Global ETF News Older than One Year
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.
Source: TABB Group
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)
Source: OECD
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.
Source: World Federation of Exchanges (WFE)
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.
Source: Business Standard
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.
Source: OECD
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.
Source: IP&E
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.
Source: BlackRock
Barclays predicts higher prices for copper, tin and lead
Barclays Capital research analysts anticipate the implied physical gold balance will improve this year and next due to a slower pace of mine supply growth.
July 20, 2010--Barclays Capital Commodities Research suggests "there is a clear fundamental signal for even higher prices" for copper, tin and lead, while Barclays analysts downgraded their price expectations for aluminum and zinc.
"In precious metals, we expect many of the dynamics that are currently in play to continue to take centre stage in 2011," Barclays analysts forecast in their most recent edition of Metals Magnifier.
"Although we expect gold's implied physical surplus to fall, excess supply will need to be met by investment demand, where for now, appetite is set to remain robust as fears of inflation and the desire to hold a hard asset supports interests," said analysts Gail Berry, Suki Cooper, Roxana Mohammadian Molina, Natalya Naqvi, Kevin Norrish, and Nicholas Snowdon.
Source: MineWeb
NASDAQ OMX and the MICEX Group Announce Market Data Partnership
July 20, 2010-- The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the MICEX Group today announced that NASDAQ OMX® has been selected to provide market data audit services for the MICEX Group.
The market data compliance services will be performed by NASDAQ OMX Global Data Products, a premier market data operation, through its Global Access program. Global Access allows companies to utilize NASDAQ OMX's distribution network, sales, administrative and technical expertise to quickly realize and maximize profits for their market data content.
The NASDAQ OMX Global Data Products compliance team will provide on-site and off-site reviews to ensure customer use of MICEX's data product content is compliant with MICEX's data policies. MICEX selected NASDAQ OMX because of NASDAQ OMX's flexible partnership model, experienced staff and successful track record in helping market data clients achieve and maintain compliance. NASDAQ OMX's compliance services help data content owners such as MICEX preserve the value of their data offerings while providing consultative recommendations regarding compliance obligations and best practices for their vendors.
"Market data is one of an exchange's most important assets and ensuring compliance maintains the integrity of the data," said Randall Hopkins, Senior Vice President of Global Data Products, NASDAQ OMX. "Given MICEX's large, geographically diverse distribution of data and Russia's growing importance in the global economy, there are many synergies to this deal that will be quickly recognized through NASDAQ OMX's global presence and industry relationships."
Eugeny Ellinskiy, Vice President of MICEX, pointed out, "Information transparency is an important principle of MICEX exchange activities. I am sure that the rich experience of NASDAQ OMX will help MICEX improve the information services and products market."
Global Access provides partners with turn-key access to a premier global data business and also helps them reduce the technical and administrative costs of market data distribution. For more information about NASDAQ OMX's Global Access program, visit http://www.nasdaqtrader.com/globalaccessprogram.
Source: NASDAQ OMX
Global Trends in Green Energy 2009
July 19, 2010--New Power Capacity from Renewable Sources
Tops Fossil Fuels Again in US, Europe
Clean energy investments show resilience in recession;
Share of renewable energy continues to grow
Growth of wind power in China a key feature of 2009
Renewables accounted for 60 per cent of newly installed capacity in Europe and more than 50 per cent in the USA in 2009. This year or next, experts predict, the world as a whole will add more capacity to the electricity supply from renewable than non-renewable sources.
The reports detail trends in the global green energy sector, including which sources attracted the greatest attention from investors and governments in different world regions.
They say investment in core clean energy (new renewables, biofuels and energy efficiency) decreased by 7% in 2009, to $162 billion. Many sub-sectors declined significantly in money invested, including large (utility) scale solar power and biofuels. However, there was record investment in wind power. If spending on solar water heaters, as well as total installation costs for rooftop solar PV, were included, total investment in 2009 actually increased in 2009, bucking the economic trend.
view Renewables 2010 Global Status Report
Source: IEA
