Global ETF News Older than One Year
Devaluation talk prompts rush to hard assets
October 1, 2010--A leading index of commodity prices rallied close to its highest levels in two years this week, as the prospect of currency devaluations by central banks prompted a rush into hard assets.
The commodity benchmark, the Reuters-Jefferies CRB index, which tracks the price of 19 raw materials from copper and oil to orange juice and live cattle, gained 1.9 per cent over the week to hit a peak of 288.93 points on Friday – the highest level since January and just below a two-year peak.
Source: FT.com
Global Private Equity Fundraising Still Slow, but Turning Corner
$57bn raised in Q3 2010, a 16% increase on the $49bn collected in Q2
Conditions still challenging, but further improvement expected in Q4 2010 and beyond
September 30, 2010--Putting the Results in Context:
81 private equity funds worldwide reached a final close in Q3 2010 raising an aggregate $57bn, a small increase from the $49bn raised in Q2 2010. Preqin would anticipate these figures rising slightly (10% - 20%) as further information becomes available. It is clear that fundraising remains extremely challenging, and is occurring at a fraction of the rate that the industry was seeing in 2006 –
2008. However, Preqin is projecting that conditions will continue to improve in Q4 2010 and beyond.
Fundraising by Region: Funds primarily focusing on the US have raised the most capital during Q3 2010, with 37 funds raising a total of $41.1bn. 21 primarily European focused funds raised an aggregate $8.3bn, while 23 funds focusing primarily on Asia and the Rest of World region gathered a total of $7.8bn.
Fundraising by Type: Buyout funds raised the most capital, with 11 funds raising an aggregate $20.4bn. This figure includes Blackstone Capital Partners VI, which closed on $13.5bn in mid-July. Five distressed private equity funds raised an aggregate $8.9bn. 19 private equity real estate funds closed with total commitments of $8.8bn. Three infrastructure funds closed raising $8.3bn while 20 venture funds held final closes totaling $3.7bn.
Funds in Market: After the number and aggregate fundraising target of funds in market fell consistently over the last year, Q4 2010 sees a small rise in both the number and value of funds being raised when compared to the previous quarter – possibly a sign of rising confidence among fund managers that conditions are starting to improve. There are currently 1,550 funds on the road seeking $573bn worldwide.
Time Taken to Close Funds: For funds closed in 2010 the average time taken was 19.8 months, double the average time taken in 2004 – further evidence of the challenging nature of the fundraising market.
Fundraising Momentum: The increased time taken for funds to achieve a final close is leading to more funds holding multiple interim closes in order to put capital to work while continuing to attract new investments. 44% of funds currently raising have held an interim close, with these funds seeking an aggregate $247bn. 13% of funds in market have now held two or more interim closes, meaning that they are likely to hold a final close within the next few months. This does indicate good momentum in the market and hints at possible improvement in the future
Source: Preqin
Internal research teams as important as ever, says AXA
September 30, 2010--Exchange traded funds, direct equities, direct fixed interest and structured products are some of the areas AXA’s research team is keeping an eye on at the moment, according to AXA general manager of technical research Robert Thomas.
Thomas said that while there could be negativity around any product, this only illustrated the importance of internal research teams that would have a greater focus on how products were used within a portfolio.
Thomas added that while AXA made use of external research, it was not the “be-all-and-end-all of an advice business”.
Source: Money Management
IMF Urges Close Regulation Of Credit Rating Agencies
September 30, 2010--“Credit rating agencies need tighter supervision because their activities have a strong impact on funding costs for debt issuers and can affect financial stability, the International Monetary Fund (IMF) said on Wednesday.
The IMF released some analytical chapters from its Global Financial Stability Report, which will be issued next week before the semiannual meetings of the lender and its sister institution, the World Bank. ‘Policymakers should continue their efforts to reduce their own reliance on credit ratings, and wherever possible remove or replace references to ratings in laws and regulations, and in central bank collateral policies,’ the IMF said.
Source: World Bank
Will It Hurt? Macroeconomic Effects of Fiscal-World Economic Outlook (WEO) IMF
September 30, 2010--To restore fiscal sustainability, many economies need to reduce their budget deficit. This chapter analyzes the impact of fiscal consolidation––tax hikes and
spending cuts––on growth in advanced economies.reforms are still needed in our view. So stay tuned for that release. You’ve had an opportunity to look at the chapters and the press points on the embargo and to remind everyone the documents and this press briefing are embargoed until 11:00 a.m. Washington time which is 1500 GMT.
Fiscal consolidation typically lowers growth in the short term. Using a new data set, we find that after two years, a budget deficit cut of 1 percent of GDP tends to lower output by about ½ percent and raise the unemployment rate by ? percentage point.
