Global ETF News Older than One Year
World Bank: Eurozone Crisis Clouds Recovery In Emerging Europe And Central Asia
September 23, 2011--Economic recovery is underway in the Emerging Europe and Central Asia (ECA) region, but at a slow pace and is at risk from the troubled Eurozone, according to the World Bank at a press briefing during the World Bank/IMF Annual Meetings 2011.
“Most countries in Emerging Europe and Central Asia have recovered from the global economic crisis, but growth has returned at lower rates than pre-crisis trends in most of the region. The region is expected to record a real growth rate of 4.3 percent in 2011, which is one of the lowest of any developing region,” said Philippe Le Houérou, World Bank Vice President for the Europe and Central Asia Region. “The slow recovery in the region may be establishing a ‘new normal’ of lower economic growth rates in many of the region’s countries.”
Le Houérou cautioned, “The sovereign debt problems in Western Europe pose challenges to the sustainability of this relatively tepid recovery. The Eastern Europe and Central Asia region is especially dependent on Western Europe as an export market and a source of finance and migrant remittances, so slower growth in the West will hurt. The region’s strong financial linkages to Western Europe, which were a source of growth during the boom years in Central and Eastern Europe, are now a source of vulnerability for some countries.”
Source: World Bank
Spatial Spillovers in Emerging Market Spreads-IMF Working paper
September 23, 2011--Summary: We use novel spatial econometrics techniques to explore spillovers in the sovereign bond market for 24 emerging economies during 1995-2010. The paper extends the previous literature focusing on spillover effects from advanced to emerging economies by analyzing transmission of shocks across emerging markets.
After controlling for the impact of global factors, we find strong evidence of spillovers from both sovereign spreads and macroeconomic fundamentals in neighboring emerging economies. In addition to the geographical proximity, the channels of spatial transmission include trade and financial linkages. The results of the paper highlight the importance of accounting not only for spillovers from advanced economies to emerging markets, but also across emerging markets when analyzing sovereign spreads.
view IMF working paper-Spatial Spillovers in Emerging Market Spreads
Source: IMF
Systemic Risks in Global Banking: What Available Data can tell us and What More Data are Needed? -IMF Working paper
September 23, 2011--Summary: The recent financial crisis has shown how interconnected the financial world has become. Shocks in one location or asset class can have a sizable impact on the stability of institutions and markets around the world. But systemic risk analysis is severely hampered by the lack of consistent data that capture the international dimensions of finance. While currently available data can be used more effectively, supervisors and other agencies need more and better data to construct even rudimentary measures of risks in the international financial system.
Similarly, market participants need better information on aggregate positions and linkages to appropriately monitor and price risks. Ongoing initiatives that will help in closing data gaps include the G20 Data Gaps Initiative, which recommends the collection of consistent bank-level data for joint analyses and enhancements to existing sets of aggregate statistics, and the enhancement to the BIS international banking statistics.
Source: IMF
Eurozone Crisis Clouds Recovery In Emerging Europe and Central Asia
September 23, 2011--Economic recovery is underway in the Emerging Europe and Central Asia (ECA) region, but at a slow pace and is at risk from the troubled Eurozone, according to the World Bank at a press briefing during the World Bank/IMF Annual Meetings 2011.
“Most countries in Emerging Europe and Central Asia have recovered from the global economic crisis, but growth has returned at lower rates than pre-crisis trends in most of the region. The region is expected to record a real growth rate of 4.3 percent in 2011, which is one of the lowest of any developing region,” said Philippe Le Houérou, World Bank Vice President for the Europe and Central Asia Region. “The slow recovery in the region may be establishing a ‘new normal’ of lower economic growth rates in many of the region’s countries.”
Source: World Bank
World Corn Harvest Outlook Cut on U.S. Conditions, IGC Says
September 22, 2011--World corn production will be lower in the year through June 2012 than forecast a month ago after the outlook for the U.S. crop was cut, the International Grains Council said.
Global corn output in 2011-12 will be 845.2 million metric tons, down from 849.1 million tons forecast in August, the London-based IGC said in a monthly report published today, cutting its outlook for a second time in two months.
Corn futures have gained 5.5 percent in Chicago this year amid deteriorating crop conditions in the U.S., the largest grower and exporter. That contrasts with wheat, which slumped 19 percent as the outlook for harvests in the European Union and Russia improved.
Source: Bloomberg
BlackRock New ETF Landscape Report: Industry Highlights – August 2011
September 22, 2011--The ETF Landscape: Monthly Highlights provides a snapshot of ETF and ETP AUM and asset flows3 at a combined global level and various regional levels as of the most recent month-end period. All currency values are denominated in US dollars.
