Global ETF News Older than One Year
Causes of Asset Shortages in Emerging Markets- IMF Working paper
May 16, 2011--Summary: We first illustrate that emerging markets (EMs) face a shortage of financial assets, with financial assets not growing as rapidly as domestic savings. We then estimate the asset shortage in EMs for 1995-2008.
We develop a model that explains how asset shortage develop, and then econometrically estimate the causes of asset shortages. We conclude with policy implications.
view the IMF Working paper-Causes of Asset Shortages in Emerging Markets
Source: IMF
Public-Private Partnerships in Europe and Central Asia
May 16, 2011--Summary
The global financial crisis that began in late 2008 has set back ambitious infrastructure development plans among many countries in Europe and Central Asia (ECA). Many such plans relied on Public-Private Partnerships (PPP) arrangements. Furthermore, the financial crisis resulted in sharp declines in gross domestic product (GDP) and country’s deteriorating fiscal space restricted the scope for maintaining the level of investment or introducing counter-cyclical measures driven by public sector investment in infrastructure.
Soaring levels of public debt, limited room to cut expenditures, and lower tax receipts due to slower than expected economic growth will mean that the ‘fiscal space’ in the region to make public investments in infrastructure will be strained in the coming years. The ability of many ECA country governments to expand expenditure any further, even for productive investments in infrastructure, will thus prove challenging.
Nevertheless, the year 2010 saw some countries and cities reaching financial close on multi-billion projects while others are still struggling to close their first PPP project in highway. The comparison of the Pulkovo Airport in Russia and the Comarnic-Brasov Highway in Romania is an illustration of this situation. On one hand St Petersburg developed a robust PPP project that involved the rehabilitation of an existing asset with established demand. On the other hand, the Romania examples show how projects with large capital requirements with unknown demand risk are still considered risky for the private sector, especially in the context of reduced liquidity from the financial
view report-Public-Private Partnerships in Europe and Central Asia
Source: World Bank
State Street eyes securities services buys
May 16, 2011-State Street plans to expand its securities services arm outside the US through acquisitions, benefiting from European lenders' needs to shed ancillary businesses to raise capital.
“The market is going to deliver opportunity,” Jay Hooley, the trust bank’s chief executive, told the Financial Times. “I think we’re poised very well, from the standpoint of business model and capital strength, to take advantage of acquisitions as they present themselves.”
Source: Financial Trust
Canadian Bid for TMX May Trumpet Nationalism to Thwart LSE
May 14, 2011---- A group of Canadian banks and pension funds is offering to buy Toronto Stock Exchange owner TMX Group Inc. in a C$3.6 billion ($3.7 billion) bid that champions a domestic alternative to London Stock Exchange Group Plc’s takeover agreement.
Ontario Finance Minister Dwight Duncan said in an interview yesterday that he welcomed the proposal from Maple Group Acquisition Corp., a consortium of four banks including Toronto- Dominion Bank and five Canadian pension funds. Toronto-based TMX already trades 7.2 percent higher than LSE’s Feb. 9 bid.
Source Bloomberg Businessweek
TMX Group Inc. Statement
May 14, 2011 (Canada NewsWire via COMTEX) -- TMX Group Inc. announces that it has received a written proposal for the acquisition of TMX Group by a corporation, formed by a number of Canadian financial institutions, including pension funds and banks, operating under the name Maple Group Acquisition Corporation ("Maple").
The Maple proposal, which is not binding and was prepared for discussion purposes, provides for a combination of cash and equity consideration stated to be at a premium to the current market price of TMX Group shares. The proposal also involves a number of significant conditions, including regulatory approval for the combination of TMX Group with both Alpha Group and CDS Inc., but does not specify the means for satisfying these conditions.
The Board of Directors of TMX Group, in accordance with its fiduciary duties and with counsel from its financial and legal advisers, will fulfill its legal responsibility and will evaluate the proposal.
TMX Group will continue to pursue efforts currently underway to secure the necessary regulatory and shareholder approvals required to complete its agreed merger with London Stock Exchange Group.
