Global ETF News Older than One Year
Top 25 Financial Sectors to Get Mandatory IMF Check-Up
Stability part of voluntary Financial Sector Assessment Program now mandatory
25 biggest, most interlinked financial sectors to get IMF review every five years
Decision strengthens, integrates IMF’s financial, economic surveillance
September 27, 2010--Economies with financial sectors that have the greatest impact on global financial stability are now required to undergo in-depth reviews of their financial health by the International Monetary Fund every five years.
The landmark decision by the IMF’s Executive Board on September 21 converts the financial stability component of the voluntary Financial Sector Assessment Program (FSAP) into a mandatory part of the IMF’s surveillance for the world’s top 25 financial sectors.
The global economic crisis laid bare the devastating economic consequences a financial crisis in one country can have on the global economy. This decision is a concrete step toward strengthening the IMF’s surveillance of those members whose financial sectors could have the biggest potential impact on global stability. It is one of the key steps taken by the Fund to modernize its surveillance mandate and modalities in light of the recent crisis, and is consistent with the commitment made by the leaders of the Group of 20 advanced and emerging economies at the Washington Summit in November 2008 to subject their financial sectors to greater scrutiny.
Source: IMF
Towards investment clarity on controversial weapons
Could non-compliance with prohibition of controversial weapons be a problem for institutional investors?
September 27, 2010--In 2004, Belgium was the first country to introduce legislation explicitly prohibiting the financing of anti-personnel mines, a weapon banned under the 1997 Mine Ban Treaty. Since then, Belgium has progressively extended its prohibition to cover other controversial weapon categories, including cluster munitions, ahead of the signing of the international Convention on Cluster Munitions in late 2008, and depleted uranium ammunition.
A proposal to extend the prohibition to also cover incendiary weapons with white phosphorus is now under discussion. However, the Belgian government has provided little guidance to investors regarding what is required to be in compliance with the law. Similar financing prohibitions are being discussed across Europe, with Ireland and Luxembourg having already introduced financing prohibitions on anti-personnel mines and cluster munitions. Also, a significant number of investors have taken action to address concerns regarding controversial weapons.
Source: Responsible Investor
S&P launches website to help pension funds better understand ratings process
September 24, 2010--Standard & Poor's has launched a website to help pension funds and plan sponsors better understand how the company arrives at its ratings.
The free website provides articles, videos, podcasts and educational guides on what credit ratings are – "and what they are not" – the processes by which S&P produces ratings and how those ratings have performed over time.
Over the last two years, investors have consistently called for more transparency about how S&P determines its ratings, according to Bruce Schachne, vice-president of market development.
Source: IP&E
RiskMetrics founder Berman leaves MSCI
September 24, 2010--Ethan Berman, the founder and former Chief Executive of RiskMetrics, is to retire from the company’s new owner MSCI, the index group, according to an internal letter seen by Responsible-Investor.com.
Berman, who had an advisory role following MSCI’s $1.55bn acquisition of RiskMetrics, had been expected to depart at the end of the fourth quarter. But the rapid integration of the two companies means Berman has brought forward his plans.
Source: Responsible Investor
September 2010 “Market’s Measure” Preliminary Report - A Monthly Report From Dow Jones Indexes On The Performance Of U.S., European, Asia And Other Global Stock Market Indexes
September 23, 2010--Dow Jones Industrial Average Posts 7.24% Gain in September, European Stocks Gain 9.71%, Asia Rises 7.23% and World Equities Rise by 7.74%
Basic Materials Sector Posts Biggest Gain for September in Europe
Utilities Sector Posts Narrowest Gain for September in U.S., Europe, Asia & Worldwide
As of September 22 the Dow Jones Industrial Average rose 7.24% in September, closing at 10739.31. Stock market indexes in Europe, Asia and globally were up in September, according to preliminary monthly figures from global index provider, Dow Jones Indexes.
The Dow Jones Industrial Average rose 7.24% in September, closing at 10739.31Year-to-date, the index is up 2.98%.
The Dow Jones Europe Index rose 9.71% in September to 254.85. So far this year, the index is down 3.56%.
The Dow Jones Asian Titans 50 Index rose 7.23% in September to 132.78. So far this year, the index is down 1.11%.
The Dow Jones Global Titans 50 Index rose 7.74% in September, closing at 164.35. Year-to-date, the index is down 5.35%.
SEPTEMBER 2010 Sector Winners and Losers
In the U.S., the Dow Jones U.S. Technology Index was the biggest winner in September, posting a 10.50% gain. The Dow Jones U.S. Utilities Index posted the narrowest gain, up 2.57%.
In Europe, the Dow Jones Europe Basic Materials Index posted the biggest gain, climbing 13.84%. The Dow Jones Europe Utilities Index had the narrowest gain, up 5.81%.
In Asia, the Dow Jones Asia/Pacific Basic Materials Index posted the biggest gain, rising 10.58%. The Dow Jones Asia/Pacific Utilities Index posted the narrowest gain, up 1.64%.
