Global ETF News Older than One Year
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
Swaps Dealers Will Spend $504 Million in 2012 to Create and Market Liquidity Aggregation Systems to Buy-Side Clients, Says TABB
Historical Data and First-Hand Accounts of Change in FX, US Treasuries and Institutional Equities Demonstrates How Technology and Regulation, or Lack Thereof, Will Cause Swaps Liquidity to Fragment
January 18, 2012--Despite the fact that swaps execution facilities (SEFs) don’t technically exist yet and swaps market liquidity isn’t fragmented today, swaps dealers tell TABB Group in a new research report that they intend to spend millions to create, implement and market swaps liquidity aggregation systems to their buy-side client base.
According to Kevin McPartland, a TABB principal, director of fixed income research and author of “Swaps Liquidity Aggregation: Best Execution to Product Selection,” liquidity in the most liquid parts of the swaps market is going to fragment. “Whether there will be three or as many as 10 SEFs per asset class remains unclear, but finding the size you need at the right price will become less about who you know and more about the quality of your aggregation technology.”
The new report is based upon conversations with swaps dealers, proprietary trading firms, hedge funds, swap-execution facilities and technology providers. It examines historic precedent for market automation and liquidity fragmentation and the impact of proposed regulation and technology innovation on swaps market liquidity. The report also examines approaches being utilized to re-aggregate swaps liquidity via SEF aggregation technology.
Source: TABB Group
Clearstream and Strate explore collateral management cooperation for South Africa
The two companies have entered into exclusive negotiations to explore the development of the new service for South Africa * Strate clients would benefit from a more efficient use of their domestic collateral * South Africa would be the third market, after Brazil and Australia, to use the Liquidity Hub GO outsourcing service from Clearstream
January 18, 2012--On 18 January 2012, Clearstream and Strate, the South African central securities depository, signed a Letter of Intent (LOI) aimed at exploring a new triparty collateral management service for South Africa.
The service intents to target the collateralisation of exposures in the South African market. Under the LOI, Strate will look to utilise Clearstream’s collateral management infrastructure, the Global Liquidity Hub, for the allocation, optimisation and substitution of local collateral.
The system operates on a fully automated basis in real time and could enable Strate clients to handle their domestic collateral holdings and exposures more efficiently without the need to move collateral out of the domestic South African environment.
Jeffrey Tessler, CEO Clearstream, said: “The ongoing financial crisis and regulatory initiatives like EMIR or reforms like Basel III require market participants to improve their liquidity management. Companies need to more efficiently handle their collateral holdings and exposure, and our outsourcing service addresses this industry concern.
Source: Clearstream
SEC clears way for NYSE, Deutsche Boerse to merge
SEC approves exchange rule filings related to NYSE-Deutsche Boerse merger
Rule filings needed for change of exchanges' ownership to new parent
European Union seen likely to block the deal on antitrust grounds
January 18, 2012--The Securities and Exchange Commission on Wednesday approved the proposed merger of NYSE Euronext and Deutsche Boerse AG, adding to U.S. authorizations of a deal seen likely to be nixed by European Union regulators.
SEC officials approved a raft of rule filings by the NYSE Euronext-owned exchanges, including the New York Stock Exchange and NYSE Amex, as well as the Deutsche Boerse-owned International Securities Exchange, relating to a change in ownership that would see the markets move under a new parent.
Source: Market Watch
Legg's Fetting eyes ETFs, international for 2012 | Reuters
January 18, 2012--After four years as chief executive officer of Legg Mason, Mark Fetting is finally able to talk about growth. Exchange traded funds and international markets are his two targets for 2012.
Fetting, 57, said he is "testing the waters" in the ETF space, and looking to expand in Europe and Asia as top priorities.
"We are looking to see if there are some niche areas as opposed to going aggressively into let's say the commodity space, which I think is more of an oligopoly," he said in an interview last week.
Source: Reuters
BofA Merrill Lynch Fund Manager Survey Finds Gloom Lifting Over Global Growth Prospects
January 17, 2012-- Global investors have started 2012 with a reawakened sense of optimism towards the global economy and greater appetite for risk, according to the BofA Merrill Lynch Survey of Fund Managers for January.
The global survey of 214 institutional investors shows far fewer predicting a global slowdown. Only a net 3 percent believe the world economy will weaken in the coming 12 months down from a net 27 percent in December – the biggest one-month improvement in the growth outlook since May 2009.
Many investors are showing more appetite to take risk. BofA Merrill Lynch’s Composite Risk and Liquidity Indicator is the highest since July 2011, before the sovereign debt crisis fully emerged. Cash levels have fallen to their lowest levels since July 2011. Cash now makes up, on average, 4.4 percent of a portfolio, down from 4.9 percent in December. The proportion of investors taking lower than normal levels of risk has improved to a net 33 percent of the panel, compared to a net 42 percent in December.
One concern that investors have highlighted is geopolitical risk. The proportion of respondents viewing geopolitical risk as “above normal” has jumped to 69 percent from 48 percent last month. This has, in the past, been correlated with a spike in the oil price.
“Investors are tip-toeing rather than hurtling toward higher risk exposure; the U.S. market and high quality cyclical sectors, such as energy and tech, have been the main beneficiaries of lower cash holdings,” said Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research. “Despite improvement in global and European growth expectations asset allocators remain deeply skeptical towards European equities, especially banks,” said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research.
Source: Bank of America
NZX and Markit shake hands on final deal
January 16, 2012-- NZX is pleased to announce that leading global financial information services company, Markit, will pay NZX US$21.4 million, by 31 January 2012, to bring to completion the performance of each party’s obligations in respect of the 2009 sale by NZX of the TZ1 environmental registry to Markit.
Under the June 2009 purchase agreement between Markit and NZX, Markit had the option to acquire the consideration shares issued to TZ1 based on the environmental registry's performance.
Markit has chosen to exercise this option and pay NZX in cash for its shareholding in Markit.
“Markit is a world class organisation, and one with which we have been proud to be associated. NZX has enjoyed an excellent working relationship with Markit since 2009, and the fact that final payment is to be made in front of what was expected reflects the strength of that relationship,” said NZX CEO Mark Weldon.
The full details of the TZ1 transaction have previously been disclosed in NZX's Annual Financial Statements.
Source: NZX
BlackRock -New ETF Landscape Report: Industry Summary
January 16, 2012--2011 Asset Growth Highlights (US$):
Under the backdrop of various macro-economicchallenges in 2011, the global Exchange Traded Products (ETPs) industry grew 2.9% on the year,ending with $1.53tn in Assets Under Management
(AUM). While growth was lower than in recent years, the difference was primarily driven by unfavorable market return which has historically
been a strong contributor to industry asset growth.
Fixed income ETPs expanded at the fastest rate with 24% growth or $50.6bn over 2010 driven entirely by strong cash inflows of $49.8bn, topping the $40 billion collected in 2010. This expansion was largely driven by US-listed products.
Developed equity captured healthy net inflows of $93bn offset by negative market return of ($65.5bn) to deliver modest growth of $27.7bn or a 3.3% increase in assets on the year.
Emerging markets equity products surrendered 18.7% of asset values due to negative market returns of ($43bn) and net redemptions of ($1.8bn) for the year.
Emerging markets equity products surrendered 18.7% of asset values due to negative market returns of ($43bn) and net redemptions of ($1.8bn) for the year.
Source: BlackRock
