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ETFS US Precious Metals Weekly: Palladium steadies on EU debt-deal hopes as Russia confirms stockpile sales to end
October 24, 2011--Precious metal prices and futures positioning consolidated last week, as hopes for a European debt management package gained traction. The hopes helped steady financial markets after a jittery few weeks of trade that saw broadbased de-leveraging across a wide variety of asset markets. Futures positioning has likewise steadied, with net speculative futures positioning lifting off October lows for
both platinum and palladium.
Russia draws the curtain on the era of state palladium stockpile sales.
Russian officials were quoted as saying that state sales of 4-4.5 tonnes were likely in 2012-2013 - less than one-quarter the 24 tonnes scheduled for 2011-and stopping thereafter. Russia shipments to Switzerland, a key export market, dropped 24% yoy in September, with YTD shipments of 12 tonnes. If realized, this cessation of Russian state exports will remove a key supply uncertainty to palladium markets
in coming years. Russian stock sales are estimated to have been equivalent 10% of supply in 2010 and have been difficult to forecast due to the unknown level of Russian state stockpiles.
No.1 global platinum producer Anglo American Platinum Ltd (Amplats) reports double-digit cost inflation, flat production, over Q3. In-house production dropped 1% yoy, with a sharp rise in metals purchased from third parties (+14% yoy). Cost inflation remains a significant issue for the largest platinum and palladium miners, with Amplats noting a 10% p.a. rise in costs in Q3. Declining ore grades were an important component, with high grade ore seams currently accounting for less than half of their peak levels of around 25% of total production.
Event risk surrounding European debt plan still the major market focus, though seasonal emerging market demand may provide underlying support to gold in the absence of financial investors. European officials are scheduled to release their blueprint for expanding the safety net for European sovereign debt and banking recapitalization on Wednesday. Particular attention will be paid to how or if the sovereign bailout fund will be boosted and deployed, with rising speculation that it will be leveraged via use as a guarantee for sovereign bonds. Official comments over the weekend suggest that Greek sovereign bond holders may be encouraged to take further voluntary losses on bond holdings, and that the IMF may be expected to take a larger role in providing a safety net for sovereign bonds. If so, the blueprint may yet leave unanswered questions regarding IMF involvement and bank fall-out in the run-up to the G20 summit on November 3-4. ETFS research suggests that if the 2008 credit crisis is a guide, precious metals may be one of the first commodity sectors to rebound once widespread uncertainty and volatility subsides. Gold is likely to see near term support from physical demand as India enters seasonally high demand periods for gold associated with religious festivals throughout this week.
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Source: ETF Securities
DB Global Equity Research: US ETF Market Weekly Review: ETP AUM remains flat, recent risk related inflows lose steam
October 24, 2011--Net Cash Flows Review
Last week, equity markets in the US (S&P 500) completed a three-week winning streak rising by 1.12%. Other developed and emerging markets outside the US were mixed, with the MSCI EAFE (in USD) gaining 0.37% and the MSCI EM (in USD) losing 1.59% during the week. Moving on to other asset classes, the 10Y Treasury yield slightly retreated, dropping by 3bps; the DB Liquid Commodity Index was down by 2.18%, driven by a generalized drop across the majority of the sectors. The Agriculture sector (DB Diversified Agriculture Index),
Gold and Silver were down by 1.05%, 2.28%, and 2.52%, respectively; while WTI Crude Oil was the exception to the rule (+0.69%). Last but not least, Volatility (VIX) rebounded and rose by 10.9%, climbing back above 30 last week.
The total US ETP flows from all products registered $0.9bn of outflows during last week vs $6.6bn of inflows the previous week, setting the YTD weekly flows average at +$1.9bn.
The recent risk comeback lost some steam last week, but still keeps some momentum, all in all the risk-off reversal still remains undetermined. Equity, Fixed Income, and Commodity ETPs experienced flows of -$0.8bn, +$0.1bn, and -$0.2bn last week vs. +$5.5bn, +$1.3bn, and -$0.3bn the previous week, respectively.
