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UN World Economic Situation and Prospects 2011
January 17, 2011--Highlights
After a year of fragile and uneven recovery, global economic growth started to decelerate on a broad front in mid-2010 and this slower growth is expected to continue into 2011 and 2012. The United Nations baseline forecast for the growth of world gross product (WGP) is 3.1 per cent for 2011 and 3.5 per cent for 2012, which is below the 3.6 per cent estimated for 2010 and the pre-crisis pace of global growth.
Weaknesses in major developed economies continue to drag the global recovery and pose risks for world economic stability in the coming years. The unprecedented scale of the policy measures taken by Governments during the early stage of the crisis has no doubt helped stabilize financial markets and jump-start a recovery. However, overcoming the structural problems that led to the crisis—and those that were created by it—is proving much more challenging and will be a lengthy process. This contrasts with the strong GDP growth in many developing countries and economies in transition, which has contributed more than half of the total expansion of the world economy since the third quarter of 2009.
view report-World Economic Situation and Prospects 2011
London Stock Exchange Group Signs Strategic Partnership With Mongolian Stock Exchange - Development And Technology Partnership Signed - Management And Market Expertise To Be Deployed As MSE Privatises
Development and technology partnership signed
Management and market expertise to be deployed as MSE privatises
January 18, 2011--London Stock Exchange Group (“LSEG”) and the Mongolian State Property Committee (“SPC”) today announce that they have signed an exclusive Strategic Partnership Agreement to restructure and develop the Mongolian Stock Exchange (“MSE”).
Speaking ahead of an event marking the twentieth anniversary of the MSE today, Xavier Rolet, Chief Executive of LSEG, said:
“We are thrilled to have been chosen to partner with the Mongolian Stock Exchange as it enters a new and exciting period in its development. Mongolia is predicted to become one of the world’s fastest growing economies and we are delighted to be providing our extensive expertise and assistance at this critical time. The London Stock Exchange Group is very much looking forward to working with business, government and the people of Mongolia in the growth and privatisation of its significant capital markets.”
‘Graying Revolution’ Reaches Low- and Middle-income Countries
Developing and middle-income countries must care for growing numbers of the elderly but often without enough money and experience.
In less developed regions, life expectancy increased by 26 years from 1950-55 to 2005-10.
Two World Bank reports address the economic impact of aging populations worldwide and offer direction on policy reforms.
January 18, 2011--Since the 1950s, smaller family sizes and longer life expectancies have steadily expanded the ranks of the elderly in many societies—a shift some commentators have dubbed the ‘Graying Revolution.’
Once considered a rich country phenomenon because of its origins in high national incomes and better personal health, the ‘graying’ trend has now reached developing and middle-income countries, according to new research by the World Bank. These countries are catching up, but largely without the economic means to cope with the social and economic challenges posed by such a profound demographic shift.
“Population aging is a global issue that is affecting, or will soon affect, virtually every country around the world, at a time when family support and other traditional safety nets have become less certain,” says Daniel Cotlear, co-author of a recent Bank report “Some Consequences of Global Aging,” and a lead economist in the World Bank’s Human Development Network.
view the report-Some Economic Consequences Of Global Aging
Ground-breaking research shows that large private equity firms underperform small firms
January 17, 2011--Newly-released research by Florencio Lopez-de-Silanes of EDHEC Business School with co-authors Ludovic Phalippou and Oliver Gottschalg, entitled “Giants at the Gate: On the Cross-Section of Private Equity Investment Returns,” examines the determinants of private equity (PE) returns using a newly constructed database of 7,500 investments worldwide over forty years. The dataset is, to the best of the authors’ knowledge, the largest panel of worldwide PE (buyout) investment performance.
Among the many key and previously undocumented findings of the study:
The scale of private equity firms is a significant and consistent driver of returns. Diseconomies of scale are linked to firm structure: independent firms, less hierarchical firms, and those with managers of similar professional backgrounds exhibit smaller diseconomies of scale. More globally, small investments outperform large ones.
Credit Suisse introduces the Emerging Consumer Survey
January 17, 2011--Credit Suisse today announced the release of the inaugural Emerging Consumer Survey – a detailed study exploring the spending profile of consumers within Brazil, Russia, India and China (BRIC) markets plus Egypt, Indonesia and Saudi Arabia. Taken together, these consumers represent over 3 billion of the world’s population, residing in countries that make up a combined GDP of over USD 10 trillion.
The survey produced by the Credit Suisse Research Institute seeks to establish a unique profile of the spending patterns and preferences of consumers who are at the heart of a structural shift in global demand.
To undertake this project, Credit Suisse engaged the leading global market research firm AC Nielsen to conduct primary research on its behalf. 120 questions, over a range of 11 different subjects, were included in the survey and put to some 13,000 respondents of varying location, gender and income levels.
Fawzi Kyriakos-Saad, CEO of Europe, Middle East and Africa at Credit Suisse, said: “Credit Suisse’s overall commitment to emerging markets was a key driver of conducting this study. We are committed to developing thought leadership to provide our developed and emerging markets clients with insights on future trends and their implications for the global economy and financial markets.”
read the Emerging Consumer Survey
NYSE Euronext Leads ETP Listing Globally In 2010
NYSE Arca U.S. listed a record 220 New ETPs in 2010 – new high compared to 2009
A total of 112 new ETPs launched on NYSE Euronext European Markets
January 14, 2011--NYSE Euronext (NYX) today announced that NYSE Arca, its fully electronic U.S. market, and its combined European markets in Paris, Amsterdam, Brussels and Lisbon continued to show strong growth in Exchange Traded Products (ETPs) listings in 2010.
