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Early Estimates From BNY Mellon Reveal Almost All Asset Classes Achieved Positive Returns in 2009
UK pension funds record best return since 2005
January 5, 2010--Estimates released by BNY Mellon Asset Servicing today show that the average UK pension fund achieved an estimated weighted average return of 14.0% for the year ending 31 December 2009 - this is the best return BNY Mellon has recorded since 2005. This is an estimated real return of 14.9% when measured against the Retail Price Index for 2009 and an estimated 12.8% when measured against the National Average Earnings Index.
This is a strong turnabout in annual performance of UK pension funds over the last 12 months. In 2008, the average UK pension fund achieved a weighted average return of -13.6% for the year ending 31 December 2008 - the first time that BNY Mellon has recorded negative yearly returns for UK pension funds since the three-year downturn at the beginning of the decade.
UK pension funds also made gains over a three-year period to 31 December 2009 with an estimated average return of 1.7% per annum. However, over this period pension funds failed to make gains against both the Retail Prices Index and the National Average Earnings Index.
According to BNY Mellon, results were mixed over longer term periods with funds achieving an estimated weighted average return of 6.4% per annum over a five-year period. Funds made real returns over this period of 3.6% per annum against the Retail Prices Index and 3.0% per annum against the National Average Earnings Index. Over 10 years to 31 December 2009 the average fund posted an estimated return of 3.2% per annum which beat the Retail Prices Index by 0.6% per annum, however, underperformed the National Average Earnings Index by 0.5% per annum.
Over the year returns were in positive territory for each of the key equity markets with one exception - Japanese Equities which posted the only negative equity return with -5.9%.
UK Equities posted 30.1% over the period while the strongest returns came from Pacific Ex Japan Equities with 50.7% and Emerging Market Equities with 58.9%.
Bonds were negative during 2009 with UK Bonds returning -1.2% and Overseas Bonds providing -9.7%. Index-Linked Gilts performed well in comparison returning 6.4% over the same period. Property continued to struggle with this sector returning -5.6%.
Commenting on the results, Alan Wilcock, BNY Mellon Asset Servicing' Performance and Risk Analytics Manager said: "Following the worst annual return for over 30 years in 2008, pension funds clawed back most of those losses by the end of 2009, despite the poor start to the year."
Total Fund weighted average return estimate for the year:
This is calculated by linking the three quarterly weighted averages to 30 September 2009 with an estimated weighted average for Q4 2009.
The Q4 2009 estimate is calculated by applying the weighted average asset distribution for funds at the start of Q4 2009 to the sector index returns for Q4 2009.
The weighted average return represents the total performance of the pension fund assets within our sample.
The weighted average is used in preference to the simple unweighted average, which takes no account of fund asset size.
Total Trading Volume at Eurex and ISE at 2.65 Billion Contracts in 2009
January 4, 2010--The international derivatives markets of Eurex closed out 2009 with a turnover of more than 2.65 billion contracts, compared with 3.17 billion in the record year 2008. This year’s figure splits into 1.7 billion contracts traded at Eurex and 960 million contracts traded at the International Securities Exchange (ISE). This corresponds to a daily average trading volume of 10.5 million contracts compared with 12.5 million y-o-y.
At Eurex, equity index derivatives were the largest segment in 2009 with a total volume of 798 million contracts (2008: 1 billion). Derivatives on the Dow Jones EURO STOXX 50® index were the largest single product with 333 million futures and 300 million options. The equity derivatives segment (options and single stock futures) saw 421 million contracts (2008: 480 million). In 2009, the interest rate derivatives segment reached a total of 466 million contracts (2008: 658 million). The dividend derivatives product suite, launched in summer 2008, recorded the strongest growth and totaled 2.6 million contracts.
In December 2009, the Eurex derivatives markets reached an average daily volume of 8.85 million contracts; thereof 6.15 million contracts traded at Eurex (Dec 2008: 6.15 million) and 2.7 million contracts traded at the ISE (Dec 2008: 2.66 million). In December, a total of 179.2 million contracts were traded on both exchanges, thereof Eurex with 123.0 million (Dec 2008: 116.8 million) and ISE with 59.8 million contracts (Dec 2008: 58.6 million).
At Eurex, equity index derivatives recorded the highest turnover among all product segments in December 2009 with 54.5 million contracts (Dec 2008: 64.0 million). The top equity index derivative was the future on the Dow Jones EURO STOXX 50 index with 26.0 million contracts; another 16.1 million options on this index were traded.
29.0 million contracts were traded in equity derivatives, compared with 21.2 million y-o-y. Within this segment, equity options traded 19.5 million contracts and single stock futures another 9.5 million contracts. A total of 39.2 million contracts were traded in the interest rate derivatives segment in December 2009, an increase of 25.5 percent compared to the same period last year (Dec 2008: 31.2 million).
