Global ETF News Older than One Year
Euro Proving No Reserve Asset as Central Banks Shift
February 1, 2010-- Investors are pulling cash out of Europe at a record pace as central banks slow euro purchases, jeopardizing its status as a substitute to the dollar as the world’s reserve currency.
Last year, policy makers loaded up on euros, while analysts at Barclays Plc in London and Aletti Gestielle SGR SpA in Milan predicted central bankers would make good on threats to reduce the greenback’s dominance. Now the euro is down 8.1 percent since Nov. 25 in its fastest slide in 10 months amid concern that cash-strapped countries like Greece won’t pay their debts. Billionaire investor George Soros said Jan. 28 that there’s “no attractive alternative” to the dollar.
Source: Bloomberg
CME Group Inc. Reports Solid Fourth-Quarter 2009 Financial Results
GAAP diluted EPS of $3.04- Pro Forma diluted EPS of $3.37- GAAP operating margin of 60 percent- Pro forma operating margin of 61 percent
February 4, 2010--CME Group Inc. (NASDAQ: CME) today reported that fourth-quarter GAAP total revenues were $667 million and GAAP operating income was $402 million. Fourth-quarter net income on a GAAP basis was $203 million and diluted earnings per share on a GAAP basis were $3.04.
The 2009 GAAP results reflect the operations of Chicago Mercantile Exchange (CME), Board of Trade of the City of Chicago (CBOT) and New York Mercantile Exchange (NYMEX) and include reductions in net income of $22 million, consisting of an impairment charge of $24 million on our investment in the Dubai Mercantile Exchange (DME) and net favorable impacts to net income of $2 million related to the ERP settlement. The 2008 GAAP results reflect the operations of both CME and CBOT, as well as the results of NYMEX after August 22, 2008, when the acquisition closed.
Fourth-quarter pro forma non-GAAP diluted earnings per share were $3.37, down 6 percent compared with the prior-year period. All pro forma results reflect the operations of both CME Group and NYMEX as if they were combined for all periods reported, and fourth-quarter 2009 pro forma non-GAAP results exclude the impairment charge, ERP adjustment and other merger-related items. Despite challenging market conditions that persisted throughout 2009, fourth-quarter represented the company's best quarterly revenue of the year. Total pro forma revenues decreased 4 percent from the prior year to $667 million, but increased $17 million from third-quarter 2009 revenues. Pro forma operating expenses decreased 2 percent to $258 million, compared with the same period last year.
Source: CME Group
As World Economy Slowly Recovers, Developing World Faces Scarce Financing, Says World Bank
Developing countries facing higher borrowing costs, lower credit levels, and reduced international capital flows
February 3, 2010-Published January 21, 2010
The global economic recovery that is now underway will slow later this year as the impact of fiscal stimulus wanes. Financial markets remain troubled and private sector demand lags amid high unemployment, according to a new report from the World Bank.
Global Economic Prospects 2010, released today, warns that while the worst of the financial crisis may be over, the global recovery is fragile. It predicts that the fallout from the crisis will change the landscape for finance and growth over the next 10 years.
Global GDP, which declined by 2.2 percent in 2009, is expected to grow 2.7 percent this year and 3.2 percent in 2011[1]. Prospects for developing countries are for a relatively robust recovery, growing 5.2 percent this year and 5.8 percent in 2011 -- up from 1.2 percent in 2009. GDP in rich countries, which declined by 3.3 percent in 2009, is expected to increase much less quickly—by 1.8 and 2.3 percent in 2010 and 2011. World trade volumes, which fell by a staggering 14.4 percent in 2009, are projected to expand by 4.3 and 6.2 percent this year and in 2011.
While this is the most likely scenario, considerable uncertainty continues to cloud the outlook. Depending on consumer and business confidence in the next few quarters and the timing of fiscal and monetary stimulus withdrawal, growth in 2011 could be as low as 2.5 percent and as high as 3.4 percent.
“Unfortunately, we cannot expect an overnight recovery from this deep and painful crisis, because it will take many years for economies and jobs to be rebuilt. The toll on the poor will be very real,” said Justin Lin, World Bank Chief Economist and Senior Vice President, Development Economics. “The poorest countries, those that rely on grants or subsidized lending, may require an additional $35-50 billion in funding just to sustain pre-crisis social programs.”
