types of open-ended CIS which offer a continuous redemption right, and apply irrespective of whether they are offered to institutional or retail investors. They are addressed to those entities responsible for the overall operation of the CIS and in particular its compliance with the legal/regulatory framework in the respective jurisdiction and thus for the implementation of the principles. The delegation of activities may not be used to circumvent the principles and there should be compliance with the principles, whether activities are performed directly or through a third party.
view the Principles on Suspensions of Redemptions in Collective Investment Schemes Final Report
Source: IOSCO
Dow Jones Industrial Average Component Companies Increase Expected Annual Dividend Distribution For 2012 By 12.34% From A Year Ago
Survey By Dow Jones Indexes Also Indicates Expected Annual Dividend Distribution From DJIA’s 30 Stocks To Rise 1.94% From Previous Quarter - DJIA Components’ Dividends Represent 38% Of Total U.S. Stock Market Payouts - Dividend Data Provides Insight Into Outlook Of Bellwether U.S. Corporations, Dow Jones Indexes Says
January 19, 2012--– The Dow Jones Industrial Average‘s 30 component companies are expected to increase their annual dividend payout by 12.34% for 2012 compared with 2011, according to a survey by Dow Jones Indexes.
The expected annual dividend distribution as of the end of 2011’s fourth quarter will rise by 1.94% from the previous quarter, the survey also indicates.
DJIA component companies’ $104.7 billion expected dividend distribution for the 12 months beginning January 1, 2012, represents 38% 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 the U.S. equity market. (IAD is a forward-looking measure defined as a company’s most recently paid quarterly dividend multiplied by four.)
For the quarters ended September 30, 2011 and December 31, 2011, DJIA component companies paid $102.7 billion and $93.2 billion in IAD, respectively.
Source: Dow Jones Indexes
World Bank-Global Economic Prospects 2012
January 18, 2012—Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, says the World Bank in the newly-released Global Economic Prospects (GEP) 2012.
Overview and main messages
The world economy has entered a very difficult phase characterized by significant downside risks and fragility.
The financial turmoil generated by the intensification of the fiscal crisis in Europe has spread to both developing and high-income countries, and is generating significant headwinds.
Capital flows to developing countries have declined by almost half as compared with last year, Europe appears to have entered recession, and growth in several major developing countries (Brazil, India, and to a lesser extent Russia, South Africa and Turkey) has slowed partly in reaction to domestic policy tightening.
As a result, and despite relatively strong activity in the United States and Japan, global growth and world trade have slowed sharply.
Indeed, the world is living a version of the downside risk scenarios described in earlier editions of Global Economic Prospects (GEP), and as a result forecasts have been significantly downgraded.
The global economy is now expected to expand 2.5 and 3.1 percent in 2012 and 2013 (3.4 and 4.0 percent when calculated using purchasing power parity weights), versus the 3.6 percent projected in June for both years. High-income country growth is now expected to come in at 1.4 percent in 2012 (-0.3 percent for Euro Area countries, and 2.1 percent for the remainder) and 2.0 percent in 2013, versus June forecasts of 2.7 and 2.6 percent for 2012 and 2013 respectively. Developing country growth has been revised down to 5.4 and 6.0 percent versus 6.2 and 6.3 percent in the June projections.
Reflecting the growth slowdown, world trade, which expanded by an estimated 6.6 percent in 2011, will grow only 4.7 percent in 2012, before strengthening to 6.8 percent in 2013.
However, even achieving these much weaker outturns is very uncertain. The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce one another, resulting in an even weaker outcome.
view the Global Economic Prospects-Uncertainties and Vulnerabilities-January 2012
Source: World Bank