Eurex Repo, which operates CHF and EUR repo markets, continued to grow in 2009. All Eurex Repo markets grew by 16 percent and reached average outstanding volume of 152.5 billion euro. The secured money market segment, GC Pooling, had a new record with average outstanding volume of 73.0 billion euro. In December 2009, the Eurex Repo markets totaled an average outstanding volume of 146.8 billion euro, thereof GC Pooling with the new record figure of 84.3 billion euro (Dec 2008: 57.8 billion euro).
The electronic trading platform Eurex Bonds, which rounds out Eurex’s fixed-income product range, traded volume of 5.2 billion euro (single counting) in December 2009; in December 2008 it was 4.9 billion euro. In 2009, Eurex Bonds traded a total volume of 87.3 billion euro (single counted), compared with 97.4 billion euro in 2008.
Strongest spot price increases since 1970
January 4, 2010-The scale and rapidity of the rebound in commodity prices in 2009 surprised investors after the meltdown in financial markets in 2008 and the subsequent economic recession.
Spot commodity prices, as measured by the S&P GSCI, the most widely followed benchmark for commodity markets, rose 50.4 per cent last year, the strongest annual increase since this series began in 1970.
Commodities ended the year on a high with US crude oil touching $80 a barrel in the final trading session and copper, lead and zinc all enjoying price gains of more than 100 per cent over the year.
BATS Exchange Reports Record Volume In 2009
January 4, 2010--BATS Global Markets, an innovative global financial markets technology company, reports that BATS Exchange recorded 9.3% US matched market
share in December and earned record average daily matched volume in 2009.
BATS Exchange’s 2009 average daily matched volume of 1 billion shares represents an increase of
approximately 20% from 830.6 million in 2008.
BATS Europe, the fast-growing Multilateral Trading Facility (MTF), earned record overall European market share for the fourth consecutive month with approximately 4.0% in December and set a new market share record in the FTSE MIB with 5.8% for the month. BATS Europe also recorded approximately 8.0% market share in the FTSE 100 and 5.1% in the FTSE 250, its second highest average monthly showing in the two indices.
The BATS Europe MTF experienced tremendous growth during 2009 and ended the year with average daily notional value traded of more than €917 million for all markets, compared to €228 million in January, an increase of more than 300%.
Currency Composition of Official Foreign Exchange Reserves (COFER)-Updated December 30, 2009
December 30, 2009--COFER is an IMF database that keeps end-of-period quarterly data on the currency composition of official foreign exchange reserves.
view report
Global Imbalances: In Midstream?
December 30, 2009--On December 22, 2009 the IMF published the report-Global Imbalances: In Midstream
Introduction
Global imbalances are probably the most complex macroeconomic issue facing economists and policy makers. They reflect many factors, from saving to investment to portfolio decisions, in many countries. These cross-country differences in saving patterns,
investment patterns, and portfolio choices are in part “good”—a natural reflection of differences in levels of development, demographic patterns, and other underlying economic fundamentals.
But they are also in part “bad,” reflecting distortions, externalities, and risks,
at the national and international level. So it is not a surprise that the topic is highly
controversial, and that observers disagree on the diagnosis and thus on the policies to be
adopted.
Global Markets for Residential and Commercial Solar Thermal Technologies to be worth $20 Billion in 2014
Decembr 31, 2009--According to a new technical market research report issued by BCC on December 9, 2009-Global Markets for Residential and Commercial Solar Thermal Technologies (EGY069A) from BCC Research (www.bccresearch.com), the global market for residential and commercial solar-thermal technologies is worth an estimated $8 billion in 2009, but is expected to increase to nearly $20 billion in 2014, for a 5-year compound annual growth rate (CAGR) of 19,8%.
The largest segment of the market, water heating, is estimated to be worth $7.9 billion in 2009, and is projected to grow at a CAGR of 19.9% to reach $19.6 billion in 2014.
The smaller segment, air heating, is expected to reach nearly $92 million in 2014, after increasing at a 5-year CAGR of 7.9% from $62.5 million in 2009.
Residential and commercial solar-thermal technologies include products that capture, concentrate, and/or absorb sunlight to provide thermal energy to a particular process or system. Because all residential and commercial solar-thermal installations must include a component that collects solar radiation, solar-thermal collectors and absorbers provide excellent indicators regarding the market performance and penetration of residential and commercial solar-thermal systems.
The following residential and commercial solar-thermal technologies are included in the scope of this report: unglazed solar collectors, flat-plate solar collectors, evacuated-tube solar collectors, integral collector storage, concentrating solar collectors, glazed solar air collectors, and transpired solar air collectors.
This study will be of interest to manufacturers of solar-thermal technologies, distributors, suppliers, and entrepreneurs and entrepreneurial companies interested in entering or expanding into the solar-thermal technology sector. It will also be of interest to corporate planners and strategists, large commercial and industrial energy consumers, energy market researchers, solar energy advocacy groups, and other public- and private-sector interest groups and market analysts.
