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ETF Landscape Industry Preview End of November 2009
December 14, 2009--Highlights
Global ETF and ETP Industry 2009:
Global ETF assets have hit an all time high of US$982 Bn at the end of November 2009; 4.3% above the previous all time high of US$942 Bn set in October 2009.
At the end of November 2009 the Global ETF industry had 1,907 ETFs with 3,678 listings and assets of $982.28 Bn, from 103 providers on 39 exchanges around the world.
Globally, net sales of mutual funds (excluding ETFs) were US$13.3 Bn, while net sales of ETFs were US$93.8 Bn during the first nine months of 2009 according to Strategic Insight.
Additionally, there were 601 other Exchange Traded Products (ETPs) with assets of US$154.52 Bn from 40 providers on 19 exchanges.
Combined, there were 2,508 products with 4,565 listings and assets of US$1,136.80 Bn from 129 providers on 42 exchanges around the world.
US ETF and ETP Industry 2009:
US ETF assets have hit an all time high of US$665 Bn at the end of November 2009 which tops the previous all time high of US$640 Bn set in October 2009.
At the end of November 2009 the US ETF industry had 753 ETFs and assets of $665.45 Bn, from 26 providers on two exchanges.
In the US, net sales of mutual funds (excluding ETFs) were minus US$131.5 Bn, while net sales of ETFs domiciled in the US were positive US$64.0 Bn in the first nine months of 2009 according to Strategic Insight.
Additionally, there were 144 other Exchange Traded Products (ETPs) with assets of US$88.38 Bn from 18 providers on one exchange.
Combined, there were 897 products with assets of US$753.82 Bn from 40 providers on two exchanges in the US.
European ETF and ETP Industry 2009:
European ETF assets have hit an all time high of US$217 Bn at the end of November 2009 which is 5.5% above the previous all time high of US$206 Bn set in October 2009 and 35.5% above the high of US$160 Bn recorded in July 2008.
At the end of November 2009 the European ETF industry had 812 ETFs with 2,315 listings and assets of $216.78 Bn, from 32 providers on 18 exchanges.
In Europe net sales of mutual funds (excluding ETFs) were US$177.7 Bn while net sales of ETFs domiciled in Europe were US$28.6 Bn during the first nine months of 2009 according to Lipper FMI.
Additionally, there were 175 other Exchange Traded Products (ETPs) with assets of US$19.95 Bn from five providers on six exchanges.
Combined, there were 987 products with assets of US$236.73 Bn from 33 providers on 18 exchanges in Europe.
BofA Merrill Lynch Global Research Forecasts a Slow but Steady Global Economic Recovery in 2010
Equities and commodities poised to benefit while bond outlook is modest
December 14, 2009--According to the BofA Merrill Lynch Global Research Macro Year Ahead for 2010, the global economy will grow ahead of consensus estimates in 2010.
BofA Merrill Lynch Global Research is forecasting global GDP growth of 4.4 percent in 2010.
Emerging Market economies are expected to take the lead, growing at an anticipated average rate of 6.3 percent while Developed World economies are expected recover from recession and grow at an average 2.7 percent.
The report highlights several reasons for this optimistic, above consensus outlook.
First, after Lehman’s collapse global policy makers adopted a “do whatever it takes” attitude to the economic and financial crises. This has meant not only consistently aggressive monetary and fiscal stimulus, but policies that are repeatedly recalibrated to match the scale of the crisis.
Second, the BofA Merrill Lynch Global Economics team points out that forecasters and investors tend to underestimate the power of the business cycle. During recessions, many sectors of the economy overshoot to the downside and any improvement in confidence results in a bounce in activity.
“We expect the economic recovery to remain stronger than consensus expectations, but still significantly weaker than a normal recovery from a major recession,” said Ethan Harris, head of North America economics and coordinator of global economics.
“With few domestic imbalances, the eurozone can ride the upturn in global manufacturing and enjoy robust growth,” said Holger Schmieding, head of European economics research.
The muted recovery will likely lead to low core inflation, continued soft monetary policy and further quantitative easing, the report says. This outlook favours equities and commodities and signals a year of lower returns for government and corporate bonds.
Equities to benefit from growth The prediction from BofA Merrill Lynch Global Research of 4.4 percent GDP growth in 2010 spells good news for equities. Global stock markets will be in a strong position to continue the recovery started in 2009 so long as a second recession is avoided. Despite the 30 percent return so far in 2009, valuations remain below the 10-year average of a 16.0x price-earnings ratio. Furthermore global economic policy favours risk-taking.
“We remain long risk assets, including global equities, until we see a policy mistake or a double-dip in economic activity,” said Michael Hartnett, chief global equities strategist.
Gary Baker, head of European equity strategy, said, “Our positive global economic view for 2010 suggests that consensus top line sales estimates are too cautious. Attractive valuations and strong earnings revisions point to another good year for European equities, led initially by cyclicals.”
