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IPOs Shelved at Record Pace as Offer Pipeline Balloons
September 29, 2011--Companies canceled or postponed $8.9 billion in initial public offerings in the third quarter as stocks plunged, putting the market on pace to set a record for pulled deals.
The value of withdrawn and delayed IPOs so far this year rose to $34 billion, approaching the $40 billion pulled in 2010, the most since Bloomberg began compiling data. Siemens AG (SIE) suspended an IPO of its Osram lighting unit, while U.S. defense equipment maker ADS Tactical Inc. and Shanghai-based Xiao Nan Guo Restaurants Holdings Ltd. abandoned offerings.
SocGen's Newedge futures unit for sale - source
September 28, 2011--Societe Generale has put up for sale its stake in Newedge, a futures and clearing brokerage it co-owns with Credit Agricole, a source familiar with the situation said on Tuesday, as the No. 2 French bank looks to shrink its balance sheet and sell risky assets.
"Newedge is definitely for sale," the source said, adding that the bank could also sell its custody and securities unit SGSS but no firm decision had been reached on that.
"Both of these are fairly difficult to sell," the source said, adding: "I wouldn't hold my breath" on a successful sale.
Societe Generale, whose shares soared 17 percent on Tuesday as part of a broader rally in European banking stocks, declined comment.
Dark pools lose out to exchanges
September 27, 2011--The private stock trading venues owned by banks and brokerages known as "dark pools" suffered a sharp decline in market share in the US in August, reversing a rapid ascent over the past three years, according to new figures.
The share of all US equity trading taking place in the 18 dark pools tracked by Rosenblatt Securities fell by more than a percentage point in August, from 12.51 per cent in July to 11.26 per cent last month.
BlackRock -New ETF Landscape Report: Global Handbook – Q2 2011
September 27, 2011--The ETF Landscape series of reports, the Global Handbook is a comprehensive directory of all 3,987 Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) with 8,027 listings, assets of US$1,626.1 Bn from 184 providers on 52 exchanges around the world, as at end of June 2011.
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BlackRock New ETF Landscape Report: Industry Highlights – August 2011
September 27, 2011--Global ETF/ETP overview
Month-end AUM: US$1,575 Bn
Decrease from prior month AUM: -US$68 Bn
August 2011 NNA:1 US$1.6 Bn
YTD NNA:1 US$106 Bn
# of ETFs and ETPs: 4,036
August 2011 monthly flow highlights:
The “risk-off” market conditions of August 2011 were evident in ETF/ETP AUM flows.
Overall, fixed income and commodity products attracted US$5.6 Bn and US$0.8Bn NNA respectively, while equity products experienced net outflows of US$3.7 Bn for the month.
AUM of US$1,575 Bn decreased by US$68 Bn (-4%) in August 2011 as NNA of US$1.6 Bn were combined with US$70 Bn of negative market and exchange rate move, which represents a one month return of -4% compared to the MSCI All Countries World Index2 one month return of -7.3%.
This marks the third month in 2011 where global AUM has decreased from the prior month-end, which likewise occurred in May and June 2011 when AUM decreased 2% and 1%, respectively.
Despite challenging market conditions, AUM has grown by US$378 Bn or 32% versus August 2010 AUM of US$1,197 Bn. 3
1. Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America (excludes Asia, Middle East and Africa which are not available). Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, July 2011.
2. The MSCI ACWI is a free float-adjusted market capitalisation weighted index that is designed to measure the equity market performance of developed and emerging markets. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Note: AUM = Assets Under Management. NNA = Net New Assets. Data as at end August 2011. Source: BlackRock Investment Institute – ETF Research, Bloomberg, National Stock Exchange (NSX).
August 2011 YTD flow highlights:
AUM increased by US$93 Bn YTD through August 2011. Underlying this YTD change were NNA of US$106 Bn offset by US$13 Bn of negative market and exchange rate move, or -0.9% YTD return as compared to the MSCI All Countries World Index YTD return of -4.5%.
North America equity funds generated the largest 2011 YTD NNA with US$35 Bn, followed by fixed income with US$28 Bn, Europe equity with US$16 Bn, global/other with US$13 Bn, commodities with US$13 Bn, and Asia Pacific equity withUS$3 Bn. Emerging markets equity funds generated NNA outflows of -US$2 Bn.
Global Financial Centres Index (GFCI) published today
September 26, 2011--Today the Z/Yen Group publishes the tenth Global Financial Centres Index (GFCI 10) covering 75 financial centres.
The big changes from GFCI 9 in March 2011 are:
The Nordic and Eastern European centres - now getting strong support. Centres such as Tallinn (up 118 points in the ratings), Istanbul (up 86 points), Moscow (up 75 points), Helsinki (up 72 points), Copenhagen (up 55 points and St Petersburg (up 50 points) all demonstrate strong increases in competitiveness;
The Eurozone - capital cities of the weaker Euro economies are clearly suffering - examples include Madrid down 11 places in the rankings, Dublin down ten places and Milan down nine places;
More Clarity in Asia - the strongest centres are strengthening and consolidating their positions - Hong Kong is up 11 points, Singapore is up 13, Shanghai is up 30 points and Seoul is up 28. Certain Asian centres are now perceived as weaker - Tokyo, Beijing, Taipei and Shenzhen have all fallen in the ranks;
view the The Global
FinancialCentres Index 10 report
Woodbine Associates Produces OTC Derivatives Study for the Institute for Financial Markets
Report Details New Hedging and Transaction Costs that Derivative Traders and End Users Will Face from the Dodd-Frank Act and Basel III
September 26, 2011--In the wake of new regulation of the over-the-counter derivative markets in both the US and Europe, traders face new capital requirements and transaction costs relative to the size and the particulars of their transactions.
