Global ETF News Older than One Year
Thomson Reuters Global Equities Monthly Market Share Data Reports-September 2011
October 13, 2011----Trading is fragmenting between exchanges and competing venues. But by how much and which venues? Find out in our summarised monthly reports.
Source: Thomson Reuters
BRICS Exchanges alliance announced
October 12, 2011--The exchanges of the BRICS emerging markets bloc have announced plans to form an alliance to expose foreign investors to their dynamic economies and to increase the liquidity of their trading venues. This initiative was announced at the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg.
The initiative brings together BM&FBOVESPA from Brazil, MICEX from Russia (currently merging with RTS Stock Exchange), Hong Kong Exchanges and Clearing Limited (HKEx, China) and Johannesburg Stock Exchange (JSE) from South Africa. The National Stock Exchange of India (NSE) and the BSE Ltd (India) have signed letters of support and will join the alliance after finalizing outstanding requirements.
At the first stage of this project the exchanges will begin cross-listing of financial derivatives on their benchmark equity indices. It is planned to launch cross-listed products by June 2012.
“Global investors are increasingly seeking exposure to leading developing markets,” says Ronald Arculli, chairman of HKEx and of the WFE. “Thanks to this alliance, investors will gain easier access to major equity index derivatives of the BRICS markets which will now be offered in local currency on the alliance exchanges”.
This is an important milestone in the history of developing countries, continues Mr Arculli. “The alliance enables more investors to gain exposure to the emerging economies of the BRICS group whose economic power is on the rise. From a global perspective this alliance highlights the growing significance of the BRICS economies and financial markets for the coming decade, and further underlines the importance of enhancing cooperation between the BRICS members”.
At the second stage of the project members of the alliance plan to jointly develop new products for cross-listing on their exchanges. “In addition to measuring market performance, equity indices may be used as underlying assets to create new products, which can be the next step in the alliance development”, says Russell Loubser, CEO of the JSE.
Source: WFE
Highlights of the latest OMR -IEA
October 12, 2011--Oil futures tracked latest economic developments amid the worsening European debt crisis, which triggered downward price moves throughout September. Prices partially recovered on renewed optimism that European leaders would address euro-zone financing issues, with WTI last trading at $84.50/bbl and Brent near $108/bbl.
Global oil demand is revised down by 50 kb/d for 2011 and by 210 kb/d for 2012 with lower-than-expected 3Q11 readings in the non-OECD and a downward adjustment to global GDP growth assumptions. Global GDP growth is now seen at 3.8% in 2011 and 3.9% in 2012 with significant downside risks. Demand estimates stand at 89.2 mb/d in 2011 (+1.0 mb/d y-o-y) and 90.5 mb/d in 2012 (+1.3 mb/d).
Global oil supply fell by 0.3 mb/d to 88.7 mb/d in September from August, due to non-OPEC outages. Non-OPEC supply projections are trimmed by 0.3 mb/d for 4Q11 and by 0.2 mb/d for 2012, with annual growth averaging 0.2 mb/d, to 52.8 mb/d, and 0.9 mb/d to 53.6 mb/d for 2011 and 2012 respectively. OPEC NGL output averages 5.9 mb/d in 2011 and 6.3 mb/d in 2012.
OPEC crude oil supply nudged down to 30.15 mb/d in September, with lower Saudi Arabian and Nigerian output partly offset by resumed Libyan supply. Output there reached 350 kb/d in early October and capacity is assumed at 600 kb/d by end-year. The 4Q11 ‘call on OPEC crude and stock change’ is adjusted up by 0.3 mb/d to 30.8 mb/d on lower non-OPEC supply, with the 2012 ‘call’ unchanged at 30.5 mb/d.
Source: International Energy Agency (IEA)
OECD launches new report on measuring well-being
October 12, 2011-- Do you like your job? How’s your health? Are you spending enough time each day with your children? When you need them, are your friends there for you? Can you trust your neighbours? And how satisfied are you, overall, with your life?
