Global ETF News Older than One Year
US committee completes review of Deutsche Börse and NYSE Euronext combination
August 23, 2011--The Committee on Foreign Investment in the United States (CFIUS) has completed its review of the Deutsche Börse and NYSE Euronext combination without objection to the transaction going forward. CFIUS is an inter-agency committee of the US government to regulate foreign investment in the US. With this approval, the companies have cleared another important regulatory hurdle.
CFIUS reviews the national security implications for the US of foreign investment in US companies. The committee, which is chaired by the Department of the Treasury, includes representatives from the Departments of Justice, Commerce, State, Defense and Homeland Security. It concluded that there are no national security grounds to oppose the merger.
The transaction remains subject to further conditions being met, including approval in the US and Europe by the relevant bodies governing competition, finance and securities, and by other supervisory authorities. These assessments concerning regulatory requirements and competition law are expected to continue until the end of the year.
Source: Deutsche Börse
ETFS Precious Metals Weekly: Gold Nears $1,900/oz as Wall of Worry Hits Global Markets
August 22, 2011--Gold spot price hits record high above $1894/oz today as trifecta of global growth, financial stability and currency worries roil markets. Continued policy gridlock on solving sovereign debt problems in Europe, growing concerns about the potential for European bank insolvencies against a backdrop of lacklustre European and US activity data have combined to drive the gold price higher.
Silver price rises at double digit pace, plays catch-up to gold.
Rising concerns about precious metal mining regulations in South Africa and ongoing stop-work action add support to platinum and palladium prices. Tougher safety laws and class action health and safety lawsuits were announced last week in South Africa as the country’s National Union of Mineworkers announced a wage dispute with No.2 global producer Impala Platinum. Supply concerns helped support platinum and palladium prices despite continued concerns about the possibility of weaker industrial demand as global growth slows.
Gold price trades just shy of $1,900/oz mark - sovereign risk worries soar as stuttering European growth and political paralysis spook money markets. The Franco-German political summit provided little fresh impetus to beleaguered European sovereign bond markets, with the prospect of jointly issued Eurobonds dimissed by German authorities. News of a sharp fall in the growth of ‘core’ European growth driver Germany also rattled markets, raising questions as to how much the country will be able to contribute to further sovereign debt bailouts. This has contributed to interbank payment anxieties as participants question the robustness of bank balance sheets amidst slowing growth and heightened bank default risk.
Bernanke speech likely a key driver for precious metal prices this week. Markets are awaiting hints from the Fed Governor’s speech at Jackson Hole on August 26 as to whether a third round of quantitative easing (QE3) is back on the table and if so how much. Silver, platinum and palladium prices rallied particularly strongly in the wake of QE2, rising between 8% and 27% in the 3 months after the programme was announced. A move towards QE3 would reinforce recent comments that US official interest rates are set to remain at rock-bottom levels until at least 2013 and boost inflation expectations.
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Source: ETFS Securities
Institutional investors eager to invest in infrastructure
August 22, 2011--Institutional investors are showing a strong appetite for infrastructure, with almost three-quarters seeking to make further investments in the asset class within the next 12 months, a new survey has revealed.
According to Preqin, institutional investors are more eager to invest in infrastructure this year than in 2010, when most cited management fees, carry structures, liquidity, limited partners (LP)/general partners (GP) interaction and hurdle rate as the main barriers for such investments.
But Preqin said the current infrastructure fundraising market remained highly competitive, although the same issues continue to curb investor appetite and capital raising.
One of the main issues for institutional investors remains interaction with GPs, according to Preqin's survey.
Source: Preqin
OECD GDP growth continues to slow in the second quarter of 2011
August 22, 2011--Gross domestic product (GDP) in the OECD area slowed to 0.2% in the second quarter of 2011, down from 0.3% in the previous quarter. This is the fourth consecutive quarter of slower growth.
The slowdown was particularly marked in the Euro area and the European Union, where growth slowed to 0.2% compared to 0.8% in the previous quarter. In Germany, GDP growth slowed to 0.1% compared to 1.3% in the previous quarter, and in France, growth was 0.0% compared to 0.9% in the previous quarter. In the United Kingdom, GDP growth slowed to 0.2% compared to 0.5% in the previous quarter. In contrast, GDP growth picked up to 0.3% in Italy and the United States, compared to 0.1% in the first quarter. In the United States however, latest estimates for the first quarter reflect a significant downward revision from the earlier estimates of 0.5% released in June.
