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NASDAQ OMX Reports Strong Second Quarter 2010 Results
Non-GAAP Diluted EPS Increased 21% to $0.52 (GAAP Diluted EPS $0.46)
Announces an Additional $100 Million for Share Repurchase Program
July 27, 2010--The NASDAQ OMX Group, Inc. ("NASDAQ OMX®") (Nasdaq:NDAQ) reported strong results for second quarter of 2010. Net income attributable to NASDAQ OMX for the second quarter of 2010 was $96 million, or $0.46 per diluted share, compared with $61 million, or $0.28 per diluted share, in the first quarter of 2010, and $69 million, or $0.33 per diluted share, in the second quarter of 2009. Included in the second quarter of 2010 results are $16 million of charges related to the divestiture of businesses, expenses associated with severance, merger and strategic initiatives, and other non-recurring items.
Financial Highlights1:
•Non-GAAP EPS increased 21% over first quarter of 2010 results
•Net revenues grew 8% over prior quarter to $390 million
•Non-GAAP operating income improved to $183 million, up 15% from first quarter of 2010, while operating margins increased to 47%
•Completed $200 million of the original $300 million share repurchase program. Board has authorized an additional $100 million for the program, bringing the total authorized amount to $400 million.
MSCI and the RiskMetrics branding mystery
July 27, 2010--The company isn’t saying much, but it seems that a rebranding on the ESG side could be underway at MSCI’s recently acquired RiskMetrics division, which could jettison the RiskMetrics brand.
According to correspondence from staff in the organization seen by Responsible-Investor.com, ‘MSCI ESG Analytics’ seems to be the form of words being used for the new branding, suggesting that the RiskMetrics brand could shortly disappear from the ESG world as part of the buyout of the firm by the global index group. An MSCI spokesperson was tight-lipped: “MSCI is still finalising the business areas following the acquisition of RiskMetrics Group and will communicate to clients and wider audiences in due course.”
Any repositioning would be taking place amid continuing consolidation in the ESG advisory and proxy voting sector. The merger last week between The Corporate Library and GovernanceMetrics International is the latest in a series of deals that has seen smaller providers strike up alliances or get bought up by bigger names.
ETFS Securities-Commodities Review H1 2010
July 26, 2010--Highlights of Report
The precious metals sector was the best performing commodity sector in H1 2010, rallying 13% as most other key asset classes succumbed to sovereign risk and growth concerns. Gold was the strongest performer rising 14% in US dollars, 34% in Euro and 23% in Sterling continuing its run as one of the best performing assets over the past ten years. This compares to a 14% decline in the FTSE 100
Index and a 20% decline in the EuroStoxx 50 index in USD over the period1.
Flows into gold ETPs rose at an unprecedented pace, with ETF Securities seeing gold ETC assets rise almost $3bn to $11.4bn. Global physically-backed gold ETP
assets soared to $83bn, up $18bn (29%)1.
Energy saw mixed performance with oil trading around a $70-$85/bbl range and natural gas prices rebounding at the end of the half. ETC investors appeared to be adroitly trading the oil price range with long inflows rising at the bottom of the price range and long outflows and short positions increasing at the top. Positions were reduced in natural gas ETCs as prices rose.
· Industrial metals saw sharp declines as risk appetite fell and China growth concerns took their toll in Q2. Despite the sharp declines in Q2, the strength of the rally in 2009 meant that industrial metals as a group were still up over 20% on a 12 month basis. ETFS Short Copper saw record inflows in Q1 as some investors’ correctly hedged against price declines in Q2. Shorts have been reduced but remain high relative to history.
TABB Group Sees Low-Touch Order Channels Accounting for 62% of Buy Side Firms’ Options Trading by 2011
Evolving Market Structure and Complexity Drive Adoption of Trading System Technology
Options Algorithms to Represent 28% of Total Trading by 2011
July 26, 2010-- The increasingly complex options markets is resulting in growing demand for tools and systems that can help make options trading more efficient, especially as traders are continue to adopt sophisticated trading strategies, says TABB Group in a new annual research study, “US Electronic Options Trading 2010: Algorithms, DMA and Crossing Networks.” The proportion of order flow moving through low-touch channels is projected to rise to 62% by 2011, as options traders turn to electronic trading systems to manage order flow.
According to Andy Nybo, a TABB principal, head of derivatives and author of the study, “Hedge funds are using direct market access (DMA) and algorithms as their preferred method of finding liquidity, not only because of their more complex strategies, but as a result of traders’ need to reduce execution costs with higher turnover activities.” He adds that TABB expects hedge funds to direct 31% of total trading to algorithmic tools in 2011, up from 9% in 2009.
The report details the proliferation of DMA platforms residing on the buy-side trading desk, identifying key functionalities that make the systems attractive to options traders. “Through more than 50 interviews, we identified 20 different platforms currently deployed to trade options electronically, with the most sophisticated offering a suite of tools that provide complex order-support and algorithmic-trading capabilities,” said Nybo. “We discovered that competition for low-touch flow remains fierce, that brokers are battling to attract customer flow through new functionality and tools designed to meet the needs of the larger number of firms using these low-touch channels.”