A new OECD publication, How’s Life? , looks at these questions and others, offering a comprehensive picture of what makes up people’s lives in 40 countries worldwide. The report assesses 11 specific aspects of life – ranging from income, jobs and housing to health, education and the environment – as part of the OECD’s ongoing effort to devise new measures for assessing well-being that go beyond Gross Domestic Product.
OECD Secretary-General Angel Gurría launched How’s Life? during an international conference at the OECD commemorating the two-year anniversary of the landmark Stiglitz-Sen-Fitoussi report on the measurement of economic performance and social progress. The landmark report sought to address concerns that standard macroeconomic statistics like GDP failed to give a true account of people’s current and future well-being. The OECD has been addressing the issue of measuring progress since 2000, with its latest work forming the basis of this publication.
Source: OECD
Spread betting groups face stricter rules
October 12, 2011--Spread betting companies are likely to be faced with stricter capital requirements, senior industry figures and analysts say, as the industry’s rapid growth brings it under closer scrutiny.
Spread betting has become more popular during the past decade, because it allows users to make profits and losses from betting on minor fluctuations in the prices of securities, by placing relatively small deposits.
Source: FT.com
Korea Exchange Plans Currency Futures Tie-Up With CME Group
October 11, 2011--Korea Exchange Inc. is in discussions with CME Group Inc. (CME) on an agreement that would see the Chicago-based exchange company trade the South Korean firm's most-popular currency derivatives during U.S. business hours, according to a senior KRX executive.
Such a deal is expected to draw more investors to the market and extend KRX's raft of overseas partnerships, which include similar trading arrangements with CME and Deutsche Boerse AG's (DB1.XE) Eurex platform.
Source: Wall Street Journal
FSB publishes second progress report on OTC derivatives market reforms implementation
October 11, 2011--The FSB published on 11 October its second progress report on implementation of OTC derivatives market reforms. The report summarises progress made toward implementation of the G20 commitments concerning standardisation, central clearing, exchange or electronic platform trading, and reporting of OTC derivatives transactions to trade repositories.
In particular it looks at progress against the 21 recommendations set out in the FSB's October 2010 report for implementing reforms in an internationally consistent and non-discriminatory way. The report concludes that juridictions should aggressively push forward to meet the G20 end-2012 deadline in as many reform areas as possible.
view the second report-OTC Derivatives Market Reforms Progress report on Implementation
Source: Financial Stability Board (FSB)
CME Co-Location Services to Launch January 29
October 10, 2011--CME Group today announced CME Co-Location Services, comprised of hosting, connectivity and support services, will officially launch for trading on Sunday, January 29, 2012. The co-location service allows for the lowest latency connectivity possible for trading all products on the CME Globex platform.
“We offer a number of ways for our customers around the world to connect to CME Globex as we strive to provide them with the highest reliability and lowest latency possible,” said Bryan Durkin, Chief Operating Officer for CME Group. “Our new CME Co-Location Services provide fair and equal access by offering all customers equal pricing, the same terms and conditions, as well as equal lengths of fiber between customer cabinets and the CME Globex platform or connections to carriers. To date, we have seen a higher than expected customer demand for our new service."
CME Co-Location Services will run out of the company’s data center in the Chicago suburbs and include the following:
Licensed Space: A dedicated cabinet or dedicated cage environment, to contain customer equipment within the co-location facility.
Power: Two tiers of maximum power capacity per licensed cabinet space, 8.5 kW or 17 kW.
Source: CME Group
TABB Says Proposed Margin Rules for OTC Interest-Rate Derivatives Will Severely Damage Swaps Market Liquidity
Proposed Rules will Render Many Trade Structures Extinct and Represent $1.4 Trillion in New Capital Allocation Globally for Rates Swaps
October 10, 2011--Regulatory mandates requiring firms to post initial margin on over-the-counter derivatives (OTCD) are among the biggest changes that Dodd-Frank legislation is set to bring about. According to TABB Group estimates issued today in new research, these new margin rules will cause OTC interest-rate derivatives market participants to shoulder at least $1.4 trillion in new capital charges globally within the next three to five years.