TMX Group will make no other public comment on the Maple proposal until the Board of Directors has completed its analysis.
Source: Toronto Stock Exchange
Hedge Fund Inflows Swell to 9-month High
May 13, 2011--Hedge funds last month enjoyed their biggest monthly net inflows since August, as investors backed managers to profit from increasing market volatility, indicative data from GlobeOp Financial Services (GO.L) shows.
The GlobeOp Capital Movement Index -- which tracks the monthly net of subscriptions to and redemptions from around $167 billion (103 million pounds) of hedge fund assets under administration -- showed a net inflow of 2.29 percent in the month to May 1 compared with a 0.05 percent net outflow a month earlier.
Source: Reuters
Statement: The Management and Supervisory Boards of Deutsche Börse AG recommend acceptance of the offer made by Alpha Beta Netherlands Holding N.V.
Combination of Deutsche Borse and NYSE Euronext creates the world’s premier global exchange group/ Superior value creation through enhanced growth profile and significant synergies/ Management and Supervisory Boards of Deutsche Börse recommend that all shareholders accept the offer
May 12, 2011-- Management Board and Supervisory Board of Deutsche Borse Aktiengesellschaft today made a joint statement in accordance with Section 27 of the German Securities Acquisition and Takeover Act (WpÜG) on the voluntary takeover offer published on 4 May 2011 by Alpha Beta Netherlands Holding N.V.
The Management Board and the Supervisory Board recommend that the shareholders of Deutsche Börse AG accept the offer under which they will receive one share of the Dutch holding for each share in Deutsche Börse. The Dutch holding will be the joint holding company of Deutsche Börse AG and NYSE Euronext in the combined company.
Reto Francioni, CEO of Deutsche Börse AG, said: “The combination with NYSE Euronext will drive significant long-term value for all shareholders through superior cash flow generation, a strong balance sheet and a clear path to value creation. The unique growth opportunities and specific, clearly identified synergies will allow the combined company to maintain a shareholder-friendly distribution policy while providing it with the flexibility to invest, grow and innovate to meet the demands of the global marketplace.”
Source: Deutsche Börse
CDS Spreads and Default Risk: A Leading Indicator?
May 12, 2011--Summary
Credit default swap (CDS) spreads have been gaining greater visibility as default risk indicators
over the past several years. Fitch Ratings provides its ratings analysts with access to CDS pricing
data as one of many analytical tools, and outliers whose spreads deviate significantly from peers
may prompt further review of an individual credit.
Some market participants also use CDS spreads to derive quantitative estimates of a company’s probability of default (PD).
Given the growing influence of CDS spreads as risk indicators, Fitch has undertaken a series of studies to assess the predictive performance of CDS spreads more systematically. This study analyzes the ability of CDS spreads to identify in advance companies that eventually default by reviewing the CDS-implied PDs of monolines, financial institutions, and corporate entities that experienced a credit event (e.g. failure to pay, bankruptcy, restructuring) between 2008 and 2010.
Source: Fitch Ratings
Banks look to counter LSE’s TMX deal
May 12, 2011--This week a giant blue illuminated ball and electronic ticker tapes were inaugurated at the London Stock Exchange as the UK bourse launched a new market opening ceremony to kick off trading each day.
It was probably a welcome distraction for Xavier Rolet, LSE chief executive, from having to follow the progress of his planned “merger of equals” with TMX Group, operator of the Toronto and Montreal exchanges, thousands of miles away in Canada.
Source FT.com
D Börse raises NYSE revenue forecasts
May 12, 2011--Deutsche Börse on Thursday raised its estimates for revenue synergies that could be achieved in its planned combination with NYSE Euronext from €100m ($141m) to €150m partly through expanding the group’s clearing service across the proposed new group.
Reto Francioni, Deutsche Börse chief executive, also attacked the counter-bid for NYSE Euronext by Nasdaq OMX and IntercontinentalExchange, saying it would lead to a monopoly in US listings, weaken New York as a financial centre and “marginalise” European cash markets through “a US-oriented Nasdaq and NYSE Euronext combination”.
Source: FT.com