TABB also found that there are sharp differences between asset managers and hedge funds. Asset managers, Nybo points out, have been reluctant to use automated trading tools. “Asset managers are heavily dependent on the phone to get their trades done, since they tend to trade infrequently and in larger size, and prefer to rely on their brokers for access to capital and ease of execution. They have little need to learn the nuances of a trading platform.” However, he adds, “One begins to question the rationale of executing via high-touch channels and paying double or triple the going rate for electronic executions, especially for more liquid options. At some point, lower commission rates for electronic execution will become undeniably attractive.”
Electronic commission rates have remained relatively stable since 2009, averaging 89 cents per contract, a slight increase over last year’s rate. The buy side is increasingly negotiating blended options execution rates across voice, direct market access and algorithmic channels that fund commission-sharing agreements (CSAs) for research and other services.
Consumer confidence shows a slowing down in pace of recovery for the first half of 2010
July 26, 2010--Consumer confidence in the OECD area has levelled out since January 2010, possibly announcing a new peak or maybe just indicating uncertainty in the coming months. Confidence levels remain historically low, a result of the financial crisis and indicating that the effects of the crisis are continuing to be felt by consumers who remain pessimistic about the future.
After the 2007 financial crisis, consumer confidence drastically decreased underlining a pessimistic view from households on the economy at the time and for the near future. This fall in the confidence indicators was unprecedented, and hit a recorded low. Between the end of 2008 and the beginning of 2009, a trough was reached for the OECD area and most OECD countries. Since then consumer confidence indicators have shown improved sentiment.
The charts included in this short note, indicate that the early part of 2010 has seen consumer confidence indicators experienced a decline in Canada, France, Italy and the United Kingdom, while continuing to recover in Japan, Germany and the United States. As a result of these diverging trends among the G7 countries, consumer confidence has been slowing on average in the OECD area.
view the OECD standardised Consumer Confidence Indicators (CCI)
Market highlights for first half-year 2010
July 23, 2010--Exchanges across the globe saw the value of their indexes drop an average of 11.5% in USD terms in the first six months of the year, according to figures released today from the World Federation of Exchanges (WFE).
Among the markets showing gains in the first half of 2010, most were from emerging economies.
BlackRock profit up, but outflows worry investors
July 22, 2010--Money manager BlackRock failed to impress investors with better-than-expected second-quarter profits on Wednesday, amid continuing concerns that founder and Chief Executive Laurence Fink's big move into exchange-traded funds is making the firm more dependent on low-fee products.
Shares of the world's largest asset manager were down 4 per cent in afternoon trading as the firm's results showed clients were picking up passively managed products, like its iShares ETFs, and getting out of more-lucrative actively managed stock and bond funds.
The second quarter results were a big improvement from the first quarter, when BlackRock missed Wall Street expectations, but showed that the sizable movement of client money out of its actively managed funds in the first quarter was a continuing trend.
International trade statistics: trends in first quarter 2010
July 21, 2010--Merchandise trade volumes for the G7 countries as a whole continued to grow in the first quarter of 2010, but at a slower pace than in the fourth quarter of 2009. Based on seasonally adjusted monthly data, merchandise trade values remain approximately 20% below pre-crisis levels in April and May.
G7 merchandise export and import volumes both grew by 3.2% in the first quarter of 2010 compared to 4.7% and 3.7%, respectively, in the fourth quarter of 2009. The highest increases were registered in Germany and Japan, where export volumes rose by 4.3% and 6.5%, and import volumes rose by 5.7% and 3.7%, respectively. Export volumes grew more slowly in Canada (0.4%), the United Kingdom (1.4%) and the United States (1.6%), where growth was also down from the fourth quarter of 2009. Growth in import volumes also slowed in all three countries.
BlackRock's Q2 assets under management plummet by 6%
July 21, 2010--– Assets under management at BlackRock, the largest asset manager in the world, fell by 6% to $3.1trn (€2.4trn) in the second quarter, sending its shares down by nearly 5% today.
However, Laurence Fink, chairman and chief executive, said the company's outlook remained positive.
BlackRock’s ETF Research & Implementation Strategy Team Releases Updated “ETF Landscape Global Handbook,”The Market’s Most Comprehensive Source of ETF Data and Commentary
July 21, 2010--With strong investor demand continuing to drive rapid growth in the market for exchange traded funds (ETFs), a proliferation of new offerings has made it considerably more challenging for investors and their advisors to identify those ETFs best suited for a particular investment need. As part of its ongoing effort to help investors and advisors better understand all the varied offerings of this ever-expanding marketplace, BlackRock’s ETF Research & Implementation Strategy Team has just released its new “ETF Landscape Global Handbook”, updated for Q2 2010 -- a free guide providing a comprehensive look at all ETFs and exchange traded products (ETPs) listed on exchanges around the world.
This unique handbook series, developed for sovereign wealth funds, pension plans, insurance companies, asset managers, private banks, hedge funds, financial advisors, banks and brokerage firms, provides the industry’s most complete look at the global ETF market – now comprising 3,010 ETFs and ETPs with 5,613 listings, assets of US $1,173.4 billion, and 157 providers on 44 exchanges worldwide.
As the ETF market continues to flourish, the “ETF Landscape Global Handbook” will continue to offer the most timely, relevant market data and serve as an indispensable go-to resource for better understanding meaningful trends and prospects market-wide.
To receive a hard copy or to subscribe to BlackRock’s ETF Landscape series of weekly, monthly, quarterly or annual reports and quarterly global handbooks please send your name, title, company name, address, email and phone to ETFresearch@blackrock.com.