Interest rate cuts and a fall in the value of the currency usually soften the impact of fiscal consolidation on growth. However, this cushioning effect is lower when interest rates are already near zero, or when many countries consolidate at the same time.
Over the long term, debt reduction can raise output by bringing down real interest rates and allowing taxes to be reduced.
view the Will It Hurt? Macroeconomic Effects of Fiscal Consolidation
Source: IMF
Currency Composition of Official Foreign Exchange Reserves (COFER)
September 30, 2010--COFER is an IMF database that keeps end-of-period quarterly data on the currency composition of official foreign exchange reserves. The currencies identified in COFER are:
U.S. dollar,
Euro,
Pound sterling,
Japanese yen,
Swiss francs, and
Other currencies
Source: IMF
Assistant Secretary for International Markets and Development Marisa Lago Introductory Comments for Eurofi Panel Discussion of “Prospects of future G-20 discussions and Expected impacts for the EU”
September 30, 2010--As Prepared for Delivery
The G-20 agenda has been enormous. In the financial regulatory sphere alone, we produced a 47-point action plan in Washington, 148 pages of working group papers in London, and 23-page and 27-page communiqués in Pittsburgh and Toronto.
The work by the Leaders and Finance Ministers has led, in turn, to dozens of working group reports by standard setters, the Financial Stability Board, and national authorities. The IMF published no less than 897 pages in its assessment of the U.S. financial system alone. The agenda is so large and complex that it has drawn more than 800 of us to this conference to dissect every feature of the G-20 agenda over four days.
In light of this, I was struck by Sir Howard Davies' recent article in the Financial Times calling for heightened clarity and focus on the core issues, or as he so eloquently phrased it, to move away from a sybaritic menu of foie gras and soufflé to "meat and two veggies" or as we Americans would say "meat and potatoes" -- core issues that are tough, but ultimately more nourishing.
Source: U.S. Department of the Treasury
ESG now integrated at $6.8trn of assets globally, UN PRI says
September 29, 2010-Environmental, social and governance (ESG) factors are now integrated at $6.8trn (€5trn) of internally active managed assets worldwide, according to the United Nations Principles for Responsible Investment.
The PRI has reported that such assets subject to integration by its 808 signatories now represents 7% of the total market, estimated at $121trn. And it says the figure “conservatively underestimates” the findings of its latest survey of signatories.
view Report on Progress 2010-An analysis of signatory progress and guidance on implementation
Source: Responsible Investor
Rebuilding Together: Europe and the United States
Under Secretary for International Affairs Lael Brainard U.S. Treasury House of Finance of Goethe University Frankfurt, Germany
September 29, 2010--Auf Deutsch
Vielen Dank fuer Ihre Gastfreundschaft hier im House of Finance der Goethe-Universitaet. Es freut mich immer sehr, die Gelegenheit zu haben Deutschland zu besuchen. Ich bin in Hamburg geboren und meine Erfahrungen als Kind in Deutschland, und auch in Polen, haben mein Welt- und Wirtschafts-verstaendnis gepraegt. Ich habe am eigenen Leib erfahren, in welchem Masse dynamische Maerkte, wirtschaftliche Kooperation und politischer Wille, ein Leben veraendern und Frieden und Sicherheit befoerdern koennen
[I am always glad for the chance to visit Germany. I was born in Hamburg, and my experience growing up in Germany, and also in Poland, shaped my view of the world and economics. I saw first-hand the power of dynamic markets, economic cooperation, and political will to change lives, and underwrite peace and security.]
Those same forces are equally relevant today. Together, we surmounted the financial crisis through action that was bold, proactive, and coordinated. While action by individual countries was necessary, it would not have been decisive without coordinated action by Europe and the United States working together and with our partners in the G-20. In response to the most globally synchronized recession the world has seen, we joined together to mount the most globally coordinated response the world has known.
Crisis Response
Two years ago, the world economy was in the grips of a crisis on a scale not seen since the Great Depression. Trade was plunging by more than a third, global output was contracting at an annual rate of six percent, financial markets were frozen, and people were losing their jobs at an alarming rate.
Source: U.S. Department of the Treasury
Tightening copper supply buoys prices
September 29, 2010--The price of copper surged above $8,000 a tonne to its highest level since the financial crisis, as tightening physical supplies spurred investors to pour money into the red metal.
Analysts, producers and investors are almost unanimously bullish about the prospects for copper in the next year, with many believing the metal could rise to an all-time high above $9,000 a tonne.
Michael Jansen, metals analyst at JPMorgan said: “It looks like the Chinese will probably run down their inventory level through to year-end as much as they can, but eventually they’ll have to come back to the market and buy.”
Source: FT.com
