Global ETF News Older than One Year
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
BATS Global Markets Reports Record January
- BATS Exchange Earns More Than 10% Us Market Share, Sets Monthly Tape B Record - Bats Europe Eclipses Highs For Market Share, Notional Value
February 1, 2010 – BATS Global Markets, an innovative global
financial markets technology company, reports that BATS Exchange increased its US matched market
share in January to 10.2%, compared to 9.3% in December 2009, and set a new market share record in
Tape B securities with 16.6%.
BATS Europe, the fast-growing Multilateral Trading Facility (MTF), finished its best month to date with new market share records in the FTSE 100 (8.4%), FTSE 250 (5.9%), FTSE MIB (6.8%), DAX 30 (4.7%), SMI (3.6%), STOXX 50 (5.1%) and the overall European market (4.6%)
Source: BATS
SEC and UK FSA Hold Fifth Meeting of the SEC-FSA Strategic Dialogue
February 1, 2010--Today, Financial Services Authority (FSA) chairman Lord Turner and chief executive Hector Sants, and US Securities and Exchange Commission (SEC) chairman Mary Schapiro met as part of the SEC-FSA Strategic Dialogue.
The purpose of the Dialogue, which was established in 2006, is to engage at the senior levels of the two agencies on current matters affecting the US and UK capital markets and areas of future collaboration. This was the fifth meeting of the Dialogue. Some of the areas of mutual interest discussed during today's meeting included:
Corporate governance and executive compensation;
Regulation of hedge funds and investment advisors and the protection of customer assets;
Disclosure regimes around client asset risks;
Market infrastructure, particularly relating to central counterparties for OTC derivatives;
Market supervision;
Cooperation on cross-border supervision.
At the meeting, Schapiro, Turner, and Sants agreed that, given the linkages between the US and UK markets, enhanced supervisory cooperation is critical to market integrity. Cooperative efforts between the staffs of the two agencies are increasing in areas such as oversight of credit rating agencies, hedge fund advisers and the clearing of OTC derivatives. To facilitate this expanding cooperation, the two agencies plan to review the existing Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information Related to the Supervision of Financial Services Firms and Market Oversight, entered into by the SEC and the FSA in 2006. This memorandum of understanding is designed to promote the coordination of robust and sound supervision of cross-border financial institutions and markets.
Today’s Dialogue also provided the opportunity for the SEC and the FSA to continue discussions in the areas of corporate governance, particularly board risk oversight, and executive compensation. Consistent with the emerging international consensus, both agencies’ current efforts seek to address, among other things, the intrinsic links between the types and degree of risks regulated entities/registrants assume and their corporate governance and compensation policies.
FSA chief executive Hector Sants said,
“Global cooperation between regulators is central to tackling the reform agenda and the relationship between the FSA and the SEC is key for international markets. Our ongoing dialogue gives us the opportunity to widen the areas of cooperation between the FSA and the SEC, in particular progressing our collaborative work on hedge funds and credit rating agencies.”
SEC chairman Schapiro said,
“This Dialogue has proven its utility again in allowing the SEC and FSA to share expertise and experiences regarding the rapid changes occurring in our capital markets. As regulatory reform advances on both sides of the Atlantic, we can feed this combined body of knowledge into the development of high-quality regulatory systems that take into account both national and international market dynamics.”
Source: FSA
Eurex achieved 63.4 million contracts in its equity index segment – the largest product segment, compared with 70.2 million contracts the year before. Futures on the DJ EURO STOXX 50® Index stood at 26.6 million contracts and 23.5 million on the options o
ADV increased by 3 percent/ Significant growth year-on-year for Eurex’s interest rate derivatives segment
February 1, 2010--In January 2010, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.8 million contracts (Jan 2009: 10.5 million). Of those 7.0 million were Eurex contracts and 3.75 million contracts were at the U.S.-based International Securities Exchange (ISE). In total, 140.0 million contracts were traded at Eurex and 71.2 million at the ISE.
Eurex achieved 63.4 million contracts in its equity index segment – the largest product segment, compared with 70.2 million contracts the year before. Futures on the DJ EURO STOXX 50® Index stood at 26.6 million contracts and 23.5 million on the options of this index.
The equity derivatives (equity options and single stock futures) segment at Eurex recorded 36.8 million contracts (Jan 2009: 40.0 million). Thereof, equity options totaled at 28.8 million contracts and single stock futures another 8.0 million contracts. Dividend-based derivatives represented roughly 370,000 contracts.
The interest rate derivatives segment increased by 16 percent and achieved 39.6 million contracts (Jan 2009: 34.1 million). The Euro-Bund-Future reached 15.0 million contracts in January, the Euro-Bobl-Future 8.7 million contracts and the Euro-Schatz-Future 10.6 million contracts. The Euro BTP future – launched in September 2009 – totaled almost 100,000 contracts.
In January 2010, Eurex Repo reported growth in all markets. Its secured money market segment GC Pooling recorded an average outstanding volume of 78.7 billion euro, which is up 57 percent year-on-year. The EUR Repo market grew by 31 percent and totaled 95 billion euro. All Eurex Repo markets achieved an average outstanding volume of €181.1 billion, an increase of 19 percent year-on-year.
The electronic trading platform Eurex Bonds, which rounds out Eurex’s fixed-income product range, grew in January 2010 by 8 percent y-o-y and recorded a volume of €7.7 billion (single counting) compared to €7.1 billion the previous year. In December the figure was €5.2 billion.
Source: Eurex
Repo market to escape planned US bank levy
February 1, 2010--The Obama administration plans to exclude a crucial part of the financial system from a proposed levy on banks’ administration, officials disclosed on Monday.
