Global ETF News Older than One Year
G20 to delay tough bank regulations
June 4, 2010--Group of 20 finance ministers are set to delay the implementation of tougher regulations for the world’s banks as splits emerge over the scope of the new regulations.
Officials and ministers from the G20 group of industrialised nations, meeting in Busan, South Korea, acknowledged there were still big differences on the “Basel III” proposals that are due to be finalised by November. The disagreements cover the scale, scope and timing of the increases in capital and liquidity banks will be required to hold, as well as the leverage they will be allowed.
In response to the splits, the UK and the US are offering to delay the implementation of the Basel reforms in a bid to ensure that the principles do not get watered down.
Source: FT.com
Safe haven reputation sees dollar surge
June 4, 2010--The dollar surged on Friday as investors dashed for cover after weaker-than-expected US employment data and concerns that Hungary’s economy may be in a perilous condition.
Non-farm payrolls data showed that 431,000 jobs were created in the US in May, falling short of most forecasts, which had factored in a huge intake of government jobs in the census department.
Hungary’s forint fell 2.7 per cent to Ft289.10 versus the euro after Peter Szijjarto, a spokesman for Prime Minister Viktor Orban, said Hungary’s economy was in a “very grave situation” due to the last government manipulating official data.
Source: FT.com
ETF Landscape: Industry Review April 2010
June 3, 2010--The April 2010 edition the monthly ETF Landscape Industry Review. This report is a review of the Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) industry through the end of April 2010.
At the end of April 2010 the global ETF industry had 2,189 ETFs with 4,354 listings, assets of US$1,113.1 Bn from 122 providers on 42 exchanges around the world.
Year-to-date assets have increased by 7.4 per cent, which is more than the 2.6 per cent increase in the MSCI World index in US dollar terms.
The top 100 ETFs, out of 2,189, account for 64.2 per cent of global ETF AUM, while 423 ETFs have less than USD10.0m in assets.
Year-to-date the number of ETFs increased by 12.4 per cent with 253 new ETFs launched.
The number of ETFs listed in Europe has surpassed the US with 932 ETFs listed in Europe, compared to 839 in the US.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Aggregate Impact of Basel, Other Global Reform Measures Could Stifle Economic Growth, Job Creation, GFMA Says
June 3, 2010--The Global Financial Markets Association (GFMA) issued the following statement today on global financial regulatory reform ahead of the June 4-5 meeting of G20 Finance Ministers:
"GFMA welcomes the continued measures that governments and industry have taken in building a framework for a more robust financial system.
As these measures are being developed and refined, we call on governments to assess the cumulative impact of these regulations on the financial markets, and the corresponding impact these changes will have on global economic growth and job creation. We believe that these changes – increasingly fragmented – are likely to have a negative impact on both the financial system and the hundreds of millions of people and businesses that it serves,” said Chief Executive Officer, Tim Ryan.
“Importantly, we are concerned over possible hasty implementation of the Basel capital proposals which would reduce the ability of the industry to provide capital to businesses and consumers to support economic growth. Finalizing the proposed revisions to the Basel Accord by the end of this year without providing additional time to comment will not give enough time to assess their wider economic consequences and make any necessary changes,” noted Ryan.
Source: GFMA
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
