Global ETF News Older than One Year
ETFS Precious Metals Weekly: Gold price drop short-lived as bargain hunters emerge below $1,800/oz
September 19, 2011--Gold prices ended last week close to $1,800/oz despite a marginal easing in bank jitters on international liquidity coordination. The announcement that major central banks would coordinate to extend short term loans to Euro-region banks saw risk aversion dialled back a touch, though the move was largely interpreted by markets as yet another stop-gap measure. The intra-week drop in
gold prices below $1,800/oz stimulated a jump in gold trading activity in emerging markets, mirroring recent trends.
Metals consultancy Thomson Reuters GFMS forecast record gold investment in H2 2011, as spot prices seen breaking $2,000/oz by year end. The consultancy sees investment demand as the main driver of price growth for the remainder of 2011, with public sector investment increasingly complementing emerging market-led private sector demand. Investment is expected to double from H1 levels to $60bn.
Platinum prices hold their ground as the gold:platinum ratio approaches record high. Platinum spot prices have held relatively steady over the past 3 months, in contrast to palladium, as speculative futures investor positioning continues to hold at its highest level in six months. Platinum is now at its cheapest level relative to gold since the height of the post-Lehman credit crisis in 2008.
London to see second new precious metals vault in as many years as sharp rise in investor demand for vaulted gold bars spurs building of extra facilties. Investors own 2,145 tons of metal in exchange traded products according to Bloomberg estimates, holdings that are greater than all but the largest four central banks.
visit www.etfsecurities.com for more info
Source: ETF Securities
Dow Jones Indexes Reclassifies Colombia To ‘Emerging’ From ‘Frontier’ Markets Status After Annual Review of Its Country Classification System
11 Countries Added to Classification System as ‘Frontier’ Markets:
4 from Europe, 4 Middle East/Africa, 3 Asia/Pacific
September 16, 2011-- Dow Jones Indexes, a leading global index provider, today announced it reclassified Colombia to “Emerging Markets” status from “Frontier Markets” status, and added 11 countries to Frontier Markets status following the annual review of the Dow Jones Indexes Country Classification System. The changes are effective as of March 19, 2012.
Designed with the global investor in mind, the Dow Jones Indexes Country Classification System is used to classify all countries covered in Dow Jones Indexes’ major index families. Assessments of the countries are used to produce a country classification assignment into one of three categories:
Developed Markets: the most accessible to, and supportive of, foreign investors with a high degree of consistency across these markets;
Emerging Markets, which generally have less accessibility relative to developed markets, but demonstrate a level of openness; and
Source: Dow Jones Indexes
August 2011 FIF Market Share and Market Dynamics Reports – Executive Summary
September 15, 2011--U.S. Equities Market Share
Share volumes traded across Tape A, B, and C increased 74% monthly to 243 billion shares the highest since March 2009.
In August 2011, off-exchange trading accounted for 27% of the shares traded in NMS Equity Securities which is the lowest since February 2009.
Share volumes in NYSE-listed securities
increased 75% monthly to 133 billion shares, the highest since May 2009.
NASDAQ-listed securities traded over exchange increased 53% monthly to 58 billion shares, the highest since October 2008.
view August 2011 FIF Market Share and Market Dynamics Reports – Executive Summary
Source: Financial Information Forum (FIF)
IOSCO announces commodity derivatives markets supervisory principles
September 15, 2011--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has today published its report on Principles for the Regulation and Supervision of Commodity Derivatives Markets. The Report, prepared by the Task Force on Commodity Futures Markets, addresses the G20’s November 2010 request for further work on regulation and supervision of physical commodity derivatives markets.
The Principles are aimed at ensuring a globally consistent approach to the oversight of commodity derivatives markets which will deliver effective supervision, combats market manipulation and improves price transparency. They are aimed at contributing to enhanced price discovery in commodity derivative markets as opposed in themselves to addressing absolute price levels or price volatility in an underlying physical commodity.
The Principles update and add to the guidance in the 1997 Tokyo Communiqué which set benchmarks for contract design, market surveillance and information sharing for physical commodity derivatives markets. They are primarily intended to apply to exchange-traded futures contracts, futures contracts options and options referenced to a physical commodity, index or price series which may settle in cash or by physical delivery, although many of the principles will also be applicable to OTC markets.
Source: IOSCO
Resource Summit Predicts Dangerous Future Trend towards Nationalization
September 15, 2011--More than 20 mining and metal industry leaders and cross-industry partners unanimously predicted an inevitable future increase in government nationalization of critical resources over the next two decades as a burgeoning middle class in emerging economies begins to demand higher living standards.
“The resounding answer was that nationalizations will take place and that this is not a good thing,” said Richard O’Brien, President and Chief Executive Officer of Newmont Mining Corporation, USA. The corporate executives were meeting as part of this year’s Resource Summit, a feature of the World Economic Forum’s Annual Meeting of the New Champions 2011 in Dalian, People’s Republic of China. The Summit is part of an ongoing dialogue on resource issues sponsored by the World Economic Forum. If nationalizations do take place, they will very likely have a negative impact on globalization and world trade.