Within Equity ETPs, Dividend products experienced the largest inflows (+$0.9bn), followed by Leveraged Short products (+$0.5bn), while Small Cap vehicles experienced the largest outflows (-$2.1bn). Within Fixed Income ETPs, Corporates products experienced the largest inflows (+$0.4bn), while Sovereign vehicles experienced the largest outflows (-$0.4bn). Within Commodity ETPs, all sectors experienced relatively mild outflows with Precious Metals products leading the ranking table (-$0.2bn), and Broad benchmarks following in the distance (-$30m).
New Launch Calendar: new ETPs to invest with lower volatility
There were 6 ETPs and 8 new ETNs listed on the NYSE Arca during the previous week. The new ETPs offer exposure to international indices with a minimum volatility focus, dividend, and emerging market debt; while the new ETNs provide access to short and long leveraged positions on precious metals. (Figure 18)
Turnover Review:
ETP turnover rose in tandem with volatility
Total weekly turnover rose by 12.7% to $421bn vs. $374bn in the previous week. The largest increase was on Equity ETP turnover, which climbed by $42bn or 12.3% to $381bn. Fixed Income ETP turnover increased by $1.4bn to $17.7bn last week. Finally, Commodity ETPs products turnover jumped by $3.6bn, totaling $18.7bn at the end of last Friday.
Assets Under Management (AUM) Review: assets remained flat
An overall positive equity market and mild outflows left US ETP AUM practically unchanged during last week. Total ETP assets were 2.5% up YTD by the end of last week, ending up at $1.02 trillion. Assets for equity, fixed income and commodity ETPs moved +$0.5bn, +$1.2bn, and -$2.5bn during last week, respectively.
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Source: Deutsche Bank - Global Equity Research
Morgan Stanley-ETF Weekly Update
October 24, 2011--Weekly Flows: $1.1 Billion Net Outflows
ETF Assets Stand at $1 Trillion, up 3% YTD
Launches: 6 New ETFs
SSGA Makes Changes to Financial Industry ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net outflows of $1.1 bln last week, three out of past six weeks ETFs posted outflows
Net outflows last week were primarily driven by US Small- & Micro-Cap Equity ETFs ($2.1 bln net outflows)
Fixed Income ETFs have exhibited net inflows for 10 straight weeks ($13.6 bln net inflows over the 10 weeks)
ETF assets stand at $1.0 tln, up 3% YTD (due to net inflows)
13-week flows were mixed among asset classes; combined $10.1 bln net inflows
Leveraged/Inverse ETFs have posted net inflows of $6.6 bln the past 13 weeks, which equates to 20% of the
category’s market cap
We estimate ETFs have generated net inflows 25 out of 42 weeks in 2011; net inflows of $80.9 bln YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares S&P 500 Index Fund (IVV) posted net inflows of $1.2 bln last week, the most of any ETF
Interestingly, the SPDR S&P 500 ETF (SPY), which also tracks the S&P 500 Index, posted net outflows of
$3.2 bln; iShares MSCI Emerging Markets Index Fund (EEM) and Vanguard MSCI Emerging Markets ETF
(VWO), which both track the MSCI Emerging Markets Index, exhibited similar divergence
Over the last 13 weeks, six out of the 10 ETFs to post the largest net outflows, were US Equity ETFs
Data Unchanged: Based on data as of 9/30/11
EEM exhibited the largest increase in USD short interest since last updated
$842 million in additional short interest
Highest level of shares short for EEM since 2/15/11
SPY exhibited the largest decline in USD short interest since last updated
$11.1 billion in reduced short interest
SPY was coming off its highest level of shares short of all-time
For the fourth period in a row, shares short declined for GLD
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Source: Morgan Stanley
Invesco PowerShares Secures Exclusive Rights to KBW Financial Indexes
Four New ETFs based on KBW indexes expected to list on Nov. 1, 2011
October 24, 2011-- Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), announced today it has expanded its partnership with Keefe, Bruyette & Woods, Inc. (KBW) to become the exclusive licensee of four KBW indexes providing targeted access to the bank, capital markets and insurance sectors, effective November 1, 2011.
"We are looking forward to providing investors a way to gain continued access to these key financial sub-sector indexes," said Ben Fulton, Invesco PowerShares managing director of global ETFs, "we expect these ETFs to start trading November 1st."
