Global ETF News Older than One Year
Impact of bank rules likely to be 30% tougher
September 16, 2010-The full impact of the new global bank capital rules announced at the weekend is likely to be 30 per cent tougher than the headline ratio suggests, according to regulators and industry participants who have studied private banking data.
The data model the impact of earlier rule changes approved by the Basel Committee on Banking Supervision narrowing the definition of what banks can count towards core tier one capital ratio. On Sunday, the committee ordered banks to raise their minimum core tier one capital from 2 per cent to 7 per cent of their risk weighted assets by 2019 or face restrictions on pay and bonuses. That more than tripled the old requirement of 2 per cent to force banks to hold more top quality capital against potential losses.
Source: FT.com
FTSE implements 2009 country classification changes to its Global Equity Index Series
September 16, 2010--FTSE Group (“FTSE”), the award winning global index provider, is implementing the changes announced in its September 2009 Country Classification Annual Review, after the markets close on Friday, 17 September.
FTSE’s Country Classification Annual Review is the process by which stock markets are classified as having Developed, Emerging or Frontier status within the FTSE Global Equity Index Series.
The following country classification changes will be made:
UAE will be included in the FTSE Global Equity Index Series as a Secondary Emerging Market;
Malta will be classified as a Frontier Market; and
Argentina will be reclassified as a Frontier Market, having previously been classified as a Secondary Emerging Market.
Working with an expert committee of independent market practitioners, FTSE has developed the most sophisticated approach to classifying countries that provides both a transparent and consistent assessment of a market in respect of the quality of its investment infrastructure for international investors.
For full information about FTSE’s Country Classification process, including details of all criteria for Developed, Emerging and Frontier status and an assessment of each of the markets classified in FTSE equity indices, please visit www.ftse.com/country
Source: FTSE
Latest Global Energy Statistics Now Available
September 16, 2010--On September 1, 2010, the International Energy Agency issued the 2010 edition of its Key World Energy Statistics.
view the Key World Energy Statistics report
Source: International Energy Agency (IEA)
BlackRock-* New Report * ETF Landscape Industry Highlights End August 2010
September 14, 2010--Below are the ETF Landscape industry highlights as at end August 2010.
United States ETF and ETP Industry end August 2010:
The US ETF industry had 871 ETFs, assets of US$715.7 Bn, from 30 providers on two exchanges.
In August 2010, US domiciled ETFs/ETPs experienced net outflows totalling US$1.9 Bn. Equity ETFs/ETPs saw US$6.9 Bn net outflows, of which US$11.6 Bn was from net redemptions of North American equity ETFs/ETPs while US$4.5 Bn went into Emerging Markets equity ETFs/ETPs.
Fixed Income ETFs/ETPs saw net inflows of US$3.0 Bn, of which US$0.9 Bn went into High Yield ETFs/ETPs and US$0.8 Bn into Government bond ETFs/ETPs. Commodity ETFs/ETPs experienced US$0.9 Bn net inflows, of which US$1.0 Bn went into Precious Metals ETFs/ETPs in August 2010.
In August 2010, US domiciled ETFs experienced net outflows totalling US$3.9 Bn. Vanguard gathered the largest net inflows with US$3.7 Bn, followed by ProShares with US$1.2 Bn net inflows, while State Street Global Advisors saw US$7.9 Bn net outflows in August 2010.
Global ETF and ETP Industry end August 2010:
The global ETF industry had 2,308 ETFs with 4,922 listings, assets of US$1,064.4 Bn, from 129 providers on 43 exchanges around the world.
The global ETF and ETP industry combined had 3,182 products with 6,361 listings, assets of US$1,199.3 Bn from 159 providers on 46 exchanges around the world.
European ETF and ETP Industry end August 2010:
The European ETF industry had 985 ETFs with 3,140 listings, assets of US$230.9 Bn, from 37 providers on 19 exchanges.