By 2030, the world population will pass the 8 billion mark, and shortages are likely to be felt in water and food as well as petroleum mineral resources. In a panel discussion on resources, Sir Mohammad Jaafar, Chairman and Managing Director of the Kuwaiti Danish Dairy Company, Kuwait, noted that, by 2030, matching European living standards would require three planets of natural resources, and to match US living standards would require at least five. While it may be possible to meet some of the increasing demand with technology and innovation, prices – especially on fuel – will inevitably rise and even populations in the US and Europe will be forced to modify their lifestyles.
Source: World Economic Forum
Report Highlights Innovative Business Practices for Sustainable Growth
World Economic Forum and Boston Consulting Group launch new report, Redefining the Future of Growth: The New Sustainability Champions
Companies from emerging markets, such as Costa Rica and the Philippines, share a unique set of practices that make for robust growth and enhance sustainability
September 15, 2011--The World Economic Forum today launched a new report, entitled Redefining the Future of Growth: The New Sustainability Champions. The report, prepared with The Boston Consulting Group (BCG), highlights innovative business practices from companies originating and operating in emerging markets. By focusing on a group of 16 exemplary companies called the New Sustainability Champions,
the report shows how those businesses create unconventional and profitable solutions that positively impact economic growth and enhance overall sustainability in their regions.
Taking into account criteria covering sustainability, innovation, scalability, geography and size, the World Economic Forum and BCG analysed over 1,000 businesses in the preparation of this report and identified 16 fast-growth companies that share a unique mindset and set of practices. The report contains valuable insights that can help business leaders better balance economic growth with responsible stewardship of Earth’s resources.
view the Redefining the Future of Growth: The New Sustainability Champions report
Source: World Economic Forum
Survey: Inefficiencies in collateral management cost the financial sector more than €4 billion annually
Clearstream and Accenture surveys collateral management within a broad range of global banks/Fragmented internal and external collateral pools drive costs up/Upcoming regulatory changes increase need for collateral and better collateral management
September 14, 2011--The financial services sector could save more than €4 billion annually in collateral management costs by addressing operational inefficiencies, according to a survey by Accenture and Clearstream. The research, which was based on publicly available information, together with interviews with 31 executives at 16 global banks, found that decentralized operations and unaligned business objectives are limiting banks’ ability to manage collateral efficiently.
As a result, banks are unable to maximize liquidity, keep down financing costs and are forced to maintain excess collateral buffers. These inefficiencies cost the financial sector more than €4 billion annually, according to the research.
Banks use collateral mainly for secured funding from markets and central banks. It is key enabler of a variety of services and products, including traditional securities financing and the facilitation of trading and risk mitigation. Collateral management has become a critical industry issue as regulators set more rigorous capital and liquidity standards and banks confront new cost and growth challenges in the wake of the global financial crisis. Efficient collateral management can free up liquidity for banks, enabling them to offer a greater range of products and services and more readily meet these new regulatory requirements. Accenture estimates the total value of cash and securities used as collateral in the financial system globally to be more than €12 trillion.
Source: Clearstream
What Fuels the Boom Drives the Bust: Regulation and the Mortgage Crisis-IMF Working paper
September 14, 2011--Summary: We show that the lightly regulated non-bank mortgage originators contributed disproportionately to the recent boom-bust housing cycle. Using comprehensive data on mortgage originations, which we aggregate at the county level, we first establish that the market share of these independent non-bank lenders increased in virtually all US counties during the boom.
We then exploit the heterogeneity in the market share of independent lenders across counties as of 2005 and show that higher market participation by these lenders is associated with increased foreclosure filing rates at the onset of the housing downturn. We carefully control for counties’ economic, demographic, and housing market characteristics using both parametric and semi-nonparametric methods. We show that this relation between the pre-crisis market share of independents and the rise in foreclosure is more pronounced in less regulated states. The macroeconomic consequences of our findings are significant: we show that the market share of these lenders as of 2005 is also a strong predictor of the severity of the housing downturn and subsequent rise in unemployment. Overall our findings lend support to the view that more stringent regulation could have averted some of the volatility on the housing market during the recent boom-bust episode.
view the IMF working paper-What Fuels the Boom Drives the Bust: Regulation and the Mortgage Crisis
Source: IMF
Thomson Reuters Global Equities Monthly Market Share Data Updated - Reflects August 2011 Activity
September 14, 2011--Monthly Data at a Glance
The charts show the traded value of all MTF operated Dark Pools and six of the leading broker crossing services equities (in Euro € millions) recorded over the last 13 months. For the most recent month the break down for the main venues is provided.
The data for the MTFs has been sourced from our Equity Market Share Reporter whilst the Broker Crossing System data, available since June 2010 has been sourced from Markit BCS Daily reporting (http://www.markit.com/).
Source: Thomson Reuters
Assessing Systemic Trade Interconnectedness - An Empirical Approach
September 14, 2011--Summary: The paper focuses on systemically important jurisdictions in the global trade network, complementing recent IMF work on systemically important financial sectors. Using the IMF’s Direction of Trade Statistics (DOTS) database and network analysis, the paper develops a framework for ranking jurisdictions based on trade size and trade interconnectedness indicators using data for 2000 and 2010.
The results show a near perfect overlap between the top 25 systemically important trade and financial jurisdictions, suggesting that these ought to be the focus of risk-based surveillance on cross-border spillovers and contagion. In addition, a number of extensions to the approach are developed that can provide a better understanding of trade dynamics at the bilateral, regional, and global levels.
view report-Assessing Systemic Trade Interconnectedness - An Empirical Approach
Source: IMF