David Bianco, head of U.S. equity strategy expects S&P 500 sales growth to be led by the four ‘global cyclical’ sectors of Technology, Energy, Industrials and Materials. “We also expect Financials and Energy to appreciate the most in 2010 and expect strong appreciation with lesser risk from Industrials, Tech and Materials. Our S&P 500 12-month price target is 1275.” said Bianco.
Siam City Bank To Enter The FTSE SET Large Cap After The December 2009 Semi-Annual Review
December 14, 2009--FTSE Group (“FTSE”), award-winning global index provider, and the Stock Exchange of Thailand (“SET”) announce that Siam City Bank Public Company Limited will replace Thai Tap Water Supply Public Company Limited in the FTSE SET Large Cap Index following the semi-annual review concluded by the FTSE SET Advisory Committee today.
The FTSE SET Large Cap Index is used as the basis of financial products including the ThaiDEX FTSE SET Large Cap ETF (TFTSE), derivatives and for benchmarking. The indices are reviewed semi-annually by the independent FTSE SET Index Advisory Committee in accordance with the index ground rules. The reviews ensure that the indices accurately reflect the market they represent. This is essential when the indices are used to benchmark investment portfolios and used as the basis of index-linked products.
Other indices in the FTSE SET Index Series were also reviewed, with a summary of changes as follows. Full details of additions and deletions can be found at http://www.ftse.com/Indices/FTSE_SET_Index_Series/Index_Reviews.jsp:
Deutsche Bank sets €10bn profit target
December 14, 2009--Deutsche Bank is to target record pre-tax profits of €10bn ($14.6bn) from its operating businesses by 2011, Germany’s largest bank said yesterday.
The goal compares with pre-tax profits of about €7.2bn in 2007 from the same operations and reflects the bank’s belief in its recovery prospects.
Russell Investments Selects NASDAQ OMX to Disseminate Index Values for Its Global Indexes
December 14, 2009--The
NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and Russell Investments today
announced that NASDAQ OMX(R) has been selected as the primary source of
real-time index values for Russell's global and ex-U.S. indexes.
In order to more broadly distribute this comprehensive, rules-based
index information, NASDAQ OMX will begin disseminating real-time values
for the Russell Global Indexes on January 11, 2010 via its premier
index service, the Global Index Data Service(SM) (GIDS(SM)). GIDS
subscribers have low administrative and technology costs and GIDS is
designed to facilitate excellence in trading performance and portfolio
valuation due to its frequent dissemination of index data. GIDS
supports a diverse array of NASDAQ OMX-branded indexes that cover
equities, bonds, commodities and exchange traded funds (ETFs), as well
as third party partnered indexes.
"Russell and NASDAQ OMX clients worldwide will have instant access to our comprehensive global index data, equipping them with the sharpest picture of the global investment landscape," said Rolf Agather, Russell's director of index research and innovation. "This arrangement streamlines our process for efficiently delivering real-time, delayed and end-of-day data through existing data feeds."
"We are pleased to be selected to disseminate index values for a leading index provider like Russell Investments," said Randall Hopkins, Senior Vice President of Global Data Products, NASDAQ OMX. "By leveraging the capabilities of NASDAQ OMX, critical Russell index information is delivered to the market in real-time and in a highly scalable manner for customers. This agreement expands the relationship between our organizations which work closely together during the annual reconstitution of Russell indexes."
Since 2004, Russell has leveraged the NASDAQ Closing Cross for the annual reconstitution of its U.S. indexes. The NASDAQ Closing Cross is used to determine NASDAQ official closing prices (NOCPs) which are widely used throughout the financial industry.
NASDAQ OMX will disseminate values for these Russell Investment indexes
through the NASDAQ OMX Global Access program. NASDAQ OMX Global Access
offers Russell the opportunity to distribute its data through one of
the largest and most successful data distribution organizations in the
world, NASDAQ OMX Global Data Products. By leveraging the sales,
administrative, technical and brand strength of NASDAQ OMX, Global
Access provides customers turn-key access to a premier data business.
For details, visit
http://www.nasdaqtrader.com/Trader.aspx?id=globalaccessprogram.
NASDAQ Announces the Annual Re-Ranking of the NASDAQ-100 Index
December 11, 2009--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) announced today the annual re-ranking of the NASDAQ-100
Index(R), effective with the market open on Monday, December 21, 2009.
The following seven issues will be added to the NASDAQ-100 Index:
Vodafone Group Plc (Nasdaq:VOD), Mattel, Inc. (Nasdaq:MAT), BMC
Software, Inc. (Nasdaq:BMC), Mylan Inc. (Nasdaq:MYL), QIAGEN N.V.
(Nasdaq:QGEN), SanDisk Corporation (Nasdaq:SNDK), and Virgin Media Inc.