Under the proposed financial crisis responsibility fee, banks would pay a fee of 15 basis points on all liabilities above $50bn (€36bn, £31bn) that are not already subject to an insurance premium paid to the Federal Deposit Insurance Corporation.
Source: FT.com
Islamic finance is likely to grow apace on broadening geographic reach in 2010
February 1, 2010--Just when many of the world's
financial systems have been working to weather the capital market turmoil and
its spread to economies around the globe, Islamic finance growth has stayed
strong and will likely be brisk during the next year, said Standard & Poor's
Ratings Services in a report "Islamic Finance Is Likely To Advance In 2010 On
Firm Growth And Widening Geographic Reach," published today on RatingsDirect.
"We believe Islamic finance has become a recognized and a specific segment of finance on its own with still-bright growth prospects," said Standard & Poor's credit analyst Mohamed Damak. "We think Islamic finance is set to make further inroads in developed Western markets while Southeast Asian countries will likely fuel the Islamic finance advance in Asia in 2010."
At the same time, though, we believe there are a number of important questions for which the answers are not necessarily yet clear but that may play a part in shaping the sector's future growth. Specifically in non-Muslim countries, and especially in Europe, we consider they include the size of demand for Sharia-compliant products, regulatory and tax environments, the support of the political and financial communities, sovereign sukuk issuance, and the possibility of a common strategy for extending Islamic finance across EU countries.
Assets of the top 500 Islamic banks expanded 28.6% to total $822 billion in 2009, compared with $639 billion in 2008, according to publicly available information.
Source: Standard & Poors
Global Pension Funds Rebound in 2009
February 1, 2010--Global institutional pension fund assets in the 13 major markets increased by 15% during 2009, from US$20 trillion to over US$23 trillion, according to Towers Watson’s Global Pension Assets Study released today. The growth is in sharp contrast to a 21% fall in asset values during 2008 and brought assets back to 2006 levels.
The study also reveals that the global pensions balance sheet[1] strengthened by around 10% in 2009, compared to a 25% fall in 2008. According to the study, pension assets now amount to 70% of the average global GDP, down from 76% a decade earlier, but substantially higher than the equivalent figure in 2008 of 58%.
Roger Urwin, global head of investment content at Towers Watson, said: “The global financial crisis was a huge wake-up call and problems of poor systemic design in the industry point to increased likelihoods of further periods of financial distress in future. While the recovery of markets will be welcomed, it is hoped that it will not stifle recognition of these as major issues for national governments and companies to address. I fear that without exceptional leadership we will have another tough decade in the pension and investment world.”
Other highlights from the report include:
Global asset data for the P13
On average global pension assets (measured in local currency) grew by over 16% in 2009, compared with an 11% fall in 2008, improving the ten-year average growth rate to almost 7% Despite losing market share in the past ten years the US, Japan and the UK remained the largest pension markets in the world, accounting for 57%, 14% and 8% respectively of total pension global fund assets
All countries saw significant growth in pension assets in 2009 (measured in local currency), except Japan which still has a negative five-year growth rate In terms of ten-year CAGR (in local currency terms), these are mostly positive, with Brazil (18%), Hong Kong (14%), the Netherlands (12%) and Australia (10%) having the highest and Japan (1%), Switzerland (2%), US (3%) and the UK (3%) having the lowest The Netherlands now has the largest proportion of pension assets to GDP (120%), followed by Switzerland (113%) and Australia (93%).
Asset Allocation for the P7
Bond allocations for the P7 countries increased from 25% in 2005 to 32% in 2008, but fell back to 27% in 2009. Allocation to equities rose significantly during 2009 to reach 54%
Other assets, especially real estate and to a lesser extent hedge funds, private equity and commodities, have grown from 12% to 17% in the last five years.
Roger Urwin said: “The gyrations of markets during the past few years has presented pension funds with very difficult strategic asset allocation choices. During the crisis, some funds sold out of equities to address solvency issues, some drifted out of equities and into bonds by not rebalancing, while others maintained their strategic mix and rebalanced to prior equity percentages. The result overall was a phase of de-risking, but not in a measured way and this has largely been reversed as equity markets have rebounded and risk allocations rebuilt.
Highly changeable market conditions in short periods of time will have caused serious disruptions for pension funds. In order to get back on track, they will be reviewing all options, including extra contributions from sponsors, contingent funding arrangements, investment strategy reviews, hedging strategies and pension insurance buy-ins, not to mention changes to benefits structures including fund closures.”
Defined Benefit (DB) vs. Defined Contribution (DC) for the P7
During the ten-year period from 1999 to 2009, the CAGR of DC assets was 6% against a rate of 2% for DB assets DC assets now comprise 42% of global pension assets compared with 32% in 1999
Australia has the highest proportion of DC pension assets, having increased them from 78% to 82% of overall assets between 1999 and 2009
The countries that show a larger proportion of DC assets than DB assets are the US, Australia and Switzerland while Japan and Canada are close to 100% DB.
Roger Urwin said: “As a result of the crisis there is a heightened awareness of the need to be better prepared in future and to think differently about how markets can be buffeted by extreme events. An important characteristic of this new environment is the acknowledgement by asset owners of much increased complexity and the recognition that the appropriate governance for a chosen investment strategy is critical. This will increasingly lead investors to either prioritising higher governance and allocate proportionate resources or simplifying their investment strategies to minimise cost and avoid value destruction. This will become all the more important as pensions and financial services regulators seek to spell out what governance standards funds should adhere to and their broader responsibilities. Funds in the past have had a very light touch applied on these issues, but the massive size and sphere of their influence make pension funds ripe for greater regulatory influence.”
view the Global Pension Asset Study 2010 report
Source: Towers Watson
