Global ETF News Older than One Year
Study highlights CDS shortcomings
October 11, 2010-Financial derivatives that are widely tracked as a measure of creditworthiness of companies and countries have in many cases been poor indicators of default in the financial crisis, says Fitch Ratings.
The findings of the Fitch study highlight how privately-traded credit default swaps, where even the most actively traded contracts change hands only a few times per day, are influenced by many factors beyond the fundamental credit positions of companies or countries concerned.
Source: FT.com
Financial Sector Taxation: The IMF’s Report to the G-20 and Background Material
October 8, 2010--Foreword
At their September 2009 Pittsburgh Summit, G20 Leaders requested the International
Monetary Fund to prepare a report on how the financial sector could make a ‘fair and substantial contribution’ to meeting the costs associated with government interventions to
repair it. In response, a talented team of Fund experts was assembled, recognizing both the
topic’s importance and the analytical challenge it posed. The question of how best to reconfigure the tax system to serve this purpose – while aligning it with a regulatory regime
that itself is under significant reforms – goes to the core of the difficulties faced in dealing
with financial system failures.
Surprisingly, previous academic work and policy debates provided very little guidance in this critical subject. Moreover, the issue was – and remains – both politically charged and highly controversial. This made the project one of the most difficult and fascinating that the IMF has undertaken in recent years.
The report that we delivered to the G20 Leaders Toronto Summit provided a concise summary of our analysis and views. Not surprisingly, policymakers’ reactions varied widely – in some countries, policies are being implemented along the lines suggested. In other cases, the proposals were met with strong objections.
view Financial Sector Taxation: The IMF’s Report to the G-20 and Background Material
Source: IMF
Growth Returning to Emerging Europe And Central Asia, But Concerns Center on Jobless Recovery
October 8, 2010?Economic growth has returned to the Emerging Europe and Central Asia (ECA) Region, but it has come with concerns about its jobless nature and doubts about its durability, according to the World Bank at a press briefing during the World Bank/IMF Annual Meetings 2010.
“The good news is that economic growth has returned to Emerging Europe and Central Asia, after the region suffered a sharp decline during the global economic crisis,” said Philippe Le Houérou, World Bank Vice President for the Europe and Central Asia Region. “Today, the region is back on the road to recovery. Thanks to stronger economies in Poland, Russia, and Turkey, growth went from a negative 5.1 percent dip in 2009 to a projected 3.9 percent growth in 2010.”
Source: World Bank
Business must press governments on climate change ahead of the Cancun summit
CDP FTSE 350 report shows just 1 in 10 companies encouraging policy action that drives mitigation and adaptation
HSBC Holdings, Reckitt Benckiser, Royal Bank of Scotland Group, Scottish and Southern Energy and Tesco among UK companies leading efforts to tackle climate change
October 8, 2010-Carbon Disclosure Project (CDP) urges companies to engage with governments in the lead up to the UN climate change summit to encourage policy action and demonstrate the significant opportunities that are now recognised across UK boardrooms from action on climate change. The CDP FTSE 350 report, prepared by PricewaterhouseCoopers (PwC) and released today, reveals that only one in ten companies are engaging with policymakers to encourage policy action that drives climate change mitigation and adaptation.
Despite this, more than eight out of ten FTSE 350 companies that reported to CDP identify significant opportunities from climate change. Responses indicate that not only do “cleaner” and “greener” operations and products put companies at a competitive advantage in terms of regulation and reputation, they capture shifting consumer demands and present significant new market opportunities.
Speaking in September at the CDP global forum, Christiana Figueres, the executive secretary for the UN Framework Convention on Climate Change, said: “If you want to push governments you have to push them at home. The green race has started and we are on the verge of a new industrial revolution which must succeed. Businesses best course is to press governments to give companies and investors the regulatory framework, the incentives and benchmarks to push this new revolution forward on to a global scale”.
Source: Carbon Disclosure Project
“Lower bank profits can cover the costs of stricter regulation”
October 7, 2010--The Riksbank and Finansinspektionen (the Swedish Financial Supervisory Authority): The banks’ shareholders and customers must share the costs ensuing from new and tougher bank regulations. The new Basel III regulations have laid a global foundation for a more stable financial system in the future. The details of the regulations are complex, but based on simple insights, such as the banks' need for more and better capital.
One criticism that is often put forward is that stricter bank regulations lead to larger costs for society. We will probably have to live with slightly higher lending rates in the future. But banks which take less risk do not need to make such large profits. So some of the adjustment can be made through the banks accepting lower profits, write Stefan Ingves and Martin Andersson
Following the collapse of the major US bank Lehman Brothers in autumn 2008 the international financial crisis was a reality. Unease spread rapidly across the globe and confidence between the banks vanished overnight. When the global financial market had ceased to function, governments and pubic authorities in the countries concerned were forced to resort to special measures to maintain stability in the financial system. With the aid of loans and capital injections it was possible to avoid a total collapse. But the financial crisis nevertheless had considerable consequences, as the economic situation deteriorated, unemployment rose and deficits in public finances grew alarmingly around the world.
Source: Finansinspektionen
TOPIX Futures to launch on NYSE Liffe on 18 October 2010
October 7, 2010--Tokyo Stock Exchange, Inc (“TSE”) and NYSE Liffe today announce that TOPIX Futures will be available for trading on NYSE Liffe from 18 October 2010, making this benchmark index available in both Tokyo and London.
