Global ETF News Older than One Year
EDHEC-Risk Institute and Rothschild set up a research
June 3, 2010--EDHEC-Risk Institute and Rothschild have announced the creation of a research chair entitled ‘The
Case for Inflation-Linked Corporate Bonds: Issuers’ and Investors’ Perspectives’. The purpose of the
research chair is to support research undertaken at EDHEC-Risk Institute on the benefits of inflationlinked
corporate bonds both from the issuers’ as well as from the investors’ points of view.
The chair will also focus on contrasting the analysis, in corporate finance, and perceptions of inflation-linked corporate bonds both by issuers and investors. The chair is led by Lionel Martellini, scientific director of EDHEC-Risk Institute.
According to Professor Martellini, “While a dominant fraction of inflation-linked debt is issued by sovereign states, there has been recent interest amongst various state-owned agencies, municipalities and also corporations, in particular from the utility, financial-services and real estate sectors, to issue inflation-linked bonds. On the supply side, intuition suggests that if a given firm's or a municipality’s revenues tend to grow with inflation, then inflation-linked issuance is naturally hedged through evolution of revenues. On the demand side, strong interest is expected as inflation hedging has become a concern of critical importance for pension funds with inflation-linked liabilities, and for private investors, who consider inflation as a direct threat with respect to the protection of their purchasing power.”
Source: EDHEC
Financial hubs to be replaced by 'spider web'
June 1, 2010--A de-linking of emerging economies from dependence on the traditional financial market centres of New York and London is taking place and will develop further, delegates at the International Capital Markets Association annual meeting heard in Brussels last week.
The world’s economic centre of gravity, which in the mid 1970s was located somewhere in the mid-Atlantic, has now moved eastwards to between Dubai and Shanghai, according to Dr Nasser Saidi, chief economist to the Dubai International Financial Centre.
The shift in capital market centres has followed growing production of goods, and oil and gas.
Saidi described the financial crisis and great recession of 2008 as the “end of the US financial empire”. This was resulting in a “tectonic movement” away from the “Western-centric” culture.
He said that the financial crisis was contributing to the demise of the hub-spoke model, centred on London and New York. This was giving impetus to a transition to a polycentric “spider web” model.
Whereas in 1999 the US held 46% of capital market activity, by last year this had fallen to 28%. Emerging markets during the same period picked up from a 14% share to 45%.
Source: IP&E
FEAS May 2010 Newsletter
June 1, 2010--The FEAS May 2010 Newsleeter is now available.
Source: FESE
Annual inflation rate in OECD remains stable at 2.1% in April 2010
June 1, 2010--Consumer prices in the OECD area rose by 2.1% in the year to April 2010, unchanged from March. Energy and Food prices rose at slightly higher rates in April compared with March (12.2% and 0.7% respectively, compared with 11.3% and 0.2%). But excluding food and energy, consumer prices increased by 1.2% only in April, the lowest rate on record..
In Chile1, a member of the OECD since 7 May 2010, consumer prices rose by 0.9% year-on-year in April, compared with 0.3 % in the year to March.
Deflation continued in Japan where consumer prices fell by 1.2% in the year to April after a decrease of 1.1% in the year to March and inflation decelerated in Germany (1.0% compared to 1.1%) and the United States (2.2% compared to 2.3%). Annual inflation rose in the United Kingdom (3.7% up from 3.4%), Canada (1.8% up from 1.4%), France (1.7% up from 1.6%) and Italy (1.5% up from 1.4%). Euro area annual inflation (HICP) was 1.5% in April 2010 compared with 1.4% in March.
Source: OECD
Fourth consecutive quarter of GDP growth in the OECD area
June 1, 2010--Gross domestic product (GDP) in the OECD area rose by 0.7% in the first quarter of 2010, the fourth consecutive quarter of growth for the area.
Strong GDP growth continued in the United States (0.8%) and Japan (1.2%). GDP growth was more subdued in both the Euro area and the European Union (0.2%).
Italy returned to positive GDP growth in the first quarter of this year (0.5%), after the small decline of the previous quarter, while the pace of the recovery eased in both France and the United Kingdom and was unchanged in Germany.