In this still weak environment, oil prices are expected to remain broadly stable, averaging about $76 a barrel; and other commodity prices should rise by only 3 percent per year on average during 2010 and 2011.
view the Global Economic Prospects 2010 report
Source: World Bank
Banks concede reform is inevitable
February 3, 2010--Paul Volcker and Barack Obama have either thrown the world into chaos or given the cause of global bank regulation new impetus – it depends on your point of view. But one thing is for certain: the twin US initiatives to derisk banks and tax them according to their size – the Volcker rule and the Obama levy as they have been dubbed – have seized the attention of bankers and regulators around the world.
The US last month first made clear that it wanted to exact a levy of 0.15 per cent on any bank balance sheet over $50bn. Then it said that banks should no longer engage in what it felt were riskier practices – investing in hedge funds, private equity or proprietary trading, the archetypal casino-style betting of bank funds for a quick profit.
Source: FT.com
ETF Landscape: Industry Review - Year End 2009-Blackrock
February 2, 2010--Global ETF assets break through US$1 trillion milestone at the end of 2009
At the end of December 2009 the global ETF industry assets exceeded US$1 trillion with 1,947 ETFs and 3,787 listings from 110 providers on 40 exchanges around the world.
Although there was significant growth in assets during 2009, just 100 ETFs, out of 1,947,account for US$683.3 BN OR 66% of the US$1 Trillion total.
Additionally, there were 611 OTHER Exchange Traded Products (ETPs) with assets of US$150.79BN from 37 providers on 18 Exchanges.
Combined there were 2,558 products with 4,687 listings, assets of US$1,186.48 BN from 133 providers on 43 exchanges around the world at the end of December 2009.
Source: ETF Research and Implementation Strategy, Blackrock
Impairment reporting - improving stakeholder confidence
February 2, 2010--Ernst & Young study of over 170 users of financial reports reveals that impairments reported during the last two years were lower than expected.
Executive Summary
Complexity, consistency and building confidence
Despite growing signs that the global economy is regaining its health, it is likely that recovery will be gradual for most and fragile for many.
What is not in doubt is that market confi dence was severely impacted in virtually every area of the global economy. Whatever the timeline for recovery, boards will continue to find it challenging to deliver the future performance and returns needed
to satisfy investors. In the meantime, scarcity of capital and increased risk aversion are driving investors and lenders to focus on the reliability of information used to make investment decisions.
Source: Ernst & Young
World Federation of Exchanges (WFE)Announces Priorities for 2010
February 2, 2010--The officers and members of the Board of Directors of the World Federation of Exchanges (WFE) today announced priorities for the year in which WFE celebrates its 50th anniversary. The WFE brings the world’s regulated exchanges together in order to improve the quality of markets.
The Board of Directors targeted the following priorities for 2010, pledging to:
• Support reform in the regulation of OTC derivatives markets, which were a contributing factor in the recent financial crisis. The exchange community offers a clear alternative and a model for post-trade clearing and settlement, risk management and transparency in pricing. WFE intends to convey this message through constructive collaboration with policy makers and regulators, including a closer working relationship with the International Organization of Securities Commissions (IOSCO), to ensure that these reforms are coordinated globally, and in a manner which reduces systemic risk.
• Continue to press for international cooperation and coordination among regulators and exchanges on intermarket mechanisms.
• Examine the structure of fixed income markets in order to evaluate how post-trade transparency, risk management and investor protection could help these markets recover from the drop in liquidity that they have experienced since the credit crisis.
View the WFE 2009 Market Highlights
Source: World Federation of Exchanges (WFE)
FTSE Group Appoints New Committee Chairman
February 2, 2010--FTSE Group (“FTSE”), the award winning global index provider, today announces the appointment of David Hobbs, Director of FTSE Group, as Chairman of the FTSE Policy Group. The FTSE Policy Group is the senior FTSE practitioner committee, which reviews the ongoing management of all FTSE indices and advises FTSE Group on strategic index and investment-related issues.