In the U.S., NYSE Arca listed 220 new ETPs, which included 144 ETFs, 9 ETVs, 43 ETNs and 24 certificates. That brought the total number of ETPs on NYSE Arca to 1,124 ETPs comprised of 837 Exchange Traded Funds (ETFs), 57 Exchange Traded Vehicles (ETVs), 132 Exchange Traded Notes (ETNs) and 98 certificates. New issuers of ETPs in 2010 included: Pax World Management, RBS, Sprott Asset Management, Teucrium, U.S. One and Velocity Shares. The total combined assets of NYSE Arca-listed ETPs reached $980 billion (as of Dec. 31, 2010), an increase of approximately 27% over 2009.
During 2010, NYSE Euronext’s European ETP segment listed 112 new ETPs, an increase of 9% over 2009. Two new issuers joined NYSE Euronext’s European market in 2010 with ETFs based on NYX indices: Comstage ETF listed five ETFs based on CAC 40, CAC 40 Short, CAC 40 Leverage, PSI 20 and PSI 20 Leverage, while ESAF ETF listed one ETF based on the NYSE Euronext Iberian Index. ETP issues are eligible to be listed across all NYSE Euronext’s European markets. At the end of 2010, NYSE Euronext ETP segment consisted of 491 ETFs from 16 issuers covering 329 indices, 43 ETVs, 5 ETNs and 18,661 warrants and certificates. The total combined assets of all ETPs listed on NYSE Euronext’s European markets reached €147.6 billion (as of Dec. 31, 2010), an increase of 26.7% over 2009.
Oil prices test $100-a-barrel
January 14, 2011--Oil prices ended the week closing in on the key psychological $100-a-barrel level amid mounting optimism that global economic growth will boost energy demand.
The oil surge also comes on the back of supply disruptions such as this week’s outage in a pipeline in Alaska and strong investor inflows in commodities.
DB Global Equity Index & ETF Research : Part fund, part stock: ETFs in a path to unlock global asset liquidity
January 13, 2011--Capital market advances, supported by technological innovations over the past two decades, have redefined capital market mechanics. ETFs are a brainchild of this evolution. Currently, the global ETF market is close to €1 trillion, with the European market accounting for 22% of this figure. The sector’s impressive growth over the past decade demonstrates that ETFs are here to address a key market need: dependable secured fund instruments that do away mutual fund trading inefficiencies and derivatives risk considerations.
Possessing fund and stock characteristics, an ETF combines the best features of both instruments: security [funded] – mutual funds - and trading flexibility – stocks. The amalgamation of these features translates to liquidity levers that can prove paramount when looking to unlock an investment portfolio’s full liquidity potential.
As the global markets continue to evolve and investor instrument needs expand, asset liquidity considerations will only become more important and shall increasingly determine how an investor chooses a tracker instrument. ETFs are developing to become the pre-eminent global index instrument. Today, an impressive 50%+ (in terms of AUM) of ETFs assets trade on a global level across the major three regions (US, Europe, Asia). ETF trading globalization has thus put these instruments on a global market bridging path. This makes all the more important for a portfolio manager to use ETF liquidity levers to their advantage in order to help optimize and better achieve investment objectives.
ETF liquidity is composite in nature. To understand it, both its fund and stock trading characteristics need to be understood. Similar to a traditional mutual fund, an ETF is not an asset per se, it is an asset wrapper. Irrespective of the replication method that an ETF utilizes in order to achieve its investment objectives, it needs to access its underlying benchmark’s physical market to achieve investment exposure. Due to this dependence, the link with ETF underlying benchmark market plays the biggest role in determining an ETF’s liquidity standing.
ETFs, however, are also equity instruments whose shares trade like stocks. In this respect their intra-day pricing is subject to supply and demand forces as well as other trading market dynamics (such as market depth, trading restrictions, intermediaries’ pricing etc). Despite the trading similarities of an ETF and a common stock, using stock liquidity measures such as turnover, has generated confusion, in measuring ETF liquidity.
Three main areas relating to ETF liquidity have attracted attention as the ETF market has gained prominence next to established index instruments such as futures, total return swaps and mutual funds.
Trading: How can an ETF be traded and what are the implications of different trading possibilities on its liquidity?
Creation: How is ETF wrapper liquidity created? What is the impact of the ETF wrapper on the underlying benchmark’s index liquidity?
Measurement: What are the appropriate ETF liquidity measurement indicators?
Using these three pillars, we have performed an analysis of ten popular ETF benchmarks and the associated ETF listings across sixteen exchanges in all of the three major global regions (Europe, US, Asia).
To request a copy of the report
Thomson Reuters Monthly Market Share Reports For December 2010
January 13, 2011--Trading is fragmenting between exchanges and competing venues. But by how much and which venues? Find out in the summarised monthly reports.
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 the Thomson Reuters 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/).
2011 Index of Economic Freedom
January 13, 2011--Executive Highlights
Economic freedom advanced this year, regaining much of the momentum lost during the fiscal crisis and global recession. Many governments around the world have rededicated themselves to fiscal soundness, openness and reform, and the majority of countries are once again on a positive path to greater freedom.
The 2011 Index of Economic Freedom reports on economic policy developments since the second half of 2009 in 183 economies. Based on 10 measures that evaluate openness, the rule of law, and competitiveness, the Index ranks economies according to their economic freedom. The principles of economic freedom emphasized in the Index are individual empowerment, non-discimination, and the promotion of competition.
HIGHLIGHTS FROM THE 2011 INDEX OF ECONOMIC FREEDOM
The global average economic freedom score for the 2011 Index is 59.7, a 0.3 point increase from last year. (See Chart 1.) Despite the challenging global economic environment, the forces of economic freedom around the world have been resilient and even increasing. In fact, economic freedom has taken an upturn in the majority of the economies that are assessed in the 2011 Index.