Relative to a year earlier, GDP in the OECD area returned to positive growth (2.5%) after five consecutive quarters of contraction. With the exception of the United Kingdom (where GDP was 0.2% lower than a year earlier), GDP was above the level recorded in the previous year in all other major OECD economies, with a large rebound in the case of Japan (4.2%).
Source: OECD
FX sector unites to form global body
June 1, 2010--The biggest foreign exchange banks have formed a new industry group in a sign of the strength of market concern about the impact of new regulations.
The FX markets, where some $3,200bn is traded daily, have typically been lightly overseen by central banks. But sweeping financial reforms currently being debated in Brussels and Washington are expected to include currency derivatives, raising concerns among the banks about how this will affect their businesses and their clients’ ability to use the market.
The new body will be formed as the FX division of the Association for Financial Markets in Europe, in co-operation with its US and Asian sister organisations.
Source: FT.com
Growth rising faster than expected but risks increasing too, says OECD Economic Outlook
May 26, 2010--Economic activity in OECD countries is picking up faster than expected but volatile sovereign debt markets and overheating in emerging-market economies are presenting increasing risks to the recovery, according to the OECD’s latest Economic Outlook.
Gross domestic product (GDP) across OECD countries is projected to rise by 2.7% this year and by 2.8% in 2011. These are upward revisions from the previous, November 2009, forecasts of OECD-wide GDP growth of 1.9% in 2010 and 2.5% in 2011.
In the US, activity is projected to rise by 3.2% this year and by a further 3.2% in 2011. Euro area growth is forecast at 1.2% this year and 1.8% next while, in Japan, GDP is expected to expand by 3.0% in 2010 and by 2.0% in 2011.
Source: OECD
ETF demand pushes gold price higher
May 26, 2010--Gold resumed its upward momentum on Wednesday as concerns over the eurozone debt crisis spurred strong investment demand for the precious metal.
Exchange-traded funds holding bullion on Tuesday saw their strongest daily inflows since October 2009, sending the spot gold price up 1.1 per cent to $1,213.15 a troy ounce on Wednesday. That was still short of the record nominal high of $1,248.95 an ounce hit two weeks ago.
The World Gold Council, a body backed by the gold mining industry, said in a quarterly report that European investment demand was “exceptionally strong” and that it expected it to remain so in the rest of the year “driven by jewellery demand in India and China and investment demand in Europe and the US”.
Source: FT.com
Regional Economic Outlook: Middle East and Central Asia
May 25, 2010--The May 2010 Regional Economic Outlook: Middle East and Central Asia reports on the implications for the region of global economic developments and presents key policy challenges and recommendations. A resumption of capital inflows and the rebound in crude oil prices have aided the recovery in the oil-exporting countries of the Middle East and North Africa.
The group of oil-importing countries is expected to show marginal increase in growth in response to a pickup in trade, investment, and bank credit. A key challenge for these countries is to enhance competitiveness to raise growth rates and generate employment. In the Caucasus and Central Asia, exports have begun to pick up, the decline in remittances appears to be slowing or reversing, and capital inflows have turned positive. For 2010, a recovery across the region is projected as the global economy, and in particular Russia, picks up speed. Overall, prospects for the region are improving and the regional impact of the Dubai crisis and events in Greece has been limited so far. Nevertheless, a repricing of sovereign debt cannot be excluded, adding a degree of uncertainty to the outlook.
view the Regional Economic Outlook: Middle East and Central Asia
Source: IMF
Plea for pension funds to engage on reporting standards
May 25, 2010--Pension funds are being urged to engage with global accounting standards setters amid what is being seen as a “once in a generation” opportunity to help set the agenda on corporate reporting.
There’s a raft of new standards being put forward as US generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) converge. Some 14 so-called ‘exposure drafts’ are due from the International Accounting Standards Board and the US Financial Accounting Standards Board in the near future. The clock is ticking as the bodies have been told by the G20 leaders to complete the convergence project by June 2011.
Source: Responsible Investor
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