In August 2010, net new assets into European domiciled ETFs/ETPs totalled US$2.2 Bn. Equity ETFs/ETPs gathered US$1.2 Bn net inflows, of which US$0.6 Bn went into Emerging Markets equity ETFs/ETPs and US$0.6 Bn into European equity ETFs/ETPs. Fixed Income ETFs/ETPs saw net inflows of US$0.1 Bn, of which US$0.6 Bn went into Corporate bond ETFs/ETPs while Government bond ETFs/ETPs saw net outflows of US$0.9 Bn. Commodity ETFs/ETPs saw net inflows of US$0.9 Bn, of which US$1.0 Bn went into Precious Metals ETFs/ETPs while Agriculture ETFs/ETPs saw net outflows of US$0.2 Bn.
In August 2010, net new assets into European domiciled ETFs totalled US$1.6 Bn. iShares has received the largest net inflows with US$1.0 Bn, followed by db x-trackers with US$0.9 Bn net inflows, while Source Markets had the largest net outflows with US$0.5 Bn.
Canada ETF and ETP Industry end August 2010:
The Canadian ETF industry had 150 ETFs, assets of US$31.6 Bn, from four providers on one exchange.
Asia Pacific ex-Japan ETF and ETP Industry end August 2010:
The Asia Pacific ex-Japan ETF industry had 180 ETFs with 284 listings, and assets of US$48.2 Bn from 56 providers on 13 exchanges.
Japan ETF and ETP Industry end August 2010:
The Japanese ETF industry had 74 ETFs with 77 listings, and assets of US$24.3 Bn from six providers on two exchanges.
Latin America ETF and ETP Industry end August 2010:
The Latin American ETF industry had 21 ETFs with 347 listings, and assets of US$11.9 Bn from three providers on three exchanges.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Global Corporate Rating Activity
September 14, 2010--Summary
Global corporate (industrial and financial institution) downgrades trailed upgrades by a margin of 0.8 to 1 in the first half of 2010, a marked departure from the widespread
and severe credit erosion of early 2009. Credit gains among industrial firms accounted for the majority of positive rating movements in the first half of the year, with industrial upgrades outpacing downgrades across developed and emerging markets.
In contrast, downgrades continued to top upgrades among global financial institutions, although at a far slower pace than in 2009 and still mostly affecting developed market institutions. Weak financials contributed to a downgrade to upgrade ratio across developed markets of 1.1 to 1 in the first half, lagging the far improved 0.3 to 1 ratio recorded across emerging markets.
Fitch-rated global corporate issuer defaults totaled just five in the 2010 first half, resulting in a year-to-date corporate default rate of 0.2%. All five defaults were rated ‘CC’ or lower at the beginning of the year.
The share of global corporate issuers on Negative Outlook fell to 17% at midyear from 26% at year-end 2009. A decline was recorded by both major market sectors, with the share of industrial and financial institution issuers ending the first half with Negative Outlook assignments of 11% and 23%, respectively ? down considerably from 18% and 33% at year-end 2009.
Source: Fitch Ratings
Basel rewrites capital rules for banks
September 13, 2010--Global banking regulators on Sunday sealed a deal to effectively triple the size of the capital reserves that the world’s banks must hold against losses, in one of the most important reforms to emerge from the financial crisis.
The package, known as Basel III, sets a new key capital ratio of 4.5 per cent, more than double the current 2 per cent level, plus a new buffer of a further 2.5 per cent. Banks whose capital falls within the buffer zone will face restrictions on paying dividends and discretionary bonuses, so the rule sets an effective floor of 7 per cent.
Source: FT.com
Group of Governors and Heads of Supervision announces higher global minimum capital standards
September 12, 2010--At its 12 September 2010 meeting, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced a substantial strengthening of existing capital requirements and fully endorsed the agreements it reached on 26 July 2010. These capital reforms, together with the introduction of a global liquidity standard, deliver on the core of the global financial reform agenda and will be presented to the Seoul G20 Leaders summit in November.