Jordan-Canada free trade agreement to start Q1
December 1, 2009--Amer Hadidi, Jordanian minister of industry and trade has announced the free trade agreement between the kingdom and Canada will go into force during the first quarter of 2010, Jordan Times has reported.
The agreement will open a new market for Jordanian products, most of which will be exempted from taxes. Also, taxes on imported products from Canada will drop gradually over transitional periods, leading to their complete removal at a later stage, the minister said.
OPEC Monthly Oil Market Report-December 2009
December 31, 2009--Highlights
Crude oil prices rose in November supported by expectations for economic growth in the coming year and the positive impact on demand, as well as US dollar depreciation. The OPEC Reference Basket soared by $3.62/b or 5% to average $76.29/b in November.
However, this bullish sentiment
has been undermined in recent weeks, due to counterseasonal stock builds as well as the stronger US dollar. The Basket stood at $70.64/b on 14 December. The slow recovery in demand and increasing the risk of further stockbuilds due to the widening of contango is likely to continue to
impact market sentiment in December.
The world economy is forecast to grow at a pace of 2.9% in 2010, following a contraction of 1.1% in 2009. Government support has helped to cushion the downturn this year and is expected to remain a main driver in 2010. However, this has come at a price of unprecedented debt to GDP ratios. While the OECD is expected to now grow at 1.3% in 2010, the bulk of growth next year will be contributed by non-OECD with China and India expected to grow at 8.5% and 6.5% respectively. The main challenges for 2010 will be the extent of the recovery in household consumption within the OECD as well as the health of the banking sector which still appears to need government support.
The year 2009 was one of the worst years for world oil demand. Consumption has recovered in the fourth quarter as a result of an improvement in economic activities worldwide, however, the forecast for global oil demand still shows a contraction of 1.4 mb/d in 2009, unchanged from the previous report. Following two years of sharp declines, world oil demand is expected to return to growth in 2010, with an increase of 0.8 mb/d following an upward revision of around 70 tb/d from the last assessment. Non-OECD countries will account for all of the increase. Downward risk factors that may put pressure on next year’s oil demand include the pace of the economic recovery in the OECD, especially in the US.
2009 Performance of MSCI Indices Reveals Recovery in Global Equity Markets
December 30, 2009--Equity financial markets globally have continued the path to recovery begun earlier this year, with strong year to date performance figures for all major regional MSCI indices across different size segments. The MSCI ACWI IMI (All Country World Investable Market Index), which combines 23 Developed and 22 Emerging Markets across Large, Mid and Small Cap size segments, delivered a year to date performance of 34.14% [1] .
The Emerging Markets continued to show the strongest signs of recovery with year to date performance of 72.93% for the MSCI Emerging Markets Index. The MSCI BRIC Index, which was particularly impacted by the financial crisis in 2008, showed a strong performance year to date of 87.39%. The best performer within the Emerging Markets was the MSCI Brazil Index with a positive 120.90% performance, while the worst performer was the MSCI Morocco Index with a negative 8.77% performance. All other MSCI Emerging Markets country indices exhibited positive returns, ranging from 21.12% to 118.89%.
Developed Markets are also on the recovery path, with the MSCI World Index producing a positive performance of 28.01% year to date. The MSCI Europe Index outperformed the MSCI USA Index year to date, posting a performance of 31.91% compared to 25.44% for the MSCI USA Index. Within the Developed Markets, the MSCI Norway Index and the MSCI Australia Index were the best performing indices year to date with returns of 84.58% and 67.48%, respectively. The MSCI Japan Index was the bottom performer with a performance of 6.73%, followed by the MSCI Finland Index with 7.13%.
The MSCI Global Small Cap Indices outperformed the MSCI Global Standard Indices (Large + Mid Cap) in 2009 across all regions. The MSCI ACWI Small Cap Index outperformed its large and mid cap counterpart, MSCI ACWI, by more than 16.60% year to date, with the MSCI ACWI Small Cap and MSCI ACWI Indices posting positive performance figures of 48.91% and 32.29%, respectively.
Looking at the performance of sectors globally, the MSCI ACWI Materials and MSCI ACWI Information Technology Indices exhibited very strong year to date performance of 67.52% and 56.77%, respectively. By contrast, the MSCI ACWI Utilities and MSCI ACWI Telecommunication Services Indices posted a relatively modest performance of 6.54% and 11.92%, respectively.
The relative strong performance of many major currencies around the world relative to the US Dollar significantly contributed to the positive returns of the MSCI indices in 2009. The British Pound and the Euro posted an appreciation relative to the US Dollar of 11.04% and 3.04%, respectively. Within the Emerging Markets, the Brazilian Real exhibited the strongest year to date performance relative to the US Dollar with an appreciation of 34.06%.
Historical and daily index levels for the full range of MSCI Country & Regional Indices, including year to date performance, are freely available on www.mscibarra.com .