(Nasdaq:VMED).
"We are delighted that these companies have been included in the NASDAQ-100 Index," said NASDAQ OMX Executive Vice President John L. Jacobs. "Of the seven new companies in the index, four transferred their listed securities from the NYSE to The NASDAQ Stock Market(R). Inclusion in the NASDAQ-100 Index, a globally recognized brand, provides these companies with increased visibility and distinguishes them as some of the world's leading large-cap growth companies."
The NASDAQ-100 Index is composed of the 100 largest non-financial stocks on The NASDAQ Stock Market and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index(R), which is comprised of the 100 largest financial stocks on NASDAQ(R). These indexes were originally designed to segment NASDAQ into two major industry groups to support media coverage and to act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 Index is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.
On a cumulative price return basis, the NASDAQ-100 Index has returned 1314% since inception, although past performance is not indicative of future performance.
The NASDAQ-100 Index is the basis of the PowerShares QQQ(R) Trust (Nasdaq:QQQQ) which aims to provide investment results that, before expenses, correspond with the NASDAQ-100 Index performance. In addition, options, futures and structured products based on the NASDAQ-100 Index and the PowerShares QQQ Trust trade on various exchanges.
As a result of the re-ranking of the NASDAQ-100 Index, the following seven securities will be removed: Akamai Technologies, Inc. (Nasdaq:AKAM), Hansen Natural Corporation (Nasdaq:HANS), IAC/InterActive Corp (Nasdaq:IACI), Liberty Global's Class A Common Stock (Nasdaq:LBTYA), Pharmaceutical Product Development, Inc. (Nasdaq:PPDI), Ryanair Holdings plc (Nasdaq:RYAAY), and Steel Dynamics, Inc. (Nasdaq:STLD).
To learn more about the criteria for inclusion to the NASDAQ-100, visit
https://indexes.nasdaqomx.com/data.aspx?IndexSymbol=NDX.
Europe urges 'social' tax on banks worldwide
December 11, 2009--Europe on Friday backed Anglo-French moves to introduce a future "social" tax on banks, insurers and markets, but Germany blocked calls for it to impose a levy on bankers' past bonuses as well.
European Union leaders endorsed a fresh call by British Prime Minister Gordon Brown, supported by French President Nicolas Sarkozy, for the International Monetary Fund to examine a global so-called 'Tobin' tax.
The idea is one among a series of proposals they want considered to ensure that trillions of dollars of taxpayers' support during the 2007-8 financial crisis is repaid with a slice of boom-time profits.
EU Backs Global Financial Transaction Tax
December 11, 2009--The European Union urged the International Monetary Fund on Friday to pursue a global tax on financial transactions to limit the risk of another economic crisis, despite U.S. opposition.
EU leaders also underlined the need for "sound and effective" financial sector pay at a two-day summit but, with the notable exception of Germany, did not broadly support French and British proposals to tax bankers' bonuses heavily.
Dow Jones Islamic Market Indexes Index Review Results: 4th Quarter 2009
December 10, 2009--Dow Jones Indexes, a leading global index provider, today announced the results of the regular quarterly review of the Dow Jones Islamic Market Indexes. All changes will be effective after the close of trading on Friday, December 18, 2009.
In the Dow Jones Islamic Market World Index, 55 components will be added while 100 components will be deleted. That decreases the number of components in the index to 2,356 from 2,401.
With 33 additions and 52 deletions, the number of components in the Dow Jones Islamic Market Asia/Pacific Index will decrease to 1,049 from 1,068. In the Dow Jones Islamic Market Europe Index, seven components will be added, while 25 components will be deleted. That decreases the number of components in the index to 386 from 404. The number of components in the Dow Jones Islamic Market Americas Index will decrease to 782 from 783, with 13 additions and 14 deletions. In the Dow Jones Islamic Market MENA Index, one component will be added, while 13 components will be deleted. That decreases the number of components in the index to 152 from 164.
In the Dow Jones Islamic Market BRIC Equal Weighted Index, no component will be added, while four components will be deleted. That decreases the number of components in the index to 60.
In the Dow Jones Islamic Market China Offshore Index, no component will be added, while two components will be deleted. That decreases the number of components to 20. With seven additions and two deletions, the number of components in the Dow Jones Islamic Market Hong Kong Index will increase to 90 from 85. In the Dow Jones Islamic Market India Index, one component will be added, while nine components will be deleted. That decreases the number of components in the index to 178 from 186. The number of components in the Dow Jones Islamic Market Turkey Index will remain at 27, with two companies being exchanged.
The total free-float market capitalization of the reconstituted Dow Jones Islamic Market World Index decreased to US$11.80 trillion from US$12.04 trillion1.
