Global ETF News Older than One Year
Emerging markets stock exchange M&A activity to accelerate – PwC report
August 8, 2011--The emerging markets will drive the next wave of transformational change and deal-making in the exchanges sector. This is according to a new report by PwC, ‘Trading blocs – what next for the stock exchanges?’. The report suggests the most viable growth options for Western exchanges are to focus on developing post-trade clearing and settlement capabilities or fostering ties with emerging market players.
High operating leverage and heightened competition have suppressed margins across the sector and will continue to provide a compelling economic rationale for consolidation. Much of the new competition in Europe has been enabled by regulatory changes, such as Europe’s Market in Financial Instruments Directive (MiFID), allowing new entrants with low-cost business models to seize market share.
Shamshad Ali, partner at PwC, said:
“Talk of an end to consolidation in the stock exchange sector may be largely true for the more mature Western European markets, but Asia and Latin America are likely to see significant M&A in the future - if regulatory hurdles can be overcome.
view the Trading blocs - What next for the stock exchanges? report
Source: PricewaterhouseCoopers
UBS Launches UBS-MISTRAL Family of Innovative Active Interest Rate Indices
August 8, 2011--This week, UBS launches the Multi Indicator Short Term Rate Algorithm (UBS-MISTRAL) indices. Going beyond traditional trend following, UBS-MISTRAL identifies the underlying fundamental drivers of trends in interest rates, using a diversified set of leading indicators to take positions in interest rate futures. The indices are transparent to participating clients and will be published on a daily basis.
Over the past 50 years most of the developed world has seen one big "megacycle" in interest rates and several pronounced mini-cycles.
Source: Mondovisione
Quick View: What next for DB-NYSE probe?
August 7, 2011-- No surprises.
That’s how most people reacted to last week’s decision by the European Commission’s competition authorities to move its probe of the Deutsche Börse-NYSE Euronext merger to a deeper, second phase.
It had been widely flagged that Brussels was concerned about how the combination of Eurex and Liffe would create a dominant player in European derivatives. Also that there would be issues with the consolidation of the “vertical silo” and perhaps with the index business as well.
Source: FT.com
The Bright and the Dark Side of Cross-Border Banking Linkages
August 5, 2011--Summary:
When a country’s banking system becomes more linked to the global banking network, does that system get more or less prone to a banking crisis? Using model simulations and econometric estimates based on a world-wide dataset, we find an M-shaped relationship between financial stability of a country’s banking sector and its interconnectedness.
In particular, for banking sectors that are not very connected to the global banking network, increases in interconnectedness are associated with a reduced probability of a banking crisis. Once interconnectedness reaches a certain value, further increases in interconnectedness can increase the probability of a banking crisis. Our findings suggest that it may be beneficial for policies to support greater interlinkages for less connected banking systems, but after a certain point the advantages of increased interconnectedness become less clear.
Source: IMF
The Effectiveness of Capital Controls and Prudential Policies in Managing Large Inflows-IMF paper
August 5, 2011--EXECUTIVE SUMMARY
IMF staff have recently sought to clarify the circumstances under which capital controls and
prudential policies designed to influence cross-border capital flows (referred to together as
“capital flow measures,” or CFMs) could be a part of the toolkit to manage large capital
inflows.
In doing so, considerable emphasis has been given to the need to ensure that these measures in fact achieve their intended objectives, which have typically included stemming currency appreciation, reducing the volume of inflows, changing their composition, providing greater room for maneuver for monetary policy, slowing credit growth, and dampening asset price bubbles. This note considers the empirical evidence for the effectiveness of capital controls and related prudential measures, with the focus on what has been learned in the past decade.
A review of the literature shows that capital controls (as distinct from prudential CFMs) have little effect on overall flows, although it appears that controls can change the composition of flows. In most cases, controls also have little effect on currency appreciation. There has not yet been much in-depth study of the effectiveness of prudential measures in addressing the risks from capital inflows.
view the The Effectiveness of Capital Controls and Prudential Policies in Managing Large Inflows
Source: IMF
Growing alarm drives gold to records
August 5, 2011--The gold rally gathered pace this week as a growing sense of alarm in financial markets drove bullion to a series of new records.
The precious metal touched a fresh nominal record of $1,681.67 a troy ounce on Thursday, having rallied 12 per cent since the start of July. It also hit records in euros and sterling.
Source: FT.com
China says debt financing unlikely 'to save' US, EU
August 5, 2011--China said Friday that debt deals in the United States and in Europe would not be enough to save their economies and "concrete steps" must be taken to rebalance the global economy.
"The only way the Americans have come up with to improve economic growth has been to take on new loans to repay the old ones," a blistering commentary published on the official Xinhua news agency said.
"To eat May's grain in April, however, will never be a permanent solution to a problem," the report said.
Source: EUbusiness
'Fear' Gauges Show Unusual Disparity Between US, Emerging Markets
U.S., developed-world volatility benchmarks rise faster than emerging markets
Trend shows more anxiety about stocks that are usually perceived as less risky
Lower emerging-market volatility views seen as sign of those markets' emergence
August 5, 2011--Global risk worries are turning the stock market's "fear" gauges on their heads.
Volatility indexes such as the VIX reflect the prices investors pay to use stock options as protective hedges. Typically, protective options in markets such as those in the U.S. and Europe carry a lower risk premium than those in emerging markets, which investors generally perceive to be riskier and more volatile.
Source: Wall Street Journal
Taxing Financial Transactions: An Assessment of Administrative Feasibility-IMF Working paper
August 4, 2011--Summary: This paper considers how a tax on financial transactions could be applied to three broad and partially overlapping categories of financial instruments: (1) exchange-traded instruments; (2) over-the-counter instruments; and,
(3) foreign exchange instruments. For each category, the paper examines the factors that would facilitate or complicate the administration of a financial transactions tax, the options for collecting the tax, the types of compliance risks that are likely to be encountered, and measures for mitigating these risks.
Source: IMF
Stocks plunge on debt, growth fears
June 4, 2011--World stocks plunged to new 2011 lows on Thursday as worries about a global slowdown intensified and investors piled more money into safe-haven assets like bonds.
As Wall Street’s losses deepened, gold turned negative after touching another record high near $1700 an ounce.
The exodus from stocks pushed the broad Standard & Poor’s 500 Index down 3% percent, while the clamor for safe-haven investments drove the yield of the 10-year US Treasury note below 2.5%, the lowest since early November 2010.
Source: FIN24