The Tokyo Stock Exchange’s TOPIX (Tokyo Stock Price Index) is the most popular index for benchmarking Japanese equity portfolios, and TOPIX Futures are already actively traded by investors worldwide.
The NYSE Liffe launch of TOPIX Futures will increase the number of potential investors who can access these products, particularly outside Asia. The NYSE Liffe market will remain available for trading for 11 hours (10 hours during British Summer Time) following the close of the TSE market. There will also be simultaneous trading in London and Tokyo during the final TSE trading session, leading to potential arbitrage opportunities.
The two exchanges have established a position transfer mechanism so that all NYSE Liffe TOPIX Futures positions at the end of each day will be transferred to the TSE. TOPIX Futures on TSE and NYSE Liffe will be fully fungible, allowing a single, fungible pool of Open Interest to exist in Tokyo.
Source: NYSE Liffe
Dow Jones Index Data Monthly Reports
October 6, 2010--The following Dow Jones Index Data Monthly Reports for September 2010 are now available.
Index Data Monthly Report: Asia Pacific Edition
Index Data Monthly Report: MENA Edition
Index Data Monthly Report: Europe Edition
Index Data Monthly Report: Dow Jones-UBS Commodity Indexes
Index Data Monthly Report: Latin America Edition
Index Data Monthly Report: U.S. Edition
Index Data Monthly Report: Dow Jones Brookfield Infrastructure Indexes
visit Dow Jones Indexes for more info.
Source: Dow Jones Indexes
World Bank Group Reiterates Focus on Green Energy
Financing for renewables and energy efficiency reaches $3.63 billion
Demand from borrowing countries for green energy up: accounts for more than 50% of 2010 energy lending
1.5 billion people still lack access to electricity, 640 million in Africa
October 6, 2010-The World Bank Group said today its financing commitments to new renewable energy projects increased to $1.5 billion in 2010, more than triple the amount committed in 2008. Energy efficiency lending increased 48 percent during the same period.
The figures confirm the institution is on track to meet its commitment to increase support for new renewable energy and energy efficiency by nearly $8.8 billion over 2008-2012.
“Combined with our large hydropower commitments, this amounts to $3.63 billion for green energy,” said Inger Andersen, the Bank’s Vice President for Sustainable Development. “It’s a record for the World Bank Group, and clear evidence of a shared commitment between the institution and borrowing countries to invest in a sustainable energy future.”
In 2010, the Bank Group commitments on renewable energy, energy efficiency, transmission and distribution, and energy sector reform accounted for more than 60 percent of total energy financing.
Source: World Bank
Quarterly Review Results for the FTSE China Index Series (previously named FTSE Xinhua Index Series)
Jiangsu Yanghe Brewery Joint-Stock (A) to be added to FTSE China A 50 Index
Agriculture Bank of China (H) to be added to FTSE China 25 Index
October 6, 2010-FTSE Group, the award winning global index provider, today announces the results of its FTSE China Index Series (previously named FTSE Xinhua Index Series) quarterly review.
In the FTSE China A 50 Index (previously named FTSE/Xinhua China A50 Index), Jiangsu Yanghe Brewery Joint-Stock (A Share, 002304) will replace Shenzhen Development Bank (A Share, 00001). Agriculture Bank of China (H Share, 1288) will also replace Datang International Power Generation (H Share, 0991) in the FTSE China 25 Index (previously named FTSE/Xinhua China 25 Index). Nearly 60% of assets under management in China ETFs listed globally are benchmarked to a FTSE China index. The indices are widely regarded as a leading measure of the China market by domestic and international investors.
Several changes were also approved to FTSE China B 35 index, FTSE China A 200, A 400 and A Small Cap Index. Full details of all inclusions and exclusions for the FTSE China Index Series can be obtained here. All the changes will be effective after the close of trading on Friday 15 October, 2010.
Source: FTSE
TABB Says the APAC Derivatives Market is Growing, Generating Nearly 38% of Global Volumes as the East Seeks Greater Parity with the West
TABB Says the APAC Derivatives Market is Growing, Generating Nearly 38% of Global Volumes as the East Seeks Greater Parity with the West
Gaining Functional Parity Requires Overcoming a Complex Tapestry of Regulatory, Currency, Tax and Technological Hurdles to Support Market Demand
Largest Opportunities for Western Traders Exist within the Most Open Markets of Japan, Australia, Hong Kong and Singapore
October 6, 2010--The Year of the Tiger has seen an unprecedented focus on the capital markets of the Asia-Pacific (APAC) region based on a growing interconnectedness and interdependency between the East and West. In a new research report issued today, “Trading in Asian Derivatives: Opportunities Near and Far,” TABB Group says the APAC derivatives markets are big and continuing to grow larger, currently capturing 35% of global volumes in the region.
According to E. Paul Rowady, Jr., TABB senior analyst and author of the report, 99% of commodity and 100% of FX derivatives volumes are in closed or challenged markets with 100% of rates and 31% of equity-linked derivatives volumes in the open markets in Japan, Australia, Singapore and Hong Kong. There, exchanges with the most highly integrated trading platforms across asset classes are expected to top the list, including the HKEx, SGX and ASX.
He also points out that “in aggregate, 85% of the derivatives volume is now based in markets that represent closed or challenged access from western traders, in China, India, Taiwan and Korea, e.g., the KRX, ZCE, MCX and TAIFEX. At TABB, we believe that Chinese exchanges will remain off-limits to active foreign trading strategies for the foreseeable future, with India in the same category due to factors related to poor infrastructure and the prohibitive regulatory environment, there.”
Source: TABB Group