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Source: Invesco PowerShares
Standard & Poor's Announces Changes In The S&P/TSX SmallCap And Global Mining Indices
October 21, 2011--Standard & Poor's will make the following changes in the S&P/TSX SmallCap and Global Mining Indices:
Shareholders of Western Copper Corporation (TSX:WRN) approved on October 3, 2011, the Plan of Arrangement whereby the company will spin out certain copper interests to shareholders. For every 2 shares of Western Copper held, shareholders will receive 1 share of a new company named Copper North Mining Corp. and 1 share of a new company named NorthIsle Copper and Gold Inc.
Copper North and NorthIsle Copper will trade on TSX Venture Exchange for the first time (the ex-date of the spin-off) on October 24, 2011, under the ticker symbols "COL" and "NCX" respectively. The spun out shares of Copper North and NorthIsle Copper will be added at zero price to the S&P/TSX SmallCap and Equity SmallCap, the S&P/TSX Global Mining and Global Base Metals and the S&P/TSX Equal Weight Global Base Metals Indices after the close of trading on Friday, October 21, 2011.
Effective after the close of Monday, October 24, 2011, the shares of Copper North and NorthIsle Copper will be removed from the same five indices.
The shares of Century Mining Corporation (TSXVN:CMM) will be removed from the S&P/TSX Venture Composite and Venture Select Indices after the close of Friday, October 21, 2011. Shareholders of Century Mining will receive 0.4 shares of White Tiger Gold Ltd. (TSX:WTG) for each share held. Century Mining will be delisted from the TSX Venture Exchange after close of trading on Friday, October 21, 2011.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Bolsa Electronica de Chile Chooses NASDAQ OMX for New Trading System and Strategic Alliance
Members of Chile's Largest Electronic Exchange to Benefit From Proven NASDAQ OMX Exchange Technology, Gaining Significant Latency and Capacity Improvements
October 21, 2011--NASDAQ OMX to Provide Advisory Services for Strategic Development of New Products and Global Visibility
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and Bolsa Electronica de Chile (BEC) today signed a strategic alliance which will provide BEC with the NASDAQ OMX market technology, exchange trading, and advisory services for product development and global visibility.
BEC and its members will benefit from significant enhancements in performance, latency and throughput capacity by shifting to NASDAQ OMX's proven exchange technology. BEC members will remain connected via the FIX trading protocol for a seamless system shift. NASDAQ OMX market technology is used by over 70 exchanges in 50 countries.
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Source: NASDAQ OMX
CFTC.gov Commitments of Traders Reports Update
October 21, 2011--The current reports for the week of October 18, 2011 are now available.
view updates
Source: CFTC.gov
SEC Staff to Hold Roundtable on "Measurement Uncertainty in Financial Reporting"
October 21, 2011--The Securities and Exchange Commission today announced that the inaugural roundtable in the Financial Reporting Series will be held on November 8.
The purpose of the Financial Reporting Series is to proactively help identify risks and potential improvements in the financial information provided to investors. The inaugural roundtable will examine the extent to which financial reporting should include measurement uncertainties, and the information investors find important to understanding and assessing those uncertainties.
"We want to consider whether the right balance has been struck to provide investors with useful information," said SEC Chief Accountant James Kroeker. "This roundtable discussion will provide us with an opportunity to hear directly from investors about the challenges in understanding the types of uncertainties included in financial reports."
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Source: SEC.gov
Testimony of Market Microstructure: Examination of Exchange-Traded Funds (ETFs) held on October 19, 2011.
October 21, 2011-Following is the witnesses testimony given at the Market Microstructure: Examination of Exchange-Traded Funds (ETFs).
Testimony of Ms. Eileen Rominger
Director
Division of Investment Management, U.S. Securities and Exchange Commission
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Mr. Eric Noll
Executive Vice President
Transaction Services, NASDAQ OMX
Mr. Noel Archard
Managing Director, BlackRock I-Shares
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Mr. Harold Bradley
Chief Investment Officer, Ewing Marion Kauffman Foundation
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view webcast
Source: U.S. Senate Committee on Banking, Housing, and Urban Affairs
Russell files with the SEC
October 20, 2011--Russell has filed a post-effective amendment, registration statement with the SEC for the Russell U.S. Large Cap ETF
Russell U.S. Large Cap Growth ETF
Russell U.S. Large Cap Value ETF
Russell U.S. All Cap ETF
Russell U.S. Mid Cap ETF
Russell U.S. Small Cap ETF
view filing
Source: SEC.gov