Globally, the Dow Jones World Automobiles & Parts Titans Index had the best performance, climbing 11.75%. The Dow Jones World Utilities Titans Index posted the narrowest gain, up 3.48%.
Source: Mondovisione
Growth to Reaccelerate for Remainder of 2010, Barclays Capital Says
“Global Outlook” research forecast sees easy monetary policy and renewed economic growth favouring risky assets
September 23, 2010--With monetary policy expected to remain extremely easy and the global economic recovery intact, financial market conditions are favourable for investors, Barclays Capital today said in its latest flagship quarterly research publication, Global Outlook: Nothing More Than a Pause. As indicated by the title, Barclays Capital expects the recent mid-cycle slowdown to be followed by a pickup in growth.
While we do not expect growth to reach the pace of the initial post-recession phase, easy monetary conditions are working across global financial markets, and it is simply a matter of time before that provides a lift to real activity,” said Larry Kantor, Head of Research at Barclays Capital. “Emerging markets should continue to outperform developed markets, and we see the massive underperformance of equities relative to credit nearing an end.”
Additional themes of Barclays Capital’s Global Outlook include:
Underperformance of developed markets relative to emerging markets is likely to weigh on developed market currencies
In Asia, China slowdown concerns have abated, and growth in rest of region remains strong
In the US, economic growth should be modestly above-trend for remainder of year, though policy risks remain critical to market performance
In Europe, improved economic data and sensible policy actions have reduced market risks.
Source: Barclays Capital
The IMF-FSB Early Warning Exercise - Design and Methodological Toolkit
September 23, 2010--Summary:
The Early Warning Exercise (EWE) draws together a combination of analytical techniques, practical experience, seasoned judgment and unique databases in order to assess the potential consequences associated with economic and financial tail risks. There are several key features of the exercise. First, the exercise aims to help prevent the occurrence of financial crises and to limit their potential damage, not to predict the timing of crises.
Second, coverage is fairly comprehensive, including both advanced and emerging economies. Third, the EWE is based on rigorous analysis and cutting-edge techniques, but it uses a holistic approach, drawing also various other tools rather than relying on a single crisis model. Fourth, it combines empirical analysis with forward-looking thinking, based on inputs from key policymakers and academics, in-depth real-world knowledge from practitioners, and seasoned judgment from IMF experts. The primary purpose of the EWE is to identify as early as possible the buildup of underlying vulnerabilities that predispose a system to a crisis, so that corrective policies can be implemented and contingency plans put in place.
view the The IMF-FSB Early Warning Exercise - Design and Methodological Toolkit
Source: IMF
Asset managers set to consolidate and increase scale, says State Street
September 23, 2010--Fewer and bigger players applying capabilities across a broad range of asset classes and strategies to deliver solutions rather than products – is the future of Europe's asset management industry as it goes through "unprecedented" change, according to State Street's latest VisionFocus.
Consolidation has already been driven by banks selling their asset management divisions, as regulators, boards and shareholders pressure them to return to their core businesses, and they take the opportunity to monetise the spread in earnings multiples between themselves and other public-listed asset managers.
Source: IP&E
FTSE Announces 2010 Country Classification
Czech Republic, Malaysia and Turkey promoted to
Advanced Emerging markets
September 23, 2010--FTSE Group
(“FTSE”), the award winning global index provider, today announces the results of its 2010 Country Classification Annual Review.
The FTSE Country Classification Annual Review, carried out every September, is the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier within the FTSE Global Equity Index Series.
Working with independent practitioner committees, made up of senior industry experts and index users, FTSE has designed a sophisticated approach for determining the investability status of global markets. Using this approach, global markets which meet the economic conditions of a developed or emerging economy are measured against the ‘Quality of Markets Assessment’ criteria developed in consultation with the investment community (Details of the criteria are available at www.ftse.com/country).
This is further supported by an in-depth engagement programme with the markets being assessed within the Global Equity Index Series. As a result, the FTSE Country Classification methodology provides a transparent and consistent assessment of the markets of over 70 countries with respect to the quality of their investment infrastructure for international investors.
As a result of the 2010 annual review, the FTSE Policy Group has approved the following changes:
Czech Republic – Promoted from Secondary Emerging to Advanced Emerging;
· Malaysia – Promoted from Secondary Emerging to Advanced Emerging; and
· Turkey – Promoted from Secondary Emerging to Advanced Emerging
Source: FTSE
Policymakers turning blind eye to problem of deflation, says ING
September 22, 2010--Policymakers for the world's larger economies have turned a blind eye to the very real risk of deflation, according to ING Investment Management.
Valentijn van Nieuwenhuijzen, head of fixed income and economics at ING IM, said the chance of deflation occurring – triggered by a double-dip recession in the US, an oil-price spike or a similar "negative shock" – was uncomfortably large.
"What policymakers should do – and what I fear they are not doing aggressively enough – is eliminate the risk that deflation will materialise on a two to three-year horizon," he said.
Source: IP&E
