Global ETF News Older than One Year
Volatility Expected to Continue in 2012;Key Risk to Improved Global Market Sentiment is Europe
December 15, 2011-- Russell Investments' team of global investment strategists have released the firm's 2012 Global Outlook in which they predict that global deleveraging will continue through 2012, noting that "it took three decades for the developed economies to borrow too much money and it will take years to pay it back."
Against this backdrop, however, Russell forecasts that investors can expect to see modest levels of recovery and growth overall, driven by Asia and the U.S.
“The global markets in 2011 have played out consistently with our expectations and as we look ahead to 2012 we anticipate continued volatility, especially as Western democracies reconcile the need for austerity with the need to support economic growth and provide for rising outlays on entitlements. However, we do expect to see more clarity around the impacts of the proposed solutions to this year’s headline-dominating policy issues globally,” said Pete Gunning, Russell’s global Chief Investment Officer.
The 2012 Annual Global Outlook points specifically to four themes that Russell believes will have the greatest impact on markets and asset returns in 2012:
1. Global deleveraging will continue to be the backdrop for economics, finance and politics for 2012. Balance sheet recessions are typically followed by elongated, grinding and below-trend recoveries. Lower standards of living, high unemployment, lower returns and higher volatility should all be expected.
view Russell Investments 2012 Global Outlook
Source: Russell
Bernanke tells lawmakers 'no euro bailout'
December 15, 2011--US Federal Reserve chief Ben Bernanke told Republican lawmakers Wednesday that he cannot and will not bailout struggling European economies, senators at the meeting said.
Amid suspicions that Fed funds may be used to help debt-ridden eurozone countries, leading Republican Lindsay Graham said Bernanke assured senators "he doesn't have the intention or the authority to do that."
But Bernanke also warned President Barack Obama's foes in the Senate that if European leaders cannot solve the eurozone debt crisis, it would damage the US economy.
Source: EUbusiness
MSCI to Continue to Review the Classification of the MSCI UAE and MSCI Qatar Indices in 2012
December 14, 2011 – MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate
governance services, announced today that the MSCI UAE Index and the MSCI Qatar Index will maintain
their Frontier Market status and will remain under review for potential reclassification to Emerging
Markets as part of the 2012 Annual Market Classification Review.
As a reminder, MSCI extended the review period for the potential reclassification of the MSCI Qatar Index and the MSCI UAE Index from Frontier Market to Emerging Market status to December 2011, following the implementation of new delivery versus payment (“DVP”) models on the Qatar Exchange, Dubai Financial Market and Abu Dhabi Securities Exchange in May 2011, in order to give additional time for market participants to assess the effectiveness of these models and for the regulators and the stock exchanges to address the remaining concerns raised by international institutional investors.
Regarding the UAE, the feedback received since June 2011 from international institutional investors was very positive on the introduction and seamless functioning of the new DVP model; however, investors continue to stress significant concerns over the effectiveness of this new framework to fully ensure the safeguarding of their assets under certain circumstances. This is in particular the case for failed trades where a forced sale of assets, without the owner’s consent, remains a possibility. As a result many international institutional investors and their custodians continue to view the use of a dual account structure as a requirement. The potential introduction of new regulations allowing for securities borrowing and lending (“SBL”) agreements and security short selling have been raised by market participants as a possible way of resolving these issues. The Emirati regulator (Securities and Commodities Authority ‐ SCA) has already published regulation drafts on these topics.
Source: MSCI
Emerging hedge fund managers optimistic on 2012 prospects, survey says
December 14, 2011--Emerging managers expect their hedge funds to achieve gains of 10 percent or more in 2012, according to the Global Alternative Investment Management (Gaim) USA survey of emerging hedge fund managers.
The survey of 90 emerging managers (defined as having USD250 million or less in assets under management or AUM) found that 61 percent of the managers expect their portfolios to earn more than 10 percent, net of fees, while 31 percent of them expect to earn 15 percent or more.
Source: The Asset
State Street Corp shuns UK as bond auctions lose lustre
December 14, 2011--U.S.-based State Street Corp (STT.N) pulled out of British government bond auctions on Wednesday, a sign banks are shying away from markets they once queued up to support and a potential new stress for countries struggling to raise money.
Although the number of banks taking part in bond auctions has risen sharply in the past few years, many are now reassessing the risks they previously absorbed as the price of good relations with governments.
Source: Reuters
Banks face €350bn Basel III shortfall
December 14, 2011--European banks will have to raise nearly €200bn ($260bn) in new capital or cut their balance sheets by nearly 20 per cent, to
achieve the tougher new Basel III banking reform rules that start taking effect in 2013..
Source: FT.com
ETF Securities bidding 'gone quiet'
December 14, 2011--Industry experts say ETF Securities will struggle to find a buyer, with private-equity firms and asset managers unlikely to fall over themselves to snap up the provider.
The firm’s founder, Graham Tuckwell, who is also chairman and majority shareholder of ETF Securities, has reportedly mandated Goldman Sachs to find a buyer for the London-based provider, asking for unconditional offers to be submitted before Christmas.
Source: FT.com
EDHEC-Target-volatility strategies -a response to current investment dilemma
December 14, 2011--Insurance companies and pension funds have traditionally played an important role as providers of long-term risk capital and, in a world of deleveraging credit institutions, are crucially needed to finance economic development.
However, recent and forthcoming changes in accounting and prudential standards encourage long-term institutional investors to invest in low risk assets that are highly correlated with liabilities. Meanwhile, in the current low interest rate environment, institutional investors cannot meet their future obligations out of the yields on these instruments. At the same time, risk-based capital charges and financial reporting standards penalise assets that offer high risk premia and make it expensive for long-term investors to directly hold volatile assets.
Visit www.edhec-risk.com for more info
view the Structured Equity Investment Strategies for Long-Term Asian Investors study
Source: EDHEC
Gold reels near three-month lows as euro crisis rages
December 14, 2011--Gold tumbled to its lowest level since early October on Wednesday, set for its weakest monthly performance since September, as a weak euro and a shortage of dollar funding over the year-end prompted investors to sell aggressively.
Gold has lost about 8.0 percent in value so far this month, on course for its weakest December performance since 2008 and its third-largest monthly sell-off in three years, the point at which the global credit crunch was at its worst.
Source: Reuters
Deutsche Börse AG and NYSE Euronext statement on revised remedy submission
December 13, 2011--NYSE Euronext (NYSE:NYX) and Deutsche Börse AG (XETRA: DB1) today confirm that they have submitted revised remedies to the European Commission’s Directorate-General for Competition (DG Competition).
The revisions are designed to reflect the European Commission’s feedback on the initial proposal, and thereby fully address the Commission’s remaining concerns while preserving the industrial and economic logic of the merger.
In summary, the parties have strengthened their original proposal with respect to European single equity derivatives by increasing the assets to be included in the divesture, and to provide the purchaser of that business with an option to access Eurex Clearing for single equity derivatives products. The parties have also improved the coverage of their clearing access remedy for innovative equity index and interest rate derivatives. In addition, the parties committed to license the Eurex trading system to a third party interested in launching interest rate derivatives.
Source: Deutsche Börse