FTSE committees are made up of leading investment market professionals from around the world who serve in a voluntary capacity providing a credible “voice of the market” which FTSE can rely upon to offer informed and expert advice. The committees ensure that all FTSE products and services reflect their underlying market and that FTSE index ground rules meet the highest standards of the industry. Expert industry opinion also lends substance and authority where FTSE is required to make complex decisions.
David Hobbs has been a Director of FTSE Group since July 2006, following a career at UBS spanning 38 years and culminating in the position of Managing Director and Global Head of Passive Investment at UBS Global Asset Management. During his career at UBS, David worked closely with FTSE, chairing a number of FTSE practitioner committees, including the FTSE Equity Indices Committee which at that time was responsible for oversight of all FTSE’s major equity indices.
Mark Makepeace, Chief Executive FTSE Group, said today: “David has extensive experience both as a market practitioner and as a FTSE committee member and will ensure that all FTSE indices continue to meet the constantly evolving needs of investors globally. We welcome him as the new Chairman.”
David is also a Fellow of the Chartered Institute for Securities & Investment, an Affiliate member of the UK Society of Investment Professionals and was awarded an Honorary Fellowship of the Faculty of Actuaries in June 2006.
Source: FTSE
Majority of Small Businesses Surveyed Worldwide Hold a Positive Business Outlook
Emerging Markets’ Small Business Confidence Leads Developed Countries
U.S. Surveyed for First Time Trails in Semi-Annual HSBC Small Business Confidence Survey
February 2, 2010-- A growing proportion of small businesses worldwide are bullish on the first half of 2010 and, for the first time since the financial crisis, many are signaling strong local economic growth and an increase in capital investment and recruitment plans. Still, business confidence among U.S. small businesses surveyed trails the sentiment of small businesses in emerging markets.
The semi-annual HSBC Small Business Confidence Monitor gauges the six-month outlook of small businesses on local economic growth, capital investment plans and recruitment. This fifth wave of the survey is the largest to date, capturing the views of more than 6,000 small businesses across 20 markets. In addition to gauging the views of small businesses in Asia, the Middle East, Europe, and Latin America, the most recent Small Business Confidence Monitor also surveyed small businesses in the U.S. for the first time. The results were used to calculate an index ranging from 0 to 200 where 200 represents the highest confidence level, 0 represents the lowest, and 100, neutral.
Mark Luppi, Executive Vice President and Head of Business Banking for HSBC - North America, said: "The small business sector is a key indicator of the overall health and competitiveness of local economies and our Small Business Confidence Monitor allows us to gauge the sentiment of this critical group. While the findings reveal that confidence levels are relatively positive in the U.S., they do lag behind the levels seen in the emerging markets surveyed. The news overall is encouraging with the majority of U.S. small businesses expecting capital expenditure and recruitment plans to remain relatively stable or increase slightly versus the reductions we have seen in the past."
Source: HSBC
Supply Chain Strategy for Major Global Companies 6% of Leading Companies Already Deselect Suppliers Who Fail to Manage Carbon, 56% Committed to Do So in the Future
February 1, 2010--Suppliers are now expected by some of their global
customers to demonstrate greenhouse gas emissions management, awareness and action, in order to maintain business relationships, a Carbon Disclosure
Project (CDP) report shows.
The second annual CDP Supply Chain Report, produced by A.T. Kearney, summarizes climate change information* from 710 suppliers. Members, who include global customers, such as Dell, Juniper Networks, National Grid, PepsiCo and Reckitt Benckiser are requesting their suppliers to disclose data via the CDP Supply Chain program. Although this report shows significant improvement in best practices over last year's results, suppliers still have a long way to go.
The 44 CDP Supply Chain member companies (see below) are leading in carbon management within their own businesses and expecting their suppliers to demonstrate strong carbon management strategies too:
-- 89% of CDP Supply Chain members have an established strategy to engage with suppliers on carbon related issues.
-- 91% of members have a board level executive responsible for climate change, compared to 80% within the Global 500 constituents.**
-- 90% have an emissions or energy reduction plan in place, compared to 51% in the Global 500.**
view the Carbon Disclosure Project-Supply Chain Report 2010
Source: Carbon Disclosure Project