Key global ETF/ETP statistics at a glance:
Month-end AUM: US$1,575 Bn
Decrease from prior month AUM: -US$68 Bn
August 2011 NNA: US$1.6 Bn
YTD NNA: 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
Global ETF/ETP YTD flows and market share
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 with US$3 Bn. Emerging markets equity funds generated NNA outflows of -US$2 Bn.
Regional highlights:
The global business remains concentrated in the United States with 68% of AUM market share.
Europe has market share of 22%, Asia Pacific (ex-Japan) has 6% and other regions have market share in the range of 1% to 3%.
United States AUM of US$1,066 Bn has grown 5% YTD through August 2011. Other regions have experienced higher growth rates including Europe which grew by US$339 Bn (8%), Asia Pacific (ex-Japan) grew by US$61 Bn (12%) and Latin America grew by US$11 Bn (10%).
Source: BlackRock Investment Institute
Global Experts Poll: Confidence Severely Lacking in the State of the Global Economy
New quarterly Global Confidence Index polls 1,500 experts from business, government, international organizations and academia who are members of the Forum’s Network of Global Agenda Councils
Less than 10% express confidence in the state of the global economy over the next 12 months
Less than 10% express confidence in the state of global governance over the next 12 months
September 21, 2011--The World Economic Forum’s Global Confidence Index shows very little confidence worldwide in the state of the global economy and in global governance over the next 12 months.
Over 1,000 global experts from the public and private sectors were surveyed; one-half of the respondents are pessimistic about the global economic outlook and one-quarter anticipates there will be an economic disruption during the next year. One in four say there is a lack of global leadership to deal with problems during this time and a majority fear a geopolitical as well as societal upheaval, according to the quarterly Global Confidence Index.
Perspectives outside the private sector were the most bearish with almost 54% of the respondents indicating that they are not confident in the state of the global economy; just over 40% expressed little confidence in the economy in the next 12 months.
view results-Global Confidence Index
Source: World Economic Forum
IMF: Global Financial System Risks Escalate
Weak growth, balance sheets and political resolve cause crisis of confidence
Large number of countries affected by government debt risks
Policymakers need to act to repair household, government and financial balance sheets
September 21, 2011--Financial stability risks have risen sharply in recent months, as slower economic growth, market turbulence in Europe, and the credit downgrade of the United States have weighed on the global financial system, according to new analysis by the IMF.
Financial markets have begun to question the ability of policymakers to command broad political support for needed policy actions, the IMF said in its latest Global Financial Stability Report.
“We are in the middle of a crisis of confidence, which is taking its toll on both the economy and the financial system” said José Viñals, Financial Counsellor and head of the IMF”s Monetary and Capital Markets Department, which produced the report. Improvements in financial stability over the past three years have been partly reversed, said Viñals.
view the Global Financial Stability Report Grappling with Crisis Legacies
Source: IMF
FTSE Announces 2011 Country Classification Changes
September 20, 2011--FTSE Group (“FTSE”), the award winning global index provider, today announces the results of its 2011 Country Classification Annual Review.
The FTSE Country Classification Annual Review, carried out every September, is the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier within the FTSE Global Equity Index Series.
The Review has assumed particular importance this year in the light of speculation about the possibility of a sovereign default within the Eurozone. If such a default were to occur, FTSE will immediately review the affected country’s ranking against the country classification criteria, and determine whether any further classification changes are warranted.
2011 Country Classification Changes
As a result of the 2011 annual review, the FTSE Policy Group has approved the following changes:
Thailand will move from Secondary to Advanced Emerging
Ghana will be included as a Frontier market
The change to Thailand’s market status will be implemented in the FTSE Global Equity Index Series in March 2012. The inclusion of Ghana as a Frontier market will take effect from June 2012.
Source: FTSE
Mining: Sector Results Profile
September 20, 2011-The World Bank has supported 39 mining sector reform projects in 24 countries since 1988. The reforms have contributed to an increase in investment in the mining sector and related economic indicators such as exports, fiscal revenues and gross domestic product (GDP) in most recipient countries. The critical next steps are promoting policies and programs to strengthen governance and the links to the rest of the economy to ensure that the benefits are widespread and sustained.
Challenge
Many countries now view the mining sector as a key engine of economic development. Ample evidence exists that countries which adopt modern mining legislation and offer an enabling environment can attract private sector investment in mining exploration and production. This, in turn, contributes to increased tax revenues, export earnings, employment opportunities, infrastructure development especially in rural areas, and transfer of technology to the host countries. However, there is the risk that mining operations turn into socio-economic enclaves as well as cause environmental damage. Attention to social and environmental considerations, and government commitment to good governance and transparency is important. Countries, communities, and companies face tough questions about opportunities and risks as they develop steps to ensure responsible approaches toward mineral resource development.
Source: World Bank