Woodbine Associates has produced a focused study on the potential impact of margin, capital, execution and market structure under the new regulatory framework on End User derivative transactions to help educate financial professionals. The research compares the direct and indirect costs of centrally-cleared transactions with those of transactions directly between counterparties and proposes cost-minimizing End User hedging strategies.
Notwithstanding this practical focus, this research also is intended to help financial media, policy makers, regulators, academics and others understand cost implications of the new regulations.
The report is underwritten by a grant from The Institute for Financial Markets, which earlier this year selected Woodbine Associates as part of its annual initiative to examine high priority issues whose understanding are of critical importance to the trading and clearing of listed and OTC derivatives worldwide. The report will be published in a special edition of the Review of Futures Markets in early 2012.
“Under the new regulatory framework created by Dodd-Frank and Basel III, bilateral hedging will become much more expensive, forcing firms to separate risk transfer from customization to minimize their costs,” said Sean Owens, author of the research. “Firms should realize substantial savings through replicating or delta-hedging customized transactions with a combination of centrally-cleared „vanilla‟ transactions to hedge market risk and bilateral basis transactions to address firm-specific needs.”
Woodbine Associates is an independent capital markets research and consulting firm focused on strategic, regulatory, market structure, business and technology issues facing firms active in the financial markets. Sean Owens, Director of Fixed Income Research and Consulting, had more than a decade of OTC derivatives trading experience and the chief author of the report.
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ETFS Precious Metals Weekly: Precious metal prices plunge as USD surge and CME gold margin hikes take hold
September 26, 2011--Gold sees profit taking as investors demand liquidity. Gold prices were hit by a sharply appreciating USD and the announcement of a further 21% increase in gold
futures margin requirements by the CME on Friday.
Gold:silver ratio at 54 times is the highest in nearly a year. While gold prices dipped below $1600 per ounce, representing an 10 per cent drop over the past week, silver prices plunged by around 25 per cent over the same period.
Investors reduce gold positioning by 30%from 2011 highs. Net long noncommercial
positions indicates that speculative gold holdings were at the lowest
levels since July 2011.
Investor deleveraging hits precious metal prices. Rising concern over when, not if, Greece will default has prompted investors to liquidate investment positions. Gold has recorded positive returns in 2011, and it is often the better performing parts of a portfolio that are liquidiated to fund margin calls or a move into cash and bonds. The USD has benefited and gold’s historical inverse correlation has seen sharp price declines in gold and silver. The increase in the CME gold margins by over 20% added to the lacklustre sentiment for gold.
Memories of gold price drop in 2008 as gold silver ratio hits highest level in a year. The moves in the gold price mirror those seen in September 2008 when gold acted as an important source of liquidity in the earliest stages of the post-Lehman credit crisis. Prices subsequently bounced back rapidly vs. other assets in late 2008 with gold positions being quickly rebuilt as investors built diversified positions in perceived store of value assets. Silver’s closer ties to the global industrial cycle have potentially fuelled the stronger market reaction as risk appetite has evaporated in recent weeks.
Gold holdings were at the lowest in just over two months according to CFTC futures data. Speculative net long gold positions last week dropped by around 30% from the 2011 highs as investors liquidated long positions, whereas silver net long speculative positions have dropped by around 20% from 2011 highs seen in August.
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Copper drops to 14-mo low on recession fears
September 26, 2011--Industrial metals pressured, copper hits 14-mo low
COMEX copper sees 200-day MA support on weekly chart
Copper dropped under $7,000 a tonne in the London market for the first time in 14
months on Monday as the threat of a global recession had investors worried demand for the metal will continue to
deteriorate.
Copper was down for the seventh-straight day and moving
deeper into bear-market territory for the year. It is down
nearly 30 percent from its mid-February record above $10,000.
Economic Freedom of the World: 2011 Annual Report
September 23, 2011--This year's report notes that economic freedom fell for the second consecutive year. The average economic freedom score rose from 5.53 (out of 10) in 1980 to 6.74 in 2007, but fell back to 6.64 in 2009, the most recent year for which data are available. In this year's index, Hong Kong retains the highest rating for economic freedom, 9.01 out of 10, followed by Singapore, New Zealand, Switzerland, Australia, Canada, Chile, the United Kingdom, and Mauritius. The world's largest economy, the United States, has suffered one of the largest declines in economic freedom over the last 10 years, pushing it into tenth place. Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components.
This year's report also contains new research comparing policies that promote "freedom" compared to "entitlement" in relation to economic development. The findings suggest that fundamental freedoms are paramount in explaining long-term economic growth. Countries that favor free choice — economic freedom and civil and political liberties — over entitlement rights are likely to achieve higher sustainable economic growth and to achieve many of the distinctive proximate characteristics of success identified by the Commission on Growth and Development (World Bank, 2008). In contrast, pursuing entitlement rights through greater coercion by the state is likely to be self-defeating in the long run. The report also includes findings on the positive relationship between increases in economic freedom and improvements in women's well-being.
The first Economic Freedom of the World Report, published in 1996, was the result of a decade of research by a team which included several Nobel Laureates and over 60 other leading scholars in a broad range of fields, from economics to political science, and from law to philosophy. This is the 15th edition of Economic Freedom of the World and this year's publication ranks 141 nations for 2009, the most recent year for which data are available.