The total free-float market capitalization of the reconstituted Dow Jones Islamic Market Asia/Pacific Index decreased to US$2.25 trillion from US$2.31 trillion, while the total free-float market capitalization of the reconstituted Dow Jones Islamic Market Europe Index decreased to US$2.53 trillion from US$2.60 trillion. As of December 7, 2009, the total free-float market capitalization of the reconstituted Dow Jones Islamic Market Americas Index decreased to US$6.87 trillion from US$6.97 trillion and the total free-float market capitalization of the Dow Jones Islamic Market MENA Index decreased to US$100.66 billion from US$104.25 billion.
The total free-float market capitalization of the reconstituted Dow Jones Islamic Market BRIC Index increased to US$465.79 billion from US$459.16 billion.
The free-float market capitalization of the reconstituted Dow Jones Islamic Market China Offshore Index decreased to US$47.42 billion from US$48.33 billion, while the free-float market capitalization of the reconstituted Dow Jones Islamic Market Hong Kong Index decreased to US$109.27 billion from US$112.72 billion. As of December 7, 2009, the free-float market capitalization of the reconstituted Dow Jones Islamic Market India Index decreased to US$295.99 billion from US$299.78 billion, while the free-float market capitalization of the reconstituted Dow Jones Islamic Market Turkey Index increased to US$15.37 billion from US$15.08 billion.
The Dow Jones Islamic Market Indexes were introduced in 1999 as the first indexes intended to measure the global universe of investable equities that pass screens for Shari'ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index.
An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies. To determine their eligibility for the Dow Jones Islamic Market Indexes, stocks are screened based on their industry type and their financial ratios. Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 24-month average market capitalization; cash plus interest-bearing securities divided by trailing 24-month average market capitalization; and accounts receivables divided by trailing 24-month average market capitalization.
There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.
More information on the Dow Jones Islamic Market Indexes is available on http://www.djindexes.com.
Company additions to and deletions from the Dow Jones Islamic Market Indexes do not in any way reflect an opinion on the investment merits of the company.
The Dow Jones Islamic Market China/Hong Kong Titans 30 Index is reviewed annually in September.
Dow Jones Islamic Market Titans 100, Dow Jones Islamic Market U.S. Titans 50, Dow Jones Islamic Market Asia/Pacific Titans 25, Dow Jones Islamic Market Europe Titans 25 and Dow Jones Islamic Market Malaysia Titans 25 indexes are reviewed annually in June.
The Dow Jones DFM Titans 10 Index is reviewed annually in March.
1 The market capitalization values of all indexes cited in this report are as of December 7, 2009.
Norton Rose publishes survey on hopes for Copenhagen
December 9, 2009--On Novemember 26, 2009 Norton Rose published the result of the survey on hopes for Copenhagen.
Introduction
Over the past two years, the 2009 United Nations Climate Change Conference that will take place in Copenhagen from 7 to 18 December (COP15), has been hailed as one of the most significant global events for a generation. With the first commitment period of the Kyoto Protocol set to expire in 2012, senior politicians from around the world are to converge on Denmark with the goal of reaching an agreement on how best to address climate change. In anticipation of this, we decided to undertake a survey of the views of individuals in business involved with the environmental, sustainability and climate change issues for their organisations.
Rseults of the survey
Over three quarters of business respondents believe that an unsuccessful outcome at Copenhagen will have a detrimental impact on business.
Success or failure
79% think an unsuccessful outcome at Copenhagen will have a detrimental impact on business
70% believe the US position is significant
72% believe the negotiations will be a ‘compromised success’
Most significant global issue
60% feel climate change should be a priority over the global economic crisis
98% believe strong political leadership will be required
90% say their organisation is committed to combating climate change
Business opportunities
96% say there are business opportunities in their country as a result of the drive to reduce carbon emissions
The survey “The Hopes for Copenhagen” is based on 114 individual responses from people involved in all aspects of the environmental, sustainability and climate change issues in their business. The survey took place from 2 November to 13 November 2009 to canvas the views of climate change stakeholders on the perceived consequences to their business of the United Nations Climate Change Conference (COP 15) in Copenhagen, 7-18 December 2009.
Umberto Mauro, Norton Rose Studio Legale partner and member of the Global Climate Change & Carbon Finance Group at Norton Rose commented: "While the chances of agreeing a legally binding treaty at COP15 are small, there is hope that some form of agreement will be reached and a legally binding treaty will follow some time in 2010. With this survey, we wanted to give our clients the chance to express their views as to their hopes and expectations for COP15. The overriding insight we gained is that business leaders are, on the whole, very committed to combating climate change, but feel that the politicians are not paying close enough attention to the fact that the private sector will have to make significant investment to meet new CO² reduction targets. One of the key questions my colleagues and I at Norton Rose expect to see debated at Copenhagen is: What measures will be taken by governments to attract private sector finance to the green energy sector?"