The Committee's package of reforms will increase the minimum common equity requirement from 2% to 4.5%. In addition, banks will be required to hold a capital conservation buffer of 2.5% to withstand future periods of stress bringing the total common equity requirements to 7%. This reinforces the stronger definition of capital agreed by Governors and Heads of Supervision in July and the higher capital requirements for trading, derivative and securitisation activities to be introduced at the end of 2011.
Source: Bank for International Settlements
OECD composite leading indicators show signs of possible peak in expansion
September 13, 2010--OECD composite leading indicators (CLIs) for July 2010 point to clearer signs of a moderation in the pace of expansion compared to last month’s assessment. The CLI for the OECD area decreased by 0.1 point in July 2010.
In Canada, France, Italy, the United Kingdom, China and India there are stronger signals of a slower pace of economic growth in coming months than was anticipated in last month’s release. Stronger signals that the expansion may lose momentum have emerged in Japan, the United States and Brazil. Tentative signals have also emerged that the expansion phases of Germany and Russia may soon peak.
The OECD Development Centre’s Asian Business Cycle Indicators (ABCIs) show that the recovery of ASEAN economies keeps on track with some signs of moderation.
Source: OECD
Confidence in FDI recovery growing as TNCs look beyond the crisis, UNCTAD survey reveals
September 12,2010-- Transnational corporations (TNCs) are increasingly optimistic about the international investment environment and their own prospects for foreign direct investment (FDI) this year and beyond, this year´s World Investment Prospects Survey 2010-2012 (WIPS) shows. The results point to a recovery in global FDI flows in 2010 and further growth in 2011 and 2012. The annual survey seeks to ascertain the FDI plans of the world´s largest TNCs. This year´s results are based on the responses of 236 TNCs and 116 IPAs (investment promotion agencies) to an UNCTAD questionnaire.
Reflecting other forecasts of improving global economic activity, TNCs´ perceptions of the international investment climate are on an upswing. Compared to last year´s survey, in which some 47 per cent of respondents expressed pessimistic views regarding 2010, only 36 per cent of respondents this year expressed pessimistic views for the current year. Looking beyond 2010, the outlook is markedly brighter, with 47 per cent of respondents expressing an optimistic view for 2011 and a solid majority (62 per cent) expressing an optimistic view for 2012 (fig. 1). These results suggest that while TNCs are continuing to face short-term difficulties, the crisis has not structurally shifted their plans for the future.
The results from the survey also suggest that the crisis was less destructive to FDI than had been feared. While investment budgets, including those for FDI, were squeezed during the crisis, TNCs did not engage in wholesale divestment of their foreign affiliates (fig. 2). The crisis did, however, accentuate one recent trend, namely the shifting of TNCs´ geographical focus to developing and transition economies. These economies, which weathered the downturn better and are leading the global recovery, are playing an increasingly important role in TNC strategies. Nine of the top 15 priority FDI destinations for the period ending 2012 are developing or transition economies (fig. 3).
view the World Investment Prospects Survey 2010-2012
Source: UNCTAD
FTSE4Good Semi Annual Review September 2010
September 10, 2010-- FTSE Group (“FTSE”), the award-winning global index provider, announces that thirteen companies will be added and eight removed from the FTSE4Good Global Index Series following the FTSE4Good September semi-annual review held today.
Review decisions are made by the independent FTSE4Good Index Policy Committee (“Committee”) made up of experts from the fields of responsible investment, fund management, academia and the business community. Additions and deletions are based on environmental and social criteria set out in the FTSE4Good Index Rules.
Additions
Most of the companies added are from the United States and the United Kingdom. As part of the review, new stringent criteria regarding nuclear safety and waste disposal were also introduced for companies involved in nuclear power generation. This is in line with the Committee’s ongoing commitment to replace activity screens with entry criteria that identify companies meeting internationally recognised environmental and social standards. To be included in the index, companies involved in nuclear power generation are assessed on their nuclear safety and waste disposal policies, management systems, disclosure and performance as well as the existing FTSE4Good requirements. Only one company globally, Iberdrola, has met all the requirements for inclusion at this review. The new criteria will also encourage other companies in this sector to improve their practices.
Source: FTSE