Regulatory mandates requiring firms to post initial margin on over-the-counter derivatives (OTCD) are among the biggest changes that Dodd-Frank legislation is set to bring about. According to TABB Group estimates issued today in new research, these new margin rules will cause OTC interest-rate derivatives market participants to shoulder at least $1.4 trillion in new capital charges globally within the next three to five years.
“Although dealers have readily adopted clearing for the most vanilla segment of their OTC derivative portfolios, these exposures require comparatively little initial margin since they represent the cream of the proverbial crop,” says E. Paul Rowady, Jr., a TABB senior analyst and author of “Initial Margins for OTC Derivatives: The Burden of Opportunity Costs.” This new research examines the detailed costs of imposing new initial margin requirements on all OTC interest-rate derivatives, whether cleared or not.
For exotic OTC derivative positions and smaller portfolios held by a majority of other end users, however, Rowady explains that the initial margin requirements will range from painful to the outright extinction of some types of trades. “Only through cross-margining and other offset mechanisms can these opportunity costs be minimized.”
Source: TABB Group
DB Global Equity Index & ETF Research : European ETF Market Monthly Monitor : Q3-11 equity price declines weigh down 2011 ETF market growth prospects
NEW REPORT LAUNCH: Monthly ETF Market Monitor
October 10, 2011--We are happy to announce the launch of our new European ETF Market Monthly Monitor. This new report will cover both European ETFs and ETCs and will also provide summary facts on the global and US markets.
Going forward, we are retiring our quarterly ETF market review publication. Moving from a quarterly to a monthly reporting schedule will permit us to provide enhanced and timely coverage. We will maintain our weekly reports, which will also get a facelift.
In addition to continuing our existing coverage on ETF assets, cash flows, turnover and new products, we have made several other enhancements to our reporting content:
Cash Flows: We are happy to report the most complete and timely ETF cash flow statistics on the street, providing analysis by ETF provider, by asset class and by segment.
Investment trends: Cumulative progressive cash flow analysis by asset class and by segment, both for intra-month as well as year to date. We have also created new classification categories, such as country and strategy type, which will permit the reader to better track ETF investment activity.
ETF trading share: We will capture and report ETF turnover relative to cash equities turnover, both for the European as well as US markets, including ETF OTC turnover relative to on-exchange turnover for Europe.
ETFs vs unlisted mutual funds: Reporting of ETF industry asset size and cash flows versus the unlisted mutual fund industry, for both the US and Europe.
Cost of investing: Updated total expense ratio [TER] averages for both ETFs (by investment strategy type) and ETCs (by segment). [Figures 63-66].
Turnover activity ranking by ETF listing: This is something which is particularly relevant in Europe where cross-exchange turnover is not fungible. [Figures 89-92]
ETF industry growth: Growth attribution analysis, distinguishing between (asset) price and cash flow/new money impact. [Figures 45-48]
Replication style analysis: European ETF industry analysis by replication style utilized, including analysis by asset class as well as by provider.
Global ETF provider ranking tables: We provide market share analysis both in terms of assets as well as new money/cash flow, turnover and products, at a European as well as at a global level, for both ETF and ETC providers.
ETF broker rankings: Competition has intensified not only among ETF providers in the past year, but also among ETF brokers. We initiate ETF and ETC broker ranking reporting, for €/$ activity as well as volume, based on advertised interest as reported by brokers. [Figures 100-103].
Exchange rankings: We track both the turnover by exchange and by exchange family, for both ETFs and ETCs. In addition, we report on-exchange vs OTC ETF turnover statistics for three major European exchanges. [Figures 85-92]
We will keep updating our content as information availability permits and would welcome any suggestions you might have in making the research more useful. In the meantime, many thanks for following our research and we look forward to continuing and strengthening the dialogue as the ETF industry continues to evolve.
To request a copy of the report
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