GDP continued to contract in Japan but at a slower rate than in the previous quarter (minus 0.3% compared to minus 0.9%).
Relative to a year earlier, GDP increased by 1.6% in the second quarter of 2011 in the OECD area, down from 2.4% in the previous quarter. Among the Major Seven* economies, Germany recorded the highest rate (2.7%) and Japan the lowest (minus 0.9%)
Source: OECD
Investors Using ETPs More for Risk Management
August 21, 2011--Stomach-turning global volatility has bolstered demand for certain alternative exchange-traded products used by institutions to hedge their portfolios or make directional bets quickly in order to profit from market instability.
“We've seen pretty significant year-to-date increases on inverse” ETPs, said Russ Koesterich, managing director and global chief investment strategist for BlackRock Inc.'s iShares business. “In general, investors are using these products to position against what they think might be a dour movement of assets, and they want to hedge part of that exposure.”
Source: Investment News
Response to IOSCO consultation on the Impact of Technological Changes
August 19, 2011--Significant technology advancements have such as high frequency trading (HFT) which allows more accurate, granular and faster pricing of securities. As pointed out in the consultation report, there is no clear evidence of consistent negative effects of HFT. Following the US Flash Crash - the roots of which are, for various reasons, specific to the US - the focus has shifted to HFT and the potentially detrimental effects it may have on already volatile markets. In this regard, FESE welcomes this opportunity to outline the provisions taken by its members to foresee such problems and the tools that they have put in place to safeguard against this.
FESE believes that due to the high fragmentation in European capital markets brought about by competition, and the significant growth of dark trading in European equity markets, any failure to fully implement the correct trading venue rules will see a significant number of venues in Europe, such as Broker Crossing Networks/Broker-Dealer Platforms, which are not regulated in the same manner and to the same standards as trading venues. This unexpected increased fragmentation will no doubt have a negative effect on price formation. The fact that not all trading platforms are regulated in the same way also needs to be taken into account when designing policies to address the potential risks of HFT, which, in different forms, takes place in all venues, including OTC.
Source: FESE
ESMA published updated list of registered and certified credit rating agencies
August 19, 2011--According to the Credit Rating Agencies Regulation ((EC) No 1060/2009), ESMA publishes today the list of those credit rating agencies that as of today were either registered or cirtified in the European Union
To access the list, view List of registered and certified credit rating agencies
Source: ESMA
Investors back Hedge Funds Amid Turbulence
August 19, 2011--Investors are largely sticking with hedge funds to guide them through the summer's highly volatile markets, data showed on Thursday, despite lacklustre performances so far this year from these freewheeling portfolios.
The GlobeOp Forward Redemption Indicator -- a monthly snapshot of clients giving advance notice they want their money back as a percentage of GlobeOp's assets under administration -- was 2.71 percent, the third lowest figure seen this year. Whilst up from July's 2.08 percent, it is still well below the 4.01 percent seen in June and well below the 19.27 percent recorded in November 2008 shortly after the collapse of Lehman Brothers.
Source: Reuters
West shows worrying signs of ‘Japanisation’
August 19, 2011--The big question for many investors these days is one that could scarcely have been thought about a few years ago: is the west turning into Japan?
The response to that will determine the future direction of western economies as well as of shares and bonds. To date, the tentative answer has been that the developed world is heading Japan’s way as government bonds have far outperformed equities.
Source: FT.com
BlackRock New ETF Landscape Report: Industry Review – H1 2011
August 17, 2011--ETP and ETF industry overview, as at H1 2011:
At the end of H1 2011, the global ETF industry had 2,825 ETFs with 6,229 listings and assets of US$1,442.7 Bn, from 146 providers on 49 exchanges around the world. This compares to 2,252 ETFs with 4,570 listings and assets of US$1,025.9 Bn from 130 providers on 42 exchanges at the end of H1 2010.
Additionally, at the end of H1 2011, there were 1,162 other ETPs with 1,798 listings and assets of US$183.4 Bn from 57 providers on 23 exchanges. This compares to 823 ETPs with 1,161 listings and assets of US$132.6 Bn from 47 providers on 18 exchanges, at the end of H1 2010.
Combined, there were 3,987 products with 8,027 listings, assets of US$1,626.1 Bn from 182 providers on 52 exchanges around the world. This compares to 3,075 products with 5,731 listings, assets of US$1,158.4 Bn from 156 providers on 44 exchanges, at the end of H1 2010.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
